AG 13-228 - VEBA SERVICES GROUPI
1 RETURN TO: J J aim\ 1.61 EXT: as-3
CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM
1. ORIGINATING DEPT./DIV: 4.A. rn c tel SOI.I_rC.�S
2. ORIGINATING STAFF PERSON: EXT:eZ3' 3. DATE REQ. BY:
4. TYPE OF DOCUMENT (CHECK ONE):
❑ CONTRACTOR SELECTION DOCUMENT (E.G., RFB, RFP, RFQ)
❑ PUBLIC WORKS CONTRACT
❑ PROFESSIONAL SERVICE AGREEMENT
❑ GOODS AND SERVICE AGREEMENT
❑ REAL ESTATE DOCUMENT
❑ ORDINANCE a
A�CONTRACT AMENDMENT (AG #): 3' Z2
❑ OTHER
❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT
❑ MAINTENANCE AGREEMENT
❑ HUMAN SERVICES / CDBG
❑ SECURITY DOCUMENT (E.G. BOND RELATED DOCUMENTS)
❑ RESOLUTION
❑ INTERLOCAL
io to
5. PROJECT NAME: 4 - \(�.A / v' Q (a \
6. NAME OF CONTRACTOR:
ADDRESS: : _ D F} _ Q ' :��: TELEPHONE
E -MAIL: jnYQve.bA. FAX: 21g. 3i7 3020
SIGNATURE NAME: TITLE
7. EXHIBITS AND ATTACHMENTS: ❑ SCOPE, WORK OR SERVICES ❑ COMPENSATION ❑ INSURANCE REQUIREMENTS /CERTIFICATE ❑ ALL
OTHER REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN ❑ REQUIRED LICENSES ❑ PRIOR CONTRACT /AMENDMENTS
8. TERM: COMMENCEMENT DATE:
COMPLETION DATE:
9. TOTAL COMPENSATION $ (INCLUDE EXPENSES AND SALES TAX, IF ANY)
(IF CALCULATED ON HOURLY LABOR CHARGE - ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES)
REIMBURSABLE EXPENSE: ❑ YES ❑ NO IF YES, MAXIMUM DOLLAR AMOUNT: $
IS SALES TAX OWED ❑ YES ❑ NO IF YES, $
RETAINAGE: RETAINAGE AMOUNT: ❑ RETAINAGE BY (SEE CONTRACT) OR ❑ RETAINAGE BOND PROVIDED
PAID BY: ❑ CONTRACTOR ❑ CITY
❑ PURCHASING: PLEASE CHARGE TO:
10. DOCUMENT /CONTRACT REVIEW INITIAL /DATE REVIEWED INITIAL /DATE APPROVED
❑ PROJECT MANAGER
❑ DIRECTOR
❑ RISK MANAGEMENT (IF APPLICABLE)
❑ LAW N2.. L hiSq' I I■
11. COUNCIL APPROVAL (IF APPLICABLE) COMMITTEE APPROVAL DATE: COUNCIL APPROVAL DATE:
12. CONTRACT SIGNATURE ROUTING
❑ SENT TO VENDOR/CONTRACTOR DATE SENT: DATE REC'D:
❑ ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE, LICENSES, EXHIBITS
❑ LAW DEPARTMENT
❑ CHIEF OF STAFF
❑ SIGNATORY (MAYOR OR DIRECTOR)
❑ CITY CLERK
❑ ASSIGNED AG#
❑ SIGNED COPY RETURNED
INITIAL / DATE SIGNED
A 2I qA 41 4441.
