SWEET HOME SCHOOL DISTRICT. SUMMARY PLAN DESCRIPTION Flexible Spending Account

Transcription

1 SWEET HOME SCHOOL DISTRICT SUMMARY PLAN DESCRIPTION Flexible Spending Accunt Effective: 10/1/2016 This dcument explains in detail the peratin and rules that gvern yur Plan. Sme features f a Flexible Spending Accunt described in this Summary Plan Descriptin may nt apply. Refer t Sectin II Yur Plan at a Glance t determine the specific features yur Emplyer ffers. All participants must receive a cpy f this Summary Plan Descriptin. PPDB2082

2 Table f Cntents I. Intrductin... 3 II. Yur Plan at a Glance III. Participatin in the Plan IV. Cmpnent Optins Premium Payment Cmpnent Health FSA Cmpnent DCAP Cmpnent V. Administrative Prvisins Funding and Type f Plan Administratin Electin Changes Family and Medical Leave Act (if applicable) Use-it-r-Lse-it Rule Hw Benefits are Taxed The Plan Can Be Changed Hw t File a Reimbursement Request Handling Denied Claims Appeals ERISA Rights HIPAA Privacy Rights VI. Ntices Required by Law FSA Summary Plan Descriptin Page 2 ver

3 SWEET HOME SCHOOL DISTRICT SUMMARY PLAN DESCRIPTION FLEXIBLE SPENDING ACCOUNT I. Intrductin This Summary Plan Descriptin (SPD) prvides, in general terms, the main features f the SWEET HOME SCHOOL DISTRICT Flexible Spending Accunt Plan (the Plan ) and the related Premium Payment Cmpnent, Health FSA Cmpnent, and DCAP Cmpnent, hw it can wrk fr yu, and hw it can benefit yu. Such plans are als knwn as cafeteria plans, r Sectin 125 plans. Under the Plan, yu may chse t redirect a prtin f yur wages t pay fr certain benefits fr yu, yur spuse, and yur dependents with pre-tax dllars instead f after-tax dllars. Participating in the Plan will reduce the amunt f yur taxable cmpensatin. Accrdingly, there culd be a decrease in yur Scial Security benefits and/r ther benefits (e.g., pensin, disability, and life insurance), which are based n taxable cmpensatin. Hwever, the tax savings that yu realize thrugh Plan participatin will ften mre than ffset any reductin in ther benefits. Alternatively, eligible Emplyees may chse t pay fr any f the benefits with after-tax cntributins n a payrll-reductin basis. Yu shuld read this SPD carefully s that yu understand the prvisins f the Plan and the benefits yu will receive. We want yu t be fully infrmed f the benefits available t yu under the Plan bth befre yu enrll and while yu are a Participant. Yu shuld direct any questins yu have t the Emplyer. A cpy f yur Plan Dcument is n file at yur Emplyer s ffice and may be read by yu, yur Beneficiaries, r yur legal representatives at any reasnable time. IF THERE IS A CONFLICT BETWEEN THIS SUMMARY PLAN DESCRIPTION AND THE PLAN DOCUMENT, THE PLAN DOCUMENT WILL TAKE PRECEDENCE. The prvisins f the Plan, as initially adpted r subsequently amended and restated, as the case may be, are effective 10/1/2016, thrugh 9/30/2017. Yur Plan s recrds are maintained n a fiscal perid knwn as the Plan Year. This SPD des nt describe the Grup Spnsred Insurance. The prvisins f this Plan are nt intended t verride any exclusins, eligibility requirements, r waiting perids specified in the Grup Spnsred Insurance plan dcuments. Assistance in Other Languages Plan Participants wh d nt speak English may cntact PacificSurce Administratr s Custmer Service Department fr assistance. PacificSurce Administratrs can usually arrange fr a multilingual staff member r interpreter t speak with them in their native language. FSA Summary Plan Descriptin Page 3 ver

4 II. Yur Plan at a Glance PERIOD OF COVERAGE and PLAN YEAR f this Plan: 10/1/2016 thrugh 9/30/2017 Cafeteria Plan Name: SWEET HOME SCHOOL DISTRICT Three Digit Plan Number: 509 Type f Legal Entity: Emplyer/Plan Spnsr: Benefits Crdinatr: Legal Representative: Plan Administratr: Third Party Administratr: Secure Web Prtal (TPA): Claim Mailing Address (TPA): Emplyer Representative r Named Fiduciary: Gvt Entity SWEET HOME SCHOOL DISTRICT 1920 LONG ST SWEET HOME, OR Human Resurces/Benefits Representative (541) SWEET HOME SCHOOL DISTRICT SWEET HOME SCHOOL DISTRICT PacificSurce Administratrs, Inc. PO Bx Springfield, OR Phne: (800) FAX: (866) PacificSurce Administratrs, Inc. PO Bx 2797 Prtland, OR SWEET HOME SCHOOL DISTRICT The HIPAA Effective date: 10/1/2016 HIPAA Privacy Officer: SWEET HOME SCHOOL DISTRICT FSA Summary Plan Descriptin Page 4 ver

5 BENEFIT PLANS: The administrative plan expenses are paid by the Emplyer. The fllwing cmpnents are ffered under the Flexible Spending Accunt. Yu may elect: Premium Payment Cmpnent: Yur salary reductins will be used t pay the premium fr medical and hspitalizatin insurance, majr medical insurance, dental insurance, visin insurance, and/r ther qualified benefits under Sectin 125 fr yu and yur eligible family members. Health FSA Cmpnent: Yur salary reductins will be depsited int a Health FSA Accunt frm which funds will be withdrawn t reimburse yu fr eligible medical care expenses incurred by yu and yur eligible family members. The electin may be fr: General-Purpse Health FSA (HRE) Optin Maximum Salary Reductin: $2,550 Minimum Salary Reductin: $0 Limited-Scpe Health FSA (LSFSA) Optin (Visin/Dental Care) Maximum Salary Reductin: Nt Available Minimum Salary Reductin: Nt Available Limited-Purpse Health FSA (LFSA) Optin (Visin/Dental/Preventive Care) Maximum Salary Reductin: Nt Available Minimum Salary Reductin: Nt Available Mid-year Electins: Mid-year hires will be pr-rated based n the plan maximum s as t nt exceed the IRS Federally mandated maximum. Allws all applicable Change in Status ptins: N DCAP Cmpnent: Yur salary reductins will be depsited int a Dependent Care Expense (DCE) Accunt frm which funds will be withdrawn t reimburse yu fr eligible dependent care expenses. Maximum Salary Reductin: $5,000 (legal maximum f $5,000; $2,500 fr a married individual filing a separate return) Minimum Salary Reductin: $0 Mid-year Electins: Mid-year hires will be pr-rated based n the plan maximum s as t nt exceed the IRS Federally mandated maximum. Allws all applicable Change in Status ptins: All f the events cnstituting a change in status under the regulatins shall be allwed. FSA Summary Plan Descriptin Page 5 ver

6 Funding Medium and Type f Plan Administratin: The Health FSA Cmpnent is a grup health plan. The Health FSA and DCAP Cmpnents are self-funded by the Emplyer and are cntract administratin plans. A third-party administratr prcesses claims fr these cmpnents, but the Emplyer pays the claims ut f its general assets. A health insurance issuer is nt respnsible fr the financing r administratin (including payment f claims) f these cmpnents. There is n trust fr the Plan r any cmpnent. Eligibility Requirements: Classified Emplyees are scheduled t wrk at least 4 hurs per day. Bus Drivers must wrk at least 3 hurs per day. N hurly requirement fr licensed Emplyees. Entry Dates: First f the mnth after 30 days f cntinued emplyment Exclusins: Nne Deemed Electins: Under the Premium Payment Cmpnent yu will be deemed t elect fr each upcming Plan Year whatever electin is in effect in the current Plan Year, unless yu expressly change yur electin by turning in a cmpleted electin frm prescribed by the Emplyer. Fr example, if yu are enrlled in the Premium Payment Cmpnent in the current year and want t remain enrlled in the upcming year, yu need nt d anything, but if yu want t stp participating in that Plan, yu must affirmatively elect nt t participate during the pen enrllment perid fr the upcming Plan Year. Under all the ther cmpnents, yu must make an affirmative electin t participate every year by turning in a cmpleted Enrllment Frm prescribed by the Emplyer r yu will be deemed t have elected nt t participate. FSA Summary Plan Descriptin Page 6 ver

7 Electin Changes: The electin changes allwed under the Plan are thse made effective by the IRS January 1, Any new electin must be made and cmmunicated in writing t the Emplyer within 30 days f the change in status. Carryver Prvisin: Carryver is permitted up t $500 n the Health FSA Cmpnent. By default, yu will be allwed t carryver unused amunts int the new Plan Year when yu are a participant in the Health FSA Cmpnent as f the last day f the Plan Year, even if yu d nt make a new salary reductin in the new Plan Year. Unused amunts in a Participant s HRE, LSFSA r LFSA Accunt may carry frward and remain available t reimburse eligible expenses incurred in later years. Under the Health FSA Cmpnent, when the Carryver Prvisin is permitted and unused amunts are carried frward, yu will be deemed as having elected fr each upcming Plan Year. Grace Perid: Yur Emplyer des nt ffer a Grace Perid n the FSA Cmpnent(s). Frfeitures: Unclaimed cash balances are frfeited t the Emplyer after the end f a Plan Year. All frfeitures under this Plan shall be used as fllws: first, t ffset any lsses experienced by the Emplyer during the Plan Year as a result f making reimbursements with respect t all Participants in excess f the cntributins paid by such Participants thrugh salary reductins; secnd, t reduce the cst f administering the Plan during the Plan Year r the subsequent Plan Year (all such administrative csts shall be dcumented by the Emplyer); and third, t prvide increased benefits r cmpensatin t Participants in subsequent years in any weighted r unifrm fashin that the Emplyer deems apprpriate, cnsistent with applicable regulatins. Cash balances frfeited t the Emplyer cannt be returned directly t the individual Participant(s) wh frfeited thse funds. Claim Reimbursement Frms may be submitted the fllwing ways: Electrnically via ur secure web prtal: Faxed t (866) Mailed t PO Bx 2797, Prtland, OR Claim Submissin Perid Ends: 90 days after the clse f the Plan perid f cverage (als knwn as a run-ut perid) Debit Card Availability: Nt Available Dcumentatin needed fr claim submissin: Yur claim fr expense reimbursement must include a statement frm yur service prvider that yu have incurred the expense, the date f service, and the amunt f yur expense. Nte: In sme instances, a statement frm the prvider that a medical care expense is medically necessary may be required. Participatin Rules: Reimbursements f Health FSA expenses include the perid f cverage if such expenses are therwise eligible healthcare expenses under the Cde. If yu terminate emplyment, yur FSA participatin ends n the date f terminatin r n the last day f the pay perid in which the Participant has cntributed, whichever gives the Participant the greater perid f cverage. FSA Summary Plan Descriptin Page 7 ver

