HomeMy WebLinkAboutResolution No. 12-7378 - Amending and Restating the City of Downey Flexible Benefits Plan RESOLUTION NO. 12 -7378
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY
AMENDING AND RESTATING THE CITY OF DOWNEY FLEXIBLE BENEFITS
PLAN
WHEREAS, the City of Downey implemented a Flexible Benefits Plan effective January
1, 2004, also known as a "Cafeteria Plan," in accordance with Internal Revenue Code Section
125 in order to administer benefits to its eligible employees; and,
WHEREAS, the City of Downey has reviewed the Flexible Benefits Plan document
prepared by Keenan & Associates that includes necessary changes to update the Plan
document for compliance with current benefits administration and applicable regulations and,
law; and
WHEREAS, the City of Downey Flexible Benefits Plan incorporates Appendix "A,"
Premium Conversion Benefit Component, to allow participating employees to contribute salary
reduction amounts on a pre -tax basis for the purchase of benefits and to exclude the value of
such benefits provided by the City from employee's salary in compliance with Internal Revenue
Code regulations; and,
WHEREAS, Appendix "A," includes Exhibit A, Member Plans, which identify benefits
which may periodically change, and as such, it is necessary that City staff have the authority to
automatically update or revise Exhibit A whenever changes are made to such benefits pursuant
to any collective bargaining agreement approved by the City Council; and,
WHEREAS, the Flexible Benefits Plan incorporates Appendix "B," Health Care
Reimbursement Program Benefit Component; and,
WHEREAS, the Flexible Benefits Plan incorporates Appendix "C," Dependent Care
Assistance Program Benefit Component; and,
WHEREAS, the City Council desires to authorize the Assistant City Manager or his
designee to take all steps relative to the implementation of the Plan, including execution and
any revisions to the Plan document on behalf of the City, along with any future amendments to
the Plan document for the administration of employee benefits in compliance with Internal
Revenue Code Section 125.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City of Downey Flexible Benefits Plan document is hereby amended
and restated effective January 1, 2013 (premium conversion benefit component effective
October 1, 2012) and incorporates Appendix A, Appendix B, and Appendix C, attached hereto,
and by this reference, is hereby adopted.
SECTION 2. This Resolution hereby supersedes any previously adopted Resolution
establishing the City of Downey Flexible Benefits Plan.
RESOLUTION NO 12 -7378
PAGE 2
SECTION 3. The City Council hereby authorizes the Assistant City Manager or his
designee to duly execute the Flexible Benefits Plan on behalf of the City of Downey, along with
any future amendments or administrative changes to the Plan document to administer
authorized employee benefits in compliance with Internal Revenue Code Section 125 and other
applicable law.
APPROVED AND ADOPTED this 23 day of October, 2012.
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R GE; . BROSSMER, Mayor
ATTEST: ,
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ADRIA M. JIMENEZ, CMC
City Clerk
HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of
the City of Downey at a regular meeting thereof held on the 23 day of October, 2012, by the
following vote, to wit: ---
AYES: Council Members: Guerra, Marquez, Vasquez, Gafin, Mayor Brossmer
NOES: Council Members: None
ABSTAIN: Council Members: None
ABSENT: Council Members: None
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ADRIA M. JIMENE , CMC
City Clerk
CITY OF DOWNEY
FLEXIBLE BENEFITS PLAN
PLAN DOCUMENT
EFFECTIVE JANUARY 1, 2013
(PREMIUM CONVERSION BENEFIT COMPONENT
EFFECTIVE OCTOBER 1, 2012)
City of Do7,77ney—Flemble Benefits Plan—Plan Document
Contents
INTRODUCTION .... ...... ...... ...... 1
ARTICLE I — DEFINITIONS ••• 1
ARTICLE II — ELIGIBILITY AND PLAN PARTICIPATION ....... 4
2.1 Eligibility 4
2.2 Effective Date of Participation ......... 4
2.3 Participation ...... ... 5
2.4 Termination of Participation 5
2.5 Suspension of Participation ••• 5
2.6 Revocation of Salary Reduction 5
2.7 Reinstatement of Former Participant..... 5
ARTICLE III — METHODS AND TIMING OF ELECTIONS 6
3.1 In General. ............ ... 6
3.2 Salary Reduction ............... ............ 7
3.3 Benefit Component Elections ............. .......••... ••• ••• 7
3.4 Opt -Out Contribution ... ...... ... 7
3.5 Plan Administrator's Power to Modify and Suspend Elections ................ 7
3.6 Election Change or Revocation ••• 8
ARTICLE IV —PLAN RECORDKEEPING 10
4.1 Payment of Benefits ..... ... ... ... 10
4.2 Accounts .. ......... ............ ............ ............ ......... 10
ARTICLE V — BENEFITS AND METHOD OF FUNDING. ...... 10
5.1 General Rule 10
5.2 Limitation of Benefits for Certain Individuals 10
City of D077/1C7-Flexible Benefits Plan - -Plan D
10/01/2012
CITY OF DOWNEY FLEXIBLE BENEFITS PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2013
(PREMIUM CONVERSION BENEFIT COMPONENT EFFECTIVE
OCTOBER 1, 2012)
INTRODUCTION
Effective as of October 1, 2012 for the City of Downey Flexible Benefits Plan Premium Conversion
Benefit Component and effective as of January 1, 2013 for the City of Downey Flexible Benefits
Plan Health Care Reimbursement Program Benefit Component and for the City of Downey
Flexible Benef=its Plan Dependent Care Assistance Program Benefit Component, the City of
Downey (hereinafter "Employer') adopted a Flexible Benefits Plan as a cafeteria plan to provide
benefits for certain of its employees. The Plan includes the Premium Conversion, Opt -Out
Contribution, Health Care Reimbursement Prograrn, and the Dependent Care Assistance Prograrn
Benefit Components covering Eligible Employees of the Employer as set out in the Appendices of
the Plan.
The Plan is designed to meet the appropriate requirements of Code sections 105, 106, 125 and 129,
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 the 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.
ARTICLE I DEFINITIONS
When used in the 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.
Applicable Law - The Code, as herein defined, and the laws of the state of California. and any other
laws of the United States.
Benefit Component - A written benefit program maintained by the Employer to provide to
Eligible Employees premium conversion options, health care reimbursement benefits and
dependent care assistance. Such Benefit Components are contained in the Appendices for the
Components and are incorporated herein. Each Benefit Component is governed by its terms, which
shall prevail in case of any conflict between the Plan and a Benefit Component. Benefit
Components include the following:
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City of Downey Flexible Benefits Plan Premium Conversion Benefit Component (Appendix
City of Downey Flexible Benefits Plan Health Care Reimbursement Program Benefit
Component ( "HCRP ") (Appendix `B "); and
City of Downey Flexible Benefits Plan Dependent Care Assistance Program Benefit Component
( "DCAP") (Appendix "C
Code - The Internal Revenue Code of 1986, as amended, as it exists or from time to time may be
amended.
Compensation — the total remuneration received by a Participant from the Employer, including but
not limited to wages, salary, overtime, bonuses, commissions and any other payment, which is not
an advance, a loan or an expense reimbursement.
Council — the elected members of the City Council of the City of Downey, as constituted from time
to time.
Effective Date — October 1, 2012 for the City of Downey Flexible Benefits Plan Premium
Conversion Benefit Component (Appendix "A "); January 1, 2013 for the City of Downey Flexible
Benefits Plan Health Care Reimbursement Program Benefit Component ( "HCRP ") (Appendix "B ");
and the City of Downey Flexible Benefits Plan Dependent Care Assistance Program Benefit
Component ( "DCAP ") (Appendix "C ").
Eligible Employee - Any full -time employee of the Employer working a minimum of forty (40)
hours er week, excluding: (i) any person who is covered b T a collective bargaining agreement,
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which does not provide for inclusion in this Plan; (ii) any person who performs services for the
Employer solely as a nonresident alien, commissioned employee, seasonal employee, independent
contractor, employee of an independent contractor, leased employee (whether or not a "leased
employee" under the Code); (iii) part-time employees, i.e., those working less than 40 hours per
week; or (iv) any person who is not treated as a cornrnon law employee of the Employer for income
tax withholding purposes, regardless of any subsequent determination of such individual's legal
employment status.
Employer — City of Downey and any organization that is a successor thereto.
"Grace Period" — Applies to the HCRP and DCAP and is the 2`%2 month period following the end
of the calendar year, during which time Participants in the HCRP and DCAP may incur expenses
and have them reimbursed from unused contributions from the immediately preceding Plan Year.
The Grace Period is included in the Period of Coverage. The Grace Period does not apply to the
Premium Conversion Benefit Component.
HIPAA - The Health Insurance Portability and Accountability Act of 1996 as amended from time
to time.
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Open Election Period - The period immediately prior to the beginning of each new Plan Year
during which time Eligible Employees may enroll in the Plan, make changes to their existing
elections, elect Salary Reduction amounts and benefit allocations thereof for the following Plan
Year, make an Opt -Out Election or withdraw from the Plan; provided, however, Sections 2.20)(2)
and 2.2(a)(3) shall apply in the case of an Eligible Employee who first becomes eligible to
participate, or is eligible to make a new election or change an election during the Plan Year. The
Open Election Period may be changed by the Plan Administrator without the need to amend the
Plan.
