Horizon Healthcare Services, LLP

Transcription

1 Horizon Healthcare Services, LLP Employee Flexible Spending Account Plans January 1, 2017

2 PART 1. CAFETERIA PLAN Horizon Healthcare Services, LLP Employee Flexible Spending Account Plans PROGRAM SELECTION PAGE Check one: Part 1 I s adopted by the Employer (this must be checked if any or all of Parts 2, and/or 3, below are adopted). Part 1 is NOT adopted by the Employer. PART 2. HEALTH FLEXIBLE SPENDING ACCOUNT (FSA) COMPONENT Check one: Part 2 is adopted by the Employer as a part of the Cafeteria Plan. Part 2 is reserved and NOT adopted by the Employer. PART 3. DEPENDENT CARE ASSISTANCE ACCOUNT (DCA) COMPONENT Check one: Part 3 is adopted by the Employer as a part of the Cafeteria Plan. Part 3 is reserved and NOT adopted by the Employer. Program Selection Page

3 IMPORTANT INFORMATION ABOUT THE PROGRAM Plan Name Plan Sponsor Plan Administrator Named Fiduciary Agent for Service of Legal Process Horizon Healthcare Services, LLP Employee Flexible Spending Accounts Horizon Healthcare Services, LLP 1070 New Holland Avenue Lancaster, PA Linda Russ, HR Consultant Horizon Healthcare Services, LLP Plan Administrator Employer Identification Number Plan Number 501 Type of Plan(s) Flexible Spending Accounts Effective Date of Program January 1, 2016 Plan Year Ends December 31 Plan Costs Third Party Administrator (TPA) for Claims $6.50 pepm Morgan-White Administrators, Inc. P.O. Box Lancaster, PA Telephone: (877) Important Information About the Program

4 TABLE OF CONTENTS Page PART 1. - CAFETERIA PLAN Purpose of Cafeteria Plan Effective Date of Cafeteria Plan Plan Year Eligibility Requirements for Participation....2 (a) Employee Status...2 (b) Participation Requirements...3 (c) Entry Date...3 (d) Additional Participation Requirements Elections by Participants....3 (a) Initial Elections...3 (b) Other Elections...4 (c) Effect of Election Irrevocability of Elections During the Plan Year Exceptions...4 (a) Altering Elections Pursuant to a Change in Status Funding Unused Contributions or Benefits Maximum Contributions Under the Cafeteria Plan Family and Medical Leave Act...6 (a) Unpaid FMLA Leave In General...6 (b) Special Rule for FSA Benefits...7 PART 2. - HEALTH FLEXIBLE SPENDING ACCOUNT (FSA) COMPONENT Purpose of FSA Effective Date of FSA i -

5 3. Plan Year Eligibility Requirements for Participation....8 (a) Participant Requirements...8 (b) Entry Date Funding and Amount of Benefits....8 (a) Cost of Coverage...8 (b) Flexible Spending Account...9 (c) FSA Limits and Uniform Coverage Payment of Benefits....9 (a) Eligibility for Benefits...9 (b) Eligible Medical, Dental or Vision Expenses Termination of FSA Benefits Unused Benefits...10 PART 3. - DEPENDENT CARE ASSISTANCE ACCOUNT COMPONENT Purpose of Dependent Care Account Effective Date of Dependent Care Account Plan Year Eligibility Requirements for Participation (a) Participation Requirements...12 (b) Entry Date Funding and Amount of Benefits (a) Cost of Coverage...12 (b) Dependent Care Account...13 (c) Dependent Care Account Limits Payment of Benefits ii -

6 (a) Limitation on Benefits...13 (b) Child or Dependent Care Expenses...13 (c) Qualifying Dependent...14 (d) Earned Income Limitation...14 (e) Additional Information Required Termination of DCA Benefits Unused Contributions or Benefits Statements to Participants...15 PART 4. - PROVISIONS OF GENERAL PROGRAM APPLICABILITY Termination of Coverage (a) In General...17 (b) Cafeteria Plan Plan Administration...17 (a) Allocation of Authority...17 (b) Provision for Third-Party Service Providers...18 (c) Fiduciary Liability...18 (d) Bonding...19 (e) Payment of Program Expenses...19 (f) Funding Policy...19 (g) Timeliness of Benefit Payments Claims Procedure (a) Availability of Debit Card...19 (b) Claims for Benefits...20 (c) Required Information...21 (d) Method and Contents of Denial Notices iii -

7 (e) Appealing an Adverse Benefit Determination...22 (f) Decision on Appeal of Disputed Claims (g) Contents of Notice of Decision on Appeal Continuation Coverage Under COBRA and USERRA (a) Continuation Coverage after Termination of Normal Participation...23 (b) Who is a Qualified Beneficiary...24 (c) What is a Qualifying Event...24 (d) What Benefit is Available Under Continuation Coverage...24 (e) Notice Requirements (f) Election Period...25 (g) Duration of Continuation Coverage...25 (h) Automatic Termination of Continuation Coverage...26 (i) Continuation Coverage for Employees in the Uniformed Services...26 (j) Premium Requirements Certificates of Coverage Nondiscrimination Participating Employers Amendment or Termination of Program...28 (a) Employer s Right to Amend...28 (b) Employer s Right to Terminate Reentry After Uniformed Service Duty No Employment Rights Conferred Payments to Beneficiary Nonalienation of Benefits Mental or Physical Incompetency iv -

8 14. Inability to Locate Payee Source of Payments Tax Effects Definitions (a) Code...30 (b) "Covered Person"...30 (c) Dependent...30 (d) ERISA...30 (e) IRS...30 (f) Participating Employer...30 (g) PHI...30 (h) Qualified Beneficiary...30 (i) Qualifying Dependent...30 (j) QMCSO...31 (k) Spouse...31 (l) TPA Gender and Number Applicable Laws Regulatory References Severability...31 PART 5. - PROTECTED HEALTH INFORMATION Purpose and Applicability Use and Disclosures of Protected Health Information, Including for Treatment, Payment, and Health Care Operations v -

9 3. The Program Will Use and Disclose Protected Health Information as Permitted by Authorization of the Covered Person and as Required or Permitted by Law Provision of Summary Health Information, Enrollment and Disenrollment Information, and Other Protected Health Information to the Employer...33 (a) Summary Health Information...33 (b) Enrollment and Disenrollment Information...33 (c) Other Protected Health Information Employer Certification of Amendment of Plan Documents With Respect to Protected Health Information, the Employer Agrees to Certain Conditions Adequate Separation Between the Program and the Employer Must Be Maintained Limitations of PHI Access and Disclosure Noncompliance Issues vi -

10 Horizon Healthcare Services, LLP Employee Flexible Spending Account Plans The Employer hereby establishes these Employee Flexible Spending Account Plans (referred to as the Program ) for the benefit of Eligible Employees. The Program includes one or more of the programs as adopted on the Program Selection Page at the front of this document (the Program Selection Page ), and as set forth below and herein: If selected on the Program Selection Page, the Employer establishes the Cafeteria Plan set forth in Part 1, and in the applicable provisions of Parts 6 and 7 ( Cafeteria Plan ) which may include, if selected on the Program Selection Page, one or more of the following components: 1. the Health Flexible Spending Account Component (set forth in Part 2); and/or 2. the Dependent Care Assistance Account Component (set forth in Part 3). Under the Cafeteria Plan, Benefits means any amounts paid on behalf of a Participant or to a Participant as reimbursement for eligible expenses incurred by the Participant, his Spouse, or his Dependents during a Plan Year. Certain terms capitalized but not earlier defined in the text of this Program shall have the meanings set forth in Section 17 (entitled Definitions ) of Part 4.

