ALAMEDA COUNTY CAFETERIA PLAN FOR ELIGIBLE EMPLOYEES. Amended and Restated Plan Document. January 1, 2014

Transcription

1 ALAMEDA COUNTY CAFETERIA PLAN FOR ELIGIBLE EMPLOYEES Amended and Restated Plan Document January 1, 2014

2 TABLE OF CONTENTS Page INTRODUCTION...1 ARTICLE I DEFINITIONS Applicable Law Benefit Component Board Code Effective Date Eligible Employee Employer Employer Credits Open Election Period Participant Period of Coverage Plan Plan Administrator Plan Year Salary Reduction Claims Administrator... 4 ARTICLE II ELIGIBILITY AND PLAN PARTICIPATION Eligibility Effective Date of Participation Participation Termination of Participation Suspension of Participation Revocation of Salary Reduction Reinstatement of Former Participant... 7 ARTICLE III ELECTIONS TO PARTICIPATE In General Salary Reduction Election Benefit Component Elections Plan Administrator s Power to Modify and Suspend Elections Election Change or Revocation... 9 ARTICLE IV PLAN RECORDKEEPING Payment of Benefits Employer Credits ARTICLE V BENEFITS General Rule Limitation of Benefits for Certain Individuals i

3 ARTICLE VI PLAN ADMINISTRATION Plan Sponsor and Plan Administrator Administrative Responsibilities Delegation of Fiduciary Responsibilities ARTICLE VII CLAIMS PROCEDURES ARTICLE VIII MISCELLANEOUS State of Jurisdiction Severability Plan not an Employment Contract Non-Transferability of Interest and Facility of Payment Mistake of Fact Cost of Administering the Plan Withholding for Taxes ARTICLE IX TERMINATION Amendment Termination Applicable Law APPENDIX A HEALTH FLEXIBLE SPENDING ACCOUNT... A-l APPENDIX B DEPENDENT CARE ASSISTANCE PROGRAM... B-l APPENDIX C PREMIUM CONVERSION... C-l APPENDIX D ADOPTION ASSISTANCE FSA... D-1 APPENDIX E MEMBER PLANS...E-1 APPENDIX F CLAIMS AND REVIEW PROCEDURES... F-1 APPENDIX G ELIGIBILITY SCHEDULE... G-1 ii

4 ALAMEDA COUNTY CAFETERIA PLAN FOR ELIGIBLE EMPLOYEES INTRODUCTION Effective as of January 1, 2014, Alameda County (hereinafter Employer ) adopts the amended and restated Alameda County Cafeteria Plan for Eligible Employees Document (hereinafter Plan ) as a welfare benefit plan to provide benefits for certain of its employees, and to make plan design changes and additional changes pursuant to changes in Applicable Law and regulations promulgated thereunder. This Plan includes the Health Flexible Spending Arrangement, Dependent Care Assistance, Premium Conversion Benefit Components and Adoption Assistance Flexible Spending Account covering Eligible Employees of Alameda County, as set out in the Appendices of this Plan. The Plan is designed to meet the appropriate requirements of Code Sections 79, 105, 106, 125,129 and 137, and any other Applicable Law. It is specifically designated as a cafeteria plan under Code Section 125, which allows eligible employees of an employer to choose among certain qualified benefits as defined in Code Section 125 and any regulations thereunder. The provisions of this Plan shall apply only to certain employees of the Employer who are eligible to receive benefits under at least one of the Benefit Components in the Appendices. 1

5 ARTICLE I DEFINITIONS When used in this Plan document, the following words and phrases shall have the following meanings unless the context clearly indicates otherwise. Capitalized terms are used throughout the text of the Plan and each Benefit Component for terms defined by this and other Sections. 1.1 Applicable Law The Code, as herein defined, or any other law of the United States or any state or political subdivision thereof which in may apply to this Plan. 1.2 Benefit Component A written benefit program maintained by the Employer to provide cash, health flexible spending arrangement benefits, dependent care assistance, adoption assistance flexible spending accounts or premium conversion options to Eligible Employees. Such Benefit Components are contained in the Appendices and incorporated herein. Each Benefit Component is governed by its terms, which terms shall prevail in case of any conflict between this Plan and a Benefit Component. Benefit Components include the following: (a) (b) (c) (d) Alameda County Health Flexible Spending Arrangement Benefit Component Alameda County Dependent Care Assistance Benefit Component; Alameda County Premium Conversion Benefit Component; and Alameda County Adoption Assistance Flexible Spending Account Component 1.3 Board 1.4 Code The Board of Supervisors of the County of Alameda County, California. The Internal Revenue Code of 1986, as amended, as it now exists or from time to time may be amended. 1.5 Effective Date January 1, 2014, the date on which this Plan, as amended and restated, becomes effective. The Effective Date of each Benefit Component is stated therein. 2

