HomeMy WebLinkAboutFlexible Benefit Plan-Amended (2003)
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City of Oshkosh
Flexible Benefit Plan
Amended and Restated Effective 01/01/2003
[FLEXlRev, 11/02]
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This Flexible Benefit Plan is an important legal document. Diversified Benefit Services, Inc. (DBS) has
prepared it based upon DBS's understanding of the benefits that the Employer wishes to provide under the
Plan. You should consult with your attorney and/or accountant before you adopt this Plan. DBS is not
responsible for the Plan's legal or tax aspects, nor the Plan's appropriateness for the Employer. ,The
Employer recognizes that DBS is not engaged in the practice of law, and does not provide tax advice.
[FLEX/Rev. 11/02]
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City of Oshkosh
Flexible Benefit Plan
Amended and Restated Effective 01/01/2003
TABLE OF CONTENTS
ARTICLE
PAGE
FLEXIBLE BENEFIT PLAN ADOPTION AGREEMENT ............................................... A-1
ARTICLE 1. PURPOSE...... ................. ....... ............................... ............ ..................... ...... ............... .... ......... 1
ARTICLE 2. DEFINITIONS ....................................................................".....................................................1
2.01. Adoption Agreement........... ........... .............. ......... ........,.. ..... ....... .............. ....... ..... .... ........... 1
2.02. After-Tax Contributions.........................................................................................................1
2.03. Benefits """""""""""""""""""""""""""'"""""""""""""""""""""""""""""""'"........1
2.04. Board of Directors ................................................................................................................1
2.05. Claims Processing Date.......... .................................................................................... ......... 1
2.06. Code """""""""""""""""""""""""""""""""""""""""""""""""""""""""""..............1
2.07. Compensation.......... ............... .... ........".. .......... ...... ....... ......................... ............. ..... ..... ...... 1
2.08., Dependent ...........................................................................................................................1
2.09. Dependent Care FSA Account .............................................................................................1
2.10. Dependent Care Plan...........................................................................................................1
2.11. Dependent Care Recipient. ...... ....... ................ "'" .................. .............. .......... .............. ........ 2
2.12. Earned Income.... ...... ...... ....... """"'" ....... ................... """""" ...... """"""""""'" """""" ....2
2.13. Educational Institution............. .......... ........ ................ ........ ...... ....... ................. ...... ................2
2.14. Election Change Event.........................................................................................................2
2.15. Eligible Dependent Care FSA Expenses ..............................................................................4
2.16. Eligible Employee...................................... ...... ................ ....... ........".... ........... .....................4
2.17. Eligible Medical Reimbursement FSA Expenses ..................................................................4
2.18. Employer """"""""""""'" ......... ......... ................. ...... ....... ......................... ........ ..... ....... ......5
2.19. ,Health Benefits.... """"""" .............. ........... ...... .......... .......... ................. ....... ............. ...... ..... 5
2.20. Insurance Policy or Insurance Policies...................... ............................ ..................... ........... 5
2.21. Medical Reimbursement FSA Account ..... ....... ......... .......................... ....... ........................... 5
2.22. Participant """""""""""""""""""""""""""'"...................................................................5
2.23. Plan......................................................................................................................................5
2.24. Plan Administrator ................. ................... ......... ............. ...... ...... ............... ....... .................... 5
2.25. Plan Sponsor..... ................ ....... ......... .......... ........ .......................... ..... """"""" ......... ....... .... 5
2.26. Plan Year.... ........ ..... ..... .... ....... ........ ................. ............ ........ ........ ..... ....... ....... .................... 5
2.27. Pre-Tax Contributions...........................................................................................................5
2.28. Premium Conversion Feature...............................................................................................5
2.29. Qualified Caregiver...............................................................................................................5
2.30. Qualified Dependent Care Center...... .......... ............. .............. ..... .............. ................ ........... 5
2.31., Qualifying Dependent Care Services. ....... ................ ................... .............. ........................... 5
ARTICLE 3. ELIGIBILITY AND PARTICIPATION """"""""""""""""".""""""""'.""""."""""""'.""'"...6
3.01. Eligibility to Participate................ ....................... ......... ..... ......... ....... .......................... """"'" 6
3.02. Termination of Participation ........ ....... .............. """"""""""" ........ ............. ............. ....... ...... 6
3.03. Qualifying Leave Under the Family and Medical Leave Act (FMLA) ..................................6
[FLEXIRev. 11/02J
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ARTICLE
PAGE
ARTICLE 4. BENEFITS............. ... ..... ....................... .... ......... ....... ..... .......... .......... ..... .............. ...... ............ 10
4.02. Maximum Medical Reimbursement FSA Account Contributions .........................................16
4.03. Nondiscriminatory Benefits "'" """"""" """'" ....... .............. ....... ........ ...... .... ....... ................ 17
ARTICLE 5. 'LIMITATIONS """"""""""""""",""""""""""""""""""""""""""".....................................17
5.01. Maximum Overall Contributions ......... ....... ..... ....... ....... ...... ........ .......... ........... ........... ......... 17
5.02. Forfeiture of Unused Benefits .............................................................................................17
ARTICLE 6. ELECTIONS BY ELIGIBLE EMPLOYEES .............................................................................17
6.01. Effective Date of Elections..................................................................................................17
6.02. Duration of Elections ..............,...........................................................................................17
6.03. New Elections for Subsequent Plan Years.......................................................................... 17
6.04. Revocation of Election on Termination of Service............................................................... 17
6.05. Changes in Benefit Elections During the Plan Year on Account of Election
Change Events... ....... ..................... ......... """" ....... ........ .............. ...... ............... ................ 18
6.06. Effect of Change in Medical Reimbursement FSA Account Election on Maximum
Medical Reimbursement FSA Benefits ...............................................................................21
6.07. Cessation of Required Contributions..... ............ ........... """"""" .......... """"""""""""""" 22
ARTICLE 7. CONTINUATION OF HEALTH BENEFITS FOLLOWING TERMINATION OF
EMPLOYMENT OR COVERAGE ...................................................................................................22
7.01. COBRA Coverage..............................................................................................................22
7.02. Continuation of Health Benefits By Payment from Final Paycheck......................................23
7.03. Purchase of Health Benefits at 102% of Cost .....................................................................23
ARTICLE 8. DEPENDENT CARE PLAN ....................................................................................................23
8.01. General Benefits.................................................................................................................23
8.02. Maximum Annual Benefits ................... ............. ................. .................. ........ ............ ........... 24
8.03. Cash Alternative ""'" .............. ................... .................. ...... ..... .............. ............. ................. 24
8.04. Nondiscriminatory Benefits.. .............. """"'" .............. ...... """""'" ....... ....... ................. ......24
8.05. Maximum Overall Contributions................ ......... ......................... """"" """""" ..... """""'" 24
8.06. Forfeiture of Unused Benefits .............................................................................................24
ARTICLE 9. CLAIM PROCEDURES...........................................................................................................24
9.01. Health Benefits ...... ..................... ..... ............ ................. ............ ........ ............. ......... ............ 24
9.02. Medical Reimbursement FSA Account Benefits..................................................................25
9.03. Dependent Care FSA Account Benefits..............................................................................25
9.04. Premium Conversion Feature.............................................................................................25
9.05. Claims Submission Deadlines. ..... ...... ................. ......... .............. """"""""""""" .............. 26
ARTICLE 10. CLAIM AND REVIEW PROCEDURES .................................................................................26
10.01. Benefit Claim and Appeal Procedures ..............................................................................26
10.02. Benefit Claim and Appeal Procedures Applicable to Medical Reimbursement FSA
Account Benefits....... """" ...... ......... ..,.. ........... .... ... ..... ........ ""'" ...... ..... """"""" """'" ..... 27
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[FLEXIRev. 11/02}
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ARTICLE
PAGE
ARTICLE 11. PLAN ADMINISTRATOR. ............ .............. ....... .............. ...... ........ .......... ........... ..... ...... ....... 28
11.01. Plan Administrator.......... ..... ....... ............... ...... ....... ......... ..... ..... ........ ...... .................... ....... 28
ARTICLE 12. PLAN CONTRIBUTIONS......................................................................................................28
12.01. Characterization of Employer and Participant Contributions................................................ 28
12.02. Trust. ......... ........ ....... ...... ....... ................... ....... ....... ....... ....... ..... ......... "'" ......... ..... .... ......... 28
ARTICLE 13. AMENDMENT OR TERMINATION.......................................................................................28
13.0t. Amendment or Termination.. ...... ....... ....... ....... ....... ....... ..... ......... ....... .......... ............ .......... 28
ARTICLE 14. MISCELLANEOUS................. ...... .............. ....... ........ ............ .................... ................ ........... 28
14.01. Plan Administrator's Authority..... .......... ..... ............. .......... .....".............. .................... ......... 28
14.02. No Personal Liability....... ............ .............. ....... ....... """""""""'" ....... ................................29
14.03. Additional Procedures ......... ................ ...... .................... ...... ........ .............. ""'" ......" .......... 29
14.04. Plan Not an Employment Contract......................................................................................29
14.05. Severability.... ... ....... ....... ....... ..... ....... ....... .... ... ....... ....... ....... ........ ........ .... .......... ... ........ .....29
14.06. Gender and Number...........................................................................................................29
14.07. Construction """"""""""""""""""""""""""".................................................................29
. ARTICLE 15. ENTIRE AGREEMENT.... ............. .............. .............. ....... ..................... ...... ......... ......... ........ 30
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[FLEXIRev. 11/02]
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FLEXIBLE BENEFIT PLAN ADOPTION AGREEMENT
Plan Name
City of Oshkosh
Flexible Benefit Plan
Plan Type
This document is designed to qualify as a Cafeteria Plan under Code Section 125, a self-insured medical
reimbursement plan under Code Section 105, and a Dependent Care Assistance Plan under Code
Section 129.
Plan Sponsor
City of Oshkosh
215 Church Street
Oshkosh, WI 54902
Plan Administrator
City of Oshkosh
215 Church Street
Oshkosh, WI 54902
Pre-Tax Benefits Offered Under the Plan
Group Health Insurance Premiums
Medical Reimbursement FSA Account
Dependent Care Reimbursement FSA Account
Independent Premium Feature
Plan Eligibility
All full-time and part-time, salaried and hourly employees of the City working at least 975 hours per year shall
be eligible for the Plan the first of the month following 12 months of employment.
All full-time and part-time, salaried and hourly represented employees of the City Library working at least 780
hours per year shall be eligible for the Plan the first of the month following 12 months of employment.
All full-time and part-time, salaried and hourly non-represented employees of the City Library working at least
1,020 hours per year shall be eligible for the Plan the first of the month following 12 months of employment.
All temporary, seasonal, occasional, coop students, non-resident aliens, independent contractors and
employees working less than the above listed hours requirements shall be excluded from the Plan.
Plan Sponsor's Employer Identification Number rEINl
39-6005563
Flexible Benefit Plan Number
501
Effective Date of Amended and Restated Flexible Benefit Plan
01/01/2003
Flexible Benefit Plan Year
01/01 -12/31
A-I
[FLEXIRev. 11/02]
Claims Processing Dates & Other Deadlines
The deadline to submit claims will be the Thursday opposite payroll for processing on the Thursday of payroll.
Claims received after the claims deadline date will be processed on the next processing date.
Claims for expenses incurred during the Plan Year may be submitted up to 90 days after the end of the Plan
Year.
Claims for Medical Reimbursement FSA Account expensßs may be submitted up to 90 days after termination
of employment with the Employer. This is the length of time to submit claims for expenses incurred while you
were employed by the Employer and a Participant in the Flexible Benefit Plan. This is the deadline if COBRA
has not been elected after termination of employment with the Employer. See Article 7 for COBRA election.
Dependent Care expense claims may be submitted up to 90 days after termination of employment with the
Employer. This is the length of time to submit claims for expenses incurred while you were employed by the
Employer and a Participant in the Flexible Benefit Plan. COBRA does not apply to the Dependent Care FSA
Account.
