Agenda - Council - 02/08/2021 - Laserfiche WebLink

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burdensome and will require significant administrative time and effort. Because most of these employees will not qualify for coverage under the ACA, the effort does not result in a worthwhile outcome. There are also situations where employees who are currently working more than 30 hours per week in a city will now be eligible for health care coverage by that city, which will drive up city costs significantly, particularly for cities using the "duty crew" concept at fire stations to ensure adequate daytime response. Finally, there are provisions which require the city to offer coverage to full-time students who are already covered by their parents' insurance and do not need the coverage through the city, which results in wasted effort. Furthermore, cities that provide health insurance coverage to their employees should not be subject to the federal excise or so-called Cadillac Tax when effective in 2022, which will result in substantial costs to Minnesota taxpayers. Response: The League of Minnesota Cities supports the intent of the ACA to provide affordable health care coverage to all Minnesota residents. However, prior to implementation, Congress should: a) Exempt employees under age 26 who are covered by their parents' insurance; b) Exempt (from coverage requirements) employees who work in recreational facilities and programs owned and operated by governmental entities; c) Exempt elected officials from being counted as "employees" for the purposes of the ACA; and Revise the provisions of the federal excise "Cadillac Tax" so that it does not penalize employers and instead provides incentives to strengthen wellness and disease prevention effort. 128 FED-6. Amended Internal Revenue Code Regarding 403(b) Retirement Plans Issue: Section 403(b)(1)(A)(ii) of the Internal Revenue Code allows an employer that is a State, a political subdivision of a State, or an agency or instrumentality of a State or a political subdivision of a State to establish a 403(b) retirement plan for employees who perform services for educational organizations as described in Section 170(b)(1)(A)(ii) of the Internal Revenue Code. This provision of the Internal Revenue Code allows employees to defer substantially more income for retirement savings than their city government employee counterparts. While government employees who do not perform services for an educational organization may participant in a 457(b) deferred compensation plan, they may not participate in a 403(b) retirement plan. Government employees who perform services for an educational organization are able to participate in both a 403(b) plan and a 457(b) deferred compensation plan. Furthermore, as a result of the amendment to Section 457(c) of the Internal Revenue Code by the Economic Growth and Tax Relief Reconciliation Act of 2001, deferrals to a 457(b) plan are not coordinated with elective deferrals made to a 403(b) plan for purposes of complying with the limit on pre-tax contributions to either plan. Both employee groups serve the public and should be treated similarly under the Internal Revenue Code for purposes of tax - deferred retirement savings plans." Response: Congress should amend Section 403(b)(1)(A)(ii) of the Internal Revenue Code to allow an employer that is a State, a political subdivision of a State, or an agency or instrumentality of a State or political subdivision to establish a