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FED-3. IRS Regulations on Death <br />Benefits <br />Issue: Current IRS regulations do not allow <br />any type of death benefit to be included in a <br />post -employment health savings plan and <br />other tax-free funding vehicles. If the <br />employee who owns the savings plan <br />account dies, he or she cannot leave the <br />remaining funds to a designated beneficiary <br />(unless the beneficiary is a spouse or <br />dependent child). If the employee does not <br />have a spouse or dependent child, the funds <br />are typically redistributed among plan <br />participants. A death benefit provision is an <br />attractive feature for many employee groups. <br />Response: IRS regulations should be <br />changed to allow post -employment health <br />savings plans and other tax-free vehicles <br />for both active employees and retirees to <br />include a provision that allows the <br />employee to designate beneficiaries in <br />addition to spouses or children. <br />FED-4. Federal Public Safety <br />Collective Bargaining Bill <br />Issue: Congress is considering a bill that <br />would require all states to establish <br />collective bargaining procedures for all <br />public safety employees. The bill directs the <br />Federal Labor Relations Authority (FLRA) <br />to determine, state by state, whether it meets <br />the bill's requirements with regard to <br />collective bargaining rights for public safety <br />employees. While it appears Minnesota is <br />likely to pass the tests set out by the bill, <br />federal public sector lobbyists have <br />expressed serious concern that the bill is <br />very much open to interpretation. In <br />addition, the bill directs the FLRA to <br />"consider and give weight, to the maximum <br />extent practicable, to the opinion of affected <br />employee organizations." <br />Response: The League of Minnesota <br />Cities opposes the federal collective <br />bargaining bill for public sector <br />employees. Public sector collective <br />bargaining should be left to the <br />determination of each state. <br />FED-5. Federal Health Care <br />Reform <br />Issue: Certain provisions of the Patient <br />Protection and Affordable Care Act <br />(commonly referred to as the federal health <br />care reform law or Affordable Care Act <br />(ACA)) are problematic for cities. These <br />issues range from administratively difficult <br />to very costly. Tracking employee hours, <br />particularly hours of seasonal and temporary <br />employees and council members, is <br />burdensome and will require significant <br />administrative time and effort. Because most <br />of these employees will not qualify for <br />coverage under the ACA, the effort does not <br />result in a worthwhile outcome. There are <br />also situations where employees who are <br />currently working more than 30 hours per <br />week in a city will now be eligible for health <br />care coverage by that city, which will drive <br />up city costs significantly, particularly for <br />cities using the "duty crew" concept at fire <br />stations to ensure adequate daytime <br />response. Finally, there are provisions which <br />require the city to offer coverage to full-time <br />students who are already covered by their <br />parents' insurance and do not need the <br />coverage through the city, which results in <br />wasted effort. Furthermore, cities that <br />provide health insurance coverage to their <br />employees should not be subject to the <br />federal excise or so-called Cadillac Tax, <br />which will result in substantial costs to <br />Minnesota taxpayers. <br />Response: The League of Minnesota <br />Cities supports the intent of the ACA to <br />provide affordable health care coverage <br />to all Minnesota residents. However, <br />League of Minnesota Cities <br />2018 City Policies Page 100 <br />