HomeMy WebLinkAboutRES.2061.05-02-2005BILL NO. 05-75
RESOLUTION NO. t
A RESOLUTION AUTHORIZING THE CITY MANAGER TO
EXECUTE AN AMENDED PLAN DOCUMENT WITH
MARSHALL & ILSLEY TRUST COMPANY, N.A., FOR
THE CITY OF CAPE GIRARDEAU SECTION 125
CAFETERIA PLAN
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF CAPE GIRARDEAU,
MISSOURI, AS FOLLOWS:
ARTICLE 1. The City Manager, for and on behalf of the City
of Cape Girardeau, Missouri, is hereby authorized to execute an
Amended Plan Document with Marshall & Ilsley Trust Company, N.A.,
for the City of Cape Girardeau Section 125 Cafeteria Plan. A
copy of said Amended Plan Document is attached to this Resolution
and made a part hereof.
PASSED AND ADOPTED THIS 21 DAY OF l;_ 20
60-Ja4-
Knudtson, Mayor
Gayle L. Conrad, City Clerk
5/17/04
THE CITY OF CAPE GIRARDEAU
FLEXIBLE BENEFITS PLAN
TABLE OF CONTENTS
ARTICLEI DEFINITIONS...........................................................................................5
ARTICLE II
PARTICIPATION.....................................................................................8
4.1
BENEFIT OPTIONS
12
2.1
ELIGIBILITY
13
4.3
DEPENDENT CARE ASSISTANCE PROGRAM BENEFIT
8
2.2
EFFECTIVE DATE OF PARTICIPATION
8
2.3
APPLICATION TO PARTICIPATE
8
2.4
TERMINATION OF PARTICIPATION
9
2.5
CHANGE OF EMPLOYMENT STATUS
9
2.6
TERMINATION OF EMPLOYMENT
14
4.9
SUPPLEMENTAL CANCER CARE BENEFIT
9
2.7
DEATH
14
4.10
SUPPLEMENTAL HOSPITAL INDEMNITY BENEFIT
11
ARTICLE III CONTRIBUTIONS TO THE PLAN.....................................................11
3.1 SALARY REDIRECTION 11
3.2 APPLICATION OF CONTRIBUTIONS 12
3.3 PERIODIC CONTRIBUTIONS 12
ARTICLEIV
BENEFITS...............................................................................................12
4.1
BENEFIT OPTIONS
12
4.2
HEALTH CARE REIMBURSEMENT PLAN BENEFIT
13
4.3
DEPENDENT CARE ASSISTANCE PROGRAM BENEFIT
13
4.4
CASH BENEFIT
13
4.5
HEALTH INSURANCE BENEFIT
13
4.6
DENTAL INSURANCE BENEFIT
13
4.7
SUPPLEMENTAL INTENSIVE CARE BENEFIT
14
4.8
SUPPLEMENTAL ACCIDENT CARE BENEFIT
14
4.9
SUPPLEMENTAL CANCER CARE BENEFIT
14
4.10
SUPPLEMENTAL HOSPITAL INDEMNITY BENEFIT
14
4.11
NONDISCRIMINATION REQUIREMENTS
15
ARTICLE V PARTICIPANT ELECTIONS...............................................................16
5.1 INITIAL ELECTIONS 16
5.2 SUBSEQUENT ANNUAL ELECTIONS 16
5.3
FAILURE TO ELECT
17
5.4
CHANGE OF ELECTION
17
ARTICLE VI
HEALTH CARE REIMBURSEMENT PLAN.....................................22
6.1
ESTABLISHMENT OF PLAN
22
6.2
DEFINITIONS
22
6.3
FORFEITURES
23
6.4
LIMITATION ON ALLOCATIONS
23
6.5
NONDISCRIMINATION REQUIREMENTS
23
6.6
COORDINATION WITH CAFETERIA PLAN
24
6.7
HEALTH CARE REIMBURSEMENT PLAN CLAIMS
24
ARTICLE VII
DEPENDENT CARE ASSISTANCE PROGRAM..............................25
7.1
ESTABLISHMENT OF PROGRAM
25
7.2
DEFINITIONS
25
7.3
DEPENDENT CARE ASSISTANCE ACCOUNTS
27
7.4
INCREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS
27
7.5
DECREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS
27
7.6
ALLOWABLE DEPENDENT CARE ASSISTANCE REIMBURSEMENT
27
7.7
ANNUAL STATEMENT OF BENEFITS
27
7.8
FORFEITURES
28
7.9
LIMITATION ON PAYMENTS
28
7.10
NONDISCRIMINATION REQUIREMENTS
28
7.11
COORDINATION WITH CAFETERIA PLAN
29
7.12
DEPENDENT CARE ASSISTANCE PROGRAM CLAIMS
29
ARTICLE VIII
BENEFITS AND RIGHTS.................................................................... 30
8.1
CLAIM FOR BENEFITS
30
8.2
APPLICATION OF BENEFIT PLAN SURPLUS
32
8.3
NAMED FIDUCIARY
32
ARTICLE IX
ADMINISTRATION...............................................................................32
9.1
PLAN ADMINISTRATION
32
9.2
EXAMINATION OF RECORDS
33
9.3
PAYMENT OF EXPENSES
33
9.4
INSURANCE CONTROL CLAUSE
33
9.5 INDEMNIFICATION OF ADMINISTRATOR
34
ARTICLE X
AMENDMENT OR TERMINATION OF PLAN ................................ 34
10.1
AMENDMENT
34
10.2
TERMINATION
34
ARTICLE XI
MISCELLANEOUS................................................................................35
11.1
PLAN INTERPRETATION
35
11.2
GENDER AND NUMBER
35
11.3
WRITTEN DOCUMENT
35
11.4
EXCLUSIVE BENEFIT
35
11.5
PARTICIPANT'S RIGHTS
35
11.6
ACTION BY THE EMPLOYER
35
11.7
NO GUARANTEE OF TAX CONSEQUENCES
36
11.8
INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS
36
11.9
FUNDING
36
11.10
GOVERNING LAW
36
11.11
SEVERABILITY
37
11.12
CAPTIONS
37
11.13
CONTINUATION OF COVERAGE
37
11.14
FAMILY AND MEDICAL LEAVE ACT
37
11.15
HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT
38
11.16
UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT
RIGHTS ACT
40
THE CITY OF CAPE GIRARDEAU
FLEXIBLE BENEFITS PLAN
INTRODUCTION
Effective January 1, 2004, the Employer amends and rewrites the Plan known as The City of Cape
Girardeau Tax Savings Plan and Custodial Account to recognize contributions made to the Employer
by its Employees. The purpose of this Plan is to reward Employees by providing benefits for those
Employees who shall qualify hereunder and their dependents and beneficiaries. The concept of this
plan is to allow Employees to choose among different types of benefits based on their own particular
goals, desires and needs. The Plan shall be known as The City of Cape Girardeau Flexible Benefits
Plan (the "Plan").
This document is designed to qualify as a "Cafeteria Plan" within the meaning of Code Section 125,
under which an Employee elects to receive benefits under the Plan as included or excludable from the
Employee's income under Section 125(a) and other applicable Code Sections. Portions of this document
also reflect individual component plans designed to separately qualify as: (1) a Medical Reimbursement
Plan under Code Section 105; (2) a Premium Conversion Plan under Code Section 106; and (3) a
Dependent Care Assistance Plan under Code Section 129.
ARTICLE I
DEFINITIONS
1.1. "Administrator" means The City of Cape Girardeau, or the individual(s) or corporation
appointed by the Employer to carry out the administration of the Plan. In the event an
Administrator has not been appointed, or resigns from a prior appointment, the Employer shall
be deemed to be the Administrator.
1.2. "Affiliated Employer" means the Employer and any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414{b}) which includes the
Employer; any trade or business (whether or not incorporated) which is under common control
(as defined in Code Section 414{c}) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined in Code Section
414(m)) which includes the Employer; and any other entity required to be aggregated with the
Employer pursuant to Treasury regulations under Code Section 414(o).
1.3. "Benefit" means any of the optional benefit choices available to a Participant as outlined in
Section 4.1.
1.4. "Cafeteria Plan Benefit Dollars" means the amount available to Participants, pursuant to Article
III, to purchase Benefits. Each dollar contributed to this Plan shall be converted to one Cafeteria
Plan Benefit Dollar.
1.5. "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time.
5
1.6. "Compensation" means the total cash remuneration received by the Participant from the
Employer during a Plan Year prior to any Salary Redirection Agreement reductions authorized
here under. Compensation shall include overtime, commissions, and bonuses.
1.7. "Dependent" means any individual who is a tax dependent of the Participant as defined in Code
Section 152 except that: (a) for purposes of accident or health coverage, any child to whom Code
Section 152(e) applies (regarding a child of divorced parents, etc, where one or both parents have
custody of the child for more than half of the calendar year and where the parents together provide
more than half of the child's support for the year) is treated as a dependent of both parents; and
(b) for purposes of the Dependent Care Assistance Program, a dependent means a qualifying
individual as defined in Code Section 21(b)(1) with respect to the Participant and in the case of
divorced parents, the child shall, as provided in Code Section 21(e)(5), be treated as a qualifying
individual of the custodial parent (within the meaning of Code Section 152(e)(1)), and shall not
be treated as a qualifying individual with respect to the non-custodial parent. Notwithstanding
the foregoing, the Health Care Reimbursement Plan will provide benefits in accordance with the
applicable requirements of any qualified medical child support order, as defined in ERISA 609(a),
even if the child does not meet the definition of "dependent".
1.8. "Effective Date" means August 1, 1989. The plan was amended and rewritten effective January
1, 2004.
1.9. "Election Period" means the period immediately preceding the beginning of each Plan Year
established by the Administrator, such period to be applied on an uniform and nondiscriminatory
basis for all Employees and Participants. However, an Employee's initial Election Period shall
be determined pursuant to Section 5.1.
1.10. "Eligible Employee" means any person who is a full-time common law employee of the
Employer who is receiving remuneration for personal services rendered to the Employer. A full-
time employee is defined as an employee who is scheduled to work thirty (30) or more hours per
week on a regular basis.
1.11. "Employee" means any person who is employed by the Employer, but excludes any person who
performs services as an independent contractor and does not include leased employees within the
meaning of Code Section 414(n)(2). Any classification, reclassification or other characterization
of any such individual as an employee of the Employer, whether as a statutory or common law
employee, by a court of law or by action of any federal, state or local governmental agency shall
be of no effect on the exclusion of such individual from participation in the plan.
1.12. "Employer" means The City of Cape Girardeau and any affiliated employer that shall adopt this
Plan; any successor who shall maintain this Plan; and any predecessor which has maintained this
Plan.
