NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION GROUP BENEFITS PROGRAM

Transcription

1 NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION GROUP BENEFITS PROGRAM Medical Plan Dental Plan Vision Plan Long Term Disability Plan Short Term Disability Plan Group Term Life and AD&D Insurance Plan Business Travel Accident Plan Business Travel Accident Plan for NRECA Only 24-Hour Accident Insurance Plan Medicare Part D Prescription Drug Plan Retiree Medical Coinsurance Plan POWER Wellness Program Amended and Restated January 1, 2012

2 TABLE OF CONTENTS PAGE SECTION I ESTABLISHMENT Establishment and Continuation SECTION II DEFINITIONS Affiliate Member of NRECA "Benefit Plan Rating and Renewal Process" "Board" CBA Code Committee Director Director Emeritus Eligible Employee Employee ERISA "Full Member of NRECA" "NRECA" Participating Cooperative or Cooperative Participant Plan Year Plan or Plans "Plan Administrator" Plan Sponsor Program Retained Attorney Trustee Trust Agreement Trust Fund SECTION III PARTICIPATION BY A COOPERATIVE Cooperative Participation SECTION IV PARTICIPATION BY EMPLOYEES Eligibility Enrollment and Participation SECTION V FUNDING AND CONTRIBUTIONS Funding Insurance for Benefits Contribution Levels Required Employee Contributions Administration of Contributions Delinquent Participating Cooperative and Employee Contributions...4 i

3 TABLE OF CONTENTS PAGE SECTION VI MANAGEMENT OF FUNDS Trust Funds Management of Funds Single Trust Rights to the Fund SECTION VII BENEFITS Benefits Available Additional Benefit Plans Single Plan of Benefits Incorporation of Terms of Plans of Benefits Plan Provisions... 8 SECTION VIII CLAIMS FOR BENEFITS Claim Adjudicator Claim Adjudication for Life and Accident, Insured Vision, Wellness Program and Medicare Part D Claim Substantiation Time Limit for Claiming Benefits Claims Procedure Judicial Review SECTION IX ADMINISTRATION OF THE PLAN Appointment of Committee General Administrative Powers and Duties Fiduciary Obligations Delegations Method and Effect of Delegations Grant of Discretion SECTION X AMENDMENT AND TERMINATION Amendment of Program Termination of Program SECTION XI MISCELLANEOUS Facility of Payment Lost Payee No Right to Employment No Waiver or Estoppel Agent for Service of Legal Process Misstatements of Information Applicable Law SECTION XII HIPAA PRIVACY, SECURITY STANDARDS, AND PORTABILITY ii

4 TABLE OF CONTENTS PAGE Privacy of Health Information Disclosure to the Plan Sponsor Without Individual Authorization Certification Requirement Adequate Separation Between the Health Plan and the Plan Sponsor Must Be Maintained Disclosure to the Plan Sponsor With Individual Authorization Security Standards Definitions For Purposes of this Section Portability ATTACHMENT A MASTER LIST OF PLAN DESIGN EXCEPTIONS iii

5 NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION GROUP BENEFITS PROGRAM SECTION I Establishment 1.01 Establishment and Continuation. The National Rural Electric Cooperative Association Group Benefits Program (the Program ) provides certain welfare benefits to eligible individuals who are associated with the members of the National Rural Electric Cooperative Association ( NRECA ) on the terms and conditions of the Program and as provided by the Participating Cooperative. The Program is a continuation of the welfare benefit plans previously established and maintained by NRECA through self insured plans maintained by, and through group insurance policies issued to, the National Rural Electric Cooperative Association Group Benefits Trust. The Program is considered to be one employee welfare benefit plan as defined in Section 3(1) of ERISA and a hybrid entity as defined by 45 C.F.R. Part (a) of the Standards for Privacy of Individually Identifiable Health Information, 45 C.F.R. Parts 160 and 164 (the Privacy Rule ). Certain Plans of the Program are subject to the Administrative Simplification requirements of the Health Insurance Portability and Accountability Act of 1996, Public Law , and the regulations thereunder ( HIPAA ), including but not limited to the Privacy Rule, the Standards for Electronic Transactions (45 C.F.R. Parts 160 and 162) and the Security Standards (45 C.F.R. Part 164) (collectively, the Standards ). The following Plans in the Program shall constitute the health care component of the hybrid entity and shall be subject to the Standards: the NRECA Medical Plan, the NRECA Dental Plan, the NRECA Vision Plan, the NRECA Retiree Medical Coinsurance Plan, the NRECA Medicare Part D Prescription Drug Plan and certain activities of the NRECA POWER Wellness Program. All other benefits provided under the Program constitute the non-covered components and are not subject to the requirements of the Standards. SECTION II Definitions Each term defined in this Section II shall have the following meaning for the Program and its component Plans unless a different meaning is clearly required by the context of the Program or if a different definition is given for a specific component Plan of the Program Affiliate Member of NRECA means an affiliate member as set forth in Article III, Section 1 of the Bylaws and Articles of Incorporation of NRECA, and as determined by the Plan Administrator in accordance with Section 501(c)(9) of the Code and ERISA Benefit Plan Rating and Renewal Process means the electronic form of the Benefit Plan Rating and Renewal feature of the NRECA Employee Benefits web site, or such other form acceptable to the Committee, by which Cooperatives elect to participate in the Plans; to designate the groups of Employees that are Eligible Employees; to elect the optional provisions of the Plan(s) in which they elect to participate; and to terminate participation in the Plans Board means the Board of Directors of NRECA.

