FLEXIBLE BENEFIT PLAN (Plan Document)

Transcription

1 FLEXIBLE BENEFIT PLAN (Plan Document) Effective July 1, 1985 Restated September 1, 2010 Amended November 12, 2013 (10.8 is the amendment) Amended effective September 1, 2014

2 Anoka-Hennepin ISD #11 Flexible Benefit Plan Effective July 1, 1985 Restated September 1, 2010 TABLE OF CONTENTS SECTION 1 - THE PLAN Establishment Purpose Legal Status 1 SECTION 2 - DEFINITIONS Definitions 2 (a) Administrator 2 (b) Compensation 2 (c) Core Benefit Coverage 2 (d) Dependent 2 (e) Dependent Care 2 (f) Effective Date 2 (g) Eligible Employee 2 (h) Employer 2 (i) FMLA Leave 2 (j) Health Care 3 (k) Highly Compensated Employee 3 (l) IRC 3 (m) Key Employee 3 (n) Participant 3 (o) Plan 3 (p) Plan Sponsor 3 (q) Plan Year 3 (r) Rehired Employees 3 (s) Salary Redirection 3 (t) School Board 3 (u) School Board Policy 3 (v) School Board Policy Contribution 4 (w) USERRA Leave 4 (x) Working Agreement 4 (y) Working Agreement Contribution Gender and Number 4 Page i -

3 SECTION 3 - ELIGIBILITY AND PARTICIPATION Eligibility for Flexible Benefit Account Eligibility for Spending Accounts Other Eligibility Provisions Application to Participate in Flexible 6 Benefit Account 3.5 Application to Participate in Spending Accounts 6 SECTION 4 - SALARY REDIRECTION Salary Redirection Maximum Salary Redirection to 9 Flexible Benefit Account 4.3 Additional Limitations on Salary Redirection 9 SECTION 5 - FLEXIBLE BENEFIT ACCOUNT Flexible Benefit Accounts Flexible Benefit Limits Benefit Descriptions Terminations Separate Written Plan 11 SECTION 6 - HEALTH CARE SPENDING ACCOUNT Health Care Spending Accounts Minimum and Maximum Salary Reduction to Health Care 12 Spending Account 6.3 Health Care Benefits Health Care Limits Forfeitures Termination Continuation ii -

4 6.8 Separate Written Plan 14 SECTION 7 - DEPENDENT CARE SPENDING ACCOUNT Dependent Care Spending Accounts Maximum Salary Reduction to Dependent Care Spending Account Dependent Care Benefits Dependent Care Limits Annual Statement of Benefits Forfeitures Termination Spouse Attending School Full-time or 17 Incapable of Self-Care 7.9 Separate Written Plan 17 SECTION 8 - CLAIMS Notice of Claim Claims Procedure 18 SECTION 9 - ADMINISTRATION Plan Administrator Duties and Powers of the Administrator Rules and Decisions Delegation of Responsibilities Representations to Fiduciaries Examination of Records 22 SECTION 10 - MISCELLANEOUS PROVISIONS Amendment or Termination Applicable Law Finances Non-Guarantee of Employment Right to Information ii -

5 10.6 Assignment Statutory Continuation Rights Special Mid-Year Change for Plan Year Beginning Sept. 1, SECTION 11 - FLEXIBLE BENEFITS PLAN 11.1 Severability Conflicts of Terms State Law Headings ii -

6 Flexible Benefit Plan SECTION 1 -- THE PLAN 1.1 Establishment. ANOKA-HENNEPIN ISD #11 (the "Employer") established, effective July 1, 1985, a plan of flexible compensation for the benefit of its eligible Employees, known as the FLEXIBLE BENEFIT PLAN. The Plan was amended and restated effective July 1, 1990, July 1, 1992, July 1, 1993, September 1, 1995, September 1, 1998, September 1, 2003, September 1, 2004, September 1, 2008, and September 1, Purpose. The purpose of the Plan is to provide Employees with a choice, within those limits specified elsewhere in the Plan, of health care benefits, dependent care benefits, coverage under certain qualified benefits as defined in Section 125 of the Code maintained by the Employer, and direct compensation. 1.3 Legal Status. The Plan is a cafeteria plan under Section 125 of the Internal Revenue Code. The Plan will be "non-discriminatory," as such term is used in IRC Section 125, and the Employer will take whatever steps are necessary to maintain the Plan as non-discriminatory. Under IRC Section 105, this Plan is also an uninsured medical reimbursement Plan, to the extent that Participants use salary reduction to pay for non-insurance health expenses, as defined in Section 213 of the IRC., and an insured medical reimbursement Plan, to the extent that Participants use salary reduction to pay for Employer-sponsored group insurance premiums. In addition, the Plan is a dependent care assistance plan under IRC Section