11 PART 1. - CAFETERIA PLAN This Part 1 shall only apply if and to the extent adopted on the Program Selection Page. The Employer hereby establishes this Cafeteria Plan for the benefit of eligible employees. 1. Purpose of Cafeteria Plan. The purpose of this Cafeteria Plan is to give Eligible Employees a choice (a) to receive their full taxable compensation, or (b) to have a portion of it applied by the Employer, on a pre-tax (salary or wage reduction) basis, toward the cost of certain qualified Benefits they elect (or are deemed to have elected). This Cafeteria Plan is intended to qualify as a cafeteria plan under Section 125 of the Code and the regulations thereunder, and is to be interpreted in a manner consistent therewith, so that the salary or wage reductions contributed on behalf of participating employees will be excluded from gross income for federal income tax purposes, and so that the Benefits paid to employees hereunder will be excludable from their gross incomes under Section 105 and/or other applicable section(s) of the Code. 2. Effective Date of Cafeteria Plan. The Effective Date of this Cafeteria Plan is and means January 1, Plan Year. This Cafeteria Plan is being administered on the basis of a 12-month period running from January 1, to December 31, each year (called the Plan Year ). 4. Eligibility Requirements for Participation. (a) Employee Status. To be eligible to participate in this Cafeteria Plan, an individual must be classified by the Employer as a common law employee and working at least 20 hours per week (called an Eligible Employee ). In no event will the term Eligible Employee include (i) any individual classified by the Employer as an independent contractor or who performs services for the Employer but is paid by a temporary or other employment or staffing agency (regardless of whether any such individual is determined by the IRS to be a common law employee of the Employer); (ii) a self-employed individual such as a sole proprietor, a partner in a partnership, or a director solely serving on a corporation s board of directors (and not otherwise providing services to the corporation as an employee); or (iii) a more than 2% shareholder (including anyone deemed to be a more than 2% shareholder under Code 318) of an S corporation. In addition, participation shall not be extended to any individual who is a member of a collective bargaining unit of employees covered by a collective bargaining agreement with the

12 Employer (except as otherwise specifically provided in the applicable collective bargaining agreement). (b) Participation Requirements. Any Eligible Employee of the Employer who properly elects coverage during the waiting period (the period from date of hire or eligibility until the Entry Date defined in (c) below) may participate in this Cafeteria Plan as of his Entry Date described below). (c) Entry Date. The Entry Date shall be the first of the month following employee s date of hire or on the date the employee first becomes an Eligible Employee (called the Entry Date ). For the following Eligible Employees (Management Levels of President, Director and Director AIP), are enrolled in the Cafeteria Plan immediately upon their date of hire. An Eligible Employee who participates in this Cafeteria Plan is called a Participant. All Elections made by employees are irrevocable until the end of the applicable Plan Year unless a change in Benefit elections is permitted under Section 6 below. (d) Additional Participation Requirements. To actually participate in this Cafeteria Plan, an Eligible Employee must timely furnish to the Employer the election form prescribed by the Employer (which may be in written, electronic, telephonic, or any other form) and submit to the Employer all information which the Employer may reasonably require. Except with respect to any default Benefits designated by the Employer and communicated to Eligible Employees in the enrollment materials, if an Eligible Employee fails to return a completed election form to the Employer on or before the specified due date, the Eligible Employee shall be deemed to have waived coverage for the applicable Plan Year. 5. Elections by Participants. (a) Initial Elections. Prior to or coinciding with the Effective Date of this Cafeteria Plan, Eligible Employees of the Employer may make initial salary or wage reduction elections (called the Elections ) under this Cafeteria Plan which shall become effective prospectively, except as otherwise specifically provided in the Cafeteria Plan. All amounts subject to salary or wage reductions shall be contributed on a pro rata basis during the Plan Year (except, as otherwise specifically provided in this Cafeteria Plan).

13 (b) Other Elections. After the Effective Date of this Cafeteria Plan, employees who later become eligible to participate in the Cafeteria Plan may make initial Elections under this Cafeteria Plan by or before their Entry Date and such Elections shall become effective prospectively, except as otherwise specifically provided in the Cafeteria Plan. If an Eligible Employee does not make an initial Election when first eligible to do so, he may make an Election under this Cafeteria Plan during the annual enrollment period designated by the Employer and communicated to Eligible Employees (or, if permitted by the Plan Administrator in its sole discretion and applied on a reasonable and consistent basis) before the first day of the next Plan Year) and such Election shall become effective on the first day of such next Plan Year. Participants under the Cafeteria Plan may also change Elections during the annual enrollment period designated by the Employer and communicated to Eligible Employees (or, if permitted by the Plan Administrator in its sole discretion and applied on a reasonable and consistent basis) before the first day of the next Plan Year) and such Election shall become effective on the first day of such next Plan Year. All such Election periods shall be applied on a uniform and nondiscriminatory basis. (c) Effect of Election. By timely submitting an Election form to the Employer, the Eligible Employee voluntarily elects to reduce his future compensation in an amount sufficient to cover his share of the cost of the Benefits which he has selected, and directs the Employer to apply such specified amount to the payment of such selected Benefits. The type and amount of the Benefits which may be selected shall be governed by the specific provisions of the applicable part(s) of this Program (Part 2 and/or 3, as applicable) under which each such Benefit is offered. 6. Irrevocability of Elections During the Plan Year Exceptions. Except as specifically described in this Section 4, a Participant s Election under the Cafeteria Plan is irrevocable for the Plan Year to which it relates. If one of the exceptions below applies, a Participant may revoke an Election for the balance of the Plan Year and make a new election if both the revocation and new Election meet the applicable requirements set forth below. Any revocation and new Election must be made by notice to the Plan Administrator at such time and in such manner as prescribed by the Plan Administrator (but not less than 30 days (or such longer period as may be required by law; of the event forming the basis for the requested change). This Section 6 shall be administered in accordance with Section 125 of the Code and the applicable guidance issued from time to time thereunder (including, but not limited to, 26 C.F.R ).

14 (a) Altering Elections Pursuant to a Change in Status. A Participant (or an Eligible Employee who has not made a previous election under this Cafeteria Plan for a particular Plan Year) may make an Election change if, under the facts and circumstances (as determined by the Plan Administrator), the change is made on account of and corresponds with a change in status that affects the eligibility of the Participant or the Participant s Spouse or Dependent under the Employer s or another employer s plan. For purposes of this subsection, a change in status shall include the following events (or any other event the Plan Administrator determines in its discretion is permitted under Section 125 of the Code and the regulations and other guidance issued thereunder): (i) Legal Marital Status: Events that change a Participant s legal marital status, including marriage, death of a Spouse, divorce, legal separation, or annulment; (ii) Number of Dependents: Events that change a Participant s number of Dependents, including birth, death, adoption, or placement for adoption; (iii) Change in Employment Status: An event that changes the employment status of the Participant or the Participant s Spouse or Dependent, including termination or commencement of employment, a strike or lockout, a commencement or return from an unpaid leave of absence, and a change in worksite, as well as any other change in the individual s employment status that results in the individual becoming (or ceasing to be) eligible under a benefit plan of his employer; (iv) Dependent Satisfies or Ceases to Satisfy the Eligibility Requirements: An event that causes the Participant s Dependent to satisfy or cease to satisfy the requirements for coverage due to attainment of age or any similar circumstance; and (v) Change in Residence. A change in the place of residence of the Participant or the Participant s Spouse or Dependent. 7. Funding. All amounts associated with this Cafeteria Plan pursuant to the salary or wage reduction Elections of Participants shall be the property of the Employer, and shall be used to provide Participants with Benefits pursuant to their choice of qualified benefits in accordance with this Cafeteria Plan and the specific components of this Cafeteria Plan under which such qualified Benefits are offered, unless forfeited under Section 8 hereof. 8. Unused Contributions or Benefits. This Cafeteria Plan generally shall not permit Participants to defer the receipt of compensation from one Plan Year to a subsequent Plan Year.

15 Therefore, any unused contributions or Benefits at the end of any Plan Year attributable to compensation or wage reductions of Participants shall be forfeited by such Participants, except as otherwise specifically set forth in this Cafeteria Plan or permitted by law. 9. Maximum Contributions Under the Cafeteria Plan. The maximum amount of Employer contributions (including contributions made pursuant to a salary or wage reduction Election) available to any Eligible Employee through the Cafeteria Plan shall be the sum of the costs of the most expensive Benefits available to the Participant under the Premium Conversion Component, and to the extent applicable: (i) the maximum annual amount applicable to the FSA, and/or (ii) the maximum annual amount applicable to the DCA. 10. Family and Medical Leave Act. Notwithstanding anything in the Cafeteria Plan to the contrary, this Cafeteria Plan shall be operated in accordance with the requirements of the Family and Medical Leave Act of 1993, as amended ( FMLA ) and regulations promulgated thereunder, the provisions of which are hereby incorporated by reference, and the Plan Administrator has full power and discretion to cause the Cafeteria Plan to be so operated, including without limitation, the power to interpret, construe and implement all applicable provisions of FMLA and the provisions of 26 C.F.R , in such manner as the Plan Administrator deems appropriate and consistent with the provisions of the Cafeteria Plan. (In all instances, a paid or unpaid leave under FMLA will be treated in the same manner and consistent with, respectively, a non-fmla paid or unpaid leave.) (a) Unpaid FMLA Leave In General. Notwithstanding any provision to the contrary in this Cafeteria Plan, if a Participant goes on a qualifying unpaid leave under the FMLA, to the extent required by the FMLA, and if the Participant opts to continue any Benefits which constitute health benefit coverages during such qualifying unpaid leave, then the Participant may pay his or her required contributions in one of the following ways, as determined by the Employer in accordance with its FMLA leave policy: (i) Pay-as-you-go with after-tax dollars, by sending monthly payments to the Plan Administrator or on a pre-tax (salary or wage reduction) basis to the extent the contributions are made from taxable compensation (e.g., from unused sick days or vacations days) that is due the Participant during the leave; (ii) Pre-pay with pre-tax dollars, by pre-paying all or a portion of the contribution for the expected duration of the leave on a pre-tax (salary or wage reduction) basis

