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HomeMy WebLinkAboutItem 06.kDecember 15, 2010 Proposed Action Staff recommends adoption of the following mntinn: Move to approve the Administrative Agreement between Genesis Employee Benefits, Inc and City of Lakeville and Lakeville Arenas. Passage of this motion will result in administration services for the City's Health Savings Account. Overview The City has added a new high deductible health plan for 2011. This plan is offered along with a health savings account that will be administered by Genesis. The employees will be responsible for individual transaction fees. The City will be responsible for the administration fee which is $3.50 per month per enrolled employee. Primary Issues to Consider Genesis currently administers the City's flexible spending account program and the individual VEBA accounts tied to the HRA high deductible program. Adding administration of the HSA plan will assure continued compliance with applicable laws and regulations. Supporting Information • See attached agreement. Cindi Joos -n Human Resources Manager Health Savings Account Administrative Agreement between Genesis Employee Benefits, Inc. and City of Lakeville and Lakeville Arenas Item No. Financial Impact: $ 882 Budgeted: YIN Y Source: GF Contingency Related Documents (CIP, ERP, etc.): HEALTH SAVINGS ACCOUNT ADMINISTRATION AGREEMENT effective January 1, 2011 between Genesis Employee Benefits, Inc. ("Administrator ") and City of Lakeville and Lakeville Arenas ( "Employer ") WHEREAS, Employer contributes to health savings accounts on behalf of its eligible employees; and WHEREAS, Administrator performs services with respect to establishing and operating health savings account programs; and WHEREAS, Employer desires that Administrator furnish certain services described in this Agreement in the operation and administration of its health savings account program. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and the exhibits, if any, attached hereto, Employer and Administrator hereby agree as follows: I. Definitions The following definitions shall apply to this Agreement: A. Administrative Services - means those services relating to the administration of the HSA Program to be performed by Administrator as set forth in this Agreement and the exhibits hereto. B. Administrator — means Genesis Employee Benefits, Inc., an independent contractor designated to perform certain administrative services pursuant to this Agreement with respect to the HSA Program. C. Agreement - means this Health Saving Account Administration Agreement and any exhibits attached hereto and any outside agreements specifically incorporated by reference, D. Code - means the Internal Revenue Code of 1986 and regulations thereunder, as amended from time to time, E. Custodian/Trustee — means Healthcare Bank, an entity qualified to be a custodian or trustee of health savings accounts as provided in Code Section 223. © 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0 0.0) F. Effective Date - means the date upon which this Agreement, once fully executed by all parties, is first effective, January 1, 2011. G. Employer — means City of Lakeville and Lakeville Arenas. H. HSA — means a health savings account, as defined in Code Section 223, established by or on behalf of a Participant as part of the HSA Program. To constitute an HSA for purposes of this Agreement, the HSA must be established with the Custodian /Trustee. I. HSA Program — means a program established by Employer by which Employer makes contributions to health savings accounts established by or for certain eligible employees of Employer. Participant -- means an employee or former employee of Employer participating in the HSA Program in accordance with the terms thereof. II. Administrator Responsibilities A. Status of Administrator. Employer shall not (1) name Administrator as the trustee or custodian of the HSAs, nor (2) hold out to third parties that Administrator serves in such capacity. In addition, Administrator does not intend to assume any of the responsibilities commensurate with such designation. B. Capacity of Administrator. In fulfilling its duties and obligations under this Agreement, Administrator shall act as the administrative agent of Employer and does not intend to be a trustee or custodian of the HSA assets. C. HSA Eligibility. Administrator shall assist Employer's employees to determine whether they are eligible for contributions to a health savings account based upon information provided by such employees. Notwithstanding the foregoing, it shall be the ultimate responsibility of each employee to determine whether he or she is eligible for contributions to a health savings account. D. Establishing HSAs. Administrator shall provide to the Participants instructions regarding establishing their HSAs with the Custodian/Trustee. Administrator shall input participant data from Employer necessary for the establishment of the HSAs into