6 1.6 Eligible Employee (a) (b) (c) (d) (e) Any full-time employee or part-time employee of Alameda County occupying a position in a classification as designated in the Alameda County Salary Ordinance Section 7 1 shall be an Eligible Employee. Elected County Officials of Alameda County shall also be Eligible Employees. Eligible groups as stated in Appendix G Eligibility Schedule. Any person who performs services for the Employer solely as a nonresident alien, seasonal employee, or any person who is not treated as a common law employee of the Employer for income tax withholding purposes, regardless of any subsequent determination of such individual s legal employment status, shall not be an Eligible Employee. Notwithstanding subsections (a) and (b) above, any individual appointed (hired) or reinstated during the last two full pay periods of the Plan Year of any following partial pay periods prior to December 31 shall not be an Eligible Employee. 1.7 Employer Alameda County and any organization that is a successor thereto. 1.8 Employer Credits Amounts, other than Salary Reduction amounts, credited by the Employer to Participants subaccounts each pay period to be allocated in accordance with the Participant s benefit elections under Article III. The amounts of Employer Credits are described in Section 4.2. Any unallocated Employer Credits will be paid in cash, after-tax on a semi-monthly per pay period. 1.9 Open Election Period The annual period as determined by the Plan Administrator in its sole discretion during which Eligible Employees elect Salary Reduction amounts, and Employer Credits and benefit allocations thereof for the following Plan Year or else the Plan Administrator chooses such Salary Reduction on behalf of Eligible Employee if such Eligible Employee fails to make an election; provided, however, Sections 2.2(a)(2) and 2.2(a)(3) shall apply in the case of an Eligible Employee who first becomes eligible to participate, or elects to participate, during the Plan Year. The Open Election Period may be changed by the Plan Administrator without the need to amend this Plan. 3

7 1.10 Participant An Eligible Employee who participates in the Plan pursuant to Article II Period of Coverage 1.12 Plan The Period of Coverage as defined in each of the Benefit Components. The Alameda County Cafeteria Plan for Eligible Employees the terms of which are set forth herein, as it may be amended from time to time Plan Administrator The Employer or its delegates, notwithstanding the fact that the Employer may delegate plan administration responsibilities to a committee or to any other person, persons, or entity Plan Year The twelve-month period beginning January 1 and ending December 31. Records of the Plan shall be established and maintained on the basis of the Plan Year Salary Reduction A specified amount by which a Participant s compensation is decreased, pursuant to a Salary Reduction election, for federal income tax and Social Security tax purposes and, wherever permitted, under Applicable Law for state and local income tax purposes Claims Administrator An individual or group of individuals who execute the policies, procedures and interpretations of the Plan in an efficient manner. 4

8 ARTICLE II ELIGIBILITY AND PLAN PARTICIPATION 2.1 Eligibility (a) (b) An Eligible Employee shall be eligible to participate in the Plan as amended and restated on the Effective Date. Any individual who becomes an Eligible Employee after the Effective Date shall be eligible to participate on the date such individual becomes an Eligible Employee. 2.2 Effective Date of Participation (a) Except as provided in subsection (b) below, participation shall be effective in a Benefit Component on the later of: (1) The first day of the Plan Year, provided an election form is signed and submitted or automated enrollment is submitted in the timeframe prescribed by the Plan Administrator; (2) the first day as soon as administratively practicable following the first day of employment or reinstatement, provided that an election form or automated enrollment is submitted within 30 days of the date the employee becomes eligible, pursuant to Section 2.1; or (3) the first day as soon as administratively practicable following a change in status event, as described in Section 3.5, Section A3.4, Section B4.4, or Section C3.3, provided that an election form is submitted within 30 days of the change in status event. (b) Participation in the Premium Conversion Benefit Component begins on the later of the Effective Date or the date the Eligible Employee first becomes covered by a Member Plan as described in Section E1, unless otherwise prohibited under the Code and applicable regulations. 2.3 Participation Participation in this Plan by an Eligible Employee shall be contingent upon participation in a Benefit Component and upon receipt by the Plan Administrator of such applications, consents, proofs of birth or marriage, elections, beneficiary designations, proof of reimbursable expenses and other documents and information as may be prescribed by this Plan or the Plan Administrator. 2.4 Termination of Participation Participation in the Plan shall terminate as of the earlier of: 5

9 (a) (b) (c) (d) The last day of the Plan Year during which the Plan is terminated; or the date the Participant terminates employment; or the date the Eligible Employee is no longer a Participant in any Benefit Component; or the date the Eligible Employee revokes his Salary Reduction election, if applicable, as allowed under a Benefit Component or Applicable Law. If a Participant in the Plan is no longer eligible to participate in the Plan, the former Participant will cease to receive additional Employer Credits as of the date he or she is no longer a Participant. A former Participant may continue to receive benefits under a Benefit Component to the extent provided in such Benefit Component. 2.5 Suspension of Participation Except as otherwise provided in a Benefit Component, in the event a Participant ceases to be an Eligible Employee, takes an approved leave of absence, or ceases to have enough compensation to cover the agreed upon Salary Reduction, but does not terminate employment, participation in the Plan shall be suspended and shall terminate at the end of the Plan Year if active participation is not reinstated earlier. During periods of suspended participation, no contributions shall be made pursuant to Section 3.2, nor Employer Credits, pursuant to Section 4.2, and no benefits shall be provided under the Plan, except as otherwise explicitly stated in a Benefit Component. If the employee again becomes an Eligible Employee, has adequate compensation, or returns from a leave of absence without termination of employment before the end of the Plan Year, active participation in the Plan shall be reinstated and the most recent election shall remain in effect, subject to any changes permitted pursuant to Section 3.5. or as permitted by a Benefit Component. 2.6 Revocation of Salary Reduction If a Participant revokes his or her Salary Reduction election, pursuant to Section 3.5, A3.4, B4.4, C3.3 or D3.4, participation shall terminate at the end of the payroll period for which the last Salary Reduction was paid, unless otherwise provided under a Benefit Component. The Participant shall not be entitled to make a new Salary Reduction election until the next Plan Year. 6

