HomeMy Public PortalAboutRES 10/03RESOLUTION NO. 010 -3
A RESOLUTION OF THE TOWN COMMISSION OF THE TOWN OF GULF STREAM,
PALM BEACH COUNTY, FLORIDA CONTINUING THE TOWN OF GULF STREAM
"CAFETERIA PLAN "; AUTHORIZING THE TOWN MANAGER TO EXECUTE PLAN
DOCUMENTS; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the Town of Gulf Stream has determined that it is desirable to
continue the Cafeteria Plan within the meaning of Section 125 of the Internal Revenue
Code, as amended from time to time, to provide certain benefits to the Employees of
the Town Of Gulf Stream:
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COMMISSION OF THE
TOWN OF GULF STREAM, FLORIDA THAT:
Section 1: The Town of Gulf Stream hereby continues the Town of Gulf
Stream Cafeteria Plan attached hereto as Appendix "A" and "B ", being a part of
this Resolution as if fully set forth herein.
Section 2: The Town Commission of the Town of Gulf Stream hereby
authorizes the Town Manager to execute such plan documents.
AYOR
Section 3: This Resolution shall become effective on adoption.
PASSED AND ADOPTED this 8T" day of October, 2010.
ATTEST: TOWN COMMISSION
TOWN CLERK
THE TOWN OF G U LSTREAM
CAFETERIA PLAN
ARTICLE I. Introductory Provisions
Town of Gulstream ( "the Employer ") hereby establishes the Town of Gulstream Cafeteria Plan ( "the Plan ") effective
October 01 2010 ( "the Effective Date "). Capitalized terms used in this Plan that are not otherwise defined shall have the
meanings set forth in Article ll.
This Plan is designed to allow an Eligible Employee to pay for his or her share of Contributions under one or more
Insurance Plans on a pre -tax Salary Reduction basis.
This Plan is intended to qualify as a "cafeteria plan" under Code § 125 and the regulations issued thereunder. The terms
of this document shall be interpreted to accomplish that objective.
Although reprinted within this document, the different components of this Plan shall be deemed separate plans for
purposes of administration and all reporting and nondiscrimination requirements imposed on such components by the
Code.
ARTICLE II. Definitions
"Accidental Death & Dismemberment (AD &D) Insurance Benefits" means the Employee's Accidental Death &
Dismemberment Insurance Plan coverage for purposes of this Plan.
"Accidental Death & Dismemberment (AD &D) Insurance Plan(s)" means the plan(s) that the Employer maintains for
its Employees providing benefits through a group insurance policy or policies in the event of the accidental death and /or
dismemberment policy. The Employer may substitute, add, subtract, or revise at any time the menu of such plans and /or
the benefits, terms, and conditions of any such plans. Any such substitution, addition, subtraction, or revision will be
communicated to Participants and will automatically be incorporated by reference under this Plan.
"Benefits" means the Premium Payment Benefits.
"Benefit Package Option" means a qualified benefit under Code § 125(f) that is offered under a cafeteria plan, or an
option for coverage under an underlying accident or health plan (such as an indemnity option, an HMO option, or a PPO
option under an accident or health plan).
"Change in Status" has the meaning described in Section 4.6.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contributions" means the amount contributed to pay for the cost of Benefits (including self- funded Benefits as well as
those that are insured), as calculated under Section 6.2 for Premium Payment Benefits.
"Committee" means the Benefits Committee (or the equivalent thereof) of Town of Gulstream
"Compensation" means the wages or salary paid to an Employee by the Employer, determined prior to (a) any Salary
Reduction election under this Plan; (b) any salary reduction election under any other cafeteria plan; and (c) any
compensation reduction under any Code § 132(f)(4) plan; but determined after (d) any salary deferral elections under
any Code § 401(k), 403(b), 408(k), or 457(b) plan or arrangement. Thus, "Compensation" generally means wages or
salary paid to an Employee by the Employer, as reported in Box 1 of Form W -2, but adding back any wages or salary
forgone by virtue of any election described in (a), (b), or (c) of the preceding sentence.
"Dental Insurance Benefits" means the Employee's Dental Insurance Plan coverage for purposes of this Plan.