6 2.04 CBA means Cooperative Benefit Administrators, Inc Code means the Internal Revenue Code of 1986, as amended Committee means the NRECA Insurance and Financial Services Committee, appointed by the President of NRECA from the members of the Board Director means an elected member of the board of directors of a Participating Cooperative Director Emeritus means an unelected, specified former Director who functions in an honorary or advisory position, without voting power, on the board of directors of a Participating Cooperative, designated as such by the Participating Cooperative Eligible Employee means an Employee who is eligible to participate in the Plan(s) under the Program as provided by the Plan(s) and as designated by the Participating Cooperative pursuant to the Benefit Plan Rating and Renewal Process, and who, unless an eligible Director, eligible Retained Attorney or eligible former Employee, is among the class of Employees that (i) has worked at least 1,000 hours for a Participating Cooperative during the last twelve (12) months, (ii) is expected to work at least 1,000 hours for a Participating Cooperative in the next twelve (12) months of employment, or (iii) has worked at another rural electric cooperative within the past six (6) months and satisfies (i) or (ii). The Participating Cooperative, through the Benefit Plan Rating and Renewal Process, may set other eligibility requirements that further define an Eligible Employee Employee means any person actively employed by a Participating Cooperative as a common law employee, a Director, a Director Emeritus, or Retained Attorney of the Participating Cooperative and any other person affiliated with a Participating Cooperative, such as a former Employee, who may become a Participant in one of the Plans of the Program as provided by the Plan(s) and as designated by the Participating Cooperative pursuant to the Benefit Plan Rating and Renewal Process. Except for Directors, Directors Emeritus, Retained Attorneys and former Employees, Employee shall not include a person who is not reported on the payroll records of the Participating Cooperative as a common law employee (even if a court or administrative agency determines that such person is a common law employee and not an independent contractor) ERISA means the Employee Retirement Income Security Act of 1974, as amended Full Member of NRECA means a voting member of NRECA as set forth in Article III, Section 1 of the Bylaws and Articles of Incorporation of NRECA NRECA means the National Rural Electric Cooperative Association Participating Cooperative or Cooperative means NRECA and any Full Member or Affiliate Member of NRECA (as NRECA may permit to participate in the Program) that elects to participate in the Program pursuant to the Benefit Plan Rating and Renewal Process. 2

7 2.15 Participant means an Eligible Employee who has met all the conditions to participate in a Plan of the Program, and is participating in such Plan under the Program during the period of participation Plan Year means the calendar year Plan or Plans means these plans of specific welfare benefits as established by Section VII of this document and the associated Plans of benefits attached hereto which are elective components of the Program Plan Administrator means the Senior Vice-President, Insurance and Financial Services of NRECA for purposes of ERISA, provided however that each Participating Cooperative shall designate an administrator who shall have the responsibilities imposed by the Committee, or by ERISA or the regulations thereunder, upon the Participating Cooperative individually Plan Sponsor means NRECA Program means this NRECA Group Benefits Program, a multiple-employer plan that provides welfare benefits to Participants through its elective component Plans, all of which constitute a single plan sponsored by NRECA Retained Attorney means one attorney retained as outside counsel to the Participating Cooperative on an ongoing basis Trustee means the bank serving as trustee of the Trust Fund Trust Agreement means the agreement of trust establishing and maintaining the Trust Fund entered into between NRECA and a trustee bank Trust Fund means the National Rural Electric Cooperative Association Group Benefits Trust established to hold funds for the Program. SECTION III Participation by a Cooperative 3.01 Cooperative Participation. Any Full Member or Affiliate Member of NRECA may become a Participating Cooperative under the Program pursuant to the Benefit Plan Rating and Renewal Process, except that participation in the NRECA Medicare Part D Prescription Drug Plan and the NRECA POWER Wellness Program is subject to a separate application process. The Committee reserves the right to cancel with or without cause a Participating Cooperative s participation in the Program or a specified Plan or Plans of the Program. The Committee shall give written notice to the Participating Cooperative of the cancellation and effective date of such cancellation. Termination of the Participating Cooperative s membership in NRECA shall constitute automatic cancellation of the Cooperative s participation in the Program and all of its Plans unless otherwise agreed by NRECA. 3