1.13. "Employer Contribution" means the contributions made on behalf of a Participant by the
Employer. These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated
to the insured or self-funded Benefits established under the Plan pursuant to the Participants'
elections made under Article V.
Con
1. 14. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time
to time.
1.15. "Highly Compensated Employee" means, for the purposes of determining discrimination, an
Employee described in Code Section 414(q) and the Treasury regulations thereunder.
1.16. "Insurance Contract" means any contract issued by an Insurer underwriting a Benefit.
1.17. "Insurer" means any insurance company that underwrites a Benefit under this Plan or, with
respect to any self-funded benefits, the Employer.
1.18. "Key Employee" means an employee defined in Code Section 416(i)(1) and the Treasury
regulations thereunder.
1.19. "Participant" means any Eligible Employee who elects to become a Participant pursuant to
Section 2.3 and has not for any reason become ineligible to participate further in the Plan.
1.20. "Plan" means this instrument, including all amendments thereto.
1.21. "Plan Year" means the 12 -month period beginning January 1 st and ending December 31 st. The
Plan Year shall be the coverage period for the Benefits provided under this Plan. In the event a
Participant commences participation during a Plan Year, then the initial coverage period shall be
that portion of the Plan Year commencing on such Participant's date of entry and ending on the
last day of such Plan Year.
1.22. "Premium Expenses" or "Premiums" mean the Participant's cost for the self-funded or insured
benefits described in Section 4.1.
1.23. "Premium Reimbursement Account" means the account established for a Participant pursuant
to this Plan to which part of the Cafeteria Plan Benefit Dollars may be allocated and from which
Premiums of the Participant may be paid or reimbursed. If more than one type of insured or self-
funded Benefit is elected, a sub -account shall be established for each type of insured Benefit.
1.24. `ISalary Redirection" means the contributions made by the Employer on behalf of Participants
pursuant to Section 3.1. These contributions shall be converted to Cafeteria Plan Benefit Dollars
and allocated to the accounts established under the Plan pursuant to the Participants' elections
made under this Plan.
1.25. "Salary Redirection Agreement" means an agreement between the Participant and the Employer
under which the Participant agrees to reduce his Compensation or to forego all or part of the
increases in such Compensation and to have such amounts contributed by the Employer to the
Plan on the Participant's behalf. The Salary Redirection Agreement shall apply only to
Compensation that has not been actually or constructively received by the Participant as of the
date of the agreement (after taking this Plan and Code Section 125 into account) and,
subsequently does not become currently available to the Participant.
1.26. "Spouse" means the legally married husband or wife of a Participant, unless legally separated by
court decree.
7
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY
Any Eligible Employee shall be entitled to participate hereunder upon the first of the month
following or coinciding with 30 days of employment. Any Eligible Employee who was a
Participant in the Plan on the effective date of this amendment shall continue to be eligible to
participate in the Plan.
If a former Participant is rehired during the same Plan Year in which termination of
employment occurs and the former Participant qualifies as an Eligible Employee, such former
Participant shall be eligible for Salary Redirection pursuant to Section 2.6.
2.2 EFFECTIVE DATE OF PARTICIPATION
An newly Eligible Employee who makes an initial election to participate under Section 5.1
shall become a Participant in the Plan effective as of the first day of the month coinciding with
or following the date the benefit department receives your properly completed election form.
An Eligible Employee who makes an election to participate under Section 5.2 shall become a
Participant in the Plan effective as of the first day of the Plan Year following such election,
provided the requirements for participation under Section 5.2 are satisfied during the applicable
Election Period.
Notwithstanding the foregoing, an Eligible Employee shall become a Participant with respect
to the insured Benefits effective as of the entry date under the Employer's group medical plan.
2.3 APPLICATION TO PARTICIPATE
An Employee who is eligible to participate in this Plan shall, during the applicable Election
Period, complete an application to participate and make an election of benefits, which the
Administrator shall furnish to the Employee. The election made on such form shall be
irrevocable until the end of the applicable Plan Year unless the Participant is entitled to change
his Benefit elections pursuant to Section 5.4 hereof.
An Eligible Employee shall also be required to execute a Salary Redirection Agreement during
the Election Period for the Plan Year during which he wishes to participate in this Plan. Any
such Salary Redirection Agreement shall be effective beginning on the Employee's effective
date of participation pursuant to Section 2.2.
2.4 TERMINATION OF PARTICIPATION
A Participant shall cease to be a Participant in this Plan upon the earlier of-
(a)
£
(a) The expiration of the Plan Year for which the Employee elected to Participate, unless
the Participant makes a timely election to continue participation subject to Section 2.3.
(b) The date on which the Employee ceases to be an employee eligible to participate under
Section 2.1 because of retirement, termination of employment subject to provisions of
Section 2.6, layoff, reduction in hours subject to Section 2.5, death subject to Section
2.7 or any other reason.
(c) The date the Participant revokes an election to participate under a circumstance when
such change is permitted under the terms of this plan, or
(d) The termination of this Plan, subject to the provisions of Section 10.2.
Participation under insured Benefits will cease as of the date specified by the specific health
insurance plan.
2.5 CHANGE OF EMPLOYMENT STATUS
If a Participant ceases to be an Eligible Employee because of a change in employment status or
classification (other than through termination of employment), the Participant shall become a
limited Participant in this Plan for the remainder of the Plan Year in which such change of
employment status occurs. As a limited Participant, no further Salary Redirection may be made
on behalf of the Participant, and except as otherwise provided herein, all further Benefit
elections shall cease, subject to the limited Participant's right to continue coverage under the
individual health benefits. Without continuation coverage, any balance in the limited
Participant's Health Care Reimbursement Plan may be used to reimburse the limited Participant
for any allowable Medical Expenses incurred during the portion of the Plan Year during which
he was an Eligible Employee (except as otherwise provided in Section 2.6(c)(1)). The limited
Participant's Dependent Care Assistance Program balance may be used during such Plan Year
to reimburse the limited Participant for any allowable Employment -Related Dependent Care
Expenses incurred during the Plan Year. Subject to the provisions of Section 2.6, if the limited
Participant later becomes an Eligible Employee, then the limited Participant may again become
a full Participant in this Plan, provided he otherwise satisfies the participation requirements set
forth in this Article H as if he were a new Employee and made an election in accordance with
Section 5.1.
2.6 TERMINATION OF EMPLOYMENT
If a Participant's employment with the Employer is terminated for any reason other than death,
his participation in the Plan shall be governed in accordance with the following:
Z
(a) With regard to Insurance Benefits provided under Section 4.1, the Participant's
participation in the Plan shall cease, subject to the Participant's right to continue
coverage under any Insurance Contract for which premiums have already been paid.
(b) With regard to the Dependent Care Assistance Program, the Participant's participation
in the Plan shall cease and no further Salary Redirection contributions shall be made.
However, such Participant may request reimbursement for any qualified Employment -
Related Dependent Care Expenses per Section 7.2(d), incurred during the Participant's
coverage period and continuing through the end of the Plan Year in which the
termination occurs, based on the level of the Dependent Care Assistance Account as of
the date of termination.
(c) With regard to the Health Care Reimbursement Plan, the Participant may elect to
continue the participation in the Plan to the extent required under Code Section 4980B
and Section 11.13 of the Plan as set forth herein.
(1) If the Participant elects to continue participation in the Health Care
Reimbursement Plan to the extent required under Code Section 4980B and
Section 11.13 of the Plan as set forth herein, the Participant may continue to
seek reimbursement from the Health Care Reimbursement Fund based on the
elections made prior to the beginning of the Plan Year. However, such
contributions after termination of employment shall be with after-tax dollars
instead of Salary Redirections.
(2) If the Participant does not elect to continue participation in the Health Care
Reimbursement Plan for the remainder of the Plan Year in which such
termination occurs, participation in the Plan shall cease and no further Salary
Redirection contributions shall be made. However, such Participant may submit
claims for expenses incurred during the portion of the Plan Year preceding the
date of termination.
(3) No Participant will be allowed to continue coverage under Code Section 4980B
in accordance to Section 11.13 unless the Participant's maximum unpaid
contributions are less than or equal to the Participant's maximum Health Care
Reimbursement Plan benefits for the remainder of the Plan Year. Even if a
Participant may continue coverage under Code Section 4980B (as stated in
Section 11.13 of the Plan) through the application of the preceding sentence, the
Participant may not continue such coverage during any subsequent Plan Year.
(d) In the event a Participant terminates his participation in the Health Care Reimbursement
Plan during the Plan Year, if Salary Redirections are made other than on a pro rata
basis, upon termination the Participant shall be entitled to a reimbursement for any
Salary Redirection previously paid for coverage or benefits relating to the period after
the date of the Participant's separation from service regardless of the Participant's
claims or reimbursements as of such date.
10
(e) This Section shall be applied and administered consistent with such further rights a
Participant and his Dependents may acquire pursuant to Code Section 4980B and
Section 11.13 of the Plan.
2.7 DEATH
If a Participant dies, his participation in the Plan shall cease. However, such Participant's
beneficiaries, or the representative of his estate, may submit claims for any allowable medical
expenses incurred during the portion of the Plan Year preceding the Participant's death (except
as otherwise provided in Section 2.6(c)(1)), or Employment -Related Dependent Care Expenses
incurred during the Plan Year. A Participant may designate a specific beneficiary for this
purpose. If no such beneficiary is specified, the Administrator may designate the Participant's
Spouse, one of his Dependents or a representative of his estate.
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 SALARY REDIRECTION
Benefits under the Plan shall be financed by Salary Redirections sufficient to support the cost
of Benefits that a Participant has elected hereunder. The amount of the Salary Redirection shall
be specified in the Salary Redirection Agreement and shall be applicable for a Plan Year.
Notwithstanding the above, for new Participants, the Salary Redirection agreement shall only
be applicable from the first day of coverage following the Employee's entry date up to and
including the last day of the Plan Year. These contributions shall be converted to Cafeteria Plan
Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to
the Participants' elections made under Article V.
Any Salary Redirection shall be determined prior to the beginning of a Plan Year (subject to
initial elections pursuant to Section 5.1) and prior to the end of the Election Period, and shall
be irrevocable for such Plan Year. However, a Participant may revoke a Benefit election or a
Salary Redirection Agreement after the Plan Year has commenced and make a new election
with respect to the remainder of the Plan Year, if both the revocation and the new election are
on account of and consistent with a change in work or family status or such other permitted
events as determined under Article V of the Plan and consistent with the rules and regulations
of the Department of the Treasury. Salary Redirection amounts shall be contributed on a pro
rata basis for each pay period during the Plan Year. All individual Salary Redirection
Agreements are deemed to be part of this Plan and incorporated by reference hereunder.