16 out of pre-leave compensation or on a pre-tax basis to the extent the contributions are made from taxable compensation (e.g., from unused sick days or vacation days). To pre-pay the contribution, the Participant must make a special election to that effect prior to the date that such compensation would normally be made available (pre-tax dollars may not be used to fund coverage during the next Plan Year). In addition, contributions may also be made on an after-tax basis under this option; or (iii) Outstanding contributions due under an arrangement agreed upon between the Participant and the Plan Administrator (e.g., the Plan Administrator may fund coverage during the leave and withhold outstanding amounts upon the Participant s return). Upon return from such leave, the Participant will be permitted to re-enter the Cafeteria Plan on the same basis the Participant was participating in the Cafeteria Plan prior to his or her leave, or as otherwise required by the FMLA. (b) Special Rule for FSA Benefits. However, for FSA Benefits, if the coverage terminates due to revocation of the Benefit or due to nonpayment of contributions by the Participant, two options will be offered for such benefit upon the Participant s return to work: (i) Proration. The Participant may elect to resume coverage at a reduced level without making payment of any unpaid contributions. In this case, the Participant s maximum contribution amount will be reduced proportionately for the time that the Participant was not paying premiums. Expenses incurred by the Participant during the lapse in coverage period are not reimbursable. (ii) Reinstatement. The Participant may elect to reinstate the level of coverage in effect when the leave began, with unpaid contribution amounts being made up for the remainder of the Plan Year. The maximum coverage level originally elected will remain in effect for the Plan Year.

17 PART 2. - HEALTH FLEXIBLE SPENDING ACCOUNT (FSA) COMPONENT This Part 2 shall only apply if and to the extent adopted on the Program Selection Page; and, if so adopted, this Part 2 shall be a component of the Cafeteria Plan. As a qualified Benefit associated with the Cafeteria Plan, the Employer hereby establishes this Health Flexible Spending Account (called the FSA ) for the benefit of Eligible Employees. 1. Purpose of FSA. This FSA has been established to reimburse Participants for eligible Medical, Dental and Vision expenses incurred by them, their Spouses and Dependents. This FSA is intended to meet the requirements for qualification under Section 106 of the Code, so that the Employer s contributions and the salary or wage reductions contributed on behalf of participating employees will be excluded from gross income for federal income tax purposes, and so that the Benefits paid to employees hereunder will be excludable from their gross incomes under Code Effective Date of FSA. The Effective Date of this FSA is and means January 1, Plan Year. This FSA is being administered on the basis of a 12-month period running from January 1 to December 31 each year (called the Plan Year ). 4. Eligibility Requirements for Participation. (a) Participant Requirements. Any Eligible Employee of the Employer who elects coverage during the waiting period may participate in this FSA as of his Entry Date described below. (b) Entry Date. The Entry Date shall be the first of the month following employee s date of hire or on the date the employee first becomes an Eligible Employee (called the Entry Date ). For the following Eligible Employees (Management Levels of President, Director and Director AIP), enrollment in the FSA can occur immediately upon their date of hire. 5. Funding and Amount of Benefits. (a) Cost of Coverage. All amounts associated with this FSA pursuant to contributions of the Employer or pursuant to the salary or wage reduction elections of Participants shall be the property of the Employer, and shall be used to pay for or reimburse Participants for Eligible Medical, Dental or Vision Expenses in accordance with this FSA, unless forfeited under Section 8 hereof.

18 (b) Flexible Spending Account. The TPA shall establish, or cause to be established, bookkeeping accounts that will show for each Participant for each Plan Year the amount of Benefits available, the amount of Benefits used, and the amount of Benefits remaining. (c) FSA Limits and Uniform Coverage. (i) Maximum Annual Amounts. For each Plan Year, the maximum annual amount, if any, that will be contributed by the Employer for a Participant shall be a uniform amount determined by the Employer prior to the beginning of the Plan Year and communicated to Eligible Employees in the enrollment materials. The maximum annual amount for which a Participant may contribute pursuant to his salary or wage reduction election is $2,600 (as required by law, an Eligible Employee may elect up to this amount in salary or wage reduction contributions not to exceed $2,600 (as indexed for inflation, in accordance with Section 125(i) of the Code)). (ii) Minimum Annual Amount. For each Plan Year, the minimum annual amount, if any, which a Participant may contribute for a Plan Year shall be a uniform amount determined by the Employer prior to the beginning of the Plan Year and communicated to Eligible Employees in the enrollment materials. (iii) Uniform Coverage Rule. The total annual FSA amount (reduced by any prior reimbursements made for the Plan Year) shall be available to the Participant throughout the Plan Year, without regard to the actual amounts which have been credited to the Participant s account at any given point in time. 6. Payment of Benefits. (a) Eligibility for Benefits. Each Participant shall be entitled to Benefits hereunder for all Eligible Medical, Dental and Vision Expenses incurred by the Participant, his Spouse, or his Dependents on or after the effective date of his participation (and after the Effective Date of the FSA). (b) Eligible Medical, Dental or Vision Expenses means those unreimbursed (through insurance or otherwise) expenses incurred by the Participant, his Spouse, or his Dependents, after the effective date of the Participant s participation herein and during the Plan Year which are incurred for medical care as defined in Section 213(d) of the Code. Notwithstanding the foregoing, Eligible Medical or Dental Expenses shall not include:

19 (i) premium payments for other health coverage, including (but not limited to) the payment of premiums for any other plan, regardless of whether sponsored by the Employer; (ii) long-term care services or insurance; (iii) cosmetic surgery or other similar procedures, unless the surgery or procedure is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease (the term cosmetic surgery or other similar procedure means any procedure which is directed at improving the patient s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease); (iv) any medicine or drug, unless the medicine or drug (A) requires a prescription, (B) is available without a prescription (an over-the-counter medicine or drug) and the individual obtains a prescription, or (C) is insulin; or (v) any other services or supplies not permitted to be reimbursed from an FSA pursuant to applicable IRS guidance. For purpose of this FSA, an expense is incurred when the Participant, his Spouse, or his Dependent is furnished the care or services giving rise to the claimed expense. 7. Termination of FSA Benefits. If a Participant loses coverage under the FSA during the Plan Year (unless the Participant is eligible to, and timely elects to, continue FSA coverage (and pays for such coverage) pursuant to COBRA, as described in Section 4 of Part 4), such Participant shall have the right to submit a claim for reimbursement for Eligible Medical, Dental or Vision Expenses previously incurred during the Plan Year and prior to his termination of coverage, at any time within the 90-day period from his loss of coverage, and to receive Benefits hereunder. 8. Unused Benefits. This FSA shall not permit Participants to defer the receipt of compensation from one Plan Year to a subsequent Plan Year. Therefore, any unused Benefits with respect to a Plan Year shall be forfeited by such Participants (all such forfeitures shall be used first to offset any losses experienced by the Employer during the Plan Year as a result of making reimbursements with respect to all Participants in excess of the contributions made by such Participants; second, to reduce the costs of administering the FSA Benefits; and third, for any other purpose permitted by law).