8 SECTION IV Participation by Employees 4.01 Eligibility. An Eligible Employee shall become a Participant in the Program under the terms and conditions of eligibility for participation as provided by the Plan(s) and as designated by the Participating Cooperative pursuant to the Benefit Plan Rating and Renewal Process or separate application process, as applicable Enrollment and Participation. Each Eligible Employee upon satisfying the requirements for participation in the Program shall be enrolled by the Plan Administrator in the Plans of the Program for which such Employee elects to participate. Each Employee shall file such forms as required by the Plan Administrator to complete enrollment in the appropriate Plans of the Program. SECTION V Funding and Contributions 5.01 Funding. Funds contributed by Participating Cooperatives and Participants for funding of the Program shall be held in the Trust Fund for investment, for the payment of insurance company premiums for any insured benefits, for the payment of reasonable administrative expenses, and for the payment of benefits of the Program Insurance for Benefits. The benefits provided under the Program shall not be insured by any insurance company unless the Committee determines that such insurance is appropriate for the benefits involved. Unless so determined by the Committee, benefits shall not be insured by insurance companies other than life and accident insurance benefits, which shall be insured through life insurance and accident insurance group policies as incorporated into the applicable plan documents attached hereto Contribution Levels. Each Participating Cooperative shall contribute to the Program annually such amount as shall be determined by the Committee for funding of the Program Required Employee Contributions. The Participating Cooperative may designate pursuant to the Benefit Plan Rating and Renewal Process or other application process that Participant contributions shall be required for Employees who wish to become Participants in any of the Plans. The Participating Cooperative shall maintain on its records the amount of such Employee contributions required which shall be made available to the Committee upon request Administration of Contributions. Contributions shall be administered in accordance with the following provisions: (a) The Participating Cooperative by which a Participant is employed shall make payroll deductions from the earnings of the Participant of any contributions due from Participants or make such other arrangement for the collection of Participant contributions as is appropriate. (b) All contributions by a Participant shall be transmitted by the Participating 4

9 Cooperative in accordance with the time frames set forth in Subsection Any Participating Cooperative may at any time advance the amount of such contributions anticipated for the Plan Year and thereafter reimburse itself from deductions made under paragraph (a). (c) Subject to Subsection 5.06, contributions shall be due and payable annually and in advance to the Program or in accordance with such other periodic invoice frequency elected by the Participating Cooperative and agreed to by the Committee. If a Participating Cooperative withdraws from a Plan, its contribution for the Plan Year in which the withdrawal occurs shall be reduced to appropriately reflect the withdrawal, as determined by the Committee. (d) All contributions received by the Committee may be deposited by it in an account with a temporary depository designated by the Committee. Such temporary depository shall be a bank or trust company organized under the laws of the United States or any of its states. (e) The Committee may make such other rules for administration of contributions as it deems appropriate Delinquent Participating Cooperative and Employee Contributions. Participating Cooperatives shall be obligated to file reports and pay their and Employee contributions by the due dates as set forth in subparagraph (a) below. In the event a Participating Cooperative fails to file reports or pay contributions by such due dates, the Program shall be entitled to contributions, interest, lost earnings, liquidated damages, and attorneys fees and costs as set forth in subparagraphs (b)-(e) below. (a) Due Dates. The due dates for Program contributions shall be as follows: (1) Participating Cooperative Contributions. Contributions from Participating Cooperatives shall be due on the first day of the month selected by the Participating Cooperative with respect to payment of Participating Cooperative contributions (e.g. monthly, quarterly, semi-annually, or annually), provided, however, that such payment shall not be considered past due until the first day of the month following the date on which such payment was due. (2) Employee Contributions. Due as of the earliest date on which contributions can reasonably be segregated from the Participating Cooperative s general assets, but in no event later than (i) the 90 th day of the month following the month in which the participant contribution or participant loan repayment amounts are received by the cooperative (in the case of amounts that a participant or beneficiary pays to a Participating Cooperative), or (ii) the 90 th day of the month following the month in which such amounts would otherwise have been payable to the participant in cash (in the case of amounts withheld by a Participating Cooperative from a participant s wages) 5