11
3.2 APPLICATION OF CONTRIBUTIONS
As soon as reasonably practical after each payroll period, the Employer shall apply the Salary
Redirection to provide the Benefits elected by the affected Participants. Any contribution made
or withheld for the Health Care Reimbursement Fund or Dependent Care Assistance Account
shall be credited to such fund or account. Amounts designated for the Participant's Premium
Expense Reimbursement Account shall likewise be credited to such account for the purpose
of paying Premium Expenses.
3.3 PERIODIC CONTRIBUTIONS
Notwithstanding the requirement provided above and in other Articles of this Plan that Salary
Redirection be contributed to the Plan by the Employer on behalf of an Employee on a level
and pro rata basis for each payroll period. The Employer and Administrator may implement a
procedure in which Salary Redirection are contributed throughout the Plan Year on a periodic
basis that is not pro rata for each payroll period. However, with regard to the Health Care
Reimbursement Plan, the payment schedule for the required contributions may not be based on
the rate or amount of reimbursements during the Plan Year. In the event Salary Redirections
are not made on a pro -rata basis, upon termination of participation, a Participant may be
entitled to a refund of such Salary Redirections pursuant to Section 2.6(d).
ARTICLE IV
BENEFITS
4.1 BENEFIT OPTIONS
Each Participant may elect to have the amount of his Cafeteria Plan Benefit Dollars applied to
any one or more of the following optional Benefits:
(1) Health Care Reimbursement Plan
(2) Dependent Care Assistance Program
(3) Cash Benefit (i.e. Compensation that a Participant elected, or was deemed to have
elected, to receive as a taxable cash benefit in lieu of other non-taxable benefits
available under this Plan.)
In addition, each Participant shall have a sufficient portion of his Cafeteria Plan Benefit Dollars
applied to the following insured benefits unless the Participant elects not to receive such
benefits:
(4) Health Insurance Benefit
(5) Dental Insurance Benefit
12
(6) Supplemental Intensive Care Benefit
(7) Supplemental Accident Care Benefit
(8) Supplemental Cancer Care Benefit
(9) Supplemental Hospital Indemnity Benefit
4.2 HEALTH CARE REIMBURSEMENT PLAN BENEFIT
Each Participant may elect coverage under the Health Care Reimbursement Plan Option, in
which case Article VI shall apply.
4.3 DEPENDENT CARE ASSISTANCE PROGRAM BENEFIT
Each Participant may elect coverage under the Dependent Care Assistance Program option, in
which case Article VII shall apply.
4.4 CASH BENEFIT
If a Participant does not elect any Salary Redirections, such Participant shall be deemed to
chosen the Cash Benefit (or was not deemed to have elected) as his sole Benefit option.
4.5 HEALTH INSURANCE BENEFIT
(a) Each Participant may elect to be covered under a Health and Hospitalization Insurance
Contract for the Participant, his or her spouse, and his or her Dependents. The
Employer may select suitable Health and Hospitalization Insurance Contracts for use
in providing this health insurance benefit, which policies will provide uniform benefits
for all Participants electing this Benefit.
(b) The rights and conditions with respect to the benefits payable from such Health and
Hospitalization Insurance Contract shall be determined therefrom, and such Insurance
Contract shall be incorporated herein by reference.
4.6 DENTAL INSURANCE BENEFIT
(a) Each Participant may elect to be covered by the Employer's Dental Insurance Contract.
The Employer may select suitable Dental Insurance Contracts for use in providing this
Dental insurance benefit, for which the policies will provide uniform benefits for all
Participants electing this Benefit.
13
(b) The rights and conditions with respect to the benefits payable from such Dental
Insurance Contract shall be determined therefrom, and such Dental Insurance Contract
shall be incorporated herein by reference.
4.7 SUPPLEMENTAL INTENSIVE CARE BENEFIT
(a) Each Participant may elect to be covered by the Employer's Supplemental Intensive
Care Benefit Insurance Contract. The amount of coverage hereunder shall be sufficient
to provide a basic benefit as determined by the policy in effect for the Plan Year. The
Employer may select suitable Contract(s), which will provide benefits for all
Participants electing this Benefit on a uniform basis.
(b) The rights and conditions with respect to the Benefits payable from such Supplemental
Intensive Care Benefit Insurance Contract shall be determined therefrom, and such
Contract shall be incorporated herein by reference.
4.8 SUPPLEMENTAL ACCIDENT CARE BENEFIT
(a) Each Participant may elect to be covered by the Employer's Supplemental Accident
Care Benefit Insurance Contract. The amount of coverage hereunder shall be sufficient
to provide a basic benefit as determined by the policy in effect for the Plan Year. The
Employer may select suitable Contract(s), which will provide benefits for all
Participants electing this Benefit on a uniform basis.
(b) The rights and conditions with respect to the Benefits payable from such Supplemental
Accident Care Benefit Insurance Contract shall be determined therefrom, and such
Contract shall be incorporated herein by reference.
4.9 SUPPLEMENTAL CANCER CARE BENEFIT
(a) Each Participant may elect to be covered by the Employer's Supplemental Cancer Care
Benefit Insurance Contract. The amount of coverage hereunder shall be sufficient to
provide a basic benefit as determined by the policy in effect for the Plan Year. The
Employer may select suitable Contract(s), which will provide benefits for all
Participants electing this Benefit on a uniform basis.
(b) The rights and conditions with respect to the Benefits payable from such Supplemental
Cancer Care Benefit Insurance Contract shall be determined therefrom, and such
Contract shall be incorporated herein by reference.
4.10 SUPPLEMENTAL HOSPITAL INDEMNITY BENEFIT
(a) Each Participant may elect to be covered by the Employer's Supplemental Hospital
Indemnity Benefit Insurance Contract. The amount of coverage hereunder shall be
sufficient to provide a basic benefit as determined by the policy in effect for the Plan
14
Year. The Employer may select suitable Contract(s), which will provide benefits for
all Participants electing this Benefit on a uniform basis.
(b) The rights and conditions with respect to the Benefits payable from such Supplemental
Hospital Indemnity Benefit Insurance Contract shall be determined therefrom, and such
Contract shall be incorporated herein by reference.
4.11 NONDISCRIMINATION REQUIREMENTS
(a) It is the intent of this Plan to provide benefits to a classification of employees which the
Secretary of the Treasury finds not to be discriminatory in favor of the group in whose
favor discrimination may not occur under Section 125.
(b) It is the intent of this Plan not to provide qualified benefits as defined under Code
Section 125 to Key Employees in amounts that exceed 25% of the aggregate of such
Benefits provided for all Eligible Employees under the Plan. For purposes of the
preceding sentence, qualified benefits shall not include benefits that (without regard to
this paragraph) are included in gross income.
(c) If the Administrator deems it necessary to avoid discrimination or possible taxation to
Key Employees or a group of employees in whose favor discrimination may not occur
in violation of Code Section 125, it may, but shall not be required to, reduce
contributions or non-taxable Benefits in order to assure compliance with this Section.
Any act taken by the Administrator under this Section shall be carried out in a uniform
and nondiscriminatory manner. If the Administrator decides to reduce contributions or
non-taxable benefits, it shall be done in the following manner. First, the non-taxable
Benefits of the affected Participant (either an employee who is highly compensated or
a Key Employee, whichever is applicable) who has elected the highest amount of non--
taxable
on-taxable Benefits for the Plan Year shall have his non-taxable benefits reduced until the
discrimination tests set forth in this Section are satisfied or until the amount of his non-
taxable Benefits equals the non-taxable Benefits of the affected Participant who has
elected the second highest amount of non-taxable Benefits. This process shall continue
until the nondiscrimination tests set forth in this Section are satisfied. With respect to
any affected Participant who has had Benefits reduced pursuant to this Section, the
reduction shall be made proportionately among Health Care Reimbursement Plan
Benefits and Dependent Care Assistance Program benefits, and once all these Benefits
are expended, proportionately among insured Benefits. Contributions which are not
utilized to provide Benefits to any Participant by virtue of any administrative act under
this paragraph shall be forfeited and deposited into the benefit plan surplus.
15
ARTICLE V
PARTICIPANT ELECTIONS
5.1 INITIAL ELECTIONS
An Employee who meets the eligibility requirements of Section 2. 1, will have an additional 30
days from the date he or she becomes an Eligible Employee to elect participation in this Plan
for all or the remainder of such Plan Year in accordance to Section 2.3. Participation in the
Plan shall not be effective until after receipt of the Participant's election pursuant to Section 2.2
and shall be limited to Benefit expenses incurred for the balance of the Plan Year for which the
election is made.
If such Eligible Employee fails to make such election or satisfy such requirements within this
30 day initial Election Period, such Eligible Employee will be deemed to have elected not to
participate in the Plan for all or the remainder of the Plan Year. Section 5.2 will be applicable
with regard to subsequent annual elections to participate in the Plan.
If a former Participant is rehired to an Eligible Employee position during the same Plan Year
in which termination of employment occurred and that Participant's prior coverage was
terminated, the following shall apply:
(a) If the Employee meets an Eligible Employee status within 30 days or less of the
termination of employment the Participant shall be reinstated with the same Benefit
election such Participant had prior to termination without loss of coverage. Salary
Redirection for the Health Care Reimbursement Plan and Dependent Care Assistance
Program for the remainder of the Plan Year will be in an amount equal to the prior
Benefit Election for the Plan Year less prior Plan Year Benefit contributions subject to
the Participant's right to change his Benefit Elections pursuant to Section 5.4.
(b) If the Employee meets the Eligible Employee status 30 days or more after termination
of employment the Participant shall be entitled to make a new Benefit Election in
accordance to Section 2.2 and Section 2.3. The new Benefit Election and Salary
Redirection for non-insured Benefits for the remainder of the Plan Year may not exceed
the difference of the maximum account allowance less the prior Benefit elections for
that Plan Year.
5.2 SUBSEQUENT ANNUAL ELECTIONS
During the Election Period prior to each subsequent Plan Year, each Participant (and each
Eligible Employee who elected not to participate in the Plan in the prior Plan Year) shall be
given the opportunity to make a Benefit election regarding Plan Benefits for the next Plan Year.
The Participant or Eligible Employee must make such an election and satisfy the requirements
of Section 2.3 during the Election Period. Any such election shall be effective for any Benefit
expenses incurred during the Plan Year, which follow the end of the Election Period. With
regard to subsequent annual elections, the following options shall apply:
16
(a) A Participant or Eligible Employee who failed to initially elect to participate may elect
different or new Benefits under the Plan during the Election Period;
(b) A Participant may terminate his participation in the Plan by notifying the Administrator
in writing during the Election Period that he does not want to participate in the Plan for
the next Plan Year;
(c) An Employee who elects not to participate for the Plan Year following the Election
Period will have to wait until the next Election Period before again electing to
participate in the Plan, with respect to the Health Care Reimbursement Plan and the
Dependent Care Assistance Program, unless such Employee is entitled to make a
Change of Election pursuant to Section 5.2.