DATE SENT: 111 -` 4
COMM TS:�I E- lbtt-(f
EXHIBIT A
ANNUAL EMPLOYER CERTIFICATION REGARDING
HRA INTEGRATION WITH A QUALIFIED GROUP PLAN
The undersigned, a duly authorized officer of the Employer named below, hereby certifies the following
on behalf of such Employer:
(a) The Employer has previously adopted and made contributions into the Voluntary
Employees' Beneficiary Association Standard Health Care Reimbursement Plan For
Public Employees in the Northwest (also referred to as the "HRA VEBA Standard HRA
Plan ") offered by the Voluntary Employees' Beneficiary Association Trust for Public
Employees in the Northwest (as the same may be amended or restated from time to time,
the "Trust ")
(b) The Employer will make contributions into the HRA VEBA Standard HRA Plan only on
behalf of participants who are enrolled in the Employer's group health plan or another
Qualified Group Health Plan that provides Minimum Value (as described in "What is a
Qualified Group Health Plan ?" available through the Plan's employer web portal) ; and
(c) To the extent Employer makes contributions into the HRA VEBA Standard HRA Plan on
behalf of any participants, the Employer will, at least annually, either (i) confirm that
such participants are enrolled in the Employer's group health plan or (ii) require such
participants to certify to the Employer that they are enrolled in a Qualified Group Health
Plan for the applicable HRA Plan year; and
(d) The Employer will use its best efforts to assist the Plan and Trust to correct or reverse
any contributions made into the HRA VEBA Standard HRA Plan that are not permitted
under the Standard HRA Plan document.
IN WITNESS WHEREOF, the Employer has caused this Annual Certification to be executed and
delivered, as evidenced by the signature below of its authorized officer.
Employer
Name:
By:
City of Federal Way
orized signature
HR Manager
Title
Jean Stanley
Printed name
1 0/26/2016
Date
RETURN TO: EXT:
CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM
I . ORIGINATING DEPT. /DIV: LAW / HUMAN RESOURCES
2. ORIGINATING STAFF PERSON: JEAN STANLEY EXT: 2532 3. DATE REQ. BY:
4. TYPE OF DOCUMENT (CHECK ONE):
• CONTRACTOR SELECTION DOCUMENT (E.G., RFB, RFP, RFQ)
• PUBLIC WORKS CONTRACT ❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT
• PROFESSIONAL SERVICE AGREEMENT ❑ MAINTENANCE AGREEMENT
• GOODS AND SERVICE AGREEMENT ❑ HUMAN SERVICES/ CDBG
• REAL ESTATE DOCUMENT ❑ SECURITY DOCUMENT (E.G. BOND RELATED DOCUMENTS)
• ORDINANCE ❑ RESOLUTION
• CONTRACT AMENDMENT(AG #): ❑ INTERLOCAL
J( OTHER HR / VEBA EMPLOYER ADOPTION AGREEMENT
5. PROJECT NAME: HEALTH REIMBURSEMENT ARRANGEMENT/ VOLUNTARY EMPLOYEES BENEFITASSOCIATION
(HRA /VEBA) PLAN
6. NAME OF CONTRACTOR: VEBA SERVICES GROUP
ADDRESS: TELEPHONE
E -MAIL: FAX:
SIGNATURE NAME: TITLE
7. EXHIBITS AND ATTACHMENTS: ❑ SCOPE, WORK OR SERVICES ❑ COMPENSATION ❑ INSURANCE REQUIREMENTS /CERTIFICATE ❑ ALL
OTHER REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN ❑ REQUIRED LICENSES ❑ PRIOR CONTRACT /AMENDMENTS
8. TERM: COMMENCEMENT DATE: COMPLETION DATE:
9. TOTAL COMPENSATION $ (INCLUDE EXPENSES AND SALES TAX, IF ANY)
(IF CALCULATED ON HOURLY LABOR CHARGE - ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES)
REIMBURSABLE EXPENSE: ❑ YES ❑ NO IF YES, MAXIMUM DOLLAR AMOUNT: $
IS SALES TAX OWED ❑ YES ❑ NO IF YES, $ PAID BY: ❑ CONTRACTOR ❑ CITY
❑ PURCHASING: PLEASE CHARGE TO:
10. DOCUMENT /CONTRACT REVIEW INITIAL / DATE REVIEWED INITIAL / DATE APPROVED
• PROJECT MANAGER
• DI.RECTOR
• RISK MANAGEMENT (IF APPLICABLE)
• LAW
11. COUNCIL APPROVAL (IF APPLtCABLE) COMMITTEE APPROVAL DATE: COUNCIL APPROVAL DATE:
12. CONTRACT SIGNATURE ROUTING
❑ SENT TO VENDOR/CONTRACTOR DATE SENT: DATE REC'D:
❑ ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE, LICENSES, EXHIBITS
INITIAL / DATE SIGNED
❑ LAW DEPARTMENT
'T SIGNATORY (MAYOR OR DIRECTOR)
❑ CITY CLERK
Q ASSIGNED AG# AG# 16 -2216
❑ SIGNED COPY RETURNED DATE SENT:
COMMENTS:
11/9
HRA VEBA Employer Adoption Agreement
Employer Data Page
Employer contact information will be kept on file by VSG and the Plan TPA. This will help these
primary service providers communicate with the appropriate individual(s) when questions or
issues arise. Please immediately notify your VSG client consultant if your primary contact
information changes.
