Council defers decision on Ameriflex to manage city HSAs, cites runout-claims and compliance questions

The council voted to defer for one week a motion to authorize city staff to enter negotiations with Ameriflex to administer the city's health savings accounts (HSAs), flexible spending accounts (FSAs) and COBRA services.

Stuart Lee of IBC, the city's current benefits administrator, told the council that the Ameriflex proposal appeared lower priced but did not account for runout-claim administration, which he said would cost approximately $4,000 and typically is a three-month administrative charge when a new administrator takes over. Lee also warned that a claimed Ameriflex commitment to "cover any negative balance" at year-end could be inconsistent with IRS standards and could risk plan disqualification if an administrator reimburses uncovered expenses.

Council members raised concerns about timing before open enrollment and whether the city could onboard a new vendor in time. After discussion, a motion to defer the authorization for one week passed on a roll call with Shaner, Scott, Waters and Moore recorded as 'aye.'

Why it matters: Employee benefits administration affects payroll, employee access to accounts and compliance with federal tax law. Switching administrators requires careful handling of historical claims and plan language to avoid employee disruptions or compliance risks.

What's next: Staff will use the one-week deferral to follow up on runout-claim costs, to seek written confirmations on compliance-related promises and to negotiate with proposers as appropriate before returning to council.