Claims Submission
Send Flexible Benefit Plan Claims to the Following:
Diversified Benefit Services, Inc.
P.O. Box 260
Hartland, WI 53029
(262) 367-3300
Medical Reimbursement FSA Account Contributions
The maximum Plan Year contribution amount that can be made to a Participant's Medical Reimbursement
FSA Account is $ 5,000. For this purpose, the term "contributions" means the Plan Contributions made by the
Participants, plus the Employer Contributions, if any, made by the Employer, to such account for such year.
A-2
[FLEX/Rev. 11/02]
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ARTICLE 1. PURPOSE
The purpose of this Plan is to provide Participants a choice between taxable cash Compensation and
nontaxable Benefits specified in the Adoption Agreement. This Plan is intended to qualify as a "cafeteria
plan" under Code Section 125 and is to be interpreted in a manner consistent with the requirements of that
section. The 'Dependent Care Plan forming part of this Plan is intended to qualify as a "dependent care
assistance program" under Code Section 129 and is to be interpreted in a manner consistent with the
requirements of that section. The Medical Reimbursement FSA Account provisions of this Plan are intended
to qualify as a "self-insured medical expense reimbursement plan" under Code Section 105 and is to be
interpreted in a manner consistent with the requirements of that section.
On 1/1/02, City of Oshkosh established the City of Oshkosh Flexible Benefit Plan for the benefit of its Eligible
Employees. City of Oshkosh hereby amended and restates the Plan, into the form of this Plan document,
effective 01/01/2003.
Except as otherwise provided herein, the provisions of this amended and restated Plan shall apply only to
those individuals who are Eligible Employees on 01/01/2003. Except as otherwise specifically provided
herein, the rights and benefits, if any, of a former employee whose employment with the Employer terminated
prior to 01/01/2003 shall be determined in accordance with the provisions of the Plan as in effect from time to
time before that date.
ARTICLE 2. DEFINITIONS
2.01. "Adoption Anreement" means the Adoption Agreement forming part of this Plan that specifies the
Benefits offered hereunder, and sets forth certain identifying information about the Plan Sponsor and the
Plan.
2.02. "After-Tax Contributions" means amounts deducted from a Participant's Compensation to purchase
Benefits under the Plan on an after-tax basis.
2.03. "Benefits" means any Benefits, specified in the Adoption Agreement, that are available to Participants
under the Plan.
2.04. "Board" means the Board of the Plan Sponsor such as Board of Directors, Council, etc.
2.05. "Claims Processinn Date" means any of the dates specified in the Adoption Agreement as deadlines
for the processing of claims.
2.06. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and includes any
regulations or rulings issued thereunder.
2.07. "Compensation" means the cash wages or salary paid to an Eligible Employee by his Employer.
2.08. "Dependent" of a Participant is his dependent for Federal income tax purposes, as defined under
Code Section 152{a); provided, however, that in the case of a divorced Participant, his Dependents are those
individuals described in Code Section 21 (e){5). In the case of Health Benefits provided under the Insurance
Policies, a Participant's Dependents are those individuals defined as his dependents under such policies.
2.09. "Dependent Care FSA Account" means the flexible spending account ("FSA") under the Plan from
which Eligible Dependent Care FSA Expenses are paid.
2.10. "Dependent Care Plan" means the dependent care plan of the Employer (if adopted in the Adoption
Agreement), the terms of which are specified in Article 8 herein.
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[FLEX/Rev. 11102]
2.11. "Dependent Care Recipient" means any individual who is either:
(a) a Dependent of the Participant who is under the age of thirteen (13) and with respect to whom the
. Participant is entitled to a deduction under Code Section 151{c); or
(b) a Dependent or spouse of the Participant who is physically or mentally incapable of caring for himself or
herself.
2.12. "Earned Income" means wages, salaries, tips, commissions and other employment compensation,
but only if such amounts are includible in gross income for the taxable year, plus the amount of the
Employee's net earnings from self-employment for the taxable year (determined with regard to the deduction
allowed by Code Section 164(f)). Such term does not include any amounts excluded from earned income
under Code Section 32{c){2). In the case of a spouse who, during at least five months of each of the
calendar years covered by the Plan Year, is a full-time student at an Educational Institution or a spouse who,
during any month, is incapable of self-care, such spouse shall be deemed for each of such months to be
gainfully employed and to have Earned Income in that month of (i) $250, if the Participant incurs Eligible
Dependent Care FSA Expenses during the Plan Year for only one Dependent Care Recipient, and (ii) $500, if
the Participant incurs Eligible Dependent Care FSA Expenses during the Plan Year for two or more
Dependent Care Recipients.
2.13. "Educational Institution" means any educational institution which normally maintains a regular
faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the
place where its educational activities are regularly carried on.
2.14. "Election Change Event" means
(a) with respect to a Participant's election under this Plan relating to any Health Benefit described in
Section 4.01 (a) (i.e., any Medical Reimbursement FSA Account which is subject to the Health Insurance
Portability and Accountability Act of 1996 (HIPAA)) or Section 4.01 (b), any event that confers special
enrollment rights, as described in Code Section 9801 (f), upon the Participant, his spouse, or any of his
Dependents under HIPAA;
(b) with respect to a Participant's election under this Plan relating to any Health Benefit described in Section
4.01 (a) (i.e., .any Medical Reimbursement FSA Account, regardless of whether it is subject to HIPAA) or
Section 4.01 (b), any Dependent Care FSA Account Benefits described in Section 4.01 (c), or any group-term
life insurance Benefit described in Section 4.01{d), any change in status event described in Treasury
Regulations Section 1.125-4(c){2)(i) through (v) which affects eligibility for coverage under any such Benefits,
specifically:
(1) any event that changes a Participant's legal marital status, including the following: marriage,
death of a spouse, divorce, legal separation, and annulment;
(2) any event that changes a Participant's number of Dependents, including the following: birth,
death, adoption, and placement for adoption;
(3) any of the following events that changes the employment status of the Participant, his spouse, or
any of his Dependents: a termination or commencement of employment, a strike or lockout, a
commencement of or return from an unpaid leave of absence, a change in worksite and switching
from salaried to hourly-paid or union to non-union or vice versa, incurring a reduction or increase in
hours of employment (e.g., going from full-time to part-time), or any other similar change which
makes the individual become (or cease to be) eligible for a particular employee benefit. In addition, if
the eligibility conditions of this Plan (or any other Code Section 125 cafeteria plan of the Employer or
of any employer of the Participant's spouse or Dependent) or any other employee benefit plan of the
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[FLEX/Rev. 11/02]
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Employer (or of any such other employer) depend upon any such individual's employment status and
there is a change in that individual's employment status with the consequence that the individual
becomes (or ceases to be) eligible under any such plan, then that change shall constitute a change
in employment status under this Section 2.14{b){3). For example, if any such plan only applies to
salaried employees and an employee switches from salaried to hourly-paid with the consequence
that the employee ceases to be eligible for the plan, then that switch shall constitute a change in
employment status under this Section 2.14(b){3);
(4) any event that causes a Participant's Dependent to satisfy or cease to satisfy the eligibility
requirements for coverage on account of attainment of age, student status, or any similar
circumstance; and
(5) any change in the place of residence of the Participant, his spouse, or any of his Dependents;
(c) with respect to a Participant's election under this Plan relating to any Health Benefit described in
Section 4.01{a) (i.e., any Medical Expense Reimbursement FSA Account, regardless of whether it is subject
to HIPAA) or Section 4.01 (b), the entry of any judgment, decree, or order ("order") resulting from a divorce,
legal separation, annulment, or change in legal custody that requires Health Benefit coverage for a
Participant's Dependent child or Dependent foster child;
(d) with respect to a Participant's election under this Plan relating to any Health Benefit described in Section
4.01(a) (Le., any Medical Expense Reimbursement FSA Account, regardless of whether it is subject to
HIPAA) or Section 4.01(b), the Participant, his spouse, or any of his Dependents becoming entitled to
coverage (Le., becoming enrolled) or losing eligibility for coverage under Part A or Part B of Title XVIII
(Medicare) or Title XIX (Medicaid) of the Social Security Act, other than coverage consisting solely of benefits
under Section 1928 of the Social Security Act (the program for distribution of pediatric vaccines);
(e) with respect to a Participant's election under this Plan relating to any Health Benefit described in
Section 4.01 (b), any Dependent Care FSA Account Benefits described in Section 4.01 (c), or any group-term
life insurance Benefit described in Section 4.01 (d), any of the following cost changes during a Plan Year:
(1) an increase (or decrease) in the cost of such Benefit coverage if, under the terms of any
such Benefit, the Participant is required to make a corresponding change in his payments
thereunder (referred to herein as an "automatic cost change"); or
(2) a significant increase (or significant decrease) in the cost charged to the Participant for
such Benefit coverage, or for any indemnity, HMO, PPO or other coverage option under any
Health Benefit described in Section 4.01{b).
(f) with respect to a Participant's election under this Plan relating to any Health Benefit described in
Section 4.01 (b), any Dependent Care FSA Account Benefits described in Section 4.01 (c), or any group-
term life insurance Benefit described in Section 4.01 (d), any of the following coverage changes occurring
during a Plan Year:
(1) a significant curtailment (without loss of coverage) of the Participant's or his spouse's
or Dependent's coverage under such Benefit, or under any indemnity, HMO, PPO or
other coverage option under any Health Benefit described in Section 4.01 (b);
(2) a significant curtailment (with loss of coverage) of the Participant's or his spouse's or
Dependent's coverage under such Benefit, or under any indemnity, HMO, PPO or other
coverage option under any Health Benefit described in Section 4.01 (b); or
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[FLEXIRev. 11/02]
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the Plan Year and after the Participant has filed an election to receive Benefits under the procedures
described in Article 6.
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
3.01. Eliaibility to Participate. All Eligible Employees described in the applicable section of the Adoption
Agreement ar:eeligible to participate in this Plan, in accordance with Section 3.02.
3.02. Participation. Each Eligible Employee shall become a Participant in the Plan on the later of:
(a) the Effective Date of this Plan; or
(b) the effective date of participation set forth in the eligibility section of the Adoption Agreement.
An Eligible Employee may choose to waive participation in the Plan.
3.03. Termination of Participation. Participation in the Plan will terminate on the earliest to occur of:
(a) the date an individual ceases to be an Eligible Employee (except to the extent provided in Article
7, for COBRA qualified beneficiaries); or
(b) the date the Plan is amended to exclude such an individual from coverage; or
(c) the date the Plan is terminated.
Subject to any specific limitations for any particular Benefit which the Participant has elected: (i) participation
in the Plan will continue during any paid leave of absence; and (ii) participation in the Plan will be suspended
during any unpaid leave of absence. A Participant who terminates or is discharged from employment with
the Employer shall cease to be a Participant in the Plan on the effective date of such termination or
discharge. If such terminated employee is rehired within the same Plan Year, such employee will not be
eligible to participate in the Plan until the first date of the Plan Year following the date of rehire.
Notwithstanding the above, an individual who has ceased to be an Eligible Employee can continue to be a
Participant in the Plan as described in Article 7 and the spouse or Dependent of a Participant can become a
Participant in the Plan, if and to the extent such an individual elects continuation of Health Benefits under the
rules in Article 7.
3.04. Qualifyina Leave Under the Family and Medical Leave Act (FMLA). Notwithstanding any
provision in the Plan to the contrary, if a Participant takes a qualifying unpaid leave under the Family and
Medical Leave Act (FMLA) or applicable state law, the Employer will continue to maintain the Participant's
Health Benefits coverage on the same terms and conditions as though he were still an active Employee.
(a) Revocation or continuation of coveraae durina unpaid FMLA leave. The Employer will
either allow a Participant on unpaid FMLA leave to revoke his Health Benefits coverage, or to
continue coverage but allow the Participant to discontinue payment of his share of the cost of that
coverage, for the period of such leave.
Notwithstanding the preceding sentence, the Employer need not allow the Participant to revoke
his Health Benefits coverage for the period of the unpaid FMLA leave if the Employer pays the
Participant's share of the cost of such coverage for such period. If the Employer continues a
Participant's Health Benefits coverage during his unpaid FMLA leave, the Employer may recover
the Participant's share of the cost of such coverage when the Participant returns to work.
