CCR2007018COMMON COUNCIL - CITY OF MUSKEGO
RESOLUTION #018-2007
APPROVAL OF HEALTH REIMBURSEMENT ARRANGEMENT (HRA)
PLAN DOCUMENT AND ADOPTION AGREEMENT
WHEREAS, The attached Health Reimbursement Arrangement (HRA) Plan Document
and Adoption Agreement outlines the terms and conditions of the City of Muskego
Section 105 Health Reimbursement Arrangement Plan; and
WHEREAS, The Finance Committee has reviewed the documentation and has
recommended approval.
NOW, THEREFORE. BE IT RESOLVED That the Common Council of the City of
Muskego, upon the recommendation of the Finance Committee, does hereby approve
the attached .Health Reimbursement Arrangement (HRA) Plan Document and Adoption
Agreement.
BE IT FURTHER RESOLVED That the Mayor is authorized to sign the Agreement in
the name of the City.
DATED THIS 23rd DAY OF Januarv ,2007.
SPONSORED BY:
FINANCE COMMITTEE
Ald. Nancy Salentine
Ald. Eileen Madden
Ald. Neil Borgman
This is to certify that this is a true and accurate copy of Resolution #018-2007 which
was adopted by the Common Council of the City of Muskego.
1 iO7jmb
City of Muskego
HEALTH REIMBURSEMENT ARRANGEMENT (HRA)
PLAN DOCUMENT
Effective as of 01/01/2007
City of Muskego
Health Reimbursement Arrangement (HRA)
TABLE OF CONTENTS
A DO PTI 0 NAG R E E M E NT ................. ................ ...................................................................................................
3
ARTICLE 1 - FORWARD AND PURPOSE ..........................................................................................................
5
1.1
1.2
ARTICLE 2 - DEFINITIONS. AND CONSTRUCTION .......................................................................................
6
ESTABLISHMENT.... ...............,. ........................ ......... ......................... .... ..... .... .... ................................................5
PURPOSE......... .......... .......................... ......... ........... ....... ....... .......... ......... ................. ......................... ...... ..... ....5
2.1 DEFINITIONS... .......... .... .......... """" ......... .... .................................. ....... ................. ........................ ... ................6
(a) H RA. ...........................................................................,...................................................... ..........................
6
(b) Code................................................................................................... ..................................................,......
6
(c) Eligible Expenses................................................................................................... ......................................
6
(d) Dependent...................................................................................................................... .............................
6
(e) Effective Date. .... .... ..... ...... .... ................ ....... .... ........ ... ..... ........ ............................ ...... ............ ...... ........... .....
6
(f) Eligible Employee. ."......................... ......... ................ ..... .............. .................. ..,.... .............., ........................
6
(g) Employee................................................................................................................................. .....................
6
(h) Employer. """"""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""""" ...........
6
(i) Highly Compensated Individual................................................................................................"..................
6
0) Highly Compensated Participant. ..............................................................................".................................
6
(k) Participant............................................................................................................................ ...............,........
7
(I) Plan. """"""""""""""""""""""""""""'" ........ ................... .. .. .... .. ...... ......... ...... . .... ........ ... .. ...... ..... . ........ ...
7
(m) Plan Administrator. ................ ..... ............. ............. ............... ................... .................. ........ .............. ....... .....
7
(n) Plan Year..... ..... ........ ............... ........... ...... """""""" ..... ..................... ....... ....... ......... .."......... ....... ..............
7
2.2 CONSTRUCTION................ ............................................. ................................................................... ................
7
2.3 RIGHTS OF PARTICIPANTS.
............................ .......................................... ..................................,.......................
7
ART I C LE 3 - ADM INISTRA TI ON ........................................................................................................................8
3.1 PLAN ADMINISTRATOR. ................................ .......................................... ...................................................... ....8
3 .2 EXAMINATION OF RECORDS. ......................... ....................................................................................................8
3.3 RELIANCE ON TABLES, ETC. .............................................................................................................................8
3.4 RULES AND DECISIONS. ....................................................................................................................................9
3.5 FORMS AND REQUESTS FOR INFORMATION. ......................................................................................................
9
3.6 RESPONSIBILITY FOR THE PLAN. .......................................................................................................................9
ARTICLE 4 - AMENDMENT OR TERMINATION """""""""""""""""""""""""""""""""""""""""""""
1 0
4.1 AMENDMENT OF PLAN. ............................................................................... ....................................................
10
4 .2 TERMINATION OF PLAN.................................... ............... ..... ............................... ............................................
10
A R TI C LE 5 - M ISC E L LAN EO US...................... ........................................ ......................... ................... ..............
