Agenda - Council - 08/08/1989 - Closed Executive Session and Regular Meeting

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City Council and Residents May 23, 1989 An employer must provide all eligible participants (in general, all employees working more than 17-1/2 hours per week) in the plan, a reason- able notice of benefits under the plan. A single written document may satisfy the "in writing" requirements for several plans. Transition rules, in the regulations, indicate an employer generally must provide notice to employees before October 1, 1989. If the above notice is not properly and timely completed, the qualifica- tion test may be deemed not met and severe tax sanctions can be enforced against the employer and the employees. The Section 89 regulations issued March 2, 1989, provide that the notifi- cation include the following information: A fair and complete summary of the material terms of the plan that is reasonably likely to be significant to an eligible employee. Material terms include: - A general description of participation rules, - Coverage or coverages offered (including any deductible and co-payment amounts), - Timing and method of any election to participate, - Cost to employee, - How to obtain a copy of the plan, and - Name and method of contacting a person for further information. The Nondiscrimination Tests are very complex and may be changed by several bills being introduced by influential members of Congress. However, it is important that you begin to gather all the employee and plan information necessary to conduct the various tests. Our Technical Tax Memorandum 89-4 further discusses these requirements. We will be pleased to assist you in reviewing your situation and assisting you with compliance. Graphic Information Microcomputers are utilized extensively while performing audits of City records. A beneficial result is that certain trend analysis and analyti- cal relationship information can be obtained. The following pages contain certain generalized graphs produced from our electronic workpapers which may be of interest to you. Some of this information does appear in the various schedules of the City's financial statements while some infor- mation is from other sources which may not have been subject to our audit procedures.