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TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER
DATE: OCTOBER 21, 2003
SUBJECT: AMENDMENT TO THE SECTION 125 CAFETERIA PLAN (FLEXIBLE SPENDING ACCOUNT (FSA))
Adopt Resolution No. 2003- to amend the City of Rancho Palos Verdes Section 125 Cafeteria Plan Flexible Spending Account (FSA) in order to comply with the new IRS Ruling that certain qualified over-the-counter drugs may now be reimbursed under our FSA.
On September 3, 2003, the IRS announced that over-the-counter (OTC) drugs may now be reimbursed under our FSA. Conexis (FlexPro) who administers our FSA must amend our Plan Description to comply with the IRS ruling to include over-the-counter drugs in our plan definition of "Eligible Medical Expenses".
The City’s Plan Description must be amended by Resolution of the City Council to allow certain qualified over-the-counter drugs to be covered under the FSA. Adopting this amendment will provide a tax-deferred savings to our employees on necessary medications that were not covered prior to the IRS ruling.
Attachments: Resolution No 2003- ; Exhibit A, Amendment to the City of Rancho Palos Verdes Flexible Benefits Plan