10 provided, however, that the Plan Administrator reserves discretion at the direction of the Committee to establish due dates that precede the 15 th business day of the foregoing. (b) Interest and Lost Earnings. Interest and lost earnings on delinquent contributions shall be charged at the following rates, which shall not be reduced or waived. (1) Participating Cooperative Contributions. Interest on past due Participating Cooperative contributions shall be calculated at the rate determined under Code 6621(a)(2) (the federal short-term rate plus three percent (3%), as amended from time to time) calculated from the date a payment of contributions was due to the Program through the date the contribution was actually received by the Program. (2) Employee Contributions. Interest and lost earnings on Employee contributions, whether paid by an Employee to a Participating Cooperative or withheld from an Employee s paycheck, shall be determined by federal law under Code 6621(a)(2) and (c)(1) and the corresponding factors from IRS Revenue Procedure 95-17, which reflect daily compounding. In no event shall contributions made to the Program subject to the Voluntary Fiduciary Correction Program (VCFP) be subject to an interest rate under this provision that differs from the interest rate required by VCFP. (c) Liquidated Damages. Liquidated damages shall be charged as of the date on which a Participating Cooperative makes a late payment of contributions, including late Employee or Participating Cooperative contributions as determined under subparagraph (a) above. Liquidated damages shall be charged at a rate of twenty percent (20%) of the amount of contributions due (including both Participating Cooperative and Employee contributions), provided, however, that the Committee, or its delegate, may be authorized to waive some or all of the amount charged in its sole discretion. Liquidated damages shall not be considered a penalty or monetary in nature, and shall be defined as equitable relief necessary to offset the increased cost associated with collecting and managing late payments, including, but not limited to, NRECA staff time, systems, and all other associated costs, but shall exclude attorneys fees and costs as defined in subparagraph (d) below. (d) Attorneys Fees and Costs. In the event the Program incurs attorneys fees and costs associated with collecting contributions from a Participating Cooperative, the Participating Cooperative shall be responsible for reimbursing the Program for reasonable attorneys fees and costs arising with or without litigation, determined at the then prevailing rate, as determined by the Committee, or its delegate. (e) Policies, Procedures and Delegation. The Committee may delegate authority to the Plan Administrator to carry out the provisions of the Program relating to delinquent Participating Cooperative and Employee contributions and to develop policies and procedures necessary to ensure the legality of and compliance with the terms of the Program and federal law. 6

11 SECTION VI Management of Funds 6.01 Trust Funds. The contributions of Participating Cooperatives and their Participants and investments and reinvestments thereof and accruals thereto shall be held in the Trust Fund by one or more trustees appointed by the Committee under the Trust Agreement Management of Funds. Each Trustee shall serve at the pleasure of the Committee and shall have the exclusive authority and discretion to manage and control that portion of the assets of the Program assigned to it by the Trust Agreement, under the terms and conditions provided in the Trust Agreement Single Trust. The funds of the Program shall be held and administered in a single trust without distinction between principal and income and without distinction among the Plans of the Program, or the Participating Cooperative or Employee, from which the funds derived Rights to the Fund. No person shall have any rights in or to the Trust Fund or any part thereof except as expressly provided in the Trust Agreement or as provided herein. In the event a contribution by a Participating Cooperative is made under a mistake of fact, the contribution may be returned to the Participating Cooperative within one year after the payment of the contribution. SECTION VII Benefits 7.01 Benefits Available. The component Plans that are a part of the Program and which may be selected by a Participating Cooperative pursuant to the Benefit Plan Rating and Renewal Process are as follows: (a) (b) (c) (d) (e) (i) (f) (g) (h) (i) The Medical Plan, The Dental Plan, The Vision Plan, The Long-Term Disability Plan, The Short-Term Disability Plan, The Group Term Life and AD&D Insurance Plan, The Business Travel Accident Plan, The 24 Hour Accident Insurance Plan, The Medicare Part D Prescription Drug Plan, The Retiree Medical Coinsurance Plan, and 7

12 (j) The POWER Wellness Program Additional Benefit Plans. NRECA may adopt other plans of benefits in the Program from time to time which may be incorporated herein by appropriate action of the Committee Single Plan of Benefits. The Program is one, single employee plan of welfare benefits as defined in Section 3(1) of ERISA, and the references to the various component Plans of the Program are used only for convenience in administration of the Program. All benefits of the Program shall be paid from all the Trust Funds of the Program held by the Trustee, without distinction among the Plans of the Program, or among the Participating Cooperatives, from which such Trust Funds were derived Incorporation of Terms of Plans of Benefits. This document sets forth the general terms applicable to all Plans incorporated herein in the Program. Terms applicable to specific Plans are provided in the constituent plan documents attached hereto and the Master List of Design Exceptions attached hereto, as may be amended from time to time, which shall control the provision of such benefits Plan Provisions. The terms, conditions and provisions of all Plans elected by a Participating Cooperative shall be synonymous with the terms, conditions and provisions of its Program. SECTION VIII Claims for Benefits 8.01 Claim Adjudicator. Except for life insurance claims, accident claims, insured vision claims, POWER Wellness Program claims and Medicare Part D claims, all claims for benefits under the Program shall be determined by CBA, which shall be a named fiduciary as defined in Section 402(a) of ERISA with respect to adjudication of such claims for benefits under the Plans of the Program Claim Adjudication for Life, Accident, Insured Vision, Wellness Program and Medicare Part D claims. The insurance company issuing the policy under which a claim is made for life or accident benefits or insured vision benefits shall be the named fiduciary as provided in Section 402(a) of ERISA with respect to claim adjudication for such benefits, except as may be otherwise agreed in writing between the Program and such company. The claims adjudicator for the POWER Wellness Program and Medicare Part D Prescription Drug Plan will be the claims administrator for that plan Claim Substantiation. CBA, the insurance company, and the claims administrator described in Section 8.02, as applicable, shall require a Participant to substantiate claims for benefits under the Program to the extent necessary and appropriate in its judgment Time Limit for Claiming Benefits. No benefits shall be payable under the Program to any Participant who fails to submit a claim for benefits within the period set by the specific Plan for submitting claims. 8

