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HomeMy WebLinkAboutA3163 - BENEFITAMERICA FLEX BENEFITS PLAN IRS SEC 125 R17979 BenefitAmerica, Inc. Flex Benefits Plan IRS Sec. 125 ADMINISTRATIVE SERVICES AGREEMEN AGREEMENT#3163 R17979, 11-4-92 FOR FLEXIBLE BENEFITS PLAN — — -- --- - AGREEMENT made this 1 st day of January 1993 by and between CITY OF PALM SPRINGS ("Employer") and BenefitAmerica, Inc. of Columbia, South Carolina ("BenefitAmerica"). WHEREAS, Employer has determined that it is in the best interest of the Employer and its eligible employees to install a flexible benefits plan for the benefit of such eligible em- ployees, to be known as the Flex-Spending _ (°Plan"); and WHEREAS, in furtherance of such determination and in accordance with applicable provisions of the Plan, Employer deems it advisable to delegate certain ministerial duties and functions for purposes of accounting clairns processing and record keeping to a person or entity with the capability of providing such services; and , WHEREAS, Employer has determined that BenefitAmerica has such capability, and has elected to appoint BenefitAmerica to serve in such capacity and has and does hereby delegate such ministerial duties and functions to BenefitAmerica; and WHEREAS, the parties hereto do desire to set forth their agreement concerning the respective rights, duties and responsibilities of such parties relative to such delegation; NOW, THEREFORE, for and in consideration of the mutual covenants and agree- ments hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Employer and BenefitAmerica agree as fol- lows: I. SERVICE The Employer appoints BenefitAmerica to assist it in the performance of its adminis- trative duties under the plan. BenefitAmerica accepts such appointment subject to the terms and conditions of this Agreement. II. DUTIES OF BENEFITAMERICA A. BenefitAmerica shall assist the Employer in developing the Plan, which shall provide benefit elections for participating employees consistent with provisions of Section 125 of the Internal (Revenue Code of 1986, as amended ("Code"). B. BenefitAmerica shall.assist the Employer in developing, designing and obtaining vouchers, claim forms or other documentation necessary for the administration of the Plan. 1 30112BA-2 C. BenefitAmerica sh'approvide accounting services to then, as follows: (i) Maintain a list of participating employees, including full names and social security numbers; (ii) Maintain records of contributions by, payments of benefits to, and resulting account balances of participating employees; (iii) Prepare and mail to participating employees quarterly and year end re- ports of contributions made by and benefits paid to or on behalf of partici- pating employees under the Plan. (iv) Maintain records of all transactions under the Agreement during the term of the Agreement and for a period of five years thereafter. D. If the Plan offers one or more flexible reimbursement accounts as eligible bene- fits, BenefitAmerica shall receive claims for benefits made by participating em- ployees and shall process the same and issue checks payable to such participat- ing employees in accordance with the terms of the,Plan and any guidelines issued by the Employer; provided, however, that checks shall be issued only to the extent that accounting information provided to BenefitAmerica indicates that an account balance is available to permit payment of the benefits applied for by the employee. Checks shall be mailed to the Employer for forwarding to eligible employees unless, in return for the payment of an additional fee, the Employer instructs BenefitAmerica to mail the checks directly to the employees. If Bene- fitAmerica determines that a given application for benefits is not eligible under the Plan, for whatever reason, BenefitAmerica shall forward a notice to the employee providing the reason for denial and describing any additional information that might be necessary to perfect or complete the application. BenefitAmerica is vested only with ministerial authority to investigate and process claims for benefits under the Plan in accordance with the terms of the Plan. BenefitAmerica shall have no discretionary authority to make decisions as to Plan policy, interpretations, practices or procedures, but shall perform its duties and functions within the framework of the terms of the Plan and policies, interpre- tations, rules, practices and procedures made by the Employer. BenefitAmerica is not a fiduciary with regard to the Plan and shall not be considered the plan administrator, a fiduciary or named fiduciary as the same terms are defined in the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). BenefitAmerica shall make employee benefit eligibility determinations on behalf of the Employer in accordance with the claims procedures set forth in the Plan based upon information provided to BenefitAmerica by the employee and by the Employer. It is understood that BenefitAmerica is acting on behalf of the Em- ployer in a ministerial, administrative capacity only and shall have no responsibil- ity to investigate the accuracy or truthfulness of any information provided to BenefitAmerica. ��nn ld 3 2 BenefitAmerica shall not advance its personal funds for the payment of any benefits under the Plan. BenefitAmerica shall not be considered the insurer or underwriter of the liability of the Employer to provide benefits for the participating employees. BenefitAmerica shall provide the Employer with the information in its custody for use in the preparation of all returns and reports that are required by the Internal Revenue Service, the Department of Labor and any other federal or state agency. BenefitAmerica shall assist in the preparation of such returns and re- ports whenever called upon to do so by the Employer; provided, however, that the Employer shall be responsible for the timely preparation, filing and content of all such returns and reports, and the payment of any taxes which may be due. E. BenefitAmerica shall have the right to retain outside service providers to assist it in performing the duties delegated to it under this Agreement. All such outside services shall be provided at the expense of BenefitAmerica and shall be subject to the supervision, control and responsibility of BenefitAmerica. BenefitAmerica shall have the right to reta4-t-the services of accountants, attorneys, actuaries and any other professionals whose services are reasonably necessary or desirable to aid in the performance of its duties under this Agreement, for the benefit of the Employer. The expenses for those professional services shall be payable by the Employer upon receipt of appropriate billing from BenefitAmerica. BenefitAmer- ica shall notify the Employer oi any pending matter which necessitates the reten- tion of such professional services and shall refrain from hiring any such persons for the performance of substantial services without the prior written approval of the Employer. F. BenefitAmerica shall obtain and maintain such fiduciary bonds as are required under applicable law. III. DUTIES OF EMPLOYER A. Employer warrants that it has validly adopted the Plan and any component plans of the Plan. True copies of the Plan and any component plans are attached hereto as Exhibit A. B. Employer shall notify, or insure that the participating employees notify, Bene- fitAmerica of the age, years of service and benefit elections of participating em- ployees. The Employer shall also notify BenefitAmerica of (1) a reduction of par- ticipating employee hours of service resulting in loss of benefit eligibility of a par- ticipating'employee; (2) termination of the employment of a participating em- ployee and whether such termination was due to gross misconduct; or (3) a participating employee becoming eligible for Medicare. C. Employer shall be responsible for the initial qualification of the Plan and any component plans under the Code, ERISA, or any other applicable federal, State or local law or ordinance. 3 D. If BenefitAmerica S to process claims for benefits underTiexible reimbursement accounts, as described in paragraph II.D above, funds for the payment of bene- fits shall be provided to BenefitAmerica by the Employer in accordance with the option selected by the Employer and indicated below. OPTION 1 : Employer shall forward an amount equal to one month's pay- roll reduction (exclusive of premiums paid directly by Employer) for all employees who have e0ected to participate in the Plan to BenefitAmerica in such manner that such sum shall be in the possession of BenefitAmer- ica on or before the initial effective date of the Plan, or of this Agreement, if later. Such funds shall be deposited in an agency account called "Bene- fitAmerica Flexible Benefits Account." Benefit America shall utilize such funds to make payment of benefits properly payable according to the terms of the Plan. BenefitAmerica shall, upon making a payment for benefits under the Plan from such funds, submit a statement to the Em- ployer for reimbursement of the amount so paid to replenish the amount so paid out form the initial month's payroll reduction, thereby assuring the existence of a fund in BenefitAmerica's hands sufficient to pay benefits under the Plan. Such funds shall remain the assets of the Employer until expended in accordance with the terms of the Plan. XX OPTION 2: Employer, on notice from BenefitAmerica, shall forward to BenefitAmerica such amounts as BenefitAmerica may request in order to pay benefits payable under the terms of the Plan which are properly due and payable pursuant to properly filed processed and documented claims. IV. TERM OF AGREEMENT The appointment of BenefitAmerica under this Agreement is effective as of 01/01/93 and shall last until 08/31/94 The appointment shall automatically be extended from year to year after the end of the original term unless one party gives written notice sixty (60) days prior to the end of the term to the other of its intention to terminate this Agreement as of the end of such term. During any term hereof, and on sixty (60) days written notice, either party may terminate the Agreement with or without cause. Upon termination of this Agreement, copies of all pertinent information from the files of BenefitAmerica shall be made available to the Employer at its request. V. COMPENSATION The Employer shall pay to BenefitAmerica fees in accordance with the schedule attached hereto as Exhibit B. Fees and other charges authorized hereby shall be paid by the Employer within ten days of the presentation of a bill by BenefitAmerica. 4 VI. INDEMNIFICATION AND HOLD HARMLESS The Employer shall indemnify and hold harmless BenefitAmerica for any claims, costs, demands or actions incurred by BenefitAmerica with regard to BenefitAmerica's actions or failure to act in regard to the Plan, unless such claims, costs, demands or actions are incurred as a result of the negligence of BenefitAmerica. Any benefit payments processed by BenefitAmerica shall be made by BenefitAmerica as agent for the Employer. In the event that any benefits paid under the Plan should come to be recharacterized for any reason cis income to any participating employee, Bene- fitAmerica shall under no circumstances be liable for any Employer or employee taxes, including withholding thereof, or interest or penalties relating to them that result from such recharacterization. BenefitAmerica shall have no responsibility for federal, state or local taxes or reporting to federal, stake or local taxing authorities with respect to contribu- tions to the Plan or benefits paid from the Plan. VII. NOTICES Any notices that may be required under this Agreement shall be sent by U.S. Mail, properly addressed, with poEtage prepaid. Notices will be sent to the Employer at Vif..y of Pa9m Springs . P. n _ Rnx 2743 , Palm Springs . A�3-2743 Notices will be sent to BenefitAmerica at Notice shall be effective upon receipt. Vill. MISCELLANEOUS A. This Agreement shall constitute the entire understanding of the parties with re- gard to the matters covered in it and shall not be modified except by written document signed by both parties. B. This Agreement shall be construed in accordance with the applicable laws of the State of California C. This Agreement shall be binding upon the undersigned par�le,�,Ulf� s cGMSp ff and assigns. EXECUTED the dayyear first mentioned above. ' T and Y Cii Ait ney »te �..r.— BENEFIT ERICA, INC. IWParkins of Palm Sp ings BY. BY: Ro , fty Manager TIT!_E: -7e� D1pp ATTE_ST: `Jlfofaky 5 �C�`ru�r6 . �� leak , 4 EXHIBIT A Section V. Compensation is hereby amended in it's entirety to read as follows: V. Compensation The Employer shall cause to be collected from Employees,fees,in accordance with Exhibit "B" attached hereto and shall transmit such fees to BenefitAmerica on behalf of such employees. Fees and other charges aLithorized hereby shall be paid by the Employer on behalf of the Employee within ten days of the presentation of a bill by BenefitAmerica. City of Pay Payh Springs BenefitAmerica Robert N7. ar ins ` City Manager EXHIBIT B .FEE SCHEDULE Installation Fee: N/A Annual Enrollment Fee: N/A Annual Mailing Fee: NM Monthly Administrative Fee: $ 1 .00 per participant in Premium Conversion Y $1 .00 per participant in Medical Reimbursement 1$ 00 per participant in Dependent Care Assistance Fee schedule accepted this 1 st day of January 1993 BENEFITAMERICA, INC. EMPLOYER c7 BY: BY: TITLE: TITLE: CITY MANAGER f� 'i�6isx,a3°I�,r.J �y [ �u`i?lY.i�l,', ^.'