7 Flexible Benefit Plan SECTION 2 - DEFINITIONS 2.1 Definitions. The following words appearing in the Plan have the meanings set forth below, unless the context clearly denotes otherwise: (a) "Administrator(s)" is the person(s) appointed by the Employer to administer and manage the Plan and its assets for the sole benefit of the Participants. (b) "Code" means the Internal Revenue Code of 1986, as amended. (b) "Compensation" means a Participant's total salary, wages, incentive pay, overtime pay, bonuses, and other cash compensation before any salary redirection or reduction under this Plan or any other plan, but excluding expense reimbursements, severance pay, contributions to a qualified or non-qualified retirement or other deferred compensation plan, and any noncash compensation. (c) Core Benefit Coverage means the required enrollment in the Health, Dental, Life/AD&D, or Long Term Disability insurance plans as defined by the Plan Administrator. (d) "Dependent" means an individual who qualifies as a dependent under IRC Section 152. Effective on and after September 1, 2010 this term also includes any child of an Eligible Employee who is not yet 26 years old. (e) "Dependent Care" means the amount of expenses paid by a Participant for household or dependent care services for the care of a Dependent under the age of thirteen (13) or of a Dependent or spouse of the Participant physically or mentally incapable of caring for himself, to the extent that such expenses are incurred to enable the Participant to be gainfully employed. (f) "Effective Date" means July 1, 1985, as amended and restated on July 1, 1990, July 1, 1992, July 1, 1993, September 1, 1995, September 1, 1998, September 1, 2003, September 1, 2004, September 1, 2008, and September 1, (g) "Eligible Employee" means an employee eligible to participate in the Employer-sponsored employee benefit plans as defined by a School Board Policy or Working Agreement. (h) "Employer" is Anoka-Hennepin ISD #11. (i) FMLA Leave is a leave of absence that the Employer is required to extend to a Participant under the provisions of the Family Medical Leave Act of

8 (j) "Health Care" means the amount paid for the diagnosis, cure, mitigation, treatment, or prevention of disease; for the purpose of affecting any structure or function of the body; for hospital or nursing charges, dental care, psychiatric care, prescription drugs, insulin, and medical-related transportation expenses; as well as all other medical care as defined in IRC Section 213(d)(l), except for qualified long-term care services and insurance contracts. (k) Highly Compensated Employee means the following for each type of benefit described below: 1. For the Flexible Benefit Account under Section 5, a highly compensated individual or participant as defined in Section 125(e) of the Code. 2. For Health Care Spending Account under Section 6, a highly compensated employee for purposes of applicable nondiscrimination requirements of Section 105(h) of the Code means an employee who is highly compensated as defined in Section 105(h) of the Code. 3. For purposes of applicable nondiscrimination requirements of Section 129 of the Code for Dependent Care Spending Account under Section 7, a highly compensated employee means an employee who is highly compensated as defined in Section 414(q) of the Code. (l) "IRC" means the Internal Revenue Code of 1986, as amended. (m) "Key Employee" means any Employee who meets the criteria listed in Section 416(i)(1) of the Internal Revenue Code. (n) "Participant" means an active Employee who satisfies the participation requirements of Section 3, Eligibility And Enrollment. (o) "Plan" means the Flexible Benefit Plan, as amended from time to time. (p) "Plan Sponsor" is Anoka-Hennepin ISD #11. (q) "Plan Year" means the twelve-month period ending August 31. In the case of a newly hired employee, the employee's initial Plan Year is the period beginning on the date the employee is first eligible to participate and ending on the following August 31. (r) Rehired Employee means any employee who terminates employment with the Plan Sponsor and is subsequently rehired by the Plan Sponsor 30 or more days after termination. The term also includes any employee who begins an unpaid leave of absence from the Plan Sponsor and returns from said leave after 30 or more days have elapsed. (s) "Salary Redirection" means the Participant's designation of the Working Agreement Contribution or Compensation to his Flexible Benefit Account, Health Care Spending Account, Dependent Care Spending Account, or to any combination of these accounts. (t) School Board means the group of officials duly elected to govern the Employer. (u) School Board Policy means policy adopted by the School Board, which governs the relationship between the Employer and each employee not otherwise covered by a Working Agreement.. 3

9 (v) School Board Policy Contribution means the amount provided in each employee s School Board Policy, to be used for purchase of the Core Benefits Coverage and/or contributions to the Health Care Spending Account or Dependent Care Spending Account. (w) USERRA Leave means a leave of absence that the Employer is required to extend to a Participant under the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended from time to time. A Participant returning from a USERRA Leave shall have elections and benefits restored to him at the same level and type that were in effect at the time when the USERRA Leave began, as well as any benefits that began during the leave of absence for which the Participant would have reasonably become eligible. (x) Working Agreement means the collective bargaining agreement, which governs the employment relationship between the Employer and each employee. (y) Working Agreement Contribution means the amount negotiated in each employee s Working Agreement, to be used for purchase of the Core Benefits Coverage and/or contributions to the Health Care Spending Account or Dependent Care Spending Account. 2.2 Gender and Number. Except as otherwise indicated by context, masculine terminology includes the feminine and neuter, and terms used in the singular may also include the plural. 4

