SELF-FUNDED WAGE CONTINUANCE DISABILITY BENEFIT January 1, 2008 (revised 1-26-11)
TABLE OF CONTENTS SCHEDULE OF BENEFITS... 3 DEFINITIONS... 4 ELIGIBILITY PROVISIONS... 6 CONTRIBUTIONS... 6 BENEFITS... 7 CLAIM PROCEDURES... 9 GENERAL PROVISIONS... 10-2-
SCHEDULE OF BENEFITS Eligibility Class Full-time in-house employees working 30 hours or more per week are eligible to receive wage continuance disability benefits. This benefit applies to employees who are absent from work due to accidents, illnesses or injuries that are not work-related (including maternity-related illnesses). Eligibility Waiting Period This benefit is effective the first of the month following 90 consecutive days of employment. Benefits The schedule of benefits is as follows: Day Benefits Begin: Disability due to injury Disability due to sickness 15 th day 15 th day No benefits are payable for the first 14 consecutive days of total disability, otherwise known as the Elimination Period. Wage continuance disability benefits begin on the 15 th consecutive day of disability. Wage continuance disability benefits for the first 3 weeks of paid disability will be provided based on 75% of an eligible employee s covered weekly compensation. Wage continuance disability benefits for the remaining 8 weeks of paid disability will be paid based on 60% of an eligible employee s covered weekly compensation. Maximum Weekly Benefit: $1,000 Payment Period: Preexisting Condition Limitation Up to 11 weeks, or until Long Term Disability benefits begin, whichever occurs first. Any sickness or injury for which the employee received medical treatment, consultation, care or services during the 12 months prior to becoming covered under the benefit (the end of the Eligibility Waiting Period) will not be covered unless 12 months have passed without treatment for the condition or after being insured for 12 months. Accrued Paid Time Off (PTO) must be used prior to this plan providing wage continuance disability benefits. In no event will PTO benefits and wage continuance disability benefits be paid for the same dates. The substitution of PTO for wage continuance disability benefits shall in no case extend the Payment Period of such wage continuance disability benefits. Benefits are paid directly through payroll on regularly scheduled paydays with all normal deductions taken. Partial Disability To qualify for Partial Disability Benefits, the claimant must fulfill the waiting period and Elimination Period as Totally Disabled. Thereafter, the benefit payable while Partially Disabled will be reduced by any and all wages earned while working. Partial Disability Benefits will cease the earlier of: 1. return to work full time 2. expiration of benefits (Up to 11 weeks of payable benefits) 3. when wages earned equal or exceed the 60% of basic weekly compensation. Contribution 100% funded by the Company. -3-
DEFINITIONS Active Work, Actively at Work means the active performance of all a Participant s normal job duties: at the Company s usual place or places of business. a. for the Company on a permanent, full-time basis and paid regular earnings; b. for at least the minimum number of hours shown in the Schedule of Benefits; and c. at the Company s usual place of business or at a location to which the Company s business requires a Participant to travel. Company means the Employer, or any affiliate or successor of the Employer that subsequently adopts this Plan. The term Company includes any other organization that is a member of a controlled group of businesses within the meaning of IRS Code Sec. 414(b), (c) and (m). The term Company shall include any organization that is exempt from federal taxation under IRS Code Sec. 501. Covered weekly compensation means a Participant s rate of earnings in effect the day before the disability begins. It includes earnings from regular base salary, and scheduled overtime pay, but not commissions, bonuses, non-scheduled overtime pay and any other extra compensation. Any benefits payable will be provided on a bi-weekly basis on normally scheduled paydays. Disability, Disabled means a Participant s inability, because of sickness or injury, to work his or her normal job to perform each of the material duties of his or her occupation. Partial disability is when a Participant is able to perform some, but not all, of the essential duties of his or her occupation. Disability Due to Injury means a disability that: a. occurs solely and directly because of an accidental injury; and b. begins within thirty (30) days of the accident. Disability Due to Sickness means a disability that: a. occurs directly or indirectly because of disease, infection, hernia (other than accidental), pregnancy, mental disorder, nervous disorder, alcoholism or drug abuse; or any medical treatment for the items in a.; or b. is not a Disability Due to Injury as defined in this section. Eligibility Waiting Period means the continuous length of time immediately before an Employee s initial eligibility date during which the Employee must be in an Eligible Class. Eligible Class means all full-time, active, in-house employees working 30 hours or more per week. Elimination Period means the first 14 consecutive days of total disability before benefits are payable. Employee means an in-house person on a regular payroll of the Company and receiving earnings on a regular wage or salary basis. Employer means C&A Industries, Inc., or any affiliate or successor that adopts this benefit. Partial Disability and Partially Disabled means the claimant after fulfilling the waiting period and elimination period as totally disabled is: (a) performing at least one of the material duties of their occupation or another occupation on a part or full-time basis; and (b) earning at least 30% less per month than their pre-disability earnings due to the same disabling injury or illness. -4-