Page 2
"Dental Insurance Plan(s)" means the plan(s) that the Employer maintains for its Employees (and for their Spouses
and Dependents that may be eligible under the terms of such plan(s)) providing dental benefits through a group
insurance policy or policies. The Employer may substitute, add, subtract, or revise at any time the menu of such plans
and /or the benefits, terms, and conditions of any such plans. Any such substitution, addition, subtraction, or revision will
be communicated to Participants and will automatically be incorporated by reference under this Plan.
"Dependent" means any individual who is a tax dependent of the Participant as defined in Code § 105(b), with the
following exceptions: for purposes of accident or health coverage (to the extent funded under the Premium Payment
Component), (1) a dependent is defined as in Code § 105(b), determined without regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof; and (2) any child to whom IRS Rev. Proc. 2008 -48 applies (regarding certain children of divorced
or separated parents who receive 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.
"Earned Income" means all income derived from wages, salaries, tips, self - employment, and other Compensation
(such as disability or wage continuation benefits), but only if such amounts are includible in gross income for the taxable
year. Earned income does not include any other amounts excluded from earned income under Code § 32(c)(2), such as
amounts received under a pension or annuity or pursuant to workers' compensation.
"Effective Date" of this Plan has the meaning described in Article 1.
"Election Form /Salary Reduction Agreement" means the form provided by the Administrator for the purpose of
allowing an Eligible Employee to participate in this Plan by electing Salary Reductions to pay for Premium Payment
Benefits. This form may be in either paper or electronic form at the Employer's discretion in accordance with the
procedures detailed in Article IV.
"Eligible Employee" means an Employee eligible to participate in this Plan, as provided in Section 3.1.
"Employee" means an individual that the Employer classifies as a common -law employee and who is on the
Employer's W -2 payroll, but does not include the following: (a) any leased employee (including but not limited to those
individuals defined as leased employees in Code § 414(n)) or an individual classified by the Employer as a contract
worker, independent contractor, temporary employee, or casual employee for the period during which such individual is
so classified, whether or not any such individual is on the Employer's W -2 payroll or is determined by the IRS or others
to be a common -law employee of the Employer; (b) any individual who performs services for the Employer but who is
paid by a temporary or other employment or staffing agency for the period during which such individual is paid by such
agency, whether or not such individual is determined by the IRS or others to be a common -law employee of the
Employer; (c) any employee covered under a collective bargaining agreement; (d) any self - employed individual; (e) any
partner in a partnership; (f) any more - than -2% shareholder in a Subchapter S corporation.The term "Employee" does
include "former Employees" for the limited purpose of allowing continued eligibility for benefits under the Plan for the
remainder of the Plan Year in which an Employee ceases to be employed by the Employer, but only to the extent
specifically provided elsewhere under this Plan.
"Employer" means Town of Gulstream, and any Related Employer that adopts this Plan with the approval of Town of
Gulstream. Related Employers that have adopted this Plan, if any, are listed in Appendix A of this Plan. However, for
purposes of Articles XI and XIV and Section 15.3, "Employer" means only Town of Gulstream
"Employment Commencement Date" means the first regularly scheduled working day on which the Employee first
performs an hour of service for the Employer for Compensation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"FMLA" means the Family and Medical Leave Act of 1993, as amended.
"Health Insurance Benefits" means any insurance benefits providing medical or other health insurance coverage
Page 3
through a group insurance policy or policies.
"HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as amended.
"HMO" means the health maintenance organization Benefit Package Option under the Medical Insurance Plan.
"Hospital Indemnity Benefits" means the Employee's Hospital Indemnity Plan coverage for purposes of this Plan.
"Hospital Indemnity Plan(s)" means the plan(s) that the Employer maintains for its Employees (and for their Spouses
and Dependents that may be eligible under the terms of such plan(s)) providing certain indemnity benefits in the event of
hospitalization or other similar medical event through a group insurance policy or policies. The Employer may substitute,
add, subtract, or revise at any time the menu of such plans and /or the benefits, terms, and conditions of any such plans.
Any such substitution, addition, subtraction, or revision will be communicated to Participants and will automatically be
incorporated by reference under this Plan.
"HRA" means a health reimbursement arrangement as defined in IRS Notice 2002 -45.
"Insurance Benefits" means benefits offered through the Insurance Plans.
"Insurance Plan(s)" means a plan or plans offering benefits through a group insurance policy or policies.
"Life Insurance Benefits" means the Employee's Life Insurance Plan coverage for purposes of this Plan.