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[FLEXIRev. 11/02]
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If a Participant's Health Benefits coverage terminates while he is on unpaid FMLA leave (either
due to revocation of coverage or nonpayment of his share of the cost of such coverage), the
Participant has the right to be reinstated in each such coverage upon returning from the unpaid
FMLA leave. Such a Participant is entitled, to the extent required under the FMLA or applicable
state law, to be reinstated on the same terms as prior to taking FMLA leave (including family or
Dependent coverage), subject to any changes in benefit levels that may have taken place during
the period of FMLA leave. Such a Participant also has the right to revoke or change his benefit
election under Section 6.05 under the same terms and conditions as are available to Participants
who are working and not on FMLA leave.
(b) Pavinç¡ for continued coveraç¡e durinç¡ FMLA leave.
(1) Participant's and Emplover's payment responsibilities. Any Participant who
chooses to continue his Health Benefits coverage while on FMLA leave shall continue to
pay, during such leave, that share of the cost of such coverage which would be allocable
to him if he were working. For this purpose, amounts paid pursuant to such Participant's
pre-tax Compensation reduction election under Section 6.01 shall be treated as allocable
to him. The Employer also shall continue to pay, during such Participant's FMLA leave,
that share of the cost of his coverage which the Employer was paying before the
Participant's FMLA leave began.
(2) Payment options for Participants. If a Participant continues his Health Benefits
coverage while on unpaid FMLA leave, he may choose to pay for his share of the cost of
such coverage under the payment options{s) described in Section 3.04{b){2){A){B) or (C);
provided, however, that the payment option{s) for Participants who are on FMLA leave
shall be offered on terms at least as favorable as those offered to Employees who are not
on FMLA leave.
({A) Pre-pay payment option. Under the pre-pay payment option, a Participant
may pay, prior to the commencement of his FMLA leave period, the amount due
for the FMLA leave period. Participant contributions under the pre-pay payment
option may be made on a pre-tax Compensation reduction basis or on an after-
tax basis. Any such contributions that are made on a pre-tax Compensation
reduction basis may be made from any taxable Compensation (for example, from
unused sick days or vacation days) that is paid to the Participant during the
leave. However, if the Participant's FMLA leave spans two Plan Years, the
Participant may make his contributions on a pre-tax Compensation reduction
basis only for the remainder of the Plan Year in which his FMLA leave begins,
and not for any portion of the subsequent Plan Year. If the Participant
participates in the Plan during the subsequent Plan Year, he must either pre-pay
his contributions for such portion of that Plan Yéar on an after-tax basis or use
another payment option to make his contributions due for the relevant period.)
({B) Pav-as-vou-ç¡o payment option. Under the pay-as-you-go payment
option, a Participant may pay, during his FMLA leave, his share of the cost of his
coverage for the period of such leave (I) under the same schedule as payments
would have been made if he were not on FMLA leave, (II) under any other
payment schedule permitted by U.S. Department of Labor (DOL) Regulations
Section 825.210{c) (for example, under the same schedule as payments are
made for COBRA continuation coverage under Code Section 4980B), (III) under
the Employer's existing rules for payment by Employees on leave without pay, or
(IV) under any other system voluntarily agreed to between the Employer and the
Participant that is not inconsistent with Treasury Regulations Section 1.125-3 or
7
[FLEXIRev. 11/02]
"
.,
[FLEX/Rev. 11102]
DOL Regulations Section 825.21{c). Participant contributions under the pay-as-
you-go payment option generally will be made by the Participant on an after-tax
basis. However, Participant contributions under such payment option may be
made on a pre-tax Compensation reduction basis to the extent that the
contributions are made from taxable Compensation (for example, from unused
sick days or vacation days) that is paid to the Participant during the leave. The
Employer is not required to continue Health Benefits coverage for any Participant
who fails to. make required Participant contributions while on FMLA leave,
provided the Employer follows the notice procedures required under the FMLA
and applicable state law. However, if the Employer chooses to continue such
coverage for a Participant who fails to pay his share of the cost of such coverage
while on FMLA leave, the Employer shall recoup the Participant's share when he
returns from FMLA leave.)
({C) Catch-up payment option. Under the catch-up payment option, the
Employer and the Participant may agree in advance that the Participant's Health
Benefits coverage will continue during the period of unpaid FMLA leave, and that
the Participant will not pay his share of the cost of such coverage until he returns
from the FMLA leave. If a Participant chooses to use the catch-up payment
option, the Participant and the Employer must agree in advance of the coverage
period that: (I) the Participant elects to continue such coverage while on unpaid
FMLA leave; (II) the Employer assumes responsibility for advancing payment of
the Participant's share of the cost of such coverage on the Participant's behalf
during the FMLA leave; and (III) such advance payments are to be paid by the
Participant when he returns from FMLA leave. Participant contributions under
the catch-up payment option maybe made on a pre-tax Compensation reduction
basis or on an after-tax basis. Any such contributions that are made on a pre-tax
Compensation reduction basis may be made from any available taxable
Compensation (including from unused sick days and vacation days) paid to the
Participant after he returns from FMLA leave.
(3) Parity with Participants on non-FMLA leave. Whatever payment options are
offered to Participants on non-FMLA leave must be offered to Participants on FMLA
leave. In accordance with applicable FMLA requirements, the Plan may offer one or
more of the payment options described in Section 3.04{b )(2) above, with the following
exceptions:
(A) Pre-pay payment option may not be the sole option. The pre-pay
payment option described in Section 3.04{b){2){A) above may not be the sole
payment option offered under the Plan to Participants on FMLA leave. However,
the Plan may include the pre-pay payment option for Participants on FMLA leave,
even if that option is not offered to Participants on unpaid FMLA leave.]
(B) Pay-as-you-gO option. If the Employer offers the pay-as-you-go payment
option described in Section 3.04{b){2){B) above to Participants on unpaid non-
FMLA leave, it must also offer that option to Participants on FMLA leave. The
Employer shall also offer Participants on FMLA leave the pre-pay payment option
and/or the catch-up option.]
(C) Catch-up payment option may be the sole option under some
circumstances. The catch-up payment option. described in Section
3.04{b)(2){C) above may be the sole option offered to Participants on FMLA
8
leave if and only if it is the sole option offered to Participants on unpaid FMLA
leave.
(4) Voluntary waiver of Participant payments. In addition to the payment options
described in Section 3.04(b){2) above, the Employer may voluntarily waive, on a
nondiscriminatory basis, the requirement that Participants who elect to continue their
Health Benefits coverage while on FMLA leave pay the amounts the Participants would
otherwise be required to pay for the leave period.
(c) Special rules applicable to Medical Reimbursement FSA Account Benefits for
Participants on FMLA leave. To the extent required by the FMLA and applicable state law, the
Employer shall -
(1) Permit a Participant taking FMLA leave to continue coverage under the Medical
Reimbursement FSA Account Benefit while on FMLA leave; and
(2) If a Participant is on unpaid FMLA leave, either-
(A) Allow the Participant to revoke his Medical Reimbursement FSA Account
Benefit coverage; or
(B) Continue his Medical Reimbursement FSA Account Benefit coverage, but
allow the Participant to discontinue payment of his share of the cost of such
coverage during the unpaid FMLA leave period.
Regardless of the payment option selected under Section 3.04{b)(2) above, for so long
as the Participant continues his Medical Reimbursement FSA Account Benefit coverage
(or for so long as the Employer continues such coverage for a Participant who fails to pay
his share of the cost of such coverage), the full amount of the elected Medical
Reimbursement FSA Account Benefit coverage, less any prior reimbursements, must be
available to the Participant at all times, including the FMLA leave period.
If the Participant's coverage under the Medical Reimbursement FSA Account Benefit
terminates while he is on FMLA leave, the Participant shall not be entitled to receive
reimbursements for claims incurred during the period when such coverage is terminated.
If a Participant subsequently elects or the Employer requires the Participant to be
reinstated into the Medical Reimbursement FSA Account Benefit upon return from FMLA
leave for the remainder of the Plan Year, the Participant may not retroactively elect
Medical Reimbursement FSA Account Benefit coverage for claims incurred during the
period when such coverage was terminated. Upon reinstatement into the Medical
Reimbursement FSA Account Benefit upon return from FMLA leave (either because the
Participant elects reinstatement or because the Employer requires it), the Participant has
the right under the FMLA: (I) to resume coverage at the level in effect before the FMLA
leave and make up his unpaid share of the cost of such coverage; or (II) to resume such
coverage at a level that is reduced and resume paying his share of the cost of such
coverage at the level in effect before the FMLA leave. If a Participant chooses to resume
Medical Reimbursement FSA Account Benefit coverage at a level that is reduced, such
coverage shall be prorated for the period during the FMLA leave for which the Participant
did not pay his share of the cost of such coverage. In both cases, the coverage level
shall be reduced by prior reimbursements.
(d) Parity with respect to election chanQes. A Participant on FMLA leave has the right to
revoke or change elections under Section 6.05 under the same terms and conditions that apply to
Participants who are not on FMLA leave. For example, if any Health Benefits coverage offers an
9
[FLEX/Rev. 11102]
"
annual open enrollment period to actively employed Participants, then a Participant who is on
FMLA leave when the open enrollment is offered shall be offered the right to make election
changes on the same basis as other Participants. Similarly, if the Health Benefits coverage offers
a new benefit package option (such as an indemnity option, an HMO option, or a PPO option)
and allows actively employed Participants to elect the new option, then the Participant on FMLA
leave shall be allowed to elect the new option on the same basis as other Participants.
(e) Participants who are on paid FMLA leave. If a Participant is on paid FMLA leave and the
Employer mandates that he continue Health Benefit coverage while on FMLA leave, the
Participant's share of the cost of such coverage must be paid by the method used during any paid
leave (for example, by pre-tax Compensation reduction if the Participant's share of the cost of
such coverage was paid by pre-tax Compensation reduction before the FMLA leave began).
(f) No requirement to continue Dependent Care FSA Account Benefit, etc. coverage during
FMLA leave. The Employer is not required to maintain a Participant's Dependent Care FSA
Account Benefit coverage, group-term life insurance Benefit coverage, or any other non-health
benefit coverage, during FMLA leave. A Participant's entitlement to Dependent Care FSA
Account Benefit coverage, group-term life insurance Benefit coverage, and any other non-health
benefits under this Plan during a period of FMLA leave shall be determined under the Employer's
established policy for providing such coverage or benefits when the Participant is on paid or
unpaid FMLA leave. Thus, a Participant who takes FMLA leave is entitled to revoke an election
of Dependent Care FSA Account Benefit coverage, group-term life insurance Benefit coverage, or
any other non-health benefits under this Plan to the same extent as Participants taking non-FMLA
leave are permitted to revoke elections of such coverage or benefits under this Plan. If the
Employer continues a Participant's Dependent Care FSA Account Benefit coverage, group-term
life insurance Benefit coverage, or other non-health benefits during FMLA leave, the Employer is
entitled to recoup the costs incurred for paying the Participant's share of the cost of such
coverage or benefits during the FMLA leave period. Such recoupment may be on. a pre-tax
Compensation reduction basis. The Plan shall permit a Participant whose coverage terminated
while on FMLA leave (either by revocation or nonpayment of premiums) to be reinstated to the
Plan upon return from FMLA leave.
ARTICLE 4. BENEFITS
4.01. Benefits that Mav Be Purchased With Pre-Tax Contributions. From the Effective Date, and for
each Plan Year for as long as the Plan continues, the Employer shall allow each Participant to pay his share
of the Insurance Policy Premium (including his share of the cost of any self-insured Benefits) for such Plan
Year with Pre-Tax Contributions, by reducing his Compensation for such Plan Year by the amount specified
on the election form that he files with his Employer before such Plan Year begins, pursuant to the procedures
described in Articles 6 and 7 and, with respect to the amount of Pre-Tax Contributions that will be used to
pay his share of the cost of the Health Benefit described in Section 4.01, in the notice that his Employer
furnishes to him before such Plan Year begins, pursuant to Section 4.01.