Participant or Covered Person means any in-house Employee who is regularly scheduled to work for the Company on a full-time basis of at least the qualifying hours stated and has met the applicable waiting period requirements, and whose coverage has become effective as provided herein. In no event will benefits be available for temporary or contract employees on assignment with a client company. Payment Period means the maximum length of time (number of weeks) the wage continuance disability benefits are payable. Physician means a legally licensed medical doctor or osteopath, to the extent that same, under their license, are performing services to a Participant. Physician shall not include the Covered Person or any person who is the spouse, parent, child, brother or sister of the covered person. Plan Administrator means the person appointed by the Company who has the authority and responsibility to manage and direct the operation and administration of the benefit. Qualifying Hours means 30 per week. Total Disability and Totally Disabled means the claimant s inability, due to sickness or injury, to perform the material duties of his or her regular occupation. A person engaging in any employment for wage or profit is not Totally Disabled. The loss of a professional license, an occupational license or certification, or a driver s license for any reason does not, by itself, constitute Total Disability. -5-
ELIGIBILITY PROVISIONS New Employee Eligibility Persons eligible for coverage under this benefit shall include only those persons who meet these conditions: 1. Employed by the Company on a regular full-time basis working 30 hours per week. 2. Actively at Work at the customary place of employment and in performance of the regular duties on the effective date of coverage. 3. Is considered an in-house employee, not assigned to work at the worksite of a client company. 4. Participant of an Eligible Class. 5. Fulfills the Eligibility Waiting Period of 90 days (effective on the date of employment with the Company.) Coverage begins the first of the following month. Employee Initial Eligibility Date 1. Each Employee identified by the Company as eligible for coverage on or before the effective date of this benefit, shall become eligible for coverage the first of the month following 90 consecutive days of employment. 2. Employees commencing employment after the effective date of the benefit shall be eligible for coverage after the completion of the Eligibility Waiting Period as set forth above. 3. Employees not actively at work on the effective date of the benefit will be eligible for coverage on the day such Employee returns to active full-time service. Effective Date of Coverage The Employee s coverage under the benefit will become effective the day the Employee becomes eligible. The effective date of initial coverage, or any increased or additional coverage, will be delayed if the Employee is not Actively at Work on the date of eligibility because on an injury, a sickness, a temporary layoff or leave of absence. In such instances, coverage will begin on the date the Employee returns to active, full-time service. Employee Termination Date The coverage of any Employee shall cease at the earliest time indicated below: a. The date employment ends; or b. The date an Employee ceases to be in an Eligible Class of Employees, including leave of absence and temporary layoff, or c. The date the benefit is terminated; or d. The date the Company terminates Employee s coverage, or e. The date the Employee dies. CONTRIBUTIONS The cost of the benefit for Employees coverage is derived solely from the funds of the Company. The Employee does not share in the benefit cost. The Company retains the right to amend the benefit and add Employee contributions at its discretion without permission of participants. -6-