Opt -Out Contribution - A contribution by the Employer under Section 3.4 of the Plan on behalf
of an Eligible Employee who has made an Opt -Out Election with respect to a Period of Coverage.
Opt -Out Election - An election by an Eligible Employee to not be covered by a Member Plan
under the Premium Conversion Component in accordance with Article III of the Plan.
Participant - An Eligible Employee who participates in the Plan pursuant to Article II.
Period of Coverage - The Period of Coverage is defined in each of the Benefit Components. The
Period of Coverage shall also include the Grace Period for the HCRP and DCAP.
Plan - The City of Downey Flexible Benefits Plan, the terms of which are set forth herein, as it may
be amended from time to time.
Plan Administrator - The Council or its delegates, notwithstanding the fact that the Council may
delegate plan administration responsibilities to a committee or to any other person, persons, or
entity. The Plan Administrator may be contacted at:
City of Downey
1111 Brookshire Avenue
Downey, CA 90241 -7016
Telephone: (562) 904 -7292
Attn: Human Resources Director
Plan Year — For the City of Downey Flexible Benefits Plan Premium Conversion Benefit
Component, the first Plan Year shall be a short Plan Year and shall be the period from October 1
through December 31, 2012; thereafter, the Plan Year shall be the twelve -month period beginning
January 1 and ending the following December 31. For the HCRP and DCAP, the Plan Year shall be
the twelve -month period beginning January 1 and ending the following December 31. Records of
the Plan shall be established and maintained on the basis of the Plan Year.
Run -Out Period — Applies to the HCRP and DCAP and is the period commencing on the day after
the end of the Grace Period and ending 90 days after the close of the Grace Period following the
Plan Year for which the elections were made.
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Salary Reduction - The 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 and payroll tax purposes.
ARTICLE II ELIGIBILITY AND PLAN PARTICIPATION
2.1 Eligibility
An employee shall be eligible to participate in the Plan upon becoming an Eligible Employee and his
or her Entry Date shall be the first day of the month following the date of hire.
2.2 Effective Date of Participation
(a) Except as provided in subsection (b) below, participation (or a change in election, as
applicable) shall be effective in a Benefit Component on the latest of:
(.1) The first day of the Plan Year, provided that the election forms are appropriately
completed and submitted prior to the beginning of the Plan Year in the tirneframe
and manner as prescribed by the Plan Administrator;
(2) The first day of the month following submission of the election forms or as soon as
administratively practicable, provided that such election forms are appropriately
completed and submitted within thirty (30) days of the date the employee first
becomes eligible to participate; or
(3) Except as provided in subsection B., below, as applicable,
A. The first day of the month following a notice of change in status event or as
soon as administratively practicable, as described in Section 3.6, and in the
Appendices at Section A3.3, Section 133.4, or Section C4.4, or a special
enrollment right pursuant to the rules of HIP, provided that an election
form is submitted within thirty (30) days of such event or as otherwise
required herein;
B. Health Coverage. For a dependent child (including all family members)
newly acquired due to birth or adoption, the date of the birth or placement
for adoption, provided that all applicable conditions of the special enrollment
rules of HIPAA are satisfied.
(b) Solely for purposes of the Premium Conversion Benefit Component, participation in the
Premium Conversion Benefit Component begins on the date the employee first becomes
covered by a Member Plan, unless otherwise prohibited under the Code and applicable
regulations.
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2.3 Participation
Participation in the 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 the Plan or the Plan Administrator.
2.4 Termination of Participation
Participation in the Plan shall terminate as of the earlier of:
(a) The date on which the Plan is terminated.
(b) The date the Eligible Employee is no longer a Participant in any Benefit Component.
(c) The last day of the payroll period in which the Participant ceases to be an Eligible Employee.
Participation in the insurance benefits will cease on the date specified in the applicable Member Plan
listed in Exhibit A to the Premium Conversion Benefit Component.
2.5 Suspension of Participation
(a) 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 Salary Reduction amount, as elected, but does not terminate
employment, participation in the Plan shall be suspended and shall terminate at the end of
the Plan Fear if active participation is not reinstated earlier.
(b) During periods of suspended participation, no contributions shall be made pursuant to
Section 3.2, and no benefits shall be provided under the Plan, except as otherwise explicitly
stated in a Benefit Component.
(c) 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 rnost recent election shall
remain in effect, except as otherwise permitted pursuant to Section 3.6, or the Appendices at
Sections A3.3, B3.4, or C4.4.
2.6 Revocation of Salary Reduction
If a Participant revokes the Salary Reduction election as permitted herein, the Participant shall not
be entitled to make a new Salary Reduction election until the next Open Election Period except as
otherwise provided in Section 3.6 or under a Benefit Component.
2.7 Reinstatement of Former Participant
(a) A former Participant who again becomes eligible for participation during the same Plan Year
in which participation terminated and within thirty (30) days of the date on which
participation terminated shall not be entitled to make a new election for the remainder of the
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Plan Year. Rather, upon reemployment, the former Participant shall continue the same
election in effect prior to separation from service, except as otherwise permitted pursuant to
Section 3.6, or the Appendices at Section A3.3, Section B3.4, or Section C4.4.
(b) A former Participant who again becomes eligible for participation during the same Plan Year
in which participation terminated, but more than thirty (30) days after the date on which
participation terminated, shall be treated as a newly Eligible Employee and shall be permitted
to make new elections in accordance with Section 2.2(a)(2) of the Plan.
ARTICLE III METHODS AND TIMING OF ELECTIONS
3.1 In General
(a) An election to participate in the Plan and an Opt -Out Election shall be in writing on the
fon provided by the Plan Administrator. Participation in the Premium Conversion Benefit
Component by Participants may be subject to additional requirements (such as open
enrollment limitations, etc.) of the underlying Member Plans.
(b) The Plan Administrator shall establish procedures and deadlines for filing elections, which
shall be communicated to Eligible Employees.
(c) Failure to file an election form:
(1) If an Eligible Employee fails to complete, sign and file an election form within the
time period prescribed by the Plan Administrator during his or her initial election
period, then the Eligible Employee may not make any election hereunder under any
Benefit Component until (i) the next Open Election Period; or (ii) an event occurs
that would permit an election to be made during the Plan Year as described herein.
An Eligible Employee who fails to make any election will be treated as having made
an Opt -Out Election.
(2) An Employee who is a Participant and who fails to complete, sign, and file an
election form within the time prescribed by the Plan Administrator during an annual
election period for the City of Downey Flexible Benefits Plan Premium Conversion
Benefit Component shall be deerned to have elected to continue the same benefits
and coverages then in effect for such Participant.
(3) Participants must make annual elections for the flexible spending accounts: An
Employee who is a Participant and who fails to complete, sign, and file an election
form within the time prescribed by the Plan Administrator during an annual election
period for the City of Downey Flexible Benefits Plan Health Care Reimbursement
Program Benefit Component ( "HCRP'') or the City of Downey Flexible Benefits
Plan Dependent Care Assistance Program Benefit Component ("DCAP ") will riot
participate for the Period of Coverage for which the election would apply.
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3.2 Salary Reduction
Each Eligible Employee who wishes to participate must file a Salary Reduction election with the
Plan Administrator, and the amount of the salary reduction shall be prorated over all payroll periods
during the Plan Year as described in the Benefit Components. The election must provide that the
Participant's Cornpensation in each payroll period shall be reduced by a specific amount, 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.
3.3 Benefit Component Elections
Each Participant shall elect among Benefit Components and shall designate the amount of Salary
Reduction (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.
3.4 Opt - Out Contribution
An Opt -Out Contribution shall be made to the Plan on behalf of a Participant who has made an
Opt -Out Election for each month during the Period of Coverage to which such election applies in
the following amounts;
$81.00 per month for Employee Only
$162.00 per month for Employee plus one
$229.00 per month for Family Coverage
The Opt -Out Contribution shall be used to pay the costs of Member Plans in the Premium
Conversion Benefit Component that cover the Eligible Employee. Any amount of the Opt -Out
Contribution that is not used to pay such costs shall be paid to the Eligible Employee, subject to
withholding for federal, local and payroll taxes.
3.5 Plan Administrator's Power to Modify and Suspend Elections
(a) Notwithstanding any other Plan provisions, the Plan Administrator will suspend, modify, or
terminate Salary Reduction and/or Benefit Component elections under the following
circumstances:
(1) If the amount of any Salary Reduction agreed to is greater than the Participant's
compensation.
(2) In compliance with a change or revocation of an election as allowed in Section 3.6 or
in a Benefit Component.
(3) If necessary for the Plan to pass any relevant nondiscrimination tests of the Code.
(b) With respect to Member Plans of the Premium Conversion Benefit Component of the Plan
(see Appendix A), the Plan Administrator may, at its discretion and in a nondiscriminatory
manner:
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(1) Increase or decrease the Member Plan premium during the Plan Year; and
(2) Determine whether such increase or decrease is significant, for purposes of
Appendix A at Sections A3.3(c) and (d) regarding automatic election changes.
3.6 Election Change or Revocation
A Participant's Salary Reduction and Benefit Component elections for any Period of Coverage may
not be changed or revoked by Participant election, except as provided in this Section, or as
otherwise provided in the Appendices at Sections A3.3, B3.4, C4.4.
(a) A Participant may make a new election or change an election if one of the following change
in status events occurs, and the benefit election change is consistent with the applicable
change in status, as further described in subsection (t).
