COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

BENEPLUS Plan Revision

 

SUBJECT/PROPOSAL/REQUEST:

Requesting approval to change the “Claims Submission Deadlines” within the BENEPLUS Plan to incorporate a 2 ˝ month grace period.

 

STAFF CONTACT(S):

Tucker, White, Davis, Trank, Wiggans, Suyes, Gerome, Koonce, Critzer

 

LEGAL REVIEW:   Yes

 

AGENDA DATE:

August 10, 2005

 

ACTION:                             INFORMATION:   

 

CONSENT AGENDA:

  ACTION:    X                     INFORMATION:   

 

 

ATTACHMENTS:   Yes

 

 

REVIEWED BY: 

 


BACKGROUND: 

The County’s Flexible Health Benefits Plan (BENEPLUS) was established in 1990 to permit eligible employees to pay for certain health and dependent care benefits on a pre-tax basis.  This pre-taxed reimbursement is allowed under Section 125 of the IRS Code and is commonly referred to “Cafeteria Plans.”  One of the mandatory requirements of this IRS code section is that all remaining unused benefits or contributions remaining at the end of the plan year will be forfeited. This rule is commonly referred to as the “use-it-or-lose-it” rule.  

 

The IRS recently approved a change to Section 125, permitting a 2 ˝ month grace period immediately following the end of each plan year during which unused benefits or contributions, remaining at the end of the plan year, may be paid or reimbursed to plan participants for qualified benefit expenses incurred during the grace period. 

 

Section 13 of the County’s BENEPLUS plan provides that the plan may be amended from time to time by the Board of Supervisors.  Section 9.04 of the plan states that claims submitted for reimbursement must be submitted to the Plan Administrator no later than thirty (30) days after the earlier of the end of the Plan Year or the end of the Participant’s period of coverage.  If approved by the Board, the IRS-approved change would extend this submission deadline by up to 2 ˝ months.  

 

STRATEGIC PLAN:

4.1 Provide effective, responsive and courteous service to our customers.

 

DISCUSSION:

This change would allow Plan Participants to expand their reimbursement period to a maximum of 14 ˝ months.  Currently, Plan Participants must submit requests for reimbursement within the Plan year or within 30 days after the earlier of the end of the Plan Year or the end of the Participant’s period of coverage, if the Participant has ceased to make Plan Contributions.  The longer submission period would directly benefit eligible employees, whose unused benefits or contributions remaining at the end of the plan year would otherwise be forfeited.

 

BUDGET IMPACT:

No Impact.

 

RECOMMENDATIONS:

Staff recommends that the Board approve an amendment to the BENEPLUS plan incorporating the IRS-approved change and extending the claims submission deadline by the 2 ˝ month grace period.  The amended language is set forth in a new subsection 9.05.

 

ATTACHMENTS:

A – COUNTY OF ALBEMARLE FLEXIBLE HEALTH BENEFITS PLAN (BENEPLUS)

B - Internal Revenue Bulletin: 2005-23, Notice 2005-42
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