I SECTION 1: EMPLOYER INFORMATION
Employer Name: City of Federal Way
Employer Address: 33325 8th Avenue South Federal Way WA 98003
Street Address City State Zip
Employer Phone: 253- 835 -2532
Employer Fax: 253 -835 -2509
Estimated number of newly - enrolling employees within the next 12 months:
Plan Effective Date: 01/01/2014
Employer Tax Identification Number: 91- 1462550 Total Number of FTEs: 270
a) Contact for General Plan Communications:
Please identify the primary business or administrative contact who should receive official Plan communications (such as amendments) and
other time sensitive administrative and operational communications and information. This person will receive your counter- signed Adoption
Agreement and Employer Welcome kit.
Contact Name: Jean Stanley
Mailing Address (if different than above):
Telephone: 253 -835 -2532
Contact Title: HR Manager
E -mail: J can .stanley @cityoffederalway.00m
b) Contact for Enrollment /Payroll Contribution Matters:
Please identify the person who is generally responsible for facilitating participant enrollment and Employer contribution remittance.
Contact Name: Toni Bradshaw
Mailing Address (if different than above):
Telephone: 253-835-2522
Contact Title: Accounting Tech. 21Payroll
E -mail: toni .bradshaw @cityoffederalway.com
SECTION 3: FOR INTERNAL USE ONLY —To be completed by VSG
VSG Client Consultant: Phone:
E -mail:
PSE11(10 -13) PRC Page 5 of 17
HRA VEBA
EMPLOYER ADOPTION AGREEMENT
VEBA TRUST FOR PUBLIC EMPLOYEES IN THE NORTHWEST
Provisions:
1. Participation. [check one only]
(a) [ ] New Employer. Employer is a newly - adopting Employer, with a plan effective date
of [enter intended plan effective date]. This
Employer Adoption Agreement may be amended only in writing as executed by
authorized officers of all parties hereto.
or
(b) [x] Renewing _Fxnployer. Employer is a currently - participating Employer and wants to
renew and ratify or amend its participation in the Plans and the Trust (as defined below).
This Employer Adoption Agreement supersedes all prior Employer Adoption
Agreements, ;if any, and may be amended only in writing as executed by authorized
officers of all parties hereto.
2. Formal Authorization of Employer. The Employer, by formal action of its governing body or
other authorized action, has formally established an employee benefit plan or arrangement
pursuant to which it desires to make one or:more contributions to the following health
reimbursement arrangement ( "BRA') plans (as each may be amended,-restated or offered under
one or more alternative plan document versions from time to time and referred`to herein as a
"Plan" or an "HRA VEBA Plan") offered by the Voluntary Employees' Beneficiary Association
Trust for Public Employees in the Northwest ( as the same may be amended or restated from time
to time, the "Trust"):
(a) VOLUNTARY EMPLOYEES' BENEFICIARY ASSOCIATION STANDARD
HEALTH CARE REBMURSEMENT PLAN FOR PUBLIC EMPLOYEES IN THE
NORTHWEST (also referred to as the "HRA VEBA Standard HRA Plan"), which is
designed to be exempt from the annual limits restrictions under the Public Health and
Safety Act( "PHSA`271 I'), as amended by the Patient Protection, Affordability, and
Care Act of 2012 ( "PPACA"), based upon integration with another group health plan in
accordance Wi6PHSA 2711 and.applicable_PPACA regulatory guidance. The BRA
VEBA Standard HRA Plan may accept only contributions (i) made on behalf of
participants who are enrolled in the Employer's group health,plan or another group health
plan that provides minimum value, as defined by applicable PPACA regulatory guidance
(a "Qualified Group Health'Plan" )u or (ii) made after December 31,'2012 but before
January 1, 2014 that are approved by the Trust as permitted or "grandfathered"
contributions under PPACA and applicable PPACA regulations and regulatory guidance.