10 2.7 Reinstatement of Former Participant (a) (b) A former Participant who again becomes eligible for participation during the same Plan Year in which participation terminated and within 30 days of the date on which participation terminated shall not be entitled to make a new election for the remainder of the Plan Year, subject to any changes permitted pursuant to Section 3.5; however, upon reinstatement the Participant may continue the same election he or she had prior to separation from service and Employer Credits shall be prorated for the remainder of the Plan Year. If participation is not reinstated at the time the former Participant again becomes eligible, the former Participant will again become eligible for participation in the Plan if and when the individual meets the eligibility and participation requirements of Sections 2.1, 2.2 and 2.3 above, but in no event earlier than the beginning of the next Plan Year following termination of participation. A former Participant who again becomes eligible for participation during the same Plan Year in which participation terminated, but more than 30 days after the date on which participation terminated, shall be treated as a newly Eligible Employee and shall be entitled to make new elections in accordance with Section 2.2(a)(2) above. 7

11 ARTICLE III ELECTIONS TO PARTICIPATE 3.1 In General (a) (b) An election to participate shall be in writing on the form provided by the Plan Administrator, or an automated enrollment submitted to the Plan Administrator through the online enrollment system. The Employer shall establish procedures and deadlines for filing elections, which shall be communicated to Eligible Employees. 3.2 Salary Reduction Election Each Eligible Employee who wishes to participate shall file a Salary Reduction election with the Employer. Pursuant to the election, the Participant s compensation in each payroll period shall be reduced in equal installments for each of the 24 or fewer pay-periods during the Participant s Period of Coverage, provided, however, that the amount shall not exceed the lesser of the limits set forth in such individual s elected Benefit Components, or the Participant s compensation for that payroll period. The Salary Reduction election may not exceed the amounts as set forth under Appendix G Benefit Component Elections Each Participant as described in Appendix G of the Plan Document, shall elect among Benefit Components and shall designate the amount of Salary Reduction and/or Employer Credits (or portion of the total) to be applied during the Period of Coverage for each of the Benefit Components, and the amounts so designated shall be credited to the appropriate Benefit Component subaccount. Failure to elect to designate the amount of Salary Reduction and/or Employer Credits shall result in an automatic designation of the applicable Employer Credits to the Premium Conversion Benefit Component consisting of the premium only Medical; Supplemental Life Plan; Supplemental Accident Plan, described in Section E1 of the Plan Document, with the remainder to the Health Flexible Spending Account, if applicable. 3.4 Plan Administrator s Power to Modify and Suspend Elections Notwithstanding any other Plan provisions, the Plan Administrator will suspend, modify, or terminate Salary Reduction and/or Benefit Component elections under the following circumstances: (a) (b) If the amount of any Salary Reduction agreed to is greater than the Participant s compensation. In compliance with a change or revocation of an election as allowed in Section 3.5 or in a Benefit Component. 8

12 (c) (d) If necessary for the Plan to pass any relevant nondiscrimination tests of the Code. Termination of the Plan. 3.5 Election Change or Revocation Except as provided under the Dependent Care Assistance Program Benefit Component, the Adoption Assistance Flexible Spending Account Benefit Component or the Premium Conversion Benefit Component, a Participant s Benefit Component elections for any Period of Coverage may not be changed or revoked by Participant election after the Open Election Period deadline, except in the event of a change in status, as provided below. Change in status events: (a) (b) (c) (d) (e) Legal marital status. Events that change an Eligible Employee s legal marital status, including the following: marriage; death of spouse; divorce; legal separation; and annulment. Number of dependents Events that change an Employee s number of eligible dependents include the following: birth; death; adoption; and placement for adoption. Employment status. Any of the following events that change the employment status and eligibility status of the Employee or an eligible dependent: a termination or commencement of employment; a strike or lockout; a commencement of or return from an unpaid leave of absence; and a change in worksite. In addition, if the eligibility conditions of the Plan or other employee benefit plan of the Employer or the employer of an eligible dependent depend on the employment status of that individual and there is any other change in that individual s employment status with the consequence that the individual becomes (or ceases to be) eligible under the plan, then that change constitutes a change in employment under this paragraph. Work Schedule. Any of the following events affecting plan eligibility that involve a reduction or increase in hours of employment for a Participant, or the Participant s spouse, including a switch between parttime and full-time, a strike or lockout, or commencement of or return from an unpaid leave of absence. Dependent satisfies or ceases to satisfy eligibility requirements. Events that cause a dependent to satisfy or cease to satisfy eligibility requirements for life, accident or health plan coverage, including attainment of age. 9