10 Flexible Benefit Plan SECTION 3 ELIGIBILITY & PARTICIPATION 3.1 Eligibility For Flexible Benefit Account. Employees, either through their Working Agreement or School Board Policy eligibility to participate in the Employer sponsored insurance plans, are eligible to participate in the Flexible Benefit Account. The effective date of participation in the Flexible Benefit Account is September 1. The effective date of participation for newly eligible employees during the Plan Year shall be as of the date of eligibility if the election is completed within the first 30 days of eligibility. 3.2 Eligibility For Spending Accounts. Employees either through their Working Agreement or School Board Policy who are eligible to participate in the insurance plan sponsored by the Employer, are eligible to participate in the Health Care Spending Account and/or the Dependent Care Spending Account as of September 1. The effective date of participation in the spending accounts is September 1. The effective date of participation for newly eligible employees during the Plan Year shall be as of the date of eligibility if the election is completed within the first 30 days of eligibility. 3.3 Other Eligibility Provisions. There is no minimum or maximum age or years of service requirement for participation in the Plan. Rehired Employees may participate in the Plan as of the date of eligibility if the election is completed within the first 30 days of eligibility A Participant taking an unpaid leave under FMLA may revoke an existing election under the Flexible Benefit Plan for the remainder of the Plan Year. Upon returning from FMLA leave, the Eligible Employee will be permitted to reinstate his prior elections for the remaining part of the Plan Year. Claims incurred during the FMLA leave are covered by the Plan to the extent an employee has paid sick leave. A Participant taking an approved paid leave of absence will continue to be a Participant in the Flexible Benefit Plan unless a life event occurs. 5

11 3.4 Application to Participate in Flexible Benefit Account. Each Eligible Employee who as part of their Working Agreement or School Board Policy receives a Working Agreement Contribution or School Board Policy Contribution to the Flexible Benefit Plan will be automatically enrolled in the Plan. Based on the Working Agreement Contribution or School Board Policy Contribution, an amount necessary to purchase the Core Benefit Coverage will be redirected to the Flexible Benefit Account. Any remaining Working Agreement Contribution or School Board Policy Contribution after purchasing the Core Benefit Coverages may be taken in cash or be redirected to the Flexible Benefit Health Care Spending Account or Dependent Care Spending Account. A completed enrollment must be submitted to the Employer prior to the beginning of the Plan Year, designating the amount to be redirected to the Plan. All other Eligible Employees who do not receive a Working Agreement Contribution or School Board Policy Contribution to the Flexible Benefit Plan as part of their Working Agreement or School Board Policy are automatically enrolled in the Flexible Benefit Plan. Participation in either of the Flexible Benefit Spending Accounts are optional and require the Employee to submit to the Employer a completed and signed enrollment for participation prior to the beginning of the Plan Year. Any Eligible Employee who is not required to participate in the Flexible Benefit Plan based on their Working Agreement or School Board Policy may reject directing compensation to his Flexible Benefit Account by submitting a waiver prior to the date he is eligible to participate. 3.5 Application to Participate in Spending Accounts. As a condition of participation, each newly Eligible Employee must submit to the Employer an application for participation in the Health Care and/or Dependent Care Spending Account of the Plan within 30 days of the date on which he becomes eligible to participate. Such application will designate the portion of his compensation and/or excess School Board Policy Contribution or Working Agreement Contributions after the Flexible Benefit Plan contributions to be redirected to the Participant s Health Care Spending Account and/or Dependent Care Spending Account. If an employee fails to submit an enrollment application to the Employer designating his salary redirection, any excess Working Agreement Contribution will be included in the employee s compensation. If an Eligible Employee fails to submit an application to the Employer designating his Salary Redirection, he will not become a Participant in the Health Care Spending Account and/or the Dependent Care Spending Account until the first day of the next Plan Year following submission of a completed enrollment application. 6

12 Flexible Benefit Plan SECTION 4 SALARY REDIRECTION 4.1 Salary Redirection. Subject to the limits of Section 4.2, 6.2 and 7.2, a Participant may designate and confirm a portion of his compensation to be redirected to his Flexible Benefit Account, Health Care Spending Account, and/or Dependent Care Spending Account for any Plan Year. An automatic contribution is made to the Flexible Benefit Account based on the amount set by the individual s Working Agreement or School Board Policy to purchase the Core Benefit Coverages. Any excess Working Agreement or Policy contributions which are not used for the purchase of core benefit coverage can be directed to the Health Care Spending Account and/or Dependent Care Spending Account. Such designation is made prior to the beginning of the Plan Year, or partial year, (in the case of a newly hired employee who first becomes eligible for the Plan during the Plan Year). A designation for any given Plan Year cannot be changed or revoked after the Participant s Plan Year has begun, except that a Participant s Salary Redirection can be changed midyear if the change is on account of, and consistent with, a life event as defined below: a) the Eligible Employee's marriage, divorce, legal separation, or annulment of marriage; b) death of the Eligible Employee's spouse or dependent; c) birth, adoption, placement for adoption, or change in custody of a child of the Eligible Employee; d) termination or commencement of employment by the Eligible Employee or the Eligible Employee s spouse; e) a change in the employment status of an employee, spouse or dependent including termination or commencement of employment, strike or lockout, a return from an unpaid leave or commencement of an unpaid leave, change in worksite, or any other change in employment status that affects the Eligible Employee, spouse or Dependents eligibility for benefits offered through a cafeteria plan; The following mid-year changes also are permitted: a) if a judgment, decree or order, including a qualified medical child support order, is issued requiring an Eligible Employee to provide accident and health coverage for the Eligible Employee s child or foster children, the Eligible Employee may increase coverage accordingly; 7

