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CCR1989057. COMMON COUNCIL - CITY OF MUSKEG0 RESOLUTION #57-89 AUTHORIZING EXECUTION OF "PREMIUM ONLY" CAFETERIA PLAN WHEREAS, it is the desire of the City to reward its employees for which provides favorable tax benefits to such employees, and service rendered to the City by the adoption of a cafeteria plan WHEREAS, the Common Council has considered the features of the City of Muskego "Premium Only Plan", which when executed and carried out, will satisfactorily provide the desired benefits to employees of the City, and WHEREAS, it is believed that the adoption of said Plan is in the mutual interest of the employees and the City. NOW, THEREFORE, BE IT RESOLVED that the Common Council of the City of Muskego, upon the recommendation of the Finance Committee, does hereby adopt the City of Muskego "Premium Only Plan" and does hereby authorize the Mayor and Clerk to execute of said Plan. said Plan and related documents necessary for the implementation BE IT FURTHER RESOLVED that the Mayor and Clerk shall be designated as Co-Administrators of the Plan. March 1, 1989. BE IT FURTHER RESOLVED that the Plan shall be effective beginning DATED THIS 28th DAY OF February , 1989. FINANCE COMMITTEE Ald. Mitchel Penovich A ATTEST : City Clerk CI!l'Y OF MUSKEGO PREMIUM ONLY PLAN SUMMARY PLAN DESCRIPTION 1/20/89 . I. 11. 111. IV . V. VI. VII. EFFECTIVE DATE The plan is effective as of March 1, 1989. A plan year begins on January 1 and ends on December 31st of each year. PLAN ADMINISTRATOR The Plan is administered by: City of Muskego W182 58200 Racine Avenue Muskego, WI 53150 The person at the City to contact regarding questions and claims is the City Clerk at the above address (phone: (414) 679-4100). PLAN SPONSOR This plan is maintained by City of Muskego PIAN NAME City of Muskego Premium Only Plan. LEGAL STATUS This Plan is designed to constitute a "cafeteria plan" under Internal Revenue Code section 125, as amended. Its purpose is to provide Employees a means of paying their share of medical and dental coverage premiums in a tax-effective manner. NO SEPARATE TRUST FUND This is not a trusteed plan nor do any separate assets exist outside of the general assets of the City of Muskego. ELIGIBLE EMPLOYEES The following persons are eligible to participate in the Plan: any individual who is employed by the City, provided City's medical or dental plans which requires an insurance that such Employee receives coverage under one of the contribution from the Employee. Such eligible Employees who are employed by the City on the Effective Date of the plan will be eligible to participate in the plan as of the -1- . Effective Date. New employees and tbose who become eligi- ble after the Effective Date will be eligible to partici- pate on the first day of the first month in which such dental plans which requires an insurance contribution from Employee is covered under one of the City's medical or the Employee. Eligible Employees who do not already par- ticipate may apply to participate during annual open enrollment periods. There are no service or age requirements other than those contained, if any, under the applicable medical plan selected by the Employee. VIII. ELECTION PROCEDURE Initial Negative Enrollment Period: An Employee who, on the Effective Date, is already covered under one of the City's medical or dental plans pursuant miums will be deemed to be an automatic Participant under to a payroll deduction for that Employee's portion of pre- this Plan and will be deemed to have authorized a salary conversion election in the same amount as is being cur- rently withheld from such Employee's salary. The City has provided an initial open enrollment period prior to the Effective Date of this Plan to provide Employees the abil- ity to elect out of this Plan if they choose to do so. Salary Conversion Elections: During December of each year, Employees will be able to elect to convert part of their salary to Premium Dollars or to change or revoke their current elections for the subsequent plan year. Premium Dollars will be applied by the City toward the payment of the Employee's share of premiums/costs of medical or dental coverage. The elec- tion will be executed on a written form provided by the Administrator. Salary Conversion Elections of New Employees: will be entitled to elect to convert a portion of their New Employees will be provided with election forms and salaries to Premium Dollars. The election period for such new Employees will be specified by the Administrator but will extend no later than the beginning of the first pay period for which the Employee's election will apply. IX. FAILURE TO ELECT AND ELECTIONS FOR SUBSEQUENT PLAN YEARS If an Employee is not an immediate Participant pursuant to the initial negative enrollment and has not executed an election to participate in this Plan, then such Employee -2- will not become a Participant. .. Nevertheless, such Employee will be allowed to execute election forms during subsequent open enrollment periods. If a Participant who has filed an election does not change or revoke such election during any subsequent open enroll- ment period, such election will continue in effect. Between the time the election is effective and the end of vocable except for a change in such election made on the plan year to which it applies, such election is irre- account of and consistent with a change in the Participant's family status (e.g., marriage, divorce, death of a spouse or child, birth or adoption of a child, and termination of a spouse's employment). X. RECORDS Records pertaining to the Plan will be kept by the City on a calendar year basis. Records pertaining to individual salary conversion elections and premium payments with respect to individual Participants will be available for inspection upon request. XI. CLAIMS PROCEDURE or participation in the Plan, you may file a written claim If you have any claim with respect to payment of premiums with the Administrator, specifying the nature of the claim and the benefit or remedy sought. The Administrator must then, within thirty (30) days provide you with a written tutes a denial of the claim, the following: specific rea- response to your claim including, if the response consti- on which the denial is based: a description of any addi- sons for the denial; specific reference to Plan provisions tional information or material necessary for you to per- fect your claim; and the steps to be taken if you wish to appeal the Administrator's decision. The claims procedure is spelled out in further detail in the Plan document itself. XII. TAX BENEFITS TO YOU The salary conversion election will reduce your gross tax- able income for Federal and State income tax purposes and for purposes of social security (FICA) tax withholding. your salary (the salary conversion amount) from taxable This is achieved by your election to convert a portion of wages to non-taxable City contributions toward your health or dental care. As a result, payment of your share of premiums for your medical or dental coverage pursuant to the Plan will occur on a "before-tax" basis. Thus, an -3- .. Employee participating in the Plan should be subject to a deduction was made on an "after-tax" basis. This has the reduced payroll tax than would have applied if the payroll result of lowering the cost to the Employee of his or her Actual savings will vary among Employees, however, due to insurance co-payment when compared to the after-tax cost. differences in income, withholding exemptions, marital status and other factors. XIII. PLAN DOCUMENT WILL CONTROL The explanation contained in this Summary Plan Description is intended only as a summary of the Plan's highlights and is not the complete Plan document. In the event of any inconsistencies between this explanation and the actual wish to read the actual Plan, a copy is available for Plan provisions, the actual Plan shall govern. If you inspection upon request to the City Clerk during regular working hours. -4-