the Custodian /Trustee's system. E. Debit Cards. Administrator shall obtain and transfer to the debit card issuer all information necessary for the issuance of debit cards (if any) to the Participants. F Custodian /Trustee Information. Administrator shall provide to the Participants information regarding contacts at the Custodian/Trustee to © 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No, 11.0,0.0) 2 allow the Participants to make changes to their account information on file with the Custodian/Trustee. Notwithstanding the foregoing, it shall be the responsibility of the Participant to ensure his/her account information is up -to -date. G. Contributions. Administrator shall instruct Employer regarding the manner in which contributions will be transferred to the Participants' HSAs (including contributions made via salary reduction through Company's Section 125 cafeteria plan), along with such information as is necessary for the Custodian/Trustee to allocate such contributions to the correct HSAs. In performing this service, Administrator is entitled to rely upon the information provided by Employer, H. Contribution Limits. Administrator shall respond to inquiries from Employer regarding whether the contributions described above exceed the contribution limit established by the Code. In performing this service, Administrator is entitled to rely upon the information provided by Employer. Notwithstanding the foregoing, Employer is responsible for all applicable tax reporting (e.g., Form W-2) and withholding responsibilities resulting from excess contributions. L Comparable Contributions. If Employer's HSA contributions are subject to the comparable contribution requirements of Section 4980G of the Code, Administrator shall assist Employer, based upon information provided by Employer, with determining whether such contributions are comparable. Administrator may rely upon the information provided by Employer in performing this service, Notwithstanding the foregoing, it shall be Employer's ultimate responsibility for ensuring its contributions comply with the comparable contributions rules, if applicable. J. Participant Inquiries. Administrator shall provide customer service with respect to inquiries from Participants regarding their HSAs. Administrator shall provide a website that Participants may access for the purpose of obtaining HSA account balance information. K. Distributions. Distributions from an HSA are made via debit cards, checks, or direct deposit. For distributions made other than by debit card, Administrator will make available to Participants a website through which reimbursements may be requested and will process such requests, in cooperation with the Custodian /Trustee. Notwithstanding the foregoing, in no case will Administrator review or otherwise substantiate the reason or purpose of the request for distribution. Participants are able to request a distribution for any purpose and are solely responsible for determining and reporting any tax applicable to a distribution. U 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0.0.0) 3 L. Account Servicing and Employee Communication. Administrator shall make available to Employer a client service representative to respond to questions regarding general administrative issues. M. Compliance with Applicable Law. Administrator shall comply with applicable federal and state laws and regulations applicable to Administrator's responsibilities under this Agreement. N. Insurance. Administrator shall maintain professional liability and errors and omissions insurance in the amount of $2,000,000.00. 0. Subcontractors. Administrator may hire subcontractors to perform any of the services required of it under this Agreement and to act as its designee for purposes of this Agreement. © 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0.0.0) 4 III. Duties of Employer A. Establishment and Maintenance. Employer shall establish and maintain the HSA Program. If necessary, Employer shall obtain the high deductible health plan coverage that qualifies employees to make or receive HSA contributions and determine that such coverage meets the requirements of Code Section 223. In accordance with this Agreement, Administrator shall provide Administrative Services to Employer in connection with the operation and administration of the HSA Program. B, Contributions. Employer is solely responsible for funding and making contributions to the HSAs as required by the HSA Program. Employer shall authorize Administrator to make ACH transfers from an Employer bank account to the Custodian/Trustees for the purpose of making HSA contributions (including contributions made via salary reduction through Employer's Section 125 Cafeteria Plan) to a Participant's HSA. Administrator shall make such transfers at the appropriate times. However, Administrator is not responsible for ensuring Employer's bank account has sufficient funds to cover such transfers. In the event Employer