13 (f) (g) (h) Residence/Worksite. A change in the place of residence or worksite of the Employee or an eligible dependent resulting in no longer being able to be served by the Plan s service area. Judgment, decree, or order. This paragraph applies to a judgment, decree, or order resulting from a divorce, legal separation, annulment, or change in legal custody (including a Medical Support Notice issued under the Child Support Performance and Incentive Act of 1998) that requires health coverage for the Employee s child who is a dependent of the Employee, as defined in Code Section 152 (except that any child to whom Code Section 152(e) applies is treated as a dependent of both parents). The Plan shall change the Employee s election to provide coverage for the child if the order requires coverage for the child under one of the Benefit Components; or permit the Employee to make an election change to cancel coverage for the child if the order requires the spouse, former spouse, or other individual to provide coverage for the child. Entitlement to Medicare or Medicaid. If an Employee or eligible dependent who is enrolled in a Benefit Component becomes entitled to coverage (i.e., becomes enrolled) under Part A or Part B of Medicare or Medicaid, other than coverage consisting solely of benefits under Section 1928 of the Social Security Act (the program for distribution of pediatric vaccines), the Plan shall permit the Employee to make a prospective election change to cancel or reduce coverage of that Employee or eligible dependent under the applicable Benefit Component. In addition, if an Employee or eligible dependent who has been entitled to such coverage under Medicare or Medicaid loses eligibility for such coverage, the Plan shall permit the Employee to make a prospective election to commence or increase coverage of that Employee or eligible dependent under the applicable Benefit Component. Such other events that the Plan Administrator may determine will permit a change or revocation of an election in accordance with the rulings and regulations under Code Section 125. An election change shall be permitted only if it is consistent with the applicable change in status event, in accordance with the rulings and regulations under Code Section

14 ARTICLE IV PLAN RECORDKEEPING 4.1 Payment of Benefits (a) (b) (c) The Employer shall make all payments required by the Benefit Components out of its general assets. The Employer will retain title to and beneficial ownership of assets, which are earmarked for payment of benefits under this Plan. No pre-funding of benefits will be required. For bookkeeping purposes only, the Employer will maintain an account for each Participant. This account will be divided into subaccounts, which will be credited with the amount of Salary Reduction and Employer Credits specified by such Participant for each Benefit Component. No amount of Employer Credits shall be permitted to be allocated to the Dependent Care Assistance Program Benefit Component. 4.2 Employer Credits (a) (b) (c) The Employer will credit the account of each Participant who is a full-time Eligible Employee, or an Eligible Employee or an elected county officer of Alameda County or as stated in Appendix G of the Plan Document, an agreed amount dependent upon an employee s classification per Plan Year or an amount stated in the Memorandum of Understanding as approved by the Board of Supervisors. The Employer will credit the account of each Participant who is a parttime Eligible Employee with a pro rata amount of Employer Credits. If an Eligible Employee becomes a Participant after the first day of the Plan Year, the Employer shall credit a pro rata amount of Employer Credits to the Participant s account. However, if an Eligible Employee becomes a Participant at the end of the plan year and two or less pay periods are remaining, then the Employer shall not credit a pro rata amount of Employer Credits to the Participant s account. 11

15 ARTICLE V BENEFITS 5.1 General Rule All benefits under a Benefit Component shall be payable or provided under this Article for a Period of Coverage only if such benefits relate to periods in which the individual is eligible and has properly elected to participate in that Benefit Component. Amounts credited to each Benefit Component subaccount shall be payable in accordance with the terms of the Benefit Component. 5.2 Limitation of Benefits for Certain Individuals The benefits or premiums paid under Article IV for any Period of Coverage, and/or the corresponding Salary Reduction or Employer Credit amounts, may be limited by the Plan Administrator for certain Participants in accordance with the nondiscrimination requirements, to the extent applicable, contained in the Code including, without limitation, Sections 79, 105, 125,129, 132 and

16 ARTICLE VI PLAN ADMINISTRATION 6.1 Plan Sponsor and Plan Administrator The Employer is the plan sponsor and the plan administrator of the Plan, as such terms are used in the Code. 6.2 Administrative Responsibilities The Employer shall have the authority and discretion to control and manage the operation and administration of the Plan. In its discretion, the Employer shall make such rules, interpretations and computations and take such other actions to administer the Plan as the Employer may deem appropriate. In administering the Plan, the Employer shall act in a nondiscriminatory manner to the extent required by the Code. Subject to the limitations of the Plan, the Employer from time to time shall establish rules for the administration of the Plan and the transaction of its business. The Employer shall have total and complete discretion to interpret the Plan; including, but not limited to, the discretion to: (a) (b) (c) (d) (e) (f) (g) Determine all questions arising in the administration, interpretation and application of the Plan including the power to construe and interpret the Plan; Decide all questions relating to an individual s eligibility to participate in the Plan and/or eligibility for benefits and the amounts thereof; Decide all facts relevant to the determination of eligibility for benefits or participation; Make such adjustments that it deems necessary or desirable to correct any arithmetical or accounting errors; Require, as a condition to receiving reimbursement under the Plan, such information as it may reasonably require for the proper administration of the Plan; Make and enforce such rules and regulations and prescribe the use of such forms as it shall deem necessary for the administration of the Plan; and Direct all payments to be made pursuant to the Plan. In making its decisions, the Employer shall be entitled to, but need not rely upon, information supplied by a Participant, eligible dependent, or representative thereof. The Employer may correct any defect, supply any omission, or reconcile any inconsistency in such manner and to such extent as it shall deem necessary to carry out the purposes of this Plan. The Employer s decisions in such matters shall be binding and conclusive as to all parties. 13