(1) Legal marital status. Any event that changes Participant's legal marital status,
including marriage, death of spouse, divorce, legal separation, or annulment.
(2) Number of dependents. Any event that changes the number of a Participant's
dependents (as defined in section 152 of the Code), including birth, adoption,
placement for adoption, or death of a dependent.
(3) Employment status. Any event that changes the employment status of a Participant
or spouse or dependent, including termination or comrnencernent of employment, a
strike or lockout, the commencement or return from an unpaid leave of absence, a
change in worksite, and any other change in the employment status (e.g. changing
from union to non - union) of the Participant, spouse or dependent that results in any
one of these individuals gaining or losing eligibility under an accident or health plan,
a group term life insurance plan, or a dependent care assistance program, as
applicable.
(4) Dependent status. Any event that causes a Participant's dependent to satisfy or cease
to satisfy the eligibility requirements for coverage due to attainment of age or similar
circumstances.
(5) Residence. Any event that changes the place of residence of the Participant, his or
her spouse, or dependent.
(b) Special Enrollment Rights under HIPAA. If a Participant or dependent is entitled to a
special enrollment right under HIPAA with respect to group health plan that is subject to
HIPAA, the Participant may revoke the Participants election for coverage under such plan
during the Plan Year and make a. new election for the remaining portion of the Plan Year;
provided, however, that the new election is consistent with the applicable special enrollment
right and the applicable provisions of the Member Plan.
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(c) Judgments, decree or order. A Participant may change an election for accident or health
coverage if a judgment, decree or order (including a National Medical Support Notice)
resulting from a divorce, legal separation, annulment or change in legal custody requires
accident or health coverage for a Participant's child or fora foster child who is a dependent
of the Participant, such that the Participant may elect to provide coverage for the child if the
order requires coverage under the Participant's plan, or to cancel coverage for the child if the
order requires the Participant's spouse, former spouse or other individual to provide
coverage for the child. Unless eligible for coverage udder the continuation of coverage
provisions of the Plan, in no event shall an ex- spouse, legally separated spouse or ex- partner
of a civil union be covered under any Benefit Component.
(d) Medicare or 'Medicaid entitlement. A Participant may voluntarily cancel or reduce coverage
under accident or health plan for the individual who becomes eligible for Medicare or
Medicaid. Additionally, a Participant may commence or increase accident or health coverage
for the individual who loses eligibility for coverage under Medicare, or Medicaid.
(e) Consistency rule. For purposes of subsection (a), a benefit election change is consistent with
a change in status if the conditions described in subsections (1) or (2), as applicable, are
satisfied.
(1) Health Coverage. For election changes to the Health Care Reimbursement Benefit
Component and the Premium Conversion Benefit Component with respect to
accident or health coverage:
A. The change in status event affects the eligibility for coverage of the
Participant, spouse, or dependent for accident or health coverage under the
Plan, or under an accident or health plan sponsored by the employer of the
spouse or dependent; and
B. The election change corresponds with the gain or loss of coverage.
However, regardless of whether there is a gain or loss of coverage, if the
event causes the Participant, the Participant's spouse, or the Participant's
dependent to become eligible for continuation coverage under the
Employer's health plan pursuant to the Public Health Service Act ( "PHSA ")
or any similar state law, the Participant may elect to increase payments under
the Plan in order to pay for the continuation coverage.
(2) Dependent Care Coverage. For election changes to the Dependent Care Assistance
Program Benefit Component:
A. The change in status event affects the amount of Dependent Care Expenses
eligible for reimbursement; and
B. The election change corresponds with the gain or loss of coverage.
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(f) 30 -day limit. All election changes or revocations requested under this Section 3.6 shall be in
writing and submitted to the Plan Administrator within thirty (30) days of the applicable
event unless otherwise required by Applicable Law.
(g) Terms of other election changes. Notwithstanding this Section 3.6:
(1) It the provisions of Applicable Law and /or regulations require the Employer to
accept mid -year election changes under other circumstances, Applicable Law and /or
regulations will govern, without any amendment to this Plan.
(2) If the Internal Revenue Service issues supplemental guidance to liberalize or restrict
any of the conditions described above, the Employer may administer the Plan, in its
discretion, in accordance with such supplemental guidance, upon proper notification
to Participants.
ARTICLE IV —PLAN RECORDKEEPING
4.1 Payment of Benefits
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.
4.2 Accounts
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 specified by such Participant for each Benefit Component. The accounts are separate —
money credited to the Premium Conversion Benefit Component may be used only for premium
payments to a Member Plan; money from the HCCRP may not be used to pay for dependent care
expenses, money from the DCAP may not be used to pay for health care expenses, and money may
not be transferred from one account to the other.
ARTICLE V—BENEFITS AND METHOD OF FUNDING
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 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 amounts, may be limited by the Plan Administrator for certain
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Participants in accordance with the nondiscrimination requirements contained in the Code
including, without limitation, sections 105, 125, and 129.
5.3 Method of Funding
All amounts payable under the Plan shall be paid from the general assets of the Employer. The
maximum contribution that may be made under the Plan for a Participant is the total of the
maximum amount that may be elected in the Salary Reduction election, the Opt -Out Contribution,
Employer contributions in respect of its portion of premiums for coverage under the Premium
Conversion Benefit Component and Participant contributions for the City of Downey Flexible
Benefits Plan Health Care Reimbursement Program and Dependent Care Assistance Program.
ARTICLE VI PLAN ADMINISTRATION
6.1 Power
The Employer has full discretionary authority to administer and interpret the Plan, including
discretionary authority to make findings of fact, to determine eligibility for participation and for
benefits under the plan, to correct errors, and to construe ambiguous terms. The Employer may
delegate its discretionary authority and such duties and responsibilities as it deems appropriate to
facilitate the day -to -day administration of the Plan and, unless the Employer provides otherwise,
such a delegation will carry with it the full discretionary authority to accomplish the delegation.
Determinations by the Employer or the Employer's delegate will be final and conclusive upon all
persons. The powers of the Employer include, but are not limited to, the following:
(a) To make and enforce such rules and regulations as it shall deem necessary or proper for the
efficient administration of the Plan;
(b) To employ and appoint actuaries, attorneys, accountants, consultants, and other experts; and
(c) To perform any other necessary or proper functions in the operation of the Plan.
6.2 Protected Health Information
The Plan may disclose Protected Health Information ( "PHI'') to employees of the Employer with
employee benefits responsibility or to employees with oversight responsibility for third party
administrator claims administration. Access to and use of PHI by such individuals must be
restricted to Plan Administration functions that the plan sponsor performs for the Plan. The
applicable claims procedures under the Plan shall be used to resolve any issues of non - compliance
by such individuals. The Employer will:
(a) not use or further disclose PHI other than as permitted by the plan documents or as
required by law;
(b) ensure that any agents or subcontractors to whom it provides PHI received from the Plan
agree to the same restrictions and conditions that apply to the Employer;
11
City of Downey Flexible Benefits Plan- -Plan Document
10/01/2012
(c) not use or disclose PHI for employment- related actions or in connection with any other
employee benefit plan;
(d) report to the Plan any use or disclosure of the information that is inconsistent with the
permitted uses or disclosures;
(e) make available to Plan Participants, consider their amendments and, upon their request,
provide them with an accounting of PHI disclosures;
(f) make its internal practices and records relating to the use and disclosure of PHI received
from the Plan available to the Department of Health and Human Services upon request; and
(g) if feasible, return or destroy all PHI received from the Plan that the Employer still maintains
in any form and retain no copies of such information when no longer needed for the
purposes for which the disclosure was made, except that, if such return or destructions is not
feasible, limit further uses and disclosures to those purposes that make the return or
destruction of the information infeasible.
ARTICLE VII— CLAIMS AND APPEALS PROCEDURES
7.1 Claims Procedures
(a) The Plan Administrator shall notify each Participant of such individual's entitlement to
receive benefits under this Plan and shall provide appropriate forms on which application
for such benefits rna be made.
(b) Each Participant claiming a benefit under the Plan must complete and file such application
forms with the Plan Administrator no later than the last day of the Run -Out Period. The
Plan Administrator shall review all applications for benefits. It shall notify the claimant in
writing of its decision within ninety (90) days of receipt of the application. If special
circumstances require any extension of time (not to exceed ninety (90) days) for processing
the claim, the Plan Administrator must notify the claimant in writing of the extension prior
to the expiration of the initial ninety (90) -day period.
(c) Any denial by the Plan Administrator of a claim for benefits shall be stated in writing and
delivered to the Participant. The notice shall state clearly in language calculated to be
understood by the Participant without legal counsel:
(1) The specific reason(s) for the Administrator's decision,
(2) References to the pertinent Plan sections,
(3) What additional material or information the Participant must provide so the Plan
Administrator will reconsider the claim or pay premiums from the Participant's
account; and
12
City of Downey- Flexible Benefits Plan - -Plan -ocument
-10/01/2012
(4) The Plan's appeals procedures.
7.2 Appeal and Review Procedure
(a) If a claim has been denied by the Plan Administrator, the claimant may appeal the denial
within sixty (60) days after receipt of written notice thereof or within sixty (60) days
following the time period stated in Section 7.1 if no response has been received within such
period by submitting in writing to the Plan Administrator a request for review of the denial
of claim. A claimant also may have representation, may submit a written statement of issues
and comments concerning the claim and may request an opportunity to review the Plan and
any other pertinent documents. If so requested, the Plan Administrator shall make these
available to the claimant within thirty (30) days after its receipt of a copy of the request, at a
convenient location during regular business hours.