5.3 FAILURE TO ELECT
Any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by
the end of the applicable Election Period shall be treated in the following manner:
(a) With regard to Benefits available under the Plan for which no Premium Expenses apply,
such Participant shall be deemed to have elected not to participate in the Plan for the
upcoming Plan Year. No further Salary Redirections shall therefore be authorized or
made for subsequent Plan Year for such Benefits.
(b) With regard to Benefits available under the Plan that are insured and for which
Premium Expenses apply, such Participant shall be deemed to have made the same
Benefit elections as then in effect for the current Plan Year. The Participant shall also
be deemed to have elected Salary Redirection in an amount necessary to purchase such
insured Benefit options.
5.4 CHANGE OF ELECTION
A Participant may change a Benefit election up to five (5) times during the Plan Year to which
such election relates and make a new Benefit election with respect to the remainder of such Plan
Year if, under the facts and circumstances, the changes are necessitated by and consistent with
change of election events acceptable under the rules and regulations adopted by the Department
of the Treasury, the provisions of which are incorporated by reference. However, no Participant
shall be allowed to reduce an election for Health Care Reimbursement or Dependent Care
Assistance Benefits to a point where the annualized contribution for such benefit is less than
the amount already reimbursed. Notwithstanding anything herein to the contrary, if the rules
and regulations of the Internal Revenue Service, Department of Labor, or any other
governmental entity conflict with the terms of the Plan, then the rules and regulations of the
Internal Revenue Service, Department of Labor, or other governmental entity shall control.
An election change is considered consistent if the qualifying event affects eligibility under an
Employer's Plan, and the that same event results in an increase or decrease in the number of
17
family members who may benefit from coverage under the Plan. The qualifying event must
directly affect coverage for the individual the change in election is made for. In addition, if the
Participant, Spouse or Dependent gains eligibility for coverage under a family member's plan
as a result of a change in marital status or a change in employment status, then a Participant's
election change to cease or decrease coverage for that individual corresponds with that change
in status only if coverage for that individual becomes applicable or is increased under the family
member plan.
Regardless of the consistency requirement, if the Participant, the Participant's spouse, or
dependent becomes eligible for continuation coverage under the Employer's group health plans
as provided in Code Section 4980B or any similar state law and the Participant retains eligibility
under the Cafeteria Plan hereunder, the Participant may use Salary Redirection under this Plan
to pay for the continuation coverage.
Any new election shall be effective as of the first day of the next pay period coinciding with or
next following the day a new election form is received by the Administrator, not withstanding
special enrollment rights provided for in Code Section 9801(f). For the purposes of this
subsection, a change in election shall include the following events or other events permitted by
Treasury regulations:
(a) Change in Status. A Participant may change or terminate an actual or deemed election
under the Plan upon the occurrence of a Change in Status, but only if such change or
termination is made on account of and corresponds with a Change in Status that affects
coverage eligibility of a Participant, Participant's Spouse, or Dependent. The Plan
Administrator (in its sole discretion) shall determine, based on prevailing IRS guidance,
whether a requested change is on account of and corresponds with a Change in Status.
Assuming the general consistency requirement is satisfied, a requested change must also
satisfy the following specific consistency requirements in order for a Participant to be
able to alter an election based on that change.
(1) Legal Marital Status: Events that change a Participant's legal marital status,
including marriage, divorce, death of a spouse, legal separation or annulment;
(2) Number of Dependents: Events that change a Participant's number of dependents,
including birth, adoption, placement for adoption, or death of a dependent;
(3) Employment Status: Any of the following events that change the employment
status of the Participant, spouse, or dependent: termination or commencement of
employment, a strike or lockout, commencement or return from an unpaid leave
of absence, incurring a reduction or increase in hours of employment, or a change
in work site. In addition, if the eligibility conditions of this Plan or other employee
benefit plan of the Employer of the Participant, spouse, or dependent depend on
the employment status of that individual and there is a change in that individual's
employment status with the consequence that the individual becomes (or ceases
to be) eligible under the plan, then that change constitutes a change in
employment under this subsection;
It.]
(4) Dependent Satisfies or Ceases to Satisfy the Eligibility Requirements: An event
that causes the Participant's dependent to satisfy or cease to satisfy the
requirements for coverage due to attainment of age, student status, or any similar
circumstance. For the Dependent Care Assistance Program, a dependent becoming
or ceasing to be a "Qualifying Dependent" as defined under Code Section 21(b)
qualified as a change in status; and
(5) Residency: A change in the place of residence of the Participant, the Participant's
Spouse or Dependent allows the Participant to change or drop insured Benefits.
(b) HIPAA Special Enrollment Rights. If a Participant, Spouse, or Dependent is entitled to
a special enrollment right under a group health plan, as required by Code Section
9801(f), then the Participant may revoke a prior election for health or accident coverage
and make a new election (including salary reduction), provided the election corresponds
with such special enrollment rights. A special enrollment right might arise if medical
coverage was declined for the Employee, Spouse or Dependent under the group health
plan because of outside medical coverage and eligibility for such coverage is
subsequently lost due to legal separation, divorce, death, termination of employment,
reduction in hours, or exhaustion of the maximum COBRA period, or if a new
Dependent is acquired. For purposes of this provision, (1) an election to prospectively
add previously eligible Dependents as a result of the acquisition of a new Spouse or
Dependent child shall be considered to be consistent with the special enrollment right;
and (2) a HIPAA special enrollment election attributable to the birth or adoption of a
new Dependent child may, subject to the provisions of the underlying group health plan,
be effective retroactively (up to 30 days).
(c) Certain Judgments, Decrees and Orders. Notwithstanding subsection (a), if a judgment,
decree, or order resulting from a divorce, legal separation, annulment, or change in legal
custody (including a qualified medical child support order defined in ERISA Section
609) requires accident or health coverage for a Participant's Dependent child (including
a foster child who is a dependent), a Participant may:
(1) Elect to add or increase coverage if an order requires the Participant to cover a
Dependent; or
(2) Decrease or cancel coverage for the child if the order requires the Participant's
spouse, former spouse or another individual to cover the Dependent, and the
Dependent actually becomes covered under the Plan of the spouse, former spouse
or other individual.
(d) Medicare and Medicaid. Notwithstanding subsection (a), if a Participant, Spouse or
Dependent who is enrolled in an accident or health benefit under this Plan becomes
entitled to Medicare or Medicaid (other than coverage consisting solely of benefits under
Section 1928 of the Social Security Act program for distribution of pediatric vaccines),
the Participant may prospectively reduce or cancel the health or accident coverage of the
19
person becoming entitled to coverage. Furthermore, if the Participant, Spouse, or
Dependent entitled to Medicare or Medicaid loses eligibility for such coverage, then the
Participant may prospectively elect to commence or increase the health or accident
coverage.
(e) Change in Cost. A Participant shall not be permitted to change an election to the Health
Care Reimbursement Plan as a result of a change under this subsection.
(1) Automatic Decrease or Increase. If the Participant's share of the premium
decreases during a Plan Year or insignificantly increases, then the Salary
Redirections under each affected Participant's election shall be retrospectively
adjusted to reflect such change. The Plan Administrator will decide, in accordance
with prevailing IRS guidance, whether increases in costs are "insignificant" based
upon all surrounding facts and circumstance (including, but not limited to, the
dollar amount or percentage of the cost change).
(2) Significant Cost Increase. If the Participant's cost of a benefit package option
increases significantly, attributable to action by the Employee or the Employer, the
Administrator shall permit the affected Participants to either make corresponding
changes in their payments or revoke their election and, in lieu thereof, receive on
a prospective basis coverage under another benefit package option with similar
coverage. If the increase is deemed to be significant and no other similar coverage
is available, the Participant may drop coverage. The Plan Administrator will
decide, in accordance with prevailing IRS guidance, which defines similar
coverage to be coverage for the same category of benefits for the same individual,
whether a substitute Benefit package constitutes "similar coverage" based upon all
surrounding facts and circumstances.
(3) Significant Cost Decrease. If the Participant's cost of a benefit package option
decreases significantly during a Plan Year, Employees who had not previously
enrolled may enroll and Participants who elected another option providing similar
coverage may revoke their current coverage election and elect the option that has
decreased in cost since the coverage period commenced if permitted under each
respective insured Benefit.
(4) Dependent Care Plan Change in Cost Limitation. A "change in cost" provision
applies to the Dependent Care Assistance Program only if the cost change is
imposed by a service provider who is not a "relative" of the Participant by blood
or marriage, as defined in Proposed Treas. Reg. Section 1.125-4(f)(2)(iii).
(fl Change in Coverage. A Participant shall not be permitted to change an election to the
Health Care Reimbursement Plan as a result of a change under this subsection.
(1) Significant Curtailment or Cessation of Coverage. If the coverage under a Benefit
is deemed by the Administrator to be significantly curtailed or ceases during a Plan
Year, affected Participants may revoke their elections of such Benefit and, in lieu
20
thereof, elect to receive on a prospective basis coverage under another plan with
similar coverage. Accident and health plan coverage is deemed "significantly
curtailed" only if there is an overall reduction in coverage, which reduces coverage
to all Participants in general. If a significant curtailment does not result in a loss
of coverage, alternate coverage can be elected, but coverage cannot be dropped.
If the curtailment results in a loss of coverage, the election can be dropped, but
only if no other benefit option for similar coverage is available.
The Plan Administrator will decide, in accordance with prevailing IRS guidance
which states that a significant curtailment of coverage includes a significant
increase in deductible; significant increase in co -payments; and a significant
increase in the out-of-pocket cost sharing amounts under the Plan, whether
curtailment is "significant" and whether a substitute benefit option constitutes
"similar coverage" based upon all surrounding facts and circumstances. The Plan
Administrator will also decide, in accordance with prevailing IRS guidance, what
constitutes a "loss of coverage" based on final regulations stating plan sponsors
may consider the following events: a substantial decrease in the medical providers
available under the option; a reduction in benefits for a specific type of medical
condition for which treatment is being received; and any similar fundamental loss
of coverage.
(2) Addition or Elimination of Benefit Package Option Providing Similar Coverage.
If, during the Plan Year the Plan adds or eliminates a benefit package option or
other coverage option, then affected Participants may elect the newly -added option
(or elect another option if an option has been eliminated) prospectively and make
corresponding election changes with respect to other benefit package options
providing similar coverage. If the Plan significantly improves a Benefit,
Participants who elected other Benefit Options and Employees who are not
enrolled, may elect the Benefit if allowed on each respective insured plan. The Plan
Administrator will decide, in accordance with prevailing IRS guidance, whether
other benefit options constitute "similar coverage" based upon all surrounding facts
and circumstances.