8 If yu experience a lss f eligibility, yur FSA participatin ends n the date the lss f eligibility ccurs r n the last day f the pay perid in which the Participant has cntributed, whichever gives the Participant the greater perid f cverage. Reimbursements f DCAP expenses include the perid f cverage and/r fllwing terminatin - that is, thrugh the remainder f the Plan Year if such expenses are therwise eligible expenses under the Cde. Cverage cntinuatin (if applicable): If yu lse cverage under the Health FSA Cmpnent as a result a qualifying event (i.e. terminatin f emplyment r cessatin f eligibility because f a reductin in hurs f emplyment) yu may be entitled t elect cverage cntinuatin under the Health FSA t the extent required by federal law. See Sectin IV Cmpnent Optins Health FSA Cmpnent fr mre infrmatin. A Participant cannt be frced t repay r vluntarily repay the emplyer fr any amunts exceeding his r her Health FSA accunt balance (under mst circumstances, individuals wh have verspent their accunts will nt elect cntinued cverage). The plan cannt accept the additinal cntributins as such a practice wuld be a vilatin f the Unifrm Cverage rule. Treatment f Rehires: If yu terminate and are rehired within 1 mnth, yu will immediately rejin the plan and be reinstated with the same electins as befre terminatin f participatin. If yu terminate and are rehired 1 mnth r mre after the date f terminatin yu will be treated as a new hire and must re-satisfy (cmplete the waiting perid) the Plan eligibility requirements. Any unused reimbursement accunt balance prir t initial terminatin f participatin will have a separate eligibility perid. Treatment f Participants that regain eligibility: If yu experience a lss f eligibility and then later regain eligibility during the same plan year, yu will be treated as a new hire and must resatisfy (cmplete the waiting perid) the Plan eligibility requirements. Any unused reimbursement accunt balance prir t initial terminatin f participatin will have a separate eligibility perid. Cntinuing Plan Participatin under FMLA: Per Federal Law, cverage may cntinue under the prvisins f Family Medical Leave Act (FMLA). If applicable, the ptin fr member payment f cntinuatin is listed belw: FMLA cverage is ffered and paid by the Emplyee based n the fllwing: Pay-asyu-g with after-tax dllars, Pre-pay with pre-tax dllars, r Catch-up methd FSA Summary Plan Descriptin Page 8 ver

9 III. Participatin in the Plan Wh can participate in the Plan? Emplyees wh actually participate in the Plan are called Participants. Yu are eligible t participate if yu have met the fllwing required eligibility standards and waiting perid as indicated belw: Classified Emplyees are scheduled t wrk at least 4 hurs per day. Bus Drivers must wrk at least 3 hurs per day. N hurly requirement fr licensed Emplyees. Yur entry date is the date n which yu becme eligible t participate in the Plan as indicated belw: First f the mnth after 30 days f cntinued emplyment Eligibility fr the Health FSA Cmpnent is subject t the eligibility fr the Medical Insurance Plan. Individuals eligible t enrll in the Medical Insurance may enrll in a General-Purpse Health FSA (regardless f whether cverage under the Medical Insurance Plan is elected), cvering all healthcare expenses as defined in Cde 213(d). Individuals nt eligible t enrll in the Medical Insurance may enrll in a Limited-Scpe Health FSA, limited t cvering Visin and Dental Care. Individuals wh elect t participate in an HSA Benefit, r a Spuse participating in their Emplyer s HSA Benefit, may nly enrll in a Limited-Purpse Health FSA, limited t cvering Visin, Dental and Preventive Care. Eligibility fr the Grup Spnsred Insurance is als subject t the additinal eligibility requirements, if any, specified in the insurance plan dcuments. Are there any Emplyees wh are nt eligible t participate in the Plan? An Emplyee is an individual that the Emplyer classifies as a cmmn-law Emplyee and wh receives Cmpensatin frm the Emplyer. Emplyees d nt, hwever, include (a) individuals classified by the Emplyer as independent cntractrs, even if such an individual is later reclassified as a cmmn-law emplyee; (b) individuals wh perfrm services fr the Emplyer but wh are paid by a temprary r ther emplyment r staffing agency; r (c) selfemplyed individuals, partners in a partnership, r mre-than-2% sharehlders in a Subchapter S crpratin. The fllwing Emplyees are excluded frm participating in the Plan: Nne What must I d t enrll? When yu first meet the eligibility requirements f the Plan, yu must cmplete and sign an enrllment frm (r cmpleting electrnic enrllment materials) prir t yur entry date. The signed enrllment frm must be submitted t the Emplyer befre the first day f the pay perid in which participatin will begin. After the initial perid f cverage, yu may renew yur participatin fr the next Plan Year by filing yur electins with yur Emplyer during the next pen enrllment perid. FSA Summary Plan Descriptin Page 9 ver

10 Failure t make an electin will be treated as electing t nt participate in the Plan unless an event ccurs that wuld justify a mid-year electin change, as described in Sectin V Administrative Prvisins Electin Changes. When des participatin end? The date yur participatin will cease under the Plan varies frm cmpnent t cmpnent. Under the varius cmpnents described in Sectin IV Cmpnent Optins, yur participatin in each cmpnent will, unless therwise expressly stated, cease n the date yu terminate emplyment r therwise cease t be eligible under the Plan r therwise cease t be an eligible Emplyee. Upn terminatin, FSA participatin ends n the date f terminatin r n the last day f the pay perid in which the Participant has cntributed, whichever gives the Participant the greater perid f cverage. Upn lss f eligibility, FSA participatin ends n the date the lss f eligibility ccurs r n the last day f the pay perid in which the Participant has cntributed, whichever gives the Participant the greater perid f cverage. What if I terminate and I am rehired? If yu terminate and are rehired within 1 mnth, yu will immediately rejin the plan and be reinstated with the same electins as befre terminatin f participatin. If yu terminate and are rehired 1 mnth r mre after the date f terminatin yu will be treated as a new hire and must re-satisfy (cmplete the waiting perid) the Plan eligibility requirements. Any unused reimbursement accunt balance prir t initial terminatin f participatin will have a separate eligibility perid. What if I lse eligibility and then later regain eligibility during the Plan Year? If yu experience a lss f eligibility and then later regain eligibility during the same plan year, yu will be treated as a new hire and must re-satisfy (cmplete the waiting perid) the Plan eligibility requirements. Any unused reimbursement accunt balance prir t initial terminatin f participatin will have a separate eligibility perid. FSA Summary Plan Descriptin Page 10 ver

11 IV. Cmpnent Optins Premium Payment Cmpnent What is the Premium Payment Cmpnent? Yu will be able t pay fr yur share f cntributins fr Grup Spnsred Insurance premiums r ther qualified benefits with pre-tax dllars, prvided yu elect this cverage n the applicable enrllment frm. Because the share f the cntributins that yu pay will be with pretax funds, yu may save bth federal incme taxes and FICA (Scial Security) taxes. In sme situatins yur Emplyer may fund a prtin f the premium. Eligible Grup Spnsred Insurance premiums include the premiums paid fr medical and hspitalizatin insurance, majr medical insurance, dental insurance, visin insurance, and/r ther qualified benefits under Sectin 125 made available by the Emplyer. The insurance may cver yu, yur spuse, and/r any eligible dependent children. Yu may nt enrll fr this benefit if yu can be reimbursed fr the premium cst by any ther surce. If a Health Savings Accunt (HSA) is ffered by yur Emplyer and yu elect t participate, eligible Participants may make cntributins t the HSA n a pre-tax basis frm which funds can be withdrawn t pay fr eligible healthcare expenses. Hw are my benefits paid fr under the Premium Payment Cmpnent? If yu select Grup Spnsred Insurance described abve, then yu may be required t pay a prtin f the cntributins. When yu cmplete the enrllment frm, if yu elect t pay fr benefits n a pre-tax basis, yu agree t a salary reductin t pay fr yur share f the cst f cverage (als knwn as cntributins) with pre-tax funds instead f receiving a crrespnding amunt f yur regular pay that wuld therwise be subject t taxes. Frm then n, yu must pay a cntributin fr such cverage by having that prtin deducted frm each paycheck n a pre-tax basis (generally an equal prtin frm each paycheck, r an amunt therwise agreed t r as deemed apprpriate by the Emplyer). The Emplyer may cntribute all, sme, r n prtin f the benefits under the Premium Payment Cmpnent that yu have selected, as described in dcuments furnished separately t yu. The Emplyer will then disburse the premium payment(s) t the applicable carrier(s). This methd f payment is smetimes referred t as Emplyer Disbursed Premium (EDP) payments. Nte: This SPD des nt describe the Grup Spnsred Insurance. Cnsult the Grup Spnsred Insurance plan dcuments and the separate SPD fr the Grup Spnsred Insurance. FSA Summary Plan Descriptin Page 11 ver

12 Health FSA Cmpnent What is the Health FSA Cmpnent? Yu may use a Health FSA t pay fr eligible medical care expenses incurred during the Plan Year with pre-tax dllars that have been reduced frm yur salary, prvided yu elect this cverage n the applicable enrllment frm. Because the share f the cntributins that yu pay will be with pre-tax funds, yu may save bth federal incme taxes and FICA (Scial Security) taxes. The Health FSA Cmpnent is intended t pay benefits slely fr medical care expenses nt reimbursed elsewhere. Accrdingly, the Health FSA Cmpnent shall nt be cnsidered t be a grup health plan fr crdinatin f benefits purpses, and benefits under the Health FSA Cmpnent shall nt be taken int accunt when determining benefits payable under any ther plan. In the event that an expense is eligible fr reimbursement under bth the Health FSA Cmpnent and an HSA, yu may seek reimbursement frm either the Health FSA r the HSA, but nt bth. What are my Health FSA Cmpnent ptins? A Health FSA Cmpnent electin may be fr ne f the fllwing: (a) General-Purpse Health FSA Optin; (b) Limited-Scpe Health FSA Optin (Visin/Dental Care, excluding Preventive Care); r (c) Limited-Purpse Health FSA Optin (Visin/Dental/Preventive Care). Refer t Sectin II Yur Plan at a Glance t determine the ptins available t yu under yur Emplyers Plan. HSA Benefits cannt be elected with the Health FSA Cmpnent unless the Limited-Purpse Health FSA Optin is available and selected. In additin, when the Emplyer ffers the Carryver Prvisin, and a Participant is reprted as participating in an HSA Benefit, any unused amunts remaining in the Participant s General-Purpse Health FSA at the end f the preceding Plan Year that are available fr carryver, if any, will be carried ver t a Limited- Purpse Health FSA. What are my Health FSA accunts? Once yu elect t participate in ne f the Health FSA Cmpnent ptins, then an accunt will be set up in yur name t keep a recrd f the reimbursements that yu are entitled t, as well as the cntributins that yu elected t have reduced frm yur salary r wages. Yur Health FSA accunts are recrdkeeping accunts and d nt bear interest. Yur salary reductins will be depsited int a Health Related Expense (HRE) Accunt, a Limited-Scpe Health FSA (LSFSA) Accunt r a Limited-Purpse Health FSA (LFSA) Accunt frm which funds will be withdrawn t reimburse yu fr eligible medical care expenses incurred by yu and yur eligible family members under ne f the Health FSA Cmpnent ptins. What are the benefits that I may elect under the Health FSA Cmpnent? The maximum salary reductin yu can elect under the General-Purpse Health FSA Optin is $2,550 with a minimum salary reductin f $0. The maximum salary reductin yu can elect under the Limited-Scpe Health FSA Optin is Nt Available with a minimum salary reductin f Nt Available. The maximum salary reductin yu can elect under the Limited-Purpse Health FSA Summary Plan Descriptin Page 12 ver