20 Notwithstanding the foregoing or anything in this Part 2 to the contrary, this FSA allows Participants a two months and fifteen day extension past the last day of the Plan Year to incur reimbursable expenses for that Plan Year. This is called a grace period, and is available only to Participants (including Qualified Beneficiaries under COBRA) with FSA coverage in effect on the last day of the Plan Year. The reimbursements received for Eligible Medical or Dental Expenses incurred during the grace period do not reduce the allowable expenses for the next Plan Year. All expenses must be received by the end of the 90-day period following the end of the Plan Year to which the grace period relates in order to be eligible for reimbursement with respect to that Plan Year. The Cafeteria Plan will treat reimbursements of all FSA claims for expenses that are incurred in the current Plan Year as reimbursed first from unused amounts credited for the current Plan Year and, only after exhausting these current Plan Year amounts, as then reimbursed from unused amounts carried over from the preceding Plan Year. Any unused amounts from the prior Plan Year that are used to reimburse a current year expense: (i) reduce the amounts available to pay prior Plan Year expenses during the run-out period, (ii) must be counted against the permitted Carryover, and (iii) cannot exceed the permitted Carryover.

21 PART 3. - DEPENDENT CARE ASSISTANCE ACCOUNT COMPONENT This Part 3 shall only apply if and to the extent adopted on the Program Selection Page; and, if so adopted, this Part 3 shall be a component of the Cafeteria Plan. As a qualified Benefit, the Employer hereby establishes this Dependent Care Assistance Account (called the Dependent Care Account or DCA ) for the benefit of Eligible Employees. 1. Purpose of Dependent Care Account. This Dependent Care Account has been established to provide participating employees of the Employer with dependent care assistance in the form of payment or reimbursement for Child or Dependent Care Expenses incurred which enable Participants (and their Spouses, as applicable) to be gainfully employed within the meaning of 26 C.F.R (c). This Dependent Care Account is intended to meet the requirements for qualification under Section 129 of the Code, so as to constitute a dependent care assistance program. 2. Effective Date of Dependent Care Account. The Effective Date of this Dependent Care Account is and means January 1, Plan Year. This Dependent Care Account is being administered on the basis of a 12-month period running from January 1, to December 31, each year (called the Plan Year ). 4. Eligibility Requirements for Participation. (a) Participation Requirements. Any Eligible Employee of the Employer who elects coverage during the waiting period may participate in this Dependent Care Account as of his Entry Date described below. (b) Entry Date. The Entry Date shall be the first of the month following employee s date of hire or on the date the employee first becomes an Eligible Employee (called the Entry Date ). For the following Eligible Employees (Management Levels of President, Director and Director AIP), enrollment in the DCA can occur immediately upon their date of hire. 5. Funding and Amount of Benefits. (a) Cost of Coverage. All amounts associated with this Dependent Care Account pursuant to the salary or wage reduction elections of Participants shall be the property of the Employer, and shall be used to pay for or reimburse Participants for Child or Dependent Care

22 Expenses in accordance with this Dependent Care Account, unless forfeited under Section 7 hereof. (b) Dependent Care Account. The TPA shall establish, or cause to be established, bookkeeping accounts that will show for each Participant for each Plan Year the amount of Benefits available, the amount of Benefits used, and the amount of Benefits remaining. (c) Dependent Care Account Limits. (i) Maximum Annual Amounts. For each Plan Year, the maximum annual amount which a Participant may contribute pursuant to this salary or wage reduction election shall be $5,000, or $2,500 if the Participant is married and resides with the Spouse but files a separate federal income tax return. (ii) Minimum Annual Amount. For each Plan Year, the minimum annual amount, if any, which a Participant may contribute for a Plan Year shall be a uniform amount determined by the Employer prior to the beginning of the Plan Year and communicated to Eligible Employees in the enrollment materials. 6. Payment of Benefits. (a) Limitation on Benefits. Each Participant shall be entitled to a payment pursuant to this Dependent Care Account for any Child or Dependent Care Expenses incurred during the Plan Year (and after the Effective Date of the Dependent Care Account). The amount of the payment cannot exceed the dollar amount credited to the Participant s Dependent Care Account during any Plan Year. Payments under this Dependent Care Account shall be made only up to the amounts credited to the Participant s Dependent Care Account (i.e., less any reimbursements made to date) as of the date of payment. (b) Child or Dependent Care Expenses means those expenses incurred after the effective date of the Participant s participation herein and during the Plan Year that would be considered to be employment-related expenses under Code 21(b)(2) relating to expenses for dependent care services on behalf of a Qualifying Dependent necessary for gainful employment of the Participant and Spouse, if any, and expenses for incidental household services, but only to the extent such expenses are not reimbursed through another plan or otherwise. Such expenses include payments for services provided (i) in the Participant s home, or (ii) outside the Participant s home for the Participant s child who is a Qualifying Dependent under age 13 or for any other Qualifying Dependent who regularly spends at least eight hours per day in the

23 Participant s household. In addition, if the services are provided by a dependent care center which provides care for more than six individuals and receives a fee for its services, then the center must comply with all applicable state and local laws. Child and Dependent Care Expenses do not include services at a camp where the Qualifying Dependent stays overnight. For purposes of this Dependent Care Account, an expense is incurred when the Participant is furnished the dependent care services giving rise to the claimed expense. (c) Qualifying Dependent means any individual who is: (i) a qualifying child of the Participant as defined in Section 152(a)(1) of the Code (generally a child, sibling, niece, nephew or similar person who lives with the Participant and who does not provide more than one-half of his own support) who is under the age of 13; or (ii) a dependent (as defined in Section 152 of the Code, but determined without regard to subsections (b)(1), (b)(2), and (d)(1)(b) thereof) or Spouse of the Participant who is physically or mentally incapable of caring for himself and who has the same principal place of abode as the Participant for more than one-half of the Participant s taxable year. Also, Qualifying Dependent includes a qualifying individual as defined in Section 21(b)(1) of the Code with respect to the Participant; provided, however, that, in the case of divorced parents, the child shall, as provided in Section 21(e)(5) of the Code, be treated as the qualifying child of the custodial parent (within the meaning of Section 152(e)(4)(A) of the Code), and shall not be treated as a qualifying child with respect to the non-custodial parent. (d) Earned Income Limitation. No DCA reimbursement otherwise due a Participant for the Plan Year shall exceed the earned income limitation set forth in Sections 129(b) and 21(d)(2) of the Code. (e) Additional Information Required. In addition to the information required under Section 4, each Participant s claim for Benefits shall contain the following information (as well as any bills, invoices, or other statements from an independent third party showing that the expenses were incurred): (i) the relationship of the service provider to the Participant, if any; (ii) if the services are performed for a child of the Participant, the age of such child; (iii) the place where any services are being or will be performed;

24 (iv) if services are to be performed outside the Participant s household, a statement as to whether the Qualifying Dependent being provided with services spends at least eight hours per day in such household; (v) if services are to be performed in a dependent care center, a statement that such facility meets the requirements described in subsection (b) above; (vi) if the Participant is married, a statement of the Spouse s salary if employed, or if the Spouse is not employed, a statement that the Spouse is either incapacitated or is a full-time student at an educational institution and the months of the Plan Year that such Spouse will be in attendance at such institution; and (vii) any other such information as the Plan Administrator (or its delegate) may requested on the reimbursement request form or otherwise. 7. Termination of DCA Benefits. If a Participant loses coverage under the Dependent Care Account during the Plan Year, such Participant shall have the right to submit a claim for reimbursement of Child or Dependent Care Expenses previously incurred during the Plan Year and before his termination of coverage, at any time within the 90-day period from his loss of coverage, and to receive Benefits hereunder to the extent of any outstanding credit balance remaining in his/her Account. 8. Unused Contributions or Benefits. This Dependent Care Account shall not permit Participants to defer the receipt of compensation from one Plan Year to a subsequent Plan Year. Therefore, any unused Benefits after all claims have been paid for the Plan Year shall be forfeited by such Participants (all such forfeitures shall be used first to offset any losses experienced by the Employer during the Plan year as a result of making reimbursements with respect to all Participants in excess of the contributions made by such Participants; second, to reduce the costs of administering the DCA Benefits; and third, for any other purpose permitted by law). 9. Statements to Participants. On or before January 31 of each year, the Plan Administrator shall furnish to each Participant who has incurred dependent care assistance during the preceding calendar year a written statement showing the amount of such dependent care assistance provided during such calendar year with respect to the Participant, as required under Section 129(d)(7) of the Code. Such statement may be provided in any form and manner permitted

25 under the Code and applicable IRS guidance, including by causing the amount of dependent care assistance provided to be reported by the Employer on each such Participant s Form W-2.

