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Home My WebLink AboutRESO 10008 1 1002_20211214_th20 Resolution 10008 Resolution Amending City of Palo Alto’s Employee Flexible Benefits Plan for Healthcare Flexible Spending Accounts and Dependent Care Flexible Spending Accounts INTRODUCED AND PASSED: December 13, 2021 AYES: BURT, CORMACK, DUBOIS, FILSETH, STONE, TANAKA NOES: ABSENT: KOU ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Chief Assistant City Attorney City Manager _____________________________ Director of Human Resources _____________________________ Director of Administrative Services DocuSign Envelope ID: B9E54D32-9A36-47C6-803B-631D7A294BDA 2 1002_20211214_th20 CITY OF PALO ALTO FLEXIBLE BENEFITS PLAN AMENDMENT 1 ARTICLE I PREAMBLE 1.1 Adoption and effective date of amendment. The Employer adopts this Amendment to the City of Palo Alto’s Flexible Benefits Plan (the “Plan”). The sponsor intends this Amendment as good faith compliance with the requirements of these provisions. This Amendment shall be effective on or after the date the Employer elects in Section 2.1 below. 1.2 Supersession of inconsistent provisions. This Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions of this Amendment. 1.3 Construction. Except as otherwise provided in this Amendment, any reference to "Section" in this Amendment refers only to sections within this Amendment and is not a reference to the Plan. The Article and Section numbering in this Amendment is solely for purposes of this Amendment, and does not relate to any Plan article, section, or other numbering designations. ARTICLE II ELECTIONS 2.1 Effective Date. The provisions of this Amendment, unless otherwise indicated are effective as of January 1, 2021 (the “Effective date”). 2.2 American Rescue Plan Act of 2021 Amendment. The Employer hereby amends the Dependent Care Flexible Spending Plan within the 2021 calendar year as follows: Increase in Exclusion for Employer Provide Dependent Care Assistance Section 9632 of the American Rescue Plan Act (ARPA) amends Section 129(a)(2) of the internal Revenue code of 1986. In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022. The amount which may be excluded for dependent care assistance with respect to dependent care services provided during a taxable year shall not exceed $10,500 ($5,250 in the case of a separate return by a married individual). 2.3 H.R. 133 Consolidated Appropriations Act Amendment(s). The Employer hereby amends the Plan as follows: Post-Termination Reimbursements from Health FSAs On December 27, 2020, H.R. 133 Consolidated Appropriations Act was signed into law, impacting section 125 cafeteria plans. This guidance is designed to provide temporary flexibility for employers and employees and assist with the National response to the 2019 Novel Coronavirus outbreak (COVID- 19). DocuSign Envelope ID: B9E54D32-9A36-47C6-803B-631D7A294BDA 3 1002_20211214_th20 Effective as of the effective date, the Employer amends their plan to allow for terminated participants to continue to receive reimbursements from their Health FSA unused funds thru the end of the plan year their participation ceased. This guidance only applies to the 2020 and 2021 plan year. A plan that includes a health flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows (under rules similar to the rules applicable to dependent care flexible spending arrangements) an employee who ceases participation in the plan during calendar year 2020 or 2021 to continue to receive reimbursements from unused benefits or contributions through the end of the plan year in which such participation ceased (including any grace period). The extension of the period for incurring claims under this guidance is an extension of coverage that is not HSA compatible, consequently any terminated employee with unused amounts remaining after termination, (including any grace period) will not be eligible to contribute to an HSA during the post- termination coverage period. Section 125 Change in Status under the Health or Dependent Care FSA Effective as of the effective date, the Employer amends their plan to allow for the below change in status flexibility. This is a temporary change effective only for the plan year ending in 2021. On December 27, 2020, H.R. 133 Consolidated Appropriations Act was signed into law, impacting section 125 cafeteria plans. This guidance is designed to provide temporary flexibility for employers and employees and assist with the National response to the 2019 Novel Coronavirus outbreak (COVID- 19). These changes permit, under certain circumstances, prospective changes to health and dependent care FSA elections as follows: a) employees may revoke a health FSA election, make a new election, or decrease or increase an existing election on a prospective basis; and b) employees may revoke a dependent care FSA election, make a new election, or decrease or