��•t i6'9�.iL 1/.316 .3 6 Flexible Benefits Plan Model Plan Document Fin WITH car COLONIAL sm LIFE&ACCIDENT INSURANCE C0MPANY This Plan is merely an example of a Flexible Benefits Plan. The Plan has not been approved by the Internal Revenue Service, nor is it necessarily the best plan for a particular employer. The Plan is provided solely as a guide for employers desiring to adopt such a plan. It should not be used without being reviewed by an employer's own professional advisers. CITY OF PALM SPRINGS Re-able Benefits 1Plai JANUARY 1 , 1993 Effective Page E n°tuc P csx°e r�oa°c. aind F'aan^tne5e............... ......................................................................11 A2dde I R Die aaatn®any an�� ®ua� eaa®nn 2°1 Definitions ....................................',.....................................................................II 1 a. Code ................................................................................................................. II 1 b. Component Plan ..........................',.....................................................................II 1 C. ,, Coverage Expenses ..................................................................................... ......I I-1 d. Covered Compensation ..................................................................................... II-'I e. Dependent .........................................................................................................II 1 f. Effective Date.....................................................................................................II 1 g. Eligible Employee...............................................................................................II 1 h. Employee ..................................... ..................................................................... II-'I Employer.............................................................................................I..............I]--] j. Employer Contribution ....................................................................................... II-1 k. ERiSA ..................................................................................................I...... ..,... II-1 1. Fiduciaries..........................................................................................................11-1 rn. Fle;cible P,ay..................................'......................................................................II-2 n. Highly Compensated Individual ..........................................................................11-2 o. Highly Compensated Participant...:.....................................................................II-2 P. Key Employee ....................................................................................................11-2 q. Participant ..........................................................................................................11-2 r. Plan....................................................................................................................11-2 S. Plan Administrator ..............................................................................................11-2 t. Plan 'Year .....................................:......................................................................11-2 2°2 Construction .......................................................................................................11-2 Aa°tnefle III EHgibi ty, f�aiskeedpaticn ?nd Eaasofianenat 3.1 Eligibility ............................................................................................................111-1 3.2 Commencement of Participation .....................I..................................................III-1 3.3 Termination of Participation ...............................................................................III-1 3°4 Enrollment .........................................................................................................III 1 Flldr-le IV Co¢nts°nbnnido ns ..................................................................................................IV-1 4.1 Nonelective Contributions ............:................................................................... IV-1 4.2 Elective Contributions ...................'.................................................................... IV-1 ..3 Effect of Change in Family Status i....................................................................IV-1 4.4 Cash Benefit ................................i,....................................................................IV--I ATtaele V Adarii-iniaim6on Page 5.11 Allocation of Responsibility Among Fiduciaries for Plan Administration...............V-1 5.2 Administration ....................................................................................................V-1 5.3 Claims Procedure ..............................................................................................V-1 5 F' Other Administrative Powers and Duties ............................................................V-2 5,5; Rules and Decisions ..........................................................................................V-2 6 Forms and Requests for Information ..................................................................V-2 5>7 Responsibility for Plan.............................................. A•tnele'VR Avacaidimien't of the Plain ................................................................................VI-i Airtide VII Teams Eataon of the FiaRL................................................................................VII-2 Ardele' -Eff l/Mcelllameou5 GyI Employment Rights .........................................................................................'VIII-1 9,L Spendthrift Clause...........................................................................................VIII-1 S.3 No Guarantee of Non-Taxability ......................................................................VIII-1 &Zy Nondiscrimination ...........................................................................................VIII-1 &5 Delegation of Authority by the Employer..........................................................VIII-1 M Construction of Agreement..............................................................................VI11-1 0,7 Headings ........................................................................................................ViII-1 EntirePlan Stated ...........................................................................................VI9i-1 Fnt ele enana w°e ......................................................................................................... Scbe¢ckdz!A The CITY OF PALM SPRINGS Flexible Benefits Plan is a program chat permits Participants to elect to receive cash or coverage for themselves and their eligible Dependents under various Component Plans which provide health benefits benefits. The Plan has been established by the CITY OF PALM SPRINGS It or the benefit of its Eligible Employees. This Plan is effective January 1 1993 it is intended that this Plan shall qualify under Section 125 of the Code as a"cafeteria plan." �fle;mkrfle �ea��fies 2.1 Da iiirditna: Where the following words and phrases appear in this Plan they shall have the meaning set forth below, unless a different meaning is plainly required by the context: (a) Codo: The Internal (Revenue Code of 1986, and regulations and rulings issued thereunder, as amended from time to time. (b) Component Mors: Any one of the plans listed in subsection (c) below. It is in- tended that each of the Component Plans shall constitute a"qualified benefit"within the meaning of Section 125 of the Code. (c) Coverage Expenses: The insurance premiums or other costs for the benefit coverage a Participant elects pursuant to Section 3.4, and which is provided under one of the following Component Plans which are attached hereto and incorporated herein by reference: See attached brochures For each Plan Year, the Plan Adi-ninistrator shall specify the premium or other costs for benefit coverage which is applicable to each of the foregoing Component Plans. (d) Covered C®rrralpensadon: For each Plan Year, a Participants Covered Compensa- tion shall mean the actual compensation (including bonuses and overtime) accrued or paid by the Employer to the Employee for the period during which the Employee was a Participant in this Plan (including amounts contributed to the Employer's Plan on behal'i of the Employee in accordance with Code Section 401(k) ). (e) Dependent: A spouse, child, or other dependent of a Participant, subject to further limitations provided by each Component Plan. (1) EfGeeU ve DaPte: The date upon which this Plan is effective,_January t - 1,9.43 . (g) ED gUs Ecn ftyvee: Each Employee who meets the requirements set forth in Section 3.1 of this Plan. (h) ErrtpIoyes: Any person who is an employee (the term "employee" having its customary, common law meaning) of the Employer and who is receiving remuneration for personal services rendered to the Employer. (o) Evnot©0®ype : CTTY OF PALM_SRUNGS @ Ernptoyerr Contvibution: The Employer Contribution for each Plan Year shall be the sum of (1) and (2) below: (1) Nonelective contributions: The amount the Employer makes available for the benefit of each Participant for the Plan Year pursuant to Section 4.1. (2) Elective contributions: The amount of Fle;:ible Pay applied to a Participant's Cover- age Expenses under the Plan. It is intended hereunder that such amounts shall, for tax purposes (including Section 125 of the Code), constitute an Employer Contribution. For each Plan Year, the maximum amount of Employer Contribution available under the Plan to any Participant for application to his or her Coverage Expenses shall be that amount set forth in Schedule A of the Plan. For purposes of Section 125 of the Code, the amount set forth in Schedule A shall constitute the maximum Employer Contribution available to any Participant under the Plan during a Plan Year. The maximum amount shall be determined by the Employer prior to the beginning of the Regular Enrollment Period for the ensuing Plan Year and shall be adjusted as necessary due to the in- creases in cost to the Component Plans. LFle.�bte (Cs) EFASA: Public L.aw 93-406, the Employee Retirement Income Security Act of 1974, IBeaae&5 and regulations and rulings issued thereunder, as amended from time to time. (0) Mdudartes: The Fiduciaries who shall be the Employer and the Plan Administrator, and other parties designated as Fiduciaries by such Fiduciaries in accordance with the powers herein provided, but only with respect to the specific responsibilities of each in connection with the Plan. (m) Flm!Ha PFy: The amount of Covered Compensation that, pursuant to Section 4.2, is applied on behalf of a Participant to pay his or her Coverage Expenses of that (to the extent not otherwise applied) he,or she may elect to receive as additional cash compensation. (n) Mc c hIly :Coimpensated, hdMdmal: An individual who is (1) an officer, (2) a share- holder owning more than 5 percent of the voting power or value of all classes of stock of the Employer, (3) highly compensated, or (4) a spouse or dependent (within the meaning of Code Section (52) of an:,individual described in (1), (2), or(3). (©) HIC011y Compansw'te¢f PwIllclpant: A Participant who is described in subparagraph (1), (2), (3) or (4) of paragraph 2.1 (n). (p) Key Errgplpye a: A Participant who is (1) an officer of the Employer having at least $56,1-11 annual compensation from the Employer or such other amount as is pre- scribed by the Secretary of the Treasury from time to time, pursuant to Code Section 415 (d)(1); provided, however, that no more than 50 employees, or if the number of ernployees of the Employer is less than 500, 'the greater of three or 10% of the employ- ees, shall be treated as officers; (2) one of the 10 Employees having at least$30,000 annual compensation from the Employer (or such other amount as is prescribed by the Secretary of the Treasury from dme'io time pursuant to Code Section 415 (d)(1)) and owning (or considered as owning within the meaning of Code Section 318) the largest interests in the Employer; (3) a 5-percent owner of the Employer; or (4) a 1-percent owner of the Employer having annual compensation from the Employer of more than $150,000. Such term shall not include any officer or employee of an entity referred to in Code Section 414(d) (relating to governmental plans). (rl) `Iarft_c pan'L Any Employee who has qualified under the terms of the Plan for participation herein and who remains so qualified. (e) Flan: CTTY OE PALM SPRTN6S Flexible Benefits Plan, the Plan set forth herein, as amended from time to time. (s) Man F slecra6 ovJ:rwa oa°: The Employer or its successor or successors, which shall have authority to administer the Plan as provided in Article V. (t) Pan V(Dair: The first Plan Year shall be the period commencing January 1 , 1993 and ending August 31 , 1993 , All subsequent Plan Years shall be the 12-month period commencing on September 1 and ending on August 31 2.2 Ccns''irucUcn: As used in this Plan, the masculine gender includes the feminine, and the singular includes the plural, unless the context clearly indicates to the contrary. The words "hereof," "hereunder" and other similar compounds of the word "here" mean and refer to the entire Plan, not to any particular provision or section. 