13 8.05 Claims Procedure. Claims for benefits under the Program shall be made in accordance with the terms of the Plan under which the individual is claiming benefits and in accordance with such procedures and at such times as CBA, the insurance company, or the claims administrator described in Section 8.02, as applicable, shall prescribe. Claims for benefits and appeals of denied claims under the Plan shall be administered in accordance with Section 503 of ERISA, the regulations thereunder (and any other law that amends, supplements or supersedes said Section of ERISA) and the procedures adopted by CBA, the insurance company, or the claims administrator described in Section 8.02, as applicable, for such purpose. The Plan shall provide adequate notice to any claimant whose claim for benefits under the Plan has been denied, setting forth the reasons for such denial, and afford a reasonable opportunity to such claimant for a full and fair review by the appropriate decision maker of the decision denying the claim. Benefits will be paid under the Plan only if CBA, its delegate, the insurance company, or the claims administrator described in Section 8.02, as applicable, determines in its discretion that the applicant is entitled to them Judicial Review. Any application for judicial review of a decision by CBA, or its delegates, the insurance company or the claims administrator company described in Section 8.02, as applicable, may be made only after the claims review procedure of Section 8.05 is exhausted and must be commenced within one (1) year of the date on which CBA, its delegates, the insurance company, or the claims administrator described in Section 8.02, as applicable, renders its final decision to the claimant in writing. SECTION IX Administration of the Plan 9.01 Appointment of Committee. General management, administration and control of the Program shall be placed in the Committee, which shall be a named fiduciary as provided in Section 402(a) of ERISA. The Committee shall be charged with and shall have authority for and control of, management of the Program, including management and control of the assets of the Program. The Committee shall act by majority of its membership and the action of such majority expressed by vote at a meeting or in writing without a meeting shall constitute the action of the Committee General Administrative Powers and Duties. The Committee shall have the power to take all actions required to carry out the provisions of the Program and shall further have the following powers and duties which shall be exercised in a manner consistent with the provisions of the Program: (a) To construe and interpret the provisions of the Plans of the Program and make rules and regulations under the Plans to the extent deemed advisable by the Committee, (b) To decide all questions as to eligibility to become a Participant in the Plans and as to the rights of Participants under the Program, (c) To file or cause to be filed all such annual reports, returns, schedules, descriptions, financial statements and other statements as may be required by any federal or state statute, agency or authority for the Program, 9

14 (d) To obtain from Participating Cooperatives and Employees such information as shall be necessary to the proper administration of the Program, (e) To contract with such insurance carriers or other suppliers as may be necessary to provide benefits, (f) To communicate with any insurer or other contract supplier of benefits under the Program all information required to carry out the provisions of the Plans applicable, (g) To notify the Participants in writing of any amendment or termination of the Plans or any change in any benefits available under the Program as may be required by ERISA, (h) To prescribe such forms as may be required for Participating Cooperatives and Employees under the Plans, and (i) To do such other acts as it deems reasonably necessary to administer the Plans in accordance with their provisions or as may be provided for or required by law for the Program Fiduciary Obligations. Each person who is a fiduciary shall discharge their duties with respect to the Program and the Trust Fund with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims and in accordance with this Program, the Plans and the Trust Agreement. A fiduciary who complies with the foregoing standards shall not be liable for any loss, action or omission hereunder. A fiduciary not charged with a specific responsibility under the provisions of the Program, the Plans or Trust Agreement shall be under no duty to question in any action or lack of action of another fiduciary with respect to such responsibility, and shall not be liable for breach of such fiduciary responsibility by another fiduciary unless participating knowingly in, or knowingly undertakes to conceal, an act or omission of such fiduciary knowing such act is a breach, or if having knowledge of a breach by such fiduciary, fails to make reasonable efforts under the circumstances to remedy the breach Delegations. Any named fiduciary, any fiduciary designated by a named fiduciary, or any other party may use, employ, discharge or consult with any one or more individuals, corporations or other entities with respect to advice regarding any responsibility, obligation or duty of such fiduciary or party in connection with the Program. Any named fiduciary may designate other individuals, corporations or other entities, who may or may not be named fiduciaries to carry out such named fiduciaries responsibilities, obligations and duties with respect to the Program, except to the extent ERISA prohibits delegation of authority and discretion to manage and control the assets of the Trust Fund. Any party not a fiduciary may likewise delegate responsibilities, obligations and duties to another party. All powers of delegating include the power to redelegate unless the delegation expressly prohibits redelegation Method and Effect of Delegations. Delegations and their revocation and modification may be made at any time and any such delegation, revocation or modification shall be made by written instrument signed by the named fiduciary, fiduciary or party in accordance 10