26 PART 4. - PROVISIONS OF GENERAL PROGRAM APPLICABILITY The provisions set forth in this Part 4 are applicable to this entire Program, except to the extent otherwise specifically stated herein. 1. Termination of Coverage. (a) In General. Except as provided in Section 4 below with respect to COBRA (or USERRA) continuation coverage, coverage under this Program shall terminate automatically as of the earliest date of (i) the date on which the Program is terminated by the Employer; (ii) the date the employee is no longer an Eligible Employee (whether because of termination of employment, retirement, reduction of hours, or any other reason); (iii) the date the employee is absent from employment for more than 31 days for a period of duty in the Uniformed Services, or (iv) the date the employee fails to return to active employment with the Employer at the earlier of the end of a Family Medical Leave Act leave or the date the employee who is on Family Medical Leave Act leave gives notice to the Employer of an intent not to return to active employment. (b) Cafeteria Plan. (i) Termination of participation in the Cafeteria Plan will automatically revoke the Participant s Benefit elections. Benefits under the Premium Conversion Component will terminate as of the date(s) specified under the terms of such Benefits. Reimbursements from the FSA and/or the DCA after termination of participation will be made in accordance with, respectively, Part 2 and 3, as applicable. (ii) If a Participant terminates employment for any reason and then is rehired within 30 days or less after the date of termination but within the same Plan Year, then the Eligible Employee will be reinstated with the same Benefit elections that such individual had before termination. If the former Participant is rehired more than 30 days after the date of termination or in a later Plan Year, then the Eligible Employee may make new Cafeteria Plan elections as if he were a new hire. This provision will apply to the Benefits under the Premium Conversion Component of the Cafeteria Plan only to the extent permitted by the terms of the underlying Benefits. 2. Plan Administration. (a) Allocation of Authority. The Plan Administrator named in the Important Information About the Program section above shall control and manage the operation and administration of the Program. The Plan Administrator shall have the exclusive right to interpret

27 the Program and to decide all matters arising thereunder, including the right to remedy possible ambiguities, inconsistencies, or omissions. All determinations of the Plan Administrator with respect to any matter hereunder shall be conclusive and binding on all persons. Without limiting the generality of the foregoing, the Plan Administrator shall have the following powers and duties: (i) To allocate and delegate its responsibilities under the Program and to designate other persons to carry out any of its responsibilities under the Program (including to employ a third party claims administrator to administer claims for Program Benefits); (ii) To require any person to furnish such reasonable information as it may request for the purpose of the proper administration of the Program as a condition to receiving any Benefits under the Program; (iii) To make and enforce such rules and regulations and prescribe the use of such forms as shall be deemed necessary for the efficient administration of the Program; (iv) To decide on questions concerning the Program and the eligibility of any employee to participate in the Program, in accordance with the provisions of the Program; (v) To determine the amount of Benefits that shall be provided or payable to any person in accordance with the provisions of the Program; and (vi) To provide a full and fair review to any Participant whose claim for Benefits has been denied in whole or in part. (b) Provision for Third-Party Service Providers. The Plan Administrator may employ the services of such persons as it may deem necessary or desirable in connection operation of the Program. The Plan Administrator may rely upon all tables, valuations, certificates, reports and opinions furnished by any duly appointed actuary, accountant, consultant, third party administrator, legal counsel, or other specialist, and the Plan Administrator shall be fully protected in respect to any action taken or permitted in good faith in reliance thereon. All actions so taken or permitted shall be conclusive and binding as to all persons. (c) Fiduciary Liability. To the extent permitted by law, neither the Plan Administrator nor any other person shall incur any liability for any acts of commission or omission except for his own willful misconduct or willful breach of his fiduciary duties or this Program. One fiduciary shall not be liable or responsible for the acts of commission or omission of another fiduciary unless:

28 (i) the fiduciary knowingly participated in or knowingly undertook to conceal the act or omission of another fiduciary; (ii) the fiduciary knew the act or omission was a breach of fiduciary responsibility by the other fiduciary and failed to make reasonable efforts to remedy the breach; or (iii) the fiduciary s breach of his own fiduciary responsibilities enabled the other fiduciary to commit a breach. (d) Bonding. Unless required by any federal or state law, the Plan Administrator shall not be required to give any bond or other security in any jurisdiction in connection with the administration of this Program. (e) Payment of Program Expenses. All reasonable expenses incurred in administering the Program, including but not limited to administrative fees and expenses owing to any third party administrator, actuary, consultant, accountant, attorney, specialist, or other person or organization that may be employed by the Plan Administrator in connection with the administration hereof, shall be paid by the Employer, except as otherwise specifically provided in this Program. (f) Funding Policy. All of the amounts payable under this Plan shall be paid from the general assets of the Employer. Nothing herein will be construed to require the Employer (or the Plan Administrator) to maintain any fund or to segregate any amount for the benefit of any Participant, and no Participant shall have any claim against, right to, or security or other interest in any fund, account, or asset of the Employer from which payment under this Program may be made. (g) Timeliness of Benefit Payments. Payments shall be made as soon as administratively feasible after the required forms and documentation have been furnished by the Participant, subject to the claims procedure requirements set out in Section 3 below. 3. Claims Procedure. (a) Availability of Debit Card. Notwithstanding anything in the Program to the contrary, and to the extent permitted by applicable law, the Plan Administrator may make available a debit card (within the meaning of Proposed Treasury Regulation Section , or successive guidance) to enable an eligible Participant to pay for Eligible Medical or Dental Expenses, and/or Child or Dependent Care Expenses, as applicable. In addition to the requirements

29 generally applicable to the FSA and DCA, the use of debit cards will be subject to the requirements of Proposed Treasury Regulation Section (or successive guidance) and other applicable IRS guidance. The Plan Administrator is authorized to adopt, from time to time, such administrative procedures and requirements as may reasonably be deemed necessary or appropriate to facilitate the debit card program under the Program, provided such procedures are not inconsistent with the terms of the Program and applicable law. All such procedures and requirements shall be communicated to Participants and are hereby fully incorporated into, and will be deemed to be an integral part of, the Program. (b) Claims for Benefits. Any requests for reimbursement under the FSA and/or DCA, or other claim for Benefits under the Program ( Claims ) shall be administered by the Plan Administrator, or by a third party claims administrator employed by the Plan Administrator. In either case, any person(s) responsible for the administration of Claims is/are called in this Section 3 the TPA. Except to the extent Benefits are obtained through use of the debit card described in subsection (a) above, any Participant (who, for purposes of obtaining Benefits under the Program is called a Claimant ) may file a Claim for Benefits to which the Claimant believes that he is entitled. Such Claim must be in writing on a Benefits Claim Form prescribed by the Plan Administrator (or its delegate), and delivered to the TPA in person, by mail, electronically, or by any other method permitted under the Program. No Benefit will be paid unless a Claimant has first submitted a proper Claim for Benefits to the TPA, or has properly used a debit card. Upon receipt of a properly documented Claim or the proper use of a debit card, the Program shall pay to or for the Claimant the Benefits provided under the Program as soon as is administratively feasible. Generally, a Claimant may submit a Claim for reimbursement for an eligible expense arising during the Plan Year at any time during the period that begins when the expense is incurred, and ends 90 days after the close of the Plan Year. However, if a Claimant s coverage under the Program ceases for any reason, generally such Claimant shall be entitled to submit any Claims for reimbursement for eligible expenses incurred up to the date that coverage ceases at any time within 90 days after the date on which coverage ceased (except as otherwise specifically provided in the Program).

30 Notwithstanding the fact that the Plan Administrator may authorize the use of a debit card, the Program may nevertheless from time to time require a Claimant to file a properly documented Claim as described in this Section 3. (c) Required Information. Each Claimant s Claim for Program Benefits shall contain a written statement containing the following information: (i) the person or persons on whose behalf eligible expenses have been incurred; (ii) the nature of the eligible expenses incurred; (iii) the amount of the eligible expenses incurred; and (iv) a statement that such expenses have not otherwise been paid through insurance or reimbursed from any other source. The Claimant also must submit such evidence as the TPA shall reasonably require to substantiate the nature, the amount, and the timeliness of any eligible expenses incurred for which Program Benefits are claimed. If the Claim is incomplete, the TPA will allow the Participant 45 days in which to complete the Claim. (d) Method and Contents of Denial Notices. Any notice of the denial of a Claim for Benefits, in whole or in part ( Denial ) will be given to the Claimant either in written form or as an electronic notice within a reasonable period of time, but not later than 30 days after receipt of the Claim (unless an extension of up to an additional 15 days is necessary due to matters beyond the control of the TPA, in which case the Claimant will be notified why the extension is necessary and when the Plan Administrator expects to render a decision) and will include: (i) the specific reason or reasons for the adverse benefits determination; (ii) reference to the specific Program provision(s) on which the determination is based; (iii) a description of any additional material or information necessary for the Claimant to perfect the Claim and an explanation of why such material or information is necessary; (iv) a description of the review procedures set out in this Section 3 and the time limits applicable to such procedures, including, if applicable, a statement of the Claimant s right to bring a civil action under ERISA 502(a) following an adverse benefit determination on review; and