Unless a Participant affirmatively elects taxable cash Compensation or affirmatively elects to pay his
share of the cost of family coverage under Insurance Policies providing Health Benefits with Pre-Tax
Contributions, he shall be deemed to have elected to pay his share of the cost of Participant-only
coverage under any such Insurance Policies for the Plan Year with Pre-Tax Contributions, by reducing his
Compensation for such Plan Year by the amount specified in the notice that his Employer furnishes to
him before such Plan Year pursuant to this Section 4.01.
At the time each Eligible Employee is hired by the Employer, the Employer shall furnish him with a notice
explaining the automatic enrollment process under this Section 4.01 and the Eligible Employee's right to
10
[FLEX/Rev. 11/02]
"
decline Particípant-only coverage and his right not to have his Compensation reduced to pay for
Participant-only coverage with Pre-Tax Contributions. The Employer notice shall include:
(i) the respective Compensation reduction amounts for Participant-only coverage, and for family
coverage (Le., coverage for the Participant, his spouse, and/or his Dependents);
(ii) the procedures which the Eligible Employee must follow to exercise his right to decline automatic
Particípant-only coverage; ,
(iii) information about the time by which the Eligible Employee must make an affirmative election to
receive taxable cash Compensation or to pay his share of the cost of family coverage, instead of
automatic Participant-only coverage; and
(iv) the period for which such an affirmative election will be effective.
The Employer also shall furnish such notice to each current Eligible Employee before the first day of each
Plan Year beginning after the date such Eligible Employee is hired, except that the notice to each current
Eligible Employee must also include a description of the Eligible Employee's existing coverage, if any.
For a newly hired Eligible Employee, his affirmative election to receive taxable cash Compensation or to
pay his share of the cost of family coverage, instead of automatic Participant-only coverage, is effective if
made when the Eligible Employee is hired by the Employer or within a reasonable period ending before
the Compensation for his first pay period is currently available to him. For a current Eligible Employee,
any such affirmative election is effective if made before the first day of each Plan Year or under any other
circumstances permitted under Section 6.05. Any such affirmative election made for any prior Plan Year
shall be carried over to the next succeeding Plan Year unless changed.
(a) Medical Reimbursement FSA Account Health Benefits. Reimbursements under the Plan are available
for all Eligible Medical Reimbursement FSA Expenses incurred by a Participant or by his spouse or
Dependents for health care provided or other medical expenses incurred during the Plan Year and after the
date on which the Participant has filed an election to receive such benefits under the procedures described in
Articles 6 and 7. The maximum contribution during any Plan Year by a Participant may not exceed the
maximum amount of contributions described in Section 4.02, except to the extent that contributions equal to
102 percent of Plan costs are required under Article 7. The maximum reimbursement under the Medical
Reimbursement FSA Account available at any time during the period of coverage for any Participant during
any Plan Year equals the maximum Medical Reimbursement FSA Account Benefits actually elected by the
Participant for such period of coverage, reduced by all prior reimbursements for Eligible Medical
Reimbursement FSA Expenses paid for the same period of coverage. A Participant may not elect Medical
Reimbursement FSA Account Benefits for a Plan Year in excess of the annual maximum Medical
Reimbursement FSA Account contribution specífied in Section 4.02. If any Participant ceases to make
required contributions to the Medical Reimbursement FSA Account, no Benefits shall be paid hereunder for
any health expenses incurred after the end of that portion of the period of coverage which corresponds to the
portion of total scheduled contributions to the Medical Reimbursement FSA Account for such period of
coverage that were paid by the Participant prior to his or her cessation of contributions. If Medical
Reimbursement FSA Account Benefits cease to be provided after such cessation of required contributions,
the Participant may not make an election to rejoin the Plan for the remaining portion of the Plan Year.
(1) Compliance With Medical Privacy Requirements Under the Health Insurance Portability
and Accountability Act of 1996. as Amended (HIPAA). The following HIPAA medical privacy
requirements apply to the Medical Reimbursement FSA Account Benefits, effective April 14,
2003.
11
[FLEXIRev. 11102]
.'
[FLEX/Rev. 11/02]
(A) Permitted and Required Uses and Disclosure of Protected Health Information.
Unless otherwise permitted by law, and subject to obtaining written certification pursuant
to Section 4.01 {a){1 )(E) below, the Medical Reimbursement FSA Account portion of the
Plan may disclose Protected Heath Information (as defined in Section 4.01{a){1){G){VI)
below) to the Employer, provided the Employer uses or discloses such Protected Health
Information only for the following purposes:
(I) To perform Plan Administration Functions {as defined in Section
4.01 (a){1 )(G){V) below) which the Employer performs for the Medical
Reimbursement FSA Account portion of the Plan.
(II) Obtaining premium bids from insurance companies or other health plans for
providing insurance coverage under or on behalf of the Medical Reimbursement
FSA Account portion of the Plan; or
(III) Modifying, amending, or terminating the Medical Reimbursement FSA
Accol!nt portion of the Plan.
Notwithstanding the provisions of the Medical Reimbursement FSA Account portion of
the Plan to the contrary, in no event shall the Employer be permitted to use or disclose
Protected Health Information in a manner that is inconsistent with U.S. Department of
Health and Human Services (HHS) Regulations Section 164.504{f) (requirements
applicable to group health plans regarding the permitted use and disclosure of Protected
Health Information ).
(B) Permitted Uses and Disclosure of Summary Health Information.
Notwithstanding Section 4.01 {a){1 )(A) above, the Medical Reimbursement FSA Account
portion of the Plan (or a health insurance issuer or HMO with respect to the Medical
Reimbursement FSA Account portion of the Plan) may disclose Summary Health
Information (as defined in Section 4.01{a){1)(G)(VII) below) to the Employer, provided the
Employer requests the Summary Health Information for the purpose of:
(I) Obtaining premium bids from health plans for providing health insurance
coverage under the Medical Reimbursement FSA Account portion of the Plan; or
(II) Modifying, amending, or terminating the Medical Reimbursement FSA
Account portion of the Plan.
(C) Information Reaardina Participation. Notwithstanding Section 4.01 (a){1) (A)
above, the Medical Reimbursement FSA Account portion of the Plan, or a health
insurance issuer or HMO with respect to the Medical Reimbursement FSA Account
portion of the Plan, may disclose to the Employer information on whether the individual is
participating in the Medical Reimbursement FSA Account portion of the Plan, or is
enrolled in or has disenrolled from a health insurance issuer or HMO offered by the
Medical Reimbursement FSA Account portion of the Plan.
(D) Conditions of Disclosure. The Employer agrees that with respect to any Protected
Health Information disclosed to it by the Medical Reimbursement FSA Account portion of
the Plan, an insurer or HMO, Employer shall:
(I) Not use or further disclose the Protected Health Information other than as
permitted or required by the Medical Reimbursement FSA Account portion of the
Plan or as required by law.
(II) Ensure that any agents, including a subcontractor, to whom it provides
Protected Health Information received from the Medical Reimbursement FSA
12
..
Account portion of the Plan agree to the same restrictions and conditions that
apply to the Employer with respect to Protected Health Information.
(III) Not use or disclose the Protected Health Information for employment-related
actions and decisions or in connection with any other benefit or employee benefit
plan of the Employer.
(IV) Report to the Medical Reimbursement FSA Account portion of the Plan any
use or disclosure of Protected Health Information that is inconsistent with the
uses or disclosures provided for of which it becomes aware.
(V) Make available Protected Health Information in accordance with HHS
Regulations Section 164.524 (regarding the access of individuals to Protected
Health Information).
(VI) Make available Protected Health Information for amendment and
incorporate any amendments to Protected Health Information in accordance with
HHS Regulations Section 164.526 (regarding the amendment of Protected
Health Information).
(VII) Make available Protected Health Information required to provide an
accounting of disclosures of Protected Health Information in accordance with
HHS Regulations Section 164.528 (regarding the accounting of disclosures of
Protected Health Information).
(VIII) Make its internal practices, books, and records relating to the use and
disclosure of Protected Health Information received from the Medical
Reimbursement FSA Account portion of the Plan available to the Secretary of
HHS for purposes of determining compliance by the Medical Reimbursement
FSA Account portion of the Plan with Subpart E (Privacy of Individually
Identifiable Health Information) of Part 164 (Security and Privacy) of the HHS
Regulations issued pursuant to HIPAA.
(IX) If feasible, return or destroy all Protected Health Information received from
the Medical Reimbursement FSA Account portion of the Plan that the Employer
still maintains in any form and retain no copies. of such information when no
longer needed for the purpose for which disclosure was made, except that, if
such return or destruction is not feasible, limit further uses and disclosures to
those purposes that make the return or destruction of the information infeasible.
(X) Ensure that the adequate separation between the Medical Reimbursement
FSA Account portion of the Plan and the Employer, required in HHS Regulations
Section 164.504{f){2){iii) (regarding required provisions in group health plan
documents providing for adequate separation between the plan and the plan
sponsor), is satisfied.
(E) Certification of Employer. The Medical Reimbursement FSA Account portion of the Plan
(or a health insurance issuer or HMO with respect to the Medical Reimbursement FSA Account
portion of the Plan) shall disclose Protected Health Information to the Employer only upon the
receipt of a certification by the Employer that the Medical Reimbursement FSA Account portion of
the Plan has been amended to incorporate the provisions of HHS Regulations Section
164.504{f){2){ii), and that the Employer agrees to the conditions of disclosure set forth in
Section 4.01 (a){1 ){D) above. The Medical Reimbursement FSA Account portion of the Plan shall
not disclose and may not permit a health insurance issuer or HMO to disclose Protected Health
Information to the Employer as otherwise permitted herein unless a statement required by HHS
Regulations Section 164.520(b){1 )(iii)(C) (regarding the content of the notice of privacy practices
for Protected Health Information) is included in the appropriate notice.
(F) Adequate Separation Between Medical Reimbursement FSA Account Portion of the
Plan and the Employer. The Employer shall only allow designated employees or other persons
as determined by the Employer and under the control of the Employer to be given access to
13
[FLEX/Rev. 11102]
..
Protected Health Information to be disclosed. Such employees shall only have access to, and
use' such Protected Health Information, to the extent necessary to perform the Plan
Administration Functions that the Employer performs for the Medical Reimbursement FSA
Account portion of the Plan. In the event that any such employees do not comply with the
provisions of this Section 4.01 {a){1 )(F), the employee shall be subject to disciplinary action by the
Employer for non-compliance pursuant to the Employer's employee discipline and termination
procedures.
(G) Definitions.
(I) "Covered Entity" means:
(i) A Health Plan {as defined in Section 4.01 (a){1 )(G){III), below):
(ii) A health care clearinghouse; or
(iii) A health care provider who transmits any Health Information (as defined in
Section 4.01 (a){1){G){II), below) in electronic form in connection with a
Transaction {as defined in Section 4.01 (a){1 )(G){VIII), below).
(II) "Health Information" means any information, whether oral or recorded in any form
or medium, that:
(i) Is created or received by a health care provider, Health Plan {as defined in
Section 4.01 (a){1 )(G){III), below), public health authority, employer, life insurer,
school or university, or health care clearinghouse; and .
(ii) Relates to the past, present or future physical or mental health or condition of
an individual; the provision of health care to an individual; or the past, present, or
future payment for the provision of health care to an individual.
(III) "Health Plan" means any individual or group plan that provides or pays the cost of
medical care (as defined in Section 2791 (a){2) of the Public Health Services Act).
(IV) "Individually Identifiable Health Information" means a subset of Health
Information, including demographic information collected from an individual, and:
(i) Is created or received by a health care provider, Health Plan, employer, or
health care clearinghouse; and
(ii) Relates to the past, present, or future physical or mental health or condition
of an individual; the provision of health care to an individual; or the past, present,
or future payment for the provision of health care to an individual; and
(a) That identifies the individual; or
(b) With respect to which there is a reasonable basis to believe the
information can be used to identify the individual.