11
5.1 EMPLOYMENT RIGHTS. ................................................................................................................................... II
5.2 COMMUNICATION TO ELIGIBLE EMPLOYEES. .."""""""""""""""""""""""""""""""""""""""""""""""" II
5.3 SPEND-THRIFT CLAUSE. ................................................................................................................................. II
5.4 No GUARANTY OF TAX CONSEQUENCES.
....................................................................................................... II
5 .5 NON-DISCRIMINATION......... ...... .............................................. ....... ...... ............. .................... .......... ....... ........ II
5.6 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS. ........................................................................."...........
11
5.7 DELEGATION OF AUTHORITY BY EMPLOYER...................................................................................................12
5.8 CONSTRUCTION OF AGREEMENT..... ............. .............. ............................ ...................... ............................. ......
12
5.9 HEADINGS............... ................................................................... .............. ............................ ..........................
12
5.10 ENTIRE PLAN STATED. ................................................................................................................"................
12
5.11 ApPLICATION OF THE HIPAA PRIVACY AND SECURITY RULES .....................................................................
12
ARTICLE 6 - CLA I M S PROCED U RE................................................................................................................. 14
6.\ CLAIMS.. ....... ............................... ........... ....... ... ... .......... ........ ............ .......................... ... ... ....... ..... .................
] 4
6.2 NOTICE OF DECISION. . ...... ......... ........... ......... ........ ............ ........ ...,........ ............ ................ ..... ..... .... ....... ........
] 4
6.3 CONTENT OF NOTICE. ......... ............... ...... .,.... .............. .... ... ......... .... ........ ............ ............ ... .... ......,.. ...............
] 4
6.4 ApPEAL PROCEDURE...... .......................................................................... .......................................................
14
6.5 REVIEW PROCEDURE. ................................................. .......... ..................... .... ...... ...... ..................................... \4
6.6 DISPUTES.......... ..................................................................................................... ........................ ......... ........
15
SECTION 7 - ELIGIBILITY , PARTICIPATION AND ENROLLMENT ........................................................
16
7.1 ELIGIBILITY................. .................................... ................................................................. ...............................
] 6
7.2 COMMENCEMENT OF PARTICIPATION. ............................ .................... .............................................................
16
7.3 TERMINATION OF PARTICIPATION. ...................................................................................................................16
7.4 ENROLLMENT. ............................................................................ ......... ........ ...................................................
16
(a) Enrollment Periods. ..................................................................................................................................16 (b) Special Enrollment Events. .......................................................................................................................
17
ARTICLE 8 - FAMILY AND MEDICAL LEAVE, COBRA, HIP AA & USERRA .........................................17
8.1
8.2
8.3
8.4
FAMILY AND MEDICAL LEAVE.......................................................................................................................17
HEALTH CARE CONTINUAllON. ........... .............. ............... ..............................................................................
17
CERTIFICATES OF CREDITABLE COVERAGE. ....................................................................................................
] 7
MILITARY LEAVE..... ....... ................................. ...... ............ ..................... ........... ................ ............. ... .............
18
ARTICLE 9 - REIMBURSEMENT OF EXPENSES...........................................................................................19
9.1 ELIGIBLE EXPENSES. .......................................................................................................................................
19
9.2 MAXIMUM ANNUAL REIMBURSEMENTS..........................................................................................................\9
9.3 TIMING OF REIMBURSEMENT. ......................................................................................................................... \9
9.4 CLAIMS FOR REIMBURSEMENT. .............,....... .............. ....... .................... .........................................................
19
AR TI C LEI O. ENTIRE A G RE EM E NT ...... ........................... ..... ................. ............................................... .........
20
Diversified Benefit Services, Inc. - Copyright 2004 2
City of Muskego Section 105
Health Reimbursement Arrangement Plan
Adoption Agreement
The undersigned Employer hereby adopt(s) this Adoption Agreement, which sets forth some of the terms and
conditions that Diversified Benefit Services, Inc. will use in construing the Employer's Health Reimbursement
Arrangement (HRA) Plan Document and Summary Plan Description.
This Adoption Agreement shall establish a new Plan which shall become effective as of 01/01/2007
(hereinafter called the Effective Date).
Emplover (and for Service of Leqal Process)
City of Muskego
W182 S8200 Racine Avenue
Muskego, WI 53150
Phone: 262-679-5589 Fax:262-679-5630
Plan Sponsor
City of Muskego
Emplover Identification Number (FEIN):
39-6006023
Plan Identification Number (PIN):
505
Oriainal Effective Date of the Plan
01/01/2007
Plan Year
01/01 to 12/31
Eligibilitv
All full-time, salaried and hourly employees working at least 20 hours per week average shall be eligible for
the Plan the first of the month following date of employment. All "retirees" that are covered under the Employer's
group health plan at the time of retirement shall be eligible to receive benefits under the Plan as of their date of
retirement. The Employer shall determine the criteria (through policy, contract or collective bargaining agreement)
for qualifying as a "retiree." All temporary, seasonal, non-resident alien, and any other employees working less
than the above listed hours requirement shall be excluded from the Plan.