"Life Insurance Plan(s)" means the plan(s) that the Employer maintains for its Employees providing benefits through a
group term life insurance policy or policies in the event of the death of a covered Participant. The Employer may
substitute, add, subtract, or revise at any time the menu of such plans and /or the benefits, terms, and conditions of any
such plans. Any such substitution, addition, subtraction, or revision will be communicated to Participants and will
automatically be incorporated by reference under this Plan.
"Medical Insurance Benefits" means the Employee's Medical Insurance Plan coverage for purposes of this Plan.
"Medical Insurance Plan(s)" means the plan(s) that the Employer maintains for its Employees (and for their Spouses
and Dependents that may be eligible under the terms of such plan), providing major medical type benefits through a
group insurance policy or policies (with HMO and PPO options). The Employer may substitute, add, subtract, or revise
at any time the menu of such plans and /or the benefits, terms, and conditions of any such plans. Any such substitution,
addition, subtraction, or revision will be communicated to Participants and will automatically be incorporated by
reference under this Plan.
"Open Enrollment Period" with respect to a Plan Year means the month of November in the year preceding the Plan
Year, or such other period as may be prescribed by the Administrator.
"Participant" means a person who is an Eligible Employee and who is participating in this Plan in accordance with the
provisions of Article III. Participants include (a) those who elect one or more of the Medical Insurance Benefits and (b)
those who elect instead to receive their full salary in cash and to pay for their share of their Contributions under the
Medical Insurance Plan.
"Period of Coverage" means the Plan Year, with the following exceptions: (a) for Employees who first become eligible
to participate, it shall mean the portion of the Plan Year following the date on which participation commences, as
described in Section 3.1; and (b) for Employees who terminate participation, it shall mean the portion of the Plan Year
prior to the date on which participation terminates, as described in Section 3.2.
"Plan" means the Town of Gulstream Cafeteria Plan as set forth herein and as amended from time to time.
Page 4
"Plan Administrator" means the Town of Gulstream Human Resources Manager or the equivalent thereof for Town of
Gulstream, who has the full authority to act on behalf of the Plan Administrator, except with respect to appeals, for which
the Committee has the full authority to act on behalf of the Plan Administrator, as described in Section 13.1.
"Plan Year" means the calendar year (i.e., the 12 -month period commencing October 01 and ending on September 30,
except in the case of a short plan year representing the initial Plan Year or where the Plan Year is being changed, in
which case the Plan Year shall be the entire short plan year.
"PPO" means the preferred provider organization Benefit Package Option under the Medical Insurance Plan.
"Premium Payment Benefits" means the Premium Payment Benefits that are paid for on a pre -tax Salary Reduction
basis as described in Section 6.1.
"Premium Payment Component" means the Component of this Plan described in Article VI.
"QMCSO" means a qualified medical child support order, as defined in ERISA § 609(a).
"Related Employer" means any employer affiliated with Town of Gulstream that, under Code § 414(b), § 414(c), or §
414(m), is treated as a single employer with Town of Gulstream for purposes of Code § 125(g)(4).
"Salary Reduction" means the amount by which the Participant's Compensation is reduced and applied by the
Employer under this Plan to pay for one or more of the Benefits, as permitted for the applicable Component, before any
applicable state and /or federal taxes have been deducted from the Participant's Compensation (i.e., on a pre -tax basis).
"Spouse" means an individual who is legally married to a Participant as determined under applicable state law (and
who is treated as a spouse under the Code).
"Vision Insurance Benefits" means the Employee's Vision Insurance Plan coverage for purposes of this Plan.
"Vision Insurance Plan(s)" means the plan(s) that the Employer maintains for its Employees (and for their Spouses
and Dependents that may be eligible under the terms of such plan(s)) providing vision benefits through a group
insurance policy or policies. The Employer may substitute, add, subtract, or revise at any time the menu of such plans
and /or the benefits, terms, and conditions of any such plans. Any such substitution, addition, subtraction, or revision will
be communicated to Participants and will automatically be incorporated by reference under this Plan.