13 FSA Optin is Nt Available with a minimum salary reductin f Nt Available. Mid-year hires will be pr-rated based n the plan maximum s as t nt exceed the IRS Federally mandated maximum. Hw are my benefits paid fr under the Health FSA Cmpnent? When yu cmplete the enrllment frm, yu specify the amunt f benefits that yu wish t pay fr with yur salary reductin. Frm then n, yu must pay a cntributin fr such cverage by having that prtin deducted frm each paycheck n a pre-tax basis (generally an equal prtin frm each paycheck r an amunt therwise agreed t r as deemed apprpriate by the Emplyer). Fr example, suppse yu have elected a salary reductin f $1,300 fr medical care expenses and that yu have chsen n ther benefits under the Plan. If yu pay all f yur cntributins, then yur Accunt wuld be credited with a ttal f $1,300 during the Plan Year. If yu are paid bi-weekly, then yur Accunt wuld reflect that yu have paid $50.00 ($1,300 divided by 26) each pay perid in cntributins fr the benefits that yu have elected. What medical care expenses may be reimbursed? The Health FSA Cmpnent cannt reimburse yu fr any expenses that have been reimbursed by any ther plan r surce and yu cannt claim a tax deductin fr any expenses reimbursed under the Plan. The eligible medical care expenses vary accrding t the type f Health FSA Cmpnent ptin that is elected, as described belw. (a) General-Purpse Health FSA Optin. Fr purpses f this Optin, "Medical Care Expense" means expenses incurred by yu, yur Spuse, r yur Dependents fr "medical care" as defined in Cde 213(d). Hwever, expenses fr medicines r drugs ther than insulin will nt qualify as medical care expenses unless the medicine r drug has been prescribed. Thus, ver-the-cunter (OTC) medicines r drugs such as aspirin, antihistamines, and cugh syrup must be prescribed in rder t qualify as medical care expenses; t be reimbursed fr an OTC medicine r drug, yu must prvide dcumentatin that the item was prescribed. In additin, as described abve, nly reasnable quantities f OTC drugs will be reimbursed frm yur HRE Accunt in a single calendar mnth. Stckpiling is nt permitted. The fllwing list specifies certain expenses that are nt reimbursable, even if they meet the definitin f medical care under Cde 213(d) and may therwise be reimbursable under regulatins gverning Health FSAs. Nte that many expenses that are nt n the list f exclusins belw will still nt be reimbursable if such expenses d nt meet the definitin f medical care under Cde 213(d) and ther requirements fr reimbursement under the Health FSA. EXCLUSIONS: Premiums fr ther health cverage, including but nt limited t premiums fr any ther plan (whether r nt spnsred by the Emplyer). Lng-term care services. Csmetic surgery r ther similar prcedures, unless the surgery r prcedure is necessary t amelirate a defrmity arising frm, r directly related t, a cngenital abnrmality, a persnal injury resulting frm an accident r trauma, r a disfiguring disease. Csmetic surgery means any prcedure that is directed at imprving the patient's appearance and des nt meaningfully prmte the prper functin f the bdy r prevent r treat illness r disease. The salary expense f a nurse t care fr a healthy newbrn at hme. FSA Summary Plan Descriptin Page 13 ver

14 Funeral and burial expenses. Husehld and dmestic help (even if recmmended by a qualified physician due t an Emplyee's r Dependent's inability t perfrm physical husewrk). Custdial care. Medicines r drugs (ther than insulin) available ver-the-cunter that have nt been prescribed. Csts fr sending a child t a special schl fr benefits that the child may receive frm the curse f study and disciplinary methds. Scial activities, such as dance lessns (even if recmmended by a physician fr general health imprvement). Bttled water. Csmetics, tiletries, tthpaste, etc. Unifrms r special clthing, such as maternity clthing. Autmbile insurance premiums. Marijuana and ther cntrlled substances that are in vilatin f federal laws, even if prescribed by a physician. Any item that des nt cnstitute medical care as defined under Cde 213(d). Any item that is nt reimbursable due t the rules in Prp. Treas. Reg (k)(4) r ther applicable law r regulatins. Fr mre infrmatin abut what items are-and are nt-medical care expenses, cnsult IRS Publicatin 502 (Medical and Dental Expenses) under the headings "What Medical Expenses Are Includible?" and "What Expenses Are Nt Includible?" But use IRS Publicatin 502 with cautin, because it was meant nly t help taxpayers figure ut what medical expenses can be deducted n the Frm 1040 Schedule A (i.e., t figure ut their tax deductins), nt what is reimbursable under a Health FSA. In fact, sme statements in IRS Publicatin 502 aren't crrect when determining whether that same expense is reimbursable frm a Health FSA. This is because there are several fundamental differences between what is deductible as medical care (under Cde 213(a) and 213(b)) and what is reimbursable as medical care under a Health FSA (under Cde 213(d)). Nt all expenses that are deductible are reimbursable under a Health FSA. Fr example, health insurance premiums, funders' fees, lifetime care, lng-term cntracts, and lng-term care services are listed as deductible expenses in Publicatin 502, but generally they cannt be reimbursed frm a Health FSA. And nt all expenses that are reimbursable under a Health FSA are deductible. Fr example, Health FSAs may reimburse OTC drugs if they qualify as medical care under Cde 213(d) and have been prescribed, but they are still nt deductible under Cde 213(a) and 213(b). Ask the Emplyer r PSA if yu need further infrmatin abut which expenses are-and are nt-likely t be reimbursable, but remember that the Emplyer and PSA are nt prviding legal advice. (b) Limited-Scpe Health FSA Optin (Visin/Dental Care, excluding Preventive Care). Yu may be eligible t make/receive tax-favred cntributins t the Limited-Scpe Health FSA Optin and participate in a Health FSA Cmpnent if the Health FSA reimbursement is limited t the medical care expenses listed belw: Services r treatments fr dental care (excluding premiums); r Services r treatments fr visin care (excluding premiums). (c) Limited-Purpse Health FSA Optin (Visin/Dental/Preventive Care). The Limited- FSA Summary Plan Descriptin Page 14 ver

15 Purpse Health FSA will nt reimburse medical care expenses that wuld disqualify an individual frm cntributing t an HSA. Accrding t rules in Cde 223 (applicable t HSAs), yu will nt be able t make/receive tax-favred cntributins t yur HSA if yu participate in a Health FSA that reimburses medical care expenses as described under the General-Purpse Health FSA Optin (see subsectin (a) abve). Yu may, hwever, be eligible t make/receive tax-favred cntributins t an HSA and participate in a Health FSA Cmpnent if the Health FSA reimbursement is limited t the medical care expenses listed belw: Services r treatments fr dental care (excluding premiums); Services r treatments fr visin care (excluding premiums); r Services r treatments fr "preventive care." Preventive care is defined in accrdance with applicable rules and regulatins under Cde 223(c)(2)(C). This may include prescribed drugs t the extent that such drugs are taken by an eligible individual (1) t delay r prevent the nset f symptms f a cnditin fr which symptms have nt yet manifested themselves (i.e., the eligible individual is asymptmatic); (2) t prevent the recurrence f a cnditin frm which the eligible individual has recvered; r (3) as part f a preventive care treatment prgram (e.g., a smking-cessatin r weight-lss prgram). Preventive care des nt include services r treatments that treat an existing cnditin. What is the Carryver Prvisin? See Sectin II Yur Plan at a Glance fr details n the carryver f accunt balance, if any, available under the Health FSA Cmpnent. If the Carryver Prvisin is nt permitted, any unused amunts in a Participant s HRE, LSFSA, r LFSA Accunt at the end f a cverage perid will be frfeited per the current Treasury Regulatin Use-it-r-Lse-it rule as discussed in Sectin V Administrative Prvisins Use-itr-Lse-it Rule. If the Carryver Prvisin is permitted, unused amunts in a Participant s HRE, LSFSA, r LFSA Accunt will carry frward and remain available t reimburse eligible medical care expenses incurred in later years. The amunt allwed t carryver is subject t a maximum dllar which culd prevent a carryver f all unused amunts. Amunts ver this maximum will be subject t frfeiture per the current Treasury regulatin Use-it-r-Lse-it rule as discussed in Sectin V Administrative Prvisins. By default, yu will be allwed t carryver unused amunts int the new Plan Year when yu are a participant in the Health FSA Cmpnent as f the last day f the Plan Year, even if yu d nt make a new salary reductin in the new Plan Year.Terminatin f emplyment and cessatin f eligibility will generally result in a lss f carryver eligibility unless cverage is cntinued (see Sectin IV Cmpnent Optins - Health FSA Cmpnent, Can I cntinue my Health FSA cverage after terminating emplyment? ). Under IRS rules, if yu carry ver any unused Health FSA amunts t a General-Purpse Health FSA, yu (and any ther individual whse expenses can be reimbursed by yur Health FSA) cannt cntribute t an HSA during the entire next Plan Year. Thus, if yu have unused amunts remaining in a General-Purpse Health FSA at the end f a Plan Year that are available fr carryver and yu elect t participate in an HSA benefit fr the next Plan Year, the unused amunts will be carried ver t a Limited-Purpse Health FSA when available. Hwever, yu may cntinue t submit claims fr General-Purpse expenses incurred during the preceding Plan Year until the end f the run-ut perid f the fllwing Plan Year, t be FSA Summary Plan Descriptin Page 15 ver

16 reimbursed frm yur available Health FSA amunts fr the preceding Plan Year. Otherwise, if yu (r smene else whse expenses can be reimbursed by yur Health FSA) wuld like t cntribute t an HSA during the next Plan Year, yu must waive (decline) the carryver befre that Plan Year begins, using a frm available frm the Emplyer. If yu waive the carryver, yu may cntinue t submit claims fr expenses incurred during the preceding Plan Year until the end f the run-ut perid f the fllwing Plan Year, t be reimbursed frm yur available General-Purpse Health FSA amunts. If thse claims d nt use up yur entire Health FSA balance fr the preceding Plan Year, any unused amunts will be frfeited in accrdance with yur waiver. What amunts will be available frm the HRE, LSFSA, r LFSA Accunt at any particular time during the Plan Year? The full amunt f Health FSA cverage that yu have elected (reduced by prir reimbursements made during the same Plan Year) will be available t reimburse yu fr qualifying medical care expenses incurred during the Plan Year, regardless f the amunt that yu have cntributed when yu submitted the claim (s lng as yu have cntinued t pay the cntributins). This is knwn as the Unifrm Cverage rule. During the run-ut perid, carryver amunts may be available either fr prir-year r current-year claims. Is there any risk f lsing r frfeiting the amunts that I elect? Yes. The difference between what yu elected (increased by any carryvers frm the previus Plan Year, if applicable) and the medical care expenses that were reimbursed will be frfeited at the end f the time limits. Yu shuld read the Plan in its entirety befre electing t participate in the Plan. Des COBRA apply t my Health FSA? Health FSA COBRA cntinuatin cverage will be available if the Emplyer nrmally emplyed 20 r mre Emplyees n a typical business day during 50% r mre f the preceding calendar year. The COBRA Administratr shall prvide ntice t the Participant f his r her right t cntinuatin cverage and shall administer cntinuatin cverage hereunder in accrdance with applicable law and regulatins. Emplyers subject t COBRA must ffer Health FSA COBRA cverage t qualified beneficiaries wh lse their Health FSA cverage as the result f a qualifying event when the accunt is underspent (taking int accunt all claims submitted and deductins due befre the date f the qualifying event). An Emplyer is nt required t ffer COBRA when accunts are verspent, but may chse t d s in a unifrm manner. The type f COBRA cntinuatin bligatin depends n whether the Health FSA is cnsidered t be a qualifying Health FSA. If the Health FSA is a qualifying Health FSA, COBRA cntinuatin cverage must be ffered t all qualified beneficiaries but is subject t special limitatins. This is called Special Limited COBRA cntinuatin. If the Special Limited COBRA cntinuatin is elected fr the Health FSA, it will be available nly fr the Plan Year in which the qualifying event ccurs, with cverage fr the Health FSA ceasing at the end f the Plan Year, and n ability t re-enrll with a new electin fr the next Plan Year. In the event the qualified beneficiary experiences a secndary qualifying event, the COBRA cntinuatin perid may nt be extended. If the Health FSA is nt a qualifying Health FSA, COBRA cntinuatin cverage must be ffered t all qualified beneficiaries fr the maximum COBRA perid which includes the rest f the Plan Year in which the qualifying event ccurred, and, until the maximum FSA Summary Plan Descriptin Page 16 ver