31 (v) if the Claim is for an FSA Benefit: (A) if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse benefit determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or other criterion will be provided free of charge to the Claimant upon request; and (B) if the adverse determination is based on medical necessity or experimental treatment or a similar exclusion or limit, either an explanation of the scientific or clinical judgment, applying the terms of the Program to the Claimant s medical condition, or a statement that this will be provided without charge on request. (e) Appealing an Adverse Benefit Determination. Within 180 days after the receipt by the Claimant of written notification of the denial (in whole or in part) of the Claim, the Claimant, upon written application to the TPA, may request a review of such denial, may request or review relevant documents, and may submit issues and comments in writing. (f) Decision on Appeal of Disputed Claims. (i) Upon its receipt of a notice for a request for a review, the TPA shall make a prompt decision on the review. The individual who conducts the review shall not be the same individual who made the initial adverse benefit determination. If the adverse benefit determination under the FSA is appealed on the basis of medical judgment, the TPA shall consult with an independent health care professional who is qualified in the areas of dispute who shall not have been involved in the initial Claim denial. (ii) Appeals of adverse benefit determinations shall be decided, and notice of the decision on appeal shall be given within a reasonable period but not more than 60 days after the TPA has received the request for the review on the appeal. (g) Contents of Notice of Decision on Appeal. The TPA shall provide the Claimant with written or electronic notice of the Program s benefit determination on review in accordance with the applicable time frame set out in subsection (f) above. In the case of an adverse benefit determination on review, the notice shall include: (i) the specific reason or reasons for the adverse determination; (ii) reference to the specific Program provision(s) on which the benefit determination is based;

32 (iii) a statement that the Claimant is entitled to receive without charge reasonable access to, or copies of, any document(s), records, or other information relevant to the Claim (for purposes of this Section 3, relevant means the information: (i) was relied on in making the determination; (ii) was submitted, considered or generated in the course of making the Benefit Determination; (iii) demonstrates compliance with the administrative processes and safeguards required in making the determination; or (iv) constitutes a statement of policy or guidance with respect to the Program concerning the denied treatment without regard to whether the statement was relied on); (iv) a statement describing the Claimant s right to bring an action under Section 502(a) of ERISA, if applicable; and (v) if the Claim is for an FSA Benefit: (A) if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse benefit determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or other criterion will be provided free of charge to the Claimant upon request; and (B) if the adverse determination is based on medical necessity or experimental treatment or a similar exclusion or limit, either an explanation of the scientific or clinical judgment, applying the terms of the Program to the Claimant s medical condition, or a statement that this will be provided without charge on request. For purposes of this Section 3, all references to the Claimant shall also include and mean the Claimant s authorized representative who may act on behalf of the Claimant. 4. Continuation Coverage Under COBRA and USERRA. (a) Continuation Coverage after Termination of Normal Participation. If the Employer normally employed at least 20 employees during the preceding calendar year, each person who is a Qualified Beneficiary shall have the right to elect to continue coverage under the FSA, upon the occurrence of a Qualifying Event that would otherwise result in such person losing coverage under the Program. Such extended coverage is referred to herein as Continuation Coverage. (a) Continuation Coverage is only available under the FSA if the Participant s account is not overspent at the time of the Qualifying Event; and Continuation Coverage is only

33 available through the end of the Plan Year in which the Qualifying Event occurs if the FSA is an excepted benefit (within the meaning of 26 C.F.R (c)(3)(v)); and (b) Who is a Qualified Beneficiary. A Qualified Beneficiary is any person who, as of the day before a Qualifying Event, is (i) an employee of the Employer covered under the FSA as of such day (such persons are called Covered Employees ), (ii) the Spouse of the Covered Employee, or (iii) a Dependent of the Covered Employee. (For these purposes, a Spouse or other Dependent is called a Covered Dependent. ) A Covered Employee can be a Qualified Beneficiary only if the Qualifying Event consists of termination of employment (for any reason other than gross misconduct), or reduction of hours of the Covered Employee s employment. (c) What is a Qualifying Event. Any of the following events is a Qualifying Event : (i) Death of the Covered Employee. (ii) Termination (other than by reason of gross misconduct) of the Covered Employee s employment or reduction of hours of employment below any minimum level of hours required for participation herein. In the case of a Covered Employee who: (A) does not return to covered employment at the end of a Family Medical Leave Act leave, the Qualifying Event of termination occurs on the earlier of the last day of the Family Medical Leave Act leave or the date that the Employee notifies the Employer of the intention not to return to active employment, or (B) is absent more than 31 days due to a period of duty with the Uniformed Services, the Qualifying Event occurs on the first day of such absence. (iii) Divorce or legal separation of a Covered Employee from the Employee s Spouse. (iv) A Covered Employee becoming entitled to Medicare benefits (under Part A, Part B, or both). (v) A dependent child of a Covered Employee ceasing to be a Dependent. (d) What Benefit is Available Under Continuation Coverage. Each person who is eligible to elect to continue coverage under this Section 4 shall have the right to continue the level of coverage in effect for the Covered Employee on the day before the Qualifying Event. (e) Notice Requirements.

34 (i) When an employee becomes covered under the FSA, the Plan Administrator must inform the Participant (and Spouse, if any) in writing of the rights to continued coverage, as described in this Section. (ii) The Employer shall give the Plan Administrator written notice of a Qualifying Event within 30 days of the occurrence thereof. (iii) Within 14 days of receipt of the Employer s notice, the Plan Administrator shall furnish each Qualified Beneficiary with written notification of the termination of regular coverage under the FSA, as well as, a recital of the rights of any such Beneficiary to elect Continuation Coverage, in accordance with COBRA. (iv) In the case of a Qualifying Event described in paragraphs (iii) or (v) of subsection (c) above, a Covered Employee or a Qualified Beneficiary who is a Spouse or Dependent of such Covered Employee must notify the Plan Administrator within 60 days of the occurrence thereof. The Plan Administrator shall give written notification of Continuation Coverage rights to any such affected Qualified Beneficiary within 14 days of receipt of the notice described in this paragraph (iv). Notwithstanding any of the foregoing, notification to a Qualified Beneficiary who is a Spouse of a Covered Employee is treated as notification to all other Qualified Beneficiaries residing with that person at the time notification is made. (f) Election Period. Any Qualified Beneficiary entitled to Continuation Coverage shall have 60 days from the date of the notice required by subsection (e), in the case of occurrence of a Qualifying Event, in which to return a signed election to the Plan Administrator (or its delegate) indicating the choice to continue Benefits. (g) Duration of Continuation Coverage. The following shall apply except as otherwise provided in subsection (a) above: (i) Continuation Coverage shall extend for a period of 18 months after the date that regular coverage ends due to the Covered Employee s termination of employment or reduction of hours of employment to a level that disqualifies him for participation in the FSA or for a period of 29 months if the Social Security Administration ( SSA ) determines within the 18- month period that any Qualified Beneficiary was disabled during the first 60 days of Continuation Coverage. However, if the Covered Employee was entitled to Medicare benefits at the time of the Qualifying Event of his termination of employment or reduction of hours, each Covered Dependent shall be eligible to continue coverage for up to 36 months from the date the Covered