fails to make sufficient funds available, Administrator will have no responsibility or liability whatsoever for making the contributions on Employer's behalf. C. Custodian/Trustee Fees. If such fees are not deducted directly from the HSAs, Employer shall pay all applicable fees charged by the Custodian/Trustee with respect to the HSAs. D. Payment of Administrative Services Fees. In consideration of Administrator's performance of the services described in this Agreement, Employer shall pay to Administrator the administrative fees described in Exhibit A. 1, Failure to Pay. Fees are due fifteen (15) days from the date of the invoice. Any failure to pay any such fees within thirty (30) days of the date upon which they are due may, at Administrator's option, result in (1) the imposition by Administrator of a late fee equal to the lesser of (i) 1.5% of the outstanding balance or $75 per month, whichever is greater, or (ii) the maximum amount allowed by the usury laws of the applicable state, and/or (2) the suspension of performance of Administrator's services under this Agreement until such time as such fees are paid or this Agreement is terminated. 2. Increases. Administrator reserves the right to charge additional fees for repeating, or expanding the scope of, its services due to inaccurate, incomplete, or unusable data supplied by Employer. © 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No, 11.0.0.0) 5 3. Fees for Additional Services. In the event additional services that are not part of the normal Administrative Services contemplated by this Agreement are required, Administrator may charge Employer an additional fee commensurate with the additional services provided. Such additional services may include, but are not limited to, the provision of notices or other related services required by or related to an amendment to applicable law occurring after the Effective Date. Administrator will inform Employer of the amount of the additional fee in advance of conducting the additional services. E. Regulatory Compliance. Employer shall be responsible for compliance with applicable laws and regulations pertaining to the HSA Program, including the requirement to report all HSA contributions on a Participant's Form W -2. Employer shall be responsible for any and all governmental or regulatory charges resulting from Employer's establishment and operation of the HSA Program. This provision does not relieve Administrator from any statutory or agency requirements placed directly on it as a result of performing services under this Agreement. 1=. HSA Program Eligibility. Employer possesses and exercises ultimate authority and responsibility for determining eligibility for the HSA Program. O. Information. Employer shall comply with all requests for information made by Administrator reasonably necessary for Administrator to fulfill its duties under this Agreement. Any documentation received by Employer that should have been provided to Administrator shall be promptly forwarded to Administrator. H. Authorized Representatives. Until otherwise advised in writing by Employer, Administrator may accept the authority and rely upon the instructions of, or documents signed by, any representatives of Employer listed in Exhibit B. Additional documentation, specifying persons authorized for various purposes, may also be executed by the parties from time to time, and Administrator shall be entitled to rely upon such documentation without questions, unless it has actual knowledge that such person's authority has been revoked. 1 Legal Obligations. Employer shall possess ultimate responsibility and authority for the operation of the HSA Program and for its compliance with all applicable laws and regulations applicable to the HSA Program. 1 V. Records &Information A. Maintenance and Access. Administrator and HSA Program Administrator shall maintain adequate records relating to the terms and operation of the HSA Program for at least an eight (8) year period. Each 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No, 11 0.0.0) 6 V. Responsibility party shall have access to the records relating to the HSA Program maintained by the other party during normal business hours and upon reasonable notice and request and subject to applicable laws and regulations. The parties shall maintain the confidentiality of any information relating to Participants and the HSA Program in accordance with applicable laws and regulations. B. Record Use. Administrator and Employer agree that the names, addresses, telephone numbers, Social Security numbers, and other personal information relating to Participants, which Administrator may obtain as a result of performing Administrative Services, may be collected, maintained, and used by Administrator and Employer as necessary to administer the HSA Program. Al parties agree that such information shall be considered confidential and protected as required under applicable law. C. Confidential Business