(b) If a claimant appeals, the Plan Administrator, operating pursuant to its discretionary
authority to administer and interpret the Plan, and to determine eligibility for benefits under
the terms of the Plan, shall render its final decision, with the specific reasons therefore in
writing, and transmit it to the claimant by certified mail within sixty (60) days of its receipt of
the request for review. If special circumstances require an extension of time, written notice
of the extension shall be given to the Participant before the end of the original sixty (60) day
period, and a decision shall be rendered as soon as possible, but not later than one hundred
and twenty (120) days after receipt of the request for review.
7.3 Notices
Notices and documents relating to the Plan may be delivered, or mailed by registered mail, postage
prepaid, to the Plan Administrator:
City of Downey
1111 Brookshire Boulevard
Downey, CA 90241-7016
Telephone: (562) 904 -7292
Attn: Human Resources Director
Any notice required under the Plan may be waived by the person entitled to notice.
7.4 Evidence
Evidence required of anyone under the Plan may be by certificate, affidavit, document or other
information which the person acting on it considers pertinent and reliable. The evidence may be
signed, made or presented by the party or parties.
13
City of Downey— Flexible Benefits Plan—Plan Document
10/01/'2012
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 Plan
and the Participants, unless paid by the Employer.
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.
14
City of Downey Flexible Benefits Flan- -Plan Docent
10x'01/2012
ARTICLE IX AMENDMENT AND TERMINATION
9.1 Amendment
The Council or its delegate may amend in writing any part or all of the Plan or any contract
providing benefits with the agreement of the insurance company or service company at any time
from time to tune. The Council 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 contact with an insurer or other service provider may be terminated at any time by
action of the Council or its delegate on behalf of the Employer.
9.3 Applicable Law
The Council or its delegate reserves the right to terminate or amend the Plan at any time and for any
reason including such amendments as may be necessary to make the Plan compliant with Applicable
Law.
ADOPTION OF THE PLAN
As evidence of its adoption of the City of Downey Flexible Benefits Plan, the City Council of the
City of Downey has caused this instrument to be signed by its delegate thereunder duly authorized
this day of 2012.
For: [Insert name]
By:
(Sign name) (Date)
Its:
(Title)
15
City of Downey— Flexible Benefits Plan - -Plan Docurent
10/01/2012
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY
PLEASE SIGN BELOW TO ACINOLEDGE YOUR ACCEPTANCE OF
RESPONSIBILITY FOR THE CONTENTS OF THIS DOCUMENT AND RETURN THIS
SIGNED FORM AND A COPY OF THE SIGNED PLAN DOCUMENT TO:
Keenan & Associates
2355 Crenshaw Blvd., Suite 200
Torrance, CA 90501
Attention: Gerard A. Healy
The Plan Sponsor recognizes that it has full responsibility for the contents of the employee benefit
document attached hereto and that, while Keenan & Associates, its employees and /or
subcontractors, may have assisted in the preparation of the document, it is the Plan Sponsor who is
responsible for the final text and meaning. The Plan Sponsor further certifies that the document has
been fully read, understood, and describes its intent with regard to the employee benefit plan.
Plan Sponsor: City of Downey
By:
Authorized Representative of Plan Sponsor
Attachment: Flexible Benefits Plan — Plan Document
THE ATTACHED EMPLO Y EE BENEFIT DOCUMENT IS NOT INTENDED AS
LEGAL ADVICE.
16
City of Downey- Flexible Benefits Plan- -Flan D ocument
100/01/2012
CITY OF DOWNEY FLEXIBLE
BENEFITS PLAN
APPENDIX "A"
Premium Conversion
Benefit Component
EFFECTIVE OCTOBER 1, 2012
City of Downey-Fleble Benefits F12n--Plan Document-App. "A"
Contents
SECTION A1— DEFINITIONS 1
SECTION A2— ELIGIBILITY AND PARTICIPATION 2
A2.1 Participation 2
A2.2 Termination of Participation 2
SECTION A3— RECORDKEEPING 2
A3.1 Salary Reduction 2
A3.2 Time for Salary Reductions 2
A3.3 Change in Elections 2
A3.4 Unpaid Leaves of Absence 3
SECTION A4— BENEFITS 5
A4.1 Plan Benefits . . . 5
A4.2 Limit on the Amount of Salary Reduction to be Credited to the Premium
Conversions 5
EXHIBIT A— MEMBER PLANS • 6
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY 7
City of Downey - Flexible. Benefits Ptdn - -Plan Document -App. "A
10/01 / 2012
SECTION Al DEFINITIONS
All terms in the City of Downey Flexible Benefits Plan Document apply to this Premium
Conversion Benefit Component (`Premium Conversion''), as well as the following additions.
Dependent - Any individual who meets the definition of Dependent in a Member Plan in which the
Eligible Employee participates.
Eligible Employee - An employee who is eligible to participate in at least one of the Member
Plans.
Member Plan - A separate written plan maintained by the Employer that provides health care or
reimbursement for certain benefits including medical, hospital, dental and vision. Such Member
Plans are listed in Exhibit A, which may be amended without necessity for other amendment of this
Plan. The terms of the relevant plan documents shall govern the operation of the Member Plans,
and in case of any conflict between the terms of a Member Plan and this Premium Conversion
Benefit Component, the terms of the Member Plan shall govern. The terms of each Member Plan
are incorporated into the Plan by reference as though fully set forth herein. Existing Member Plans
may be discontinued or amended and new plans added at any time by the Employer by amendment
to the Plan or this Appendix.
All claims for benefits under a Member Plan must be made in accordance with the procedures set
forth in such Member Plan. Claims under the Plan, including this Benefit Component, must be
made in accordance with the procedures set forth in Article VII of the Plan.
Member Plan Premium - The amount an Eligible Employee is required to pay as a condition of
coverage under the Member Plan(s) to which Eligible Employees and Dependents, if any, are
entitled to participate. This amount is determined by the Employer.
Period of Coverage - The twelve -month period during which the Eligible Employee is entitled to
receive coverage under one or more Member Plans. The Period of Coverage under this Premium
Conversion shall be the period beginning January 1 and ending December 31 except:
(a) For the first Plan Year only, the Period of Coverage shall be the period from October 1,
2012 through December 31, 2012, and for a Participant who first becomes covered by a
Member Plan after October 1, 2012 shall begin on the date the employee first becomes
covered by a Member Plan, unless otherwise prohibited under the Code and applicable
regulations, and shall end on December 31, 2012. The initial Period of Coverage may be
different for the various Member Plans.
(b) The Period of Coverage for a Participant who first becomes covered by a Member Plan after
January 1 shall begin on the date the employee first becomes covered by a Member Plan,
unless otherwise prohibited under the Code and applicable regulations, and shall end on the
following December 31. The initial Period of Coverage may be different for the various
Member Plans.
1
City of Downey - Flexible Benefits Plan- -Flan Document-App. "A"
10/01/2012
(c) The Period of Coverage for a Participant shall end prior to December 31 if and when
participation in all applicable Member Plans terminate.
Premium Conversion Benefit Component ( "Premium Conversion ") - The City of Downey
Flexible Benefits Plan Premium Conversion Benefit Component of the Plan.
SECTION A2 ELIGIBILITY AND PARTICIPATION
A2.1 Participation
Each Eligible Employee may elect to participate upon election of coverage under a Member Plan
with a Member Plan Premium and to have the Member Plan Premium paid under the Premium
Conversion in lieu of an equal amount of compensation in accordance with Article III of the Plan.
A2.2 Termination of Participation
Participation in this Premium Conversion shall terminate on the earliest of the last day of the Plan
Year, or termination date of this Premium Conversion, or the date on which coverage for the
Participant in all applicable Member Plans terminates.
SECTION A3 RECORDKEEPING
A3.1 Salary Reduction
The election by an Eligible Employee to be covered by a Member Plan is the election of Salary
Reduction. Each Participant will be deemed to have made a written Salary Reduction election to
have his or her annual compensation reduced, but not below zero, by the amount of Member Plan
Premium such Participant is required to pay. The amount of elected Salary Reduction will
automatically change up or down as a result of third -party changes in the Member Plan Premium
which reflect changes in the cost of a. Member Plan.
A3.2 Time for Salary Reductions
(a) The Salary Reduction for a Participant of the Premium Conversion shall begin on the first
day of the first payroll period of the Plan Year.
(b) The Salary Reduction for an individual hired after the beginning of the Plan Year shall begin
as soon as administratively practicable, but in no event earlier that the first payroll period
after the election has been made or deemed made.
(c) The Salary Reduction shall end on the last day of the Period of Coverage.
A3.3 Change in Elections
A Participant's Salary Reduction election under this Premium Conversion Benefit Component for
any Plan Year may not be changed after the Open Election Period, except:
(a) Changes may be made which comply with the circumstances described in Section 3.6 of the
Plan.