17 COBRA perid expires. Qualified beneficiaries may re-enrll fr subsequent plan years during pen enrllment with a new electin. In additin, in the event the qualified beneficiary experiences a secndary qualifying event, the COBRA cntinuatin perid may be extended. Regardless if the Health FSA is cnsidered qualifying r nt, if the Carryver Prvisin applies t the Health FSA, the Carryver Prvisin wuld als apply t Participants wh are receiving cverage under the Health FSA at the end f the Plan Year. Althugh the Carryver Prvisin wuld nt last beynd the end f the 18-mnth r ther applicable maximum COBRA cverage perid. A Participant wh elects Health FSA COBRA cntinuatin cverage will generally pay fr cverage with after-tax dllars by writing a check t his r her Emplyer each mnth. Hwever, an agreement can be made with the Emplyer t make payments with pre-tax dllars t his r her Emplyer, generally n a mnthly basis but nly thrugh the end f the Plan Year in which the qualifying event ccurred. Can I cntinue my Health FSA cverage withut electing COBRA? N. Refer t Sectin III Participatin in the Plan, "When des participatin end?" This agreement is referred t as a Premium Cmpletin Agreement. In the event the Emplyee terminates emplyment r therwise ceases t be an eligible Emplyee, then the Emplyer can require the Emplyee t waive his r her COBRA rights with respect t the Health FSA as a cnditin t electing the vluntary Premium Cmpletin Agreement t cver the Health FSA premium fr the balance fr the current Plan Year. If the Carryver Prvisin applies t the Health FSA, the Carryver Prvisin wuld als apply t Participants wh are receiving cverage under the Health FSA at the end f the Plan Year, althugh the Carryver Prvisin wuld nt last beynd the end f the cverage perid that it rlled int. FSA Summary Plan Descriptin Page 17 ver

18 DCAP Cmpnent What is the DCAP Cmpnent? Yu may use the DCAP Cmpnent t pay fr eligible dependent care expenses incurred during the Plan Year with pre-tax dllars that have been reduced frm yur salary, prvided yu elect this cverage n the applicable enrllment frm. Because the share f the cntributins that yu pay will be with pre-tax funds, yu may save bth federal incme taxes and FICA (Scial Security) taxes. The DCAP Cmpnent is intended t pay benefits slely fr dependent care expenses nt reimbursed elsewhere. Eligible dependent expenses might include: infant care, daycare, elder care etc. Yu may receive reimbursements under this cmpnent nly if the dependent care is necessary t enable yu and yur spuse t wrk r seek emplyment, r if yu wrk and yur spuse is a student r is disabled. The dependent must reside with yu mre than half the year fr the expenses with respect t that dependent t be eligible fr reimbursement under this prtin f the DCAP Cmpnent. What is my DCE Accunt? Once yu elect t participate in the DCAP Cmpnent, then an accunt will be set up in yur name t keep a recrd f the reimbursements that yu are entitled t, as well as the cntributins that yu elected t have reduced frm yur salary r wages. The accunt is a recrdkeeping accunt and des nt bear interest. Yur salary reductins will be depsited int a Dependent Care Expense (DCE) Accunt frm which funds will be withdrawn t reimburse yu fr eligible dependent care expenses incurred by yu. What are the benefits that I may elect under the DCAP Cmpnent? The maximum salary reductin yu can elect under the DCAP Cmpnent is $5,000 with a minimum salary reductin f $0. Mid-year hires will be pr-rated based n the plan maximum s as t nt exceed the IRS Federally mandated maximum. The amunt f dependent care expense reimbursement that yu chse cannt exceed $5,000 fr a calendar year r, if lwer, the maximum amunt that yu have reasn t believe will be excludable frm yur incme under Cde 129 when yur electin is made. The $5,000 maximum will apply t yu if: yu are married and file a jint federal incme tax return; yu are married and file a separate federal incme tax return, and meet the fllwing cnditins: (1) yu maintain as yur hme a husehld that cnstitutes (fr mre than half f the taxable year) the principal place f abde f a Qualifying Individual (i.e., the Dependent fr whm yu are eligible t receive reimbursements under the DCAP); (2) yu furnish ver half f the cst f maintaining the husehld during the taxable year; and (3) during the last six mnths f the taxable year, yur Spuse is nt a member f the husehld; r yu are single r the head f the husehld fr federal incme tax purpses. If yu are married and file a separate federal incme tax return under circumstances ther than thse described abve, then the maximum DCAP benefit that yu may exclude frm yur incme under Cde 129 is $2,500 fr a calendar year. FSA Summary Plan Descriptin Page 18 ver

19 These maximums ($5,000 r $2,500 fr a calendar year, as applicable) are just the largest amunt that is pssible; the maximum amunt that yu are able t exclude frm yur incme may be less because f ther limitatins (fr example, nte that yu cannt exclude mre than the amunt f yur r yur Spuse's earned incme fr the calendar year). Hw are my benefits paid fr under the DCAP Cmpnent? When yu cmplete the enrllment frm, yu specify the amunt f DCAP benefits that yu wish t pay with yur salary reductin. Frm then n, yu must pay a cntributin fr such cverage by having that prtin deducted frm each paycheck n a pre-tax basis (generally an equal prtin frm each paycheck r an amunt therwise agreed t r as deemed apprpriate by the Emplyer). Fr example, suppse yu have elected a salary reductin f $2,600 fr dependent care expenses and that yu have chsen n ther benefits under the Plan. If yu pay all f yur cntributins, then yur DCE Accunt wuld be credited with a ttal f $2,600 during the Plan Year. If yu are paid bi-weekly, then yur DCE Accunt wuld reflect that yu have paid $ ($2,600 divided by 26) each pay perid in cntributins fr the benefits that yu have elected. What dependent care expenses may be reimbursed? Dependent care expenses means emplyment-related expenses incurred n behalf f a persn wh meets the requirements t be a qualifying individual, as defined belw. All f the fllwing cnditins must be met fr such expenses t qualify as dependent care expenses that are eligible fr reimbursement: Each persn fr whm yu incur the expenses must be a qualifying individual, that is, he r she must be: a persn under age 13 wh is yur "qualifying child" under the Cde (in general, the persn must: (1) have the same principal abde as yu fr mre than half the year; (2) be yur child r stepchild (by bld r adptin), fster child, sibling r stepsibling, r a descendant f ne f them; and (3) nt prvide mre than half f his r her wn supprt fr the year); yur spuse wh is physically r mentally incapable f caring fr himself r herself and has the same principal place f abde as yu fr mre than half f the year; r a persn wh is physically r mentally incapable f caring fr himself r herself, has the same principal place f abde as yu fr mre than half f the year, and is yur tax dependent under the Cde (fr this purpse, status as a tax dependent is determined withut regard t the grss incme limitatin fr a "qualifying relative" and certain ther prvisins f the Cde's definitin). NOTE: Under a special rule fr children f divrced r separated parents, a child is a qualifying individual with respect t the custdial parent when the nncustdial parent is entitled t claim the dependency exemptin fr the child. See the Emplyer fr mre infrmatin n which individuals will qualify as yur qualifying individuals. N reimbursement will be made t the extent that such reimbursement wuld exceed the balance in yur DCE Accunt. The expenses are incurred fr services rendered after the date f yur electin t receive DCAP benefits and during the Plan Year t which the electin applies. The expenses are incurred in rder t enable yu (and yur spuse, if yu are married) t be gainfully emplyed, which generally means wrking r lking fr wrk. There is an FSA Summary Plan Descriptin Page 19 ver

20 exceptin: If yur spuse is nt wrking r lking fr wrk when the expenses are incurred, he r she must be a full-time student r be physically r mentally incapable f self-care. The expenses can als be incurred while yu are wrking and yur Spuse is sleeping (r vice versa), if ne f yu wrks during the day and the ther wrks at night and sleeps during the day. The expenses are incurred fr the care f a qualifying individual r fr husehld services attributable in part t the care f a qualifying individual. If the expenses are incurred fr services utside f yur husehld fr the care f a qualifying individual ther than a persn under age 13 wh is yur qualifying child, then the qualifying individual must regularly spend at least eight hurs per day in yur husehld. If the expenses are incurred fr services prvided by a dependent care center (that is, a facility that prvides care fr mre than six individuals nt residing at the facility), the center cmplies with all applicable state and lcal laws and regulatins. The persn wh prvided care was nt yur spuse, a parent f yur under-age-13 qualifying child (e.g., a frmer spuse wh is the child s nncustdial parent), r a persn fr whm yu (r yur spuse) are entitled t a persnal exemptin under Cde 151(c). If yur child prvided the care, then he r she must be age 19 r lder at the end f the year in which the expenses are incurred. The expenses are nt paid fr services utside f yur husehld at a camp where the qualifying individual stays vernight. The expenses can be fr any f the fllwing (assuming that the ther requirements fr reimbursement are met): expenses fr a day camp r a similar prgram t care fr a Qualifying Individual, even if the camp specializes in a particular activity (e.g., sccer r cmputers), but excluding any separate equipment r similar charges (nte that summer schl and tutring prgram expenses dn't qualify because they are cnsidered t be primarily fr educatin rather than fr care); the cst f a Qualifying Individual's transprtatin t r frm a place where care is prvided, if furnished by a dependent care prvider; and expenses such as applicatin fees, agency fees, and depsits that relate t but are nt directly fr a Qualifying Individual's care, if yu must pay the expenses in rder t btain the related care (expenses f this type cannt be reimbursed unless and until the related care is prvided-e.g., a depsit that is frfeited because yu decide t send yur child t a different dependent care prvider is nt eligible fr reimbursement). Fr mre infrmatin abut what items are-and are nt-deductible dependent care expenses, cnsult IRS Publicatin 503 (Child and Dependent Care Expenses) under the heading "Tests t Claim the Credit." But use Publicatin 503 with cautin, because it was meant nly t help taxpayers figure ut whether they can claim the husehld and dependent care services tax credit under Cde 21 (the Dependent Care Tax Credit, discussed belw), nt t explain what is reimbursable under a DCAP. In fact, sme f the statements in Publicatin 503 aren't crrect when determining whether that same expense is reimbursable under yur DCAP. This is because there are several fundamental differences between what expenses qualify fr the Dependent Care Tax Credit and what expenses are reimbursable under a DCAP. Nt all expenses that qualify fr the Dependent Care Tax Credit are reimbursable under a DCAP. Fr example, fr an expense t qualify fr the Dependent Care Tax Credit in a given year, it must have been paid during that year, but t be reimbursed frm the DCAP, the expense must have been incurred during the Plan Year fr which reimbursement is sught. FSA Summary Plan Descriptin Page 20 ver

21 Ask the Emplyer r PSA if yu need further infrmatin abut which expenses are-and are ntlikely t be reimbursable, but remember that the Emplyer and PSA are nt prviding legal advice. What amunts will be available frm the DCE Accunt at any particular time during the Plan Year? The amunt f cverage that is available fr reimbursement f qualifying dependent care expenses at any particular time during the Plan Year will be equal t the amunt credited t yur DCE Accunt at the time yur claim is paid, reduced by the amunt f any prir reimbursements paid t yu during the Plan Year. Fr example, suppse that yu incur $1,500 f dependent care expenses. At that time, yur DCE Accunt wuld nly have been credited with $700 ($100 times 7 pay perids), s nly $700 wuld be available fr reimbursement (assuming that yu had nt received any prir reimbursements). The remaining $800 in dependent care expenses wuld be held as a pending claim until additinal cntributins are credited t yur DCE Accunt. Is there any risk f lsing r frfeiting the amunts that I elect? Yes. The difference between what yu elected and the dependent care expenses that were reimbursed will be frfeited at the end f the time limits. Yu shuld read the Plan in its entirety befre electing t participate in the Plan. Can I cntinue DCAP cverage after terminating emplyment? When yu cease t be a Participant under the DCAP Cmpnent, yur salary reductins and electin t participate will terminate. Hwever, yu will be able t receive reimbursements fr qualifying dependent care expenses incurred during the perid f cverage fllwing terminatin thrugh the end f the Plan Year. FSA Summary Plan Descriptin Page 21 ver