1F9e3dble Benefit, H-2 11 Eflgf ifityt: Generally, all full-time Employees shall be eligible to participate in the Plan. Full-time Employees are defined as those employed for 20 or more hours per week on a regularly scheduled basis and paid either on a weekly, biweekly, semi-monthly or monthly basis. 3.2 Corn menramenf:of An Eligible Employee shall commence (or recommence) participation in this Plan on the latest of the following dates: (1) the Effective Date of the Plan; (2) the Employee's first day of his 2 month of employment or reemployment [may not exceed 37 months] as an Eligible Employee; or (3) the date (as determined by the flan Administrator) that the Election Form is filed by the Participant. See Section 3.4 (c) for limitations on enrollment elections for Employ- ees who recommence employment. Notwithstanding the preceding sentence, an Eligible Employee who is disabled and not actively employed on the date his or her participation would otherwise have com- menced shall not become a Participant in the Plan until the date he or she returns to active employment as an Eligible Employee. A Participants right to participate in any Component Plan shall be dependent upon the Participant's satisfying the specific terms and conditions of participation which are applicable to such Component Plan. 3.3"f-Frrrtonathoa 4 Pao°tor ap�r o®n: A Participant shall continue to participate in this Plan until the earlier of the following dates: (1) The date the Participant terminates employment by death, disability, retirement or other separation from service; or (2) The date the Participant ceases to work for the Employer as an Eligible Employee. 3 E m,oflnishat: An Eligible Employee may enroll (or re-enroll) in the Plan by submit- ting to the Plan Administrator, during an enrollment period described in subsection (a) below, an Election Form which specifies his or her elections for the Plan Year as to Dependent status and benefit coverage under the Component Plans for which he is eligible, which sets forth his agreement to use the necessary amount of Flexible Pay to pay his Coverage Expenses (if any), and which meets such other standards for come pleteness and accuracy as the Plan Administrator may establish. Such Employee shall specify his election as to Dependent status as coming within one of the following categories: (i) Employee without Dependents, or (ii) Employee with Dependents. A Participant's Election Form shall not be effective prior to the date such form is submit- ted to the Plan Administrator. Any Election Form submitted by a Participant in accor- dance with this Section shall remain in effect until the earlier of the following dates: the date the Participant terminates participation in the Plan or the effective date (as deter- mined by the Plan Administrator) of a subsequently filed Election Form submitted pursuant to subsections (a)(2) and (3) below. (a) Enroilliment Periods: (1) Each Eligible Employee who meets the requirements of Section 3.2, on J an uary 1 shall have an Initial Enrollment Period which shall begin ontfQv_ember 8 and shall terminate orO_mbQ_r,15 Each Eligible Employee who meets the requirements after _January 1 shall have an Initial Enrollment Period which shall begin on the first day after the Employee has met the requirements and shall terminate 30 days thereafter. (2) Each Participant shall have a Regular Enrollment Period during which to mate Ft�ufafl� elections for the immediately ensuing Plan year. The Regular Enrollment Period for tdeaaeix such Plan Year shall commence on July 1 prior to such Plan Year and shall terminate 30 days thereafter (A-ust 1 ), oou�� (3) A Participant who incurs a change in family status, as provided in paragraph (c) below, shall have a Special Enrollment Period which shall begin on the date of his or her family status change and shall terminate 30 days thereafter. (h) ErnroHlin y, Dependents: An Eligible Employee may enroll in the Plan any or all of his or her Dependents during his or',her Initial Enrollment Period, Regular Enrollment Period, or Special Enrollment Period. A Participant who incurs a family status change may enroll any new Dependents during the Special Enrollment Period commencing on the date such individuals become Dependents of the Participant. Any Dependent not enrolled during an Enrollment Period described in the two preceding sentences may be enrolled thereafter for the current Plan Year only with the consent of the Plan Adminis- trator. An E-mployee shall enroll his or her Dependents by specifying, on such forms as the Plan Administrator may require,'the Dependents' names and birth dates, and by electing the category of dependent coverage that corresponds to the number of Depen- denis the Employee wishes to enroll. (c) Et nKai on on EnroHnh e f: Elecftons: A Participant's right to elect certain benefit coverage shall be limited hereunder to the extent such rights are limited in a Compo- nent Plan or in rules adopted by the Plan Administrator. Furthermore, a Participant shall not be entitled to revoke an enrollment election after a period of coverage has corrinnenced and to make a new enrollment election with respect to the remainder of the period of coverage unless both the revocation and the new election are on account of and consistent with a change in family status (e.g., marriage, divorce, death of spouse or child, birth or adoption of child, and termination of employment of spouse). Furthermore, if the Employee's participation in the Plan ceases as a result of the Employee's separation from service, and if the Employee recommences employment as an Eligible Employee within the same Plan Year, the Employee may not make a new enrollment election for the remaining portion of that Plan Year. Efle�mfle �I Benefits Ilf-2 0 AR-T l,k-de V (Cori rtilbu- nolnp) 4.-� Noraeiactoeve CantpHbut ens: For each Plan Year, the Employer in its sole discre- tion, may make on behalf of each Participant a Nonelective Contribution to provide benefits for such Participant and his or her Dependents, if applicable, under the Plan. The amount of a Nonelective Contribution shall be calculated for each Plan Year in a uniform and nondiscriminatory manner based on the Participant's Dependent status category (as elected under Section 3.4), the commencement or termination date of the Participant's employment during the Plan Year, and Such other factors as the Employer shall prescribe. It the amount of the Nonelective Contribution exceeds the cost of the benefit coverage selected by the Participant, no such excess amounts will be paid to the Participant. 4.2 EBecUve Con-h-fbuU amao: (aa) Aurarvuilf:of FfestNe Pay: Each Participant shall have an amount of Flexible Pay equal to the Employer Contribution less the Nonelective Contribution described in Section 4.1. (lo) rrfs,oboe Quay 0 nhMIOU]done: Each Participant shall authorize the Plan Administra- tor to withhold from his or her Covered Compensation for the Plan Year an amount of Flexible Pay equal to his or her Coverage Expenses in excess of his or her Nonelective Contribution for such year. In the event that the Coverage Expenses for the benefit coverage elected by the Participant increase or decrease during the Plan Year, the amount of Flexible Pay withheld from the Participant's Covered Compensation shall be increased or decreased accordingly. Any Flexible Pay which is withheld from a Participant's Covered Compensation pursuant to this Section shall be withheld in approximately equal installments from the amounts payable to the Participant for each pay period during the Plan Year (or such portion of the year as the Plan Administrator may designate). For Employees whose salary during the year is paid to them over a period of time less than a year, Flexible Pay amounts will be withheld in installments as determined by the Plan Administrator. if an Employee becomes a Participant after the beginning of the first pay period of the Plan Year, the amount withheld from his or her Covered Compensation during such year shall be a pro rate share of the amount that would have been withheld had he or she been a Participant in the Plans as of the beginning of the Plan Year. (c) EtecHon: An election under subsection (b) to authorize withholding of Fle>ible Pay shall be made on an Election Form submitted in accordance with Section 3.4. An election to have withheld an amount of Flexible Pay which, in the determination of the Plan Administrator, exceeds the limitation on Flexible Pay set forth in subsection (a) may in the discretion of the Plan Administrator be treated as void or as an election to have withheld the maximum amount permissible under such limitation. �.d Effect of Charngte un Farm Ity 81atuz: If a Participant's elections change during the Plan Year because of an election made pursuant to Section 3.4(a)(3), then in accor- dance with rules adopted by the Plan Administrator appropriate adjustments shall be made in the amount,withheld from or added to the Participant's pay for the balance of the year to reflect any changes in the Participant's Elective Contributions and benefit elections. V:4 N a:h Bet�efV: Any Flexible Pay not expended for the purchase of benefits under this Plan shall be considered a cash benefit under the Plan payable to the Participant. Y flext�fle 1�,eaae�eks 9iP-t 5.'i Affecafta Ofi -,SSPOonSH3HFT A a�rng Ffdc u2ilavies f© Ftan o9 t�o�tuato©ao: the Fiduciaries shall have only those powers, duties, responsibilities, and obligations as are specifically given or delegated to the under this Plan. (a)The Employer shall have the sole responsibility for making the Employer Contribu- tions under the Plan as specified in Article IV. (f,;The Employer shall have the sole authority to appoint and remove the Plan Admin- istrator, and to amend or terminate this Plan in whole or in part. (c.)The Plan Administrator shall have the sole responsibility for the administration of the Plan, which responsibility is specifically described herein. (dl) Each Fiduciary warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan authorizing or provid- Ing for such direction, information or action. Furthermore, each Fiduciary may rely upon any direction, information or action of another Fiduciary as being proper under the Plan, and is not required under the Plan to inquire into the propriety of any direction, informa- tion or action. It is intended under this Plan that each Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under the Plan and shall not be responsible for any act or failure to act of another Fiduciary. i4iWirrrafalistrraaoon: The Plan shalt, be administered by the Plan Administrator which may appoint or employ person to assist in the administration of the Plan and may appoint or employ any other agents it deems advisable, including legal counsel, actuar- ies, auditors, bookkeepers and recordkeepers to serve at the Plan Administrator's direction. DUI usual and reasonable expenses of the Plan and the Plan Administrator shall be paid by the Employer. C S Cfai,crez Pi,acr-dui[re: The Plan Administrator, or a party designated by the Plan Administrator, shall make all determinations as to the right of any person to an Em- ployer Contribution under the Plan. !It an assertion of any such right by a Participant or Dependent is wholly or partially denied, the Plan Administrator, or the designated party, will provide such claimant a comprehensible written notice within 90 days after receipt of the claim, unless circumstance warrant an extension of tirne not to exceed an addi- tional 90 days, setting forth: (a) The specific reason or reasons for such denial; go) Specific reference to pertinent Plan provisions on which the denial is based; (c) A description of any additional material or information necessary for the claimant to submit to perfect the claim and an explanation of why such material or information is necessary; (df� A description of the Plan's claims review procedure. The review procedure is available upon written request by the claimant to the Plan Administrator, or the desig- nated party, within 60 clays after receipt by the claimant of written notice of the denial of the claim, and includes the right to examine pertinent documents and submit issues and comments in writing to the Plain Administrator, or the designated party. The decision on review shall be made within 60 days after receipt of the request for review, unless circumstances warrant an extension of time not to exceed an additional 60 days. The decision shall be in writing and drafted in a manner calculated to be understood by the claimant, and shall include specific reasons for the decision with references to the specific Plan provisions on which the decision is based. Ffe�tPsfl¢ I Benefit-, V-1 6.