2
City of Downey — Flexible Benefits Plan- -Flan Doc=ent —.app. - A"
10./01/2012
(b) If there is a significant curtailment or cessation of coverage under a Member Plan, or if the
Employer adds or eliminates a Member Plan mid -year, a Participant may make an election
change in accordance with the Code and applicable regulations. (For example, if there is an
overall reduction in a Member Plan's coverage so as to reduce coverage to Participants in
general, Participants enrolled in that Member Plan may revoke their elections and make a
prospective election for coverage under another Member Plan providing similar coverage.
Additionally, if the Employer adds a new Member Plan mid -year, Participants may drop
existing Member Plan coverage and enroll in the new Member Plan providing similar
coverage.)
(c) If there is a significant increase in the Member Plan Premium, a Participant shall be deemed
to have made a corresponding change in the amount of his or her election, unless the
Participant affirmatively revokes his or her election and elects to receive on a prospective
basis coverage under another Member Plan with similar coverage.
(d) Any change in Member Plan cost that is not significant shall result in an automatic
prospective increase or decrease, as applicable, in affected Participant's Salary Reduction
elections.
(e) If a Participant's dependent, spouse or former spouse changes his or her election during an
open enrollment period applicable to a plan sponsored by the dependent's or spouse's
employer that differs from the open enrollment period applicable to the Member Plans, or
for any other event permitted under the Code and applicable regulations, a Participant may
- - - make a corresponding election change.
(f) A Participant may revoke an election for Member Plans providing health coverage and make
a new election, within thirty (30) days of the applicable event, in any situation governed by
the special enrollment rules of the Health Insurance Portability and Accountability Act of
1996.
A3.4 Unpaid Leaves of Absence
(a) FMLA 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), may continue to
receive benefits under Member Plans that provide medical, dental and vision benefits during
the leave. Under such circumstances:
(1) Except as provided under subsection (2) below, Member Plan Premiums 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
which 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.
3
City of Downey -Flexible Benefits Plan- -Plan Document -App. "A"
10/01/2012
(2) In the event that the Participant fails to pay Member Plan Premiums in accordance
with subsection (1) above, and the Employer continues providing medical, dental
and vision benefits to the Participant during the leave, Member Plan Premiums must
be made by the Participant through a lump sum Salary Reduction payment or on
after -tax basis upon return from the leave, subject to the conditions specified in
subsection (3) below.
(3) For purposes of subsection (2) above, the employer and Participant must agree in
advance of the leave period that the Employer will assume responsibility for
advancing payment of the Member Plan Premiums during the leave, that the
Participant elects to continue medical, vision and dental benefits while on unpaid
leave, and that the Member Plan Premiums will be paid by the Participant when the
Participant returns from the leave.
(b) USERRA Leaves
(1) A Participant who goes on an unpaid military leave of absence under the Uniformed
Services Employment and Reemployment Rights Act ( USERRA) may continue to
receive benefits under Member Plans that provide medical, dental and vision benefits
during the USERRA leave until the earlier to occur of:
(A) The day after the date on which the Participant fails to return to
employment, as described in USERRA ([United States Code Chapter 43 of
Title 38); or .�---
(B) Twenty four (24) months from the date of cornmencement of the USERRA
leave.
(2) If the USERRA leave is thirty one (31) days or longer, Participants may be required
to pay up to one hundred and two percent (1029/0) of the Member Plan Premium. If
the USERRA leave is for less than thirty one (31) days, the Member Plan Premium
will remain the same a.s when the Participant was actively employed. Member Plan
Premiums must be paid by the Participant on an after -tax basis to the Employer
during the USERRA leave or, if the Participant so elects, through a lump sum Salary
Reduction payment before the USERRA leave commences.
4
City of Downey—Flexible Benefits Plan - -Plan Document App. "A"
10x'01/2012
SECTION A4 BENEFITS
A4.1 Plan Benefits
Salary Reduction amounts shall be applied to pay the amount of any Member Plan Premium for
Participant and /or Dependent coverage which may include continuation coverage under the PHSA
payable by a Participant each payroll period during the Period of Coverage.
A4.2 Limit on the Amount of Salary Reduction to be Credited to the Premium
Conversions
The total annual benefit under the Premium Conversion for a Participant shall not exceed the total
of all Member Plan Premiums for Member Plans in which the Participant is enrolled.
5
City of Downey— Flexible Benefits Plan- -Plan Document —App. "A"
10/01/2012
EXHIBIT A—MEMBER PLANS
TO THE CITY OF DOWNEY
PREMIUM CONVERSION BENEFIT COMPONENT
Member Plans included in the Premium Conversion Benefit Component are listed below, subject to
change as provided in Section Al under the definition of Member Plan.
1. CALPERS Health Plans administered under the Public Employees Medical Hospital Care
Act (PEMHCA) and Kaiser Perrnanente HMO Health Plan (only for Downey City Employee's
Association - Maintenance Unit)
2. City of Downey Dental Programs: Currently offering a PPO and DHMO Dental Plan
3. City of Downey - Voluntary Benefits Prograrn
Effective Date: October 1, 2012
6
City of Downey- Flexible Benefits Flan- -Plan Doc -app. "A"
10/01/2012
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY
PLEASE SIGN BELOW TO ACKNOWLEDGE YOUR ACCEPTANCE OF
RESPONSIBILITY FOR THE CONTENTS OF THIS DOCUMENT AND RETURN THIS
SIGNED FORM AND A COPY OF THE SIGNED PLAN DOCUMENT TO:
Keenan & Associates
2355 Crenshaw Blvd., Suite 200
Torrance, CA 90501
Attention: Gerard A. Healy
The Plan Sponsor recognizes that it has full responsibility' for the contents of the employee benefit
document attached hereto and that, while Keenan & Associates, its employees and /or
subcontractors, may have assisted in the preparation of the document, it is the Plan Sponsor who is
responsible for the final text and meaning. The Plan Sponsor further certifies that the document has
been fully read, understood, and describes its intent with regard to the employee benefit plan.
Plan Sponsor: City of Downey
By:
Authorized Representative of Plan Sponsor
Attachment: Flexible Benefits Plan — Plan Document Appendix A
THE ATTACHED EMPLOYEE BENEFIT DOCUMENT IS NOT INTENDED AS
LEGAL ADVICE.
7
City of Dumey— Flexible Benefits P1.1- -Plan Document —App. "A"
10x'01/2012
CITY OF DOWNEY
FLEXIBLE BENEFITS PLAN
APPENDIX "B"
Health Care Reimbursement Program
Benefit Component
EFFECTIVE JANUARY 1, 2013
City of Downey—Flexible Benefits Flan--IThan Dociament—App. "F'
Contents
SECTION B1— DEFINITIONS 1
SECTION B2 —PLAN PARTICIPATION 3
132.1 Election for Participation 3
B2.2 Limit on Amount ... . 3
B2.3 Termination of Participation 3
SECTION B3— RECORDKEEPING . 3
B3.1 Health Care Reimbursement Program Subaccount 3
B3.2 Continuation of Required Contributions upon Separation from Service 3
83.3 Experience Gains .. 3
133.5 Unpaid Leaves of Absence 4
SECTION B4— BENEFITS 5
B4.1 Plan Benefits 5
84.2 Incurred Medical Care Expenses 5
B4.3 Maximum Reimbursement .. 5
134.3 Coordination of Benefits 5
SECTION B5— CLAIMS PROCEDURES 6
B 5.1 Claim substantiation 6
135.2 General Reimbursement Procedures . 6
B5.3 Claims Denied 7
SECTION Bb— CONTINUATION COVERAGE . 7
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY 8
City of Downey— Flexible Benefits Plan - -Plan Document —App. "P"
10/01/2012
SECTION B1 DEFINITIONS
All terms in the City of Downey Flexible Benefits Plan Document apply to this Health Care
Reimbursement Program Benefit Component ( "HCRP "), as well as the following additions.
Dependent - A Participant's spouse not legally separated from the Participant. "Dependent" also
includes (1) any individual who is a tax dependent of the Participant as defined in section 152 of the
Code, determined without regard to subsections (b) (1), (b) (2) and (d) (1) (B) thereof; (ii) any child (as
defined in section 152(0)(1) of the Code) who, at the end of the taxable year, has not attained age 27
and (iii) any child to whom Internal Revenue Service Rev. Proc. 2008 -48 applies (regarding certain
children of divorced or separated parents who received more than half of their support for the
calendar year from one or both parents and are in the custody of one or both parents for more than
half of the calendar year) is treated as a dependent of both parents. A Dependent also includes a
Participant's child for whom he or she is responsible to provide health coverage pursuant to a
National Medical Support Notice or similar coverage order made under Applicable Law.
Note: Because domestic partners are generally not considered eligible dependents by the
Internal Revenue Service, the HCRP may not be used for any expenses incurred on behalf
of a domestic partner or a domestic partner's children unless they qualify as dependents for
federal tax purposes and under the terms of this Plan.
Experience Gain - The excess of Required Premiums paid and income (if any) of the Plan over the
Plan's total claims reimbursements and reasonable administrative costs for the Plan Year.
Health Care Reimbursement Program Benefit Component (HCRP) - The City of Downey
Flexible Benefits Plan Health Care Reimbursement Program Benefit Component of the Plan.
Maximum Reimbursement - The total amount of coverage that is elected by the Participant to be
credited to the HCRP subaccount for the Period of Coverage in accordance with Article III of the
Plan.
Minimum Reimbursement -The minimum amount of coverage that may be elected by the
Participant to be credited to the HCRP subaccount for the Period of Coverage.