22 V. Administrative Prvisins Funding and Type f Plan Administratin The Emplyer is the Plan Administratr fr the Plan in accrdance with ERISA 3(16)(a). The Plan is intended t qualify as a cafeteria plan under Cde 125. The Emplyer s failure t enfrce any prvisin f the Plan shall nt affect its right t later enfrce that prvisin r any ther prvisin f the Plan. The Emplyer has retained PacificSurce Administratrs, Inc. (PSA) t act as the Third Party Administratr and prvide certain administrative services assciated with the Plan. PSA is nt a fiduciary f the Plan. PSA has n discretinary authrity t interpret the Plan prvisins r issues arising under the Plan, such as issues f eligibility, cverage, and benefits. PSA is nt an administratr as defined in ERISA 3(16)(a). Nthing herein will be cnstrued t require the Emplyer r PSA t maintain any fund r t segregate any amunt fr the benefit f any Participant, and n Participant r ther persn shall have any claim against, right t, r security r ther interest in any fund, accunt, r asset f the Emplyer frm which any payment under this Plan may be made. There is n trust r ther fund frm which benefits are paid. While the Emplyer has cmplete respnsibility fr the payment f benefits ut f its general assets (except fr Premium Payment benefits paid as prvided in the applicable insurance plicy), it may hire an unrelated third-party paying agent t make benefit payments n its behalf. Yu must make all electins abut the use f the Plan befre yur entry date int the Plan. If yu elect t pay fr benefits n a pre-tax basis, yu agree t a salary reductin t pay fr yur share f the cst f cverage (als knwn as cntributins) with pre-tax funds instead f receiving a crrespnding amunt f yur regular pay that wuld therwise be subject t taxes. Frm then n, yu must pay cntributins fr such cverage by having that prtin deducted frm each paycheck n a pre-tax basis (generally an equal prtin frm each paycheck, r an amunt therwise agreed t r as deemed apprpriate by the Emplyer). The amunt reduced frm yur salary r wages cannt exceed the amunt f yur annual salary r wages. Only expenses incurred n r after yur entry date and prir t the end f the Plans perid f cverage are eligible fr payment. Yur perid f cverage is generally the same as the Plans perid f cverage but if yu begin r end eligibility in the middle f the Plan Year, yur perid f cverage is the prtin f the Plan Year during which yu were eligible in the Plan. An expense is incurred n the date a service is prvided r rendered and nt n the date that the service is billed r paid. Yu may submit claims incurred during yur perid f cverage fr 90 days after the Plans perid f cverage. Claims submitted beynd this run-ut perid are ineligible fr reimbursement. Fr purpses f the Grup Spnsred Insurance, the terms Spuse and Dependent are defined as prvided in the Grup Spnsred Insurance. Fr purpses f the ther benefits, Spuse means a persn f the same r ppsite sex wh is treated as a spuse fr federal tax purpses. Fr purpses f the Health FSA, Dependent means (a) yur sn, daughter, stepchild, legally adpted child, r eligible fster child wh has nt attained age 27 (e.g. end f the year in which the child turns 26) as f the end f the calendar year; and (b) yur tax dependent under the Cde except that an individual's status as a Dependent is determined withut regard t the grss incme limitatin fr a qualifying relative and certain ther prvisins f the Cde's FSA Summary Plan Descriptin Page 22 ver

23 definitin. See the Emplyer fr mre infrmatin abut which individuals will qualify as yur Spuse r Dependents. Yu and individuals wh qualify as yur dependents may receive benefits under the Plan. An individual may qualify as yur dependent fr purpses f this Plan even if that individual is nt yur tax dependent. An individual wh wuld qualify as yur tax dependent but has grss incme in excess f the exemptin amunt, is a dependent f a dependent, r is married and files a jint tax return with his r her spuse, will be cnsidered yur dependent fr purpses f this Plan. This may include the Participant s children, grandchildren, stepchildren, parents, inlaws, r any ther persn (ther than the Participant s spuse) whse principal place f abde is the hme f the Participant and wh is a member f the Participant s husehld. Fr purpses f the DCAP Cmpnent, a dependent must reside with yu fr mre than half f the year fr expenses with respect t that dependent t be eligible fr reimbursement under that prtin f the Plan. Electin Changes Can I change my electins under the Plan during the Plan Year? As a general rule, yur electins fr the Plan Year are irrevcable fr the balance f the year. Hwever, certain exceptins apply which may allw yu t revke yur electin and make a new electin. If yu wish t change yur electin based n a change in status, yu must establish that the revcatin is n accunt f and crrespnds with the change in status. The Emplyer, in its sle discretin and n a unifrm and cnsistent basis, shall determine whether a requested change is n accunt f and crrespnds with a change in status. As a general rule, a desired electin change will be fund t be cnsistent with a change in status event if the event affects cverage eligibility. Accunts subject t the Unifrm Cverage rule (Health FSA) can be excluded. Specific t yur Plan design, benefit changes can be made as indicated belw: Increases and Decreases t the Grup Spnsred Insurance premiums (if permitted by insurance carrier) shall autmatically result in a crrespnding electin change t the Premium Payment Cmpnent N can be permitted t the HRE, LSFSA, r LFSA Accunt Bth Increases and Decreases can be permitted t the DCE Accunt If the Plan allws yu t make reductins t yur Health FSA cverage, yur reductin cannt result in yur cntributins fr the year being less than the amunt fr which yu have already been reimbursed. Fr example, assume that yu elected t cntribute $100 per mnth t the Health FSA and in the secnd mnth yu were reimbursed fr expenses in the amunt f $700. If a change in status event ccurs in the third mnth that allws yu t change cverage, yur future cntributins t the Health FSA cannt be reduced t a pint where the ttal cntributins fr the Plan Year are less than the $700 already reimbursed fr the Plan Year. When can I change my electins under the Plan during the Plan Year? If any change in electin event ccurs, yu must infrm the Emplyer and cmplete a Status Change Frm within 30 days after the ccurrence (r within 60 days after the ccurrence in the case f a special enrllment right due t lss f eligibility fr Medicaid r state children's health insurance prgram cverage, r eligibility fr a state premium assistance subsidy frm a Medicaid plan r thrugh a state children's health insurance prgram with respect t cverage FSA Summary Plan Descriptin Page 23 ver

24 under the Medical Insurance Plan). If the change invlves a lss f yur spuse s r dependent s eligibility fr medical insurance benefits, then changes made t yur Grup Spnsred Insurance Plan will be deemed effective as f the date that eligibility is lst due t the ccurrence f the Change in Electin Event, even if yu d nt request it within 30 days. Leaves f Absence (Applies t all Cmpnents f this Plan). Yu may change an electin under the Plan upn FMLA and nn-fmla leave nly as described in Sectin V Administrative Prvisins Family and Medical Leave Act. A Change in Status (Applies t all Cmpnents as Limited Belw). The Plan allws yu t make a mid-year plan change r revcatin f a benefit electin if the change r revcatin is cnsistent with a change in status. In this regard, a change in status is any f the fllwing: An event that changes yur legal marital status, including marriage, death f a Spuse, legal separatin, r annulment; An event that changes the number f yur Dependents, including by reasn f birth, adptin, placement fr adptin, r death f a Dependent; Any f the fllwing events that change the emplyment status f yu, yur Spuse, r yur Dependent and that affect benefits eligibility under a cafeteria plan (including this Plan) r ther emplyee benefit plan f yu, yur Spuse, r yur Dependents. Such events include any f the fllwing changes in emplyment status: terminatin r cmmencement f emplyment; a strike r lckut; a cmmencement f r return frm an unpaid leave f absence; a change in wrksite; switching frm salaried t hurly-paid, unin t nn-unin, r full-time t part-time (r vice versa); incurring a reductin r increase in hurs f emplyment; r any ther similar change that makes the individual becme (r cease t be) eligible fr a particular emplyee benefit; An event that causes yur Dependent t satisfy r cease t satisfy an eligibility requirement fr a particular benefit (such as attaining a specific age, ceasing t be a student, r a similar circumstance); r A change in yur, yur Spuse's, r yur Dependent's place f residence. Change in Status-Other Requirements (Applies t Premium Payment, Health FSA (as limited belw), and DCAP Cmpnents). Generally, a revcatin r change f yur electin is cnsistent with a change in status nly if it is n accunt f and crrespnds t a change in status that affects eligibility under an Emplyer s benefit plan. Fr example, if yur Spuse terminates emplyment and lses healthcare cverage under the frmer Emplyer s benefit plan as a result, then that is a change in status affecting eligibility fr healthcare cverage; if yu then add yur Spuse under the Emplyer s benefit plan, yu culd mdify yur electin under the Premium Payment Cmpnent t pay fr the increase in premiums under this Plan. An electin change under the DCAP Cmpnent is cnsistent with a change in status if the electin change is n accunt f and crrespnds with a change in status that affects dependent care expenses. In additin, yu must satisfy the fllwing specific requirements in rder t alter yur electin based n that change in status: FSA Summary Plan Descriptin Page 24 ver

25 Lss f Spuse r Dependent Eligibility; Special COBRA Rules. A special rule gverns which types f electin changes are cnsistent with the change in status. If yu, yur spuse, r dependent gains r lses cverage due t a COBRA qualifying event, yu may change yur electin under the Premium Payment Cmpnent and Health FSA Cmpnent t pay fr the cntinuatin f cverage n a pre-tax basis r t reduce yur electin fr the crrespnding lss f cverage. See yur Emplyer fr mre infrmatin. Example: Emplyee Mike is married t Sharn, and they have ne child. The Emplyer ffers a calendar-year cafeteria plan that allws Emplyees t elect any f the fllwing: n medical cverage, emplyeenly cverage, emplyee-plus-ne-dependent cverage, r family cverage. Befre the plan year, Mike elects family cverage fr himself, his wife Sharn, and their child. Mike and Sharn subsequently divrce during the plan year; Sharn lses eligibility fr cverage under the plan, while the child is still eligible fr cverage under the plan. Mike nw wishes t revke his previus electin and elect n medical cverage. The divrce between Mike and Sharn cnstitutes a change in status. An electin t cancel medical cverage fr Sharn is cnsistent with this change in status. Hwever, an electin t cancel cverage fr Mike and/r the child is nt cnsistent with this change in status. In cntrast, an electin t change t emplyee-plus-ne-dependent cverage wuld be cnsistent with this change in status. Gain f Cverage Eligibility Under Anther Emplyer's Plan. Fr a change in status in which yu, yur Spuse, r yur Dependent gains eligibility fr cverage under anther Emplyer's cafeteria plan (r qualified benefit plan) as a result f a change in yur marital status r a change in yur, yur Spuse's, r yur Dependent's emplyment status, yur electin t cease r decrease cverage fr that individual under the Plan wuld crrespnd with that change in status nly if cverage fr that individual becmes effective r is increased under the ther Emplyer's plan. DCAP Cmpnent. With respect t the DCAP Cmpnent, yu may change r terminate yur electin with respect t a change in status event nly if (a) such change r terminatin is made n accunt f and cnfrms with a change in status that affects eligibility fr cverage under the DCAP; r (b) yur electin change is n accunt f and cnfrms with a change in status that affects the eligibility f dependent care expenses fr the available tax exclusin. Example: Emplyee Mike is married t Sharn, and they have a 12- year-ld daughter. The Emplyer's plan ffers a DCAP as part f its cafeteria plan. Mike elects t reduce his salary by $2,000 during a plan year t fund dependent care cverage fr his daughter. In the middle f the Plan Year when the daughter turns 13 years ld, hwever, she is n lnger eligible t participate in the DCAP. This event cnstitutes a change in status. Mike's electin t cancel cverage under the DCAP wuld be cnsistent with this change in status. Special Enrllment Rights (Applies Only t Premium Payment Cmpnent fr the FSA Summary Plan Descriptin Page 25 ver