17 6.3 Delegation of Fiduciary Responsibilities The Employer may engage such attorneys, actuaries, accountants, consultants or other persons to render advice or to perform services with regard to any of its responsibilities under the Plan as it shall determine to be necessary or appropriate. 14

18 ARTICLE VII CLAIMS PROCEDURES Claims procedures are detailed in the regulations and procedures established by the Human Resource Services Department and the County Auditor-Controller of the County of Alameda. The claims and review procedures are set forth in Appendix F. 15

19 ARTICLE VIII MISCELLANEOUS 8.1 State of Jurisdiction Except to the extent superseded by the laws of the United States, this Plan and all, rights and duties thereunder shall be governed, construed, and administered in accordance with the laws of the State of California. 8.2 Severability If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affect any other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included herein. 8.3 Plan not an Employment Contract This Plan is not an employment contract. Nothing in this Plan shall be construed to limit in any way the right of the Employer to terminate an individual s employment at any time for any reason whatsoever with or without cause. 8.4 Non-Transferability of Interest and Facility of Payment Except as otherwise expressly permitted by the Plan, the interests of persons entitled to benefits under the Plan are not subject to their debts or other obligations and, except as may be required by the tax withholding provisions of the Code or any other Applicable Law, may not be voluntarily or involuntarily sold, transferred, alienated, assigned, or encumbered. When any person entitled to benefits under the Plan is under legal disability or in the Employer s opinion is in any way incapacitated so as to be unable to manage his affairs, the Employer may cause such person s benefits to be paid to such person s legal representative for his benefit, or to be applied for the benefit of such person in any other manner that the Employer may determine. 8.5 Mistake of Fact Any mistake of fact or misstatement of fact shall be corrected when it becomes known and proper adjustment made by reason thereof. The Employer shall not be liable in any manner for any determination of fact made in good faith. 8.6 Cost of Administering the Plan The costs and expenses incurred by the Employer in administering the Plan shall be paid by the Employer. 16

20 8.7 Withholding for Taxes Notwithstanding any other provision of the Plan, the Employer or any modified or fully self-funded program, or other organization or institution providing benefits under the Plan, may withhold from any payment to be made under the Plan such amount or amounts as may be required for purposes of complying with the tax withholding provisions of the Code or any other Applicable Law. 17

21 ARTICLE IX TERMINATION 9.1 Amendment The Employer or its delegate may amend in writing any part or the entire Plan or any contract providing benefits with the agreement of the insurance or service company at any time or from time to time. The Board or its delegate may also remove or change any insurance company or service company at any time and from time to time. 9.2 Termination The Plan and any contract with an insurer or other service provider may be terminated at any time by action of the Board or its delegate on behalf of the Employer. 9.3 Applicable Law The Board or its delegate reserves the right to terminate or amend the Plan at any time if the Plan is deemed not to be in compliance with Applicable Law. 18

22 ADOPTION OF THE PLAN As evidence of its adoption of the Alameda County Cafeteria Plan for Eligible Employees, as amended and restated effective January 1, 2014, Alameda County has caused this instrument to be signed by its delegate thereunder duly authorized this day of, 201. By: (Sign Name) For: ALAMEDA COUNTY (Print Name and Title) 19

23 APPENDIX A HEALTH FLEXIBLE SPENDING ACCOUNT BENEFIT COMPONENT OF THE ALAMEDA COUNTY CAFETERIA PLAN Amended and Restated Effective as of January 1, 2014 A-1

24 Table of Contents Section A1 Definitions A-3 Section A2 Plan Participation A-6 Section A3 Recordkeeping A-7 Section A4 Benefits A-9 Section A5 Claims Procedures A-11 Section A6 HIPAA Privacy and Security Compliance A-14 A-2

25 SECTION A1 DEFINITIONS All terms in the Plan apply to this Health Flexible Spending Account (Health FSA), as well as the following additions. A1.1 Dependent A Participant s spouse not legally separated from the Participant, and any individual who falls within the definition of Dependent in Section 152 of the Code, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(b) of the Code, or is described in Section 152(e) of the Code (without regard to whether such child is a dependent of the Participant for purposes of claiming a tax exemption under Section 152(e) of the Code), including but not limited to the following,: (a) (b) (c) Each of a Participant s children, including children placed in a Participant s home for adoption, irrespective of whether the adoption has become final, who has not attained age 26 by the close of the Plan Year; Each of a Participant s unmarried children who became permanently and totally disabled prior to attainment of age 26 and who is dependent on the Participant for support; and A Participant s unmarried child for whom he or she is responsible to provide health coverage pursuant to a Medical Support Notice issued under the Child Support Performance and Incentive Act of A1.2 Experience Gain The excess of employer credits and salary reduction of the Plan over the Plan s total claims reimbursements and reasonable administrative costs for the Plan Year. A1.3 Health Flexible Spending Account (Health FSA) The Alameda County Health Flexible Spending Account of the Plan. A1.4 Maximum Reimbursement The total amount of coverage that is elected by the Participant to be credited to the Health FSA subaccount for the Period of Coverage in accordance with Article III of the Plan. A-3