15 with procedures governing the function of such entity, and a written record shall be kept thereof. No fiduciary shall be liable for the directions, actions or omissions of any individual, corporation or other entity who has been designated to carry out any responsibilities, obligations or duties in connection with the Program and shall be fully protected by any action taken or suffered in good faith in reliance upon the advice or opinion of any such individual, corporation or other entity Grant of Discretion. In discharging the duties assigned to them under the Program, the Committee, the Plan Administrator, CBA, the insurance company, or the claims administrator described in Section 8.02, as applicable, and their delegates, have the discretion and final authority to interpret and construe the terms of the Plans; to determine coverage and eligibility for benefits under the Plans; to adopt, amend, and rescind rules, regulations and procedures pertaining to their duties under the Plans and the administration of the Plans; to approve the adoption of exceptional plan designs for the Plans for individual Participating Cooperatives; and to make all other determinations deemed necessary or advisable for the discharge of their duties or the administration of the Program. The discretionary authority of the Committee, the Plan Administrator, CBA, the insurance company, and the claims administrator described in Section 8.02, as applicable, and their delegates, is final, absolute, conclusive and exclusive, and binds all parties. NRECA, as Plan Sponsor, specifically intends that judicial review of any decision of the Committee, the Plan Administrator or CBA, or an insurance company that is a claims adjudicator or the claims administrator under Section 8.02, and their delegates, be limited to the arbitrary and capricious standard of review. The express grant of any specific power to a party with respect to any duty assigned to it under the Program should not be construed as limiting any power or authority of that party to discharge its duties Amendment of Program. SECTION X Amendment and Termination (a) The Board may amend any or all provisions of the Program at any time by written instrument identified as an amendment of the Program or its Plans effective as of a specified date. A Participating Cooperative shall have no authority to amend any provision of the Program or the Plans except as may be permitted by the selection of alternatives provided pursuant to the Benefit Plan Rating and Renewal Process. (b) A Participating Cooperative may at any time amend the terms and conditions for its Employees participation in the Program or any of the Plans, and no Participant or Employee shall have any right to continued participation in the Program or any of its Plans except as expressly provided in the Plan or in the amendment made to the terms and conditions of participation. A Participating Cooperative may at any time change the amount of contributions required by Participants for continued participation by Participants in the Plan or may at any time require such contribution where none has been required before. (c) The foregoing includes, without limitation, the right of NRECA and the Participating Cooperative to terminate the right of any group of Employees, former Employees 11

16 or retirees or others associated with the Program to future participation in any of the Plans of the Program Termination of Program. The Program or its Plans may be terminated in whole or in part at any time by action of the Board. The Participating Cooperative has the right to terminate any of the Plans of the Program as to such Participating Cooperative in whole or in part, by appropriate action of its board of directors. The foregoing includes, without limitation, the right of the Participating Cooperative to terminate the right of any group of Employees, former Employees or retirees or others associated with the Program to future participation in any of the Plans of the Program. The Participating Cooperative must submit a termination transaction to the Plan Administrator pursuant to the Benefit Plan Rating and Renewal Process not less than 30 days before the date of such termination. SECTION XI Miscellaneous Facility of Payment. If the Committee deems any person entitled to receive any amount under the provisions of the Plans and incapable of receiving or disbursing the same by reason of minority, illness, or infirmity, mental incompetence or incompetency of any kind, the Committee may take any one or more of the following actions: (a) Apply such amount directly for the comfort, support and maintenance of such person by reimbursing a person for any such support supplied to the person entitled to receive such payment, or (b) Pay such amount to a legal representative or guardian or any other person selected by the Committee to disburse for such comfort, support and maintenance, including without limitation, any relative who had undertaken, wholly or partially, the expense of such person s comfort, care and maintenance, or any institution in whose care or custody the person entitled to the amount may be. (c) Payment under this Section shall relieve the Program or any Plan of all liabilities or obligations under the Program and any applicable Plan Lost Payee. Any amount due and payable to a Participant or other individual eligible for benefits under the Program or a Plan shall be forfeited if the Committee after reasonable efforts is unable to locate the Participant or other individual eligible for benefits under the Program or a Plan to whom payment is due. Any such forfeited amount shall be reinstated and become payable if a claim is made by the Participant within the time provided for filing claims for the affected Plan. The Committee shall prescribe uniform and nondiscriminatory rules and regulations for carrying out this provision No Right to Employment. Nothing in the Program or any of the Plans of the Program shall constitute, nor be interpreted to constitute, a promise or representation of the employment, continued employment or the terms of employment of any individual by any Participating Cooperative or other entity. 12