26 Medical Insurance Plan). In certain circumstances, enrllment fr Medical Insurance Benefits may ccur utside the Open Enrllment Perid. The Emplyer's Special Enrllment Ntice als cntains imprtant infrmatin abut yur special enrllment rights. When a special enrllment right applies t yur Medical Insurance Benefits, yu may change yur electin under this Plan t crrespnd with the special enrllment right set frth in Sectin 9801(f) f the Internal Revenue Cde. In brief, thse rights prvide that if yu lse ther healthcare plan cverage under certain circumstances, marry, r btain an additinal child thrugh birth r adptin, yu may be able t change yur healthcare plan electins and make a crrespnding change t yur electins under this Plan. If yu wuld like t d s, yu shuld cntact the Emplyer as sn as pssible after the event ccurs, within 30 days f that event. Certain Judgments, Decrees, and Orders (Applies t Premium Payment and Health FSA Cmpnents, but Nt t DCAP Cmpnent). If a judgment, decree, r rder frm a divrce, separatin, annulment, r custdy change requires yur child (including a fster child wh is yur Dependent) t be cvered under the Grup Spnsred Insurance r Health FSA, yu may change yur electin t prvide cverage fr the child. If the rder requires that anther individual (such as yur frmer Spuse) cver the child, then yu may change yur electin t revke cverage fr the child, prvided that such cverage is, in fact, prvided fr the child. Medicare and Medicaid (Applies t Premium Payment and Health FSA Cmpnents as Limited Belw, but Nt t DCAP Cmpnent). If yu, yur Spuse, r yur Dependent becmes entitled t (i.e., becmes enrlled in) Medicare r Medicaid, then yu may reduce r cancel that persn's accident r health cverage under the Grup Spnsred Insurance and/r yur Health FSA may be canceled cmpletely but nt reduced. Similarly, if yu, yur Spuse, r yur Dependent wh has been entitled t Medicare r Medicaid lses eligibility fr such cverage, then yu may elect t cmmence r increase that persn's accident r health cverage (here, Grup Spnsred Insurance and/r yur Health FSA, as applicable). Change in Cst (Applies t Premium Payment and DCAP Cmpnents as Limited Belw, but Nt t Health FSA Cmpnent). If the cst charged t yu fr yur Grup Spnsred Insurance r dependent care expenses significantly increases during the Plan Year, then yu may chse t d any f the fllwing: make a crrespnding increase in yur cntributins; revke yur electin and receive cverage under anther benefit package ptin (if any) that prvides similar cverage, r elect similar cverage under the plan f yur Spuse's emplyer; drp yur cverage, but nly if n ther benefit package ptin prvides similar cverage. Fr these purpses, the Health FSA is nt similar cverage with respect t the Grup Spnsred Insurance; an HMO and a PPO are cnsidered t be similar cverage; and cverage under anther emplyer plan, such as the plan f a Spuse's r Dependent's emplyer, may be treated as similar cverage if it therwise meets the requirements f similar cverage. If the cst f Grup Spnsred Insurance r dependent care expenses significantly decreases during the Plan Year, then the Emplyer may permit the fllwing FSA Summary Plan Descriptin Page 26 ver

27 electin changes: if yu are enrlled in the benefit package ptin that has decreased in cst, yu may make a crrespnding decrease in yur cntributins; if yu are enrlled in anther benefit package ptin, yu may change yur electin n a prspective basis t elect the benefit package ptin that has decreased in cst; r if yu are therwise eligible, yu may elect the benefit package ptin that has decreased in cst n a prspective basis, subject t the terms and limitatins f the benefit package ptin. Fr insignificant increases r decreases in the cst f benefits, hwever, the Emplyer will autmatically adjust yur electin cntributins t reflect the minr change in cst. The Emplyer generally will ntify yu f increases r decreases in the cst f Grup Spnsred Insurance; yu must ntify the Emplyer f increases r decreases in the cst f dependent care expenses if yu want t make changes. The change in cst prvisin applies t DCAP Cmpnent nly if the cst change is impsed by a dependent care prvider wh is nt yur relative. Change in Cverage (Applies t Premium Payment and DCAP Cmpnents, but Nt t Health FSA Cmpnent). Yu may als change yur electin if ne f the fllwing events ccurs: Significant Curtailment f Cverage. If yur Grup Spnsred Insurance r DCAP cverage is significantly curtailed withut a lss f cverage (fr example, when there is an increase in the deductible under the Medical Insurance Benefits), then yu may revke yur electin fr that cverage and elect cverage under anther benefit package ptin that prvides similar cverage. (Cverage under a plan is significantly curtailed nly if there is an verall reductin f cverage under the plan generally-lss f ne particular physician in a netwrk des nt cnstitute significant curtailment.) If yur Grup Spnsred Insurance r DCAP cverage is significantly curtailed with a lss f cverage (fr example, if yu lse all cverage under the ptin by reasn f an verall lifetime r annual limitatin), then yu may either revke yur electin and elect cverage under anther benefit package ptin that prvides similar cverage, elect similar cverage under the plan f yur Spuse's emplyer, r drp cverage, but nly if there is n ptin available under the plan that prvides similar cverage. (The Emplyer generally will ntify yu f significant curtailments in Grup Spnsred Insurance; yu must ntify the Emplyer f significant curtailments in DCAP cverage if yu want t make changes.) Additin r Significant Imprvement f Salary Reductin Plan Optin. If the Plan adds a new ptin r significantly imprves an existing ptin, then the Emplyer may permit Participants wh are enrlled in an ptin ther than the new r imprved ptin t elect the new r imprved ptin. Als, the Emplyer may permit eligible Emplyees t elect the new r imprved ptin n a prspective basis, subject t limitatins impsed by the applicable ptin. FSA Summary Plan Descriptin Page 27 ver

28 Lss f Other Grup Health Cverage. Yu may change yur electin t add grup health cverage fr yu, yur Spuse, r yur Dependent, if any f yu lses cverage under any grup health cverage spnsred by a gvernmental r educatinal institutin (fr example, a state children's health insurance prgram r certain Indian tribal prgrams). Change in Electin Under Anther Emplyer Plan. Yu may make an electin change that is n accunt f and crrespnds with a change made under anther emplyer plan (including a plan f the Emplyer r a plan f yur Spuse's r Dependent's emplyer), s lng as (a) the ther cafeteria plan r qualified benefits plan permits its participants t make an electin change permitted under the IRS regulatins; r (b) the Salary Reductin Plan permits yu t make an electin fr a perid f cverage (fr example, the Plan Year) that is different frm the perid f cverage under the ther cafeteria plan r qualified benefits plan, which it des. Fr example, if an electin t drp cverage is made by yur Spuse during his r her emplyer's pen enrllment, yu may add cverage under this Plan t replace the drpped cverage. DCAP Cverage Changes. Yu may make a prspective electin change that is n accunt f and crrespnds with a change by yur dependent care service prvider. Fr example: (a) if yu terminate ne dependent care service prvider and hire a new dependent care service prvider, then yu may change cverage t reflect the cst f the new service prvider; and (b) if yu terminate a dependent care service prvider because a relative becmes available t take care f the child at n charge, then yu may cancel cverage. Mid-Year Electin Changes fr Health Cverage (Applies nly t Premium Payment Cmpnent) Emplyer will default t nt allw Emplyees t revke their electin under their Premium Payment Cmpnent if they meet the cnditins specified under "Reductin in hurs in service" r "Enrllment in a Qualified Health Plan". Other than the reasns abve, when culd my electins change? Yu may als change yur electin if ne f the fllwing events ccurs: Errr at time f Enrllment. If a mistake is made as t yur eligibility r participatin, the allcatins made t yur accunt, r the amunt f benefits t be paid t yu r anther persn, then the Emplyer shall, t the extent that it deems administratively pssible and therwise permissible under the Cde and ther applicable law, allcate, withhld, accelerate, r therwise adjust such amunts as will in its judgment accrd the credits t the accunt r distributins t which yu are r such ther persn is prperly entitled under the Plan. Such actin by the Emplyer may include withhlding f any amunts due frm yur cmpensatin. Highly Cmpensated and/r a Key Emplyee. If yu are a Highly Cmpensated Emplyee r a Key Emplyee as defined by the IRS, the amunt f yur cntributins and benefits may be limited s that the Plan as a whle des nt unfairly favr thse wh are highly paid. Cngress has intended this Plan t be available t all classes f Emplyees and nt t be cnsidered tp-heavy in participatin. FSA Summary Plan Descriptin Page 28 ver

29 Plan experience will dictate whether cntributin limitatins n Highly Cmpensated r Key Emplyees will apply. Emplyees will be ntified f these limitatins if affected. Yur Emplyer may als reduce yur salary reductins (and increase yur taxable regular pay) during the Plan Year if yu are a Highly Cmpensated and/r Key Emplyee as defined by the Internal Revenue Cde ("the Cde"), if necessary t prevent the Plan frm becming discriminatry within the meaning f the federal incme tax law. FSA Summary Plan Descriptin Page 29 ver

30 Family and Medical Leave Act (if applicable) What is the Impact f the Family and Medical Leave Act (FMLA)? Ntwithstanding any ther prvisin in this Plan, the Emplyer may (a) permit yu t revke (and subsequently reinstate) yur electin f ne r mre benefit cverage s under the Plan, (b) adjust yur cmpensatin reductin as a result f a revcatin r reinstatement and (c) permit payment f yur share f the cst f benefit cverage during an unpaid leave with after-tax dllars (r pay fr benefits under anther arrangement such as pre-paying the benefits with pretax dllars prir t the leave r catching up by paying fr the benefits with pre-tax dllars subsequent t the leave) t the extent the Emplyer deems necessary r apprpriate t assure the Plan s cmpliance with the prvisins f the FMLA and any regulatin pertaining theret. Yu shuld cnsult the Emplyer if yu have any questins. Hw des a leave f absence (such as FMLA) affect my health benefits? FMLA Leaves f Absence. If yu g n a qualifying leave under the FMLA, then t the extent required by the FMLA yur Emplyer will cntinue t maintain yur Grup Spnsred Insurance and Health FSA cverage n the same terms and cnditins as if yu were still active (that is, yur Emplyer will cntinue t pay its share f the cntributins t the extent that yu pt t cntinue cverage). Yur Emplyer may require yu t cntinue all Grup Spnsred Insurance and Health FSA cverage while yu are n paid leave (s lng as Participants n nn-fmla paid leave are required t cntinue cverage). If s, yu will pay yur share f the cntributins by the methd nrmally used during any paid leave (fr example, n a pre-tax salary-reductin basis). If yu are ging n unpaid FMLA leave (r paid FMLA leave where cverage is nt required t be cntinued) and yu pt t cntinue yur Grup Spnsred Insurance and Health FSA cverage, then yu may pay yur share f the cntributins in ne f the fllwing ways: Pay-as-yu-g: with after-tax dllars, by sending mnthly payments t the Emplyer by the due date established by the Emplyer; Pre-pay: with pre-tax dllars, by having such amunts withheld frm yur nging Cmpensatin, if any, including unused sick days and vacatin days, r pre-paying all r a prtin f the Cntributins fr the expected duratin f the leave n a pre-tax salary reductin basis ut f pre-leave Cmpensatin. T pre-pay the Cntributins, yu must make a special electin t that effect prir t the date that such Cmpensatin wuld nrmally be made available (pre-tax dllars may nt be used t fund cverage during the next Plan Year); Catch-up: under anther arrangement agreed upn between yu and the Emplyer (e.g., the Emplyer may fund cverage during the leave and withhld "catch-up" amunts frm yur Cmpensatin n a pre-tax r after-tax basis) upn yur return. If yur Emplyer requires all Participants t cntinue Grup Spnsred Insurance and Health FSA cverage during the unpaid FMLA leave, then yu may discntinue paying yur share f the required cntributins until yu return frm leave. Upn returning frm leave, yu must pay FSA Summary Plan Descriptin Page 30 ver