Period of Coverage - The Plan Year during which Qualifying Medical Care Expenses incurred by a
Participant are eligible for coverage under the HCRP, including the Grace Period, except:
(a) The Period of Coverage for a Participant who becomes eligible after January 1 shall begin on
the date the Eligible Employee first becomes a Participant, as described in Section 2.2(a)(2),
and shall end on the last day of the Plan Year.
(b) 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 3.6 shall begin on the date the
Eligible Employee first becomes a Participant, as described in Section 2.2(a)(3), and shall end
on the last day of the Plan Year.
1
City of Downey- Flexible Benefits Plan- -Plan Doc nest -.App_ "E''
10/01/2012
(c) The Period of Coverage for a Participant shall end prior to the end of the Period of
Coverage if the Participant fails, at any time, to pay Required Premiums, or if participation
otherwise terminates for any other reason.
Qualifying Medical Care Expenses
(a) Expenses incurred for medical care within the meaning of the term "medical care' under
Code section 213(d) and the regulations thereunder, except as otherwise provided in
subsection (b), including deductible and co- insurance payments:
(1) For which there is no reimbursement pursuant to any medical policy or program,
(2) Which have been incurred by or on behalf of a Participant or Dependent, during the
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;
(3) Expenses not permitted to be reimbursed from the I-TCRP under Applicable Law;
(4) Expenses not verifiable under Section B5.1 of this HCRP; or
(5) Medicines or drugs that are available without a prescription (``over- the - counter
drugs ") and purchased without a prescription.
Required Contribution - 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 Contribution for each payroll period. In the event that a Participant changes the
Maximum Reimbursement amount during the Period of Coverage as permitted under Section 3.6 of
the Plan, that Required Contribution following the change will be determined in accordance with
administrative procedures developed by the Plan Administrator for that purpose.
2
City of Do Flexible Benefits Pian - -Plan Document —App. `L"
10/01/2012
SECTION B2 —PLAN PARTICIPATION
132.1 Election for Participation
An Eligible Employee may elect to participate in the HCRP by submitting annually an election form
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. Unless an exception
applies as described in Section 3.6 of the Plan, such election is irrevocable for the duration of the
Period of Coverage to which it relates.
B2.2 Limit on Amount
Beginning January 1, 2013, the Maximum Reimbursement shall not exceed $2,500.00 during the
Period of Coverage, as indexed for the cost of living for years after December 31, 2013. The Plan
Administrator may implement any increases without further amendment.
B2.3 Termination of Participation
Participation in this HCRP shall terminate on the earliest of the last day of the period for which the
last Required Contribution is paid to the HCRP, the date participation in the Plan terminates, or the
end of the Plan Year, unless participation in suspended pursuant to Section 2.5 of the Plan. In the
event of fraud or intentional misrepresentation of a material fact, participation in the Plan shall
terminate retroactively, provided that at least 30 days advance written notice of a right to rescind for
fraud or misrepresentation is furnished to the Participant.
SECTION 133—RECORDKEEPING
B3.1 Health Care Reimbursement Program Subaccount
Each Participant's Required Contribution will be considered paid to the HCRP bookkeeping
subaccount on the date on which it is credited to the HCRP bookkeeping subaccount.
B3.2 Continuation of Required Contributions upon Separation from Service
.A Participant who terminates employment or reduces his /her hours resulting in loss of eligibility
under the HCRP during the Period of Coverage may immediately elect to continue participation
under this HCRP pursuant to Section B6.
If the Participant fails to make Required Contributions under this HCRP, the Period of Coverage
for the Participant shall end as of the end of the period for which Required Contributions were last
paid.
B3.3 Experience Gains
It the Plan has an Experience Gain with respect to a Plan Year, such Experience Gain shall be
returned to the general assets of the Employer (to the extent permitted by Applicable Law); or used
to defray the expenses of Plan administration.
3
City of Downey Flexible Benefits. Flan -Tian Document -App. `B"
10/01/2012
B3.4 Change in Elections
A Participant's Salary Reduction election is irrevocable, except under the circumstances described in
Section 3.6 of the Plan.
B3.5 Unpaid Leaves of Absence
(a) FN'1LA 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 FMLA, may continue to participate during the leave and to receive benefits
for Qualifying vledical Expenses incurred during the remainder of the Period of Coverage.
Under such circumstances, Required Contributions 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 which equals the remaining required Salary
Reduction for the lesser of the balance of the Period of Covera.ge or the length of the unpaid
leave of absence.
(b) USERRA Leave s
(1) A Participant who goes on an unpaid military leave of absence under the Uniformed
Services Employment and Reemployment Rights Act ( USERRA) may continue to
participate during the USERRA leave until the earlier to occur of:
(A) The day after the date on which the Participant fails to return to
employment, as described in USERRA (United States Code Chapter 43 of
Title 38); or
(B) Twenty four (24) months from the date of commencement of the USERRA
leave.
(2) If the USERRA leave is thirty one (31) days or longer, Participants may be required
to pay up to one hundred and two percent (102 %) of their Required Contributions.
If the USERRA leave is for less than thirty one (31) days, Participant's Required
Contributions will remain the same as when the Participant was actively employed.
Required Contributions must be paid by the Participant on an after -tax basis to the
Employer during the USERRA leave or, if the Participant so elects, through a lump
sum Salary Reduction payment before the USERRA leave commences.
(c) If, after going on an unpaid leave of absence, the Participant fails to make Required
Contributions under this HCRP, the Period of Coverage for the Participant shall end as of
the period for which Required Contributions were last paid.
(d) Upon return from FMLA leave or USERRA leave during which the Participant fails to make
Required Contributions under this HCRP, active participation shall be reinstated upon
returning to employment and shall resume according to the Participant's most recent
election, subject to any changes permitted pursuant to Section 3.6.
4
City of Downey— Flexible Benefits Plan- -Plan Document —App. "E"
10/01/2012
SECTION B4 BENEFITS
B4.1 Plan Benefits
During the Period of (overage the HCRP shall reimburse Participants for Qualifying Medical Care
Expenses up to the Maximum Reimbursement amount which is submitted as required by Section
B4.3.
B4.2 Incurred Medical Care Expenses
Reimbursement may only be made for Qualifying Medical Care Expenses which are incurred during
the Period of Coverage and for which claim forms are timely submitted in accordance with Section
B5. 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) Such expenses are incurred before the later of the first day of the Plan Year or the date on
which the Participant first becomes enrolled under the HCRP; or
(b) Such expenses are incurred after participation has terminated under this HCRP.
B4.3 Maximum Reimbursement
The 11/1axirnum Reimbursement elected by the Participant under the HCRP 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 Contributions for coverage under the HCRP have been paid.
Similarly, the payment schedule for the Required Contributions for coverage under the HCRP shall
not be based on the rate or amount of incurred Qualifying Medical Expenses during the Period of
Coverage.
Reimbursement shall be made within thirty (30) days of submission of the claim or as soon as
administratively practicable after receipt of each claim form. Except for the final reimbursement at
the conclusion of the Period of Coverage, no claim for reimbursement may be made unless and until
the aggregate claims for reimbursement are at least $25.00 or such other minimum amount as
determined by the Plan Administrator, consistent with Applicable Law.
B4.3 Coordination of Benefits
The HCRP is intended to pay benefits solely for Qualifying Medical Care Expenses not previously
reimbursed or reimbursable elsewhere. Accordingly, the HCRP shall not be considered a group
health plan for coordination of benefits purposes, and HCRP benefits shall not be taken into
account when determining benefits payable under any other plan.
5
City of Downey— Fleiible Benefits Flan- -Flan Document—App. " L„
10x'01/2012
SECTION B5 CLAIMS PROCEDURES
In addition to the provisions outlined in the Sections below, the claims procedures in Article VII of
the Plan shall apply for this HCRP as well.
B5.1 Claim substantiation
(a) The HCRP shall reimburse a Qualifying Medical Care Expense only if the Participant
provides a written statement, provided in the timeframe set forth in Section B5.2(c), in a
form as the Plan Administrator may prescribe, setting forth (1) the person or on whose
behalf Qualifying Medical Care Expenses have been incurred; (2) the nature and date of the
expenses so incurred; (3) the amount of the requested reimbursement (4) a statement that
such expenses have not otherwise been reimbursed and are not reimbursable through any
other source; and (5) any other information as may be required under Applicable Law.
(b) Claim forms shall be accompanied by bills, invoices, other statements from an independent
third party, or, in the case of over- the - counter drugs, the prescription (or copy thereof) or
customer receipt that identifies the purchaser and Rx number and, if not accompanied by
proper documentation, may be returned to the Participant by the Plan Administrator for
further documentation. Each Participant who fails to supply additional documentation
within sixty (60) days of the Plan Administrator's request shall have the claim automatically
denied. No Participant shall have any rights or be entitled to any reimbursement under the
HCRP unless a claim forrn is submitted as specified.
B5.2 General Reimbursement Procedures
(a) All benefits shall be payable or provided under this Section for the Period of Coverage only
with respect to periods during which the Eligible Employee is a Participant. Participants
may request reimbursement by submitting a claim form to the Plan Administrator. The Plan
Administrator shall review and process each claim form submitted to determine whether (a)
the expenses for which reimbursement is sought appear to be Qualifying Medical Care
Expenses, and (b) the request is accompanied by any required documentation. The Plan
Administrator shall not be responsible for undertaking any independent inquiry into the
truth of statements made in the Participant's claim form.