� OU18r AdJimWsh'atfue Poanvsrrs andl Duttos: The Plan Administrator shall have such powers and duties as may be necessary to discharge its functions hereunder, including the power: (a) to construe and interpret the Plan, decide all questions of eligibility and determine the amount, manner and time of payment of any reimbursements hereunder; (fo) to prescribe procedures to be followed by Participants electing benefit coverages or filing applications for reimbursements; (c"9 to prepare and distribute, in such manner as the Plan Administrator determines to be appropriate, information explaining the Plan; (dl)to receive from Employees, agents and Participants such information as shall be necessary for the proper administration of the Plan; (e) to receive, review and keep on file (as it deems convenient or proper) repons of the receipts and disbursements of the Plan; (u) to appoint or employ individuals or other parties to assist in the administration of the Plan and any other agents it deems advisable, including accountants, legal counsel, boold<eepers and recordkeepers; and (g) to designate or employ persons to carry out any of the Plan Administrator's fiduciary duties or responsibilities under the Plan. 3.5 L Res and Dearcoslons: The Plan Administrator may adopt such rules and proce- dures as it deems necessary, desirable, or appropriate for the administration of this Plan. All rules, procedures and decisions of the Plan Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon infor- mation furnished by a Participant, a Dependent, the duly authorized representative of a Participant or Dependent or the legal counsel of the Plan Administrator. 5.6 Forms and The Plan Administrator may require a Participant to complete and file such forms as are provided for herein and all other forms prescribed by the Plan Administrator, and to furnish all pertinent information requested by the Plan Administrator. The Plan Administrator may rely upon all such information, including the Participant's current mailing address. 5.7 Reslponso[ Rly 1torr Rain: The complete authority to control and manage the operation and administration of the Plan shall be placed in the Plan Administrator, who shall be solely responsible for the operation of the Plan in accordance with its 'terms. The sponsor(s) of the Component Plans shall have no responsibility for, nor liability toward the operation and administration of this Plan. IFtexnt�te Benefits y-2 The Employer shall have the right at any time by instrument in writing, duly executed and acknowledged, to modify, alter or amend this Plan in whole or in part, provided, however, that no such amendment shall diminish or eliminate any claim for any benefit to which a Participant shall have become entitled prior to such amendment. Notwith- standing the foregoing, the Employer shall have the limited right to amend the Plan at any time, retroactively or otherwise, in such respects and to such extent as may be necessary to fully qualify it as a"cafeteria plan" under existing and applicable laws and regulations, including Section 125 of the Code, and if and to the extent necessary to accomplish such purpose, may by such amendment decrease or otherwise affect benefits to which Participants may have already become entitled. neydble BeneGat5 vi-I The Plan herein provided for has been established by the Employer with the bona fide intention that it shall' be continued in operation indefinitely. However, the Employer reserves the right at any time to terminate or partially terminate the Plan. Should the Employer decide to terminate or partially 'terminate the Plan, the Plan Administrator shall be notified of such termination in writing and shall proceed at the direction of the Employer to take such steps as are necessary to discontinue the operation of the Plan in an appropriate and timely manner. �te,aaFste Beanefaks W-11 A fznniptopymawt MgMs: Under no circumstances shall the terms of employment of any Participant be modified or in any way affected hereby. This Plan shall not consti- Me a contract of employment nor afford any individual any right to be retained in the employ of the Employer. a., �pen�9lthiirrh"c Ctause: To the extent permitted by law, Participants are prohibited from anticipating, encumbering, alienating or assigning any of their rights, claims or interest in this Plan, and no undertaking or attempt to do so shall in any way bind the Plan Administrator or be of any force of affect whatsoever. Furthermore, to the extent permitted by law, no such rights, claims or interest of a Participant in this Plan shall in any way be subject to such Participant's debts, contracts or engagements, nor to attachment, garnishment, levy or other legal or equitable process. Provided, however, anything to the contrary herein nomilhstanding, to the extent permissible under appli- cable law, a Participant's interest hereunder is subject to all bona fide and existing debts owed by such Participant to the Plan. M No The plan is designed and is intended to be operaied as a"cafeteria plan" under Section 125 of the Code. Nonetheless, neither the Employer nor any Fiduciary shall in any way be liable for any taxes or other liability incurred by a Participant or anyone claiming through him or her by virtue of Participa- tion in this Plan. The Plan does not prohibit, and indeed contemplates, the payment of taxable benefits under certain of the Component Plans. C.d tov�w9ts,orrov�tnvasliour: In accordance with Section 125 (b)(1) and (2) of the Code, the Plan is intended not to discriminate in favor of Highly Compensated Individuals as io eligibility to participate, nor Highly Compensated Participants as 'to contributions and benefits, nor to provide more than 25% of all qualified benefits to Key Employees. if, in the operation of the Plan, more than 25% of the total qualified benefits are found to be provided to Key Employees, or the Plan discriminates in any other manner (or is in danger of so discriminating), the notwithstanding any other provision contained herein, the Plan Administrator shall reduce or adjust such contributions and/or benefits under the Plan as shall be necessary to assure that, in the judgment of the Plan Administra- tor, the Plan thereafter will not discriminate. All rules, procedures and decisions of the Plan Administrator shall be adopted, made and/or applied in such fashion that they do not discriminate in favor of Highly Compensated Individuals, Highly Commpensated Participants or Key Employees. (DV S.g Dcatogattor ©f ya;q'i iov KV by u6ae Ennpfoysr: Whenever the Employer under the terms of this Agreement is permitted or required to do or perform any act or matter or thing, it shall be done and performed by any officer or individual thereunto duly auiho- rized by the Employer. E.5 et` This Plan shall be construed according to the laws of the State of_a_U forni a and all provisions hereof shall be administered according to, and its validity and enforceability shall be determined under, the laws of such state, except whore preempted by the Code or ERISA. S�d F sQddfngp: The headings of sections and subsections are for ease of reference only and shall not be construed to limit or modify the detailed provisions hereof. d.S �rwtov� Ptaur _fat-c.i: This document sets forth the entire plan. No other employee benefit or employee bene'iit plan which is, or may hereafter be maintained by the Employer on a nonelective basis shall constitute a part of this Plan Flewib[2 3�an�fintls ' ��aoot•� The above Plan is hereby adopted and approved, to be effective as of this_ day of November 1992 By. _ ROB W. PARKINS, CITY MANAGER A ® Authorized Officer IFfle;�foIle BeTefigs rX_1 �hed I'jle,� e Benefits Ram Maximum amount of Employer Contributions for Plan: E9arn Veary commencMg (MSXS Murrn on or After Amowvt 'For plan years consisting less than 12 months,the stated maximum amount shall be prorated for such shorter period. i ' i Flexible Benefits Plan ]Medical Reimbursement AModel Plan Document COLONIAL LIFECACCIDENTINSURANCE COMPANY - This Plan is merely an example of a Medical Reimbursement Plan. 'The Plan has not been approved by the Internal Revenue Service, nor is it necessarily the best plan for a particular,employer. The Plan is provided solely as a guide for employers desiring to adopt such a plan. It should not be utilized without being reviewed by an employer's own professional advisers. I r o E-HL-C US January 1 , 1993 BamAe Off` C a d l@ LS Arficia L Foreword, ano(l Purpose ....... . ...... .. ........ . ......... I-1 Micie li. DaRn corns and, d u�s4u erctoo .... ...... ......... . ...... . .. II i 2.1 Definitions .... II1 2.2 Construction .... . ........ . . ..... . ...... . ....... . ....... . . ....... . ........ . II-2 2.3 Rights of participants . . .... . .... . .............I.......... ..I....... II-2 Artride M. Sigifoolofy arodl Vcar&ipaftr. ...... . . ....... . .. ....... . ....... . . ....... .. III-I 3.1 Eligibility . ....... .. ....... ........ ........ .. ........ .. .. ....... . ....... ...... . IEI-'I 3.2 Commencement of participation .. . . ....... ........ . . ........ . .......... III-1 3.3 Cessation of participation .. .. ........ . ........ .. .......... . ....... . . ....... . 3.4 Discrimination .... ..... III-1 3.5 Continuation coverage .......... .. ........ . ....... . ....... .. .. ....... . . ...... III-f .rV'Hcie W. Etecfucn W Mscehfe Mad ica0 neirrribursemeM .. . ...... . . ....... .. ..... IV-1 4.1 Election procedure..... .. . ..... . . .... .. . ........ .. .......... .. ......... .... IV-1 4.2 Maxirnum reimbursements .... . .... . ..... . . ....... .. . ....... . .... IV-1 Ab-dcOq V. MG?dica9 Reimbursement Accounts ........ .. .......... .. .... .. V-1 5.1 Establishment of accounts .... . . ..... . . ....... . ........ . . ....... . ... V-1 5.2 Crediting of accounts ........ ................... . .. ...... . ........ . .......... .. .. V-1 5.3 Debiting of accounts.... . ..... . . ..... . . ..... . .. ..... . . ....... . ........ V-1 5.4 Forfeiture of accounts ..... . ........ . ........ . ...................... . ......... . ..... V-1 Ard de Vi. peyrrvarnt of Medical RLIFtabursernams _..... . _.... . .......... . ........ VI-1 6.1 Claims for reimbursement. . ....... .. .......... .......... .. .......... ....... . ..... VI--I 6.2 Reimbursement or payment of expenses.... .. ...... . ......... ......... . VI-1 4�V'd s VH. T erminadan oD' pardacjpaf'ron .... .......... ....... . ....... . ....... . ........ VII-1 ArfocOe VUL AcImWstraUora . ..... . . ..... . . .......... ........ .. ........ . .......... . .......... VIII-1 8.1 Plan administrator . .. .... . . ........ ...... . ..... . .. ..... . .. ....... . .......VIII-1 8.2 Examination of records ..... . ....... .. ........ . ......... . ........ .......... .. ...VIII-1 8.3 Reliance on tables, etc. . ....... . ....... . ....... . ...... . ..... . . ....... .. ..VIII-1 Av'doie lX. AxnenddmeM or Terrnfnatdorj ©f Plan ..... ........... . .......... .. ....... .. ... 9.1 Amendment of Plan ....... . ..... ...... . ....... .. ..... . .... . ........ .. IX-1 9.2 Termination of plan . .... . ..... .. . ...... . ......... ................................ 1)(-1 Avalcie X. M 2r rnz prroceduvas..... . ..... . .... .. .. ..... . .. ........ . ...... . .. )C-1 10.1 Claims . ..... . . ..... . . ..... . . ..... .. . ...... . .......... . ........ .. .......... ...... )C-1 10.2 Notice of decision . . ....... . ........ ....... .. . ..... . . ..... . ..... . . ....... .. X-1 10.3 Content of notice . ..... . . .... . . .... . . ..... . ....... .. .......... .......... .. . )C-1 10.4 Appeal procedure ... . ........ .......... ........... ....... 10.5 Review procedure .. ..... . . ...... . .... . ....... . ....... .. ..... .. . . .... ):-2 10.6 Disputes ..... . . ....... .......... ........... ........ . .......... ....... . ....... .. ...... X-2 10.7 Appeals committee . ........ ...... .. ........ .. ....... ..... . . ....... .. X-2 ArNois M. iMiscaVOaraaoUs . ...... . ................... .. ....... ......... ....... . ....... ........ 11.1 Communication to eligible employees .. ........ _.. ........ ....... ....... . 11.2 Limitation of rights ................. . ....... .......... .......... ........ . . ..... .. ...... 11.3 Benefits solely from general assets..... .. ........ _......I. ......... . ....... ... 11.4 Nonassignability of rights .... . ....... . ..... .. .......... ........... ........ . ...... 11.5 No guarantee of tax consequences_ . ..... . . ..... . . .... .. .......... ...... 11.6 Indemnification of employer by participants ..... ........ . ....... . ....... .. )(B-2 11.7 Governing law .. .. .......... ....... . ....... . ..... . ....... .. ... XI-2 �1� l Mledical' Reimbursernent Plan Article 1. Foreword and Purpose CITY OF PALM SPRINGS hereby establishes a medical reimbursement plan as a component plan underthe CITY OF PALM SPRINGS _. Flexible Benefits Plan for the exclusive benefit of its employees. The Plan is intended,,to quality as a medical reimbursement plan under Section 105(b) of the Code and is to be interpreted in a manner consistent with the requirements of Section 105(b). The purpose of the Plan is to enable Participants to elect to make contributions under the plan in lieu of receiving their compensation in return for which they are entitled to receive payments or reimbursements of Oualifying Medical Care Expenses, which are excludable from the Participant's gross income under Section 105(b) of the Code. Its. Medical Reimbursement Plan M Er)s 8L :2.1 Definitions. Where the following words and phrases appear in nefiniNons and this Plan, they shall have the following meanings, unless a different Const{9'tArdon meaning is plainly required by the context: (a) Code: The Internal Revenue Code of 1986, and regulations and rulings issued thereunder, as amended from time to time. (b) Dependent: Any person who falls within the definition of dependent provided in Section 152 of the Code. (c) EMcflve Cate: The date upon which this Plan is effective, January 1 , 1993 (d) Oioble Emp oyee: Each Employee who meets the requirements set forth in section 3.1 of this plan. (e) Employee: Any person who is an employee (such term having its customary common law meaning) of the Employer and who is receiving remuneration for personal services rendered to the Employer. (f) E-:mPl©yer: - UTY O-F--RALM—SP-R-INGS (g) ERBA: Public Law 93-406, the Employee Retirement Income Security Act of 1974, and regulations and rulings issued thereunder, as amended from time to time. (h) Eierible Reneffits Pian: The Flexible Benefits Plan, effective January 1 1993 , as amended from time to time, the provisions of which are hereby incorporated by reference and made a part of this Plan. (i) Medical Reimbursement Account: The account described in Article V hereof. a) Participant: Any Employee who has qualified under the terms of Article III of the Plan and who remains so qualified. (k) Man: The CITY OF PALM SPRIN SIvedical Reimbursement Plan as set forth herein, as amended from time to time. (i) Plan Administrator: The Employer or its successor or successors which shall have the authority to administer the Plan as provided in Article Vlli. (m) Plan Year: The first Plan Year shall be the period commencing on January 1 1993 and ending August 31 1993 All subsequent Plan Years shall be the 12-month period commencing on September 1 and ending on August 1 u-i Qn� auat9G9drng Madlcaf Came :-arReonze: An expense incurred by a Participant, or by the spouse or Dependent of such Participant, for medical care as defined in Section 213(d) of the Code (including amounts paid for hospital bills, doctor and dental bills and drugs); provided, however, that commencing with Plan Years beginning after December 31, 1989, a premium payment for accident and health insurance shall not be a Qualifying Medical Care Expense An expense shall be a Qualifying Medical Care Expense only to the extent that the Participant or other person incurring the expense is not reimbursed for the expense and the expense is not reimbursable through insurance or otherwise (other than under the Plan). ta.p Cornni As used in this Plan, a pronoun or adjective in the masculine gender includes the feminine gender, and the singular includes the plural, unless the context clearly indicates otherwise. The words "hereof," ''hereunder'' and other similar compounds of the word "here'' mean and refer to the entire Plan, not to any particular provision or section. 2.s IFAghts & pairtlieliparnts. All Participants shall be bound by the terms of the Plan, including all amendments hereto made in the manner authorized herein. Participants shall also be entitled to all of the rights and privileges afforded thereby, including those granted specifically by the Code and ERISA, which are hereby adopted by reference as a part of this Plan. The Employer Intends that the Plan terms, including those relating to participation and benefits, are legally enforceable. u-z I! Medical Reimbursement Plan Artiie@e W. 3.1 Eiigibiiity. Generally, all full-time Employees shall be eligible to Hgibl flit' and Fardcppaflon participate in the Plan. Full-time Employees are defined as those employed for 20 or more hours per week on a regularly scheduled basis and paid either on a weekly, biweekly, semi- monthly or monthly basis. 3.2 Commencement of participation. An eligible Employee shall commence (or recommence) participation upon the effective date of an election under the Flexible Benefits Plan to receive medical reimbursements of Qualifying Medical Care Expenses under this Plan, hereinafter referred to as medical reimbursements. Provided, however, that if the Employee's participation in the Plan ceases as a result of the Employee's failure to make the required contributions through the reduction in compensation as required in Section 5.2, the Employee shall not be permitted to recommence participation in the Plan for the remaining portion of that Plan Year. 3.3 Cessation of participation. Except as provided in Section 3.5 hereafter, a Participant shall continue to participate in this Plan until the earlier of (a) the date on which the Plan terminates or (b) the date on which his election to receive medical reimbursements expires or is terminated under the Flexible Benefits Plan. 3A Discrimination. This Plan shall not be operated in such a manner as to discriminate in favor of highly compensated individuals (as defined in Code Section 105 (h)) pursuant to Code Section 105. 3.:5 Continuation coverage. Notwithstanding all other parts of this Plan, a Participant and/or his spouse and Dependents under the circumstances described below may elect to continue the coverage elected under the Plan even though the Participant's election to receive medical reimbursements expired or was terminated under the Flexible Benefits Plan. Those circumstances are the death of the Participant, the termination (other than by reason of gross misconduct) or reduction of hours of the Participant's employment with the Employer, the divorce or legal separation of the Participant from his or her spouse, the Participant becoming entitled to benefits under Medicare, or a Dependent child ceasing to be a Dependent child under the terms of the Plan. m-1 The election period begins when coverage would otherwise terminate under the Plan and ends 60 days after the later of the date when coverage would otherwise terminate, or the date notice of the right to continue coverage is provided by the Plan Administrator. The Plan may charge a premium to the Participant, spouse, or Dependent child as the case may be for any period of continuation coverage equal to not more than 102% of its cost of providing coverage for the period to similarly situated Participants, spouses, or Dependents as the case may be; provided, however, that in the event continuation coverage is extended from 18 to 29 months due to disability as described below, the premium charged for the additional 11 months may be 150% of the cost of providing coverage to similarly situated Participant, spouses, or Dependents. A1ny premium charged by the Plan under this Section 3.5 shall be credited to the Participant's IVledical Reimbursement Account pursuant to Section 5.2. Continuation coverage will extend for a period of not more than 36 months (18 months if the Participant terminates or is terminated from employment with the Employer or reduces or has his hours of service with the Employer reduced so as no longer to be a Participant and 29 months if the party electing continuation coverage is determined by the Social Security Administration to be disabled at the time of the termination or reduction) but may extend for a shorter period of time if, (1) the Employer ceases to provide any group health plan to any Employee, (2) the premiums described above are not paid within 30 days of their due dates, or (3) a party electing continuation coverage becomes covered under another group health plan that does not impose any preexisting condition limitation or exclusion on such party or becomes entitled to Medicare benefits. The Plan, the Employer, the Plan Administrator and any party electing continuation coverage shall comply with the notice and all other requirements of Code Section 4980B(f) all of which requirements are incorporated herein by reference. This Section 3.5 is intended to qualify the Plan under the Consolidated Omnibus Budget Reconciliation Act of 1985, P.L. 99-272, as amended from time to time and shall be interpreted in such a manner as to effectuate that intention. III-2 Alri' de N7o 4-1 Etactlion (p�'aca urs.A Participant may elect to receive Eknr 0©Gil to rklaCdw0 Mac>HB &� payments or reimbursements of his Qualifying Medical Care u�B ` P�� P�GBu �61¢�� Expenses under this Plan by filing an election to make contributions in accordance with the procedures established under the Flexible Benefits Plan. An election regarding contributions for reimbursement of Dualifying Medical Care Expenses shall be irrevocable during the Plan Year, subject to a change in family status, as provided in the Flexible Benefits Plan. 4.2. Moa-;&num vaimbuirsamernts. The maximum amount which a Participant may make as contributions under the Plan and, correspondingly, receive under this Plan in the form of payments or reimbursements for Cualifying Medical Care Expenses incurred in any Plan Year shall be $2,000 IV-1 qVi medical Reimbursement elan Article 'if. 5.1 Establishment of accounts. The Employer will establish and Medical Reimbursemeflit maintain on its books a Medical Reimbursement Account for each Accounts Plan Year with respect to each Participant who has elected under the Flexible Benefits Plan to make contributions for payment or reimbursement of Qualifying Medical Care Expenses incurred during the Plan Year. 5.2. Crediting of accounts. There shall be credited to a Participant's Medical Reimbursement Account for each Plan Year, as of each date compensation is paid to the Participant in such Plan Year, an amount equal to the reduction for contributions for medical reimbursements, if any, to be made in such compensation in accordance with the Participant's election under the Flexible Benefits Plan. All amounts credited to each such Medical Reimbursement Account shall be the property of the Employer unless and until such time as they are distributed as reimbursements of Qualifying Medical Care Expenses incurred during the Plan Year pursuant to Article VI. 15.3. Debiting of accounts. A Participant's Medical Reimbursement Account for each Plan Year shall be debited from time to time in the amount of any payment under Article VI to or for the benefit of the Participant for Qualifying Medical Care Expenses incurred during such Plan Year. Amounts debited to each such Medical Reimbursement Account shall be treated as payments of the earliest amounts credited to the Account and not yet treated as paid under this Section. 5.4. Forfeiture of accounts. The amount credited to a Participant's Medical Reimbursement Account for any Plan Year shall be used only to pay or reimburse the Participant for Qualifying Medical Care Expenses incurred during such Plan Year, and only if the Participant applies for payment or reimbursement on or before the 90th day following the close of the Plan Year. If any balance remains in the Participant's Medical Reimbursement Account for any Plan Year after all reimbursements hereunder, such balance shall not be carried over to reimburse the Participant for Qualifying Medical Care Expenses incurred during a subsequent Plan Year, and shall not be available to the Participant in any other form or manner, but shall remain the property of the Employer and the Participant shall forfeit all rights with respect to such balance. v-1 A/I[edical eirtib tseftie- PIva Aide VL 6.1 Claims for reimbursement. a Participant who has elected to Payniena of Medical receive medical reimbursements for a Plan Year may apply to the Reimbursements Employer for reimbursement of Qualifying Medical Care Expenses incurred by the Participant during the Plan Year by submitting an application in writing to the Employer on or before the 90th day following the close of the Plan Year, in such form as the Employer may prescribe, setting forth: (a) the amount, date and nature of the expense with respect to which a benefit is requested; (b) the name of the person, organization or entity to which the expense was or is to be paid; (c) the name of the person for whom the expense was incurred and, if such person is not the Participant requesting the benefit, the relationship of such person to the Participant; and (d) the amount recovered, or expected to be recovered, under any insurance arrangement or other plan, with respect to the expense. Such application shall be accompanied by bills, invoices, receipts, cancelled checks or other statements from an independent third party showing the amounts of such expenses, together with any additional documentation which the Employer may request. 