35 Employee first became so entitled. For purposes of determining Continuation Coverage rights, entitlement means actual enrollment for Medicare benefits. (ii) In order to secure the extended coverage after a determination of disability, the disabled Qualified Beneficiary must notify the Plan Administrator of SSA s finding within 45 days of its issue. If, during the 18-month period, a subsequent Qualifying Event occurs, the Covered Employee and each other Qualified Beneficiary having Continuation Coverage shall be entitled to elect to continue coverage for up to 36 months following the date coverage was originally lost due to termination of employment or reduction of hours. (iii) In addition, 36 months of Continuation Coverage shall be available to: (A) the Covered Employee s Spouse who loses coverage by ceasing to be a Dependent by virtue of a divorce or legal separation; (B) a dependent child of the Covered Employee who loses coverage by ceasing to be a Dependent; (C) any Covered Dependent who loses coverage where the Qualifying Event is the Employee s death; (D) any Covered Dependent, where the Covered Employee s entitlement to Medicare benefits results in loss of coverage; or (v) any of the Covered Employee s Covered Dependents if the Qualifying Event is the Employer s entering bankruptcy proceedings (or 36 months from the Covered Employee s death, if later), if the Covered Employee is a retiree. In no event, however, shall Continuation Coverage extend more than 36 months beyond the date of the original Qualifying Event. (h) Automatic Termination of Continuation Coverage. Continuation Coverage shall automatically cease if (A) the Employer no longer offers any group health plan coverage to any of its employees, (B) the required premium for continuation coverage is not paid within 30 days of the date due, (C) an electing Qualified Beneficiary becomes covered under another group health plan after electing Continuation Coverage, or (D) an electing Qualified Beneficiary becomes entitled to benefits under Medicare after electing Continuation Coverage. (i) Continuation Coverage for Employees in the Uniformed Services. For purposes of this Section 4, a Covered Employee who is absent from work for more than 31 days in order to fulfill a period of duty in the Uniformed Services has a Qualifying Event as of the first day of such Covered Employee s absence for such duty. Such an individual shall be treated as any other Qualified Beneficiary for all purposes of COBRA under this Section 4. The Plan Administrator shall furnish the Covered Employee a notice of the right to elect COBRA continuation coverage and shall afford the Covered Employee the opportunity to elect such

36 Coverage, except the maximum period of coverage available to the Covered Employee and the Employee s Covered Dependents is the lesser of (i) 24 months beginning on the date of the Employee s absence or (ii) the day after the date on which the Employee fails to apply for or return to active employment with the Employer. (j) Premium Requirements. (i) A Qualified Beneficiary who has elected Continuation Coverage under this Section must pay a premium of 102% of the applicable premium for the period of coverage. In the case of an individual who is determined to have been disabled, the premium for Continuation Coverage is 150% of the applicable premium for any month after the 18th month of Continuation Coverage (if that disabled individual s coverage is continued). (ii) The required premium for Continuation Coverage shall be paid in monthly installments (except as otherwise permitted by the Plan Administrator (or its delegate) and described in the election notice). (iii) Premiums for Continuation Coverage become payable 45 days after the day on which the Qualified Beneficiary makes the initial election for Continuation Coverage. (iv) Applicable premium means the cost of providing the coverage under the FSA, as determined by the Plan Administrator in accordance with applicable law. 5. Certificates of Coverage. If and only to the extent required by law, with respect to the FSA under Part 3 (unless the FSA constitutes an excepted benefit within the meaning of 26 C.F.R (c)(3)(v)), the Plan Administrator will provide a Certificate of Coverage to any Participant (or to the Participant s Spouse or Dependent, as applicable) automatically after the individual loses coverage thereunder. In addition, a Certificate of Coverage will be provided upon request, if the request is made within 24 months after the individual loses such coverage. This Section 5 will be administered in accordance with Section 9801(e) of the Code. 6. Nondiscrimination. This Program shall be administered so that contributions to and Benefits under this Program do not discriminate in favor of highly compensated employees, key employees where applicable, or other prohibited groups, as required under the Code. If the Plan Administrator deems it necessary to avoid discrimination or possible taxation to a group of employees in whose favor discrimination may not occur, it may, in its sole discretion, reject any Election or reduce contributions or Benefits in order to assure compliance with the nondiscrimination rules.

37 7. Participating Employers. With the consent of the Employer, a corporation or other entity that is a member of a controlled group of businesses within the meaning of Code 414(b), (c) and (m) or that is otherwise affiliated with the Employer, may adopt this Plan and all of the provisions hereof, and participate herein and be known as a Participating Employer by a properly executed document evidencing said intent of such Participating Employer. 8. Amendment or Termination of Program. (a) Employer s Right to Amend. The Employer reserves the right to amend the Program (or any plan or component program offered hereunder), by written instrument, at any time and from time to time, and retroactively if deemed necessary or appropriate to meet the requirements of Code 105 or other applicable law, or the rules and regulations in effect under any of such laws or, to conform with governmental regulations or other policies, to modify or amend in whole or in part any or all of the provisions of the Program. (b) Employer s Right to Terminate. The Employer reserves the right to discontinue or terminate the Program, by written instrument, at any time without prejudice. This Program also shall terminate automatically if the Employer (i) is legally dissolved, (ii) makes a general assignment for the benefit of its creditors, (iii) files for liquidation under the Bankruptcy Code, (iv) merges or consolidates with another entity and it is not the surviving entity or if it sells or transfers substantially all of its assets, or goes out of business, unless the Employer s successor in interest agrees to assume the liabilities under this Program. 9. Reentry After Uniformed Service Duty. No reentry eligibility requirements will be imposed on any Participant who returns to active employment within 90 days of completing a period of absence from employment for duty in the Uniformed Services. For this purpose, Uniformed Services means the Armed Forces, the Army National Guard, and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard Duty, the Commissioned Core of the Public Health Service, and any other category of persons designated by the President of the United States in time of war or emergency. 10. No Employment Rights Conferred. Neither this Program nor any action taken with respect to it shall confer upon any person the right to be continued in the employment of the Employer.

38 11. Payments to Beneficiary. Any Benefits otherwise payable to a Participant following the date of death of such Participant shall be paid to his Spouse, or if there is no surviving Spouse, to his estate. 12. Nonalienation of Benefits. No Benefit under the Program shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No Benefit under the Program shall in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person. If any person entitled to Benefits under the Program becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any Benefit under the Program, or if any attempt is made to subject any such Benefit to the debts, contracts, liabilities, engagements or torts of the person entitled to any such Benefit, except as specifically provided in the Program, then such Benefit shall cease and terminate in the discretion of the Plan Administrator, and it may hold or apply the same or any part thereof to the Benefit of any Dependent or Beneficiary of such person, in such manner and proportion as it may deem proper. 13. Mental or Physical Incompetency. If the Plan Administrator determines that any person entitled to payments under the Program is incompetent by reason of physical or mental disability, it may cause all payments thereafter becoming due to such person to be made to any other person for his benefit, without responsibility to follow the application of amounts so paid. Payments made pursuant to this Section 13 shall completely discharge the Plan Administrator and the Employer. 14. Inability to Locate Payee. If the Plan Administrator is unable to make payment to any Participant or other person to whom a payment is due under the Program because it cannot ascertain the identity or whereabouts of such Participant or other person after reasonable efforts have been made to identity or locate such person (including a notice of the payment so due mailed to the last known address of such Participant or other person as shown on the records of the Employer), such payment and all subsequent payments otherwise due to such Participant or other person shall be forfeited within a reasonable time (as determined by the Plan Administrator) after the date such payment first became due. 15. Source of Payments. The general assets of the Employer shall be the sole source of Benefits under the Program. No employee or beneficiary shall have any right to, or interest in, any assets of the Employer upon termination of employment or otherwise, except as provided from

39 time to time under the Program, and then only to the extent of the Benefits payable under the Program to such employee or beneficiary. 16. Tax Effects. Neither the Employer nor the Plan Administrator makes any warranty or other representation as to whether any payments received by a Participant hereunder will be treated as includible in gross income for federal or state income tax purposes. 17. Definitions. (a) Code means the Internal Revenue Code of 1986, as amended from time to time. (b) Covered Person means Participant or the Participant s Spouse or Dependent. (c) Dependent means, for the purpose(s) of accident or health coverage Benefits funded under the Premium Conversion Component of the Cafeteria Plan, and the FSA, if and to the extent applicable, any individual who qualifies as the dependent of the Participant under Section 152, as modified by Section 105(b), of the Code. This includes any child (as defined in Section 152(f)(1) of the Code) of the Participant who, as of the end of the taxable year, has not attained age 27. Further, any child to whom Section 152(e) of the Code and Revenue Procedure apply (having to do with special rules for certain children of divorced or separated parents) shall be treated as a Dependent of both parents. Notwithstanding any of the foregoing, a child who is an alternate recipient under a QMCSO will also be treated as a Dependent. (d) ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. (e) IRS means the Internal Revenue Service. (f) Participating Employer means Horizon Healthcare Services LLP. (g) PHI means Protected Health Information. (h) Qualified Beneficiary is any person who, as of the day before a Qualifying Event, is an employee of the Employer covered under the FSA as of such day, or the Spouse of the Covered Employee, or a Dependent of the Covered Employee. (i) Qualifying Dependent is a Dependent under the age of 13 and/or a Dependent who regularly spends at least eight hours per day in the Participant s household.