(V) "Plan Administration Functions" means administration functions performed by the
Employer on behalf of the Medical Reimbursement FSA Account portion of the Plan,
excluding functions performed by the Employer in connection with any other benefit or
benefit plan of the Employer.
14
[FLEXIRev. 11/02]
..
~
(VI) "Protected Health Information" means Individually Identifiable Health Information:
(i) Except as provided in Section 4.01 (a){1 )(G){IV)(ii) of this definition, that is:
(a) Transmitted by electronic media;
(b) Maintained in any media described in the definition of electronic
media at HHS Regulations Section 162.103; or
(c) Transmitted or maintained in any other form or medium.
(ii) Protected Health Information excludes Individually Identifiable Health
Information in:
(a) Education records covered by the Family Educational Rights and
Privacy Act, as amended;
(b) Records described at 20 U.S.C. §1232g{a){4){B){iv); and
(c) Employment records held by a Covered Entity in its role as
employer.
(VII) "Summary Health Information" means information that:
(i) summarizes the claims history, claims expenses or type of claims experienced
by individuals for whom a plan sponsor had provided health benefits under a
Health Plan; and
(ii) from which the information described at HHS Regulations Section
164.514{b)(2){i) (regarding certain individual identifiers) has been deleted, except
that the geographic information described in HHS Regulations Section
164.514{b){2){i){B) (regarding certain geographic identifiers) need only be
aggregated to the level of a five-digit zip code.
(IX) "Transaction" means the transmission of information between two parties to carry
out financial or administrative activities related to health care.
(2) Orderina Rules. If coverage is provided for the same Eligible Medical Reimbursement FSA
Expenses under both this Medical Reimbursement FSA Account portion of the Plan and any
employer-provided health reimbursement arrangement (described in Internal Revenue Service
Notice 2002-45, 2002-28 I.R.B. 93 and Revenue Ruling 2002-41, 2002-28 I.R.B. 75) maintained
by the Employer, coverage shall be available under any such health reimbursement arrangement
only after Eligible Medical Reimbursement FSA Expenses exceeding the dollar limit of this
Medical Reimbursement FSA Account portion of the Plan have been paid. For example, if the
Employer maintains such a health reimbursement arrangement in addition to this Medical
Reimbursement FSA Account portion of the Plan, then Eligible Medical Reimbursement FSA
Expenses shall be paid or reimbursed first from this Medical Reimbursement FSA Account
portion of the Plan and then from such health reimbursement arrangement when the amount
under this Medical Reimbursement FSA Account portion of the Plan is exhausted.
(b) Group Insurance Premium Conversion for Health Benefits (Other than Medical Reimbursement
FSA Account Health Benefits). Unless a Participant affirmatively elects taxable cash Compensation
pursuant to Section 4.01 (f) or affirmatively elects to pay his share of the cost of family coverage under
Insurance Policies providing Health Benefits with Pre-Tax Contributions, he shall be deemed to have
elected to pay his share of the cost of Participant-only coverage under any such Insurance Policies for the
Plan Year with Pre-Tax Contributions, by reducing his Compensation for such Plan Year by the amount
specified in the notice that his Employer furnishes to him before such Plan Year pursuant to this Section
4.01 (b).
[FLEXIRev. 11/02]
15
. ..
"
At the time each Eligible Employee is hired by the Employer, the Employer shall furnish him with a notice
explaining the automatic enrollment process under this Section 4.01{b) and the Eligible Employee's right
to decline Participant-only coverage and his right not to have his Compensation reduced to pay for
Participant-only coverage with Pre-Tax Contributions. The Employer notice shall include:
(i) the respective Compensation reduction amounts for Participant-only coverage, and for family
coverage (i.e., coverage for the Participant, his spouse, and/or his Dependents);
(ii) the procedures which the Eligible Employee must follow to exercise his right to decline
automatic Participant-only coverage;
(iii) information about the time by which the Eligible Employee must make an affirmative election
to receive taxable cash Compensation pursuant to Section 4.01 (f) or to pay his share of the cost
of family coverage, instead of automatic Participant-only coverage; and
(iv) the period for which such an affirmative election will be effective.
The Employer also shall furnish such notice to each current Eligible Employee before the first day of each
Plan Year beginning after the date such Eligible Employee is hired, except that the notice to each current
Eligible Employee must also include a description of the Eligible Employee's existing coverage, if any.
For a newly hired Eligible Employee, his affirmative election to receive taxable cash Compensation
pursuant to Section 4.01 (f) or to pay his share of the cost of family coverage, instead of automatic
Participant-only coverage, is effective if made when the Eligible Employee is hired by the Employer or
within a reasonable period ending before the Compensation for his first pay period is currently available to
him. For a current Eligible Employee, any such affirmative election is effective if made before the first day
of each Plan Year or under any other circumstances permitted under Section 6.05. Any such affirmative
election made for any prior Plan Year shall be carried over to the next succeeding Plan Year unless
changed.
(c) Dependent Care FSA Benefits. Reimbursements under the Plan are available for all Eligible Dependent
Care FSA Expenses incurred by a Participant or by his spouse for Dependent care provided or other
Dependent care expenses incurred during the Plan Year and after the date on which the Participant has filed
an election to receive such Benefits under the procedures described in Article 6. The maximum contribution
for dependent care assistance during any Plan Year shall be as specified in Article 8. The maximum
reimbursement under the Dependent Care FSA Account available at any time during the period of coverage
for any Participant during any Plan Year equals the amount of contributions in the Dependent Care FSA
Account of the Participant as of the processing date{s) less reimbursements paid for such Plan Year. There
is no advance payment of Benefits under the Dependent Care FSA Account to a Participant.
(d) Group-Term Life Insurance Benefits. Up to $50,000 of group-term life insurance Benefits may be
purchased with Pre-Tax Contributions or After-Tax Contributions under the Plan, but in no event may group-
term life insurance Benefits for the Participant's spouse or Dependents be provided hereunder.
(e) Cash Benefit. To the extent that a Participant elects or is deemed to elect not to have the maximum
amount of his Compensation (specified in Section 5.01) contributed as Pre-Tax Contributions or After-Tax
Contributions under the Plan for any Plan Year, the amount not elected will be paid to him in the form of
taxable cash Compensation for such Plan Year.
4.02. Maximum Medical Reimbursement FSA Account Contributions. The maximum contribution during
any Plan Year by a Participant may not exceed the maximum amount of contributions specified in the
Adoption Agreement. A Participant may not elect Medical Reimbursement FSA Account Health Benefits for a
16
[FLEXIRev. 11/02]
"
"
Plan Year in excess of the annual maximum Medical Reimbursement FSA Account contribution as specified
in the Adoption Agreement.
4.03. Nondiscriminatory Benefits. The Plan is intended to satisfy, for any Plan Year, the nondiscrimination
requirements imposed by Code Section 125{b){1) and the limitations on benefits provided to key employees
(as defined under Code Section 416{i){1)) imposed by Code Section 125{b){2). If, in the judgment of the Plan
Administrator, the operation of the Plan during any Plan Year would cause the Plan to fail to satisfy any such
requirement, then the Plan Administrator shall take such action as the Plan Administrator deems appropriate,
under rules uniformly applicable to similarly-situated Participants, to assure compliance with such
requirements or limitations. Such actions may include, without limitation, a modification of elections by highly
compensated individuals (as defined by Code Section 125{e») or key employees without their consent.
ARTICLE 5. LIMITATIONS
5.01. Maximum Overall Contributions. No Participant may forego or reduce his Compensation by more
than the aggregate maximum amount of Benefits specified in Article 4 and Article 8. In no event shall the
sum of the Participant's Pre-Tax Contributions and After-Tax Contributions hereunder for any Plan Year
exceed 100% of his Compensation for such year. Individuals whose Health Benefits continue under Article 7
shall not be required to make contributions in excess of the amounts specified in such Article.
5.02. Foñeiture of Unused Benefits. A Participant shall not receive any reimbursement for Benefits he
elected, but did not use, during a Plan Year for any reason.
ARTICLE 6. ELECTIONS BY ELIGIBLE EMPLOYEES
6.01. Effective Date of Elections. Prior to the beginning of each Plan Year, a Participant may affirmatively
elect to receive any of the Benefits specified in the Adoption Agreement by filing an election form for such
Plan Year (except to the extent that he is deemed to have elected Participant-only Health Benefit
coverage under Section 4.01), which he may obtain from the Employer, and on which he shall specify the
type and exact amount of each of such Benefits, and the corresponding amount of After-Tax Contributions or
Pre-Tax Contributions, that he will pay for such Benefits during the period covered by his election. The
Participant's affirmative election or deemed election shall become effective on the date specified on the
. election form or in the required Employer notice described in Section 4.01. If any Eligible Employee fails to
file an election form by the end of the applicable election period or if the Employer fails to timely furnish any
Eligible Employee with the required Employer notice described in Section 4.01, he shall be deemed to
have elected to receive all taxable cash Benefits under the Plan.
6.02. Duration of Elections. Once it becomes effective, any election described in Section 6.01 shall remain
in effect until the end of the Plan Year for which it was made and any deemed election described in Section
4.01 shall remain in effect until the date it expires pursuant to Section 4.01.
6.03. New Elections for SubseQuent Plan Years. Except as otherwise provided under Section 4.01, a
Participant's election expires at the end of each Plan Year and a Participant may change his election for the
subsequent Plan Year by filing a new election form prior to the first pay period of the Plan Year for which he
wants such revised election to be effective.
6.04. Revocation of Election on Termination of Service. The election or deemed election of any
Participant who ceases to be an Eligible Employee will be terminated automatically, effective as of the
effective date of such cessation. Such a terminated election may be reinstated, however, solely to the extent
that the Participant affirmatively elects to continue to receive the Health Benefits covered by such election
under the continuation of Health Benefits rules in Article 7. Except as provided in Article 7, no Benefits will be
17
[FLEXIRev. 11/02]
,.
"
paid for any expenses incurred for services provided after the effective date of any revocation of a
Participant's election. Any Pre-Tax Contributions or After-Tax Contributions made for the portion of the Plan
Year extending beyond such election revocation date will be refunded to the Participant.
6.05. Chanaes in Benefit Elections Durina the Plan Year on Account of Election Chanae Events.
(a) Election Chanae Events that Permit Chanaes in Benefit Elections.
(1) Health Benefit Group Insurance Premium Conversion. A Participant may revoke his
election or deemed election with respect to the Health Benefit Group Insurance Premium
Conversion described in Section 4.01{b), in writing, for the balance of the Plan Year, and if
desired, file a new election, in writing, if both the revocation and the new election (collectively
referred to herein as an "election change") are made on account of any Election Change Event
described in Section 2.14{a) through 2.14{i) and satisfy the applicable requirements of Section
6.05{b ).
(2) Dependent Care FSA Benefits. A Participant may revoke his Dependent Care FSA Account
Benefits election, in writing, for the balance of the Plan Year and, if desired, file a new election, in
writing, if both the revocation and the new election (collectively referred to herein as an "election
change") are made on account of an Election Change Event described in Section 2.14{b),
2.14{e), 2.14{f) or 2.14{g) and satisfies the applicable requirements of Section 6.05{b).
{3} Medical Reimbursement FSA Account Health Benefits. A Participant may revoke his
Medical Reimbursement FSA Account Health Benefits election, in writing, for the balance of the
Plan Year and, if desired, file a new election, in writing, if both the revocation and the new
election (collectively referred to herein as an "election change") are made on account of any
Election Change Event described in Section 2.14{a), 2.14{b), 2.14{c), 2.14{d) or 2.14{i) and
satisfies the applicable requirements of Section 6.05{b).
(4) Group-Term Life Insurance Benefits. A Participant may revoke his group-term life
insurance Benefit coverage, in writing, for the balance of the Plan Year and, if desired, file a new
election, in writing, if both the revocation and the new election (collectively referred to herein as
an "election change") are made on account of an Election Change Event described in Section
2.14{b), 2.14{e), 2.14{f) or 2.14{g) and satisfies the applicable requirements of Section 6.05{b).