6.2 Repmbursement or payment of expenses. The Employer shall reimburse the Participant from the Participant's Medical Reimbursement account for Qualifying Medical Care Expenses incurred during the Plan Year, for which the Participant submits documentation in accordance with Section 6A The Employer may, at its option, pay any such Qualifying Medical Care Expenses directly to the person providing or supplying medical care in lieu of reimbursing the Participant. No reimbursement or payment under this section 6.2 of expenses incurred during a Plan Year shall at any time exceed the total amount of Qualifying Medical Care Expenses for which the Participant has elected to receive reimbursement under the Flexible Benefits Plan (properly reduced as of any particular time for prior reimbursements for the same Plan Year). VI.1 .C�,LBtds VI In the event that a Participant ceases to be a Participant for any reason, the Participant's election under the Flexible Benefits Plan _ relating to contributions for medical reimbursements shall terminate. � 6"Bf 9; 7 Edit Pdotwithstanding Section 3.3 hereof, the Participant (or his estate) shall be entitledlto payment or reimbursement only for Qualifying Medical Care Expenses incurred prior to the close of the period covered by the Participant's last contribution under Section 5.2 and only if the Participant (or his esiate) applies for such payment or reimbursement'in accordance with Section 6.1 on or before the 90th day after the close of the Plan Year. vu-i vUds VIM. 8.1 Maw The administration of the Plan shall be Z'%dirnhjz,ul`1u.cn under the supervision of the Plan Administrator. It shall be a principal duty of the Plan Administrator to see that the Plan is carried out, in accordance with its terms, for the exclusive benefit of Employees entitled to participate in the Plan without discrimination among them. The Plan Administrator has full power to administer the plan in all of its details, subject to applicable requirements of law. For this purpose, the Plan Administrator's powers include, but are not 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 it deems necessary or proper for the efficient administration of the Plan; (b) to construe and interpret all terms of the Plan, such interpretation to be made in good faith and in accordance with the common meaning of such terms; (c) to decide all questions arising under the Plan including questions regarding the eligibility of any person to participate in the Plan on a basis that is not discriminatory in favor of highly compensated individuals (as defined in Code Section 105(b) and as consistent with 'the written terms of the Plan; (d) to compute the amount of benefits which will be payable to any Participant or other person in accordance with the provisions of the Plan, and to determine the person or persons to whom such benefits will be paid; (e) to authorize the payment of benefits; (f) to appoint or employ such agents, counsel, accountants, consultants, actuaries, and other persons as may be required to assist in administering the Plan; and (g) to allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, any such allocation, delegation or designation to be by written instrument and in accordance with applicable requirements of law. U.2 11,mn-anaf on of e(Dc©rrdlls. The Plan Administrator will make available to each Participant such records under the Plan as pertain to him, for examination at reasonable times during normal business hours. U.S RellanGrs on ta[ohs, ef�. In administering the Plan, the Plan Administrator will be entitled, to the extent permitted by law, io rely on all tables, valuations, certificates, opinions and reports which are furnished by accountants, counsel or other experts employed or engaged by the Plan Administrator. VIII-1 Medical'', Reimbursement Plan Article het. 9.1 Arnendme:nt of Plan. The Employer reserves the right at any Amendment Or Termination time or times and for any reason to alter or amend the provisions of of Plan and Plan in whole or in part by a written instrument, duly executed and acknowledged; provided, however. that any such amendment shall not affect'a Participant's right to reimbursement of claims already incurred. 9.2 Termination of Plan. The Employer has established the Plan with the intention and expectation that it will be continued indefinitely. However, the Employer reserves the right at any time to terminate or partially terminate the Plan for any reason whatsoever, as determined in the sole discretion of the Employer; provided, however, that such termination or partial termination shall not affect a Participant's right to reimbursement of claims already incurred. bliss 110.1 C9a ms. A Participant shall make a claim for benefits by Oaahns ppocedurs making a request therefor in accordance with Section 6.1. Ii9.2 Notice of dac&ctn. If a claim is wholly or partially denied, notice of the decision, in accordance with Section 10.3, shall be furnished to the claimant within a reasonable period of time, not to eacceed ninety (90) days after receipt of the claim by the Plan Administrator, unless special circumstances require an extension of time for processing the claim. If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial ninety (90) day period. In no event shall such extension e;cceed a period of ninety (90) days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an e>dension of time and the date on which the Plan Administrator expects to render a decision. 10-v Contisnt of no-Tice. The Plan Adminstrator shall provide every claimant who is denied a claim for benefits written notice setting forth, in a manner calculated to be understood by the claimant, the following: (a) the specific reason or reasons for the denial; (b) specific reference to pertinent Plan provisions upon which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (d) an explanation of the Plan's claims review procedure, as set forth below in sections 10.4 and 10.5 hereof. 10-4 Appea0 Pro2eduVe. The purpose of the review procedure set forth in this Section and Section 10.5 is to provide a procedure by which a claimant, under the Plan, may have reasonable opportunity to appeal denial of a claim to the Appeals Committee for a full and fav review. To accomplish that purpose, the claimant, or his duly authorized representative may: (a) request review upon written application to the Appeals Committee; (b) review pertinent Plan documents; and (c) submit issues and comments in writing. A claimant (or his duly authorized representative) shall request a review by filing a written application for review with the Appeals Committee at any time within sixty (60) days after the receipt by the claimant of written notice of the denial of his claim. x-1 Medical) Reimbursenne- t Plan 10.5 Review Procedure. Decision on review of a denied claim shall be made in the following manner: (a) the decision on review shall be made by the Appeals Committee, which may, in its discretion, hold a hearing on the denied claim; the Appeals Committee shall make its decision promptly, and not later than sixty (60) days)after the Appeals Committee receives the request for review, unless special circumstances require extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one hundred twenty ('120) days after receipt of the request for review. If such an extension of time for review is required, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension; (b) the decision on review shall be in writing and shall include specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based and shall be written in a manner calculated to be understood by the claimant; (c) in,the event that the decision is not furnished within the same period set forth in Section 10.5(a), the claim shall be deemed denied on review. '10.6 Disputes. If a dispute arises with respect to any matter under this Plan;, the Plan Administrator may refrain from taking any other or further action in connection with the matter involved in the controversy until the dispute has been resolved. 10.7 Appseaps Committee. For purposes of this Article X, the Appeals Committee shall consist of a committee of at least three (3) but not more than five (5) individuals appointed by the Board of Directors of the Employer. x-2 Medical Reimbursement Plan Article X1 11.1 Communication to Eligible Employees. The Employer will 6E�s�C�9A�CB�®�9 promptly notify all eligible Employees of the benefits available and terms of the Plan. 11.2 Limitation of rights. Neither the establishment of the Plan nor any amendment thereof will be construed as giving to any Participant or other person any legal or equitable right against the Plan Administrator or the Employer, except as expressly provided herein, and in no event will the terms of employment or service of any Participant be modified or in anyway be affected hereby. 11.3 Benefats solely ftrn general assets. The benefits provided hereunder will be paid solely from the general assets of the Employer. Nothing herein will be construed to require the Employer or the Plan 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. 111.4 Nonassignability of rlights. The right of any Participant to receive any reimbursement under the Plan shall not be alienable by the Participant by assignment or any other method, and will not be subject to claims by his creditors by any process whatsoever, and any attempt to cause such right to be so subjected will not be recognized, except to such extent as may be required by law. 111.5 No guarantee of tax consequences. While it is intended that the Plan satisfies the relevant provisions of Code Sections 125 and 105, neither the Plan Administrator nor the Employer makes any representations or assurances that any amounts paid to or for the benefit of a Participant under Article VI will be excludable from the Participant's gross income for federal or state income or employment 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 Article VI excludable from the Participant's gross income for federal and state tax purposes, and to notify the Employer if the Participant has reason to believe that any such payment is not so excludable. XI-1 I tu 11.6 hidernnlflcaVoin oV Empl oyar by pav&Apainta. If any Participant receives one or more payments or reimbursements under Article Vd that are not for Qualifying Medical Care Expenses, such Par icipant shall indemnify and reimburse the Employer for any liability it may incur for failure to pay or withhold federal or state income or employment tar, from such payment or reimbursements. However, such indemnification and reimbursement shall not exceed the amount of additional federal and state income ta;c 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. 'l L C-lovaeFnlnq luau. The Plan will be construed, administered and enforced according to the law of Cal i forni a IN WITNESS WHEREOF, the Employer has caused this Plan to be executed in its name and on its behalf by its duly authorized officer this day of November 19 92 EMP YEP AND PLAN MINISTRATOR BY: ROB W. PARKINS, CITY MANAGER A Duly Authorized Of xi-2 I I J Flexible Benefits Plan Dependent Care Reimbursement Model Plan Document iA V- , 2— COLONIAL sm ' LICE F:ACCIDENTINSURANCHCONPANY Dependent Care Reimbursement Plea This Plan is merely an example of a Dependent Care Reimbursement Plan. The Plan has not been approved by the Internal Revenue Service, nor is it necessarily the best plan for a particular employer. The Plan is provided solely as a guide for employers desiring to adopt such a plan. It should not be utilized without being reviewed by an employer's own professional advisers. CITY OF PALIVI SPRINGS Dependent Case Reimbursement Plan January 1 , 1993 Effective 'OnAents Page Arack I 1Fovew✓ord and Purpose ..................',......................,..................................................I-1 A rrrkle U 1Defmi.tioans and Conns&uaetuoan ........t........................................................................II-1 2.1 Definitions ............................................................................................................. II-1 3.2 Construction...........................................................................................................II-2 2.3 Rights of Participants .............................................................................................II-2 Astaele Ral Efigg lvil ty and Panficipardonn ...........'........................................................................111-1 3.1 Eligibility................................................................................................................III-1 3.2 Commencement of Participation ...........................................................................111-1 3.3 Cessation of Participation......................................................................................111-1 3 n, Discrimination ..........................................................___......................................III-1 Ail iele IV Oecdonn to Receive!Dependent Care Rehubunn7seusuennt .......................................... IV-1 4,1 Election Procedure ...............................................................................................IV-1 4,..2 Maximum Dependent Care Reimbursement .........................................................IV-1 43 Treatment of Onsite Facilities........:...................................................................... IV-1 Ar6 le V FDepenndeunt Cane]geiannbumseme¢nt Accoun L. ...........................................................V-1 5.1 Establishment of Accounts............:...............................................................I........V-1 5.3 Crediting of Accounis..................................................................................._........V-1 3.3 Debiting of Accounts..............................................................................................V-1 5.41 Forfeiture of Accounts............................................................................................V-1 AruicleV1 Payment offLDeipenndenntCaueRenrnnbiuxsennnennt.....................................___...........VI-1 6.1 Claims for Reimbursement ...................................................................................VI-1 6.2 Reimbursement or Payment of Expenses .............................................................VI-1 6.3 Report to Participants ...................:.......................................................................VI-1 Artnele VIE Ternminnagonn of Pard6oatlenn................................................................................VII-1 An'deleVH! Adrnnunnnstralionn................................................I................................................ ..VIII-1 0.1 Plan Administrator ....................................................................................0.........VIII-1 9.2 Examination of Records......................................................................................VIII-1 9.3 Reliance of Tables, etc. ................:.....................................................................VIII-1 Ardele Lw Aim endnmennt on!"r'enuhaadonn off P11'ann ....................................................................IX-1 9.1 Amendment of Plan ......................:..................................................I.................... 9.2 Termination of Plan........................'