3.5 Health Care Savings Plan
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration Assistant City Administrator/Human Resources Hille November 13, 2023
PRESENTER(s) REVIEWED BY: ITEM #:
Consent City Administrator/Finance Director Flaherty 3.5 – Health Care Savings Plan
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
Is a strong organization that is committed to leading the community through innovative communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and expectations in a
cost-effective manner.
X Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff recommends the City Council approve a memorandum of understanding.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:
City Staff is proposing to amend the benefit for individuals who are ineligible for the Health Savings Account (HSA)
employer contributions. A Health Care Savings Plan (HCSP) is a benefit for employees who are ineligible for Health
Savings Account contributions. This contribution would match the Employer contributions to HSAs and would be
contributions on a per pay period interval. The proposed amendment would increase, with the 2024 HSA amount, to $75
per pay period.
Health Care Savings Plan is a state sponsored account, through the Minnesota State Retirement System (MSRS). Approval
of the Memorandum of Understanding is a requirement from MSRS for participation.
SUPPORTING DOCUMENTS ATTACHED:
• Memorandum of Understanding
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to approve the Memorandum of Understanding between the City of Otsego and Minnesota State Retirement
Systems, Amending a Health Care Savings Plan through MSRS.
BUDGET INFORMATION
FUNDING: BUDGETED:
Fund 101 – General (Multiple Departments)
Fund 601 – Water Utility
Fund 602 – Sanitary Sewer Utility
Yes
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
MEMORANDUM OF UNDERSTANDING
HEALTH CARE SAVINGS PLAN PROGRAM
MINNESOTA STATE RETIREMENT SYSTEM
City of Otsego – Ineligible HSA Employees
Employees of City of Otsego who are full-time and ineligible for Health Savings Account (HSA)
contributions will participate in the Health Care Savings Plan (HCSP) administered by Minnesota State
Retirement System (MSRS). All current and future employees of the City will participate as outlined by
this agreement.
This policy is effective January 1, 2024, and will remain in force for 2 years or until renewed by the
parties, whichever is later.
Eligible employees include: Full-time employees not enrolled in City sponsored Health Insurance, full-
time employees not enrolled in a High Deductible Health Plan (HDHP), and individuals who do not
qualify for the City HSA plan, but are full-time benefit eligible employees.
City of Otsego will handle the administrative responsibilities of remitting and accounting for the
employee contributions to MSRS. Contributions to the HCSP will be as follows:
• Employer contribution of $75 per pay period for eligible employees.
Individual members may neither increase nor decrease their contributions from the amount established
by this agreement. All employees must participate as outlined by this agreement unless eligible to opt
out of the Plan. The employee must apply for a waiver in a format approved by MSRS.
Upon the employee’s death, contributions owed but not yet paid to the HCSP will be paid to the
employee’s designated beneficiary.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk