HomeMy WebLinkAbout2005-01-10 Approving Cafeteria PlanM
CERTIFICATE OF RESOLUTION
The undersigned repr ntative of City of Riverside certifies that the following resolutions were
duly adopted by City of Riverside on D and that such resolutions have not been modified or
rescinded as of the date hereof:
RESOLVED, that the form of this Cafeteria Plan including a Dependent Care Assistance Program
and Health Care Reimbursement Plan amended effective date January 1, 2005 presented to this meeting is hereby
approved and adopted and that the proper officers of the organization are hereby authorized and directed to execute
and deliver to the Third Party Administrator or to assist in the administration of the Plan.
RESOLVED, that the Administrator shall be instructed to take such actions that are deemed
necessary and proper in order to implement the Plan, and to set up adequate accounting and administrative
procedures to provide benefits under the Plan.
RESOLVED, that the proper officers of City of Riverside shall act as soon as possible to notify
the employees of the group of the adoption of the Cafeteria Plan by delivering to each employee a copy of the
summary description of the Plan in the form of the Summary Plan Description presented to this meeting, which farm
is hereby approved.
The undersigned further certifies that attached hereto as Exhibits A and B, respectively, are true
copies of City of Riverside Cafeteria Plan and the Summary Plan Description approved and adopted in the
foregoing resolutions.
Representative: `~
Date:
CITY OF RIVERSIDE
CAFETERIA PLAN
PLAN DOCUMENT
Table of Contents
Paee
ARTICLE I
DEFINITIONS
1.1 "Administrator" .................:..........................................................................................................................4
1.2 "Affiliated Employer" ..................................................................................................................................4
1.3 "Benefit" ......................................................................................................................................................4
1.4 "Cafeteria Plan Benefit Dollars" ..................................................................................................................4
1.6 "Compensation" ...........................................................................................................................................4
1.7 "Dependent" .................................................................................................................................................4
1.8 "Effective Date.. ............................................................4
...............................................................................
1.9 "Election Period" .........................................................................................................................................5
1.10 "Eligible Employee" ....................................................................................................................................5
1.11 "Employee" ..................................................................................................................................................5
1.12 "Employer" ..................................................................................................................................................5
1.13 "ERISA" .......................................................................................................................................................5
1.14 "Highly Compensated Employee" ................................................................................................................5
1.15 "Insurance Contract" ....................................................................................................................................5
1.16 "Insurance Premium Payment Plan" ............................................................................................................5
1.17 "Insurer" .......................................................................................................................................................5
1.18 "Key Employee" ..........................................................................................................................................5
1.19 Participant" .................................................................................................................................................5
1.20 "Plan" ...........................................................................................................................................................5
1.21 "Plan Yeaz" ..................................................................................................................................................5
1.22 "Premium Expenses" or "Premiums" ...........................................................................................................5
1.23 "Premium Reimbursement Account" ...........................................................................................................5
1.24 "Salary Redirection" ....................................................................................................................................5
1.25 "Salary Redirection Agreement" ..................................................................................................................5
1.26 "Spouse" ......................................................................................................................................................6
ARTICLE II
PARTICIPATION
2.1
2.2 ELIGIBILTTY ...................................................................................................
EFFECTIVE DATE OF PARTICII'ATION .....................................................
. ...........................................6
...........................................6
.......................6
2.3 .............................................................
APPLICATION TO PARTICIPATE .. ....................
.................7
2.4
2.5
2.6
2.7 TERMINATION OF PARTICIPATION ..........................................................
CHANGE OF EMPLOYMENT STATUS .......................................................
TERMINATION OF EMPLOI'MENT ............................................................
DEATH ............................................................................................................. ..........................
...........................................7
...........................................7
...........................................8
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1
3.2
3.3 SALARY REDIItECTION ...............................................................................
APPLICATION OF CONTRIBUTIONS ........................................................:
PERIODIC CONTRIBUTIONS ....................................................................... ...........................................8
...........................................8
...........................................9
i
Table of Contents
(continued)
ARTICLE IV
BENEFITS
Paee
................9
4.1 BENEFIT OPTIONS .................................................................................................. .................
9
4
2 HEALTH CARE REIMBURSEMENT PLAN BENEFIT ......................................... .................................
.
4
3 DEPENDENT CARE ASSISTANCE PROGRAM BENEFIT ................................... .................................9
. ...................9
4.4 HEALTH INSURANCE BENEFIT ........................................................................... ..............
10
4
5 DENTAL INSURANCE BENEFIT ........................................................................... ...............................
. ..10
4
6 CASH BENEFIT ........................................................................................................ .............................
.
4.7 NONDISCRIMINATION REQUIItEMENTS ........................................................... ...............................10
ARTICLE V
PARTICIPANT ELECTIONS
11
1
5 INITIAL ELECTIONS ............................................................................................... ...............................
.
2
5 SUBSEQUENT ANNUAL ELECTIONS .................................................................. ...............................11
. ..11
5
3 FAILURE TO ELECT ................................................................................................ .............................
. 12
5.4 CHANGE OF ELECTIONS ....................................................................................... ...............................
ARTICLE VI
HEALTH CARE REBVIBURSEMENT PLAN
14;
6
1 ESTABLISIMENT OF PLAN .................................................................................. ...............................
. ...14
2
6 D$FINITIONS ............................................................................................................ ............................
. 15
6
3 FORFEITURES .......................................................................................................... ...............................
.
6
4 LINIITATION ON ALLOCATIONS .......................................................................... ............................... I S
.
6
5 NONDISCRIIvIINATIONREQUIItEMENTS ........................................................... ...............................15
.
6
6 COORDINATION WITH CAFETERIA PLAN ........................................................ ...............................15
.
6.7 HEALTH CARE REIIviBURSEMENT PLAN CLAIMS ........................................... ...............................16
ARTICLE VII
DEPENDENT CARE ASSISTANCE PROGRAM
7
1 ESTABLISHMENT OF PROGRAM ..................................................................:...... ...............................16
. 16
7
2 DEFINITIONS ............................................................................................................ ...............................
.
7
3 DEPENDENT CARE ASSISTANCE ACCOUNTS .................................................. ...............................18
.
7
4 INCREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS .....................................................18
.
7
5 DECREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS ..................... ...............................18
.
7
6 ALLOWABLE DEPENDENT CARE ASSISTANCE REIMBURSEMENT ............. ..............................18
.
7
7 ANNUAL STATEMENT OF BENEFITS .................................................................. .............................18
. 18
.
7
8 FORFEITURES ........................................................................................................... .
............................
. 18
7
9 LIMITATION ON PAYMENTS ................................................................................. ..............................
.
10
7 NONDISCRIMINATION REQUIItEMENTS ............:.............................................:. ..............................18
.
11
7 COORDINATION WITH CAFETERIA PLAN ......................................................... ..............................19
.
7.12 DEPENDENT CARE ASSISTANCE PROGRAM CLAIMS ..................................... ..............................19
Table of Contents
(continued)
Page
ARTICLE VIII
ERISA PROVISIONS
8.1 CLAIM FOR BENEFITS ..........................................................................................................................20
8.2 APPLICATION OF BENEFIT PLAN SURPLUS ....................................................................................23
8.3 NAMED FIDUCIARY .....................................................................................:........................................23
8.4 GENERAL FIDUCIARY RESPONSIBILITIES .......................................................................................23
8.5 NONASSIGNABILITY OF RIGHTS .......................................................................................................23
ARTICLE IX
ADNIDVISTRATION
9.1 PLAN ADMINISTRATION ......................................................................... .............................................24
9.2 EXAMINATION OF RECORDS ................................................................. .............................................24
9.3 PAYMENT OF EXPENSES ........................................................................ .............................................24
9.4 INSURANCE CONTROL CLAUSE ............................................................ .............................................25
9.5 INDEMNIFICATION OF ADMINISTRATOR ........................................... .............................................25
ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
10.1 AMENDMENT .........................................................................................:.. .............................................25
10.2 TERMINATION ........................................................................................... .............................................25
ARTICLE XI
MISCELLANEOUS
11.1 PLAN INTERPRETATION ........................................................................... ...........................................25
11.2 GENDER AND NUMBER ............................................................................. ...........................................25
11.3 WRITTEN DOCUMENT ............................................................................... ...........................................26
11.4 EXCLUSIVE BENEFIT ................................................................................. ..................:........................26
11.5 PARTICIPANT'S RIGHTS ............................................................................ ...........................................26
11.6 ACTION BY THE EMPLOYER .................................................................... ...........................................26
11.7 EMPLOYER'S PROTECTIVE CLAUSES .................................................... ...........................................26
11.8 NO GUARANTEE OF TAX CONSEQUENCES .......................................... ...........................................26
11.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS ..................... ...........................................27
11.10 FUNDING ...................................................................................................... ...........................................27
11.11 GOVERNING LAW ....................................................................................... ...........................................27
11.12 SEVERABILITY ............................................................................................ ........................:..................27
11.13 CAPTIONS .................................................:................................................... ...........................................27
11.14 CONTINUATION OF COVERAGE .............................................................. .............:.............................27
11.15 FAMILY AND MEDICAL LEAVE ACT ...................................................... ...........................................28
11.16 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILTTY ACT ..........................................28
11.17 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT .............................28
CITY OF RIVERSIDE
CAFETERIA PLAN
INTRODUCTION
The Employer has adopted this amended Plan effective January 1, 2005 to recognize the contribution made to the
Employer by its Employees. Its purpose is to reward them by providing benefits for those Employees who shall
qualify hereunder and their dependents and beneficiaries. The concept of this Plan is to allow Employees to choose
among different types of benefits based on their own particulaz goals, desires and needs. The Plan shall be lmown as
City of Riverside Cafeteria Plan (the "Plan").
The intention of the Employer is that the Plan qualify as a "Cafeteria Plan" within the meaning of Section 125 of the
Intemal Revenue Code of 1986, as amended, and that the benefits which an Employee elects to receive under the
Plan be includible or excludable from the Employee's income under Section 125(a) and other applicable sections of
the Internal Revenue Code of 1986, as amended.
ARTICLE I
DEFIlVITIONS
Unless otherwise set forth in a specific Article of this Plan, the following terms shall have the following
meanings: ,
1.1 "Administrator" means the individual(s) or corporation appointed by the Employer to carry out the
administration of the Plan. In the event the Administrator has not been appointed, or resigns from a prior
appointment, the Employer shall be deemed to be the Administrator.
1.2 "Affiliated Employer" means the Employer and any corporation which is a member of a controlled
group of corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business
(whether or not incorporated) which is under common control (as defined in Code Section 414(c)) with the
Employer; any organization (whether or not incorporated) which is a member of an affiliated service group (as
defined in Code Section 414(m)) which includes the Employer; and any other entity required to be aggregated with
the Employer pursuant to Treasury regulations under Code Section 414(0).
1.3 "Benefit" means any of the optional benefit choices available to a Participant as outlined in
Section 4.1.
1.4 "Cafeteria Plan Benefit Dollars" means the amount available to Participants, pursuant to Article
III, to purchase Benefits. Each dollar contributed to this Plan shall be converted into one Cafeteria Plan Benefit
Dollar.
1.5 "Code" means the Internal Revenue Code of 1986, as amended or replaced from time to time.
1.6 "Compensation" means the total cash remuneration received by the Participant from the Employer
during a Plan Yeaz prior to any reductions pursuant to a Salary Redirection Agreement authorized hereunder.
Compensation shall include overtime, commissions and bonuses.
1.7 "Dependent" means any individual who qualifies as a dependent under an Insurance Contract or
under Code Section 152 (as modified by Code Section 105 (b)).
1.8 "Effective Date" means January I S. 2001.
1.9 "Election Period" means the 30 day period immediately preceding the beginning of each Plan
Year. However, an Employee's initial Election period shall be detemuned pursuant to Section 5.1.
1.10 "Eligible Employee" means any Employee who is eligible to participate in this Plan as provided
for in Section 2.1 and has satisfied the eligibility requirements therein.
1.1 l "Employee" means any person who is employed by the Employer, but excludes any person who is
engaged as an independent contractor. The term Employee shall include leased employees within the meaning of
Code Section 414(n) (2).
1.12 "Employer" City of Riverside and any successor which shall maintain this Plan; and any
predecessor which has maintained this Plan.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to
time.
1.14 "Highly Compensated Employee" means an Employee described in Code Section 414(q) and the
Treasury regulations thereunder.
1.15 "Insurance Contract" means any contract issued by an Insurer underwriting a Benefit.
1.16 "Insurance Premium Payment Plan" means the plan of benefits contained in Section 4.1 of this
Plan, which provides for the payment of Premium Expenses.
1.17 "Insurer" means any insurance company that underwrites a Benefit under this Plan.
1.18 "Key Employee" means an Employee described in Code Section 416(1) (1) and the Treasury
regulations thereunder.
1.19 "Participant" means any Eligible Employee who elects to become a Participant pursuant to Section
2.3 and has not for any reason become ineligible to participate further in the Plan.
1.20 "Plan" means this instrument, including all amendments thereto.
1.21 "Plan Yeaz" means the 12-month period beginning January 1 and ending December 31. The Plan
Yeaz shall be the coverage period for the Benefits provided for under this Plan. In the event a Participant
commences participation during a Plan Yeaz, then the initial coverage period shall be that portion of the Plan Yeaz
commending on such Participant's date of entry and ending on the last day of such Plan Year.
1.22 "Premium Expenses" or "Premiums" mean the Participant's cost for the Benefits described in
Section 4.1.
1.23 "Premium Reimbursement Account" means the account established for a Participant pursuant to
this Plan to which part of his Cafeteria Plan Benefit Dollars maybe allocated and from which Premiums of the
Participant shall be paid or reimbursed. If more than one type of insured Benefit is elected, sub-accounts shall be
established for each type of insured Benefit.
1.24 "Salary Redirection" means the contn'butions made by the Employer on behalf of Participants
pursuant to Section 3.1. These contributions shall be converted to Cafeteria Plan Benefit Dollazs and allocated to the
funds or accounts established under the Plan pursuant to the Participants' elections made under Article V.
1.25 "Salary Redirection Agreement" means an agreement between the Participant and the Employer
under which the Participant agrees. to reduce his Compensation or to forego. all or part of the increases in such
__ _.
Compensation and to have such amounts contributed by the Employer to the Plan on the Participant's behalf. The
Salary Redirection Agreement shall apply only to Compensation that has not been actually or constructively received
by the Participant as of the date of the agreement (after taking this Plan and Code Section 125 into account) and,
subsequently does not become currently available to the Participant.
1.26 "Spouse" means the legally married husband or wife of a Participant, unless legally separated by
court decree.
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY
Except as provided below, and pursuant to the terms and conditions set forth herein, any Employee is eligible to
participate in this Plan. Notwithstanding the below excluded categories of Employees, any Employee who was
employed by the Company on the Effective Date shall be eligible to participate. Those Employees ineligible to
participate in this Plan are:
(a) Leased Employees. Employees who are "leased employees" as defined in Code Section
414(n) (2) shall not be eligible to participate in this Plan.
(b) Part-Time Emplovees. Employee who are "part-time" Employees (i.e., all permanent
employees are eligible) or seasonal employees shall not be eligible to participate in this
Plan. A "part-time" Employee is any Employee who is designated as a part-tone employee
on the. Employer's personnel records.
(c) Certain Owner/Bmployees. 2-percent shareholders as defined under Code Section
1372(b) shall not be eligible to participate in this Plan if the Company is an "S"
corporation, partnership or sole proprietorship. 2percent owners of "C" corporations
may participate as long as the Plan passes the discrimination test. Any Eligible Employee
who was employed on the Effective Date of this Plan shall be eligible to participate
hereunder as of such date.
If a former Participant is rehired during the same Plan Year in which termination of employment occurs, and such
former Participant had revoked existing Benefit elections and terminated the receipt of Benefits at the time of
termination of employment, then such rehred farmer Participant shall be prohibited from making new Benefit
elections for the remaining portion of the Plan Year.
2.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee may become a Participant as of the first day of the month following one month of
employment after meeting the eligibility criteria established in Section 2.1.
2.3 APPLICATION TO PARTICIPATE
An Employee who is eligible to participate in this Plan shall, during the applicable Election Period, complete an
application to participate and election of benefits form that the Administrator shall furnish to the Employee. The
election made on such form shall be irrevocable until the end of the applicable Plan Yeaz unless the Participant is
entitled to change his Benefit elections pursuant to Section 5.4 hereof.
An Eligrble Employee shall also be required to execute a Salary Redirection Agreement during the Election Period
for the Plan Yeaz during which he wishes to participate in this Plan. Any such Salary Redirection Agreement shall be
effective for the first pay period beginning on or after the Employee's effective date of participation pursuant to
Section 2.2.
Notwithstanding the foregoing, an Employee who is eligible to participate in this Plan and who is covered by the
Employer's insured Benefits under this Plan shall automatically become a Participant to the extent of the Prerniums
for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan.
2.4 TERMINATION OF PARTICIPATION
A Participant shall no longer participate in this Plan upon the occurrence of any of the following events:
(a) His temrination of employment, subject to the provisions of Section 2.6;
(b) The end of the Plan Year during which he became a limited Participant because of a
change in employment status pursuant to Section 2.5;
(c) His death, subject to the provisions of Section 2.7; or
(d) The termination of this Plan, subject to the provisions of Section 10.2.
2.5 CHANGE OF EMPLOYMENT STATUS
If a Participant ceases to be eligible to participate because of a change in employment status or classification (other
than through temunation of employment), the Participant shall become a limited Participant in this Plan for the
remainder of the Plan Yeaz in which such change of employment status occurs. As a limited Participant, no further
Salary Redirection maybe made on behalf of the Participant, and, except as otherwise provided herein, all further
Benefit elections shall cease, subject to the limited Participant's right to continue coverage under any Insurance
Contracts and/or pursuant to Secton 11.14. However, any balances in the limited Participant's Health Care
Reimbursement Fund or Dependent Care Assistance Account maybe used during such Plan Year to reimburse the
limited Participant for any allowable Medical Expenses or Employment-Related Dependent Care Expenses incurred
during the Plan Year. Subject to the provisions of Section 2.6, if the limited Participant later becomes an Eligible
Employee, then the limited Participant may again become a full Participant in this Plan, provided he otherwise
satisfies the participation requirements set forth in this Article II as if he were a new Employee and made an election
in accordance with Section 5.1.
2.6 TERMINATION OF EMPLOYMENT
If a Participant's employment with the Employer is terminated for any reason other than death, his participation in the
Plan shall be governed in accordance with the following:
(a) With regazd to Benefits that are insured, the Participant's participation in the Plan shall
cease, subject to the Participant's right to continue coverage under any Insurance Contract
for which premiums have akeady been paid.
(b) With regard to the Dependent Care Assistance Program, the Participant's participation in
the Plan shall cease and no further Salary Redirection contributions shall be made.
However, such Participant may submit claims for employment related Dependent Care
Expense reimbursements for the remainder of the Plan Year in which such termination
occurs, based on the level of his Dependent Caze Assistance Account as of his date of
temrination.
(c) With regazd to the Health Care Reimbursement Plan, the Participant's participation in the
Plan shall cease and no further Salary Redirection contn'butions shall be made. However,
such Participant has 90 days to submit claims for expenses incurred during the portion of
the Plan Year preceding his date of termination.
(d) In the event a Participant terminates his participation in the Health Care Reimbursement
Plan during the Plan Year, if Salary Redirections are made other than on a pro rata basis,
upon termination the Participant shall be entitled to a reimbursement for any Salary
Redirection previously paid for coverage or benefits relating to the period after the date of
the Participant's separation from service.
(e) This Section shall be applied and administered consistent with such further rights a
Participant and his Dependents maybe entitled to pursuant to Code Section 4980B and
Section 11.14 of the Plan.
2.7 DEATH
If a Participant dies, his participation in the Plan shall cease. However, such Participant's beneficiaries, or the
representative of his estate, may submit claims for expenses or benefits for the remainder of the Plan Year or until
the Cafeteria Plan Benefit Dollazs allocated to each specific benefit are exhausted. A Participant may designate a
specific beneficiary for this purpose. If no such beneficiary is specified, the Administrator may designate the
Participant's Spouse, one ofhis Dependents or a representative of his estate.
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 SALARY REDIItECTION
Benefits under the Plan shall be financed by Salary Redrrections sufficient to support Benefits that a Participant has
elected hereunder and to pay the Participant's Premium Expenses. The salary administration program of the
Employer shall be revised to allow each Participant to agree to reduce his pay during a Plan Yeaz by an amount
determined necessary to purchase the elected Benefit. The amount of such Salary Redirection shall be specified in
the Salary Redirection Agreement and shall be applicable for a Plan Year. Notwithstanding the above, for new
Participants, the Salary Redirection Agreement shall only be applicable from the first day of the pay period following
the Employee's entry date up to and including the last day of the Plan Yeaz. These contributions shall be converted to
Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the
Participants' elections made under Article V.
Any Salary Redirection shall be determined prior to the beginning of a Plan Yeaz (subject to initial elections
pursuant to Section 5.1) and prior to the end of the Election Period and shall be irrevocable for such Plan Year.
However, a Participant may revoke a Benefit election or a Salary Redirection Agreement after the Plan Year has
commenced and make a new election with respect to the remainder of the Plan Year, if both the revocation and the
new election are on account of and consistent with a change in family status and such other permitted events as
determined under Article V of the Plan and consistent with the rules and regulations of the Department of the
Treasury. Salary Redirection amounts shall be contributed on a pro rata basis for each pay period during the Plan
Year. All individual Salary Redirection Agreements are deemed to be part of this Plan and incorporated by reference
hereunder.
3.2 APPLICATION OF CONTRIBUTIONS
As soon as reasonably practical after each payroll period, the Employer shall apply the Salary Redirection to provide
the Benefits elected by the affected Participants. Any contributions made or withheld for the Health Care
Reimbursement Fund or Dependent Caze Assistance Account shall be credited to such fund or account. Amounts
designated for the Participant's Premium Expense Reimbursement Account shall likewise be credited to such account
for the purpose of paying Premium Expenses.
3.3 PERIODIC CONTRIBUTIONS
Notwithstanding the requirement provided above and in other Articles of this Plan that Salary Redirections be
contributed to the Plan by the Employer on behalf of an Employee on a level and pro rata basis for each payroll
period, the Employer and Administrator may implement a procedure in which Salary Reduections are contributed
throughout the Plan Year on a periodic basis that is not pro rata for each payroll period. However, with regard to the
Health Care Reimbursement Plan, the payment schedule for the required contributions may not be based on the rate
or amount of reimbursements during the Plan Year. In the event Salary Reduections are not made on a pro rata basis,
upon ternrination of participation, a Participant may be entitled to a refund of such Salary Redirections pursuant to
Section 2.6.
ARTICLE IV
BENEFITS
4.1 BENEFIT OPTIONS
Each Participant may elect to have the amount of his Cafeteria Plan Benefit Dollars applied to any one or more of the
following optional Benefits:
(1) Health Care Reimbursement Plan
(2) Dependent Care Assistance Program
(3) Cash Benefits
In addition, each Participant shall have a sufficient portion of his Cafeteria Plan Benefit Dollars applied to the
following insured benefits unless the Participant elects not to receive such benefits:
(4) Health Insurance Benefit
(5) Group Dental Insurance
(6) Other Insurance Benefit approved by the employer
4.2 HEALTH CARE REIIvIBURSEMENT PLAN BENEFIT
Each Participant may elect coverage under the Health Care Reimbursement Plan option, in which case Article VI
shall apply.
4.3 DEPENDENT CARE ASSISTANCE PROGRAM BENEFIT
Each eligible Participant may elect coverage under the Dependent Caze Assistance Program option, in which case
Article VII shall apply.
4.4 HEALTH INSURANCE BENEFIT
(a) Each eligible employee may elect to be covered under a health and hospitalization
Insurance Contract for the Participant, his or her spouse, and his or her Dependents.
(b) In the event that any Participant shall have existing health and hospitalization insurance
protection or desires to obtain alternative health and hospitalization insurance protection,
the Administrator, in its sole discretion, may, upon submission of satisfactory proof of
payment by the Participant, reimburse the Participant for the cost of the alternative
-_ _ _
___
--
insurance protection. This alternative protection may not include the cost of coverage
obtained through a Participant's spouse's employment.
(c) The Employer may select suitable health and hospitalization Insurance Contracts for use
in providing this health insurance benefit, which policies will provide uniform benefits for
all Participants electing this Benefit.
(d) The rights and conditions with respect to the benefits payable from such health and
hospitalization Insurance Contract shall be determined therefrom, and such Insurance
Contract shall be incorporated herein by reference.
4.5 DENTAL INSURANCE BENEFIT
(a) Each eligible employee may elect to be covered under the Employer's dental Insurance
Contract. In addition, the Participant may elect either individual or family coverage under
such Insurance Contract.
(b) The Employer may select suitable dental Insurance Contracts for use in providing this
dental insurance benefit, which policies will provide uniform benefits for all Participants
electing this Benefit.
(c) The rights and conditions with respect to the benefits payable from such dental Insurance
Contract shall be determined therefrom, and such dental Insurance Contract shall be
incorporated herein by reference.
4.6 CASH BENEFIT
If a Participant elects not to participate in the Plan, such Participant shall be deemed to have chosen the Cash Benefit
as his sole Benefit option.
4.7 NONDISCRIMINATION REQUII2EMENTS
(a) It is the intent of this Plan to provide benefits to a classification of employees which the
Secretary of the Treasury fmds not to be discriminatory in favor of the group in whose
favor discrimination may not occur under Code Section 125.
(b) It is the intent of this Plan not to provide qualified benefits as defined under Code Section
125 to Key Employees in amounts that exceed 25% of the aggregate of such Benefits
provided for all Eligible Employees under the Plan. For purposes of the preceding
sentence, qualified benefits shall not include benefits which (without regard to this
paragraph) are includible in gross income.
(c) If the Administrator deems it necessary to avoid discrimination or possible taxation to
Key Employees or a group of employees in whose favor discrimination may not occur in
violation of Code Section 125, it may, but shall not be required to, reduce contributions or
non-taxable Benefits in order to assure compliance with this Section. Any act taken by the
Administrator under this Section shall be carried out in a uniform and nondiscriminatory
manner. If the Administrator decides to reduce contributions ornon-taxable Benefits, it
shall be done in the following manner. First, the non-taxable Benefits of the affected
Participant (either an employee who is highly compensated or a Key Employee,
whichever is applicable) who has the highest amount ofnon-taxable Benefits for the Plan
Year shall have his non-taxable benefits reduced until the discrin,;nation tests set forth in
this Section are satisfied or until the amount of his non-taxable Benefits equals the non-
taxable Benefits of the affected Participant who has the second highest amount of non-
taxable.Benefits. This process shall continue until the nondiscrimination tests set forth in
this Section are satisfied. With respect to any affected Participant who has had Benefits
reduced pursuant to this Section, the reduction shall be made proportionately among
Health Care Reimbursement Plan Benefits and Dependent Care Assistance Program
Benefits, and once all these Benefits are expended, proportionately among insured
Benefits. Contributions which are not utilized to provide Benefits to any Participant by
virtue of any administrative act under this paragraph shall be forfeited and deposited into
the benefit plan surplus.
ARTICLE V
PARTICIPANT ELECTIONS
5.1 INITIAL ELECTIONS
An Employee who first meets the eligibility requirements of Section 2.1 on the fast day of, or during, a Plan Yeaz
may elect to participate in this Plan for all or the remainder of such Plan Year, provided he elects to do so before his
effective date of participation pursuant to Section 2.2. However, if such Employee does not complete an application
to participate and benefit election form and deliver it to the Administrator before such date, his Election Period shall
extend 30 calendaz days after such date, or for such further period as the Administrator shall determine and apply on
a uniform and nondiscriminatory basis. However, any election during the extended 30-day election period pursuant
to this Section 5.1 shall not be effective until the first pay period following the later of such Participant's effective
date of participation pursuant to Section 2.2 or the date of the receipt of the election form by the Administrator, and
shall be limited to the Benefit expenses incurred for the balance of the Plan Year for which the election is made.
Notwithstanding the foregoing, an Employee who is eligible to participate in this Plan and who is covered by the
Employer's insured benefits under this Plan shall automatically become a Participant to the extent of the Premiums
for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan.
5.2 SUBSEQUENT ANNUAL ELECTIONS
During the Election Period prior to each subsequent Plan Year, each Participant shall be given the opportunity to
elect, on an election of benefits form to be provided by the Administrator, which spending account Benefit options
he wishes to select and purchase with his Cafeteria Plan Benefit Dollazs. Any such election shall be effective for any
Benefit expenses incurred during the Plan Year which follows the end of the Election Period. With regard to
subsequent annual elections, the following options shall apply:
(a) A Participant or Employee who failed to initially elect to participate may elect different or
new Benefits under the Plan during the Election Period;
(b) A Participant may terminate his participation in the Plan by notifying the Administrator in
writing during the Election Period that he does not want to participate in the Plan for the
next Plan Year;
(c) An Employee who elects not to participate for the Plan Year following the Election
Period will have to wait until the next Election Period before again electing to participate
in the Plan, with respect to spending account Benefits.
5.3 FAILURE TO ELECT
Any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by the end of the
applicable Election Period shall be treated as though, with regard to Benefits available under the Plan for which no
Premium Expenses apply, such Participant elected not to participate in the Plan for the upcoming Plan Year. No
further Salary Redirections shall therefore be authorized or made for the subsequent Plan Year for such Benefits.
5.4 CHANGE OF ELECTIONS
(a) General.
Any Participant may change a Benefit election after the Plan Year (to which such election relates) has
commenced and make new elections with respect to the remainder of such Plan Year if, under the facts and
circumstances, the changes are necessitated by and are consistent with a change in status which is acceptable under
the Treasury regulations, the provisions of which aze incorporated by reference. Notwithstanding anything herein to
the contrary, if the rules and regulations conflict, then such rules and regulations shall control.
In general, a change in election is not consistent if the change in status is the Participant's divorce,
annulment or legal separation from a Spouse, the death of a Spouse or Dependent, or a Dependent ceasing to satisfy
the eligibility requirements for coverage, and the Participant's election under the Plan is to cancel health insurance
coverage for any individual other than the one involved in such event. In addition, if the Participant, Spouse or
Dependent gains eligibility for coverage under a family member plan as a result of a change in marital status or a
change in employment status, then a Participant's election under the Plan to cease or decrease coverage for that
individual under the Plan corresponds with that change in status only if coverage for that individual becomes
applicable or is increased under the family member plan.
Regardless of the consistency requirement, if the Participant, the Participant's Spouse, or Dependent
becomes eligible for continuation coverage under City of Riverside's health care plan as provided in Code
section 4980B or any similar state law, then the individual may elect to increase payments under this Plan in order to
pay for the continuation coverage. However, this does not apply for COBRA eligibility due to divorce, annulment or
legal separation.
Any new election shall be effective at such time as the Administrator shall prescribe. Generally, provided
the Participant completes a new election form and returns such form to the Administrator within 30 days after the
status change, the effective date for such new election will be the date of the change of status. For the purposes of
this subsection, a change in status shall only include the following events or other events permitted by Treasury
regulations:
(1) Legal Marital Status: Events that change a Participant's legal marital status,
including marriage, divorce, death of a Spouse, legal separation or annulment;
(2) Number of Dependents: Events that change a Participant's number of
Dependents, including birth, adoption, placement for adoption, or death of a
Dependent;
(3) Employment Status: Any of the following events that change the employment
status of the Participant, Spouse, or Dependent: termination or commencement
of employment, a strike or lockout, commencement or return from an unpaid
leave of absence, or a change in worksite. In addition, if the eligibility
conditions of this Plan or other benefit plan of ABC Company in which the
Participant, Spouse, or Dependent participate in the employment status of that
individual and there is a change in that individual's employment status with the
consequence that the individual becomes (or ceases to be) eligible under this
Plan, then that change constitutes a change in employment under this
Article 5.4(a)(3);
(4) Dependent satisfies or ceases to satisfy the eligibility requirements: An event
that causes the Participant's Dependent to satisfy or cease to satisfy the
requirements for coverage due to attainment of age, student status, or any similar
circumstance; and
(5) Residency: A change in the place of residence of the Participant, Spouse or
Dependent.
(b) Dependent Care Assistance Program Exception. In addition to the change of election
provisions set forth above in Article 5.4(a), for purposes of the Dependent Care
Assistance Program, a Dependent becoming or ceasing to be a "Qualifying Dependent" as
defined under Code section 21(b) shall also qualify as a change in status.
(c) HIPAA Special Enrollment Right Exception. For purposes of the Health Insurance
Benefit, Dental Insurance Benefit and the Health Care Reimbursement Plan only, in
addition to the change of election provisions set forth above in Article 5.4(a), a
Participant may change an election for health coverage during a Plan Year under one or
more of City of Riverside's health care plan(s) and make a new election hereunder that
corresponds with the special enrollment rights provided in Code section 9801(f). Such
change shall take place on a prospective basis.
(d) Notwithstanding Article 5.4(a), in the event of a judgment, decree, or order ("order")
resulting from a divorce, legal separation, annulment, or change in legal custody
(including a qualified medical child support order defined in ERISA section 609) which
requires health coverage for a Participant's child (including a foster child who is a
Dependent of the Participant):
(1) The Plan may change an election to provide coverage for the child if the order
requires coverage under the Participant's plan; or
(2) The Participant shall be pemutted to change an election to cancel coverage for
the child if the order requires the former Spouse to provide coverage for such
child under the individual's plan and such coverage is actually provided.
(e) Notwithstanding Article 5.4(a), a Participant may change elections to cancel health
coverage for the Participant or the Participant's Spouse or Dependent if the Participant or
the Participant's Spouse or Dependent is enrolled in one or more of City of Riverside's
health care plans and becomes entitled to coverage (i:e., enrolled) under Part A or Part B
of Title XVIII of the Social Security Act (Medicare) or Title XIX of the Social Security
Act (Medicaid), other than coverage consisting solely of benefits under section 1928 of
the Social Security Act (the program for distribution of pediatric vaccines). If the
Participant or the Participant's Spouse or Dependent who has been entitled to Medicaid or
Medicare coverage loses eligibility, that individual may prospectively elect coverage
under the Plan if a benefit package option under the Plan provides similar coverage.
(f) If the cost of a Benefit provided under the Plan increases or decreases during a Plan Year,
then the Plan shall automatically increase or decrease, as the case maybe, the Salary
Redirection Agreements of all affected Participants for such Benefit. Alternatively, if the
cost of a benefit package option increases significantly, the Administrator shall permit the
affected Participants to either make corresponding changes in their payments or revoke
their elections and, in lieu thereof, receive on a prospective basis coverage under another
benefit package option with similar coverage or drop coverage prospectively if no similar
coverage is offered.
If the coverage under a Benefit is significantly curtailed or ceases during a Plan Year, affected Participants
may revoke their elections of such Benefit and, in lieu thereof, elect to receive on a prospective basis coverage under
another plan with similar coverage or drop coverage prospectively if no similar coverage is offered.
If, during the period of coverage, a new benefit package option or other coverage option is added (or an
existing benefit package option or other coverage option is eliminated), then the affected Participants may elect the
newly-added option, or elect another option if an option has been eliminated prospectively and make corresponding
election changes with respect to other benefit package options providing similar coverage. In addition, those
Eligible Employees who aze not participating in the Plan may opt to become Participants and elect the new or newly
improved benefit package option.
A Participant may make a prospective election change that is on account of and corresponds with a change
made under the plan of a Spouse's, former Spouse's or Dependent's employer if (1) the cafeteria plan or other benefit
plan of the Spouse's, former Spouse's or Dependent's employer permits its participants to make a change; or (2) the
cafeteria plan permits participants to make an election for a period of coverage that is different from the period of
coverage under the cafeteria plan of a Spouse's, former Spouse's or Dependent's employer.
A Participant may make a prospective election change that is on account of and conresponds with a change
by the Participant in the dependent care provider. The availability of dependent care services from a new childcare
provider is similaz to a new benefit package option becoming available. A cost change is allowable in the Dependent
Care Assistance Plan only if the cost change is imposed by a dependent Gaze provider who is not related to the
Participant, as defined in Code section 152(a)(1) through (8).
ARTICLE VI
HEALTH CARE REIIVIBURSEMENT PLAN
6.1 ESTABLISHMENT OF PLAN
This Health Care Reimbursement Plan is intended to qualify as a medical reimbursement plan under Code Section
105 and shall be interpreted in a manner consistent with such Code Section and the Treasury regulations thereunder.
Participants who elect to participate in this Health Caze Reimbursement Plan may submit claims for the
reimbursement of Medical Expenses. All amounts reimbursed under this Health Care Reimbursement Plan shall be
periodically paid from amounts allocated to the Health Care Reimbursement Fund. Periodic payments reimbursing
Participants from the Health Care Reimbursement Fund shall in no event occur less frequently than twice monthly.
6.2 DEFII~IITIONS
For the purposes of this Article and the Cafeteria Plan, the terms below have the following meaning:
(a) "Health Care Reimbursement Fund" means the fund established for Participants pursuant
to this Plan to which part of their Cafeteria Plan Benefit Dollars maybe allocated and
from which all allowable Medical Expenses maybe reimbursed.
(b) "Health Care Reimbursement Plan" means the plan of benefits contained in this Article,
which provides for the reimbursement of eligible Medical Expenses incurred by a
Participant or his Dependents.
(c) "Highly Compensated Participant" means, for the purposes of this Article and
det~*~+in;ng discrimination under Code Section 105(h), a participant who is:
(1) one of the 5 highestpaid officers;
(2) a shareholder who owns (or is considered to own applying the rules of Code
Section 318) more than 10 percent in value of the stock of the Employer; or
(3) among the highest paid 25 percent of all Employees (other than exclusions
permitted by Code Section 105(h) (3) (B) for those individuals who are not
Participants).
(d) "Medical Expenses" means any expense for medical caze within the meaning of the term
"medical care" or "medical expense" as defined in Code Section 213 and the rulings and
Treasury regulations thereunder, and not otherwise used by the Participant as a deduction
in determining his tax liability under the Code. However, a Participant may only be
reimbursed for the cost of other health coverage (premiums for individual health policies
maintained by the Participant) at the discretion of the plan administrator.
(e) The definitions of Article I are hereby incorporated by reference to the extent necessary to
interpret and apply the provisions of this Health Caze Reimbursement Plan.
6.3 FORFEITURES
The amount in the Health Care Reimbursement Fund as of the end of any Plan Year (and after the processing of all
claims for such Plan Yeaz pursuant to Section 6.7 hereof) shall be forfeited and credited to the benefit plan surplus.
In such event, the Participant shall have no further claim to such amount for any reason, subject to Section 8.2.
6.4 LIMITATION ON ALLOCATIONS
Notwithstanding any provision contained in this Health Caze Reimbursement Plan to the contrary, not more than
$3,OOD maybe allocated to the Health Care Reimbursement Fund by a Participant in or on account of any 12 month
Plan Year.
6.5 NONDISCRINffNATION REQUIIZEMENTS
(a) It is the intent of this Health Care Reimbursement Plan not to discriminate in violation or the Code
and the Treasury regulations thereunder.
(b) If the Administrator deems it necessary to avoid discrimination under this Health Caze
Reimbursement Plan, it may, but shall not be required to, reject any elections or reduce contributions or Benefits in
order to assure compliance with this Section. Any act taken by the Administrator under this Section shall be carried
out in a uniform and nondiscriminatory manner. If the Administrator decides to reject any elections or reduce
contributions or Benefits, it shall be done in the following manner. First, the Benefits designated for the Health Caze
Reimbursement Fund by the member of the group in whose favor discrimination may not occur pursuant to Code
Sections 105 or 125 that elected to contribute the highest amount to the fund for the Plan Yeaz shall be reduced until
the nondiscrimination tests set forth in this Section or the Code are satisfied, or until the amount designated for the
fund equals the amount designated for the fund by the next member of the group in whose favor discrimination may
not occur pursuant to Code Sections 105 or 125 who has elected the second highest contribution to the Health Care
Reimbursement Fund for the Plan Year. This process shall continue until the nondiscrimination tests set forth in this
Section or the Code are satisfied. Contributions which are not utilized to provide Benefits to any Participant by
virtue of any administrative act under this pazagraph shall be forfeited and credited to the benefit plan surplus.
6.6 COORDINATION WITH CAFETERIA PLAN
All Participants under the Cafeteria Plan are eligible to receive Benefits under this Health Care Reimbursement Plan.
The enrollment under the Cafeteria Plan shall constitute enrollment under this Health Caze Reimbursement Plan. In
addition, other matters concerning contributions, elections and the like shall be governed by the general provisions of
the Cafeteria Plan.
__
6.7 HEALTH CARE REIMBURSEMENT PLAN CLAIMS
(a) All Medical Expenses incurred by a Participant shall be reimbursed during the Plan Year
subject to Section 2.6, even though the submission of such a claim occurs after his
participation hereunder ceases; but provided that the Medical Expenses were incurred
during the applicable Plan Year.
(b) The Administrator shall direct the reimbursement to each eligible Participant for all
allowable Medical Expenses, up to a maximum of the amount designated by the
Participant for the Health Care Reimbursement Fund for the Plan Year. Reimbursements
shall be made available to the Participant throughout the year without regard to the level
of Benefit Dollars which have been allocated to the fund at any given point in time.
Furthermore, a Participant shall be entitled to reimbursements only for amounts in excess
of any payments or other reimbursements under any health care plan covering the
Participant and/or his Spouse or Dependents.
(c) Claims for the reimbursement of Medical Expenses incurred in any Plan Year shall be
paid as soon after a claim has been filed as is administratively possible; provided
however, that if a Participant fails to submit a claim within 90 days immediately
following the end of the Plan Year, those Medical Expense claims shall not be
considered for reimbursement by the Administrator. Min. check amount is $25.00.
(d) Reimbursement payments under this Plan shall be made directly to the Participant.
However, in the Administrator's discretion, payments maybe made directly to the service
provider. The application for payment or reimbursement shall be made to the
Administrator on an acceptable form within a reasonable time of incurring the debt or
paying for the service. The application shall include a written statement from an
independent third party stating that the Medical Expense has been incurred and the
amount of such expense. Furthermore, the Participant shall provide a written statement
that the Medical Expense has not been reimbursed or is not reimbursable under any other
health plan coverage and, if reimbursed from the Health Care Reimbursement Fund, such
amount will not be claimed as a tax deduction. The Administrator shall retain a file of all
such applications.
ARTICLE VII
DEPENDENT CARE ASSISTANCE PROGRAM
7.1 ESTABLISHMENT OF PROGRAM
This Dependent Care Assistance Program is intended to qualify as a program under Code Section 129 and shall be
interpreted in a manner consistent with such Code Section. Participants who elect to participate in this program may
submit claims for the reimbursement ofEmployment-Related Dependent Care Expenses. All amounts reimbursed
under this Dependent Care Assistance Program shall be paid from amounts allocated to the Participant's Dependent
Care Assistance Account.
7.2 DEFINITIONS
For the purposes of this Article and the Cafeteria Plan, the temrs below shall have the following meaning:
(a) "Dependent Care Assistance Account" means the account established for a Participant
pursuant to this Article to which part of his Cafeteria Plan Benefit Dollazs maybe
allocated and from which Employment-Related Dependent Care Expenses of the
Participant maybe reimbursed.
(b) "Dependent Caze Assistance Program" means the program ofbenefits contained in this
Article, which provides for the reimbursement of eligible expenses for the care of the
Qualifying Dependents of Participants.
(c) "Earned Income" means earned income as defined under Code Section 32(c)(2), but
excluding such amounts paid or incurred by the Employer for dependent care assistance
to the Participant.
(d) "Employment-Related Dependent Care Expenses" means the amounts paid for expenses
of a Participant for those services which if paid by the Participant would be considered
employment related expenses under Code Section 21(b) (2). Generally, they shall include
expenses for household services or for the care of a Qualifying Dependent, to the extent
that such expenses are incurred to enable the Participant to be gainfully employed for any
period for which there are one or more Qualifying Dependents with respect to such
Participant. The deternunation of whether an amount qualifies as anEmployment-Related
Dependent Care Expense shall be made subject to the following rules:
(1) If such amounts are paid for expenses incurred outside the Participant's
household, they shall constitute Employment-Related Dependent Care Expenses
only if incurred for a Qualifying Dependent as defined in Section 7.2(f) (1) (or
deemed to be, as described in Section 7.2(f) (1) pursuant to Section 7.2(f) (3)),
or for a Qualifying Dependent as defined in Section 7.2(f) (2) (or deemed to be,
as described in Section 7.2(f) (2) pursuant to Section 7.2(f)(3)) who regularly
spends at least 8 hours per day in the Participant's household;
(2) If the expense is incurred outside the Participant's home at a facility that provides
caze for a fee, payment, or grant for more than 6 individuals who do not
regularly reside at the facility, the facility must comply with all applicable state
and local laws and regulations, including licensing requirements, if any; and
(3) Employment-Related Dependent Care Expenses of a Participant shall not include
amounts paid or incurred to a child of such Participant who is under the age of
19 or to an individual who is a dependent of such Participant or such
Participant's Spouse.
(e) Highly Compensated Employee" means an Employee who is a highly compensated
employee within the meaning of Code Section 414(q) and the Treasury regulations
thereunder.
(f) "Qualifying Dependent" means, for Dependent Care Assistance Program purposes,
(1) a Dependent of a Participant who is under the age of 13, with respect to whom
the Participant is entitled to an exemption under Code Section 151(c);
(2) a Dependent or the Spouse of a Participant who is physically or mentally
incapable of caring for himself or herself; or
(3) a child that is deemed to be a Qualifying Dependent described in paragraph (1)
or above, whichever is appropriate, pursuant to Code Section 21(e)(5).
(g) The definitions of Article I are hereby incorporated by reference to the extent necessary to
interpret and apply the provisions of this Dependent Care Assistance Program.
7.3 DEPENDENT CARE ASSISTANCE ACCOUNTS
The Administrator shall establish a Dependent Care Assistance Account for each Participant who elects to apply
Cafeteria Plan Benefit Dollazs to Dependent Care Assistance Program benefits.
7.4 INCREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS
A Participant's Dependent Caze Assistance Account shall be increased each pay period by the portion of Cafeteria
Plan Benefit Dollars that he has elected to apply toward his Dependent Care Assistance Account pursuant to
elections made under Article V hereof.
7.5 DECREASES IN DEPENDENT CARE ASSISTANCE ACCOUNTS
A Participant's Dependent Care Assistance Account shall be reduced by the amount of any Employment-Related
Dependent Care Expense reimbursements paid or incurred on behalf of a Participant pursuant to Section 7.12 hereof.
7.6 ALLOWABLE DEPENDENT CARE ASSISTANCE REIIvIBURSEMENT
Subject to limitations contained in Section 7.9 of this Program, and to the extent of the amount contained in the
Participant's Dependent Care Assistance Account, a Participant who incurs Employment-Related Dependent Care
Expenses shall be entitled to receive from the Employer full reimbursement for the entire amount of such expenses
incurred during the Plan Year or portion thereof during which he is a Participant.
7.7 ANNUAL STATEMENT OF BENEFITS
On or before January 31st of each calendar yeaz, the Employer shall fiunish to each Employee who was a Participant
and received benefits under Section 7.6 during the prior calendaz yeaz, a statement of all such benefits paid to or on
behalf of such Participant during the prior calendaz year.
7.8 FORFEITURES
The amount in a Participant's Dependent Care Assistance Account as of the end of any Plan Year (and after the
processing of all claims for such Plan Year pursuant to Section 7.12 hereof) shall be forfeited and credited to the
benefit plan surplus. In such event, the Participant shall have no further claim to such amount for any reason.
7.9 LIMITATION ON PAYMENTS
Notwithstanding any provision contained in this Article to the contrary, amounts paid from a Participant's Dependent
Caze Assistance Account in or on account of any taxable yeaz of the Participant shall not exceed the lesser of the
Earned Income limitation described in Code Section 129(b) or $5,000 ($2,500 if a separate tag return is fled by a
Participant who is married as determined under the rules of pazagraphs (3) and (4) of Code Section 21(e)).
7.10 NONDISCRIMINATION REQUIItEMENTS
(a) It is the intent of this Dependent Care Assistance Program that contributions or benefits
not discriminate in favor of Highly Compensated Employees or their Dependents, as
prohibited by Code Section 129 (d)
(b) It is the intent of this Dependent Care Assistance Program that not more than 25 percent
of the amounts paid by the Employer for dependent caze assistance during the Plan Year
will be provided for the class of individuals who are shareholders or owners (or their
Spouses or Dependents), each of whom (on any day of the Plan Year) owns more than 5
percent of the stock or of the capital or profits interest in the Employer.
(c) If the Administrator deems it necessary to avoid discrimination or possible taxation to
Highly Compensated Employees defined under Section 7.2(e) or to principal shareholders
or owners as set forth in this Section, it may, but shall not be required to reject any
elections or reduce contributions or non-taxable benefits in order to assure compliance
with this Section. Any act taken by the Administrator under this Section shall be carried
out in a uniform and nondiscriminatory manner. If the Administrator decides to reject any
elections or reduce contributions or Benefits, it shall be done in the following manner.
First, the Benefits designated for the Dependent Caze Assistance Account by the Highly
Compensated Employee that elected to contribute the highest amount to such account for
the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section
are satisfied, or until the amount designated for the account equals the amount designated
for the account of the Highly Compensated Employee who has elected the second highest
contribution to the Dependent Caze Assistance Account for the Plan Yeaz. This process
shall continue until the nondiscrimination tests set forth in this Section aze satisfied.
Contributions which are not utilized to provide Benefits to any Participant by virtue of
any administrative act under this pazagraph shall be forfeited.
7.11 COORDINATION WITH CAFETERIA PLAN
All Participants under the Cafeteria Plan are eligible to receive Benefits under this Dependent Care Assistance
Program The enrollment and termination of participation under the Cafeteria Plan shall constitute emolhnent and
termination of participaton under this Dependent Caze Assistance Program. In addition, other matters concerning
contriburions, elections and the like shall be governed by the genera] provisions of the Cafeteria Plan.
7.12 DEPENDENT CARE ASSISTANCE PROGRAM CLAIMS
The Administrator shall direct the payment of all such Dependent Care Assistance claims to the Participant upon the
presentation to the Administrator of documentation of such expenses in a form satisfactory to the Administrator.
However, in the Administrator's discretion, payments maybe made directly to the service provider. In its discretion
in administering the Plan, the Administrator may utilize forms and require documentation of costs as maybe
necessary to verify the claims submitted. At a minimum, the form shall include a statement from an independent third
party as proof that the expense has been incurred and the amount of such expense. In addition, the Administrator may
require that each Participant who desires to receive reimbursement under this Program for Employment-Related
Dependent Care Expenses submit a statement that may contain some or all of the following information:
(a) The Dependent or Dependents for whom the services were performed;
(b) The nature of the services performed for the Participant, the cost of which he wishes
reimbursement;
(c) The relationship, if any, of the person perfomring the services to the Participant;
(d) If the services are being performed by a child of the Participant, the age of the child;
(e) A statement as to where the services were performed;
(f) If any of the services were performed outside the home, a statement as to whether the
Dependent for whom such services were performed spends at least 8 hours a day in the
Participant's household;
___ _. _
(g) If the services were being performed in a day care center, a statement
(1) that the day Gaze center complies with all applicable laws and regulations of the
state of residence,
(2) that the day care center provides care for more than 6 individuals (other than
individuals residing at the center), and
(3) of the amount of fee paid to the provider.
(h) If the Participant is rnanied, a statement containing the following:
(1) the Spouse's salary or wages if he or she is employed, or
(2) if the Participant's Spouse is not employed, that
(i) he or she is incapacitated, or
(ii) he or she is a full-time student attending an educational institution and
the months during the year which he or she attended such institution.
(i) If a Participant fails to submit a claim within the 60 day period immediately following the
end of the Plan Yeaz, those claims shall not be considered for reimbursement by the
Administrator.
ARTICLE VIII
ERISA PROVISIONS
8.1 CLAIM FOR BENEFTTS
(a) Claims under the Cafeteria Plan, generally and Dependent Caze Assistance Plan.