1 For a description of the types of plans that can be considered to be Qualified Group Health Plans, refer to "What is a Qualified
Group Health Plan?" enclosed or available online at www.hraveba.org.
PSE11(10 -13) PRC Page 6 of 17
Employer Adoption Agreement -- continued
(b) VOLUNTARY EMPLOYEES' BENEFICIARY ASSOCIATION POST - SEPARATION
HEALTH CARE REIMBURSEMENT PLAN FOR PUBLIC EMPLOYEES IN THE
NORTHWEST (also referred to as the "HRA VEBA Post - separation HRA Plan "), for
which payment or reimbursement of benefits are available only after an eligible
participant has retired from employment or otherwise separated from service with his or
her Employer. The HRA VEBA Post - separation HRA Plan may accept contributions on
behalf of all participants, including participants who are not enrolled in a Qualified Group
Health Plan, as directed by the Employer pursuant to (i) this Employer Adoption
Agreement, (ii) a Plan Design Change Form, (iii) contribution reports for the Post -
separation HRA Plan submitted with participant contributions, or (iv) other written
instructions from the Employer. Contributions on behalf of participants who are not
enrolled in a Qualified Group Health Plan must be submitted by the Employer into
the Post - separation HRA Plan and included only in the Employer's contribution
report for the Post - separation HRA plan.
Through this Employer Adoption Agreement the Employer applies for participation in each Plan
and the Trust, to be effective with respect to any Plan only when both of the following have
occurred with respect to such Plan: (i) the Trust has accepted this Employer Adoption Agreement
and,(ii) the Employer has made a contribution or transfer into such Plan on behalf of one or more
participants. With respect to each Plan, the Employer shall be considered to be a sponsor of such
Plan with respect to its employees and shall have adopted and become subject to the provisions of
such Plan and the Trust only upon acceptance by the Trust and the funding by the Employer of
any contributions or transfer of assets into such Plan. The Employer acknowledges that it
understands and agrees that: (a) neither the Plans, the Trust, nor the Plans/Trust's auditor
performs audit work or otherwise examines to assure that any contribution from the Employer to
the Trust is in accordance with the Employer's plan or arrangement and that this determination is
the sole responsibility of the Employer; and (b) in the event the Employer's plan or arrangement
for contributions is determined by the IRS to permit individual employee elections and thereby
results in taxable income to affected employees, the Employer shall hold harmless and indemnify
each Plan, Trust, and their agents for liability which may result therefrom.
3. HRA VEBA Standard HRA Plan - Plan Design Selections. Pursuant to collective bargaining
agreements, other written agreements, or Employer benefits policies, whichever is applicable, the
Employer hereby elects the following options under the Plan:
(a) Participant Accounts. [check one only, unless Employer is establishing more than one
type of Participant Account;( if no option is selected, the default election will be
3(axi) — In- service and post- separation coverage; 100% vested)
(1) In almost all cases Employer will select only one Participant Account option. However, more than one option may be selected if an Employer
wants to (1) establish more than one type of Participant Account per Employee or (2) establish different types of Participant Accounts across
multiple Employee groups. Example 1— Employer wants to establish two types of Participant Accounts per employee within the Standard HRA
plan: one that permits in- service and post - separation benefits and is 100% vested, and one that permits post - separation benefits only subject
to vesting. Example 2-- Employer wants to establish different types of Participant Accounts for certain Employee groups. For Employee group
A, Employer wants to establish Participant Accounts that are subject to vesting. For Employee group B, Employer wants to establish Participant
Accounts that are 100% vested.
If Employer selects more than one Participant Account option, language must be attached that dearly describes, by Employee group, which
type(s) of Participant Account(s) are to be established for each eligible Participant.
PSE11 (10 -13) PRC Page 7 of 17
Employer Adoption Agreement— continued
Commencement of Benefits shall be as directed below by Employer or, for Employees
whose assets have been transferred by Employer from a prior plan, Employer may
additionally direct in writing that the commencement of Benefits shall coincide with the
Employee's benefits eligibility date under the prior plan, provided the Employee becomes
a Participant as defined by the Plan.