17 11.04 No Waiver or Estoppel. No term, condition or provision of the Program shall be deemed to have been waived, and there shall be no estoppel against the enforcement of any provision of the Program, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived Agent for Service of Legal Process. The agent for the service of legal process under the Program shall be the Plan Administrator, except as may be required by any insurance company providing benefits under the Plans for legal process against such insurance company Misstatements of Information. In the event of any misstatement of any fact affecting benefits and eligibility for benefits, the true facts shall be used to determine eligibility and benefits Applicable Law. The provisions of this Program shall be construed according to the laws of the Commonwealth of Virginia (other than its conflict of laws provisions), except as preempted by federal law and in accordance with the Code and ERISA. SECTION XII HIPAA Privacy, Security Standards, and Portability Privacy of Health Information. In accordance with the Privacy Rule Standard at 45 C.F.R (f), pursuant to the Health Insurance Portability and Accountability Act of 1996 ( HIPAA ), as amended by the HITECH Act, effective February 17, 2010, the Health Plan will use and Disclose and will permit its Business Associates or a Health Insurance Issuer or HMO with respect to the Health Plan to use and Disclose health information, including Protected Health Information ( PHI ), to the Plan Sponsor only as provided in this Section XII. The terms and provisions of this Section XII are applicable to the NRECA Medical Plan, the NRECA Dental Plan and the NRECA Vision Plan and are effective April 14, The terms and provisions of this Section XII are applicable to the NRECA Medicare Part D Prescription Drug Plan effective January 1, The terms and provisions of this Section XII are applicable to the NRECA Retiree Medical Coinsurance Plan effective January 1, The terms and provisions of this Section XII are applicable to certain activities of the NRECA POWER Wellness Program effective January 1, For purposes of this Section, all such health plans shall be referred to collectively as the Health Plan Disclosure to the Plan Sponsor Without Individual Authorization. Summary Health Information may be Disclosed to the Plan Sponsor if the Plan Sponsor requests such information for the following purposes: (a) Obtaining premium bids from health plans for purposes of providing health insurance coverage under the Health Plan; or (b) Modifying, amending or terminating the Health Plan. 13

18 The Health Plan may Disclose to the Plan Sponsor information as to whether an individual is participating in the Health Plan or is enrolled in or has disenrolled from a fully-insured or HMO option offered under the Health Plan. Provided the requirements of Section have been met, PHI may be Disclosed to the Plan Sponsor for the following permitted and required uses and Disclosures of such PHI: (i) PHI maybe Disclosed to the Plan Sponsor if required by law. (ii) PHI maybe Disclosed to the Plan Sponsor for purposes of Treatment, Payment and Health Care Operations for and on behalf of the Health Plan. (d) PHI may be Disclosed to the Plan Sponsor s Business Associates for the purpose of conducting disease management services including: care costs; (i) (ii) population-based activities to improve health and reduce health case management and care coordination; and (iii) contacting Plan Participants with information about treatment alternatives or other health related benefits and services that may be of interest to them. When using or Disclosing PHI or when requesting PHI from another party, the Plan Sponsor must make reasonable efforts to limit PHI to the minimum necessary to accomplish the intended purposes of the use or Disclosure, and limit any request for PHI to the minimum necessary to satisfy the purposes of the request Certification Requirement. The Health Plan will Disclose PHI to the Plan Sponsor without individual authorization only upon receipt of the Plan Sponsor s written certification that the Health Plan documents have been amended to comply with the Privacy Rule and the Plan Sponsor also agrees to: (a) Not use or further Disclose PHI other than as permitted or required by the Health Plan or as required by law; (b) Ensure that any agents, including subcontractors, to whom the Plan Sponsor provides PHI received from the Health Plan agree to the same restrictions and conditions that apply to the Plan Sponsor with respect to such PHI; (c) Not use or Disclose PHI for employment-related actions and decisions unless authorized by the individual who is the subject of the PHI; (d) Not use or Disclose PHI in connection with any other benefit or employee benefit plan of the Plan Sponsor unless authorized by the individual who is the subject of the PHI; (e) Report to the Health Plan any use or disclosure of PHI that is inconsistent 14

19 with the uses and Disclosures provided for of which it becomes aware; (f) 45 C.F.R ; Make PHI available to a Participant in accordance with the Privacy Rule at (g) Make PHI available for amendment and incorporate any amendments to PHI in accordance with the Privacy Rule at 45 C.F.R ; (h) Make available the information required to provide an accounting of Disclosures in accordance with the Privacy Rule at 45 C.F. R ; (i) Make internal practices, books and records relating to the use and Disclosure of PHI received from the Health Plan available to the Secretary of the U.S. Department of Health and Human Services for purposes of determining the Health Plan s compliance with the Privacy Rule; (j) If feasible, return or destroy all PHI received from the Health Plan that the Plan Sponsor still maintains in any form, and retain no copies of such PHI when no longer needed for the purpose for which Disclosure was made (or if return or destruction is not feasible, limit further uses and Disclosures to those purposes that make the return or destruction infeasible); and (k) Ensure that the requirements of Section have been met Adequate Separation Between the Health Plan and the Plan Sponsor Must Be Maintained. In accordance with the Privacy Rule, only the following employees or classes of employees and other persons under the control of the Plan Sponsor may be given access to PHI: (a) The employees employed by NRECA, who work in the Insurance & Financial Services Department, Internal Services Department and Lincoln Operations whose job requires that they have access to PHI in order to perform their job. These employees are identified by job positions as described on Attachment A. (b) The persons described in this Section may only have access to and use and Disclose PHI for Treatment, Payment and Health Care Operations functions that the Plan Sponsor performs for the Health Plan; and (c) Persons described in this Section who do not comply with the provisions of this Section VII shall be subject to the Health Plan s Policy on Sanctions for the Improper Use and Disclosure of PHI set forth in the Plan Sponsor s HIPAA Privacy Manual Disclosure to the Plan Sponsor With Individual Authorization. PHI may be Disclosed to the Plan Sponsor pursuant to the valid authorization of the individual who is the subject of the PHI in accordance with the Privacy Rule and the Health Plan s policy and procedures for disclosure upon such authorization. 15

