Common use of Section 125 Benefit Plan Clause in Contracts

Section 125 Benefit Plan. 1. An IRS Code Section 125 benefit plan shall be established providing employees with the opportunity, through payroll reduction, to pay for legally permissible benefits. The City shall designate a plan administrator to administer the plan. Any and all charges, including charges for reimbursement accounts under the plan, shall be paid by the employee for whom the charge is assessed. The City shall not be responsible for the cost of administering the plan. The Union and the City shall jointly notify employees of the flexible benefit plan and of their rights and their responsibilities under the plan. Each employee must be offered opportunity to participate in the plan. 2. The Section 125 plan will consist of the current health insurance and dental insurance plans, plus any optional insurance benefits offered by the plan administrator. Employee only health coverage will be mandatory to participate in the plan, unless the employee can provide proof of alternate group health coverage in a comparable plan to the City's that meets the requirements of the Affordable Care Act. 3. The cost for medical and dental insurance which exceeds the City's contribution is the responsibility of the employee and the employee will cover the cost through payroll reduction (pre-tax dollars). Any balance remaining from the city's contribution will remain with the City. The purchase of optional benefits will be the responsibility of the employee through payroll reduction. No City contribution will be made towards optional benefits.