The following claims procedures shall apply with respect to claims made under the Cafeteria Plan, generally
or the Dependent Care Assistance Plan.
(1) Initial Denial of Claim If the Administrator denies any claim, the Administrator
will provide notice to the claimant, in writing, within 90 days after the claim is
filed unless special circumstances require an extension of time for processing the
claim In no event will the Adrninisttator receive an extension longer than 90
days. If the Administrator does not notify the clairnant of the denial of the claim
within the 90-day period specified above, then the claim shall be deemed denied.
The notice of a denial of a claim shall be written in a manner calculated to be
understood by the claimant and shall set forth:
(i) specific references to the pertinent Plan provisions on which the denial
is based;
(ii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation as to why such
information is necessary; and
(iii) an explanation of the Plan's claim procedure.
__ _ _ _
__ _
__ ___
(2) Appeal of Denial. Within 60 days after receipt of the notice of denial (discussed
immediately above), the claimant shall have a reasonable opportunity to appeal
the claim denial to the Administrator for a full and fair review. The claimant or
his duly authorized representative may:
(i) request a review upon written notice to the Administrator;
(ii) review pertinent documents; and
(iii) submit issues and comments in writing.
(3) Appeal Decision. A decision on the review by the Administrator will be made
not later than 60 days after receipt of a request for review, unless special
circumstances require an extension of time for processing (such as the need to
hold a hearing), in which event a decision should be rendered as soon as
possible, but in no event later than 120 days after such receipt. If special
circumstances require such an extension, the Administrator will notify the
claimant within the first 60 days after the receipt of a request for review
explaining the reason(s) for the extension. The decision of the Administrator
shall be written and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, with specific references to
the pertinent Plan provisions on which the decision is based.
(b) Claims Under the Health Care Reimbursement Plan.
Notwithstanding the foregoing under (a), any claim for Benefits under the Health Care Reimbursement Plan
shall be handled by the Administrator in accordance with the following claims procedures:
(1) Initial Denial of Claim. The Administrator will provide the claimant with
notification of whether the claimant's claim for benefits is accepted or denied
within 30 days after the claimant filed his or her initial claim In the event that,
due to matters beyond control of the Plan, the Administrator cannot make a
determination as to whether to accept or deny the claimant's claim for benefits,
the Adrinistrator shall have an additional 15 days (i.e., 45 days after the initial
claim was filed) to provide the claimant with its decision. If the Administrator
needs an extension of time, it will notify the claimant within the first 30 days of
the necessity and reason(s) for the extension.
(2) Insufficient Information. In the event that the Administrator determines that it
has insufficient information to determine whether to accept or deny the claim, it
will notify the claimant of such a determination. Following such a notice, the
claimant will have 45 days to provide the Administrator with the additional
information that it requests. Following the receipt of the additionally requested
information, the Administrator shall have 30 days to review the claim.
(3) Denial of Claim If the Administrator denies the clairant's claim, it will provide
the claimant with written or electronic notification of such claim denial. The
notice will state:
(i) The specific reason or reasons for the denial.
(ii) Reference to the specific Plan provisions on which the denial was
based.
(iii) 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.
(iv) A description of the Plan's review procedures and the time limits
applicable to such procedures. This will include a statement of the right
to bring a civil action under section 502 of ERISA following a denial
on review.
(v) A statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the Claim
(vi) If the denial was based on an internal rule, guideline, protocol, or other
similar criterion, the specific rule, guideline, protocol, or criterion will
be provided free of chazge. If this is not practical, a statement will be
included that such a rule, guideline, protocol, or criterion was relied
upon in making the denial and a copy will be provided free of charge to
the claimant upon request.
(4) Appeal. When the claimant receives the denial, the claimant shall have 180
days following receipt of the notification in which to appeal the decision. The
claimant may submit written comments, documents, records, and other
information relating to the claim. If the claimant requests, the claimant shall be
provided, free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claim The period of time within
which a denial on review is required to be made will begin at the time an appeal
is filed in accordance with the procedures of the Plan. This timing is without
regard to whether all the necessary information accompanies the filing. A
document, record, or other information shall be considered relevant to a claim if
it:
(i) was relied upon in making the claim determination;
(ii) was submitted, considered, or generated in the course of making the
claim determination, without regard to whether it was relied upon in
making the claim determination;
(iii) demonstrated compliance with the administrative processes and
safeguards designed to ensure and to verify that claim determinations
are made in accordance with Plan documents and Plan provisions have
been applied consistently with respect to all claimants; or
(iv) constituted a statement of policy or guidance with respect to the Plan
concerning the denied claim
(5) Review of Appeal. Once an appeal has been filed, a review of the appeal will be
conducted by a fiduciary of the Plan who is neither the individual who made the
initial adverse determination nor a subordinate of that individual. The review
will take into account all comments, documents, records, and other information
submitted by the claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial claim determination. The
review will not afford deference to the initial denial and will be conducted de
novo. The Administrator will make its decision of the benefit determination on
appeal and will notify the claimant of such decision with 60 days after the appeal
has been filed.
(6) Retroactive Acceptance of Claim For purposes of the Health Caze
Reimbursement Plan, as long as a participant's initial claim was submitted to the
Administrator before 90 days following the Plan Year in which the medical
expense was incurred, if such clairn, although initially denied, is subsequently
honored in accordance with these claims procedures, such claim will be
processed as if such claim had been processed prior the end of the 90 day grace
period.
8.2 APPLICATION OF BENEFIT PLAN SURPLUS
Any forfeited amounts credited to the benefit plan surplus by virtue of the failure of a Participant to incur a qualified
expense or seek reimbursement in a timely manner may, but need not be, sepazately accounted for after the close of
the Plan Year (or after such further time specified herein for the filing of claims) in which such forfeitures arose. In
no event shall such amounts be carried over to reimburse a Participant for expenses incurred during a subsequent
Plan Year for the same or any other Benefit available under the Plan; nor shall amounts forfeited by a particulaz
Participant be made available to such Participant in any other form or manner, except as permitted by Treasury
regulations. Amounts in the benefit plan surplus shall first be used to defray any administrative costs and experience
losses and thereafter be retained by the Employer.
8.3 NAMED FIDUCIARY
The Administrator shall be the named fiduciary pursuant to ERISA Section 402 and shall be responsible for the
management and control of the operation and administration of the Plan.
8.4 GENERAL FIDUCIARY RESPONSIBILITIES
The Administrator and any other fiduciary under ERISA shall dischazge their duties with respect to this Plan solely
in the interest of the Participants and their beneficiaries and
(a) for the exclusive purpose of providing Benefits to Participants and their beneficiaries and
defraying reasonable expenses of administering the Plan;
(b) with the care, skill, prudence and diligence under the circumstances then prevailing that a
pendent man acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; and
(c) in accordance with the documents an instruments governing the Plan insofaz as such
documents and instruments are consistent with ERISA.
8.5 NONASSIGNABILITY OF RIGHTS
The right of any Participant to receive any reimbursement under the Plan shall not be alienable by the Participants by
assignment or any other method, and shall not be subject to the rights of creditors, and any attempt to cause such
right to be so subjected shall not be recognized, except to such extent as maybe required by law.
ARTICLE IX
ADMINISTRATION
9.1 PLAN ADMI2~IISTRATION
The operation of the Plan shall be under the supervision of the Admvustrator. It shall be a principal duty of the
Administrator to see that the Plan is carried out in accordance with its terms, and for the exclusive benefit of
Employees entitled to participate in the Plan. The Administrator shall have full power to adrninister the Plan in all of
its details, subject, however, to the pertinent provisions of the Code. The Admhustrator's powers shall include, but
shall not be limited to the following authority, in addition to all other powers provided by this Plan:
(a) To make and enforce such rules and regulations as the Administrator deems necessary or
proper for the efficient administration of the Plan;
(b) To interpret the Plan, the Administrator's interpretations thereof in good faith to be final
and conclusive on all persons claiming benefits by operation of the Plan;
(c) To decided all questions concerning the Plan and the eligibility of any person to
participate in the Plan and to receive benefits provided by operation of the Plan;
(d) To reject elections or to limit contributions or Benefits for certain highly compensated
participants if it deems such to be desirable in order to avoid discrimination under the
Plan in violation of applicable provisions of the Code;
(e) To provide Employees with a reasonable notification of their benefits available by
operation of the Plan;
(f) To approve reimbursement requests and to authorize the payment of benefits;
(g) To appoint such agents, counsel, accountants, consultants, and actuaries as maybe.
required to assist in administering the Plan.
Any procedure, discretionary act, interpretation or construction taken by the Administrator shall be
done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with
the intent that the Plan shall continue to comply with the temu of Code Section 125 and the Treasury regulations
thereunder.
9.2 EXAMINATION OF RECORDS
The Administrator shall make available to each Participant, Eligible Employee and any other Employee of the
Employer such records as pertain to their interest under the Plan for examination at reasonable tunes during normal
business hours.