(i) [x] In- service and post- separation coverage: 100% vested. Participants shall
immediately be eligible to file claims for qualified expenses and premiums
incurred any time after a Participant Account is established with respect to such
Employee.
or
(ii) [ ] Post - separation c2iLerage only; `100% vested. Participants shall be eligible to
file claims for qualified expenses and premiums incurred after separation from
service. Employer must notify the Third -party Administrator of such Employees'
separation dates by submitting a completed Participant Status Change Form.
or
(iii) [ ] In- service and post- separation coverage, subject to vesting. Participants shall
be eligible to file claims for qualified expenses and premiums incurred while in-
service and post - separation after having met any vesting requirements. Employer
must notify the Third -party Administrator of such Employees' claims eligibility
dates, separation dates, and/or vested account percentages by submitting a
completed Participant Status Change Form.
or
(iv) [ ] Post - separation coverage only; subject to vesting. Participants shall be
eligible to file claims for qualified expenses and premiums incurred post -
separation and after having met any vesting requirements. Employer must notify
the Third -party Administrator of such Employees' separation dates and vested
account percentages by submitting a completed Participant Status Change Form.
4. HRA VEBA Post - separation HRA Plan — Plan Design Selections. Pursuant to collective
bargaining agreemerits,,other written agreements, or Employer benefits policies, whichever is
applicable, the Employer hereby elects the following options under the Plan:
(a) Participant Accounts. [check one only, unless Employer is establishing more than one
type of Participant Account;(') if no option is selected, the default election will be
4(aXi) — Post- separation coverage; 100% vested]
Commencement of Benefits shall be as directed below by Employer or, for Employees whose
assets have been transferred by Employer from a prior plan, Employer may additionally
direct in writing that the commencement of Benefits shall coincide with the Employee's
benefits eligibility date under the prior plan, provided the Employee becomes a Participant as
defined by the Plan.
PSE11(10 -13) PRC Page 8 of 17
Employer Adoption Agreement — continued
(i) [X] Post - separation coverage: 100% vested. Participants shall be eligible to file
claims for qualified.expenses and premiums incurred after separation from
service. Employer must notify the Third -party Administrator of such Employees'
separation dates by submitting a completed Participant Status Change Form.
or
(ii) [ ] Post - separation coverage: subject to vesting. Participants shall be eligible to
file claims for qualified expenses and premiums incurred post- separation and
after having met any vesting requirements. Employer must notify the Third -party
Administrator of such Employees' separation dates and vested account
percentages by submitting a completed Participant Status Change Form.
5. Forfeitures. In the event any funds within a Participant Account are forfeited in accordance
with the terms of the Plan documents, such forfeited funds will be transferred to a general
forfeiture account held within the Trust on behalf of the deceased or forfeiting Participant's
Employer to be re- contributed as future contributions or otherwise applied for the benefit of
all Participants of the Employer within the Trust, as directed by the Employer, but in all cases
subject to applicable law, the terms of the Plan document, and the rules, policies and
procedures established by the Administrator:
6. Employer Account. [check one only]
An Employer Account can be used to hold assets to offset other post - employment benefits,
such as OPEB liabilities as defined by Governmental Accounting Standards Board Statement
No. 45 (GASB 45) accounting rules. An Employer Account can also be established for the
purpose of accepting Participant Account forfeitures due to a Participant's death or failure to
meet vesting requirements, if any. An Employer Account is not required in order to receive
forfeitures as described in paragraph 5. All forfeitures will be deposited into a general
forfeiture account but may be subsequently transferred from the general forfeiture account
into an Employer Account at the direction of the Employer.
(a) [x] Employer is not establishing any Employer Account.
or
(b) [ ] Employer is establishing one or more Employer Accounts.
7. Annual Compliance Certification. The Employer acknowledges that the qualification
of the HRA VEBA Standard HRA Plan as an integrated HRA Plan depends in part
upon the Employer's compliance with the contribution restrictions under the Standard
HRA Plan and described in paragraph 2(a) above. The Employer hereby agrees to
execute and deliver herewith, and agrees to execute and deliver to the Trust annually,
a certificate substantially in the form of Exhibit A hereto, as the same may be revised
from time to time as required by law in order to maintain the qualification of the HRA
VEBA Standard Plan as an integrated HRA Plan.
PSE11(10 -13) PRC Page 9 of 17
Employer Adoption Agreement — continued
IN WITNESS WHEREOF, the Employer has approved this Employer Adoption Agreement, as
evidenced by the signature below of its authorized officer, to be effective when accepted by signature
below on behalf of HRA VEBA Trust.