.......................................................................IX-1 ArticleX Ckiins P oeed iire ..................................................................................................X-1 10.1 Claims ...................................................................................................................:( 1 10.2 Notice of Decision..................................................................................................X-1 10.3 Content of Notice...................................................................................................)C-1 104 Appeal Procedure.................................................................................................. )C 1 10.5 Review Procedure .................................................................................................X-1 10.6 Disputes ................................................................................................................X-1 10.7 Appeals Committee ...............................................................................................): 1 ArticleXd Misceffa neotns .......................................................................................................XI-1 11.1 Communication to Eligible Employees ..................................................................):@-I 11.3 Limitation of Rights ...............................................................................................XI-1 11.3 Benefits Solely From General Assets....................................................................Xi-1 11.4 Nonassignability of Rights.....................................................................................XI-1 11.5 No Guarantee of Tax Consequences.................................................................... ):I-1 11.6 Indemnification of Employer by Participants ......................................................... XI-1 11.3 Governing Law .....................................................................................................XI-1 Force-word and p ose City of Palm Springs hereby establishes a Dependent Care Reimbursement Plan (the "Plan") as a component plan under the City of Palm Springs Flexible Benefits Plan for the exclusive benefit of its employees. 'The Plan is intended to qualify as a dependent care assistance program under Section 1129 of the Internal Revenue Code of 1986, as amended. The purpose of the Plan is to enable Participants to elect to receive pay- ments or reimbursements of their dependent care expenses in lieu of their compensa- tion, which payments are incurred by Participants in connection with their employment and are excludable from the Participant's gross income under Section 129 of the Code. Dependent Care Reimbursement Plan I-1 Aedde 11 Defaidonns and CojjstrucAjojn 2.1 Definitions. Where the following words and phrases appear in this Plan, they shall have the following meanings, unless a different meaning is plainly required by the context: (a) Code: The Internal Revenue Code of 1986, and regulations and rulings issued thereunder, as amended from time to time. (b) Dependent: (1) General Rule: Any individual who is(i)a dependent of the Participant who is under the age of 13 and with respect to whom the Participant is entitled to an exemption under section 151(c) of the Code, or(ii) a dependent or spouse of the Participant who is physically or mentally incapable of caring for himself. (2) Special Rule for Divorce or Separation of Parents: Notwithstanding subsection (1), if (i) either Code section 152(e)(2) (regarding the release by a custodial parent of a claim to a dependency exemption) or Code section 152(e)(4) (regarding various pre-1985 divorce or separation agreements) is applicable to a child of a Participant, and (ii) such child is under the age of 13 or is physically or mentally incapable of self-care, then such child shall be deemed a dependent with respect to the Participant if such Participant is the custodial parent (within the meaning of Code section 152(e)(1)) of the child. (c) Dependent Care Reimbursement Account: The account described in Article V hereof. (d) Dependent Child Expenses: Expenses incurred by a Participant which (1) are paid or incurred for the care of a Dependent of the Participant or for related household services, (2) are paid or incurred to a Dependent Care Service Provider, and (3) are incurred to enable the Participant to be gainfully employed for any period for which there are one or more Dependents with respect to the Participant. Dependent Care Expenses shall not include expenses paid or incurred for services rendered outside the Participant's household for the care of a Dependent unless such Dependent is described in Section 2.1(b)(1)(i), or such Dependent regularly spends at least eight hours a day in the Participant's household. Dependent Care Expenses shall be deemed to be incurred at the time the services to which the expenses relate are rendered. (e) Dependents Care Service Provider: A person who provides care or other services described in Section 2.1(d)(1) above, but shall not include (1) a dependent care center (as defined in Code section 21(b)(2)(D) ), unless the requirements of Code Section 21(b)(2)(C) are satisfied, or(2) a related individual described in Code section 129(c). (f) Earned Income: All income derived from wages, salaries, tips, self employment and other employee compensation described in Code section 32(c)(2) but excluding amounts received under this Plan or under any other plan providing dependent care assistance. (g) Educational Institution: An educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. (h) Effective Date: The date upon which this Plan is effective, January 1 1993 (1) Eligible Employee: Each Employee who meets the requirements set forth in Sec- tion 3.1 of this Plan. (g) Employee: Any person who is an employee, (such term having its customary common law meaning) of the Employer and who is receiving remuneration for personal services rendered to the Employer. Dependent (k) Employer: _ CITY OF PALM SPRINGS Care (1) ERISA: Public Law 93-406, the Employee Retirement Income Security Act of 1974, Reienbmsement Plan and regulations and rulings issued thereunder, as amended from time to time. I I-1 (m) Flexible Ren0ts Plan: The CITY OF PALM SPRINGS Flexible Benefits Plan, effective January 1 1993 as amended from time to time, the provisions of which are hereby incorporated by reference and made a part of this Plan. (n) Participant: Any Employee whol has qualified under the terms of Article III of the Plan for participation herein and who'remains so qualified. (o) Plan: The City of PalmSprings Dependent Care Reimbursement Plan as set forth herein, as amended from time to time. (p) Plan Administrrator: The Employer or its successor or successors, which shall have the authority to administer the Plan as provided in Article VIII. (q) Plan Year: The first Plan Year shall be the period commencing January 1 1993 and ending August 31 119 3 All subse- quent Plan Years shall be the 12-month period commencing on �eptomhar 1 and ending on August 31 (r) Students An individual who during each of five (5) calendar months during a Tax Year is a full time student at an Educational Institution. (s)Tax Year: For purposes of determining a Participant's maximum dependent care reimbursement under this Plan, the taxable year of such individual. 2.2 Construction. As used in this Plan, a pronoun or adjective in the masculine gender includes the feminine gender and the singular includes the plural, unless the context clearly indicates otherwise. The words "hereof', "hereunder" and other similar compounds of the word "here" mean and refer to the entire Plan, not to any particular provision or section. 2.3 Rights of Participants. All Participants shall be bound by the terms of the Plan, including all amendments hereto made in the manner authorized herein. Participants shall also be entitled to all of the rights and privileges afforded thereby, including those granted specifically by the Code and ERISA, which are hereby adopted by reference as a part of this Plan. The Employer intends that the Plan terms, including those relating to participation and benefits, are legally enforceable. Dependent ', Caze Reimbursement Plan I I-2 Anaele V Dependent Care pekabarsement Accounts 5.1 Establishment of accounts. The Employer will establish and maintain on its books a Dependent Care Reimbursement Account for each Plan Year with respect to each Participant who has elected under the Flexible Benefits Plan to receive dependent care reimbursement for the Plan Year. 5.2 Credt Hnng of accounts. There shall be credited to a Participant's Dependent Care Reimbursement Account for each Plan Year, as of each date compensation is paid to the Participant in such Plan Year, an amount equal to the reduction for dependent care reimbursement, if any, to be made in such compensation in accordance with the Participant's election under the Flexible Benefits Plan. All amounts credited to each such Dependent Care Reimbursement Account shall be the property of the Employer until paid out pursuant to Article VI. 5.3 DsGvKt ng of accoun'ks. A Participant's Dependent Care Reimbursement Account for each Plan Year shall be debited from time to time in the amount of any payment under Article VI to or for the benefit of the Participant for Dependent Care Expenses incurred during such Plan Year. Amounts debited to each such Dependent Care Reimbursement Account shall be treated as payments of those amounts first credited to the Account that have not yet been treated as paid under this Section. 5.4 For el Wre of accounts. The amount credited to a Participant's Dependent Care Reimbursement Account for any Plan Year shall be used only to reimburse the Participant for Dependent Care Expenses incurred during such Plan Year, and only if the Participant applies for reimbursement on or before the 90th day following the close of the Plan Year. If any balance remains in the Participant's Dependent Care Reim- bursement Account for any Plan Year after all reimbursements hereunder, such balance shall not be carried over to reimburse the Participant for Dependent Care Expenses incurred during a subsequent Plan Year, and shall not be available to the Participant in any other form or manner, but shall remain the property of the Employer and the Participant shall forfeit all rights with respect to such balance. Dependent Care Reimbursement Nana V-1 Article VI Payment of Dependent Care Reimbursement 6.1 Claims for reimbursement. A Participant who has elected to receive dependent care reimbursement for a Plan Year may apply to the Employer for reimbursement of Dependent Care Expenses incurred by the Participant during the Plan Year by submit- ting an application in writing to the Employer on or before the 90th day following the close of the Plan Year, in such form as the Employer may prescribe, setting forth: (a) the amount, date and nature of the expenses with respect to which a benefit is requested; (b) the name of the person, organization or entity to which the expense was or is to be paid; and (c) such other information as the Employer may from time to time require. Such application shall be accompanied by bills, invoices, receipts, cancelled checks or other statements from an independent third party showing the amounts of such expenses, together with any additional documentation which the Employer may request. 6.2 Reimbursement or payment,of expenses. The Employer shall reimburse the Participant from the Participant's Dependent Care Reimbursement Account for Dependent Care Expenses incurred during the Plan Year for which the Participant submits documentation in accordance with Section 6.1. The Employer may, at its option, pay any such Dependent Care Expenses directly to the Dependent Care Service Provider in lieu of reimbursing the Participant. No reimbursement or payment under this Section 6.2 of expenses incurred during a Plan Year shall at any time exceed the balance of the Participant's Dependent Care Reimbursement Account for the Plan Year at the time of the reimbursement or payment. The amount of any Dependent Care Expenses not reimbursed or paid as a result of the preceding sentence shall be carried over and reimbursed or paid only if and when the balance in such Account permits such reimbursement or payment; provided, however, that no Dependent Care Expenses may be carried over from one Plan Year to the next. 6.3 Report to Participants. On or before January 31 of each year,the Plan Administrator shall furnish to each Participant who has received dependent care reimbursement during the prior calendar year a written statement showing the amount of such assistance paid or incurred by the Employer during such calendar year with respect to the Participant. I Dependent Care Reimbursement Plan vl-1 A•ticle III EhgnbnfitY and Participation 3.1 Eiiegibility. Generally, all full-time Employees shall be eligible to participate in the Plan. Full time Employees are defined as those employed for 20 or more hours per week on a regularly scheduled basis, and paid either on a weekly, biweekly, semi-monthly or monthly basis. 