(3) Change in Coverage of Spouse or Dependent Under Another Employer's Plan. A
Participant may make a prospective election change that corresponds with changes
made under any Employer's cafeteria or qualified benefits plan, so long as (a) the
Spouse's or Dependent's plan permits the change and the change is permitted
under Code Section 125 or (b) the Spouse or Dependent makes the change during
an annual enrollment period that occurs in the middle of the Participant's Plan
Year. The Plan Administrator will decide, in accordance with prevailing IRS
guidance, whether a requested change is on account of and corresponds with a
change made under the plan of the Spouse's or Dependent's employer.
(4) Loss of Coverage under a Plan Maintained by a Governmental or Educational
Institution. A Participant may add coverage for a Participant, Spouse or Dependent,
21
if the same Participant, Spouse, or Dependent loses coverage under any group
health coverage plan sponsored by a governmental or Educational Institution.
A Participant who terminates and is rehired within thirty (30) days shall be deemed to have
continued coverage during such period of termination as if he or she was never terminated
unless there is another qualifying event. Missing payments shall be made whole during
the remainder of the Plan Year. There shall be no coverage loss to the Participant.
A Participant who terminates and is rehired after thirty (30) days shall be able to change
elections. The Health Care Reimbursement Plan maximum election for the remainder of
the Plan Year will be the difference between the annual maximum less any prior election.
The Dependent Care Assistance Program maximum election for the remainder of the Plan
Year will be the difference between the annual maximum less any prior contributions.
There may be a coverage loss if the Participant did not or was not able to continue under
COBRA.
ARTICLE VI
HEALTH CARE REIMBURSEMENT PLAN
6.1 ESTABLISHMENT OF PLAN
This Health Care Reimbursement Plan is intended to qualify as a medical reimbursement plan
under Code Section 105 and shall be interpreted in a manner consistent with such Code Section
105 and the Treasury regulations thereunder. Participants who elect to participate in this Health
Care Reimbursement Plan may submit claims for the reimbursement of Medical Expenses. All
amounts reimbursed under this Health Care Reimbursement Plan shall be periodically paid
from amounts allocated to the Health Care Reimbursement Fund. Periodic payments
reimbursing Participants from the Health Care Reimbursement Fund shall in no event occur
less frequently than monthly.
6.2 DEFINITIONS
For the purposes of this Article and the Cafeteria Plan, the terms below have the following
meaning:
(a) "Health Care Reimbursement Fund" means the fund established for a Participant
pursuant to this Plan to which part of his Cafeteria Plan Benefit Dollars may be
allocated and from which all allowable Medical Expenses may be reimbursed.
(b) "Health Care Reimbursement Plan" means the plan of benefits contained in this Article,
which provides for the reimbursement of eligible Medical Expenses incurred by a
Participant or his Dependents.
22
6.3
6.4
6.5
(c) "Highly Compensated Participant" means, for the purposes of this Article and
determining discrimination under code Section 105 (h), a participant who is:
(1) one of the 5 highest paid officers;
(2) a shareholder who owns (or is considered to own applying the rules of Code
Section 318) more than 10 percent in value of the stock of the Employer; or
(3) among the highest paid 25 percent of all Employees (other than exclusions
permitted by Code Section 105(h)(3)(B) for those individuals who are not
Participants).
(d) "Medical Expenses" means any expense for medical care within the meaning of the
term "medical care" or "medical expense" as defined in Code Section 213(d) and as
allowed under Code Section 105 and the rulings and Treasury regulations thereunder,
and not otherwise used by the Participant as a deduction in determining his tax liability
under the Code. However, a Participant may not be reimbursed for the cost of other
health coverage such as premiums paid under plans maintained by the employer of the
Participant's spouse or individual policies maintained by the Participant or his spouse
or dependent. Furthermore, a Participant may not be reimbursed for "qualified long-
term care services" as defined in Code Section 7702B(c).
(e) The definitions of Article I are hereby incorporated by reference to the extent necessary
to interpret and apply the provisions of this Health Care Reimbursement Plan.
FORFEITURES
The amount in the Health Care Reimbursement Fund as of the end of any Plan Year (and after
the processing of all claims for such Plan Year pursuant to Section 6.7 hereof) shall be forfeited
and credited to the benefit plan surplus. In such event, the Participant shall have no further
claim to such amount for any reason subject to Section 8.2.
LIMITATION ON ALLOCATIONS
The maximum annual Benefit amount that a Participant may elect to receive under the Health
Care Reimbursement Plan in any Plan Year shall be $5,000.00.
NONDISCRIMINATION REQUIREMENTS
(a) It is the intent of this Health Care Reimbursement Plan not to discriminate in violation
of the Code and the Treasury regulations thereunder.
(b) If the Administrator deems it necessary to avoid discrimination under this Health Care
Reimbursement Plan, it may, but shall not be required to, reject any elections or reduce
contributions or Benefits in order to assure compliance with this Section. Any act taken
by the Administrator under this Section shall be carried out in a uniform and
23
nondiscriminatory manner. If the Administrator decides to reject any elections or
reduce contributions or Benefits, it shall be done in the following manner. First, the
Benefits designated for the Health Care Reimbursement Fund by the member of the
group in whose favor discrimination may not occur pursuant to Code Section 105 that
elected to contribute the highest amount to the fund for the Plan Year shall be reduced
until the nondiscrimination tests set forth in this Section or the Code are satisfied, or
until the amount designated for the fund equals the amount designated for the fund by
the next member of the group in whose favor discrimination may not occur pursuant
to Code Sections 105 who has elected the second highest contribution to the Health
Care Reimbursement Fund for the Plan Year. This process shall continue until the
nondiscrimination tests set forth in this Section or the Code are satisfied. Contributions
which are not utilized to provide Benefits to any Participant by virtue of any
administrative act under this paragraph shall be forfeited and credited to the benefit plan
surplus.
6.6 COORDINATION WITH CAFETERIA PLAN
All Participants under the Cafeteria Plan are eligible to receive Benefits under this Health Care
Reimbursement Plan. The enrollment under the Cafeteria Plan shall constitute enrollment
under this Health Care Reimbursement Plan. In addition, other matters concerning
contributions, elections and the like shall be governed by the general provisions of the Cafeteria
Plan.
6.7 HEALTH CARE REIMBURSEMENT PLAN CLAIMS
(a) All Medical Expenses incurred by a Participant, Spouse, or Dependent shall be
reimbursed during the Plan Year subject to Section 2.6, even though the submission of
such a claim occurs after his participation hereunder ceases; but provided that the
Medical Expenses were incurred during the applicable Plan Year, (but prior to the date
coverage ceases, except as otherwise provided in Section 2.5, 2.6 and 2.7). Medical
Expenses are treated as having been incurred when the Participant is provided with the
medical care that gives rise to the medical expenses, not when the Participant is formally
billed or charged for, or pays for the medical care.
(b) The Administrator shall direct reimbursement to each eligible Participant for all
allowable Medical Expenses, up to a maximum of the amount designated by the
Participant for the Health Care Reimbursement Fund for the Plan Year. Reimbursements
shall be made available to the Participant throughout the year without regard to the level
of Cafeteria Plan Benefit Dollars which have been allocated to the fund at any given
point in time. Furthermore, a Participant shall be entitled to reimbursements only for
amounts in excess of any payments or other reimbursements under any health care plan
sponsored by the Employer, a governmental agency or any other plan covering a
Participant and/or his Spouse or Dependents.
(c) Claims for the reimbursement of Medical Expenses incurred in any Plan Year shall be
paid as soon after a claim has been filed as is administratively practicable; provided
24
however, that if a Participant fails to submit a claim within the 90 day period
immediately following the end of the Plan Year, those Medical Expense claims shall
not be considered for reimbursement by the Administrator.
(d) Reimbursement payments under this Plan shall be made directly to the Participant.
However, in the Administrator's discretion, payments may be made directly to the
service provider. The application for payment or reimbursement shall be made to the
Administrator on an acceptable form within a reasonable time of incurring the debt or
paying for the service. The application shall include a written statement from an
independent third party stating that the Medical Expense has been incurred and the
amount of such expense. Furthermore, the Participant shall provide a written statement
that the Medical Expense has not been reimbursed or is not reimbursable under other
health plan coverage and, if reimbursed from the Health Care Reimbursement Fund,
such amount will not be claimed as a tax deduction. The Administrator shall retain a
file of all such applications.
(e) If a Participant fails to accept or cash a claim reimbursement within 120 days after a
reimbursement has been issued and the Administrator has made reasonable attempt to
reimburse the Participant, the funds shall be considered unclaimed and will be treated
as plan forfeitures under Section 6.3 provided that, if a Participant should later renew
his or her written request for reimbursement of said amount, the Company shall
reimburse such amount to Participant within 90 days of the renewed reimbursement
request.
ARTICLE VII
DEPENDENT CARE ASSISTANCE PROGRAM
7.1 ESTABLISHMENT OF PROGRAM
This Dependent Care Assistance Program is intended to qualify as a program under Code
Section 129 and shall be interpreted in a manner consistent with such Code Section.
Participants may submit claims for the reimbursement of Employment -Related Dependent Care
Expenses. All amounts reimbursed under this Dependent Care Assistance Program shall be
paid from amounts allocated to the Participant's Dependent Care Assistance Account.
7.2 DEFINITIONS
For the purposes of this Article and the Cafeteria Plan the terms below shall have the following
meaning:
(a) "Dependent Care Assistance Account" means the account established for a Participant
pursuant to this Article to which part of his Cafeteria Plan Benefit Dollars may be
25
allocated and from which Employment -Related Dependent Care Expenses of the
Participant may be reimbursed.
(b) "Dependent Care Assistance Program" means the program of benefits contained in this
Article, which provides for the reimbursement of eligible expenses for the care of the
Qualifying Dependents of Participants.
(c) "Earned Income" means earned income as defined under Code Section 32(c)(2), but
excluding such amounts paid or incurred by the Employer for dependent care assistance
to the Participant.
(d) "Employment -Related Dependent Care Expenses" means the amounts paid for expenses
of a Participant for those services, which if paid by the Participant, would be considered
employment related expenses under Code Section 21(b)(2). Generally, they shall
include expenses for household services or for the care of a Qualifying Dependent, to
the extent that such expenses are incurred to enable the Participant to be gainfully
employed for any period for which there are one or more Qualifying Dependents with
respect to such Participant. Employment-related Dependent Care Expenses are treated
as having been incurred when the Participant's Qualifying Dependents are provided
with the dependent care that gives rise to the Employment -Related Dependent Care
Expenses, not when the Participant is formally billed or charged for, or pays for the
care. The determination of whether an amount qualifies as an Employment -Related
Dependent Care Expense shall be made subject to the following rules:
(1) If such amounts are paid for expenses incurred outside the Participant's
household, they shall constitute Employment -Related Dependent Care Expenses
only if incurred for a Qualifying Dependent as defined in Section 7.2(e)(1) (or
deemed to be, as described in Section 7.2(e)(1) pursuant to Section 7.2(e)(3)),
or for a Qualifying Dependent as defined in Section 7.2(e)(2) (or deemed to be,
as described in Section 7.2(e)(2) pursuant to Section 7.2(e)(3)) who regularly
spends at least 8 hours per day in the Participant's household;
(2) If the expense is incurred outside the Participant's home at a facility that
provides care for a fee, payment, or grant for more than 6 individuals who do
not regularly reside at the facility, the facility must comply with all applicable
state and local laws and regulations, including licensing requirements, if any;
and
(3) Employment -Related Dependent Care Expenses of a Participant shall not
include amounts paid or incurred to a child of such Participant who is under the
age of 19 or to an individual who is a dependent of such Participant or such
Participant's Spouse.