Employer
Name: City of Federal Way
By: Skip Priest
pu . _ : d si . '; "re' Pr'intedriazrie, I
Mayor. l id Y! o o
Title Date
Accepted by BRA VEBA Trust:
VEBA Service Group, a Division of Gallagher Benefit Services, Inc. on behalf of the Voluntary
Employees' Beneficiary Association Trust for Public Employees in the Northwest.
t
By: Mark Wilkerson, Area President
prized si Date
PSE11(10 -13) PRC Page 10 of 17
SCHEDULE A:
FORMAL ACTION AND PLAN DESIGN DOCUMENTATION
Most items contained in this Schedule A require Employer to submit supporting documentation. The most
common and preferred method of providing the required information is to simply attach ALL applicable
excerpts from collective bargaining agreements, memorandums of understanding, other written
agreements, Employer policies, etc. that relate to the HRA VEBA Plans.
NOTE: After Employer completes and submits its Employer Adoption Agreement, Employer must complete and submit a Plan
Design Change Form prior to the adoption and implementation of future changes. Future changes include adding new
participating employee groups; adding new funding methods; ganging eAsting funding methods adding an Employer Account,
etc. The required form is available online at www.hraveba.org, or it can be requested from your VSG client consultant when
needed.
Also, when groups renew or ratify participation without making any changes, please send copies of such collective
bargaining language or other documents to VSG. This will help keep current information on file for you.
PLAN ADOPTION
1. Formal Employer Action.
Attached to this Schedule A is a copy of the formal action taken by Employer to adopt the BRA
VEBA Plans(').
DESCRIPTION OF ELIGIBILITY PROVISIONS AND FUNDING METHODS
2. Participating Employee Groins. [check one only]
(a) Attached to this Schedule A (preferred method); or
(b) x Set forth below
is information which lists the name(s) of all Employee group(s) currently eligible or
becoming eligible to participate in the Plans pursuant to collective bargaining agreements,
Employer policy, etc., whichever is applicable.
Councilmember's
(1) Formal Employer action is commonly a resolution or similar action (sample language available upon request), which is separate and apart
from collective bargaining agreements, memorandums of understanding, other written agreements, Employer policies, etc., that contain
employee group - specific details such as funding methods and corresponding eligibility requirements. For renewing Employers, the Trust does
not require any formal action; however, please provide copies of any such formal Employer action, if taken in connection with such renewal, in
order for the Trust to maintain current records.
PSE11(10 -13) PRC Page 11 of 17
Schedule A— continued
3. Employer Contribution Methods and Eligibility Requirements. [check one only (2)
(a) x Attached to this Schedule A (preferred method); or
(b) Set forth below
is information which:
(i) describes, by Employee group, the Employer contribution method(s)
applicable to each; and
(ii) defines the corresponding eligibility requirements.
(2) In most cases, Employers select option 3(a) and supply the required information by attaching the cover page and ALL applicable excerpts
from collective bargaining agreements, memorandums of understanding, other written agreements, Employer policies, etc., which relate to the
HRA VEBA Plans, and that contain clear descriptions of Employer contribution methods and corresponding definitions of eligibility.
If such documents do not exist, select option 3(b) and complete the table on the next page by entering the name, size, contribution method(s),
and eligibility requirements for each participating employee group.
EXAMPLE:
Bargaining Unit A 15 $100/month mandatory All active employee group
employee contribution members
Sick leave & vacation leave All active employee group
Bargaining Unit B 27 cash out members who separate
from service
Regardless of which option is selected, option 3(a) or 3(b), Employer must attach copies of ALL language and documentation that describes
the contribution formulas and eligibility definitions that provide the basis for its HRA VEBA contributions. For example:, if an employee group's
sick leave or vacation cash out amounts are being redirected to HRA VEBA in lieu of taxable income, ALL language and documentation which .
describes and defines the Employer's cash out program must be attached.
PSE11(10 -13) PRC Page 12 of 17
Schedule A— continued
Complete the following table if option 3(b) is selected. When entering the required information,
follow the example contained in footnote 2 on page 12.