ARTICLE III. Eligibility and Participation
3.1 Eligibility to Participate
An individual is eligible to participate in this Plan if the individual: (a) is an Employee; (b) is working 35 Hours or more
per week; and (c) has been employed by the Employer for a consecutive period of 0 days, counting his or her
Employment Commencement Date as the first such day. Eligibility for Premium Payment Benefits may also be subject to
the additional requirements, if any, specified in the Medical Insurance Plan. Once an Employee has met the Plan's
eligibility requirements, the Employee may elect coverage effective the first day of the next calendar month, in
accordance with the procedures described in Article IV.
3.2 Termination of Participation
A Participant will cease to be a Participant in this Plan upon the earlier of:
Page 5
" t h e t e r m i n a t i o n o f t h i s P l a n ; o r
" t h e d a t e o n w h i c h t h e E m p l o y e e c e a s e s ( b e c a u s e o f r e t i r e m e n t , t e r m i n a t i o n o f e m p l o y m e n t , l a y o f f , r e d u c t i o n o f h o u r s ,
o r a n y o t h e r r e a s o n ) t o b e a n E l i g i b l e E m p l o y e e . N o t w i t h s t a n d i n g t h e f o r e g o i n g , f o r p u r p o s e s o f p r e - t a x i n g C O B R A
c o v e r a g e c e r t a i n E m p l o y e e s m a y c o n t i n u e e l i g i b i l i t y f o r c e r t a i n p e r i o d s o n t h e t e r m s a n d s u b j e c t t o t h e r e s t r i c t i o n s
d e s c r i b e d i n S e c t i o n 6 . 4 f o r I n s u r a n c e B e n e f i t s .
T e r m i n a t i o n o f p a r t i c i p a t i o n i n t h i s P l a n w i l l a u t o m a t i c a l l y r e v o k e t h e P a r t i c i p a n t ' s e l e c t i o n s . T h e M e d i c a l I n s u r a n c e
B e n e f i t s w i l l t e r m i n a t e a s o f t h e d a t e s p e c i f i e d i n t h e M e d i c a l I n s u r a n c e P l a n .
3 . 3 P a r t i c i p a t i o n F o l l o w i n g T e r m i n a t i o n o f E m p l o y m e n t o r L o s s o f E l i g i b i l i t y
I f a P a r t i c i p a n t t e r m i n a t e s h i s o r h e r e m p l o y m e n t f o r a n y r e a s o n , i n c l u d i n g ( b u t n o t l i m i t e d t o ) d i s a b i l i t y , r e t i r e m e n t ,
l a y o f f , o r v o l u n t a r y r e s i g n a t i o n , a n d t h e n i s r e h i r e d w i t h i n 3 0 d a y s o r l e s s a f t e r t h e d a t e o f a t e r m i n a t i o n o f e m p l o y m e n t ,
t h e n t h e E m p l o y e e w i l l b e r e i n s t a t e d w i t h t h e s a m e e l e c t i o n s t h a t s u c h i n d i v i d u a l h a d b e f o r e t e r m i n a t i o n . I f a f o r m e r
P a r t i c i p a n t i s r e h i r e d m o r e t h a n 3 0 d a y s f o l l o w i n g t e r m i n a t i o n o f e m p l o y m e n t a n d i s o t h e r w i s e e l i g i b l e t o p a r t i c i p a t e i n
t h e P l a n , t h e n t h e i n d i v i d u a l m a y m a k e n e w e l e c t i o n s a s a n e w h i r e a s d e s c r i b e d i n S e c t i o n 3 . 1 . N o t w i t h s t a n d i n g t h e
a b o v e , a n e l e c t i o n t o p a r t i c i p a t e i n t h e P r e m i u m P a y m e n t C o m p o n e n t w i l l b e r e i n s t a t e d o n l y t o t h e e x t e n t t h a t c o v e r a g e
u n d e r t h e M e d i c a l I n s u r a n c e P l a n ( h e r e , m a j o r m e d i c a l i n s u r a n c e ) i s r e i n s t a t e d . I f a n E m p l o y e e ( w h e t h e r o r n o t a
P a r t i c i p a n t ) c e a s e s t o b e a n E l i g i b l e E m p l o y e e f o r a n y r e a s o n ( o t h e r t h a n f o r t e r m i n a t i o n o f e m p l o y m e n t ) , i n c l u d i n g ( b u t
n o t l i m i t e d t o ) a r e d u c t i o n o f h o u r s , a n d t h e n b e c o m e s a n E l i g i b l e E m p l o y e e a g a i n , t h e E m p l o y e e m u s t c o m p l e t e t h e
w a i t i n g p e r i o d d e s c r i b e d i n S e c t i o n 3 . 1 b e f o r e a g a i n b e c o m i n g e l i g i b l e t o p a r t i c i p a t e i n t h e P l a n .