(e) "Qualifying Dependent" means, for Dependent Care Assistance Program purposes,
26
(1) A Dependent of a Participant who is under the age of 13, with respect to whom
the Participant is entitled to an exemption under Code Section 151(c);
(2) A Dependent or the Spouse of a Participant who is physically or mentally
incapable of caring for himself or herself; or
(3) A child that is deemed to be a Qualifying Dependent described in paragraph (1)
or (2) above, whichever is appropriate, pursuant to Code Section 21(e)(5).
(f) The definitions of Article I are hereby incorporated by reference to the extent necessary
to interpret and apply the provisions of this Dependent Care Assistance Program.
7.3 DEPENDENT CARE ASSISTANCE ACCOUNTS
The Administrator shall establish a Dependent Care Assistance Account for each Participant
who elects to apply Cafeteria Plan Benefit Dollars to Dependent Care Assistance Program
benefits.
7.4 INCREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS
A Participant's Dependent Care Assistance Account shall be increased each pay period by the
portion of Cafeteria Plan Benefit Dollars that he has elected to apply toward his Dependent
Care Assistance Account pursuant to elections made under Article V hereof.
7.5 DECREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS
A Participant's Dependent Care Assistance Account shall be reduced by the amount of any
Employment -Related Dependent Care Expense reimbursements paid or incurred on behalf of
a Participant pursuant to Section 7.12 hereof.
7.6 ALLOWABLE DEPENDENT CARE ASSISTANCE REIMBURSEMENT
Subject to limitations contained in Section 7.9 of this Program and to the extent of the amount
contained in the Participant's Dependent Care Assistance Account, a Participant who incurs
Employment -Related Dependent Care Expenses shall be entitled to receive from the Employer
full reimbursement for the entire amount of such expenses incurred during the Plan Year or
portion thereof during which he is a Participant.
7.7 ANNUAL STATEMENT OF BENEFITS
On or before January 31 st of each calendar year, the Employer shall furnish to each Employee
who was a Participant and received benefits under Section 7.6 during the prior calendar year,
a statement of all such benefits paid to or on behalf of such Participant during the prior calendar
year.
27
7.8 FORFEITURES
The amount in a Participant's Dependent Care Assistance Account as of the end of any Plan
Year (and after the processing of all claims for such Plan Year pursuant to Section 7.12 hereof)
shall be forfeited and credited to the benefit plan surplus. In such event, the Participant shall
have no further claim to such amount for any reason.
7.9 LIMITATION ON PAYMENTS
Notwithstanding any provision contained in this Article to the contrary or negotiated union
contracts to the contrary, the amounts paid from a Participant's Dependent Care Assistance
Account in or on account of any taxable year of the Participant shall not exceed the lesser of
the Earned Income limitation described in Code Section 129(b) or $5,000 ($2,500 if a separate
tax return is filed by a Participant who is married as determined under the rules of paragraphs
(3) and (4) of Code Section 21(e)).
7.10 NONDISCRIMINATION REQUIREMENTS
(a) It is the intent of this Dependent Care Assistance Program that contributions or benefits
not discriminate in favor of the group of employees in whose favor discrimination may
not occur under Code Sections 129(d).
(b) It is the intent of this Dependent Care Assistance Program that not more than 25 percent
of the amounts paid by the Employer for dependent care assistance during the Plan Year
will be provided for the class of individuals who are shareholders or owners (or their
Spouses or Dependents), each of whom (on any day of the Plan Year) owns more than
5 percent of the stock or of the capital or profits interest in the Employer.
(c) If the Administrator deems it necessary to avoid discrimination or possible taxation to
a group of employees in whose favor discrimination may not occur in violation of Code
Section 129 it may, but shall not be required to, reject any elections or reduce
contributions or non-taxable benefits in order to assure compliance with this Section.
Any act taken by the Administrator under this Section shall be carried out in a uniform
and nondiscriminatory manner. If the Administrator decides to reject any elections or
reduce contributions or Benefits, it shall be done in the following manner. First, the
Benefits designated for the Dependent Care Assistance Account by the affected
Participant that elected to contribute the highest amount to such account for the Plan
Year shall be reduced until the nondiscrimination tests set forth in this Section are
satisfied, or until the amount designated for the account equals the amount designated
for the account of the affected Participant who has elected the second highest
contribution to the Dependent Care Assistance Account for the Plan Year. This process
shall continue until the nondiscrimination tests set forth in this Section are satisfied.
Contributions which are not utilized to provide Benefits to any Participant by virtue of
any administrative act under this paragraph shall be forfeited.
28
7.11 COORDINATION WITH CAFETERIA PLAN
All Participants under the Cafeteria Plan are eligible to receive Benefits under this Dependent
Care Assistance Program. The enrollment and termination of participation under the Cafeteria
Plan shall constitute enrollment and termination of participation under this Dependent Care
Assistance Program. In addition, other matters concerning contributions, elections and the like
shall be governed by the general provisions of the Cafeteria Plan.
7.12 DEPENDENT CARE ASSISTANCE PROGRAM CLAIMS
The Administrator shall direct the payment of all such Dependent Care Assistance claims to
the Participant upon the presentation to the Administrator of documentation of such expenses
in a form satisfactory to the Administrator. However, in the Administrator's discretion,
payments may be made directly to the service provider. In its discretion in administering the
Plan, the Administrator may utilize forms and require documentation of costs as may be
necessary to verify the claims submitted. At a minimum, the form shall include a statement
from an independent third party as proof that the expense has been incurred and the amount of
such expense. In addition, the Administrator may require that each Participant who desires to
receive reimbursement under this Program for Employment -Related Dependent Care Expenses
submit to the Administrator a statement, which may contain some or all of the following
information:
(a) The Dependent or Dependents for whom the services were performed;
(b) The nature of the services performed for the Participant, the cost of which he wishes
reimbursement;
(c) The relationship, if any, of the person performing the services to the Participant;
(d) If the services are being performed by a child of the Participant, the age of the child;
(e) A statement as to where the services were performed;
(f) If any of the services were performed outside the home, a statement as to whether the
Dependent for whom such services were performed spends at least 8 hours a day in the
Participant's household;
(g) If the services were being performed in a day care center, a statement:
(1) that the day care center complies with all applicable laws and regulations of the
state of residence,
(2) that the day care center provides care for more than 6 individuals (other than
individuals residing at the center), and
(3) the amount of fee paid to the center.
29
(h) If the Participant is married, a statement containing the following:
(1) the Spouse's salary or wages if he or she is employed, or
(2) if the Participant's Spouse is not employed, a statement that
(i) he or she is incapacitated, or
(ii) he or she is a full-time student attending an educational institution and
the months during the year which he or she attended such institution.
(i) If a Participant fails to submit a claim within the 90 -day period immediately following
the end of the Plan Year, those claims shall not be considered for reimbursement by the
Administrator.
(j) If a Participant fails to accept or cash a claim reimbursement within 120 days after a
reimbursement has been issued and the Administrator has made reasonable attempt to
reimburse the Participant, the funds shall be considered unclaimed and will be treated
as plan forfeitures under Section 7.8 provided that, if a Participant should later renew
his or her written request for reimbursement of said amount, the Company shall
reimburse such amount to Participant within 90 days of the renewed reimbursement
request.
ARTICLE VIII
BENEFITS AND RIGHTS
8.1 CLAIM FOR BENEFITS
(a) Any claim for Benefits underwritten by insured Contracts shall be made in accordance
with that specific Benefit plan. If the Benefit is denied, the Participant or beneficiary
shall follow the claims review procedures for that insured Benefit. A `Claim for
Benefits' under the Health Care Reimbursement Plan or the Dependent Care Assistance
Plan for purposes of triggering ERISA is deemed to have been made when a signed
claim request is received by the Plan Administrator or authorized representative from
the Participant, beneficiary or authorized representative using a pre -approved form and
attaching third -party documentation substantiating health care expenses per Section 6.7
or dependent care expenses per Section 7.12, and such other information as is
reasonably necessary to determine the validity of the claim.
(b) The Administrator shall make a benefit determination within a reasonable time period
not longer than 30 days after receipt, unless for matters beyond the control of the Plan
Administrator a 15 -day extension is required, in which case, the claimant will be
notified. A claim for benefits will be deemed incomplete if information necessary to
render a full and fair claim determination under the Plan is missing, a notice detailing
30
information necessary to perfect the claim or make it whole shall be issued to the
claimant. The Participant has 45 days after receipt of the incomplete notice to provide
such information to the Administrator. The Administrator's time period for making a
benefit determination is tolled from the date an incomplete notice is issued to the date
the claimant responds.
(c) If an adverse determination is made regarding a claim for benefits, the claimant shall,
in a manner calculated to be understood by the claimant, be notified of:
(1) the specific reason(s) for the adverse determination;
(2) specific plan provisions on which the determination is based;
(3) description of addition materials or information necessary from the claimant to
complete the claim;
(4) the plan's review or appeal procedures, including time limits and a statement of
the claimant's rights to bring civil action under 502(a) of the Act following the
appeal.
A Participant shall have 180 days from receipt of an adverse determination to submit
written comments, documents or information to support the claim for benefits under
Code provisions and Cafeteria Plan and request a review of the determination. If no
action is taken, the Participant's ERISA rights of appeal for the claim expire.
(d) If a Participant makes a written request for an adverse decision appeal in a timely
manner, an authorized representative of the Administrator other than the representative
or subordinate of the representative making the initial adverse determination shall
independently review the claim for benefits and as well as all subsequently submitted
materials. The Participant shall be notified of a decision within 60 days. The written
decision shall be made in accordance with governing plan documents and where
appropriate, Plan provisions that have been applied consistently with respect to similarly
situated claimants. If an adverse determination is made, the Administrator shall set
forth:
(1) the specific reasons for the adverse decision,
(2) reference to Plan provision(s) on which the decision is based, and
(3) a description of claimant's review or appeal procedures, including time limits,
and if applicable, any internal rules, protocol or similar criterion used in making
the decision.