BENEFITS Benefit Qualification A Participant will qualify for benefits if: a. Disability begins while he or she is covered under this benefit; b. The Participant is under the care of a Physician; c. The Disability is not subject to any Limitations listed under the Limitations below; d. A payment period is established; e. The claim requirements listed under Claim Procedures below are satisfied. If Disability is Due to Sickness or Injury, a Payment Period will be established after any applicable waiting period and Elimination Period during which time the Participant has not worked for wage or profit. Benefits Payable Subject to the Eligibility Date provisions, the Benefits Payable to a qualified Participant for each weekly portion of a Payment Period will be determined by the rate of benefits as stated in the Schedule of Benefits. The Benefits Payable amount will not be more than the Maximum Weekly Benefit and will be paid up to the Maximum Payment Period as shown in the Schedule of Benefits. The Benefits Payable for each day of any part of a Payment Period that is less than a full week will be the weekly benefit divided by seven. The weekly income benefit will be reduced by any of the other disability income benefits that are payable for the same disability, including: a. any amount an Employee receives or is entitled to receive under the mandatory portion of any no-fault motor vehicle plan; or b. the amount an Employee receives or is entitled to receive under any state compulsory benefit act or law. Benefits Payable for Maternity The standard recovery time is 8 weeks for a normal delivery. After the 14 day elimination period has been satisfied benefits would be payable for up to 6 weeks maternity leave. The standard recovery time is 10 to 12 weeks for C-Sections and/or complications verified by the doctor. After the 14 day elimination period has been satisfied benefits would be payable for up to 8 to 10 weeks maternity leave. Payment Termination A Payment Period will end on the earliest of: a. The date of the Participant s death; b. The date Disability ends, unless a Recurring Disability exists; c. The date the Participant performs work on a full-time basis for wage or profit; d. The date the Participant ceases to be under the care of a Physician; e. The first day following the end of the maximum number of benefit weeks stated in the Schedule of Benefits; f. The date the Participant fails to provide proof of their disability; g. On the date that the Company s Long Term Disability Plan benefits begin; or -7-
Recurring Disability A Recurring Disability will exist if a Participant s Payment Period ends because Disability ceases, and: a. While covered under this benefit, but before having returned to Active Work for a continuous period of two continuous weeks, the Participant is Disabled again as the result of a sickness or injury that is related to the initial Disability; or b. While covered under this benefit, but before returning to Active Work, the Participant is Disabled again as a result of a sickness or injury that is not related to the initial Disability. Recurring Disabilities will be treated as if the initial Disability had not ended, except that no benefits will be payable for the time between Disabilities. New Payment Periods will not be established. Benefits will be payable from the first day of each Recurring Disability, but only for the remainder, if any, of the Payment Period established for the initial Disability. Limitations No benefits will be paid for any disability that: a. Results from willful self-injury; b. Results from voluntary participation in an assault or felony, riot or war; c. Is a continuation of a Disability for which a Payment Period has ended (except as provided for a Recurring Disability above); d. Results from a sickness that is covered by a Workers Compensation Act or similar law; e. Results from an injury arising out of or in the course of employment for wage or profit; f. Results from injury or sickness not being treated by a Physician; g. Occurs after your employment terminates; h. Occurs while you are on an unpaid leave of absence or while you are not on active payroll status; or i. Is the result or continuation of a Preexisting Condition, and is excluded from payment under the Preexisting Condition Limitation in the Schedule of Benefits. Right of Recovery The Company has the right to recover any benefit payments for total disability resulting from an injury or a sickness for which a third party is liable, and for which recovery is made from the third party. The right of recovery applies to the full amount recovered, whether by judgment, settlement or otherwise. The amount recovered is the amount left after deducting any reasonable and necessary expenditure (including attorney fees) incurred in effecting the recovery. Further, the Company has the right to recover any benefit payments for total or partial disability from a Participant who does not return to work on a full-time basis for a minimum of 30 days following a benefit period. This recovery will be waived for participants who remain totally disabled after benefits expire. The Company also has the right to recover any overpayments made because of any error in processing a claim. -8-