(b) If any balance remains in the Participant's HCRP subaccount for a Period of Coverage, after
all reimbursements have been made, such balance shall be forfeited.
(c) Qualifying Medical Care Expenses shall not be reimbursed for any Period of Coverage
unless the Participant applies for such reimbursement on or before the last day of the Run -
Out Period.
(d) No Cash -Out or Conversion. Prior Plan Year HCRP subaccount amounts may not be
cashed out or converted to any other taxable or nontaxable benefit.
6
City ofDoumey— Flexible Benefits Plan- -Plan Document —App. "T"
10 /01 /2012
The Plan Administrator may request any reasonable information needed to substantiate a claim.
B5.3 Claims Denied
For reimbursement claims that are denied, see the appeals procedure in Article VII of the Plan
Document.
SECTION B6 CONTINUATION COVERAGE
Notwithstanding any provision contrary in the Plan, to the extent required under the PHSA, a
Participant and his Spouse and Dependents, whose coverage terminates under the HCRP because of
a qualifying event, shall be given the opportunity to continue coverage under the HCRP on an after-
tax basis for the periods prescribed by the PHSA if applicable (subject to all the conditions and
limitations of the PHSA). Specifically, such individuals will be eligible for continuation coverage
only if, under Section 13.4.7 they have a positive HCRP subaccount balance at the time of the
qualifying event (taking into account all claims submitted before the date of the qualifying event).
Such individuals will be notified if they are eligible for continuation coverage. If elected,
continuation coverage will be available only for the Plan Year in which the qualifying event occurs.
Continuation coverage will cease at the end of the Plan Year and cannot be continued for the next
Plan Year.
Coverage under this HCRP shall be extended and financed in accordance with the administrative
procedures that have been adopted by the Employer to comply with Applicable Law and that are
applicable to the health plans sponsored by the Employer.
If Applicable Law requires that continuation coverage be extended, financed, or offered under this
HCRP in a different manner, the HCRP shall be deemed amended to comply with the minimum
requirements of Applicable Law and shall be administered in accordance thereof. This provision is
not intended to implement changes in Applicable Law any earlier than the latest date required by
such law.
7
City of Downey - Flexible Benefits Plan - -Pian Doclunent -App. `B"
10/01/2012
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY
PLEASE SIGN BELOW TO ACKNOWLEDGE YOUR ACCEPTANCE OF
RESPONSIBILITY FOR THE CONTENTS OF THIS DOCUMENT AND RETURN THIS
SIGNED FORM AND A COPY OF THE SIGNED PLAN DOCUMENT TO:
Keenan & Associates
2355 Crenshaw Blvd., Suite 200
Torrance, CA 90501
Attention: Gerard A. Healy
The Plan Sponsor recognizes that it has full responsibility for the contents of the employee benefit
document attached hereto and that, while Keenan & Associates, its employees and/or
subcontractors, may have assisted in the preparation of the document, it is the Plan Sponsor who is
responsible for the final text and meaning. The Plan Sponsor further certifies that the document has
been fully read, understood, and describes its intent with regard to the employee benefit plan.
Plan Sponsor: City of Downey
By:
Authorized Representative of Plan Sponsor
Attachment: Flexible Benefits Plan — Plan Document Appendix B
THE ATTACHED EMPLOYEE BENEFIT DOCUMENT IS NOT INTENDED AS
LEGAL ADVICE.
8
City of Downey — Flexible Benefits Plan - -Plan Doclunent —App. "B"
10/01/2012
CITY OF DOWNEY
FLEXIBLE BENEFITS PLAN
APPENDIX "C"
Dependent Care Assistance Program
Benefit Component
EFFECTIVE JANUARY 1, 2013
City of Downey-Flexible Benefit, D OC =en ---App "C"
Contents
SECTION C1— DEFINITIONS 1
SECTION C2 —PLAN PARTICIPATION ..... 2
C2.1 Election for Participation 2
C2.2 Termination of Participation 2
C3.1 Eligible Dependent Care Expenses 3
C3.2 Exclusions 3
SECTION C4 —PLAN RECORDKEEPING ., 4
C4.1 D CAP Subaccount 4
C4.2 Limit on amount Credited to DCAP Subaccount 4
C4.3 Experience Gains 4
C4.4 Change in Elections 4
SECTION C5— BENEFITS 5
C5.1 Plan Benefits 5
C5.3 Reimbursement Rules 5
C5.4 Annual Statement of Benefits 6
SECTION C6— CLAIMS PROCEDURES 6
C6.1 Claims Substantiation 6
C6.2 Claims Denied 7
C6.3 Documentation Processing 7
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY 8
City of Downey— Flexible Benefits Plan —Plan L octunent —App. "C"
10/01/2012
SECTION C1 DEFINITIONS
All terms in the Plan apply to this Dependent Care Assistance Program Benefit Component
( "DCAP "), as well as the following additions.
Dependent - An individual who is a "Qualifying Individual' as follows:
(a) A tax dependent of the Participant as defined in Code section 152 who is under the age of
13 and is a qualifying child as defined in Code section 152(a)(1); or
(b) A tax dependent of the Participant as defined in section 152, without regard to subsections
(b)(1), (b)(2), and (d)(1)(B) thereof, who is physically or mentally incapable of self -care and
who has the same principal place of abode as the Participant for more than half of the year;
or
(c) The spouse of a Participant who is physically or mentally incapable of self-care and has the
same principal place of abode as the Participant for more than halt of the year.
(d) In the case of divorced or separated parents, a Qualifying Individual who is a child, as
provided in Code section 21(e)(5), shall be treated as a Qualifying Individual of the custodial
parent and shall not be treated as a Qualifying Individual with respect to the non - custodial
parent.
Note: Because domestic partners are generally not considered eligible dependents by the
Internal Revenue Service, the DCAP may not be used for any expenses incurred on behalf of
a domestic partner or a domestic partner's children unless they qualify as dependents for
federal tax purposes and under the terms of this Plan.
Dependent Care Assistance (DCAP) Contributions - The total amount of Salary Reduction
elected by the Participant to be directed to the Dependent Care Assistance subaccount.
Dependent Care Assistance Program Benefit Components (DCAP) - The City of Downey
Flexible Benefits Plan Dependent Care Assistance Program Benefit Component of the Plan.
Dependent Care Center - A facility which:
(a) Receives a fee, payment or grant for providing services for any of the individuals (regardless
of whether such facility is operated for profit); and
(b) Provides care for more than six individuals (other than individuals who reside at the facility).
Dependent Care Expenses - The expenses specified in Section C.3 of this DCAP.
Earned Income - Wages, salaries, tips and other employee compensation, plus net earnings from
self- employment, computed without regard to any community property laws. It does not include
any amounts received as a pension or annuity. An employee's spouse who is either a student or
1
City of Downey— Flexible Benefits Plan- -Pian Document —App. "C"
10/01/2012
incapable of self -care shall be deemed, for each month during which such spouse is either a full -time
student at an educational institution or a Dependent, to be gainfully employed and to have Earned
Income of not less than:
(a) $200 per month, if the Participant has only one Dependent for the Plan Year, or
(b) $400 per month, if the Participant has two or more Dependents for the Plan Year.
Experience Gain - The excess of DCAP Contributions and income (if any) of the DCAP over the
total claim reimbursements and reasonable administrative costs for the Plan Year.
Period of Coverage - The Plan Year during which Dependent Care Expenses incurred by a
Participant are eligible for coverage under the DCAP, including the Grace Period, except:
(a) The Period of Coverage for an employee who becomes eligible after January 1 shall begin on
the date the Eligible Employee first becomes a Participant, as described in Section 2.2(a)(2),
and shall end on the last day of the Plan Year.
(b) The Period of Coverage for an Eligible Employee who becomes a Participant as a result of a
change in status, as described in Section C4.4, shall begin on the date the Eligible Employee
first becomes a Participant, as described in Section 2.2(a) (3), and shall end on the last day of
the Plan Year.
(c) The Period of Coverage for a Participant shall end prior to the end of the period described
above if the Participant fails, at any time, to make required DCAP Contributions.
SECTION C2 —PLAN PARTICIPATION
C2.1 Election for Participation
An Eligible Employee may elect to participate in the DCAP by submitting annually an election form
to the Plan Administrator (in accordance with Article III of the Plan) which designates the amount
of DCAP Contributions to be allocated to the DCAP subaccount, as provided in Section 3.3 of the
Plan. Unless an exception applies as described in Section C4.4, such election is irrevocable for the
duration of the Period of Coverage to which it relates.
C2.2 Termination of Participation
Participation in this DCAP shall terminate on the last day of the period for which the last Salary
Reduction is paid by the Participant to the DCAP.
2
City of Downey- Flexible Benefits Plan- -Plan Document -.app. "C"
10/01/2012
SECTION C3 DEPENDENT CARE EXPENSES
C3.1 Eligible Dependent Care Expenses
"Dependent Care Expenses" are amounts paid by a Participant for expenses incurred during the
Period of Coverage for which an election is in force for household services and for the care of a
Dependent which are incurred to enable the Participant (and spouse, if any) to be gainfully
employed by the Employer for any period for which he or she has one or more Dependents.