(b) Requirements That Apply to Certain Election Chanaes.
(1) Chanaes in Status. If an Election Change Event described in Section 2.14{b) (referred to
herein as a "change in status") occurs, then any election change which a Participant desires to
make under this Plan, on account of such change in status, relating to any Health Benefit
coverage, any Dependent Care FSA Account Benefits coverage, or any group-term life insurance
Benefit coverage, may be made only if it satisfies the consistency requirements of this Section
6.05{b)(1).
Any such election change under this Plan relating to any Health Benefit coverage, or any group-
term life insurance Benefit coverage shall satisfy such consistency requirements only if it is made
on account of, and corresponds with, a change in status that affects eligibility for coverage under
an employer's plan. A change in status that affects eligibility under an employer's plan includes a
change in status that results in an increase (or decrease) in the number of an employee's family
members or dependents who may benefit from coverage under the Plan.
Any such election change under this Plan relating to any Dependent Care FSA Account Benefit
coverage shall satisfy such consistency requirements only if it is made on account of, and
18
[FLEXIRev. 11/02]
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corresponds with, a change in status that affects eligibility for coverage under an employer's plan.
Any election change relating to any Dependent Care FSA Account Benefit coverage also shall
satisfy such consistency requirements if such election change is on account of and corresponds
with a change in status that affects Employment Related Dependent Care Expenses {including
employment-related expenses as defined in Code Section 21 (b )(2)).
If the change in status under Section 2.14(b) is the Participant's divorce, annulment or legal
separation from his spouse, the death of his spouse or Dependent, or his Dependent ceasing to
satisfy the eligibility requirements for coverage, the Participant's election change under this Plan
to cancel Health Benefit or group-term life insurance Benefit coverage for any individual other
than the spouse involved in the divorce, annulment or legal separation, the deceased spouse or
Dependent, or the Dependent that ceased to satisfy the eligibility requirements for coverage,
respectively, shall not be consistent with that change in status. Thus, if a Participant's Dependent
dies or ceases to satisfy the eligibility requirements for coverage, the Participant's election
change under this Plan to cancel Health Benefit or group-term life insurance Benefit coverage for
any other Dependent, for himself, or for his spouse shall not be consistent with that change in
status. In addition, if the Participant or his spouse or Dependent gains eligibility for coverage
under a Code Section 125 cafeteria plan or qualified benefits plan (as defined in Treasury
Regulations Section 1.125-4{i){8)) sponsored by the spouse's or Dependent's employer as
a result of a change in marital status or employment status described in Section 2.14{b){1) or (3),
respectively, the Participant's election change under this Plan to cease or decrease coverage for
that individual hereunder shall be consistent with either change in status only if coverage for that
individual becomes applicable or is increased under such other employer's plan.
Notwithstanding the foregoing, if the Participant or his spouse or Dependent becomes eligible for
continuation coverage relating to the Health Benefit coverage as provided under Code Section
4980B or similar state law, the Participant may make an election change under this Plan to
increase his contributions hereunder in order to pay for such coverage.
(2) Certain JudQments, Decrees or Orders. If an Election Change Event described in Section
2.14{c) occurs, then (A) if the judgment, decree or order (referred to herein as an "order") requires
coverage for the Participant's Dependent child or Dependent foster child relating to Health
Benefits, the Plan Administrator automatically shall make an election change under this Plan on
the Participant's behalf to provide Benefits for such child under the applicable plan, and (B) if the
order requires the Participant's spouse, former spouse or other individual to provide accident or
health coverage for such child and if that coverage is, in fact, provided, then the Participant may
make an election change under this Plan to cancel Health Benefit coverage for such child.
(3) Entitlement To or Loss Of Medicare or Medicaid CoveraQe. If an Election Change Event
described in Section 2.14{d) occurs whereby a Participant or his spouse or Dependent becomes
entitled to coverage (i.e., becomes enrolled) under Medicare or Medicaid, the Participant may
make a prospective election change under this Plan to cancel or reduce the Health Benefits for
the affected individual. In addition, if an Election Change Event described in Section 2.14{d)
occurs whereby a Participant or his spouse or Dependent loses eligibility for coverage under
Medicare or Medicaid after having been entitled to such coverage, the Participant may make a
prospective election change under this Plan to commence or increase the Health Benefits for the
affected individual.
(4) Cost ChanQes.
(A) Automatic Cost ChanQes. If an Election Change Event described in Section
2.14(e){1) (i.e., an automatic cost change) occurs, the Plan Administrator may, on a
reasonable and consistent basis, automatically make a prospective increase {or
19
[FLEXlRev.11/O2]
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decrease) in the affected Participant's Pre-Tax Contributions under this Plan with respect
to the Health Benefits described in Section 4.01{a) and Section 4.01{b), any Dependent
Care FSA Account Benefits, or group-term life insurance Benefits.
(B) Significant Cost Changes. If an Election Change Event described in Section
2.14{e){2) (i.e., a significant cost change) occurs, the Participant may make a
corresponding election change under this Plan. Election changes that may be made
under this Plan include electing the Health Benefit coverage described in Section 4.01{a)
and Section 4.01 (b), any Dependent Care FSA Account Benefit coverage, or group-term
life insurance Benefit coverage, if such benefits have decreased in cost, or, if such
benefits have increased in cost, revoking an election for such benefits and, in lieu thereof,
either prospectively electing Benefits under another similar plan or coverage option or
canceling such benefits altogether if no other similar plan or coverage option is available.
For example, if the cost of an indemnity option under the Health Benefit described in
Section 4.01{b) significantly increases during the Plan Year, any Participant who is
covered by that option may make a corresponding election under this Plan to increase his
contributions hereunderor may instead revoke his election for such indemnity option and,
in lieu thereof, either prospectively elect another coverage option (including an HMO
option) or cancel his Health Benefits described in Section 4.01{b) altogether if no other
similar plan or coverage option is available.
(c) Application of Cost Changes. For purposes of Sections 6.05{b){4){A) and (B), a cost
increase or decrease refers to an increase or decrease in the amount of a Participant's
Pre-Tax Contributions under this Plan, whether that increase or decrease results from an
action taken by the Participant (such as switching between full-time and part-time status)
or the Company (such as reducing the amount of Company contributions for a class of
Participants).
(D) Application to Dependent Care FSA Account Benefits. If an Election Change
Event described in Section 2.14{ e) occurs, a Participant may make an election change
under this Plan relating to his Dependent Care FSA Account Benefits only if the cost
change is imposed by a Qualifying Facility who is not a relative of the Participant. For
this purpose, a "relative" of the Participant is an individual who is related to him as
described in Code Section 152{a){1) through (8), incorporating the rules of Code Section
152{b){1) and (2).
(5) Coverage Changes.
[FLEX/Rev. 11/02]
(A) Significant Curtailment Without Loss of Coverage. If an Election Change Event
described in Section 2.14{f)(1) (i.e., a significant curtailment without loss of coverage)
occurs, the affected Participant may make an election change under this Plan to revoke
his election for that coverage and, in lieu thereof, prospectively elect Benefits under
another similar plan or coverage option. Coverage under the Health Benefit described in
Section 4.01{b), any Dependent Care FSA Account Benefit, or any group-term life
insurance Benefit, or under any indemnity, HMO, PPO or other coverage option under
the Health Benefit described in Section 4.01 (b) is significantly curtailed (but not lost) for
these purposes only if there is an overall reduction in the coverage provided under such
plan or coverage option so as to constitute reduced coverage generally. For example,
there would be a significant curtailment (but not loss) of coverage under such a plan or
coverage option if there is a significant increase in the deductible, the copay, or the out-
of-pocket cost sharing limit thereunder. However, in most cases, the loss of one
particular physician in a network would not constitute a significant curtailment.
20
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(B) Significant Curtailment With Loss of Coverage. If an Election Change Event
described in Section 2.14{f){2) (i.e., a significant curtailment with loss of coverage)
occurs, the affected Participant may revoke his election under this Plan and, in lieu
thereof, prospectively elect Benefits under another similar plan or coverage option or
cancel such benefits altogether if no similar plan or coverage option is available. For
these purposes, a loss of coverage means a complete loss of coverage under the Health
Benefit described in Section 4.01{b), any Dependent Care FSA Account Benefit, or any
group-term life insurance Benefit, or under any indemnity, HMO, PPO or other coverage
option under the Health Benefit described in Section 4.01{b) {including the elimination of
any such plan or coverage option, an HMO coverage option ceasing to be available in the
area where the individual resides, or the individual losing all coverage under any such
plan or coverage or coverage option by reason of an overall lifetime or annual limitation).
In addition, the Plan Administrator may, in its discretion (which may be exercised on a
case by case basis, provided such exercise does not discriminate in favor of any highly
compensated Participant) treat any of the following events as a loss of coverage for these
purposes:
(I) A substantial decrease in the medical care providers available under a plan or
coverage option (such as a major hospital ceasing to be a member of a preferred
provider network or a substantial decrease in the physicians participating in a
preferred provider network or an HMO);
(II) A reduction in the benefits for a specific type of medical condition or treatment
with respect to which the Participant or his spouse or Dependent is currently in a
course of treatment;
(III) Any other similar fundamental loss of coverage.
(c) Addition or Improvement of a Plan or Coverage Option. If an Election Change
Event described in Section 2.14{f){3) (i.e., the addition or improvement of a qualified
benefits plan or coverage option thereunder) occurs, any Eligible Employee (whether or
not he has previously made an election under this Plan or has previously elected such
qualified benefits plan or coverage option) may revoke his election under this Plan and, in
lieu thereof, make a prospective election for coverage under the new or improved
qualified benefits plan or coverage option thereunder.
(6) Coverage Changes Under Other Plans. If an Election Change Event described in Section
2.14{g) (i.e., a coverage change under another Code Section 125 cafeteria plan or qualified
benefits plan of the Employer or another employer) occurs, the Participant may make a
prospective election change under this Plan if (A) such other plan permits participants to make an
election change that would be permitted under this Plan, disregarding Section 2.14{g), or (B) the
Plan Year of this Plan is different from the plan year of such other plan.
6.06. Effect of Change in Medical Reimbursement FSA Account Election on Maximum Medical
Reimbursement FSA Benefits. Any change in an election affecting Medical Reimbursement FSA Account
Benefits pursuant to Section 6.05 shall effect a corresponding change in the Maximum Medical
Reimbursement FSA Account Benefits for the balance of the Plan Year during which such change was
made. The maximum Medical Reimbursement FSA Account Benefits for the balance of the Plan Year
following such election change shall be calculated by adding the balance remaining in the Participant's
Medical Reimbursement FSA Account immediately preceding such change, to the contributions that the
Participant has elected to make to his Medical Reimbursement FSA Account the remainder of the Plan Year.
[FLEX/Rev. 11/02]
21
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6.07. Cessation of Required Contributions. Nothing in this Plan shall prevent the cessation of any Benefit
under the Plan on account of a Participant's failure to pay his share of the cost of that Benefit, and any such
Participant shall not be permitted to make a new Benefit election for the balance of the Plan Year.
ARTICLE 7. CONTINUATION OF HEALTH BENEFITS FOLLOWING
TERMINATION OF EMPLOYMENT OR COVERAGE
7.01. COBRA Coverage.
(a) Health Benefit Premiums. To the extent that a Participant has the right to continue his Health Benefit
coverage described in Section 4.01 (b) even after an event that otherwise would cause a termination of his
participation in this Plan, he may continue to pay his Health Benefit Insurance Policy premiums for such
continuation coverage under this Plan. To the extent that the Participant no longer receives Compensation
from the Employer, he shall pay such premiums with after-tax contributions in a manner provided under
applicable law or according to rules established by the Plan Administrator. Without limitation, the rights
provided in this Article 7 shall apply to any Participant who has the right to continue his group health plan
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or applicable
State law ("COBRA") and the Uniform Services Employment and Reemployment Rights Act of 1994, as
amended ("USERRA"). The amount of the premiums for such continuation coverage shall be determined
under COBRA, USERRA or other applicable law. Anyone eligible to elect to continue coverage under this
Article 7 shall be referred to herein as a "qualified beneficiary" (within the meaning of Code Section
4980B{g)(1 ).
