Employee Benefit Trust Minutes - 06/20/2005 V
CITY OF WICHITYA FALLS
EMPLOYEE BENEFITS TRUST MEETING
June 20,2005
Present: Bill Sullivan, Chair
Darron Leiker, Interim City Manager
Gail Garmon, Employee Benefits Coordinator
The meeting was called to order by Bill Sullivan at 10:00 AM.
Agenda Items:
Presentation of Flex Spending Account Proposal
Eve Nieto and Lisa Johnson, the City's AFLAC representatives, were present to present
AFLAC's flex spending account program for the Board's consideration. They furnished
an extensive list of their current AFLAC clients for references, including the Wichita
Falls ISD, Postel Family CU and others.
Eve explained that AFLAC has been part of the City's benefits structure for
approximately nine years and that the company has one of the top financial ratings in the
industry. She noted that AFLAC supplies more Section 125 documents than anyone else
in the US. She further noted that AFLAC is #1 in payroll marketing, servicing over
10,000 municipalities and over 150,000 employers using AFLAC for their Section 125
plans.
Eve explained that with the money going into the Flex spending accounts pre-taxed, it
saves both the employee and the employer money. In setting up the initial flex program,
AFLAC does all of the education, enrollment paperwork, and follow-up work. She stated
that there is some liability for the City, in that if an employee enrolls, uses more than is in
the account, then leaves the City's employment, the City loses that money. She further
stated that in order to minimize this possibility, most employers limit the amount that a
participant can put into the account during the year. AFLAC offers both unreimbursed
medical accounts and dependent care accounts. Mr. Leiker stated that the City, at this
time, is only planning to implement the unreimbursed medical expense account.
Eve explained that fees to AFLAC for administration of the plan are as follows:
$450.00 initial set up fee (AFLAC will waive this fee for the City of Wichita Falls)
$3.00 monthly per participating member(AFLAC will reduce this to $1.50)
$4.50 monthly per debit card (optional)
There is no yearly renewal fee.
All materials (Board resolution, Plan document and all enrollment materials) are supplied
at no charge.
Eve explained that AFLAC offers a debit card program (at a fee) but that none of her
clients use it since claims are paid on a daily basis, assuring prompt reimbursement to the
participant.
Eve said that participants cannot cancel the program in the middle of a plan year except
as allowed by certain Federal rules, such as change in family status, etc.
AFLAC would require that the City initially set up the account with two times the
amount of monthly pledged money.
Bill Sullivan inquired as to whether or not participants would be dealing directly with
AFLAC for reimbursement of their expenses. He was assured that participants would be
dealing directly with AFLAC and no employee time would be required for filing claims.
She went over the procedure AFLAC would use to cducate and enroll the employees in
the program and gave examples of the forms to be used. It would be the employees
individual decision as to whether or not to pretax the deductions.
Eve then went over the other products that are offered by AFLAC. She asked for the
board to consider changing the current Short Term Disability plan from a 30 day to a 7
day wait period. The Board expressed an interest in the Dental Plan as a supplement to
our current dental coverage and asked her to send a copy of the rates. The Board also had
an interest in vision coverage. She explained that the vision plan through AFLAC should
be coming out in the near future and that she will forward information to us.
Last, she presented information on AFLAC's "Info One" product which is a yearly letter
sent out to employees outlining the total company cost for employee benefits. This
service is optional and is provided free of charge by AFLAC.
Discussion of Consulting Proposal
Gail Garmon, Employee Benefits Coordinator, provided the Board with a proposal for
plan consulting from Benefits Partners, Inc. Since the Board had previously agreed that
Marvin Traywick would do the consulting work, they elected not to follow up on this
proposal.
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No definite date was set for the next meeting.
The meeting was adjourned at 11:30 AM.
Respectfully submitted,
Gail Garmon
Employee Benefits Coordinator