26 A1.5 Minimum Reimbursement The minimum amount of coverage that may be elected by the Participant to be credited to the Health FSA subaccount for the Period of Coverage. A1.6 Period of Coverage The twelve-month period during which Qualifying Medical Expenses incurred by a Participant are eligible for coverage under the Health FSA. The Period of Coverage under this Health FSA shall be the period beginning January 1 and ending December 31 except: (a) (b) (c) The Period of Coverage for a Participant who becomes eligible after January 1 shall begin on the date the employee first becomes a Participant, as described in Section 2.2(a)(2), and shall end on the following December 31. The Period of Coverage for a Participant shall end prior to December 31 if the Participant fails, at any time, to pay Required Premiums, or if participation otherwise terminates for any other reason. The Period of Coverage for an Eligible Employee who becomes a Participant as a result of a change in status event or any other event listed in Section 3.5 shall begin on the date the employee first becomes a Participant, as described in Section 2.2(a)(3), and shall end on the following December 31. A1.7 Qualifying Medical Expenses (a) Amounts paid for medical care within the meaning of Code Section 213(d) including Dental Benefits except as otherwise provided in subsection (b), including deductible and co-insurance payments: (1) For which the Participant is not reimbursed pursuant to any medical policy or program, and (2) which have been incurred by or on behalf of a Participant or Dependent, during a Period of Coverage. (b) Qualifying Medical Expenses shall not include: (1) Premiums paid by a Participant or Dependent for coverage under the Employer s or any other employer s group health plan or under an individual plan; (2) payments for long term care services; A-4

27 A1.8 Required Premium (3) expenses that are not substantiated as required under Treasury regulations or other guidance issued by the Internal Revenue Service under Section 125 of the Code and Section A5.1 of this Health FSA; or (4) expenses for medicines or drugs other than prescribed drugs or insulin. The Maximum Reimbursement amount divided by the number of payroll periods remaining in the Period of Coverage when a Participant makes an election will be the Required Premium for each payroll period. In the event that a Participant changes his Maximum Reimbursement amount during the Period of Coverage as permitted under Section 3.5 of the Plan, the Required Premium following the change will be determined in accordance with administrative procedures developed by the Plan Administrator for that purpose. A-5

28 SECTION A2 PLAN PARTICIPATION A2.1 Election for Participation An Eligible Employee may elect to participate in the Health FSA by submitting annually, or upon becoming eligible, an election form or automated enrollment to the Employer in accordance with Article III of the Plan. The election form shall designate the amount of Maximum Reimbursement available during the Period of Coverage. A2.2 Limit on Amount The Maximum Reimbursement for an Eligible Employee, as determined in Appendix G of the Plan Document, whose participation becomes effective on the first day of the Plan Year shall include both the amount of applicable Employer Credits plus Salary Reduction for Health Flexible Spending Account, and is limited to $2,500 (as adjusted for cost-of-living increases under Section 125(i) of the Code after 2013) during a Period of Coverage. Employer Credits that may be defaulted into the Health FSA is limited based on a formula to an amount matching the Participant s Salary Reduction amount into the Health FSA, or, if greater, $500 plus the Participant s Salary reduction amount. In the event that participation begins after the beginning of the Plan Year, the Maximum Reimbursement shall be prorated in accordance with the regulations and procedures as established by the Human Resource Services Department and the County Auditor-Controller of the County of Alameda. Employer Credits will also be pro-rated for the remaining pay periods within the Plan Year. A2.3 Termination of Participation Participation in this Health FSA shall terminate on the earliest of the last day of the period for which the last Required Premium is paid to the Health FSA, the date participation in the Plan terminates, or the end of the Plan Year, unless participation is suspended pursuant to Section 2.5 of the Plan. A-6