Any individual whom the Plan Sponsor determines is not an Eligible Employee shall not be treated as an
Eligible Employee hereunder solely because he has been classified or reclassified as an employee of the
Employer by any arbitrator, court or other governmental entity.
Available Benefits
Reimbursement of Health Insurance Deductibles
Maximum Plan Year Reimbursement Amount
Single Deductible:
Employee Plus One Deductible:
Family Deductible:
$ 750
$ 1,500
$ 1,500
Diversified Benefit Services, Inc. - Copyright 2004 3
Timing of Reimbursement
Employees may receive reimbursements pursuant to the following schedule: The Employer paid dollar values
may be available immediately at the commencement of the Participant's participation.
The deadline to submit claims will be 12:00 p.m. CST on Friday each week. Claims submitted by the deadline
will be processed on the following Friday.
Claims for expenses incurred during the Plan Year may be submitted up to 60 days after the end of the Plan
Year.
Diversified Benefit Services, Inc - Copyright 2004 4
ARTICLE 1 - FORWARD AND PURPOSE
1.1 Establishment.
Effective 01/01/2007 City of Muskego ("Employer"), established the City of Muskego Section 105 Health
Reimbursement Arrangement Plan ("Plan").
1.2 Purpose.
The Plan is established for the purpose of providing reimbursement for certain health expenses incurred by
Plan Participants and/or their Dependents. The Plan is intended to be a Health Reimbursement Arrangement
under Internal Revenue Code ("Code") Section 105 and shall be administered in accordance with Code
Section 105 and I RS Notice 2002-45 and Revenue Ruling 2002-41.
Diversified Benefit Services, Inc. - Copyright 2004 5
ARTICLE 2 - DEFINITIONS AND CONSTRUCTION
2.1 Definitions.
The words and phrases defined in this section shall have the following meanings for purposes of these Plans
unless a different meaning is plainly required by the context.
(a) HRA.
The City of Muskego Section 105 Health Reimbursement Arrangement Plan, as set forth herein, as
amended from time to time.
(b) Code.
The Internal Revenue Code of 1986, and regulations and rulings issued thereunder, as amended
from time to time. Each reference to any section or subsection of the Code includes a reference to
any comparable or succeeding provisions of any legislation, which amends, supplements, or replaces
such section or subsection.
(c) Eligible Expenses.
Expenses which are eligible for reimbursement pursuant to the expenses stated in the Available
Benefits section of the Adoption Agreement.
(d) Dependent.
For purposes of the HRA, a Dependent is any person who falls within the definition of Dependent
provided in Code section 152, without regard to subsections (b)(1), (b)(2) or (d)(1)(B) thereof.
(e) Effective Date.
Effective date of the Plan as stated in the Adoption Agreement.
(f) Eligible Employee.
Each Employee or retiree (as that term is defined by the Employer) who meets the requirements set
forth in the Adoption Agreement.
(g) Employee.
Any person who is an employee (such term having its customary common law meaning) of the
Employer and who is receiving remuneration for personal services rendered to the Employer.
Employee for purposes of this Plan shall not include any independent contractor, leased employee or
temporary help person, as such persons are classified by the Employer, in its sole discretion. Any
classification or reclassification of an independent contractor, leased employee or temporary help
person as an "employee" or "statutory employee" of the Employer by any court, state or local agency
shall be of no affect as the exclusion of such individual from participation in the Plan.
(h) Employer.
City of Muskego
(i) Highly Compensated Individual.
An individual who meets the criteria identified in Code section 105(h).
(j) Highly Compensated Participant.
A Participant who is described in section (i) above.
Diversified Benefit Services, Inc. - Copyright 2004 6
(k) Participant.
For purposes of the Plan, an Employee who has satisfied the requirements as set forth in the
Eligibility section of the Adoption Agreement.
(I) Plan.
The City of Muskego Section 105 Health Reimbursement Arrangement Plan.
(m) Plan Administrator.
The Employer or its successor(s), delegate(s), and/or assign(s), which shall have authority to
administer the Plan as provided in Article 3 below.
(n) Plan Year.
The Plan Year shall be as stated in the Plan Year section in the Adoption Agreement.
2.2 Construction.
As used in this Plan, a pronoun or adjective in the masculine gender includes the feminine gender, and the
singular includes the plural, unless the context clearly indicates otherwise. The words "hereof," "hereunder,"
and other similar compounds of the word "here" mean and refer to the entire Plan, not to any particular
provision or section.
2.3 Rights of Participants.
All Participants shall be bound by the terms of the Plan, including all amendments thereto made in the manner
authorized herein. Participants shall also be entitled to all of the rights and privileges afforded thereby,
including those granted specifically by the Code, which are hereby adopted by reference as part of this Plan.
The Plan Administrator intends that Plan terms, including those relating to participation and benefits, are
legally enforceable.