Information. Administrator and Employer shall each take all necessary steps to protect the other party's confidential business information. Such information shall not be disclosed to third parties without the express written consent of the other parties unless required by law or court order. D. Nonpublic Data, Administrator and Employer shall comply with applicable state law governing the use and disclosure of nonpublic, private, and/or confidentiai data to the extent applicable. E. Transfer of Records. When this Agreement ends, Administrator may transfer to Employer and /or any successor administrator those records Administrator determines are reasonably necessary to effectuate a smooth transition of administration of the HSA Program and any other records Administrator possesses that relate to the HSA Program. Administrator intends that this transfer of records will satisfy its obligation to maintain such records as described above. Administrator shall provide Employer an opportunity to review the records and obtain copies of any such records in addition to the records Administrator has identified as necessary for a smooth transition or otherwise transferred. The details of such transfer including, but not limited to, the means, method and timing, shall be agreed to by the parties. Al costs associated with such a record review and transfer will be paid by Employer. Each party is r',sponsible for its own acts and omissions and the results thereof to the extent authorized by law, Minnesota Statutes CM titer 466 and other applicable law govern the Employer's liability © 2011 Genesis Employee Benefits, inc. Health Savings Account Administration Agreement (No. 11.0.0.0) 7 VI. Term and Termination A. Term. This Agreement is effective as of the date first written hereinabove and shall continue for a period of twelve (12) consecutive months and for each twelve (12) consecutive month period thereafter until the termination of this Agreement pursuant to this Section VI of the Agreement. B. Termination. This Agreement may be terminated as of the expiration of a term of this Agreement by either party giving written notice of intention to terminate not less than ninety (90) days from the expiration of said term. C. Termination For Cause. Either party shall have the right to immediately terminate the Agreement upon: 1. The material breach of the terms of this Agreement, by either Administrator or Employer, including failure to remit service fees due Administrator, if such material breach is not corrected within ten (10) days of receipt of written notice specifying the nature of the breach to the satisfaction of the non- breaching party; 2. The bankruptcy or insolvency of Employer or Administrator; or 3. The enactment of any law, promulgation of any regulation or action of any State or Federal agency or authority which makes or declares illegal the continuance of this Agreement or the performance of any of the services of Administrator hereunder. D. Post- Termination Obligations. Administrator may, as mutually agreed upon by Employer and Administrator, provide certain administrative services following the termination of this Agreement. G 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0.0.0) VII. Miscellaneous A. Agreement Amendment. This Agreement may be amended only by mutual agreement in writing executed by all parties, except that Administrator may amend this Agreement to the extent necessary to comply with applicable federal, state or local laws or regulations. B. Notices. All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and delivered personally, or sent by registered or certified mail or nationally recognized overnight carrier, postage prepaid, electronic transmission, or by facsimile transmission, to the address set forth below, or to such other address set forth in a notice given in the manner herein provided. All such notices, requests, information or other communications shall be deemed to have been given (1) when delivered if personally delivered, (ii) three business days after having been placed in the mail, if delivered by registered or certified mail, (iii) the business day after having been placed with a nationally recognized overnight carrier, if delivered by nationally recognized overnight carrier, and (iv) the business day after transmittal by facsimile if transmitted with electronic confirmation of receipt. If to Employer: © 2011 Genesis Employee Benefits, Inc, Health Savings Account Administration Agreement (No. 11.0.0.0) City of Lakeville and Lakeville Arenas Attn :Cynthia Joosten 20195 Holyoke Avenue Lakeville, MN 55044 Telephone: 952- 985 -4491 Fax: 952 - 985 -4489 If to Administrator: Genesis Employee Benefits, Inc. Attn: President One Braemar Office Park 8000 West 78 Street, Suite 320 Minneapolis, MN 55439 -2506 Telephone: 888- 308 -8322 Fax: 866 - 680 -0614 Upon the occurrence of a change in any of the above address information, each party shall notify the other party(ies) of such change within