(4) a statement of the claimant's right to bring suit under ERISA after the appeal.
(e) Any balance remaining in a Participant's Health Care Reimbursement Plan or Dependent
Care Assistance Program at the end of each Plan Year shall be forfeited and deposited
in the benefit plan surplus of the Employer pursuant to Section 6.3 or Section 7.8,
whichever is applicable, unless the Participant had made a written claim for such Plan
Year, which has been denied and is pending; in which event the amount of the claim
31
shall be held in his account until the claim appeal procedures set forth above have been
satisfied or the claim is paid. If any such claim is denied on appeal, the amount held
beyond the end of the Plan Year shall be forfeited and credited to the benefit plan
surplus.
8.2 APPLICATION OF BENEFIT PLAN SURPLUS
Any forfeited amounts credited to the benefit plan surplus by virtue of the failure of a
Participant to incur a qualified expense or seek reimbursement in a timely manner may, but
need not be, separately accounted for after the close of the Plan Year (or after such further time
specified herein for the filing of claims) in which such forfeitures arose. In no event shall such
amounts be carried over to reimburse a Participant for expenses incurred during a subsequent
Plan Year for the same or any other Benefit available under the Plan; nor shall amounts
forfeited by a particular Participant be made available to such Participant in any other form or
manner, except as permitted by Treasury regulations. Amounts in the benefit plan surplus shall
be applied in any manner determined by the Employer that shall not violate the Code, ERISA,
or any regulations thereunder, including defraying of administrative costs and experience
losses.
8.3 NAMED FIDUCIARY
Amounts in the benefit plan surplus shall first be used to defray any administrative costs and
experience losses and thereafter be retained by the Employer.
ARTICLE IX
ADMINISTRATION
9.1 PLAN ADMINISTRATION
The operation of the Plan shall be under the supervision of the Administrator. It shall be a
principal duty of the Administrator to see that the Plan is carried out in accordance with its
terms, and for the exclusive benefit of Employees entitled to participate in the Plan. The
Administrator shall have full power to administer the Plan in all of its details, subject, however,
to the pertinent provisions of the Code. The Administrator's powers shall include, but shall not
be limited to the following authority, in addition to all other powers provided by this Plan:
(a) To make and enforce such rules and regulations as the Administrator deems necessary
or proper for the efficient administration of the Plan;
(b) To interpret the Plan, the Administrator's interpretations thereof in good faith to be final
and conclusive on all persons claiming benefits by operation of the Plan;
(c) To decide all questions concerning the Plan and the eligibility of any person to
participate in the Plan and to receive benefits provided by operation of the Plan;
32
(d) To reject elections or to limit contributions or Benefits for certain highly compensated
participants if it deems such to be desirable in order to avoid discrimination under the
Plan in violation of applicable provisions of the Code;
(e) To provide Employees with a reasonable notification of their benefits available by
operation of the Plan;
(f) To approve reimbursement requests and to authorize the payment of benefits; and
(g) To appoint such agents, counsel, accountants, consultants, and actuaries as may be
required to assist in administering the Plan.
Any procedure, discretionary act, interpretation or construction taken by the Administrator shall
be done in a nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to comply with the terms of Code
Section 125 and the Treasury regulations thereunder. Benefits under this Plan will be paid only
if the Administrator decides in its discretion that the Participant is entitled to them.
9.2 EXAMINATION OF RECORDS
The Administrator shall make available to each Participant, Eligible Employee and any other
Employee of the Employer such records as pertain to their interest under the Plan for
examination at reasonable times during normal business hours.
9.3 PAYMENT OF EXPENSES
Any reasonable administrative expenses shall be paid by the Employer unless the Employer
determines that administrative costs shall be borne by the Participants under the Plan or by any
Trust Fund which may be established hereunder. The Administrator may impose reasonable
conditions for payments, provided that such conditions shall not discriminate in favor of highly
compensated employees.
9.4 INSURANCE CONTROL CLAUSE
In the event of a conflict between the terms of this Plan and the terms of an Insurance Contract
of an independent third party Insurer whose product is then being used in conjunction with this
Plan, the terms of the Insurance Contract shall control as to those Participants receiving
coverage under such Insurance Contract. For this purpose, the Insurance Contract shall control
in defining the persons eligible for insurance, the dates of their eligibility, the conditions which
must be satisfied to become insured, if any, the benefits Participants are entitled to and the
circumstances under which insurance terminates.
33
9.5 INDEMNIFICATION OF ADMINISTRATOR
The Employer agrees to indemnify and to defend to the fullest extent permitted by law any
Employee serving as the Administrator or as a member of a committee designated as
Administrator (including any Employee or former Employee who previously served as
Administrator or as a member of such committee) against all liabilities, damages, costs and
expenses (including attorney's fees and amounts paid in settlement of any claims approved by
the Employer) occasioned by any act or omission to act in connection with the Plan, if such act
or omission is in good faith.
ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
10.1 AMENDMENT
The Employer, at any time or from time to time, may amend any or all of the provisions of the
Plan without the consent of any Employee or Participant. No amendment shall have the effect
of modifying any benefit election of any Participant in effect at the time of such amendment,
unless such amendment is made to comply with Federal, state or local laws, statutes or
regulations.
10.2 TERMINATION
The Employer is establishing this Plan with the intent that it will be maintained for an indefinite
period of time. Notwithstanding the foregoing, the Employer reserves the right to terminate the
Plan, in whole or in part, at any time. In the event the Plan is terminated, no further
contributions shall be made. Benefits under any Insurance Contract shall be paid in accordance
with the terms of the Contract.
No further additions shall be made to the Health Care Reimbursement Fund or Dependent Care
Assistance Account, but all payments from such Fund shall continue to be made according to
the elections in effect until the end of the Plan Year in which the Plan termination occurs (and
for a reasonable period of time thereafter, if required for the filing of claims). Any amounts
remaining in any such account as of the end of the Plan Year in which Plan termination occurs
shall be forfeited and deposited in the benefit plan surplus after the expiration of the filing
period.
34
ARTICLE XI
MISCELLANEOUS
11.1 PLAN INTERPRETATION
All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory
manner. This Plan shall be read in its entirety and not severed except as provided in Section
11.11.
11.2 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be
construed as though they were also used in another gender in all cases where they would so
apply, and whenever any words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases where they would so
apply.
11.3 WRITTEN DOCUMENT
This Plan, in conjunction with any separate written document which may be required by law,
is intended to satisfy the written Plan requirement of Code Section 125 and any Treasury
Regulations thereunder relating to cafeteria plans.
11.4 EXCLUSIVE BENEFIT
This Plan shall be maintained for the exclusive benefit of the Employees who participate in the
Plan.
11.5 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute an employment contract between the Employer and
any Participant or to be a consideration or an inducement for the employment of any Participant
or Employee. Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere with the right of
the Employer to discharge any Participant or Employee at any time regardless of the effect
which such discharge shall have upon him as a Participant of this Plan.
11.6 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required to do or perform
any act or matter or thing, it shall be done and performed by a person duly authorized by its
legally constituted authority.
35
11.7 NO GUARANTEE OF TAX CONSEQUENCES
Neither the Administrator nor the Employer makes any commitment or guarantee that any
amounts paid to or for the benefit of a Participant under the Plan will be excludable from the
Participant's gross income for Federal or state income tax purposes, or that any other Federal
or state tax treatment will apply to or be available to any Participant. It shall be the obligation
of each Participant to determine whether each payment under the Plan is excludable from the
Participant's gross income for Federal and state income tax purposes, and to notify the Employer,
if the Participant has reason to believe that any such payment is not so excludable.
Notwithstanding the foregoing, the rights of Participants under this Plan shall be legally
enforceable.
11.8 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS
If any Participant receives one or more payments or reimbursements under the Plan that are not
for a permitted Benefit, such Participant shall indemnify and reimburse the Employer for any
liability it may incur for failure to withhold Federal or state income tax or Social Security tax
from such payments or reimbursements. However, such indemnification and reimbursement
shall not exceed the amount of additional Federal and state income tax (plus any penalties) that
the Participant would have owed if the payments or reimbursements had been made to the
Participant as regular cash compensation, plus the Participant's share of any Social Security tax
that would have been paid on such compensation, less any such additional income and Social
Security tax actually paid by the Participant.
11.9 FUNDING
Unless otherwise required by law, contributions to the Plan need not be placed in trust or
dedicated to a specific Benefit, but shall instead be considered general assets of the Employer.
Furthermore, and unless otherwise required by law, nothing herein shall be construed to require
the Employer or the Administrator to maintain any fund or segregate any amount for the benefit
of any Participant, and no Participant or other person shall have any claim against, right to, or
security or other interest in, any fund, account or asset of the Employer from which any payment
under the Plan may be made.
11.10 GOVERNING LAW
This Plan is governed by the Code and the Treasury regulations issued thereunder (as they
might be amended from time to time). In no event shall the Employer guarantee the favorable
tax treatment sought by this Plan. To the extent not preempted by Federal law, the provisions
of this Plan shall be construed, enforced and administered according to the laws of the State of
Missouri.
36
11. 11 SEVERABILITY
If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability
shall not affect any other provisions of the Plan, and the Plan shall be construed and enforced
as if such provision had not been included herein.
11.12 CAPTIONS
The captions contained herein are inserted only as a matter of convenience and for reference,
and in no way define, limit, enlarge or describe the scope or intent of the Plan, nor in any way
shall affect the Plan or the construction of any provision thereof.
11.13 CONTINUATION OF COVERAGE
Notwithstanding anything in the Plan to the contrary, in the event any welfare benefit under this
Plan, subject to the continuation coverage requirements of Code Section 4980B becomes
unavailable, the Participant may be entitled to continuation coverage as prescribed in Code
Section 4980B.
11.14 FAMILY AND MEDICAL LEAVE ACT
Notwithstanding any provision in the Plan to the contrary, if a Participant goes on a qualifying
leave under the Family and Medical Leave Act of 1993 (FMLA) and elect to continue
coverage(s) while on leave, then to the extent required by the FMLA, the Employer will
continue to maintain the Participant's insured and uninsured group health benefits on the same
terms and conditions as if the Participant were still active.
If the Participant elects to continue coverage while on leave, he shall enter into a payment
agreement with the Employer prior to leave based on the Participant's share of the premium due
for the current Plan Year. One or more of the following payment methods may be used:
• with after-tax dollars, by sending monthly payment to the Employer
• with pre-tax salary reduction by pre -paying all or a portion of the coverage
contributions during the leave for that Plan Year.
• With pre-tax salary reduction by catching -up on all or a portion of the coverage
contributions during the leave for that Plan Year. Salary redirection must be
from the same Plan Year as the leave.