31 yur share f any required cntributins that yu did nt pay during the leave. Payment fr yur share will be withheld frm yur cmpensatin either n a pre-tax r after-tax basis, depending n what yu and the Emplyer agree t. If yur Grup Spnsred Insurance and Health FSA cverage ceases while yu are n FMLA leave (e.g., fr nn-payment f required cntributins), yu will be permitted t re-enter such Benefits, as applicable, upn return frm such leave n the same basis as when yu were participating in the Plan befre the leave r as therwise required by the FMLA. Yu may be required t have cverage fr such Benefits reinstated s lng as cverage fr Emplyees n nn-fmla leave is required t be reinstated upn return frm leave. But, despite the preceding sentence, with regard t the Health FSA cverage, if yur cverage ceased (e.g., yu revke cverage r chse the Pay-as-yu-g ptin and then fail t pay a required cntributin) then yu are nt entitled t reimbursement fr claims incurred during the perid when the cverage is nt in effect and yu may nt retractively elect Health FSA cverage fr claims incurred during the perid when cverage was nt in effect. Hwever, yu will be permitted t elect whether t be reinstated in the Health FSA at the same cverage level as was in effect befre the FMLA leave (with increased cntributins fr the remaining perid f cverage) r at a cverage level that is reduced pr rata fr the perid f FMLA leave during which yu did nt pay cntributins. If yu elect the pr rata cverage, the amunt withheld frm yur cmpensatin n a payrll-by-payrll basis fr the purpse f paying fr reinstated Health FSA will equal the amunt withheld befre FMLA leave. Nn-FMLA Leaves f Absence. If yu g n an unpaid leave f absence that des nt affect eligibility, then yu will cntinue t participate and the cntributins due fr yu will be paid by pre-payment befre ging n leave, by after-tax cntributins while n leave, r with catch-up cntributins after the leave ends, as may be determined by yur Emplyer. If yu g n an unpaid leave that affects eligibility, then the electin change rules in Sectin V Administrative Prvisins Electin Changes will apply. Hw des a leave f absence (such as FMLA) affect my health benefits? If yu are cmmencing r returning frm FMLA leave, then yur electin fr nn-health benefits (such as dependent care expenses, etc.) will be treated in the same way as under yur Emplyer's plicy fr prviding such Benefits fr Participants n a nn-fmla leave (see abve). If that plicy permits yu t discntinue cntributins while n leave, then upn returning frm leave yu will be required t repay the cntributins nt paid by yu during leave. Payment will be withheld frm yur cmpensatin either n a pre-tax r after-tax basis, as agreed t by the Emplyer and yu r as the Emplyer therwise deems apprpriate. Yu are nt entitled t reimbursements fr claims incurred during the perid when cverage is nt in frce. Use-it-r-Lse-it Rule If the expenses that yu incur during yur perid f cverage in this Plan Year are less than the annual amunt that yu elected, yu will frfeit any amunts that are nt eligible fr carryver t the fllwing Plan Year. Therefre, it is imprtant t cnsider reducing yur salary nly t pay expenses yu are sure yu will incur during the Plan Year. Examples f the types f expenses that yu knw yu will incur are regular expenses fr items such as braces, insulin r ther recurring drug expenses, ffice visit c-pay charges and weekly r mnthly dependent care expenses. FSA Summary Plan Descriptin Page 31 ver

32 Cntributins allcated t ne accunt under a cmpnent can nly be used t pay claims fr that cmpnent and n ther. Fr example, amunts credited t yur DCE Accunt cannt be used t pay r reimburse yu fr an expense under the HRE Accunt, even if yur DCE Accunt has mney in it but yur HRE Accunt has nne. Similarly, amunts credited t yur HRE Accunt cannt be used t pay r reimburse yu fr a dependent care expense under the DCE Accunt, even if yur HRE Accunt has mney in it but yur DCE Accunt has nne. Yu will frfeit any amunts in yur accunt(s) that are nt applied t pay expenses submitted n later than the end f the run-ut perid fllwing the cmpnent s perid f cverage end date fr which the electin was effective. Frfeited amunts will be used as fllws: first, t ffset any lsses experienced by the Emplyer as a result f making reimbursements in excess f cntributins paid by all Participants; secnd, t reduce the cst f administering the accunt during the Plan Year and subsequent Plan Year; and third, t prvide increased benefits r cmpensatin t Participants in subsequent years in any weighted r unifrm fashin that the Emplyer deems apprpriate, cnsistent with applicable regulatins. In additin, any benefit payments that are unclaimed (e.g., uncashed benefit checks) shall be frfeited and applied as described abve. Hw Benefits are Taxed Generally, yu may nt be taxed fr the amunts yu elect under the Plan. Hwever, the Emplyer cannt guarantee that specific tax cnsequences will flw frm yur participatin in the Plan. This infrmatin is nt intended t prvide legal r tax advice. Yu shuld cnsult yur wn persnal tax advisr. The tax benefits that yu receive depend n the validity f the claims that yu submit. If yu are reimbursed fr a claim that is later determined t nt be eligible under the Plan, then yu will be required t repay the amunt. Alternatively, PSA may ffset the amunt against any ther eligible expense submitted fr reimbursement r yur Emplyer may withhld the amunt frm yur pay. Ultimately, it is yur respnsibility t determine whether any reimbursement under the Plan cnstitutes an eligible expense that qualifies fr the federal incme tax exclusin. Any reimbursement that the Emplyer has reasn t believe will exceed yur statutry limit will be subject t FICA and incme tax withhlding. Nte that if yu are married and yur spuse als participates in a DCAP, the maximum amunt that yu and yur spuse tgether can exclude frm taxable incme is $5,000. Hw des enrllment in a DCAP affect my taxes? Using a DCAP fr reimbursement f dependent care expenses results in a reductin f yur taxable salary; therefre, yur tax payments are reduced. Depending n yur incme tax bracket, yu may als be entitled t claim the Federal Incme Tax Credit fr dependent care expenses. It is imprtant t remember that yu may use either f these (r a cmbinatin f the tw), but yu may nt take a tax deductin f thse expenses reimbursed under this Plan, r vice versa. Fr mst individuals, participating in a DCAP will prduce the greater federal tax savings, but there are sme fr whm the ppsite is true. And in sme cases, the federal tax savings frm participating in a DCAP will be nly marginally better. Because the preferable methd fr treating benefits payments depends n certain factrs such as a persn's tax filing FSA Summary Plan Descriptin Page 32 ver

33 status (e.g., married, single, head f husehld), number f qualifying individuals, earned incme, etc., each Participant will have t determine his r her tax psitin individually in rder t make the decisin. Use IRS Frm 2441 (Child and Dependent Care Expenses) t help yu. Ask yur Emplyer if yu need further infrmatin abut the DCAP r the Dependent Care Tax Credit, but remember that yur Emplyer is nt prviding legal advice. If yu need an answer upn which yu can rely, yu shuld cnsult yur wn persnal tax advisr. If I elect DCAP, d I still reprt dependent care expenses n my federal incme tax return? Yu must file a 2441 Child Care Tax Credit frm with yur annual tax filing. Yur Emplyer is required t reprt the amunt yu elect t withhld frm yur salary n yur IRS W-2 frm. Yu must list the names and taxpayer identificatin numbers (TINs) f any entities that prvided yu with dependent care services during the calendar year fr which yu have claimed a tax-free reimbursement. Yu may nt claim any ther tax benefit fr the amunt f yur pre-tax salary reductins under the DCAP Cmpnent, althugh yur dependent care expenses in excess f that amunt may be eligible fr the Dependent Care Tax Credit. Fr example, if yu elect $3,000 in cverage under the DCE Accunt and are reimbursed $3,000, but yu had dependent care expenses ttaling $5,000, then yu culd cunt the excess $2,000 when calculating the Dependent Care Tax Credit if yu have tw r mre qualifying individuals. Ask yur Emplyer r PSA if yu need further infrmatin abut which expenses are, and are nt, likely t be reimbursable. The Plan Can Be Changed The Plan is intended t cmply with all applicable sectins f the Internal Revenue Cde and specifically Sectin 125; therefre, the Plan and any Emplyer benefit plans ffered under the Plan may be amended t cmply with the Internal Revenue Cde and the Treasury Regulatins as they may be amended. In additin, the Plan and any Emplyer benefit plans ffered under the Plan may be amended at any time fr reasns ther than cmpliance with new law. Althugh the Emplyer expects t maintain the Plan, it has the right t amend r terminate all r any part f the Plan at any time fr any reasn. Hw t File a Reimbursement Request What is required t submit a claim fr benefits? If yu have a claim under an insurance plan r plicy, yu shuld fllw the claims prcedure applicable t that plan r plicy, as described in the SPD r similar explanatry bklet available frm the insurer. Fr claims assciated slely with this Plan, yu shuld file yur claim fr reimbursement as sn as pssible after yu have incurred the expense. It is nt necessary fr yu t have actually paid the amunt due fr an expense; nly fr yu t have incurred the expense and that it is nt being paid fr r reimbursed frm any ther surce. A signed Request fr Reimbursement Frm is required fr all requests that yu submit via mail r fax. Yur claim fr expense reimbursement must include a statement frm yur service prvider that yu have FSA Summary Plan Descriptin Page 33 ver

34 incurred the expense and the amunt f yur expense. Further details abut what must be prvided are cntained in the Request fr Reimbursement Frm. In sme instances, a statement frm the prvider that a Health FSA expense is medically necessary may be required. If the Emplyer implements an electrnic payment card plan (debit card, credit card, r similar methd) t pay expenses frm the Health FSA, sme expenses may be validated at the time the expense is incurred (like c-pays fr medical care). Fr ther expenses, the card payment is nly cnditinal and yu will still have t submit supprting dcuments. Hw d I submit a claim fr benefits? Claims may be submitted the fllwing ways: Electrnically via ur secure web prtal: Faxed with a reimbursement frm t (866) Mailed with a reimbursement frm t PO Bx 2797, Prtland, OR Is there a filing deadline? Claims will be paid up t 90 days after the Plan s perid f cverage end date. Thse submitted after the allwable year-end run-ut perid may nt be paid. What happens if I receive an verpayment? If yu receive reimbursement and it is later determined that yu received an verpayment r a payment was made in errr (e.g., yu were reimbursed fr an expense that is later paid by an insurance plan), yu will be required t refund the imprper payment t the Plan. If yu d nt refund the imprper payment, the Plan reserves the right t ffset future reimbursement equal t the imprper payment r, if that is nt feasible, t withhld such funds frm yur pay. If all ther attempts t recup the imprper payment are unsuccessful, the Emplyer may treat the verpayment as a bad debt, which may have incme tax cnsequences fr yu. Handling Denied Claims What happens if my claim fr benefits is denied? If PSA denies a claim, in whle r in part, yu will be ntified in writing within 30 days f the date PSA receives yur claim. The 30-day perid may be extended fr an additinal 15 days fr matters beynd PSA s cntrl, such as situatins where a claim is incmplete. PSA will prvide written ntice f any extensin, describing the reasns fr the extensin and the date by which yu can expect a decisin. Where a claim is incmplete, the extensin ntice will describe the infrmatin still needed by PSA and allw yu 45 days frm receipt f the ntice t prvide the additinal infrmatin. If this happens, it will have the effect f suspending any decisin n yur claim until yu prvide the specified infrmatin. If PSA denies yur claim, yu will receive a ntice that includes the fllwing elements: The specific reasn r reasns fr the denial; The specific Plan prvisin r prvisins that supprt the denial; A descriptin f any items r infrmatin yu wuld need t validate yur claim and an explanatin f why the added material is necessary; and A descriptin f the steps t appeal the denial, including yur right t submit written cmments, yur right t review (upn request and at n charge) relevant dcuments and ther infrmatin, and yur right t file suit under ERISA (where applicable) with respect t any adverse determinatin after appeal f yur claim. FSA Summary Plan Descriptin Page 34 ver