29 SECTION A3 RECORDKEEPING A3.1 Health FSA Subaccount Each Participant s Required Premium shall be considered paid on the date on which it is credited to the Health FSA bookkeeping subaccount. If the Participant fails to make Required Premium payments under this Health FSA, the Period of Coverage for the Participant shall end as of the end of the period for which Required Premiums were last paid. A3.2 Experience Gains If the Plan has an Experience Gain with respect to a Period of Coverage, such Experience Gain shall be returned to the general assets of the Employer. A3.3 Change in Elections A Participant s Salary Reduction election for any Plan Year may not be changed after the first payroll period to which it applies, except under the circumstances described in Section 3.5 of the Plan. A3.4 Unpaid Leaves of Absence (a) (b) FMLA Leaves, USERRA Leaves and Other Unpaid Leaves. A Participant who goes on an unpaid leave of absence from the service of the Employer during the Period of Coverage, including a leave of absence under the federal Family and Medical Leave Act (FMLA) or the Uniformed Employees Employment and Reemployment Rights Act (USERRA), may continue to participate during the leave and to receive benefits for Qualifying Medical Expenses incurred during the remainder of the Period of Coverage. Under such circumstances, Required Premiums, not including any Employer Credits which were allocated to the Health FSA prior to the leave, must be paid by the Participant on an after-tax basis to the Employer during the leave, or through a lump sum Salary Reduction payment prior to the unpaid leave of absence that equals the remaining required Salary Reduction for the lesser of the balance of the Period of Coverage or the length of the unpaid leave of absence. If, after going on an unpaid leave of absence, the Participant fails to make Required Premium payments under this Health FSA, the Period of Coverage for the Participant shall end as of the period for which Required Premiums were last paid, provided, however, that, in the case of an FMLA A-7

30 Leave or a USERRA leave the Participant receives at least 15 days notice that the Period of Coverage will end unless the Participant pays the Required Premium within 15 days. (c) Upon return from an FMLA leave or other unpaid leave of absence during which the Participant fails to make Required Premium payments under this Health FSA, active participation shall be reinstated upon returning to employment and shall resume at the level in effect before the leave (with the Participant making up any Required Premium payments) or at a level that is reduced (with the Participant making Required Premium payments at the level in effect before the FMLA leave), subject to any changes permitted pursuant to Section 3.5. A-8

31 SECTION A4 BENEFITS A4.1 Plan Benefits During the period of Coverage the Health FSA shall reimburse Participants for Qualifying Medical Expenses up to the Maximum Reimbursement amount which are submitted as required by Section A4.3 A4.2 Incurred Medical Expenses Reimbursement may only be made for Qualifying Medical Expenses which are incurred during the Period of Coverage and for which claim forms are timely submitted in accordance with Section A5.1. Expenses are considered incurred on the date of treatment, service or purchase of goods. Expenses are not treated as having been incurred when the Participant is formally billed or charged for or pays for the medical care. Expenses are not treated as having been incurred during the Period of Coverage if: (a) (b) Such expenses are incurred before the later of the Effective Date of the Health FSA or the date on which the Participant first becomes enrolled under the Health FSA; or such expenses are incurred after participation has terminated under this Health FSA. A4.3 Maximum Reimbursement The Maximum Reimbursement elected by the Participant under the Health FSA shall be available at all times during the Period of Coverage (properly reduced as of any particular time for prior reimbursements for the same Period of Coverage). The Maximum Reimbursement at any particular time during the Period of Coverage shall not relate to the extent to which the Required Premiums for coverage under the Health FSA have been paid. Similarly, the payment schedule for the Required Premiums for coverage under the Health FSA shall not be based on the rate or amount of incurred Qualifying Medical Expenses during the Period of Coverage. Reimbursement shall be made in accordance with the regulations and procedures established by the Human Resource Services Department and the County Auditor- Controller of the County of Alameda. A-9

32 SECTION A5 CLAIMS AND REVIEW PROCEDURES Claims procedures are detailed in the regulations and procedures established by the Human Resource Services Department and the County Auditor-Controller of the County of Alameda. The claims and review procedures are set forth in Appendix F. A-10

33 SECTION A6 HIPAA PRIVACY AND SECURITY COMPLIANCE The Health FSA is intended to comply with the privacy and security requirements of the Health Insurance Portability and Accountability Act ( HIPAA ), as set forth in regulations issued by the Secretary of Health and Human Services in 65 CFR Parts 160 and 164, as they may be amended from time to time (the Privacy Regulations and the Security Regulations, respectively). A6.1 Additional Definitions For purposes of this Section A6, the following additional terms apply: Protected Heath Information means information that is created or received by the Health FSA and (a) relates to (i) the past, present, or future physical or mental health or condition of an individual; (ii) the provision of health care to an individual; or (iii) the past, present, or future payment for the provision of health care to an individual; and (b) (i) identifies the individual; or (ii) with respect to which there is a reasonable basis to believe the information can be used to identify the individual. Protected Health Information includes information of persons living or deceased. Electronic Protected Health Information means Protected Health Information that is transmitted by or maintained in electronic media. A6.2 Permitted and Required Uses and Disclosures of Protected Health Information by the Employer. The Employer may use and disclose Protected Health Information received from the Plan, to the minimum extent necessary, to carry out the Health FSA payment and health care operations specified below: (a) (b) (c) (d) (e) (f) Monitor proper administration of claims and appeals by the claims administrator. Verify enrollment information obtained from the Health FSA. Assist employees and their covered dependents with claims processing. Determine eligibility for coverage in accordance with the terms of the Plan and the Health FSA. Conduct or arrange for legal services and auditing functions. Perform management activities pertaining to compliance with the Privacy and Security Regulations. A-11