Diversified Benefit Services, Inc. - Copyright 2004 7
ARTICLE 3 - ADMINISTRATION
3.1 Plan Administrator.
The administration of each Plan shall be under the supervision of the Plan Administrator. It shall be a principal
duty of the Plan Administrator to see that the Plan is carried out, in accordance with its terms, for the exclusive
benefit of the Employees entitled to participate in the Plan without discrimination among them. The Plan
Administrator has full power to administer the Plan in all of its details, subject to applicable requirements of
law. For this purpose, the Plan Administrator's powers include, but are not limited to, the following authority, in
addition to all other powers provided herein:
(a) to make and enforce such rules and regulations as it deems necessary or proper for the efficient
administration of the Plan;
(b) to construe and interpret all terms of the Plan, such interpretation to be made in good faith and in
accordance with the common meaning of such terms;
(c) to decide all questions arising under the Plan, including questions regarding the eligibility of any
person to participate in the Plan on a basis that is not discriminatory in favor of highly compensated
individuals (as defined in Code section 105(h)) and as consistent with the written terms of the Plan;
(d) to compute the amount of benefits which will be payable to any Participant or other person in
accordance with the provisions of the Plan, and to determine the person or persons to whom such
benefits shall be paid;
(e) to authorize the payment of benefits;
(f) to appoint or employ such agents, counsel, accountants, consultants, actuaries, and other persons
as may be required to assist in administering the Plan; and
(g) to allocate and delegate its responsibilities under the Plan and to designate other persons to carry
out any of its responsibilities under the Plan, any such allocation, delegation, or designation to be by
written instrument and in accordance with the applicable requirements of law.
In addition to the foregoing, the Plan Administrator shall have full authority to administer and interpret the
terms of this Plan with any such determination being final and binding upon the parties. The Plan
Administrator has authority under this Plan to determine all matters related to the Plan, including benefit
eligibility and the payment of benefits, with such determination being conclusive. The review of any
determination by the Plan Administrator under this Plan shall confirm the decision of the Plan Administrator
unless it is determined by the reviewing tribunal that the Plan Administrator acted in an arbitrary and capricious
manner in reaching its determination. The Plan Administrator shall have full authority to recover erroneous
payments under the Plan.
3.2 Examination of Records.
The Plan Administrator will make available to each Participant such records under the Plan as they pertain to
him for examination at reasonable times during normal business hours.
3.3 Reliance on Tables, Etc.
In administering the Plan, the Plan Administrator will be entitled, to the extent permitted by law, to rely on all
tables, valuations, certificates, opinions, and reports which are furnished by accountants, counsel, or other
experts employed or engaged by the Plan Administrator.
Diversified Benefit Services, Inc. - Copyright 2004 8
3.4 Rules and Decisions.
The Plan Administrator may adopt such rules and procedures as it deems necessary, desirable, or appropriate
for the administration of the Plan. All rules, procedures, and decisions of the Plan Administrator shall be
uniformly and consistently applied to all Participants in similar circumstances. When making a determination
or calculation, the Plan Administrator shall be entitled to rely upon information furnished by a Participant, a
Dependent, the duly authorized representative of a Participant or Dependent, or the legal counsel of the Plan
Administrator.
3.5 Forms and Requests for Information.
The Plan Administrator may require a Participant to complete and file such forms as are provided for herein
and all other forms prescribed by the Plan Administrator and to furnish all pertinent information requested by
the Plan Administrator. The Plan Administrator may rely upon all such information, including the Participant's
current electronic mail and U.S. postal mailing addresses.
3.6 Responsibility for the Plan.
The complete authority to control and manage the operation and administration of the Plan shall be placed
with the Plan Administrator, who shall be solely responsible for the operation of the Plan in accordance with its
terms.
Diversified Benefit Services, Inc. - Copyright 2004 9
ARTICLE 4 - AMENDMENT OR TERMINATION
4.1 Amendment of Plan.
The Employer reserves the right at any time or times and for any reason to alter or amend the provisions of
the Plan in whole or in part by a written instrument, duly executed and acknowledged; provided, however, that
any such amendment shall not affect a Participant's right to reimbursement of claims already incurred.
Notwithstanding the foregoing, the Employer shall have the limited right to amend the Plan at any time,
retroactively or otherwise, in such respects and to such extent as may be necessary to fully qualify it as a
Health Reimbursement Arrangement under existing and applicable laws and regulations, including Code
section 105, and if and to the extent necessary to accomplish such purpose, may by such amendment
decrease or otherwise affect benefits to which Participants may have already become entitled.
4.2 Termination of Plan.
The Employer has established the Plan with the intention and expectation that it will be continued indefinitely.
However, the Employer reserves the right at any time to terminate or partially terminate the Plan for any
reason whatsoever, as determined in the sole discretion of the Employer; provided, however, that such
termination or partial termination shall not affect a Participant's right to reimbursement of claims already
incurred.
Diversified Benefit Services, Inc. - Copyright 2004 10
ARTICLE 5 - MISCELLANEOUS
5.1 Employment Rights.
Under no circumstances shall the terms of employment of any Participant be modified or in any way affected
hereby. The Plan shall not constitute a contract of employment nor afford any individual any right to be
retained in the employ of the Employer.