35 Appeals Can I appeal a denied claim f benefits? Yu may appeal a claim denial by submitting a Request fr Review (r ther written appeal request) t PSA, in writing, within 180 days f yur claim denial. If yu d nt appeal n time, yu will lse the right t appeal the denial and the right t file suit in curt. Yur written appeal shuld state the reasns that yu feel yur claim shuld nt have been denied, and shuld include any additinal items r infrmatin that yu feel supprts yur claim. The appeal prcess will prvide yu with the pprtunity t ask additinal questins and make written cmments, and yu may review (upn request and at n charge) dcuments and ther infrmatin relevant t yur appeal. T the extent a dispute arises under the terms f ne f the insurance plans r plicies, such as a grup medical r dental insurance plan ffered by yur Emplyer, yur ability t appeal decisins under the insurance plan will be utlined in the SPD r similar explanatry bklet available frm the insurer. PSA will review yur appeal in a reasnable time, but within 60 days after receiving yur request. PSA may, in its discretin, hld a hearing n the denied claim. If PSA cnsults with a medical expert t help analyze yur appeal, the expert will be different frm, and nt subrdinate t, any expert that was cnsulted in cnnectin with the initial claim denial. If upn review a decisin is reached t affirm the riginal denial f yur claim, yu will receive a ntice f that determinatin, which will include the fllwing elements: The specific reasn r reasns fr the decisin n review; The specific Plan prvisin r prvisins that mtivated the decisin; A statement f yur right t review (upn request and at n charge) relevant dcuments and ther infrmatin; If internal rules, guidelines, prtcls, r ther similar criteria (cllectively referred t as internal guidelines ) are relied n in making the decisin n review, a descriptin f the specific internal guidelines, r a statement that such internal guidelines were relied n, and a cpy f the internal guidelines will be prvided free f charge t yu upn request; and A statement f yur right t bring suit under ERISA Sectin 502(a) (where applicable). ERISA Rights The Premium Payment, and the DCAP Cmpnents are nt ERISA welfare benefit plans under the Emplyee Retirement Incme Security Act f 1974 (ERISA). Hwever, the Health FSA Cmpnent and the Grup Spnsred Insurance are gverned by ERISA. Nte: This SPD des nt describe the Grup Spnsred Insurance. Cnsult the Grup Spnsred Insurance Plan Dcuments and the separate SPDs fr the Grup Spnsred Insurance. D I have ERISA Rights? As a Participant in this Plan, yu may be entitled t certain rights and prtectins under ERISA. ERISA des nt apply t Emplyee benefit plans spnsred by gvernmental entities r churches. If yur Emplyer is a church r gvernmental rganizatin (such as a city r schl district), ERISA will nt apply and yu will nt have the rights described in this FSA Summary Plan Descriptin Page 35 ver

36 sectin. If I have ERISA Rights, what des that mean t me? ERISA prvides that Plan Participants are entitled t: Examine, withut charge, at the Emplyer s ffice and at ther specified lcatins, such as wrk-sites and unin halls, all Plan Dcuments and cpies f all dcuments filed by the Plan with the U.S. Department f Labr, such as detailed annual reprts. Obtain cpies f all dcuments and ther Plan infrmatin upn written request t the Emplyer. The Emplyer may make a reasnable charge fr the cpies. Receive a summary f the Plan s annual financial reprt, if any. The Emplyer is required by law t furnish each Participant with a cpy f this SPD. Fiduciary Obligatins In additin t creating rights fr Plan Participants, ERISA impses duties upn the Emplyer wh is respnsible fr the peratin f an Emplyee benefit plan. The Emplyer is called the fiduciary f the Plan, and has a duty t d s prudently and in the interest f yu and ther Plan Participants and beneficiaries. N ne, including yur Emplyer r any ther persn, may fire yu r therwise discriminate against yu in any way t prevent yu frm btaining a benefit frm the Plan, r frm exercising yur rights under ERISA. Right t Review If yur claim fr a benefit is denied r ignred, in whle r in part, yu have a right t knw why this was dne, t btain cpies f dcuments relating t the decisin withut charge, and t appeal any denial, yu must submit this request t PSA, in writing, 180 days f the date f ntice f yur claim denial. Requests shuld be submitted t PacificSurce Administratrs, Attn: Request fr Review, PO Bx 2797, Prtland, OR Enfrcing yur rights Under ERISA, there are steps yu can take t enfrce the abve rights. Fr instance, if yu request a cpy f the Plan Dcuments r the latest annual reprt frm the Plan and d nt receive them within 30 days, yu may file suit in a federal curt. In such a case, the curt may require the Emplyer t prvide the materials and pay yu up t $110 a day until yu receive the materials, unless the materials were nt sent because f reasns beynd the cntrl f the Emplyer. If yu have a claim fr benefits which is denied r ignred, in whle r in part, and if yu have exhausted the claims prcedures available t yu under the plan, yu may file suit in a state r federal curt. In additin, if yu disagree with the Plan s decisin r lack theref cncerning the qualified status f a dmestic relatins rder r a medical child supprt rder, yu may file suit in federal curt. If it shuld happen that Plan fiduciaries misuse the Plan's mney, r if yu are discriminated against fr asserting yur rights, yu may seek assistance frm the U.S. Department f Labr, r yu may file suit in a federal curt. The curt will decide wh shuld pay curt csts and legal fees. If yu are successful, the curt may rder the persn yu have sued t pay these csts and fees. If yu lse, the curt may rder yu t pay these csts and fees, fr example, if it finds yur claim is frivlus. Assistance with Yur Questins Cntact yur Emplyer if yu have any questins abut yur Plan, this statement r abut yur rights under ERISA. If yu need assistance in btaining dcuments frm the Emplyer, yu shuld cntact the nearest ffice f the Emplyee Benefits Security Administratin, U.S. Department f Labr, listed in yur telephne directry r the Divisin f Technical Assistance FSA Summary Plan Descriptin Page 36 ver

37 and Inquiries, Emplyee Benefits Security Administratin, U.S. Department f Labr, 200 Cnstitutin Avenue N.W., Washingtn, D.C Yu may als btain certain publicatins abut yur rights and respnsibilities under ERISA by calling the publicatins htline f the Emplyee Benefits Security Administratin. HIPAA Privacy Rights A federal law, the Health Insurance Prtability and Accuntability Act f 1996, as amended (HIPAA), requires that the Plan prtect the cnfidentiality f yur private health infrmatin. The Plan and yur Emplyer, as spnsr f the Plan, will nt use r further disclse infrmatin that is prtected under HIPAA (Prtected Health Infrmatin r PHI) except as necessary fr treatment, payment, healthcare peratins and Plan administratin, r as permitted r required by law. As required under HIPAA, the Plan has required all f its business assciates t als bserve HIPAA s privacy rules. In particular, the Plan will nt, withut a written authrizatin frm yu, use r disclse PHI fr emplyment-related actins and decisins r in cnnectin with any ther benefit r emplyment benefit plan f the Emplyer. Under HIPAA, yu have certain rights with respect t yur PHI, including the right t review and cpy the infrmatin, receive an accunting f any disclsures f the infrmatin and, under certain circumstances, amend the infrmatin. Yu als have a right t file a cmplaint with the Plan r with the Secretary f the U.S. Department f Health and Human Services if yu believe yur rights under HIPAA have been vilated. FSA Summary Plan Descriptin Page 37 ver

38 VI. Ntices Required by Law Qualified Medical Child Supprt Order The Health FSA will prvide benefits as required by any qualified medical child supprt rder (QMCSO), as defined in ERISA 609(a). The Health FSA has detailed prcedures fr determining whether an rder qualifies as a QMCSO. Participants and beneficiaries can btain, withut charge, a cpy f such prcedures frm the Emplyer. Newbrns' and Mthers' Health Prtectin Act f 1996 (NMPHA) Grup health plans and health insurance issuers generally may nt, under federal law, restrict benefits fr any hspital length f stay in cnnectin with childbirth fr the mther r newbrn child t less than 48 hurs fllwing a vaginal delivery r t less than 96 hurs fllwing a cesarean sectin. Hwever, federal law generally des nt prhibit the mther's r newbrn's attending prvider, after cnsulting with the mther, frm discharging the mther r her newbrn earlier than 48 hurs (r 96 hurs, as applicable). In any case, plans and issuers may nt, under federal law, require that a prvider btain authrizatin frm the Plan r the issuer fr prescribing a length f stay nt in excess f 48 hurs (r 96 hurs). Wmen's Health and Cancer Rights Act f 1998 (WHCRA) The Wmen's Health and Cancer Rights Act f 1998 (WHCRA) is a federal law that prvides prtectins t patients wh chse t have breast recnstructin in cnnectin with a mastectmy. This law applies generally bth t persns cvered under grup health plans and persns with individual health insurance cverage. But WHCRA des NOT require health plans r issuers t pay fr mastectmies. If a grup health plan r health insurance issuer chses t cver mastectmies, then the plan r issuer is generally subject t WHCRA requirements. Michelle's Law "Michelle's Law", enacted Octber 9, 2008, requires grup and individual health plans t cntinue t cver therwise eligible dependent children taking a medical leave f absence frm a pstsecndary educatinal institutin (e.g., a cllege, university, r vcatinal schl) due t a serius illness r injury. Dependent children n a leave f absence must be cvered until the earlier f ne year frm the first day f the leave f absence r the date n which the cverage therwise wuld terminate. The Genetic Infrmatin Nndiscriminatin Act f 2008 (GINA) GINA prhibits discriminatin by health insurers and Emplyers based n individuals' genetic infrmatin. Genetic infrmatin includes the results f genetic tests t determine whether smene is at increased risk f acquiring a cnditin in the future, as well as an individual's family medical histry. GINA impses the fllwing restrictins: prhibits the use f genetic infrmatin in making emplyment decisins restricts the acquisitin f genetic infrmatin by Emplyers and thers impses strict cnfidentiality requirements and prhibits retaliatin against individuals wh ppse actins made unlawful by GINA r wh participate in prceedings t vindicate rights under the law r aid thers in ding s. Health Infrmatin Technlgy fr Ecnmic and Clinical Health Act (HITECH Act) HITECH was passed as part f the American Recvery and Reinvestment Act f 2009 t strengthen the privacy and security prtectin f health infrmatin, and t imprve the wrkability and effectiveness f HIPAA Rules. FSA Summary Plan Descriptin Page 38 ver

39 The Paul Wellstne and Pete Dmenici Mental Health Parity and Addictin Equity Act f 2008 This law amends ERISA, the Public Health Service Act (PHSA), and the Internal Revenue Cde (IRC) and applies t all ERISA grup health plans and t health insurers that prvide insurance cverage t grup health plans. In general, this new law requires grup health plans that prvide mental health r substance use disrder benefits t prvide such benefits n par with medical-surgical benefits. What is a Qualified Reservist Distributin? A Qualified Reservist Distributin permits yu t take a distributin f the amunt yu have cntributed t the Plan (less reimbursements yu have received r distributins previusly taken) as f the date yu request the distributin. If yu are rdered r called t active military duty fr 180 days r mre yu may request a Qualified Reservist Distributin by delivering a cpy f such rder r call t active duty t the Emplyer. Yu must request a Qualified Reservist Distributin n r after the date f the rder r call t active duty, and befre the last day f the Plan Year, if applicable) during which the rder r call t active duty ccurred. A Qualified Reservist Distributin is included in yur grss incme and wages, and is subject t emplyment taxes. Yu may submit expenses incurred after the date a Qualified Reservist Distributin has ccurred. The amunt that may be reimbursed is the amunt by which yu have elected t reduce yur Cmpensatin, less the sum f the Qualified Reservist Distributin and the amunt f the reimbursements yu received as f the date f the Qualified Reservist Distributin. USERRA Cntinuatin and reinstatement rights may als be available if yu are absent frm emplyment due t service in the unifrmed services pursuant t the Unifrmed Services Emplyment and Reemplyment Rights Act f 1994 (USERRA). Mre infrmatin abut cverage under USERRA is available frm the Emplyer. FSA Summary Plan Descriptin Page 39 ver

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