13 b) if an Eligible Employee, spouse, or dependent becomes entitled to Medicare, the Eligible Employee may cancel or reduce coverage under an accident or health plan. If the Eligible Employee, spouse, or Dependent ceases to be entitled to Medicare, then the Eligible Employee may prospectively increase coverage under an accident or health plan; c) an Eligible Employee may change their election if the spouse or dependent election covers a different period or if the spouse is entitled to make a change to their elections under another employer s plan due to a permitted election change recognized by that plan; d) if a benefit or coverage option is added, eliminated, or significantly curtailed, effected Eligible Employees may elect to revoke their election or choose a similar option. This rule does not apply to the Health Care Spending Account; e) if costs change significantly an Eligible Employee may make corresponding changes in their election or may revoke their election or elect another similar benefit option. This rule does not apply to the Health Care Spending Account; f) if the cost of child care for an Eligible Employee is significantly reduced because such Eligible Employee finds a new child care provider, the Eligible Employee may make a corresponding change to his or her salary redirection amount for the Dependent Care Spending Amount; g) if an Eligible Employee, spouse, or Dependent becomes eligible for COBRA under the group health plan of the Eligible Employee s employer, an Eligible Employee may increase their Salary Redirection to pay the COBRA premiums; h) if an Eligible Employee, spouse, or Dependent has any special enrollment rights provided under the Health Insurance Portability and Accountability Act of 1996, a change to correspond to those rights; i) if the Eligible Employee s Dependent satisfies or ceases to satisfy coverage requirements due to age, student status, or other similar circumstance, a change to correspond with the Dependent s eligibility or loss of eligibility; j) if the Eligible Employee commences or returns from leave authorized by the Family and Medical Leave Act of 1993 (FMLA); k) if the Eligible Employee commences or returns from a non-fmla unpaid leave of absence or the Eligible Employee s spouse commences or returns from any unpaid leave of absence; l) if there are significant changes in the health coverage of the Eligible Employee or the Eligible Employee s spouse attributable to the spouse s employment; m) if there is a change in the place of residence for the Eligible Employee, the Eligible Employee s spouse, or the Eligible Employee s Dependent which would restrict or greatly affect the ability to access care through the medical plan or daycare provider. 8

14 A mid-year change, when permitted, must be elected by the Participant no more than 30 days after the event giving rise to the opportunity to make such mid-year change occurs. However, if the event is a HIPAA special enrollment right based on the Eligible Employee s Dependent losing edibility under a State Medicaid or CHIP program, or becoming eligible for premium assistance under State Medicaid or CHIP, the Participant will have 60 days from the event to make the appropriate mid-year change. The effective date of any permitted mid-year change will be the first pay period after the mid-year election form is completed and returned to the Administrator. However, if the event giving rise to the permitted mid-year change is the Eligible Employee s birth or adoption of a child, the effective date will be the date of such birth or adoption. A Participant's Salary Redirection shall be changed automatically to reflect any change in the cost to the Participant of an insured coverage. A Participant may not reduce his Salary Redirection for the Health Care Spending Account below the total of prior reimbursements in that year. A Participant may increase or decrease his Salary Redirection for the Dependent Care Spending Account. Notwitstanding any provision herein, no mid-year change shall be permitted if such change would be inconsistent with Treas. Reg A Participant may change the amount of his Salary Redirection for any new Plan Year during the annual open enrollment period for that Plan Year. The election will be effective as of the first day of the new Plan Year. 4.2 Maximum Salary Redirection to Flexible Benefit Account. A Participant will be limited in the amount of Compensation that may be redirected to his Flexible Benefit Account to the sum of his portion of the premium for eligible Employersponsored group medical, dental, basic life and/or long term disability insurance plans. 4.3 Additional Limitations on Salary Redirection. No redirection will be allowed under this Plan for any premiums for insurance coverage which is not sponsored by the Employer. In addition to the limits on Salary Redirection designated in Sections 4.2, 6.2, and 7.2, a Participant's Salary Redirection may be further limited to prevent the total Dependent Care Benefits paid to a Participant in any calendar year from exceeding the Participant's Compensation in that same calendar year. The Salary Redirection for Key Employees and Highly Compensated Employees will automatically be further limited to ensure that the Plan satisfies all eligibility, benefits, and coverage tests, as specified by the IRC. 9