34 The Employer may use or disclose Protected Health Information received from the Plan when required to do so by federal, state or local law, including when required by court orders and subpoenas, or by the police or other authorized governmental organizations. The Employer may also use or disclose Protected Health Information for certain public health and safety reasons, as provided in of the Privacy Regulations. A6.3 Disclosure of Protected Health Information and Electronic Protected Health Information by the Health FSA to the Employer. The Health FSA shall disclose Protected Health Information to the Employer only for the purposes of performing the Employer s Plan administration functions, with respect to the Health FSA. As a condition of receiving Protected Health Information from the Health FSA (other than enrollment and disenrollment information and summary health information, and information pursuant to a signed authorization that complies with the requirements of section of the Privacy Regulations, which are not subject to these restrictions), the Employer agrees: (a) (b) (c) (d) (e) (f) Not to use or further disclose Protected Health Information provided to it by the Plan other than as permitted or required by the Plan or as required by law. To ensure that any agents, including a subcontractor, to whom it provides Protected Health Information received from the Health FSA, agree in writing to the same restrictions and conditions that apply to the Employer with respect to such information. Not to use or disclose Protected Health Information for employmentrelated actions or decisions in connection with any other benefit or employee benefit plan of the Employer. To report to the Plan any use or disclosure of Protected Health Information that is inconsistent with the uses and disclosures permitted under the Plan to the extent the Employer becomes aware of such inconsistent use or disclosure. To grant any individual whose Protected Health Information is held by the Plan access to his or her Protected Health Information, upon his or her request, to the extent required under section of the Privacy Regulations. To permit individuals to request that amendments be made to their Protected Health Information, and incorporate requested amendments to the extent required by section of the Privacy Regulations. A-12

35 (g) (h) (i) (j) To provide an accounting of disclosures of an individual s Protected Health Information, to the extent that an accounting is required by section of the Privacy Regulations, to that individual, upon his or her request. To make its internal practices, books, and records relating to its use and disclosure of Protected Health Information received from the Plan available to the Secretary of Health and Human Services, so that the Secretary may determine compliance by the Plan with sections of the Privacy Regulations. If feasible, to return or destroy all Protected Health Information received from the Plan that the Employer still maintains in any form, and not to retain copies of the Protected Health Information after it ceases to be needed for the purpose for which the Plan disclosed it to the Employer; except that, if return or destruction of the Protected Health Information is not feasible, to limit further uses and disclosures to those purposes that make the return or destruction of the information not feasible. To ensure that the adequate separation between the Plan and the Employer required by section (f) (2) (iii) of the Privacy Regulations is established, as set forth in Section A6.4, below. As a condition of receiving, creating, receiving, maintaining, or transmitting any Electronic Protected Health Information on behalf of the Health FSA (other than enrollment and disenrollment information and summary health information, and information pursuant to a signed authorization that complies with the requirements of section of the Privacy Regulations, which are not subject to these restrictions), the Employer agrees to implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the Electronic Protected Health Information, and it will ensure that any agent (including subcontractors) to whom it provides such Electronic Protected Health Information agrees to implement reasonable and appropriate security measures to protect the information. The Employer will report to the Health FSA any security incident of which it becomes aware. A6.4 Ensuring Adequate Separation between the Plan and the Employer. (a) Only those employees of the Employer, described by the following classifications, shall be given access to the Protected Health Information disclosed by the Health FSA: (i) The Privacy Official. A-13

36 (ii) (iii) (iv) (v) (vi) Each employee assigned to the Human Resources Department who has responsibility with respect to the Health FSA s payment activities and health care operations. Each employee assigned to the Auditor-Controller Department who has responsibility with respect to the Health FSA s processing of claims and any reimbursement activities. Each employee with responsibility for monitoring or allocating Health FSA costs and expenditures. Each employee with responsibility for information technology or information systems, who requires access to computers or computer systems or networks containing Protected Health Information for the purposes of maintaining, repairing, and upgrading such computer systems containing Protected Health Information, ensuring system security, and similar administrative functions. The supervisor of the mail room, who shall have access to Protected Health Information only when and if such Protected Health Information has been enclosed in an improperly-addressed mailing envelope, and solely for the purpose of determining the appropriate recipient of the improperly-addressed mail. (b) (c) The employees designated in Section A6.4(a) may only use and disclose Protect Health Information for the purposes of performing the Employer s Plan administration functions, as described in Section A6.2 or for the additional limited purposes also described in Section A6.2. In addition, no designated employee may use or disclose Protected Health Information except as provided in the Employer s privacy policy and procedures. Any Plan participant or covered dependent, or any other employee of the Employer, who believes that an employee designated in Section A6.4 (a) has violated the provisions of this Section A6.4, shall notify the Privacy Official appointed by the Employer pursuant to the Employer s privacy policy and procedures that a violation may have occurred. If the Plan participant or covered dependent believes that his or her Protected Health Information has been used or disclosed in violation of Section A6.4, such person may file a complaint in accordance with the complaint procedures specified in the Employer s privacy procedures. The Privacy Official shall investigate, or cause to be investigated, the alleged violation. If, based upon this investigation, the Privacy Official determines that a violation has occurred, the privacy official shall take, or seek to have taken, appropriate disciplinary action in accordance with the disciplinary procedure set forth in the privacy procedures. The Privacy Official shall A-14