five (5) business days of the effective date of the change. C. Severability. The provisions of this Agreement are severable. If any provision of this Agreement is held invalid by a court of law or other 9 tribunal, the invalidity of any provision will riot affect any other provision of this Agreement. D. Survival. The rights and obligations described in Sections IV, V, and VI shall survive termination of this Agreement. E. No Waiver of Rights. Nothing in this Agreement shall be deemed to limit or abrogate any right or remedy available under law. The failure of any party to insist upon the strict observation or performance of any provision of this Agreement or to exercise any right or remedy shall not impair or waive any such right or remedy. F. Copyrighted Works. The Employer acknowledges that Administrator and its agents are the sole copyright owners of all administrative guides and forms and all other materials provided under the terms of this Agreement and that such materials are proprietary to Administrator. Administrator grants Employer a nonexclusive, nontransferable right to copy such materials provided such copies are needed for the sole purpose of collecting and reporting information regarding Participants or notifying Participants of information regarding the HSA Program. Other materials provided by Administrator shall not be copied or reproduced by Employer without Administrator's prior written consent. G. Non- Assumption of Liabilities. Unless specifically provided in this Agreement, the parties do not assume the existing or future obligations, liabilities or debts of the other party. H. Entire Agreement. This Agreement shall supersede and replace any and all other agreements between the parties relating to the same subject matter. This Agreement contains the entire agreement and understanding of the parties relating to the subject matter hereof, except as otherwise provided in this Agreement. Governing Law. The Agreement shall be governed by and interpreted in accordance with applicable federal law. To the extent the federal law does not govern, this Agreement shall be governed by the laws of the State of Minnesota and the courts in such state shall have sole and exclusive jurisdiction of any dispute related hereto and arising hereunder. J. Independent Contractors. Administrator shall be construed to be acting as an independent contractor and not as an employee of Employer. Administrator and Employer shall not have the power or authority to act for or on behalf of, or to bind the other party, except as set forth in this Agreement, K. Third Party Beneficiaries. The obligations of each party to this Agreement shall inure solely to the benefit of the other signatory © 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0.0.0) 10 party(ies). Except as expressly provided in this Agreement, no person or entity is intended to be or shall be construed or deemed to be a third party beneficiary of this Agreement. L. Successors and Assigns. This Agreement shall be binding on any successors, assigns and subcontractors of the parties authorized under this Agreement. M. Audit Rights. The parties agree to cooperate in all reasonable audits. Audit fees shall be payable by the party initiating the audit. Audits shall be conducted using procedures mutually agreed upon by the parties. Results of the audit may be shared with the party being audited at the sole discretion of the party initiating the audit. N. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. O. Force Majeure. Neither party shall be liable for any delay or failure to perform its obligations under this Agreement arising out of a cause beyond its control or without its fault or negligence. Such causes may include, but are not limited to, fires, floods, and natural disasters. I N WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the effective date indicated above. EMPLOYER ADMINISTRATOR By: By: Authorized Representative of Title: Genesis Employee Benefits, Inc. Its: 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0 -0.0) 11 Debit Card Transaction NIC Card Replacement (per card) $5.00 Non - sufficient Funds $25.00 Stop Check Service $25.00 HSA Paper aleck Distribution $2.00 HSA Closure Fee $25.O0 Printed HSAAccount Summary $1.50 Description of Standard Service Fee Initial Set -Up Fee NIC Monthiy Account Fee $3.50 HSAAccount Setup Fee - Online NIC HSA Account Setup Fee — Paper (per enrollment keyed) $waived 125 Document Fee (by request: initial here ) $375.00 125 SPD Fee (by request: initial here ) $100.00 EMPLOYER FEES EXHIBIT A Administrative Fees The following standard administrative fees shall be paid by Employer: ACCOUNT HOLDER TRANSACTIONAL FEES as applicable O 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0.0.0) 12 EXH I BIT B Authorized Representatives Name: Signature: Name: Signature: Name: Signature: Name: Signature: © 2011 Genesis Employee Benefits, Inc. Health Savings Account Administration Agreement (No. 11.0.0.0) 13