15 Flexible Benefit Plan SECTION 5 FLEXIBLE BENEFIT ACCOUNT 5.1 Flexible Benefit Accounts. The Employer will establish for each Participant a Flexible Benefit Account. A Participant's Flexible Benefit Account will be increased by the amount of the Participant's Working Agreement Contributions, School Board Policy Contributions, and/or redirected Compensation necessary to pay premiums for eligible group medical, dental, life and longterm disability insurance coverage from the Employer. The redirection cannot exceed the amount necessary to pay premiums for eligible group medical, dental, life, and long-term disability insurance coverage. A Participant's Flexible Benefit Account will be reduced by the amount of all such premiums. 5.2 Flexible Benefit Limits. A Participant may redirect his Compensation in accordance with his Working Agreement Contribution or School Board Policy Contribution requirement in the amount necessary to pay premiums for eligible group insurance coverage, provided that such coverage is sponsored by the Employer and the Participant has complied with all necessary enrollment procedures. No redirection will be allowed under this Plan for any premiums for group insurance coverage which is not sponsored by the Employer. In no case shall the Plan allow a Participant to carry over unused contributions from one Plan Year to the next. The amount of benefits paid to Highly Compensated Employees or Key Employees may be limited to prevent the Plan from becoming discriminatory under IRC Section Benefit Descriptions While the election to receive one or more benefits may be made under this Plan, the actual benefits will be provided based on the provision of the plan documents or contract of those plans. These contracts or plan documents and provisions are incorporated into this Plan by reference. 5.4 Terminations. If a Participant terminates employment with the Employer, he will terminate participation in the Plan. 10

16 5.5 Separate Written Plan. For purposes of the IRC, this Section 5 will constitute a separate written plan providing for redirection of employee premium contributions for eligible group insurance plans. To the extent necessary, other provisions of the Plan are incorporated by reference in this Section 5. 11

17 Flexible Benefit Plan SECTION 6 HEALTH CARE SPENDING ACCOUNT 6.1 Health Care Spending Accounts. The Employer will establish a Health Care Spending Account for each Participant. A Participant's Health Care Spending Account will be increased by the amount of the Participant's Compensation that he has elected to redirect to his Health Care Spending Account and/or any excess Working Agreement Contributions or School Board Policy Contributions, plus any carrover from the immediately preceding Plan Year pursuant to Section 6.5. A Participant's Health Care Spending Account will be reduced by the amount of any benefits paid to or on behalf of a Participant pursuant to Section Maximum Salary Redirection to Health Care Spending Account. A Participant will be limited in the amount of Compensation that may be redirected to his Health Care Spending Account to a maximum of $3,600 per Plan Year. The maximum that may be redirected will be $2,500 (adjusted for inflation pursuant to IRC 125(i)(2)) for Plan Years beginning on and after September 1, Health Care Benefits. A Participant will be entitled to receive reimbursement from the Employer for eligible Health Care expenses incurred by the Participant or the Participant's Dependents, to the extent that the reimbursement does not exceed the annual election in the Participant's Health Care Spending Account plus any carryover from the immediately preceding Plan Year pursuant to Section 6.5, provided the Health Care expense was: (a) incurred after the Eligible Employee became a Participant in the Plan, and (b) incurred within the current Plan Year. Eligible expenses are considered incurred on the date services were received. Eligible Health Care expenses will be reimbursed biweekly during the Plan Year whenever the Participant submits to the Administrator satisfactory written application for claims of $25 or more. Eligible expenses must be submitted by October 31 following the end of the Plan Year. The minimum reimbursement of $25 is waived at this time. 12

18 Claims will be paid for eligible Health Care expenses incurred up to the Participant s Salary Redirection to his Health Care Spending Account for the Plan Year plus any carryover from the immediately preceding Plan Year pursuant to Section 6.5, without regard to the amount of contributions made through the date of reimbursement. Claims will be paid first from unused amounts credited to the Participant s Health Care Spending Account based on his Salary Redirection election for that Plan Year; only after such amounts have been exhausted will claims be paid from any carryover from the immediately preceding Plan Year pursuant to Section Health Care Spending Account Benefit Limits. No benefits will be paid under this Plan: (a) for expenses reimbursed under any insurance policy or any other plan of reimbursement for Health Care expenses; (b) in any Plan Year in an amount greater than the total amount of a Participant's annual election to his Health Care Spending Account for that Plan Year plus any carryover from the immediately preceding Plan Year pursuant to Section 6.5; (c) for any premiums for health or life insurance plans; (d) for claims submitted after October 31 following the end of the Plan Year in which the claims were incurred. The amount of benefits paid to Highly Compensated Employees or Key Employees may be limited to prevent the Plan from becoming discriminatory under IRC Section 125 and IRC Section Carryover and Forfeiture of Unused Balances. A Participant may carry over to the following Plan Year an amount equal to the lesser of (1) the unused amounts from the immediately preceding Plan Year, or (2) $500. Any unused amounts from the immediately preceding Plan Year exceeding $500 will be forfeited and retained by the Employer. The Employer has no further obligation to the Participant with respect to such forfeited sum. A Participant s unused amounts from the immediately preceding Plan Year is the amount, if any, by which the total amount available in the Participant s Health Care Spending Account to pay claims for expenses incurred during the Plan Year exceeds the Participant s total eligible Health Care expenses incurred during such Plan Year and permitted for payment during the claim submission period. For this purpose, the total amount available in the Participants Health Care Spending Account to pay claims for expenses incurred during the Plan Year equals the Participant s Health Care Spending Account Salary Redirection election for such Plan Year plus any carryover from the immediately preceding plan year. 6.6 Termination. If a Participant terminates employment with the Employer, he will terminate participation in 13