Employee Group
Name
Councilmembers
Group Size
(# of members)
Contribution
Method(s)
$475/month employer
contribution
Eligibility
Requirement(s)
•. •
■
4. Vesting Requirements. [check one only]
(a) x All Employer contributions are 100% vested at all times (most common); or
(b) Attached to this Schedule A; or
(c) Set forth below
is information which includes a description, by Employee group, of any vesting requirements
applicable to Participant Accounts which must be satisfied before a Participant becomes
eligible to file claims for qualified expenses incurred on or after the date upon which the
Participant becomes vested.
If vesting applies, Employer is responsible for tracking when an Employee becomes eligible
to file claims after having met the Employer's vesting requirements and providing such
notification to the Third -party Administrator. Notification shall include what percentage of
the Participant's account balance is vested (e.g. 100% vested; 50% vested, 0% vested, etc.). A
Participant Status Change Form for this purpose is required and is available online or can be
requested from the Third -party Administrator.
PSE11(10 -13) PRC Page 13 of 17
Schedule A— continued
5. Automatic Enrollment for Certain Previously Enrolled Participants of Renewing Employers
[Applicable only for Renewing Employers who (a) previously adopted the HRA VEBA Plan
prior to July 1, 2013 and (b) are adopting the Post- separation HRA Plan for the first time
with this Adoption Agreement].
Attached to this Schedule. A is a list of participants ( "Initial Post - separation Participants') who
were enrolled in the HRA VEBA Plan prior to July 1, 2013, and for which the Employer wishes
to establish a Post - separation HRA participant account upon initial adoption of the Post -
separation HRA Plan. Upon receipt of this Adoption Agreement, the Trust will establish a
participant account within the Post - separation HRA Plan for all Initial Post - separation
Participants, and such participants will be automatically enrolled in the Post - separation HRA
Plan. Thereafter, a Participant Enrollment Form will be required for any other participant who is
added to the Employer's contribution report for the Post - separation HRA Plan (whether or not
such participant was enrolled prior to July 1, 2013).
[The remainder of this page is intentionally left blank.]
PSE11(10 -13) PRC Page 14 of 17
SCHEDULE B:
SUMMARY OF COMPLIANCE
REQUIREMENTS APPLICABLE TO HRAs
1. HSA Participation
(a) Employees /participants can have both a health savings account (HSA) and a health
reimbursement arrangement (HRA), such as HRA VEBA. But, for a participant or his or
her spouse to become eligible to make or receive contributions to an HSA, the participant
will need to elect limited purpose coverage.
(b) If you currently make HSA contributions on behalf of eligible employees, you may want
to consider offering HRA VEBA contributions in lieu of HSA contributions for
employees who are ineligible for HSA contributions, such as those covered under their
spouse's medical plan, health flexible spending account (FSA), etc.
(c) Your VSG client consultant is available to help you determine what employee /participant
educational communication may be warranted regarding HSA participation and
coordination of benefits.
2. No Individual Choice
(a) Applicable law governing the tax - exemption of the HRA VEBA Plans does not permit
individual choice with regards to participation (eligibility) or contribution amounts. All
employee group members defined as eligible (in Schedule A of this Employer Adoption
Agreement) must participate. If an eligible employee refuses or fails to complete the
required Enrollment Form, the employee may receive no other remuneration in lieu of the
HRA contribution.
(b) Indirect cafeteria plan funding is not permitted. This means an employee's salary
reduction election cannot affect (increase) their HRA contribution. (IRS Notice 2002 -45)
3. Form W -2 Reporting Requirements
(a) Form W -2 reporting is not required for HRAs. This is not expected to change unless the
IRS publishes further guidance. (IRS Notice 2012 -9)
4. Summary of Benefits and Coverage Requirements
(a) Newly - enrolling participants may access a Summary of Benefits and Coverage document
on the HRA VEBA website (hraveba.org). The HRA VEBA Participant Enrollment Kit
directs enrolling participants to the website, or they can contact the TPA and request a
free, paper copy.
5. Medical oat -outs
(a) Employers may not provide employees with HRA contributions to purchase individual
medical plans in lieu of offering their employees an employer - sponsored group health
plan. (HIPAA rules)
(b) Employers may provide medical opt -out HRA contributions (Le. contributions made for
any employee who has elected to not participate in the employer's group health plan)
only (i) the employee is enrolled in another Qualified Group Health Plan (other than
PSE11(10 -13) PRC Page 15 of 27
Schedule B-- continued
Medicare; see (d) below) or (ii) such contributions are directed only to the Post -
separation HRA Plan. (HIPAA and PPACA rules)
(c) The only medical opt -out HRA contributions that may be made to the Standard HRA
Plan are those on behalf of employees who are covered under another Qualified Group
Health Plan, not an individual policy.