CLAIMS PROCEDURES Introduction The Company has the responsibility for payment of benefits and controls the payment of benefit procedures. The Company has designated authority to the Plan Administrator in regards to this responsibility. Claim Responsibility Any claims by a Participant for benefits shall be submitted to the Plan Administrator. The Plan Administrator shall be responsible for deciding such claim and for providing full and fair review of the decision on such claim. The costs of defending any legal action arising out of the denial in whole or in part of such claims shall be the responsibility of the Plan Administrator and the Company. Claim Filing Notwithstanding anything in the benefit to the contrary, no benefits shall be payable under the benefit to any Participant who fails to submit a claim for benefits hereunder within ninety (90) days after the date disability began, provided that the Company (or its delegates for claim payment purposes) in its sole discretion, may accept a claim after such time has elapsed if extenuating circumstances prevented the Participant from making a claim during such period. Each Participant, beneficiary or other interested person shall file with the Plan Administrator such pertinent information as the Plan Administrator may specify, and in such manner and form as the Plan Administrator may specify or provide; such person shall not have any rights or be entitled to any benefits or further benefits hereunder, as the case may be, unless such information is filed by the Participant or on the Participant s behalf. The Plan Administrator, in its sole discretion, shall have the right at the expense of the covered person claiming benefits hereunder, and as often as the Plan Administrator may determine is reasonably necessary, to examine or to have a physician designated by the company to examine such covered person. Notification of Decision The Plan Administrator shall furnish notice of a decision by the Plan Administrator with respect to a claim to the claimant within forty-five (45) days following the receipt of a claim. If special circumstances require an extension of the time for processing the claim, written notice of the extension shall be furnished by the Plan Administrator to the claimant, which allows for up to two 30-day extension periods, prior to the expiration of the initial forty-five (45) day period. The notice of extension shall indicate the special circumstances requiring the extension and the date by which the notice of decision with respect to the claim shall be furnished. Commencement of benefit payments shall constitute notice of approval of a claim to the extent of the amount of the approved benefit. If such claim shall be wholly or partially denied, such notice shall be in writing and worded in a manner calculated to be understood by the claimant, and shall set forth (a) the specific reason or reasons for the denial; (b) specific reference to pertinent provisions of the Plan on which the denial is based; (c) 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; and (d) an explanation of the benefit s claims review procedure. If the Plan Administrator fails to notify the claimant of the decision regarding the claim in accordance with this Section, that claim shall be deemed denied and the claimant shall then be permitted to proceed with the claim review procedure provided herein. -9-
Claim Review Procedure Within one hundred eighty (180) days following receipt by the claimant of notice of the claim denial, or within one hundred eighty (180) days following the close of the forty-five (45) day period referred to herein, if the Plan Administrator fails to notify the claimant of the decision within such forty-five (45) day period, the claimant may appeal the denial of the claim by written application to review with the Plan Administrator. Following such request for review, the Plan Administrator shall fully and fairly review the decision denying the claim. Prior to the decision of the Plan Administrator pursuant to this section, the claimant shall be given an opportunity to review pertinent documents and to submit issues and comments in writing and request a review by the Plan Administrator of such decision denying the claim. Such a request shall be made in writing and filed with the Plan Administrator within one hundred eighty (180) days after delivery to the claimant of written notice of the decision. Such written request for review shall contain all additional information which the claimant wishes the Plan Administrator to consider. The Plan Administrator may hold a hearing or conduct an independent investigation regarding the merits of the denied claim and promptly, within forty-five (45) days following receipt by the Plan Administrator of the request for review (or within ninety (90) days after such receipt in a case where there are special circumstances requiring extension of time for reviewing such denied claim), shall deliver the decision to the claimant in writing. For all purposes under the benefit, such decision on claims (whether or not review is requested) and decisions on other claims (where review is requested) shall be final, binding and conclusive on all interested parties as to participation relating to the benefit. GENERAL PROVISIONS Incontestability No statement made by any Participant under this benefit relating to himself shall be used in contesting the validity of the coverage with respect to which the statement was made after such coverage has been in force prior to the contest for a period of two years during such person s lifetime nor unless it is contained in a written instrument signed by the person. Physical Examination and Autopsy The Plan Administrator at its own expense shall have the right and opportunity to examine the person or any individual whose injury or sickness is the basis of claim when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death, where it is not forbidden by law. -10-