19 the Plan. The Employer will continue to reimburse the Participant, or his spouse or dependents if the Participant dies, for any remaining eligible Health Care expenses incurred prior to the Participant's termination, up to the remaining annual election amount. A Participant who has terminated employment with the Employer may continue participation in the Plan by making monthly after-tax contributions or contributing the remaining balance of his annual election from his last paycheck(s) on a pre-tax basis. The Employer will continue to reimburse the Participant, or his Dependents if the Employee dies, for any remaining eligible Health Care expenses incurred prior to the Participant's termination, or prior to the end of the current Plan Year if after-tax or pre-tax monthly contributions are made, to the extent sufficient funds exist in the Participant's Health Care Spending Account. 14

20 6.7 Continuation. If a Participant's eligibility under the Plan terminates due to a reduction of hours of employment or termination of employment for reasons other than the Participant's gross misconduct, continuation of participation in the Plan is available under federal law. 6.8 Separate Written Plan. For purposes of the IRC, this Section 6 will constitute a separate written plan providing for reimbursement of Health Care expenses. To the extent necessary, other provisions of the Plan are incorporated by reference in this Section 6. 15

21 Flexible Benefit Plan SECTION 7 DEPENDENT CARE SPENDING ACCOUNT 7.1 Dependent Care Spending Accounts. The Employer will establish a Dependent Care Spending Account for each Participant. A Participant's Dependent Care Spending Account will be increased by the amount of the Participant's Compensation and/or the excess Working Agreement Contributions or School Board Policy Contributions, if any, that he has elected to redirect to his Dependent Care Spending Account. A Participant's Account will be reduced by the amount of any benefits paid to or on behalf of a Participant pursuant to Section Maximum Salary Redirection to Dependent Care Spending Account. A Participant will be limited in the amount of Compensation that may be redirected to his Dependent Care Spending Account to a maximum of $5,000 per Plan Year. 7.3 Dependent Care Benefits. A Participant will be entitled to receive from the Employer reimbursement for eligible Dependent Care expenses paid by himself or his spouse, to the extent sufficient funds exist in the Participant's Dependent Care Spending Account, provided the Dependent Care was: (a) incurred after the Eligible Employee became a Participant of the Plan, (b) incurred within the current Plan Year, and (c) not in excess of the limits specified in Section 7.4. Eligible Dependent Care expenses will be reimbursed biweekly during the Plan Year whenever the Participant submits to the Administrator satisfactory written application for claims of $25 or more, provided that sufficient funds exist in the Participant's Dependent Care Spending Account. The $25 minimum benefit payment will be waived for eligible Dependent Care expenses submitted by October 31 following the end of the Plan Year to close out the Dependent Care Spending Account. 16

22 7.4 Dependent Care Benefit Limits. No benefits will be paid: (a) in any Plan Year in an amount greater than the total amount of a Participant's Salary Redirection to his Dependent Care Spending Account for that Plan Year; (b) for claims submitted after October 31 after the end of the Plan Year in which the claims were incurred; (c) in an amount greater than the Participant's Compensation in any calendar year. If the Participant is married, Dependent Care benefits also cannot be greater than the earned income of the spouse. (Also see Section 7.8.) The benefits paid to Highly Compensated Employees or Key Employees may also be limited to ensure that the Plan satisfies all eligibility, benefits, and coverage tests, as specified by the IRC. 7.5 Annual Statement of Benefits. The Employer will provide, on or before January 31 of each calendar year, to each Participant who received benefits under Section 7.3 during the prior calendar year, a statement of all salary reduction amounts for Dependent Care benefits for each Participant during the prior calendar year. This information will be provided on Internal Revenue Service Form W Forfeitures. If the total eligible Dependent Care expenses incurred during a Plan Year and presented for payment during the claim submission period by any Participant are less than the total Salary Redirection to such Participant's Dependent Care Spending Account for that Plan Year, the remaining unused balance will be forfeited and retained by the Employer. The Employer has no further obligation to the Participant with respect to such forfeited sum. 17

23 7.7 Termination. If a Participant terminates employment with the Employer, he will remain a Participant in the Plan until the end of the Plan Year in which he terminates. The Employer will continue to reimburse the Participant for any remaining eligible Dependent Care expenses incurred prior to the Participant's termination, to the extent sufficient funds exist in the Participant's Dependent Care Spending Account. A Participant who has terminated employment with the Employer may contribute the remaining balance of his annual election on a pre-tax basis from his final paycheck(s), or may continue to make after-tax contributions to the Plan until the end of the current Plan Year. If he does so, the Employer will likewise continue to reimburse the Participant for eligible Dependent Care expenses incurred before the end of the current Plan Year, to the extent that sufficient funds exist in the Participant's account. 7.8 Spouse Attending School Full-time or Incapable of Self-Care. If a Participant's spouse is a full-time student or is incapable of taking care of himself or herself, the spouse will be regarded as having income of $250 per month if there is one dependent, or $500 per month if there are two or more dependents, for each month that the spouse qualifies for this exception. 7.9 Separate Written Plan. For purposes of the IRC, this Section 7 will constitute a separate written plan providing for the reimbursement of Dependent Care expenses. To the extent necessary, other provisions of the Plan are incorporated by reference in this Section 7. 18