5.2 Communication to Eligible Employees.
The Employer will promptly notify all Eligible Employees of the benefits available and terms of the Plan.
5.3 Spend-Thrift Clause.
To the extent provided by law, Participants are prohibited from anticipating, encumbering, alienating, or
assigning any of their rights, claims, or interest in the Plan, and no undertaking or attempt to do so shall in any
way bind the Plan Administrator or be of any force or effect whatsoever. Furthermore, to the extent provided
by law, no such rights, claims, or interest of a Participant in each Plan shall in any way be subject to such
Participant's debts, contracts, or engagements, nor to attachment, garnishment, levy, or other legal or
equitable process. Notwithstanding anything herein to the contrary, to the extent permissible under applicable
law, a Participant's interest hereunder is subject to all bona fide and existing debts owed by such Participant to
the Plan.
5.4 No Guaranty of Tax Consequences.
While it is intended that the Plan will satisfy the relevant provisions of the Code as set forth above, the Plan
Administrator makes no representations or assurances that any amounts paid to or for the benefit of a
Participant under any Plan will be excludable from the Participant's gross income for federal or state income or
employment tax purposes, or that any 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 tax purposes and to notify the Plan
Administrator if the Participant has reason to believe that any such payment is not so excludable.
5.5 Non-Discrimination.
In accordance with Code section 105(h), the Plan is intended not to discriminate in favor of Highly
Compensated Individuals as to eligibility to participate, nor Highly Compensated Participants as to benefits. If,
in the operation of the Plan, the Plan discriminates in any unlawful manner (or is in danger of so
discriminating), then notwithstanding any other provision contained herein, the Plan Administrator shall reduce
or adjust such contributions and/or benefits under the Plan as shall be necessary to assure that, in the
judgment of the Plan Administrator, the Plan thereafter will not discriminate. All rules, procedures, and
decisions of the Plan Administrator shall be adopted, made, and/or applied in such fashion that they do not
unlawfully discriminate in favor of Highly Compensated Individuals or Highly Compensated Participants.
5.6 Indemnification of Employer by Participants.
If any Participant receives one or more payments or reimbursements under the Plan that are not for the
intended purposes of the Plan (~, HRA benefits which are not for Qualifying Medical Care), such Participant
shall indemnify and reimburse the Plan for any liability it may incur for failure to payor withhold federal or state
income or employment tax from such payment or reimbursements. However, such indemnification and
reimbursement shall not exceed the amount of additional federal and state income tax that the Participant
would have owed if the payments or reimbursements had been made to the Participant as regular cash
compensation, plus the Participant's share of any Social Security tax that would have been paid on such
compensation, less any such additional income and Social Security tax actually paid by the Participant.
Diversified Benefit Services, Inc. - Copyright 2004 11
5.7 Delegation of Authority by Employer.
Whenever the Employer under the terms of this Agreement is permitted or required to do or perform any act or
matter or thing, it shall be done and performed by any officer or individual thereunto duly authorized by the
Employer.
5.8 Construction of Agreement.
Except where preempted by the Code, this Plan shall be construed according to the laws of the State of
Wisconsin, and all provisions hereof shall be administered according to, and its validity and enforceability shall
be determined under, the laws of such state.
5.9 Headings.
The headings of sections and subsections are for ease of reference only and shall not be construed to limit or
modify the detailed provisions hereof.
5.10 Entire Plan Stated.
This document including the Adoption Agreement sets forth the entire Plan. No other employee benefit or
employee benefit plan, which is or may hereafter be maintained by the Plan Administrator on a non-elective
basis, shall constitute a part of this Plan.
5.11 Application of the HIPAA Privacy and Security Rules
The Plan will use Protected Health Information (hereinafter referred to as "PHI" and as
defined in 45 C.F.R. 9 160.103) in accordance with the uses and disclosures permitted by the
Privacy and Security Rules issued pursuant to the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA Privacy Rules" and "HIPAA Security Rules," respectively).
Specifically, the Plan will use and disclose PHI for purposes related to health care treatment,
payment for health care and health care operations as defined in the Notice of Privacy
Practices distributed to Plan Participants. With respect to PHI, the Employer agrees to the
following conditions:
(a)
(b)
Use or disclose PHI only as permitted or required by the HIPAA Privacy Rules;
Ensure that any agents, including a subcontractor, to whom the Employer provides
PHI received from the Plan agree to the same restrictions and conditions that apply
to the Employer with respect to such PHI;
(c) Not use or disclose PHI in connection with any other benefit or employee benefit plan
of the Employer unless authorized by the individual;
(d) Report to the Plan any unauthorized PHI use or disclosures provided of which it
becomes aware;
(e) Make PHI available for amendment and incorporate any amendments to PHI in
accordance with the HIPAA Privacy Rules;
(f) Make available the information required to provide an accounting of disclosures to a
requesting individual;
(g) Make internal practices, books and records relating to the use and disclosure of PHI
received from the Plan available to the Secretary for the Department of Health and
Human Services for the purposes of determining the Plan's compliance with the
HIPAA Privacy Rules; and
Diversified Benefit Services, Inc. - Copyright 2004 12
(h) If feasible, return or destroy all PHI received from the Plan that the Employer still
maintains and retain no copies of such PHI when no longer needed for the purpose
for which disclosure was made (or if return or destruction is not feasible, limit further
uses and disclosures to those purposes that make the return or destruction
infeasible).
