Employee Benefits

Q: How can employees past age 65 avoid contributing to an HSA while also receiving Medicare coverage?

LMC: Many cities now offer a high deductible health care plan and Health Savings Account (HSA) to their employees. These plans help keep premium costs down while allowing employees to save for health care expenses using pre-tax dollars. However, employees who continue to work for the city past age 65 and delay Medicare enrollment may run into a problem.

Once an employee enrolls in any part of Medicare, they can no longer contribute to their HSA. Employees who delay their Medicare beyond their initial enrollment period (age 65) will generally receive six months of retroactive coverage for premium free Medicare Part A once they enroll. This means they will have unwittingly contributed to an HSA during a period of time in which they also received Medicare coverage.

To avoid this situation, an employee who has delayed Medicare Part A and B enrollment (usually because they are working past age 65 and still receive health care benefits from the city) should stop making contributions to their HSA six months before enrolling in Medicare.

For more information on this and other benefits issues, please consult the Benefits chapter of LMC’s HR Reference Manual at lmc.org/benefits.

Answered by Human Resources Director Laura Kushner: lkushner@lmc.org

Safety Committees

Q: Are cities required to have an employee safety committee?

LMC: Minnesota Statutes, section 182.676 requires every public or private employer of more than 25 employees to establish and administer a joint labor-management safety committee. Smaller cities should not automatically assume they are excluded from this requirement. When counting “employees” for this purpose, it is important to include in the count all volunteer firefighters, police volunteers, and other volunteers that are considered city employees for purposes of workers’ compensation benefits. The inclusion of these positions often means that even a very small city meets the definition and needs a committee.

Employers with 25 or fewer employees are also required to establish and administer a safety committee if they have a lost workday cases incidence rate in the top 10% of all rates for employers in the same industry, or if the work comp premium classification assigned to the greatest portion of the payroll for the employer has a pure premium rate as reported by the Workers’ Compensation Rating Association in the top 25% of premium rates for all classes. Your League of Minnesota Cities Insurance Trust loss control consultant can assist you in calculating these rates.

Answered by Research Analyst Angie Storlie: astorlie@lmc.org

ADA Compliance

Q: Which employees should be counted to determine if a city has 50 or more employees?

LMC: Title 28 of the Code of Federal Regulations (CFR) § 35.107 paragraph (a) requires Title II entities that employ 50 or more employees to designate an employee to coordinate its American with Disabilities Act (ADA) compliance efforts. Paragraph (b) of 28 CFR § 35.107 requires the adoption and publishing of ADA grievance procedures.

The Title II ADA Best Practices Tool Kit for State and Local Governments provides that: “The number of employees is based on a government-wide total, including employees of each department, division, or other sub-unit. Both part-time and full-time employees count. Contractors are not counted as employees for determining the number of employees.”

The police and fire departments are also included in calculating the city-wide employment pool. The factoring of seasonal employees is not specifically addressed in 28 CFR § 35.107. However, the Equal Employment Opportunity Commission (EEOC), which interprets Title I, states that a worker can be counted as an employee if he/she has worked for the employer for at least 20 calendar weeks in a year.

The cautious approach would be for cities to include all part-time employees in the count, even if there may be an argument that some part-time employees do not fall within the counting mechanism used for Title I and FMLA as the ADA is typically interpreted more broadly.

Answered by Senior Loss Control Consultant Joe Gehrts: jgehrts@lmc.org