24 Flexible Benefit Plan SECTION 8 - CLAIMS 8.1 Notice of Claim. In the event the Participant has a claim for any benefits under this Plan, such Participant must file a claim during the relevant reimbursement period with the Administrator on the form(s) provided for such purpose. If the Participant fails to file a claim for benefits, the Administrator may take whatever steps are necessary and proper to dispose of the Participant's potential benefits under the Plan. Prior to making any payment of benefits, the Administrator may require the Participant to provide such information and complete the appropriate documents or forms necessary for the proper administration of the Plan. Further, the Administrator may also request that the Participant file all appropriate claims and requests for payment from any other plan or plans maintained by the Employer prior to the making of any payments under this Plan. The Administrator's request may also include the requirement that the Participant file all appropriate claims and requests for payment with any insurance carrier responsible for making any benefit payments under any plans maintained by the Employer. 8.2 Claims Procedure. The Administrator will make all determinations as to the right of any person to the payment of a claim for benefits. Any denial by the Administrator of the claim for benefits by a Participant will be stated in writing by the Administrator and delivered or mailed to the Participant. Such notice will set forth the specific reasons for the denial, written to the best of the Administrator's ability, in a manner that may be understood without legal counsel. Such notice will be given within 90 days after the claim is received by the Administrator. If notification is not given within this period, the claim will be considered denied as of the last day of the period, and the Participant may request a review of his claim. 19

25 If a person is determined by the Administrator to be not eligible for benefits, or if the person believes that he is entitled to greater or different benefits, he will have the opportunity to have his claim reviewed by the Administrator by filing a petition for review with the Administrator within sixty (60) days after receipt by him of the notice issued by the Administrator. The petition will state the specific reasons the person believes he is entitled to benefits, or greater or different benefits. Within sixty (60) days after receipt by the Administrator of the petition, the Administrator will afford the person (and his counsel, if any) an opportunity to present his position to the Administrator orally or in writing. The person or his counsel will have the right to review pertinent documents. Within thirty (30) days after the hearing, or thirty (30) days after the date the Administrator receives the written submission that follows the petition, if the person does not request a hearing, the Administrator will notify the person of its decision in writing. The decision will be written in a manner calculated to be understood by the person, stating specifically the basis of the decision and the specific provisions of the Plan on which the decision is based. 20

26 Flexible Benefit Plan SECTION 9 - ADMINISTRATION 9.1 Plan Administrator. The Plan is administered by the Plan Administrator and shall be the "named fiduciary" for the Plan. The Plan Administrator shall have complete and discretionary control of the administration of the Plans. 9.2 Duties and Powers of the Plan Administrator. The Plan Administrator shall have the following duties, responsibilities and authority with respect to the administration of the Plan. (a) To construe and interpret the Plan, decide all questions of eligibility, and determine the amount, manner, and time of payment for all benefits; (b) To prescribe uniform procedures to be followed by Eligible Employees and Participants in making elections, filing claims, and other tasks necessary to properly administer the Plan; (c) To prepare and distribute information explaining the Plan to Eligible Employees and Participants; (d) To receive from the Eligible Employees and Participants all information necessary for the proper administration of the Plan; (e) To employ experts, including, but not limited to, actuaries, accountants, claims administrators, and counsel, to assist in the administration of the Plan, to perform services required by regulatory bodies, and to render advice upon request with regard to matters arising under the Plan; (f) To prepare and file reports and returns for the Plan required under applicable law; (g) To take all other steps deemed necessary to properly administer the Plan in accordance with the terms and the requirements of applicable law; and (h) To act in accordance with all applicable laws governing fiduciary standards. 21

27 9.3 Rules and Decisions. The Plan Administrator shall decide any matter and may adopt any rule or procedure regarding eligibility, benefits, claims, or other issues arising under the Plan that he deems necessary, desirable or appropriate in the administration of the Plan. All rules and decisions of the Plan Administrator shall be uniformly and consistently applied to all Eligible Employees and Participants in similar circumstances and shall be conclusive and binding on all persons having an interest in the Plan. Whenever any discretionary action is required, the Plan Administrator shall exercise its authority in a nondiscriminatory manner so that all similarly situated individuals receive substantially similar treatment. When making any decision or determination, the Plan Administrator shall be entitled to rely upon information furnished by the Eligible Employee or Participant, legal counsel, or the administrator of the Plan or another plan. 9.4 Delegation of Responsibilities. The Plan Administrator may allocate or delegate any of its responsibilities regarding the Plan among other entities, and may designate other entities to carry out such responsibilities. Any such allocation or designation shall be in writing, in the record of the Plan, and shall specifically identify those to whom a responsibility is allocated or delegated, and the nature and scope of the responsibility allocated. The entity to whom a responsibility of the Plan Administrator is allocated or delegated shall be responsible only for the performance of that responsibility according to the terms of the delegation or allocation. Such entity shall not be liable for the act or omission of any other entity unless: (a) By its failure to properly administer the specific responsibility, it has enabled such other entity to commit a breach of fiduciary responsibility; or (b) It knowingly participates in or undertakes to conceal an act or omission of another entity, knowing such act or omission to be a breach; or (c) Having knowledge of the breach of another, it fails to make reasonable efforts under the circumstances to remedy said breach. (d) Any entity may serve in more than one fiduciary capacity with respect to the Plan and/or the Programs. 22