In accordance with the HIPAA Privacy Rules, only the individuals listed in the Notice of
Privacy Practices may be given access to PHI. If the persons described therein do not act in
accordance with the HIPAA Privacy Rules, the Employer shall impose disciplinary sanctions.
The Employer further agrees that if it creates, receives or transmits Electronic Protected
Health Information (hereinafter referred to as "e-PHI" and as defined in 45 C.F.R. 9160.103)
(other than enrollment/disenrollment information and Summary Health Information (as
defined in 45 CFR. 9 164.501), and information disclosed pursuant to a signed authorization
that complies with the requirements of 45 C.F.R. 9 164.508, which are not subject to these
restrictions) on behalf of the Plan, it shall:
(a)
(b)
(c)
(d)
Implement administrative, physical and technical safeguards that reasonably and
appropriately protect the confidentiality, integrity, and availability of the e-PHI that it
creates, receives, maintains, or transmits on behalf of the Plan;
Ensure that the adequate separation between the Plan and the Employer (i.e., the
firewall) required by 45 C.F.R. 9 504(f)(2)(iii) is supported by reasonable and
appropriate security measures;
Ensure that any agent, including a subcontractor, to whom it provides e-PHI agrees
to implement reasonable and appropriate security measures to protect the
information; and
Report to the Plan any security incident of which it becomes aware, as follows: the
Employer will report to the Plan, with such frequency and at such times as agreed,
the aggregate number of unsuccessful, unauthorized attempts to access, use,
disclose, modify, or destroy e-PHI or to interfere with systems operations in an
information system containing e-PHI; in addition, the Employer will report to the Plan
as soon as feasible any successful unauthorized access, use, disclosure,
modification, or destruction of e-PHI or interference with systems operations in an
information system containing e-PHI.
The Plan shall disclose PHI and e-PHI to the Employer only upon the receipt of a certification by the Employer
that the Plan has been amended to incorporate the restrictions of the HIPAA Privacy and HIPAA Security
Rules and that the Employer agrees to the conditions of disclosure set forth herein. The Plan shall not
otherwise disclose PHI or e-PHI to the Employer.
Diversified Benefit Services, Inc. - Copyright 2004 13
ARTICLE 6 - CLAIMS PROCEDURE
6.1 Claims.
A Participant shall make a claim for benefits by making a request therefore in accordance with the appropriate
provisions of this Section.
6.2 Notice of Decision.
If a claim, as described under section 6.1, is wholly or partially denied, notice of the decision, in accordance
with section 6.3, shall be furnished to the Participant within a reasonable period of time.
6.3 Content of Notice.
The Plan Administrator shall provide every Participant who is denied a claim for benefits written notice setting
forth, in a manner calculated to be understood by the Participant, the following:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions upon which the denial is based;
(c) a description of any additional material or information necessary for the Participant to perfect the
claim and an explanation of why such material or information is necessary;
(d) an explanation of the Plan's claims review procedure, as set forth below in sections 6.4 and 6.5
hereof.
6.4 Appeal Procedure.
The purpose of the review procedures set forth in this section and in section 6.5 is to provide a procedure by
which a Participant, under the Plan, may have reasonable opportunity to appeal denial of a claim to the
Appeals Committee (comprised of members appointed by the Plan Administrator) for a full and fair review. To
accomplish that purpose, the Participant, or his or her duly authorized representative, may:
(a) request review upon written application to the Appeals Committee;
(b) review pertinent Plan documents; and
(c) submit issues and comments in writing.
A Participant (or his or her duly authorized representative) shall request a review by filing a written application
for review with the Appeal$ Committee at any time within sixty (60) days after the receipt by the Participant of
written notice of the denial of his or her claim.
6.5 Review Procedure.
Decision on review of a denied claim may be made in the following manner:
(a) The decision on review may be made by the Plan Administrator, which may, in its discretion, hold
a hearing on the denied claim.
(b) The decision on review may be in writing and may include specific reasons for the decision and
specific references to the pertinent Plan provisions on which the decision is based and may be written
in a manner calculated to be understood by the Participant.
(c) In the event that the decision is not furnished within a reasonable period of time, the claim shall be
deemed denied on review.