20 12.06 Security Standards. In accordance with the Security Rule Standard at 45 C.F.R (a), pursuant to HIPAA, as amended by the HITECH Act, effective February 17, 2009, Plan Sponsor shall: (a) Implement administrative, physical, and technical safeguards that reasonable and appropriately protect the confidentiality, integrity, and availability of all Electronic Protected Health Information ( EPHI ) that it creates, receives, maintains, or transmits on behalf of the Health Plan; (b) Protect against any reasonably anticipated threats or hazards to the security or integrity of EPHI, and ensure that the provisions of Section of the Program are supported by reasonable and appropriate security measures; (c) Protect against any reasonably anticipated uses or Disclosures of EPHI that are not permitted or required under the Privacy Rule. (d) Ensure that any Business Associate, agent, including a subcontractor, to whom it provides EPHI agrees to implement reasonable and appropriate safeguards to protect such information as required under the Security Rule; and (e) Sponsor becomes aware. Report to the Health Plan any security incident of which Plan For purposes of this Section 12.06, the term Electronic Protected Health Information shall have the same meaning as that term is defined in 45 C.F.R Definitions. For purposes of this Section VII, the following terms shall have the following meanings: (a) Business Associate means a natural person or organization that: (i) On behalf of the Health Plan, performs or assists in the performance of a Health Plan function or activity involving the use or Disclosure of PHI, including claims processing or administration, data analysis, processing or administration, utilization review, quality assurance, billing, benefit management, and repricing, or any other Health Plan function or activity regulated by 45 C.F.R. Subtitle A, Subchapter C; or (ii) Provides legal, actuarial, accounting, consulting, data aggregation, management, administrative, accreditation, or financial services to or for the Health Plan, where the provision of the services involves the Disclosure to the person of PHI from the Health Plan or from another Business Associate of the Health Plan. (b) Disclose means to release, transfer, provide access to, or divulge information in any other manner outside the entity that holds the information. Health Plan: (c) Health Care Operations means any of the following activities of the 16

21 (i) Conducting quality assessment and improvement activities, including outcomes evaluation and development of clinical guidelines, provided that the obtaining of generalizable knowledge is not the primary purpose of any studies resulting from such activities; population-based activities relating to improving health or reducing health care costs, protocol development, case management and care coordination, contacting of health care providers and patients with information about treatment alternatives; and related functions that do not include treatment; (ii) Reviewing the competence or qualifications of health care professionals, evaluating practitioners, providers or Health Plan performance, conducting training programs in which students, trainees, or practitioners in areas of health care learn under supervision to practice or improve their skills as health care providers, training of non-health care professionals, accreditation, certification, licensing, or credentialing activities; (iii) Securing a contract of stop-loss insurance or excess of loss insurance, provided that the requirements of 45 C.F.R (g) are met, if applicable; (iv) Conducting or arranging for medical review, legal services and auditing functions, including fraud and abuse detection and compliance programs; (v) Business planning and development, such as conducting cost-management and planning-related analyses related to managing and operating the Health Plan, including formulary development and administration, development or improvement of methods of Payment or coverage policies; and (vi) Business management and general administrative activities of the Plan, including, but not limited to: (1) Management activities relating to implementation of and compliance with the requirements of the HIPAA rules at 45 C.F.R. Subtitle A, Subchapter C; (2) The provision of data analyses for the Plan Sponsor, provided that PHI is not disclosed to such Plan Sponsor; (3) Resolution of internal grievances; (4) The sale, transfer, merger or consolidation of all or part of the Health Plan with another covered entity as defined by 45 C.F.R , or an entity that following such activity will become a covered entity, and due diligence related to such activity; (5) Consistent with the applicable requirements of 45 C.F.R , creating de-identified health information or a limited data set. (d) Health Insurance Issuer means an insurance company, insurance service, or insurance organization (including an HMO) that is licensed to engage in the business of insurance in a state and is subject to state law that regulates insurance. (e) Payment means: 17