If a Participant's coverage ceases while on FMLA leave, the Participant, will be permitted to
re-enter the Plan upon return from such leave, however the Participant's annual election prior
to the leave will be pro -rated for the period of time during the FMLA when coverage ceased,
unless the Participant is entitled to make a new election pursuant to Section 5.7.
37
11.15 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT
Notwithstanding anything in this Plan to the contrary, this Plan shall be operated in accordance
with HIPAA and regulations thereunder.
Members of the Company's workforce have access to the individually identifiable health information
of Plan participants for administrative functions of the Plan. When this health information is provided
from the Plan to the Plan Sponsor, it is Protected Health Information (PHI).
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its implementing
regulations restrict the Plan Sponsor's ability to use and disclose PHI. The following HIPAA
definition of PHI applies to this plan:
Protected Health Information. Protected health information means information that is created or
received by the Plan and relates to the past, present, or future physical or mental health or condition
of a participant; the provision of health care to a participant; or the past, present, or future payment
for the provision of health care to a participant; and that identifies the participant or for which there is
a reasonable basis to believe the information can be use to identify the participant. Protected health
information includes information of persons living or deceased.
The Plan Sponsor shall have access to PHI from the Plan only as permitted under this plan
amendment or as otherwise required or permitted by HIPAA.
Provision of Protected Health Information to Plan Sponsor
(a) Permitted Disclosure of Enrollment/Disenrollment Information
The Plan may disclose to the Plan Sponsor information on whether the individual is
participating in the Plan.
(b) Permitted Uses and Disclosure of Summary Health Information
The Plan may disclose Summary Health Information to the Plan Sponsor, provided the
Plan Sponsor requests the Summary Health Information for the purpose of (a) obtaining
premium bids from health plans for providing health insurance coverage under the Plan;
or (b) modifying, amending, or terminating the Plan.
"Summary Health Information" means: information that (a) 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 (b) from which the
information described at 42 CFR §
164.514(b)(2)(i) has been deleted, except that the geographic information described in
42 CFR § 164.514(b)(2)(i)(B) need only be aggregated to the level of a five -digit zip
code.
Permitted and Required Uses and Disclosure of Protected Health Information for
Plan Administrative Purposes
W
Unless otherwise permitted by law, and subject to the conditions of disclosure described in
paragraph IV and obtaining written certification pursuant to paragraph VI, the Plan may
disclose PHI to the Plan Sponsor, provided the Plan Sponsor uses or discloses such PHI only
for Plan administration purposes. "Plan administration purposes" means administration
functions performed by the Plan Sponsor on behalf of the Plan, such as quality assurance,
claims processing, auditing, and monitoring. Plan administration functions do not include
functions performed by the Plan Sponsor in connection with any other benefit or benefit plan of
the Plan Sponsor, and they do not include any employment-related functions.
Notwithstanding the provisions of this Plan to the contrary, in no event shall the Plan Sponsor
be permitted to use or disclose PHI in a manner that is inconsistent with 45 CFR § 164.504(f).
(c) Conditions of Disclosure for Plan Administration Purposes
Plan Sponsor agrees that with respect to any PHI (other than enrollment/disenrollment
information and Summary Health Information, which are not subject to these restrictions)
disclosed to it by the Plan, Plan Sponsor shall:
i. Not use or further disclose the PHI other than as permitted or required by the
Plan or as required by law.
ii.. Ensure that any agent, including a subcontractor, to whom it provides PHI
received from the Plan agrees to the same restrictions and conditions that apply
to the Plan Sponsor with respect to PHI.
iii. Not use or disclose the PHI for employment-related actions and decisions or in
connection with any other benefit or employee benefit plan of the Plan Sponsor.
iv. Report to the Plan any use or disclosure of the information that is inconsistent with
the uses or disclosures provided for of which it becomes aware.
V. Make available PHI to comply with HIPAA's right to access in accordance
with 45 CFR § 164.524.
vi. Make available PHI for amendment and incorporate any amendments to PHI
in accordance with 45 CFR § 164.526.
vii. Make available the information required to provide an accounting of
disclosures in accordance with 45 CFR § 164.528.
viii. Make its internal practices, books, and records relating to the use and
disclosure of PHI received from the Plan available to the Secretary of Health
and Human Services for purposes of determining compliance by the Plan
with HIPAA's privacy requirements.
ix. If feasible, return or destroy all PHI received from the Plan that the Plan
Sponsor 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 Plan and Plan Sponsor (i.e., the
"firewall"), required in 45 CFR § 164.504(f)(2) ( iii ), is satisfied.
39
(e) Adequate Separation Between Plan and Plan Sponsor
The Plan Sponsor shall allow employees of the Human Resources Department access to PHI.
No other persons shall have access to PHI. These specified employees (or classes of employees)
shall only have access to and use PHI to the extent necessary to perform the plan administration
functions that the Plan Sponsor performs for the Plan. In the event that any of these specified
employees do not comply with the provisions of this Section, that employee shall be subject to
disciplinary action by the Plan Sponsor for non-compliance pursuant to the Plan Sponsor's
employee discipline and termination procedures.
(f) Certification of Plan Sponsor
The Plan shall disclose PHI to the Plan Sponsor only upon the receipt of a certification by the
Plan Sponsor that the Plan has been amended to incorporate the provisions of 45 CFR §
164.504(f)(2)(ii), and that the Plan Sponsor agrees to the conditions of disclosure set forth in
paragraph IV of this Section.
11.16 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service
credit with respect to qualified military service shall be provided in accordance with USERRA
and the regulations thereunder. A Participant returning from a USERRA Leave shall have
elections and benefits restored to him at the same level and type that were in effect at the time
when the USERRA Leave began, as well as any benefits that began during the leave of absence
for which the Participant would have reasonably become eligible.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its authorized
officer(s) on /)lq-3 af}
THE CITY OF CAPE GIRARDEAU
—r .��Z ,
By:
WITNESSES AS TO EMPLOYER
0
(Attach Corporate Resolution)
City of Cape Girardeau 04 kp
Parent: L:\\emp ben\flex\plan documents\A Master Document.6/03 5/17/04
M
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of the City Council of the City of Cape Girardeau (the "City") hereby
certifies that the following resolutions were duly adopted by the City Council on
and that such resolutions have not been modified or rescinded as of the date
hereof:
IT IS RESOLVED, that the amended City of Cape Girardeau Flexible Benefits Plan effective
January 1, 2004, is hereby approved and adopted. The proper officers of the City are hereby
authorized and directed to execute said Plan.
IT IS FURTHER RESOLVED, that appropriate officers of the City shall be instructed to take such
actions deemed necessary and proper in order to implement the Plan and to set-up adequate
accounting and administrative procedures to provide benefits- as provided under the Plan.
IT IS FURTHER RESOLVED, that the proper officers of the City shall act as soon as possible to
notify employees of the City of the amendments to this Plan by delivering to each employee a
Summary Plan Description as presented to this meeting, which is hereby approved.
IT IS FURTHER RESOLVED, that the City hereby agrees to indemnify and to hold Marshall &
Ilsley Trust Company harmless from and against all claims, expenses (including reasonable attorney
fees), liabilities, damages, actions or other charges incurred by or assessed against Marshall & Ilsley
Trust Company as a direct or indirect result of anything done or omitted by Marshall & Ilsley Trust
Company in reliance upon the directions, or absence of directions, of the Plan Administrator, the
Corporation, or any participant in the Plan or any prior service provider.
The undersigned further certifies that attached hereto, are true copies of the City of Cape Girardeau
Flexible Benefits Plan and the Summary Plan Description approved and adopted in the foregoing
resolutions.
Secretary
Date: J51,�- 5'
City of Cape Girardeau Resolution 04 kp 5/17/04
L:EmpBen\flex\corporate resolutions2002
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of City of Cape Girardeau (the "Corporation") hereby certifies
that the following resolutions were duly adopted by the Board of Directors on
p5 , and that such resolutions have not been modified or rescinded as of
the dat " ereof:
IT IS RESOLVED, that the City of Cape Girardeau Flexible Benefits Plan ("Plan"), is
hereby amended as follows effective for plan years beginning on or after January 1, 2005:
1. Section 1.7 is amended to read as follows:
"Dependent" means any individual who is a dependent of the Participant as
defined in Code Section 152 except that: (a) for purposes of accident or health
coverage, (1) any child to whom Code Section 152(e) applies (regarding a child of
divorced parents, etc, where one or both parents have custody of the child for
more than half of the calendar year and where the parents together provide more
than half of the child's support for the year) is treated as a dependent of both
parents and (2) dependent status shall be determined without regard to subsections
(b)(1), (b)(2) and (d)(1)(B) of Section 152; and (b) for purposes of the Dependent
Care Assistance Program, a dependent means a qualifying individual as defined in
Code Section 21(b)(1) with respect to the Participant and in the case of divorced
parents, the child shall, as provided in Code Section 21(e)(5), be treated as a
qualifying individual of the custodial parent (within the meaning of Code Section
152(e)(3)), and shall not be treated as a qualifying individual with respect to the
non-custodial parent. Notwithstanding the foregoing, the Health Care
Reimbursement Plan will provide benefits in accordance with the applicable
requirements of any qualified medical child support order, as defined in ERISA
609(a), even if the child does not meet the definition of "dependent".
2. Article V is amended by adding a new Section 5.5 to read as follows:
"DEPENDENT" FOR PURPOSES OF ARTICLE V
"For purposes of Article V of the Plan, the term "Dependent" shall have the
meaning given that term by Treas. Reg. 1.125-4(i)(3) or as otherwise provided by
the Internal Revenue Service or the Department of the Treasury."
3. Section 6.2(d) is amended by replacing the word "dependent' with the word
"Dependent."
4. Section 7.2(d)(3) is amended to read as follows:
"Employment -Related Dependent Care Expenses of a Participant shall not include
amounts paid or incurred to a child of such Participant who is under the age of 19
at the close of the taxable year or to an individual with respect to whom
Participant or Participant's Spouse is entitled to a deduction under Code Section
151(c)."
5. Section 7.2(e) is amended to read as follows:
(e) "Qualifying Dependent" means, for Dependent Care Assistance Program
purposes,
(1) A Dependent of a Participant (as defined in Section 152(a)(1)) who is
under the age of 13;
(2) A Dependent or the Spouse of a Participant who is physically or mentally
incapable of caring for himself or herself and who has the same principal
place of abode as the Participant for more than one-half of the taxable
year; or
(3) A child that is deemed to be a Qualifying Dependent described in
paragraph (1) or (2) above, whichever is appropriate, pursuant to Code
Section 21(e)(5).
IT IS FURTHER RESOLVED, that appropriate officers of the Corporation shall be
instructed to take such actions deemed necessary and proper in order to implement the
foregoing resolution.
Secretary
Date: 5 -- 3_