Diversified Benefit Services, Inc. - Copyright 2004 14
6.6 Disputes.
If a dispute arises with respect to any matter under any Plan, the Plan Administrator may refrain from taking
any other or further action in connection with the matter involved in the controversy until the dispute has been
resolved.
Diversified Benefit Services, Inc. - Copyright 2004 15
SECTION 7 - ELIGIBILITY, PARTICIPATION AND ENROLLMENT
7.1 Eligibility.
Each Employee of the Employer is eligible to participate in the Plan as set forth in the Adoption Agreement.
7.2 Commencement of Participation.
An Eligible Employee shall commence (or recommence) participation in the Plan on the latest of the following
dates:
(a) the Effective Date of the Plan;
(b) the first day of the first month commencing after attainment of Eligible Employee status; or
(c) the date as determined by the Plan Administrator.
7.3 Termination of Participation.
A Participant shall continue to participate in the Plan until the earlier of the following dates:
(a) the date the Participant terminates employment by death, disability, or other separation from
service unless otherwise specified in the Adoption Agreement; or
(b) the date the Participant ceases to work for the Employer, or ceases to be eligible for classification
(except as otherwise provided herein) as an Eligible Employee.
(c) notwithstanding the foregoing, retirees may continue in the Plan pursuant to the Employer's
policies and on the basis of self-payment of premiums.
7.4 Enrollment.
An Eligible Employee may enroll (or re-enroll) in the Plan by submitting to the Plan Administrator, during an
enrollment period described in subsection (a) below, an election form which specifies an election to participate
in the Plan. A Participant's election form shall not be effective prior to the date such form is submitted to the
Plan Administrator. Any election form submitted by a Participant in accordance with this section shall remain
in effect until the earlier of the following dates: the date the Participant terminates participation in the Plan or
the effective date (as determined by the Plan Administrator) of a subsequently filed election form submitted
pursuant to subsections (a)(i) and (ii) below. For purposes of this Section 7.4 the term "Election Form" may
include an enrollment form used by the Employee for Employee Enrollment in an underlying Health Insurance
Plan.
(a) Enrollment Periods.
(i) Each Participant shall have an "initial enrollment period" during which to make his/her
election to participate in the Plan. The initial enrollment period commences on the first day of
the first month commencing after attainment of Eligible Employee status.
(ii) Each Participant shall have a "regular enrollment period" during which to make his/her
election for the immediately ensuing Plan Year. The regular enrollment period for such Plan
Year shall commence 30 days before the last day of the prior Plan Year and shall terminate
on the last day of such prior Plan Year.
(iii) Each Participant who experiences a "special enrollment event" as provided in
paragraph (b) below, shall have a "special enrollment period" during which to make his/her
Diversified Benefit Services, Inc. - Copyright 2004 16
election to participate in the Plan. The special enrollment period shall begin on the date of
his or her special enrollment event and shall terminate 30 days thereafter.
(b) Special Enrollment Events.
If a Participant declines to enroll in the Plan because of other health insurance coverage, the
Participant may in the future be able to enroll himself or herself in the Plan upon the involuntary loss
of that coverage. Such involuntary loss of coverage will be considered a "special enrollment event"
pursuant to subsection (a)(iii) above. In addition, marriage, birth, adoption or placement for adoption
will be considered "special enrollment events" pursuant to subsection (a)(iii) above.
ARTICLE 8 - FAMILY AND MEDICAL LEAVE, COBRA, HIPAA & USERRA
8.1 Family and Medical Leave.
If the Employer is subject to state or federal family and medical leave laws, the Participant may have the right
to continue to participate in the Plan while on family or medical leave on the same terms and conditions as if
the Participant had not taken the leave.
8.2 Health Care Continuation.
This Section 8.2 shall only apply to the Plan if the Employer is subject to the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"). A Participant and/or his or her spouse and Dependents under the
circumstances described below may elect to continue the coverage elected under the Plan even though the
Participant's coverage would normally terminate pursuant to section 7.3 above. Those circumstances are the
death of the Participant, the termination (other than by reason of gross misconduct) or reduction of hours of
the Participant's employment with the Employer, the divorce or legal separation of the Participant from his or
her spouse, the Participant becoming entitled to benefits under Medicare, or a Dependent child ceasing to be
a Dependent child under the terms of the Plan.