(d) Employers may not offer medical opt -out HRA contributions to employees age 65 or
older, unless such employee has primary coverage other than Medicare. Medicare
Secondary Payer (MSP) rules prohibit Employers from providing incentives to
employees to drop employer - sponsored coverage, which would otherwise be primary to
Medicare. (MSP rules)
6. PCORI Fee
(a) Federal health care reform imposes the new Patient - Centered Outcomes Research
Institute ( PCORI) fee on all group health plans, including the HRA VEBA Plans, to fund
clinical effectiveness research.
(b) For the 2012 -13 Plan year, the PCORI fee was $1.00 per participant. The fee increased to
$2.00 per participant for the 2013 -14 Plan year and may go up each year thereafter
through the 2019 -20 Plan year based on increases in the projected per capita amount of
national health expenditures.
7. Annual Limit Restrictions under PHSA 2711 (and related PPACA guidance)
(a) The HRA VEBA Standard HRA Plan has been re- designed'to be exempt from the annual
limits restrictions under'PHSA 2711, as an HRA plan that is integrated with another
group health plan. To qualify as an integrated HRA plan, the HRA VEBA Standard HRA
Plan may accept only contributions (i) made on behalf of employees who are enrolled in
a Qualified Group Health Plan or (ii) that are approved by the Trust as "grandfathered"
contributions under PPACA and applicable PPACA regulations and regulatory guidance.
Contributions that do not qualify for the Standard HRA Plan will be accepted into the
Post - separation HRA Plan. -
(b) The HRA VEBA Post - separation HRA Plan is designed to be exempt from the annual
limits restrictions under PHSA 2711, as an-HRA plan that provides benefits to former
employees only after retirement or other separation from service from the Employer. The
HRA VEBA Post- se Plan may accept contributions for any participant,
including participants who are not enrolled in a Qualified Group Health Plan.
PSE11(10 -13) PRC Page 16 of 27
EXHIBIT A
ANNUAL EMPLOYER CERTIFICATION REGARDING
HRA INTEGRATION WITH A QUALIFIED GROUP PLAN
The undersigned, a duly authorized officer of the Employer named below, hereby certifies the following
on behalf of such Employer:
(a) The Employer has previously adopted and made contributions into the Voluntary
Employees' Beneficiary Association Standard Health Care Reimbursement Plan For
Public Employees in the Northwest (also referred to as the "HRA VEBA Standard HRA
Plan") offered by the Voluntary Employees' Beneficiary Association Trust for Public
Employees in the Northwest (as the same may be amended or restated from time to time,
the "Trust')
(b) The Employer will make contributions into the HRA VEBA Standard HRA Plan only (i)
on behalf of participants who are enrolled in the Employer's group health plan or another
Qualified Group Health Plan that provides Minimum Value (as described in "What is a
Qualified Group Health Plan?" attached hereto) or (ii) during the period after December
31, 2012 but before January 1, 2014 if such contributions are approved by the Trust (or
its designee) as permitted or "grandfathered" contributions under PPACA and applicable
PPACA regulations and regulatory guidance; and
(c) To the extent Employer makes contributions into the HRA VEBA Standard HRA Plan on
behalf of any participants, the Employer will, at least annually, either (i) confirm that
such participants are enrolled in the Employer's group health plan or (ii) require such
participants to certify to the Employer that they are enrolled in a Qualified Group Health
Plan for the applicable HRA Plan year; and
(d) The Employer will use its best efforts to assist the Trust and the Third -party
Administrator to correct or reverse any contributions made into the HRA VEBA Standard
HRA Plan that are not permitted under the Standard HRA Plan document.
IN WITNESS WHEREOF, the Employer has caused this Annual Certification to be executed and
delivered, as evidenced by the signature below of its authorized officer.
Employer
Name: City of Federal Way
By: - ' A
Au zed ature
Mayor
Title
Skip Priest
Printed name
Date T
PSE11(10 -13) PRC Page 17 of 17