3.2 Commencement of Participation. An Eligible Employee shall commence (or recommence) participation upon the effective date of an election under the Flexible Benefits Plan to receive dependent care reimbursement under this Plan. 3.3 Cessation of Participation. A Participant shall continue to participate in this Plan until the earlier of (a) the date on which the Plan terminates or(b) the date on which his election to receive dependent care reimbursement expires or is terminated under the Flexible Benefits Plan. 3.4 Discrimination. This Plan shall not discriminate in favor of highly compensated employees (as defined in Code Section 414(q)) or their dependents pursuant to Code Section 129, as may be in effect from time to time. Not more than twenty-five percent of the amounts paid or incurred by the Employer for dependent care reimbursement during any Plan Year shall be provided to the class of individuals, each of whom own more than five percent of the Employer within the meaning of Code section 129(e), or their spouses or dependents. The Plan Administrator shall terminate completely the participation of a Participant at the time that trial testing of discrimination indicates the Participant's participation must be terminated in order to avoid failing any applicable discrimination test. Dependent Care Reimbursement Plan III-1 Ilele IV Electiei� to Receive Dependent Care Reim re ant 4.1 Election procpdure. A Participant may elect to receive dependent care reimbursement under this Plan by filing an election in accordance with the procedures established under the Flexible Benefits Plan. An election to receive dependent care reimbursement shall be irrevocable during the Plan Year, subject to a change in family status, as provided in the Flexible Benefits Plan. 4.2 Maximum dependent care reirn: bu.ursernent. The maximum amount which the Participant may receive in any Tax Year in the form of dependent care reimbursement under this Plan shall be (a) in the case of a Participant who is not married at the close of such period, the Participant's Earned Income for the Tax Year, (b) in the case of a Participant who is married at the close of such period, the lesser of (i) the Earned Income of the Participant for the Tax Year or (ii) the Earned Income of the Participant's spouse for the Tax Year, or (c) $ I5,000 . Notwithstanding (a), (b) and (c), however, the maximum amount that,the Participant may receive under this Plan in any Taxable Year shall not exceed $5,000. The $5,000 limit shall be reduced to $2,500 in the case of a married Participant filing a separate return. In the case of a spouse who is a Student or is physically or mentally incapable of caring for himself or herself, such spouse shall be deemed to have Earned Income of not less than $200 per month if the Participant has one Dependent and $400 per month if the Participant has two or more Dependents. 4.3 Treatment of Onsite Facilities. Except to the extent provided in regulations, the amount of dependent care reimbursement any Participant may receive under this Plan with respect to an onsite facility maintained by the Employer shall be based on utilization of the facility by a Dependent of the Participant and the value of services provided to such individual. Dependent Care Reiniburseinen4 Plan IV-1 Article V1I Termination Of Participation ion In the event that a Participant ceases to be a Participant in this Plan for any reason, the Participant's election under the Flexible Benefits Plan relating to dependent care reimbursement shall terminate. Notwithstanding Section 3.3 hereof, the Participant (or his estate) shall be entitled to reimbursement only for Dependent Care Expenses incurred within the same Plan Year and only if the Participant (or his estate) applies for such reimbursement in accordance with Section 6.1 on or before the 90th day after the close of the Plan Year. No such reimbursement shall exceed the remaining balance, if any, in the Participant's Dependent Care Reimbursement Account for the Plan Year in which the expenses were incurred. Dependent Care Reimbursement Plan VII-1 -A-ed e V111 Administration 31. Plan Administrator. The administration of the Plan shall be under the supervision of the Plan Administrator. It shall be a principal duty of the Plan Administrator to see that the Plan is carried out, in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan without discrimination among them. The Plan Administrator has full power to administer the Plan in all of its details, subject to applicable requirements of law. For this purpose, the Plan Administrator's powers include, but are not 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 it deems necessary, desirable or appropriate for the efficient administration of the Plan, including the establishment of any claims procedures that may be required by applicable provi- sions of the law; (b) To construe and interpret all terms of the Plan, such interpretation to be made in good faith and in accordance with the common meaning of such terms; (c) To decide all questions arising under the Plan including questions regarding the eligibility of any person to participate in the Plan on a basis that is not discriminatory in favor of highly compensated employees (as defined in Code Section 414(q)) and consistent with the written terms of the Plan; (d) To appoint or employ such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan; and (e) To ;allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, any such allocation, delegation or designation to be by written instrument and in accordance with applicable requirements of law. 8.2 Examination of records. The, Plan Administrator will make available to each Participant such records under the Plan as pertain to him,for examination at reasonable times during normal business hours. 8.3 Reliance on tables, etc. In administering the Plan, the Plan Administrator will be entitled to the extent permitted by law to rely on all tables, valuations, certificates, opinions and reports which are furnished by accountants, counsel or other experts employed or engaged by the Plan Administrator. Dependent Care Reimbursement Plan vlll-1 Amendment zw Termination of Flan 9.1 Amondment ®f ?Dan. The Employer reserves the right at any time or times and for any reason to alter or amend the provisions of the Plan in whole or in part, by a written instrument, duly executed and acknowledged; provided, however, that any such amendment shall not affect a Participant's right to reimbursement or payment of Dependent Care Expenses incurred prior to the amendment. 9.2 Termination of Plan. The Employer has established the Plan with the intention and expectation that it will be continued indefinitely. However, the Employer reserves the right at any time to terminate or partially terminate the Plan for any reason what.. soever, as determined in the sole discretion of the Employer; provided, however, that any such termination shall not affect a Participant's right to reimbursement or payment of Dependent Care Expenses incurred prior to the termination. Dependent Care Reimbursement Plan IX-1 AA- de X Gees Procedure 10.1 Cia ms. A Participant shall make a claim for benefits by making a request therefor in accordance with Section 6.1. 10.2 notice of Uscision. If a claim is wholly or partially denied, notice of the decision, in accordance with Section 10.3, shall be furnished to the claimant within a reasonable period of time, not to exceed ninety (90) days after receipt of the claim by the Plan Administrator, unless special circumstances require an extension of time for processing the claim. If such an extension of time is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial ninety (90) day period. In no event shall such extension exceed a period of ninety (90) days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date on which the Plan Administrator expects to render a decision. 10.3 Content of Notice. The Plan Administrator shall provide every claimant who is denied a claim for benefits written notice setting forth, in a manner calculated to be understood by the claimant, the following: (a) the specific reason or reasons for the denial; (b) specific reference to pertinent Plan provisions upon which the denial is based; (c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (d) an explanation of the Plan's claims review procedure, as set forth below in sections 10.4 and 10.5 hereof. 10.4 ,Appc:ai Procedure. The purpose of the review procedure set forth in this Section and Section 10.5 is to provide a procedure by which a claimant, under the Plan, may have reasonable opportunity to appeal a denial of a claim to the Appeals Committee for a full and fair review. To accomplish that purpose, the claimant, or his duly authorized representative may: (a) request review upon written application to the Appeals Committee; (b) review pertinent Plan documents; and (c) submit issues and comments in writing. A claimant (or his duly authorized representative) shall request a review by filing a written application for review with the Appeals Committee at any time within sixty (60) days after receipt by the claimant of written notice of the denial of his claim. 10.:5 P,eariew Prrace^du e?. Decision on review of a denied claim shall be made in the following manner: (a) The decision on review shall be made by the Appeals Committee, which may, in its discretion, hold a'hearing on the denied claim; the Appeals Committee shall make its decision promptly, and not later than sixty (60) days after the Appeals Committee receives the request for review, unless special circumstances require extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one hundred twenty (120) days after receipt of the request for review. if such an extension of time for review is required, written notice of the extension shall be furnished to the,claimant prior to the commencement of the extension. (b) The decision on review shall be in writing, written in a manner calculated to be understood by the claimant, and shall include specific reasons for the decision, and specific references to the pertinent Plan provisions on which the decision is based. (c) In the event that the decision is not furnished within the same period set forth in Section 10.5 (a), the claim shall be deemed denied on review. 10.6 Disfcr9ts'es. If a dispute arises'! respect to any matter under this Plan, the Plan Administrator may refrain from taking any other or further action in connection with the matter involved in the controversyluntil the dispute has been resolved. 10.7 Appeais Gor-arriiUse. For purposes of this Article X, the Appeals Committee shall Dependent consist of a committee of at least three (3) but not more than five (5) individuals CaTe appointed by the Board of Directors of the Employer. Reimbursement Man :C-1 t C®rarr�9ruacats6�r t® Bgibie Employess. The Employer will promptly notify all Eligible Employees of the availability and terms of the Plan. 11.2 q ornitaUen of rlghta. Neither the establishment of the Plan nor any amendment thereof will be construed as giving to any Participant or other person any legal or equitable right against the Plan Administrator or the Employer except as e;:pressly provided herein, and in no event will the terms of employment or service of any Participant be modified or in any way be affected hereby. f 1.3 BsrnreMs s®MgP'fezarro gsrnsrraB assets. The benefits provided hereunder will be paid solely from the general assets of the Employer. Nothing herein will be construed to require the Employer or the Plan 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 e of dghts. The right of any Participant to receive any reim- bursement under the Plan shall not be alienable by the Participant by assignment or any other method, and will not be subject to claims by his creditors by any process whatsoever, and any attempt to cause such right to be so subjected will not be recognized, except to such extent as may be required by law. f b•5 KLO guarantcee Of taar COnsequences. While it is intended that the Plan satisfy the relevant provisions oi Code Sections 125 and 129, neither the Plan Administrator nor the Employer makes any representations or assurances that any amounts paid to or for the benefit of a Participant under Article VI 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 Article VI 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 payment is not so excludable. 't 1.6 Or ds r rnofocatt ern Of EnIPIOVU foy Ear[,copamts. If any Participant receives one or more payments or reimbursements under Article VI that are not for Dependent Care Expenses, such Participant shall indemnify and reimburse the Employer for any liability it may incur for failure to withhold federal or state income fax or Social Security lax from such payments or reimbursements. However, such indemnification and reimbursement shall not exceed the amount of additional federal and state income tax that the Participant would have owned if the payments or reirnbursements 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, 11.7 GOVG-Fna rg Darr. To the extent not preempted by ERISA, the Plan will be con- strued, administered and enforced according to the laws of California r Depenndeunl Care Refnttnibur5en neynt Plan XI-1 IN WITNESS WHEREOF, the Employer has caused this Plan to be executed in its name and on its behalf by its duly authorized officer this day of I November , 19 92 EMPLOYER AND PLAN ADMINISTRATOR: Y OF PA SPRINGS BY: ROB W. PARKINS CITY MANAGER Duly Authorized Officer Dependent Care Rennbmsement Plan XI-2