increase an existing election on a prospective basis. Employers are not required to allow unlimited election changes but may determine the extent to which such changes are permitted and applied. Any change allowed shall not permit a revocation or decrease in election below the amount already disbursed. Extension of Grace Periods for Plan Years ending in 2020 and 2021 Effective as of the effective date, the Employer amends their plan to allow for the extension of the Grace Period for plan year ending in 2020 and 2021 to 12 months after the end of such plan year. In general a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement extends the grace period for a plan year ending in 2020 or 2021 to 12 months after the end of such plan year, with respect to unused benefits or contributions remaining in a health flexible spending arrangement or a dependent care flexible spending arrangement. The extension of the period for incurring claims under this guidance is an extension of coverage that is not HSA compatible, consequently any employee with unused amounts remaining at the end of a plan year or grace period ending in 2020 or 2021 will not be eligible to contribute to an HSA during the extend period (unless the FSA is a limited FSA). DocuSign Envelope ID: B9E54D32-9A36-47C6-803B-631D7A294BDA 4 1002_20211214_th20 This amendment has been executed this _________________ day of ______________________________________, ________. Name of Employer: Terence Howzell By: EMPLOYER DocuSign Envelope ID: B9E54D32-9A36-47C6-803B-631D7A294BDA December 2021 22nd 5 1002_20211214_th20 CERTIFICATE OF ADOPTING RESOLUTION The undersigned authorized representative of the City of Palo Alto hereby certifies that the following resolutions were duly adopted on December 13, 2021 (date) and that such resolutions have not been modified or rescinded as of the date hereof; RESOLVED, that the Amendment to the Plan (the Amendment) is hereby approved and adopted, and that an authorized representative of the Employer is hereby authorized and directed to execute and deliver to the Administrator of the Plan one or more counterparts of the amendment. The undersigned further certifies that attached hereto is a copy of the Amendment approved and adopted in the foregoing resolution. Date: Signed: Terence Howzell/Chief Assistant City Attorney [print name/title] DocuSign Envelope ID: B9E54D32-9A36-47C6-803B-631D7A294BDA 12/22/2021 Certificate Of Completion Envelope Id: B9E54D329A3647C6803B631D7A294BDA Status: Completed Subject: Please DocuSign: RESO 10008 Resolution Amending City of Palo Alto's Employee Flexible Benefits ... Source Envelope: Document Pages: 5 Signatures: 8 Envelope Originator: Certificate Pages: 2 Initials: 0 Danielle Kang AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Danielle.Kang@cityofpaloalto.org IP Address: 199.33.32.254 Record Tracking Status: Original 12/21/2021 11:51:28 AM Holder: Danielle Kang Danielle.Kang@cityofpaloalto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Terence Howzell Terence.Howzell@CityofPaloAlto.org Chief Assistant City Attorney City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 12/21/2021 11:55:51 AM Viewed: 12/22/2021 2:25:25 PM Signed: 12/22/2021 2:39:33 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Kiely Nose Kiely.Nose@CityofPaloAlto.org Director, Administrative Services/CFO City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Uploaded Signature Image Using IP Address: 199.33.32.254 Sent: 12/22/2021 2:39:35 PM Viewed: 12/22/2021 2:51:22 PM Signed: 12/22/2021 2:51:27 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Rumi Portillo Rumi.Portillo@CityofPaloAlto.org Director Human Resources/CPO City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 12/22/2021 2:51:28 PM Viewed: 12/22/2021 5:43:45 PM Signed: 12/22/2021 5:43:59 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ed Shikada Ed.Shikada@CityofPaloAlto.org Ed Shikada, City Manager City of Palo Alto Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 73.93.95.49 Sent: 12/22/2021 5:44:00 PM Viewed: 12/23/2021 7:57:51 AM Signed: 12/23/2021 7:57:59 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Signer Events Signature Timestamp Tom DuBois tomforcouncil@gmail.com Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 24.5.55.204 Sent: 12/23/2021 7:58:01 AM Viewed: 12/23/2021 10:51:44 AM Signed: 12/23/2021 10:51:52 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Lesley Milton Lesley.Milton@CityofPaloAlto.org City Clerk Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 199.33.32.254 Sent: 12/23/2021 10:51:55 AM Viewed: 12/28/2021 8:52:01 AM Signed: 12/28/2021 8:52:19 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 12/21/2021 11:55:51 AM Certified Delivered Security Checked 12/28/2021 8:52:01 AM Signing Complete Security Checked 12/28/2021 8:52:19 AM Completed Security Checked 12/28/2021 8:52:19 AM Payment Events Status Timestamps