40 (j) QMCSO means a qualified medical child support order as that term is defined in Section 609(a) of ERISA (including a National Medical Support Notice deemed to constitute a qualified medical child support order pursuant to ERISA 609(a)(5)(c)). (k) Spouse means an individual who is treated as a spouse under federal tax law; provided, however, that for the purpose of the Dependent Care Account, the term Spouse shall not include an individual (i) who is separated from the Participant under a decree of divorce or of separate maintenance (pursuant to Code 21(e)(3)), or (ii) who, although married to the Participant, files a separate federal income tax return, maintains a residence separate from the Participant during the last six months of the taxable year, and does not furnish more than half the cost of maintaining the principal place of abode of the Participant (pursuant to Code 21(e)(4)). (l) TPA means Third Party Administrator or Morgan-White Administrators. 18. Gender and Number. Masculine pronouns include the feminine as well as the neuter gender and vice-versa, and the singular shall include the plural, unless indicated otherwise by the context. 19. Applicable Laws. The provisions of the Program shall be construed, administered, and enforced according to applicable federal law (and to the laws of the State of Pennsylvania, only if and to, the extent not preempted by federal law). 20. Regulatory References. Any reference in this Program to a section of the Code of Federal Regulations ( C.F.R. ) shall mean the cited section as in effect or as such may be amended or replaced from time to time, and for which compliance by or with respect to the Plan is required. 21. Severability. Should any part of this Program subsequently be invalidated by a court of competent jurisdiction, the remainder thereof shall be given effect to the maximum extent possible.

41 PART 5. - PROTECTED HEALTH INFORMATION 1. Purpose and Applicability. This Part 5 shall only apply if and to the extent the Health Flexible Spending Account (FSA) set forth in Part 3 was adopted on the Program Selection Page. The purpose of this Part 5 is to describe the FSA (hereby designated as the health care component(s) (as defined at 45 C.F.R ) of the Program) of the Program s uses and disclosures of protected health information within the meaning of 45 C.F.R and generally includes individually identifiable health information held by or on behalf of the Program ( PHI ). In addition, certain terms of this Part 5 apply specifically to the Employer in its role as sponsor of the Program, as required by the Health Insurance Portability and Accountability Act of 1996, as amended, and the privacy and security regulations promulgated pursuant thereto, as set forth at 45 C.F.R. Parts 160 and 164 (collectively referred to in this Part 5 as HIPAA ). 2. Use and Disclosures of Protected Health Information, Including for Treatment, Payment, and Health Care Operations. The Program will only use and disclose PHI as permitted or required by this Program, including all appendices hereto and all documents incorporated hereinto by reference (collectively, the Plan Document ), or as required by law. The Program will use and disclose PHI to the extent, and in accordance with, the uses and disclosures permitted by HIPAA, which shall include using and disclosing PHI for purposes related to treatment, payment, and health care operations, each as defined at 45 C.F.R The Program Will Use and Disclose Protected Health Information as Permitted by Authorization of the Covered Person and as Required or Permitted by Law. With an authorization signed by the Participant or the Participant s Spouse or Dependent (the Covered Person ), the Program will disclose PHI to other benefit plans established by the Employer for the purposes related to administration of such plans. The Program may also use and disclose PHI as otherwise permitted by the terms of an authorization signed by the Covered Person. Further, the Program may use and disclose PHI as required by law or as permitted by law, including but not limited to, HIPAA.

42 4. Provision of Summary Health Information, Enrollment and Disenrollment Information, and Other Protected Health Information to the Employer. (a) Summary Health Information. Except as prohibited by 45 C.F.R (a)(5)(i) (specifically prohibiting the use and disclosure of genetic information for underwriting purposes), the Program may disclose summary health information (as defined at 45 C.F.R (a)) to the Employer, if the Employer requests the summary health information for the purpose of: (i) Obtaining premium bids from health plans for providing health insurance coverage under the Program; or (ii) Modifying, amending, or terminating the Program. (b) Enrollment and Disenrollment Information. The Program may disclose enrollment and disenrollment information (within the meaning of 45 C.F.R (f)(1)(iii)) to the Employer. (c) Other Protected Health Information. The Program may disclose any other PHI to the Employer only subject to the conditions of Sections 5 and 6. Notwithstanding anything to the contrary, in no event shall the Employer be permitted to use or further disclose PHI in any manner that is inconsistent with 45 C.F.R (f). 5. Employer Certification of Amendment of Plan Documents. The Program will disclose PHI to the Employer only upon receipt of a certification from the Employer that the Plan Document incorporates the provisions set forth in Sections 6 through 8 below. 6. With Respect to Protected Health Information, the Employer Agrees to Certain Conditions. The Employer agrees to: (a) Not use or further disclose PHI other than as permitted or required by the Plan Document or as required by law (permitted uses or disclosures of PHI by the Employer include those (i) described with respect to the Program in Sections 2 and 3 when the Employer is performing plan administration functions; (ii) when the Employer is acting pursuant to an authorization that complies with all applicable law, including HIPAA, and that is signed by the Covered Person; and (iii) described in Section 4(a) above); (b) Ensure that any agents to whom the Employer provides PHI received from the Program agree to the same restrictions and conditions that apply to the Employer with respect to such PHI;

43 (c) Not use or disclose PHI for employment-related actions and decisions unless authorized in compliance with all applicable law, including HIPAA, by the Covered Person; (d) Not use or disclose PHI in connection with any other benefit or employee benefit plan of the Employer unless authorized in compliance with all applicable law, including HIPAA, by the Covered Person; (e) Report to the Program any PHI use or disclosure of which it becomes aware which is inconsistent with the uses or disclosures provided for by the Plan Document; (f) Make PHI available to an individual in accordance with HIPAA s access requirements (45 C.F.R ); (g) Make PHI available for amendment and incorporate any amendments to PHI in accordance with HIPAA (45 C.F.R ); (h) Make available the information required to provide an accounting of disclosures in accordance with HIPAA (45 C.F.R ); (i) Make its internal practices, books, and records relating to the use and disclosure of PHI received from the Program available to the Secretary of the U.S. Department of Health and Human Services for the purpose of determining the Program s compliance with HIPAA; (j) If feasible, return or destroy all PHI received from the Program that the Employer 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); (k) Ensure that the adequate separation as described in Sections 7 through 9 is maintained; (l) To the extent the Employer creates, receives, maintains, or transmits electronic PHI within the meaning of 45 C.F.R ( Electronic PHI ) on behalf of the Program, the Employer agrees to: (i) Implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the Electronic PHI that it creates, receives, maintains, or transmits on behalf of the Program in compliance with HIPAA (45 C.F.R , , , , and );

44 (ii) Ensure that the safeguards of Sections 7 through 9 are supported by reasonable and appropriate security measures; (iii) Ensure that any agent to whom the Employer provides Electronic PHI agrees to implement reasonable and appropriate security measures to protect the Electronic PHI; and (iv) Report as soon as feasible any security incident (as defined at 45 C.F.R ) of which it becomes aware to the Program; provided, however, that the Program and its sponsor (the Plan Sponsor ) acknowledge and agree that this provision constitutes notice by Plan Sponsor to Program of the ongoing existence and occurrence of attempted but unsuccessful security incidents for which no additional notice to Program shall be required ( unsuccessful security incidents shall include, but not be limited to, pings and other broadcast attacks on Plan Sponsor s firewall, port scans, unsuccessful log-on attempts, denials of service, and any combination of the above, so long as no such incident results in unauthorized access, use, or disclosure of Electronic PHI). 7. Adequate Separation Between the Program and the Employer Must Be Maintained. In accordance with HIPAA, only those identified employees, named from time to time, in Horizon Healthcare Services, LLP s HIPAA policies and procedures, may be given access to PHI or Electronic PHI. These employees or classes of employees must include those who need to receive PHI relating to payment under, health care operations of, or other matters pertaining to, the Program in the ordinary course of business. 8. Limitations of PHI Access and Disclosure. The persons described in Section 5 may only have access to, use, and disclose PHI or Electronic PHI for plan administration functions that the Employer performs for the Program. 9. Noncompliance Issues. If the persons described in Section 5 do not comply with the requirements of this Part 5, the Employer shall implement a disciplinary procedure designed to resolve issues of noncompliance. Such disciplinary procedure shall take into account the severity of the violation, whether the person has previously violated the such requirements, and other relevant factors. The disciplinary procedure shall establish appropriate disciplinary sanctions, up to and including termination of the non-compliant person(s).

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