9.3 PAYMENT OF EXPENSES
Any reasonable administrative expenses shall be paid by the Employer unless the Employer determines that
administrative costs shall be borne by the Participants under the Plan or by any Trust Fund which maybe established
hereunder. The Administrator may impose reasonable conditions for payments, provided that such conditions shall
not discriminate.in favor ofhighly compensated employees.
9.4 INSURANCE CONTROL CLAUSE
In the event of a conflict between the terms of this Plan and the terms of an Insurance Contract of an independent
third party Insurer whose product is then being used in conjunction with this Plan, the temis of the Insurance
Contract shall control as to those Participants receiving coverage under such Insurance Contract. For this purpose,
the Insurance Contract shall control in defining the persons eligible for insurance, the dates of their eligibility, the
conditions which must be satisfied to become insured, if any, the benefits Participants are entitled to and the
circumstances under which insurance terminates.
9.5 INDEMNIFICATION OF ADMINISTRATOR
The Employer agrees to indemnify and to defend to the fullest extent permitted by law any person or firm serving as
the Administrator or at the Administrator's direction (including any person or fum serving as Administrator or as a
member of such committee) against all liabilities, damages, costs and expenses (including attorney's fees and
amounts paid in settlement of any claims approved by the Employer) occasioned by any act or omission to act in
connection with the Plan, if such act or omission is in good faith.
ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
10.1 AMENDMENT
The Employer, at any time or from time to time, may amend any or all of the provisions of the Plan without the
consent of any Employee or Participant. Any such amendment shall be adopted by fom~al action of the Employer
and executed by a representative authorized to act on behalf of the Employer. No amendment shall have the effect of
modifying any benefit claim of any Participant in effect at the time of such amendment, unless such amendment is
made to comply with Federal, state or local laws, statutes or regulations.
10.2 TERMINATION
The Employer reserves the right to terminate this Plan, in whole or in part, at any time. In the event the Plan is
temunated, no further contributions shall be made. Benefits under any Insurance Contract shall be paid in
accordance with the terms of the Contract.
No further additions shall be made to the Health Caze Reimbursement Fund or Dependent Caze Assistance Account,
but all payments from such fund shall continue to be made according to the elections in effect until the end of the
Plan Year in which the Plan termination occurs (and for a reasonable period of time hereafter, if required for the
filing of claims). Any amounts remaining in any such fund or account as of the end of the Plan Year in which Plan
termination occurs shall be forfeited and deposited in the benefit plan surplus after the expiration of the filing period.
ARTICLE XI
MISCELLANEOUS
11.1 PLAN INTERPRETATION
All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. This Plan shall
be read in its entirety and not severed except as provided in Section 11.12.
11.2 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though
they were also used in another gender in all cases where they would so apply, and whenever any words aze used
herein in the singular or plural form, they shall be construed as though they were also used in the other form in all
cases where they would so apply.
11.3 WRITTEN DOCUMENT
This Plan, in conjunction with any separate written document which maybe required by law, is intended to satisfy
the written Plan requirement of Code Section 125 and any Treasury regulations thereunder relating to cafeteria plans.
11.4 EXCLUSIVE BENEFIT
This Plan shall be maintained for the exclusive benefit of the Employees who participate in the Plan.
11.5 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute an employment contract between the Employer and any Participant or to
be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this
Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to dischazge any Participant or Employee at any time regazdless of the effect
which such discharge shall have upon him as a Participant of this Plan.
11.6 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required to do or perform any
act or matter or thing, it shall be done and performed by a person duly authorized by its legally constituted authority.
11.7 EMPLOYER'S PROTECTIVE CLAUSES
(a) Upon the failure of either the Participant or the Employer to obtain the insurance
contemplated by this Plan (whether as a result of negligence, gross neglect or otherwise),
the Participant's Benefits shall be limited to the insurance premium(s), if any, that
remained unpaid for the period in question and the actual insurance proceeds, if any,
received by the Employer or the Participant as a result of the Participant's claim.
(b) The Employer's liability to the Participant , as to insured benefits, shall only extend to and
shall be limited to any payment actually received by the Employer from the Insurer. In the
event that the fall insurance Benefit contemplated is not promptly received by the
Employer within a reasonable time after submission of a claim, then the Employer shall
notify the Participant of such facts and the Employer shall no longer have any legal
obligation whatsoever (except to execute any document called for by a settlement reached
by the Participant). The Participant shall be free to settle, compromise or refuse to pursue
the claim as the Participant, in his sole discretion, shall see fit.
(c) The Employer shall not be responsible for the validity of any Insurance
Contract issued hereunder or for the failure on the part of the Insurer to make payments provided
for under any Insurance Contract. Once insurance is applied for or obtained, the Employer shall
not be liable for any loss, which may result from the failure to pay Premiums to the extent
Premium notices are not received by the Employer.
11.8 NO GUARANTEE OF TAX CONSEQUENCES
Neither the Administrator nor the Employer makes any commitment or guarantee that any amounts paid to or for the
benefit of a Participant under the Plan will be excludable from the Participant's gross income for federal or state
income tax purposes, or that any other federal or state tax treatment will apply to or be available to any Participant. It
shall be the obligation of each Participant to determine whether each payment under the Plan is excludable from the
Participant's gross income for federal and state income tax purposes, and to notify the Employer if the Participant has
reason to believe that any such payment is not so excludable. Notwithstanding the foregoing, the rights of
Participants under this Plan shall be legally enforceable.
11.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS
If any Participant receives one or more payments or reimbursements under the Plan that are not for a permitted
Benefit, such Participant shall indemnify and reimburse the Employer for any liability it may incur for failure to
withhold federal or state income tax or Social Security talc from such payments or reimbursements. However, such
indemnification and reimbursement shall not exceed the amount of additional federal and state income tax (plus any
penalties) that the Participant would have owed if the payments or reimbursements had been made to the Participant
as regulaz 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.
11.10 FUNDING
Unless otherwise required by law, contributions to the Plan need not be placed in trust or dedicated to a specific
Benefit, but may instead be considered general assets of the Employer. Furthermore, and unless otherwise required
by law, nothing herein shall be construed to require the Employer or the Administrator to maintain any fund or
segregate any amount for the benefit of any Participant, and no Participant or other person shall have any claim
against, right to, or security or other interest in, any fund, account or asset of the Employer from which any payment
under the Plan may be made.
11.11 GOVERNING LAW
This Plan is governed by the Code and the Treasury regulations issued thereunder (as they might be amended from
time to time). In no event shall the Employer guarantee the favorable tax treatment sought by this Plan. To the extent
not preempted by Federal law, the provisions of this Plan shall be constmed, enforced and administered according to
the laws of the State of Kansas.
11.12 SEVERABILITY
If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any
other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included
herein.
11.13 CAPTIONS
The captions contained herein are inserted only as a matter of convenience and for reference, and in no way define,
limit, enlarge or describe the scope or intent of the Plan, nor in any way shall affect the Plan or the constmction of
any provision thereof.
11.14 CONTINUATION OF COVERAGE
Notwithstanding anything in the Plan to the contrary, in the event any benefit under this Plan subject to the
continuation coverage requirement of Code Section 4980B becomes unavailable, each Participant will be entitled to
continuation coverage as prescribed in Code Section 4980B, if applicable.
11.15 FAMILY AND MEDICAL LEAVE ACT
Subject to any provision in the Code, the Treasury regulations or the Employer's Family Medical Leave of Absence
Policy to the contrary, FMLA type continuation coverage shall be available to all Participants. Participants shall
have the following payment options for coverage while on unpaid Family Medical Leave Act leave:
Pre-pay before commencement of leave through pre-tax or after-tax Salary Redirection Agreement from any taxable
compensation, provided all other plan requirements are met.
Pay-as-you-go. Employees may pay their share of premium payments on the same schedule as payments would be
made if the Employee were not on leave, or under another schedule permitted under Department of Labor
regulations.
The Employer shall not be required to continue the health coverage of an Employee who fails to make required
premium payments while on FMLA leave. However, if the Employer chooses to continue the health coverage of an
Employee who fails to make required premium payment while on FMLA leave, The Employer is entitled to recoup
those payments after the Employee returns from FMLA leave.
Catch-up-Option. Under this payment option the Employer shall advance the Employee's share of group health
premiums while the Employee is on FMLA leave and thereafter shall be entitled to recover such advanced amounts
when the Employee returns from FMLA leave.
11.16 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT
Notwithstanding anything in this Plan to the contrary, this Plan shall be operated in accordance with HIPAA and
regulations thereunder.
11.17 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with USERRA and the regulations thereunder.
IN WITNESS WHEO O~JF, try's.arrtended Plan document is hereby accepted this ~~ daY
CITY OF RIVERSIDE
By p~~""' _'_" '~
EMPLOYER
WITNESS AS TO