Dependent Care Expenses must satisfy the following rules in order to be "Qualifying Dependent
Care Services ":
(a) If the expenses are incurred for services outside a Participant's household, they are incurred
for the care of a Dependent as defined in the DCAP who regularly spends at least eight
hours each day in the Participant's household.
(b) If the expenses are incurred at a Dependent Care Center, such Dependent Care Center must
comply with the applicable state and local laws and regulations, and the expenses must be
incurred for the care of a Dependent as defined in the DCAP who regularly spends at least
eight hours each day in the Participant's household.
(c) If the expenses are incurred in the Participant's home, the services must be attributable in
part to the care of a Dependent as defined in the DCAP and must be necessary to the
maintenance of the household.
C3.2 Exclusions
Dependent Care Expenses shall in no event include amounts paid by a Participant to an individual:
(a) With respect to whom a deduction is allowable to the Participant or the spouse under Code
Section 151(c) (relating to personal exemptions for dependents), or
(b) Who is a child (within the meaning of Code Section 151(c) (3)) of the Participant under the
age of 19 at the close of the Plan Year in which such amounts are paid.
Dependent Care Expenses shall in no event include amounts paid for overnight camp
accommodations of a Dependent or amounts for such other expenses as the Employer shall deem
ineligible for reimbursement.
3
City of Downey- Flexible Benefits Flan - -Pi. n DocL vent -App.
10/01/2012
SECTION C4 PLAN RECORDKEEPING
C4.1 DCAP Subaccount
Each Participant's elected Dependent Care Assistance contribution will be considered paid to the
DCAP bookkeeping subaccount on the date on which it is credited to the DCAP bookkeeping
subaccount.
C4.2 Limit on amount Credited to DCAP Subaccount
Dependent Care Assistance Contributions, combined with any other dependent care assistance
received through an employment- related plan by the Participant or his or her spouse for a calendar
year, may not exceed the lesser of:
(a) $5,000 ($2,500 if the Participant is married and files a Federal Income Tax return separately
from his or her spouse), or
(b) The Participant's Earned Income, or
(c) The Earned Income of the Participant's spouse, if the Participant is married.
For subsequent Plan Years, the maximum and minimum dollar lirnits may be changed by the
Employer and shall be communicated to Eligible Employees through an election form or another
document.
C4.3 Experience Gains
If the Plan has an Experience Gain with respect to a Plan Year, such Experience Gain shall be
returned to the general assets of the Employer (to the extent permitted by Applicable Law); or used
to defray the expenses of Plan administration.
C4.4 Change in Elections
A Participant's Salary Reduction election under this DCAP for any Plan Year is irrevocable, except:
(a) Changes may be made which comply with the circumstances, as applicable, described in
Section 3.6 of the Plan.
(b) If a Participant's dependent, spouse, or former spouse changes their election during an open
enrollment period that differs from the Open Election Period, or for any other event
permitted under the Code or applicable regulations, a Participant may make a corresponding
election change under the DCAP, in accordance with the Code and applicable regulations.
(c) If Dependent Care Expenses increase during the year due to a rise in provider's rates, other
than a provider who is the Participant's relative, a Participant may prospectively increase his
4
City of Downey- Flexible Benefits Plan- -Plan Document-App. "C"
10/01/2012
or her Salary Reduction election or switch to another provider and adjust his or her Salary
Reduction Election accordingly.
SECTION C5 BENEFITS
C5.1 Plan Benefits
The DCAP shall reimburse Participants for Dependent Care Expenses which are incurred during
the Period of Coverage and which are submitted under Section C6.
C5.2 Incurred Expenses
Reimbursement may only be made for expenses which are incurred during the Period of Coverage.
Expenses are considered incurred on the date care is provided. Expenses are not treated as having
been incurred when the Participant is formally billed or charged for or pays for the Dependent Care
Expenses. Dependent Care Expenses are not treated as having been incurred during a Period of
Coverage if:
(a) such expenses are incurred before the date on which the Participant first becomes a
Participant; or
(b) such expenses are incurred after participation has terminated under this DC AP.
C5.3 Reimbursement Rules
(a) All benefits shall be payable or provided under this Section for the Period of Coverage only
with respect to periods during which an Eligible Employee is a Participant.
(b) The Employer shall pay reimbursements of Dependent Care Expenses only to the extent
permitted by a Participant's subaccount balance, the maximum reimbursement elected, and
the maximum allowed by law.
(c) Reimbursement shall be made within thirty (30) days of submission of the claim or as soon
as administratively practicable after receipt of each claim forrn. Except for the final
reimbursement at the conclusion of the Period of Coverage, no claim for reimbursement
may be made unless and until the aggregate claims for reimbursement are at least $25.00 or
such other minimum amount as determined by the Plan Administrator, consistent with
Applicable Law.
(d) If any balance remains in a Participant's subaccount for the Period of Coverage, after all
reimbursements have been made, such balance shall be forfeited.
5
City of Downey — Flexible Benefits Plan 1 i n Document—App. "C"
10/01/2012
(e) Dependent Care Expenses shall not be reimbursed for any Period of Coverage unless the
Participant applies for such reimbursement by the last day of the Run -Out Period.
(f) Upon termination of participation, a Participant may claim reimbursement for any
Dependent Care Expenses incurred through the last day of the Plan Year in which
participation was terminated, provided, that the Participant (or the Participant's estate) files a
claim prior to the end of the Run -Out Period for the Plan Year in which the expense was
incurred.
C5.4 Annual Statement of Benefits
On or before the close of the Plan Year, the Employer shall furnish to each employee who was a
Participant and received reimbursement for Dependent Care Expenses during the Plan Year a
statement of all such benefits paid to or on behalf of such Participant during that portion of the Plan
Year to which the statement relates.
SECTION C6 CLAIMS PROCEDURES
In addition to the provisions outlined in the Sections below, the claims procedures in Article VII of
the Plan shall apply for this DCAP as well.
_ r C6.1 Claims Substantiation
(a) Within thirty (30) days after receipt by the Plan Administrator of a reimbursement claim
from a Participant or as soon as administratively practical thereafter, the Participant will be
reimbursed for Dependent Care Expenses subject to the other terms and conditions of the
Plan or the Plan Administrator will notify the Participant that the claim has been denied.
(b) The DCAP shall reimburse a Dependent Care Expense only if the Participant provides a
request for reimbursement form and/or written statement prior to the end of the Run -Out
Period for the particular Plan Year in which the Expense was incurred setting forth (a) the
person or person on whose behalf the Dependent Care Expenses have been incurred; (b)
the nature and date of the expenses so incurred; (c) the amount of the requested
reimbursement; (d) the name of the person, organization or entity to whom the Dependent
Care Expense was or is to be paid, and taxpayer identification number; (e) a statement that
such expenses have not otherwise been paid and are not expected to be paid through
another source; and (f) any other information as may be required under Applicable Law.
6
City of Downey—Flexible Benefits Plan - -Plan Document—App. "C"
10/01/2012
(c) Claim forms which are not accompanied by properly documented expense vouchers may be
returned to the Participant by the Plan Administrator for further documentation. Each
Participant who fails to supply additional documentation within sixty (60) days of the Plan
Administrators request seeking such documentation shall be deemed not to have requested
reimbursement for the amounts in question. No Participant shall have any rights or be
entitled to any reimbursement under the DCAP unless a claim form is submitted as
specified.
(d) The claim shall be accompanied by bills, invoices, or other statements from an independent
third party showing the amounts of such Dependent Care Expenses, together with any
additional documentation that the Plan Administrator may request.
C6.2 Claims Denied
For reimbursement clairns that are denied, see the appeals procedure in Article VII of the Plan
Document.
C6.3 Documentation Processing
The Plan Administrator will process and review all claims that are submitted by Participants. The
scope of the review with respect to this DCAP is to determine:
(a) Whether the Participant's expenses appear to be Dependent Care Expenses, and
(b) Whether the Participant's claim form is accompanied by the required documentation.
The Plan Administrator shall not be responsible for undertaking any independent inquiry into the
truth of statements made in the Participant's claim form.
7
City of Downey — Flexible Benefits Pig,- -Flan ` ,cinenr .app. ``C"
10/01/2012
PLAN SPONSOR ACCEPTANCE OF RESPONSIBILITY
PLEASE SIGN BELOW TO ACKNOWLEDGE YOUR ACCEPTANCE OF
RESPONSIBILITY FOR THE CONTENTS OF THIS DOCUMENT AND RETURN THIS
SIGNED FORM AND A COPY OF THE SIGNED PLAN DOCUMENT TO:
Keenan & Associates
2355 Crenshaw Blvd., Suite 200
Torrance, CA 90501
Attention: Gerard A. Healy
The Plan Sponsor recognizes that it has full responsibility for the contents of the employee benefit
document attached hereto and that, while Keenan & Associates, its employees and, /or
subcontractors, may have assisted in the preparation of the document, it is the Plan Sponsor who is
responsible for the final text and meaning. The Plan Sponsor further certifies that the document has
been fully read, understood, and describes its intent with regard to the employee benefit plan.
Plan Sponsor: City of Downey
By:
Authorized Representative of Plan Sponsor
Attachment: Flexible Benefits Plan — Plan Document Appendix C
THE ATTACHED EMPLOYEE BENEFIT DOCUMENT IS NOT INTENDED AS
LEGAL ADVICE.
8
City of Do,mey— Flexible Benefits Plan - -Plan Document —App.
10/01/2012