(b) Medical ReimbursementFSA Account Benefits. Qualified beneficiaries may, under certain limited
circumstances, have the right to continue to receive Medical Reimbursement FSA Account Benefits as
described in Section 4.01 (a), in accordance with COBRA. In particular, a qualified beneficiary will be allowed
to continue to receive Medical Reimbursement FSA Account Benefits following the termination of Benefits
due to one of the following events: (1) death of the Participant; (2) the termination (other than by reason of
gross misconduct), or reduction of hours, of employment of the Participant; (3) the divorce or legal separation
of the Participant from his or her spouse; (4) a Participant's becoming entitled to Medicare; (5) a Dependent
child of the Participant ceasing to be a Dependent child under the terms of the Medical Reimbursement FSA
Account; or for Plans that cover retirees in addition to active employees (6) a proceeding in bankruptcy under
Title 11 of the U.S. Code with respect to an Employer from whose employment the Participant retired at any
time.
In order to receive any COBRA continuation coverage under the Medical Reimbursement FSA Account, the
benefit that the qualified beneficiary may elect to receive through the Medical Reimbursement FSA Account
must exceed the amount of premiums or contributions that he would be required to make over the remainder
of the Plan Year.
Even if a qualified beneficiary has the right to elect to continue to receive Medical Reimbursement FSA
Account Benefits for the remainder of the then-current Plan Year, his right to do so will end earlier if: (a) the
Employer ceases to provide any group health plan coverage to any employee; (b) the qualified beneficiary
does not pay the premiums described below within 30 days of their due dates; (c) the qualified beneficiary
electing coverage becomes covered under another group health plan that does not impose any pre-existing
condition limitation or exclusion or which cannot impose such limitationary exclusion on the qualified
beneficiary. Under no circumstances will any qualified beneficiary be allowed to continue to receive Medical
Reimbursement FSA Account Benefits for any period after the end of the Plan Year in which the coverage
otherwise would end. A qualified beneficiary may, however, still be entitled to request reimbursement for
expenses incurred prior to the end of that Plan Year, in accordance with the terms of the Plan as set forth
herein.
22
[FLEX/Rev. 11/02]
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The Plan Administrator shall notify the Participants and other qualified beneficiaries who become eligible to
continue to receive Medical Reimbursement FSA Account Benefits under COBRA, unless any such individual
becomes entitled to such coverage due to a divorce or legal separation or due to ceasing to be a Dependent.
In those circumstances, the qualified beneficiary who wishes to continue to receive Medical Reimbursement
FSA Account Benefits must notify the Plan Administrator within 60 days after the date that the qualified
beneficiary otherwise would cease to receive Medical Reimbursement FSA Account Benefits. The Plan
Administrator shall then notify the qualified beneficiary of his specific rights to continue to receive Medical
Reimbursement FSA Account Benefits,
Upon receipt of a notice from the Plan Administrator, the qualified beneficiary shall have 60 days after the
Plan Administrator sends a notice describing these continuation rights (or, if later, 60 days after the qualified
beneficiary otherwise would cease to receive such benefits), within which to elect to receive continuation
. coverage. The notice shall advise the qualified beneficiary of the date upon which he must return the
completed election form and the dates upon which he must pay his premiums. Any continuation of Medical
Reimbursement FSA Account Benefits under this provision will be subject to a requirement that the qualified
beneficiary pay 102% of the cost (with after-tax dollars) of continuing to receive the Medical Reimbursement
FSA Account Benefits.
7.02. Continuation of Health Benefits By Payment from Final Paycheck. Any Participant who is
terminated or discharged from employment with the Employer may elect to continue to receive all or some of
the Health Benefits covered by his Plan election in effect at the time of such termination, by paying the
contribution due for such Health Benefits for the balance of the Plan Year with Pre-Tax Contributions from his
final paycheck (to the extent allowable under any Federal minimum wage laws or applicable State laws) in
the case of a termination of employment. If such paycheck is not sufficient to cover the full amount of such
Plan contribution due for the balance of the Plan Year, the Participant shall pay any balance due to the
Employer, by making additional after-tax contributions after termination of employment.
7.03. Purchase of Health Benefits at 102% of Cost. A qualified beneficiary whose Health Benefits have
been terminated for any COBRA qualifying event has the right to continue under the Plan for all Health
Benefits which the qualified beneficiary was entitled to receive under the Plan on the day immediately
preceding the date of the qualifying event. The period of continuation coverage is the period of coverage, set
forth in Code Section 4980B{f){2)(B), which corresponds to the applicable qualifying event. One Hundred
Two Percent (102%) of the full cost of providing such coverage may be charged to any qualified beneficiary
continuing in the Plan. Notwithstanding the foregoing, in the case of an extension of the 18-month period to
29 months, One Hundred Fifty Percent (150%) shall be substituted for One Hundred Two Percent (102%) in
the preceding sentence for any month after the eighteenth month of continuation coverage. This cost shall
be determined at the beginning of each Plan Year and shall remain in effect for the remainder of such Plan
Year.
ARTICLE 8. DEPENDENT CARE PLAN
8.01. General Benefits. From the Effective Date and for each Plan Year for as long as the Plan continues,
every Participant may elect to reduce his Compensation and receive instead dependent care assistance
Benefits (DCA Benefits) for all Eligible Dependent Care FSA Expenses incurred by such Participant or his
spouse for Qualifying Dependent Care Services which are provided during the Plan Year and after the date
on which the Participant has filed an election to receive such DCA Benefits under the procedures described
in Article 6, The maximum amount of such DCA Benefits payable in response to any claim filed under the
claims procedures described in Article 9 shall not exceed the Participant's Pre-Tax Contributions as of the
Claims Processing Date with respect to such DCA Benefits, minus all previous reimbursements of Eligible
Dependent Care FSA Expenses for Qualifying Dependent Care Services paid during the preceding portion of
the Plan Year. No Benefits shall be paid hereunder for Qualifying Dependent Care Services incurred after
the date on which any Participant ceases to be an Eligible Employee.
23
[FLEX/Rev. 11/02J
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8.02. Maximum Annual Benefits. A Participant who is married at the close of a Plan Year may not receive
DCA Benefits for Eligible Dependent Care FSA Expenses for Qualifying Dependent Care Services incurred
by him for the Plan Year in excess of the least of:
(a) $5,000 (or $2,500 in the case of a married Participant filing a separate Federal income tax return from his
spouse);
(b) his Earneçllncome for such Plan Year; or
(c) the Earned Income of his' spouse for such Plan Year.
A Participant who is not married at the close of a Plan Year may not receive DCA Benefits for Eligible
Dependent Care FSA Expenses for Qualifying Dependent Care Services incurred by him for the Plan Year in
excess of the lesser of $5,000 or his Earned Income for the Plan Year. Notwithstanding the above, the
maximum DCA Benefits paid under this Plan must also be reduced by the amount of any tax-exempt DCA
Benefits received by the Participant or his spouse from any other employer during the Plan Year.
8.03. Cash Alternative. Any Participant who has not elected under the procedures described in Article 6 to
receive DCA Benefits will be assumed to have elected taxable cash benefits, and his Compensation will not
be reduced to cover the payment of DCA Benefits.
8.04. Nondiscriminatory Benefits. The Dependent Care Plan is intended to satisfy, for any Plan Year, the
nondiscrimination requirements imposed by Code Section 125{b){1) and the limitations on benefits provided
to key employees imposed by Code Section 125(b )(2). If, in the judgment of the Plan Administrator, the
operation of the Dependent Care Plan during any Plan Year would èause the Dependent Care Plan to fail to
satisfy any such requirement, then the Plan Administrator shall take such action as the Plan Administrator
deems appropriate, under rules uniformly applicable to similarly-situated Participants, to assure compliance
with such requirements or limitations. Such actions may include, without limitation, a modification of elections
by highly compensated individuals (as defined by Code Section 125{e)) or key employees without their
consent.
8.05. Maximum Overall Contributions. No Participant shall be entitled to reduce Compensation by more
than the aggregate maximum amount of DCA Benefits specified in Sections 8.02 and 8.04 above.
8.06. Forfeiture of Unused Benefits. A Participant shall not receive any reimbursement for DCA Benefits
he elected, but did not use, during a Plan Year for any reason.
ARTICLE 9. CLAIM PROCEDURES
9.01. Health Benefits. Claims for Health Benefits under this Plan shall be made on forms maintained and
provided by the insurer named in the applicable Insurance Policy. Each Participant electing to receive Health
Benefits shall be entitled to claim reimbursement for health expenses. Such claim shall be made by filing, on
a form provided by the insurer, a request for reimbursement of medical expenses incurred and paid by the
Participant. Such form shall be filed together with such evidence of either payment or indebtedness to the
third party as shall be required by the insurer in accordance with the Insurance Policy for Health Benefits
received during the Plan Year. The Employer assumes no obligation to pay Benefits under the applicable
Insurance Policy or any other policy or contract of insurance. Any review of any claim or denial of a claim
shall be performed by the insurer in accordance with the rules of the Insurance Policy.
9.02. Medical Reimbursement FSA Account Benefits. Each Participant who desires to receive
reimbursement under the Plan for Eligible Medical Reimbursement FSA Expenses (up to the maximum
amounts outlined below) shall submit to the Plan Administrator or designated third party, at the times
24
[FLEXIRev. 11/02]
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"
indicated in Section 9.05, on forms (including requests for additional information) furnished by the Employer
providing:
(a) written evidence of the amount of the indebtedness or payment to the independent third party showing the
amount of the qualifying expense that has been incurred; and
(b) a written statement that the amount of such expense has not been reimbursed and is not reimbursable
under any other health plan coverage; and
(c) written evidence of the date of service for the qualifying expense that has been incurred and third party
verification of the expense. The date of service must be within the Plan Year for which the expense is being
submitted.
As soon as is administratively feasible, the Plan Administrator or designated third party shall review all of the
claims submitted by Participants in accordance with the foregoing procedures, and shall pay Participants the
Medical Reimbursement FSA Account Benefits which each Participant is entitled to receive under the Plan, in
accordance with Section 4.01 (a). The maximum amount of such Medical Reimbursement FSA Account
Benefits payable in any calendar month shall not exceed the maximum amount of Medical Reimbursement
FSA Account Benefits available during the period of coverage, as calculated under the rules of Section 6.07,
properly reduced by prior reimbursements for the same period of coverage.
9.03. Dependent Care FSA Account Benefits. Each Participant who desires to receive reimbursement
under the Plan for Eligible Dependent Care FSA Expenses (up to the maximum amounts outlined below and
subject to the Maximum Annual Benefit specified in Section 8.02) shall submit to the Plan Administrator or
designated third party, at the times indicated in Section 9.05, on forms (including requests for addition
information) furnished by the Employer providing:
(a) written evidence of the amount of the indebtedness or payment to the independent third party (Qualified
Caregiver or Qualified Dependent Care Center) showing the amount of the qualifying expense that has been
incurred; and
(b) a written statement that the amount of such expense has not been reimbursed and is not reimbursable
under any other plan coverage; and
(c) written evidence of the date of service for the qualifying expense that has been incurred and third party
verification of the expense as well as the Federal Tax Identification number and/or Social Security Number of
the Qualified Caregiver or Qualified Dependent Care Center. The date of service must be within the Plan
Yearfor which the expense is being submitted.
As soon as administratively feasible the Plan Administrator or designated third party shall review all of the
claims submitted by Participants in accordance with the foregoing procedures, and shall pay Participants the
Dependent Care FSA Account Benefits which each Participant is entitled to receive under the Plan, in
accordance with Section 4.01{c). The maximum amount of such Dependent Care FSA Account Benefits
payable in any calendar month shall not exceed the amount of Plan Contributions in the Participant's
Dependent Care FSA Account.