The election period begins when coverage would otherwise terminate under the Plan and ends sixty (60) days
after the later of the date when coverage would otherwise terminate or the date notice of the right to continue
coverage is provided by the Plan Administrator. The Plan may charge a premium to the Participant, spouse or
Dependent child as the case may be for any period of continuation coverage equal to not more than 102% of
its cost of providing coverage for the period to similarly situated Participants, spouses or Dependents as the
case may be; provided, however, that in the event continuation coverage is extended from 18 to 29 months
due to disability as described below, the premium charges for the additional 11 months may be 150% of the
cost of providing coverage to similarly situated Participants, spouses or Dependents. Continuation coverage
will extend for a period of not more than 36 months (18 months if the Participant terminates or is terminated
from employment with the Employer or reduced or has his or her hours of service with the Employer reduced
so as no longer to be a Participant, and 29 months if the party electing continuation coverage is determined by
the Social Security Administration to be disabled at the time of the termination or reduction or 60 days
thereafter) but may extend it for a shorter period of time if: (a) the Plan Administrator ceases to provide any
group health plan to any Employee; (b) the premiums described above are not paid within thirty (30) days of
their due dates; or (c) a party electing continuation coverage becomes covered under another group health
plan that does not impose any pre-existing condition limitation or exclusion on such a party or the party
becomes entitled to Medicare benefits. The Plan, the Employer, the Plan Administrator and any party electing
continuation coverage shall comply with the notice and all other requirements of Code section 4980B(f), all of
which requirements are incorporated herein by reference. This section 8.3 is intended to qualify this Medical
Reimbursement Plan under the Consolidated Omnibus Budget Reconciliation Act of 1985, P.L. 99-272, as
amended from time to time, and shall be interpreted in such a manner as to effectuate that intention.
8.3 Certificates of Creditable Coverage.
The Health Insurance Portability and Accountability Act ("HIPAA") requires the Plan to issue a certificate of
creditable coverage to the following individuals under the following circumstances:
Diversified Benefit Services, Inc - Copyright 2004 17
(a) an individual who is entitled to elect continuation coverage pursuant to section 8.2 above;
(b) an individual who loses coverage under the Plan and who is not entitled to elect continuation
coverage pursuant to section 8.2 above;
(c) an individual who has elected continuation coverage pursuant to section 8.2 above either within a
reasonable period of time after the Plan learns that the continuation coverage ceased or, if applicable,
within a reasonable time after the individual's grace period for the payment of continuation coverage
premiums ends.
8.4 Military Leave.
The Uniformed Services Employment and Reemployment Rights Act ("USERRA") requires that the Employer
continue to provide Plan coverage for Participants during a military leave that is covered by USERRA. The
coverage provided must be identical to the coverage provided under the Plan for similarly situated active
Participants. This means that if the coverage for similarly situated active Participants is modified during an
individual's military leave, coverage for the individual on military leave will also be modified. The required
duration of continued coverage under USERRA shall not exceed 24 months, and shall run concurrently with
any other continuation coverage available to the Participant, including under COBRA.
Diversified Benefit Services, Inc. - Copyright 2004 18
ARTICLE 9 - REIMBURSEMENT OF EXPENSES
9.1 Eligible Expenses.
The Plan provides reimbursement for the expenses as stated in the Available Benefits section of the Adoption
Agreement.
9.2 Maximum Annual Reimbursements.
The maximum amount of expenses for which a Participant may receive reimbursement under the Plan in a
given Plan Year as stated in the Adoption Agreement. For a Participant that enrolls in the Plan during the Plan
Year, the Maximum Reimbursement Amount will be available for the remainder of that Plan Year.
9.3 Timing of Reimbursement.
Participants will be able to receive reimbursements based upon the schedule as outlined in the Adoption
Agreement.
9.4 Claims for Reimbursement.
A Participant may apply for reimbursement of expenses eligible for reimbursement pursuant to the Available
Benefits section of the Adoption Agreement that were incurred by the Participant during the Plan Year by
submitting a claim form in writing to the Plan Administrator on or before the 60th day following the close of the
Plan Year, in such form as the Plan Administrator may prescribe. The claim form shall set forth: (a) the
amount, date and nature of the expense with respect to which a benefit is requested; (b) the name of the
person, organization or entity to which the expense was or is to be paid; (c) the name of the person for whom
the expense was incurred, and, if such person is not the Participant requesting the benefit, the relationship of
such person to the Participant; and (d) the amount recovered, or expected to be recovered, under any
insurance agreement or other plan, with respect to the expense. Such claim form shall be accompanied by
bills, invoices, receipts, canceled checks or other statements from an independent third party showing the
amounts of such expenses, together with any additional documentation which the Plan Administrator may
request.
Diversified Benefit Services, Inc. - Copyright 2004 19
ARTICLE 10. ENTIRE AGREEMENT
This document sets forth the entire Plan. Except as provided in this Plan, no other employee benefit plan which
is, or may hereafter be, maintained by the Employer on a non-elective basis shall constitute a part of this Plan.
IN WITNESS WHEREOF, the Plan Sponsor has caused this Plan to be executed this ß. day of
~ ,J.:dJ, to be effective as stated in the Adoption Agreement.
::onkZ2íL ~~ (signat~LJ
.--, ,- Name: V IÞ It i'( fl- J 0 1--1 r-r ~ .:;) ~r
(please print name)
~
Title: ;1,1 ~ y 0 fL-
Diversified Benefit Services, Inc. - Copyright 2004 20
N: \DOCS\07 9 ~ 3 \075 93\TXS2596. DOC