28 9.5 Representations to Fiduciaries. Any fiduciary shall be entitled to rely on representations made by Eligible Employees, Participants, employees, former employees, and beneficiaries with respect to age, marital status and other personal facts, unless the fiduciary knows the representations to be false. 9.6 Examination of Records The Plan Administrator will make records available to Participants for examination at reasonable times during normal business hours. 23

29 Flexible Benefit Plan SECTION 10 MISCELLANEOUS PROVISIONS 10.1 Amendment or Termination. The Plans are established with the intention of being maintained for an indefinite period of time. However, the Plan Sponsor assumes no obligation as to the continuance and may alter, amend or terminate the Plan in whole or in part at any time. The Plan Sponsor may amend or substitute any set of program terms without affecting other Plan provisions. Except to comply with applicable laws, the Plan Sponsor shall not retroactively amend, alter, or terminate the Plan or any Program in a manner that would reduce a Participant's right to receive benefits which are already payable upon submission of a claim Applicable Law. The Plan will be governed by the laws of the State of Minnesota, except to the extent such laws are preempted by the laws of the United States of America Finances. The costs of the Plan will be borne as provided in the Plan. For purposes of this Plan, Salary Redirection will be deemed contributions by the Employer No-Guarantee of Employment. Nothing contained in the Plan shall be deemed to give an Eligible Employee, Participant, or employee of the Employer the right to be retained in the service of the Employer or to limit the right of the Employer to discharge such person at any time. 24

30 10.5 Right to Information. The Administrator may obtain any information deemed necessary to administer the Plan or any program. Any person claiming benefits under the Plan or any program shall furnish to the Administrator any information necessary to implement the Plan or the relevant program Assignment. Except as specifically provided in the Plan, or applicable law, a Participant s rights, interests or benefits under the Plan shall not be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, and any such attempt shall be void Statutory Continuation Rights. Notwithstanding anything contrary in the Plan, an Employee who is a Participant shall have the right to continue coverage under the following statutory provisions to the extent that the statutory provision relied upon is applicable to the separate written plan in question. a) FMLA Continuation Coverage. Notwithstanding any other provision of the Plan, an Employee who takes a leave of absence under the Family and Medical Leave Act of 1993 ( FMLA ) may elect to revoke the application for participation in the Plan for the remainder of the Plan Year, or if the leave is unpaid, to modify the application for participation in the Plan as provided in Section 4.1, or if the leave is paid, to continue participation as allowable. An Eligible Employee whose enrollment terminates during the FMLA leave may, upon the return of the Eligible Employee to a job status that confers eligibility for enrollment during the same Plan Year in which the application for participation in the Plan terminated, elect to reactivate the application for participation in the Plan for the remainder of the Plan Year, with regard to those separate written plans under which the Eligible Employee was covered immediately prior to the leave of absence. A Participant on leave under FMLA shall have the same right as any other Participant to modify the application for participation in the Plan consistent with a life status change as described in Section 4.1. b) USERRA Continuation Coverage. Coverage for an Eligible Employee on leave of absence for military service and upon return to employment following such leave shall be administered pursuant to the rules set out in the Uniformed Services Employment and Reemployment Rights Acts of 1994 ( USERRA ), including applicable regulations. c) COBRA Continuation Coverage. Upon loss of eligibility for benefits under a separate written plan, continuation coverage, if any, will be administered pursuant to the rules set out in the Consolidated Omnibus Budget Reconciliation Act of 1985 ( COBRA ), Part 6 of Title I of the Employee Retirement Income Security Act of 1974 and Section 4980B of the Code, including applicable regulations Special Mid-Year Change for Plan Year Beginning September 1, 2013 Notwithstanding any other provision of this Plan to the contrary, this paragraph authorizes Participants to make a one-time mid-year change to their Salary Redirection elections during the Plan Year beginning on September 1, 2013 even if such change would not otherwise be permitted by Section 4.1. The only mid-year changes authorized by this paragraph are the following: 25

31 A Participant who elected Salary Redirection for the Health plan may prospectively revoke or change his election; and A Participant who failed to elect Salary Redirection for the Health plan may prospectively elect to begin Health plan coverage. The mid-year change authorized by this paragraph is not available with respect to any other Plan benefits, including the Health Care Spending Account. Any request for a mid-year change under this paragraph must be made before April 1, No mid-year change will be permitted under this paragraph for any Plan Year beginning prior to September 1, 2013, or after August 31,

32 Flexible Benefit Plan SECTION 11 FLEXIBLE BENEFITS PLAN 11.1 Severability. If any provision of the Plan is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue to be fully effective Conflicts of Terms. In the event of a conflict of terms between this Plan Document and any other document, including a Summary Plan Description, the provisions of this Plan Document prevail State Law. This Plan shall be administered, construed, and enforced according to the laws of the State of Minnesota and in courts situated in that State, except as preempted by ERISA Headings. Headings and titles are for convenience, and the text will control in all matters. IN WITNESS WHEREOF, Anoka-Hennepin ISD #11 has caused the Flexible Benefit Plan, as amended, to be executed by its duly authorized Board on this day of, ANOKA-HENNEPIN ISD #11 By: Title: ATTEST: By: Title: 27