9.04. Independent Premium. Feature. Each Participant who desires to receive Benefits under the Plan's
Independent Premium Feature in Section 4.01{b) shall submit to the Plan Administrator or designated third
party, at the times indicated in Section 9.05, on forms (including requests for additional information) furnished
by the Employer, providing:
(a) written evidence of the amount of eligible expenses incurred for independent insurance (including
Medicare Part B); and
(b) a written statement that the amount of such expenses has not been reimbursed and is not reimbursable
under any other plan coverage; and
25
[FLEXIRev. 11/02]
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(c) written evidence of the date of service for the eligible expense that has been incurred. The date of service
must be within the Plan Year for which the expense is being submitted.
As soon as is administratively feasible the Plan Administrator or designated third party shall review all of the
claims submitted by Participants in accordance with the foregoing procedures, and shall pay each Participant
the amount under the Plan's Independent Premium Feature which he is entitled to receive under the Plan, in
accordance with Section 4.01{b). The maximum amount payable in any calendar month shall not exceed the
amount of Plan contributions that are subject to the Plan's Independent Premium Feature with respect to
such Participant.
9.05. Claims Submission Deadlines. Claims submitted under Sections 9.02, 9.03, and 9.04 must be filed
with the Plan Administrator or designated third party within the claim submission deadlines listed in the
Adoption Agreement. In addition, at the end of the Plan Year, Participants will be allowed necessary time for
filing claims for expenses that were incurred during the Plan Year. The Plan Year end filing deadline is listed
in the Adoption Agreement.
ARTICLE 10. CLAIM AND REVIEW PROCEDURES
10.01. Benefit Claim and Appeal Procedures. This Section 10.01 applies to any claim, filed with the
Plan Administrator prior to JanuarY,1 , 2003, for Medical Reimbursement FSA Account Benefits.
(a) Benefit Claim Procedure. Any Participant or beneficiary whose claim for benefits is denied
may file a claim with the Plan Administrator stating the nature and amount of the claim and any
additional information necessary to support the claim. If the Plan Administrator denies the claim,
it shall provide the claimant with written notice, setting forth in language calculated to be
understood by the claimant: (i) the specific reason or reasons for the denial; (ii) the specific
reference to pertinent Plan provisions on which the denial is based; (iii) a description of any
additional material or information necessary for the claimant to perfect the claim and an
explanation of why the material or information is necessary; and (iv) appropriate information as to
the steps to be taken if the claimant wishes to submit his claim for review. Such written notice
shall be furnished within 90 days after receipt by the Plan Administrator of such claim unless the
claimant is furnished a written notice of an extension prior to the termination of the initial 90-day
period indicating that special circumstances require an extension of not more than 90 days from
the end of such initial period. Such extension notice shall indicate the special circumstances
requiring an extension of time and the date by which the Plan Administrator expects to render the
final decision. If notice of a denial of the claim is not furnished within the above time limits, the
claim shall be deemed denied and the claimant shall be entitled to a review of the decision
pursuant to Section 10.01 (b).
(b) Procedure for Reviewina Denied Claims. A claimant whose claim for benefits under Section
10.01{a) has been denied may have such decision reviewed by the Plan Administrator within
60 days after receipt of written notice denying such claim. The claimant, or his duly authorized
representative, may review pertinent documents and may submit written issues and comments to
the Plan Administrator. Within 60 days (or 120 days if special circumstances warrant an
extension of time) after receipt of a request for a review, the Plan Administrator shall render a
written decision and, in the event the appeal is denied, the Plan Administrator shall set forth in
language calculated to be understood by the claimant, the specific reasons for the decision and
specific references to the pertinent Plan provisions on which such decision is based. If an
extension of time for rendering a written decision is required because of special circumstances,
written notice of the extension (not to exceed 120 days after receipt of a request for review) shall
be furnished to the claimant prior to the commencement of the extension. If the decision on
review is not furnished within such time, the claim shall be deemed denied on review.
26
[FLEX/Rev. 11102]
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10.02. Benefit Claim and Appeal Procedures Applicable to Medical Reimbursement FSA Account
. Benefits. This Section 10.02 applies to any claim, filed with the Plan Administrator on or after January 1,
2003, for Medical Reimbursement FSA Account Benefits.
(a) Benefit Claim Procedure. Any Participant or beneficiary or his authorized representative
(referred to herein as the "claimant") whose claim for Medical Reimbursement FSA Account
Benefits is denied may file a claim with the Plan Administrator stating the nature and amount of
the claim and any additional information necessary to support the claim. If the Plan Administrator
denies the claim, it shall provide the claimant with written notice (or electronic notice that
complies with the standards imposed by U.S. Department of Labor Regulations Section
2520.104b-1{c)(i), (iii), and (iv», setting forth, in a manner calculated to be understood by the
claimant: (i) the specific reason or reasons for the denial; (ii) reference to the specific Medical
Reimbursement Plan provisions on which the denial is based; (iii) a description of any additional
material or information necessary for the claimant to perfect the claim and an explanation of why
the material or information is necessary; and (iv) a description of the Medical Reimbursement
Plan's review procedures and the time limits applicable to such procedures following a denial on
review. Such written (or electronic) notice shall be furnished to the claimant within 30 days after
receipt by the Plan Administrator of such claim. This 30-day period may be extended one time by
the Plan Administrator for up to 15 days, provided that the Plan Administrator both determines
that such an extension is necessary due to matters beyond the control of the Plan Administrator
and notifies the claimant, prior to the expiration of the initial 30-day period, of the circumstances
requiring the extension of time and the date by which the Plan Administrator expects to render a
decision. If such an extension is necessary due to a failure of the claimant to submit the
information necessary to decide the claim, the notice of extension shall specifically describe the
required information, and the claimant shall be afforded at least 45 days from the receipt of the
notice within which to provide the specified information.
(b) Procedure for Reviewing Denied Claims. A claimant whose claim for Medical
Reimbursement FSA Account Benefits has been denied may have such decision reviewed by a
party designated by the Employer. Such party shall be a named fiduciary of such plan who
denied the claim that is the subject of the review nor the subordinate of such individual, within 180
days after receipt of the written (or electronic) notice denying such claim. The claimant shall have
the opportunity to submit written comments, documents, records, and other information relating to
the claim for benefits. The claimant shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other information relevant to the
claim for benefits. For purposes of this Section 10.02, a document, record or other information
shall be considered "relevant" to a claim for benefits if it (i) was relied upon in making the benefit
determination; (ii) was submitted, considered, or generated in the course of making the benefit
determination, without regard to whether it was relied upon in making such determination; or
(Hi) demonstrates compliance with required administrative processes and safeguards. Any review
of a denied claim shall take into account all comments, documents, records and other information
submitted by the claimant relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination. In addition, any review of a denied
claim shall not afford deference to the Plan Administrator's denial of the claim. Within 60 days
after receipt of a request for review, the designated Employer party shall provide the claimant with
written notice {or electronic notice that complies with the standards imposed by U.S. Department
of Labor Regulations Section 2520.1 04b-1 (cHi), (iii), and (iv)) of the decision on review. If the
appeal is denied, such notice shall set forth, in a manner calculated to be understood by the
claimant: (i) the specific reason or reasons for the denial; (ii) reference to the specific Medical
Reimbursement Plan provisions on which the denial is based; and (iii) a statement that the
claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies
of, all documents, records, and other information relevant to the claimant's claim for benefits.
27
[FLEX/Rev. 11/02J
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ARTICLE 11. PLAN ADMINISTRATOR
11.01. Plan Administrator. The Plan Administrator shall have authority and responsibility, as set forth in
Section 14.01, to take any reasonable actions necessary to control and manage the operation and
administration of this Plan under rules applied to all Participants on a uniform and nondiscriminatory basis.
ARTICLE 12. PLAN CONTRIBUTIONS
12.01. Characterization of Employer and Participant Contributions. All Pre-Tax Contributions made
under the Plan shall be designated and deemed to be Employer contributions. All After-Tax Contributions
made under the Plan shall be designated and deemed to be Participant contributions.
12.02. Trust. A separate fund or trust may but need not be established by the Employer to hold any
contributions to be later transferred to Participants as Benefits hereunder.
ARTICLE 13. AMENDMENT OR TERMINATION
13.01. Amendment or Termination. This Plan may be amended or terminated at any time by the Board of
Directors; provided, however, that any termination or amendment shall not affect the right of any Participant
to claim Benefits for that portion of the Plan Year or coverage period prior to such termination or amendment,
to the extent such amounts are payable under the terms of the Plan as in effect prior to the calendar month in
which the Plan is terminated or amended. Any amendment or termination shall take effect only as of the end
of a pay period.
ARTICLE 14. MISCELLANEOUS
14.01. Plan Administrator's Authority. The Plan shall be administered in accordance with its terms by the
Plan Administrator who shall have all powers necessary to effectuate the provisions of the Plan. Decisions,
interpretations, determinations, rules or regulations issued by the Plan Administrator shall be in its sole
discretion and shall be final and binding upon any Participant, the Participant's spouse, the Participant's
Dependents and any other party. Subject to the terms and conditions of the Plan, the Plan Administrator
shall have exclusive authority to:
(a) interpret the provisions of the Plan, determine all questions arising in the administration,
interpretation, and application of the Plan document, resolve ambiguities, inconsistencies, and
omissions related thereto, and formulate and issue such rules and regulations as may be necessary
for the purpose of administering the Plan;
(b) determine the eligibility of a Participant, a Participant's spouse, a Participant's Dependents or any
other party for benefits under the Plan;
(c) prescribe the form of any documents or instruments required in the administration of the Plan;
and
(d) do all other things needed for the orderly administration of the Plan.
In any review of any such interpretation, determination, rule or regulation, the Plan Administrator's decision
shall be given deference and shall be set aside by a reviewing tribunal only in the event that the Plan
Administrator acted in an arbitrary and capricious manner.
14.02. No Personal Liability. Nothing contained herein shall impose on any officers or directors of any
Employer any personal liability for any Benefits due a Participant or Dependent under this Plan.
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[FLEX/Rev. 11102]
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14.03. Additional Procedures. Any rules, regulations, or procedures that may be necessary for the proper
administration or functioning of the Plan that are not covered herein shall be promulgated and adopted by the
Plan Administrator.
14.04. Plan Not an Employment Contract. This Plan shall not be deemed to constitute a contract between
any Employer and any Participant or to be a consideration or an inducement for the employment of any
Participant. This Plan shall not be deemed to give any Participant or other employee the right to be retained
in the service of any Employer or to interfere with the right of any Employer to discharge any Participant or
other employee at any time regardless of the effect which such discharge shall have upon such individual as
a Participant)n this Plan. This Plan shall not be deemed to give any Employer the right to require any
Participant or other employee to remain in the employ of any Employer or to restrict any such individual's right
to terminate his employment at any time.
14.05. Severability. If any provision of this Plan shall be held invalid for any reason such illegality or
invalidity shall not affect the remaining parts of this Plan and this Plan shall be construed and enforced as if
such illegal and invalid provisions had never been included.
14.06. Gender and Number. In the construction of this Plan, reference to any gender shall include the
masculine, feminine and neuter genders, the plural shall include the singular and the singular the plural,
whenever appropriate.
14.07. Construction. The terms of the Plan shall be construed under the laws of the Plan Sponsor's
principal place of business except to the extent such laws are pre-empted by the laws of any other State or
by Federal law.
29
[FLEX/Rev. 11/02]
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ARTICLE 15. ENTIRE AGREEMENT
This document sets forth the entire Plan. Except as provided in this Plan, no other employee benefit
plan which is, or may hereafter be, maintained by the Employer on a non-elective basis shall constitute a part
of this Plan.
.J
IN WITNESS WHEREOF, the Plan Sponsor has caused this Plan to be executed this ~ day of
~~ to be effective as stated in the Adoption Agreement.
m tÞ l/~ er-
By:
By: ~~.Ü~~AAQ Q.J/\.(.~J
Title: ~ we. -N_Q A. ¡J 0 k-<" S Dì',~~ t! e..
APPROVED
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[FLEXIRev. 11/02]