3 . 4 F M L A L e a v e s o f A b s e n c e
( a ) H e a l t h B e n e f i t s . N o t w i t h s t a n d i n g a n y p r o v i s i o n t o t h e c o n t r a r y i n t h i s P l a n , i f a P a r t i c i p a n t g o e s o n a q u a l i f y i n g l e a v e
u n d e r t h e F M L A , t h e n t o t h e e x t e n t r e q u i r e d b y t h e F M L A , t h e E m p l o y e r w i l l c o n t i n u e t o m a i n t a i n t h e P a r t i c i p a n t ' s H e a l t h
I n s u r a n c e B e n e f i t s o n t h e s a m e t e r m s a n d c o n d i t i o n s a s i f t h e P a r t i c i p a n t w e r e s t i l l a n a c t i v e E m p l o y e e . T h a t i s , i f t h e
P a r t i c i p a n t e l e c t s t o c o n t i n u e h i s o r h e r c o v e r a g e w h i l e o n l e a v e , t h e E m p l o y e r w i l l c o n t i n u e t o p a y i t s s h a r e o f t h e
C o n t r i b u t i o n s .
A n E m p l o y e r m a y r e q u i r e p a r t i c i p a n t s t o c o n t i n u e a l l H e a l t h I n s u r a n c e B e n e f i t s c o v e r a g e f o r P a r t i c i p a n t s w h i l e t h e y a r e
o n p a i d l e a v e ( p r o v i d e d t h a t P a r t i c i p a n t s o n n o n - F M L A p a i d l e a v e a r e r e q u i r e d t o c o n t i n u e c o v e r a g e ) . I f s o , t h e
P a r t i c i p a n t ' s s h a r e o f t h e C o n t r i b u t i o n s s h a l l b e p a i d b y t h e m e t h o d n o r m a l l y u s e d d u r i n g a n y p a i d l e a v e ( f o r i n s t a n c e ,
o n a p r e - t a x S a l a r y R e d u c t i o n b a s i s ) .
I n t h e e v e n t o f u n p a i d F M L A l e a v e ( o r p a i d F M L A l e a v e w h e r e c o v e r a g e i s n o t r e q u i r e d t o b e c o n t i n u e d ) , a P a r t i c i p a n t
m a y e l e c t t o c o n t i n u e h i s o r h e r H e a l t h I n s u r a n c e B e n e f i t s d u r i n g t h e l e a v e . I f t h e P a r t i c i p a n t e l e c t s t o c o n t i n u e c o v e r a g e
w h i l e o n F M L A l e a v e , t h e n t h e P a r t i c i p a n t m a y p a y h i s o r h e r s h a r e o f t h e C o n t r i b u t i o n s i n o n e o f t h e f o l l o w i n g w a y s :
" w i t h a f t e r - t a x d o l l a r s , b y s e n d i n g m o n t h l y p a y m e n t s t o t h e E m p l o y e r b y t h e d u e d a t e e s t a b l i s h e d b y t h e E m p l o y e r ;
" w i t h p r e - t a x d o l l a r s , b y h a v i n g s u c h a m o u n t s w i t h h e l d f r o m t h e P a r t i c i p a n t ' s o n g o i n g C o m p e n s a t i o n ( i f a n y ) , i n c l u d i n g
u n u s e d s i c k d a y s a n d v a c a t i o n d a y s , o r p r e - p a y i n g a l l o r a p o r t i o n o f t h e C o n t r i b u t i o n s f o r t h e e x p e c t e d d u r a t i o n o f t h e
l e a v e o n a p r e - t a x S a l a r y R e d u c t i o n b a s i s o u t o f p r e - l e a v e C o m p e n s a t i o n . T o p r e - p a y t h e C o n t r i b u t i o n s , t h e P a r t i c i p a n t
m u s t m a k e a s p e c i a l e l e c t i o n t o t h a t e f f e c t p r i o r t o t h e d a t e t h a t s u c h C o m p e n s a t i o n w o u l d n o r m a l l y b e m a d e a v a i l a b l e
( p r e - t a x d o l l a r s m a y n o t b e u s e d t o f u n d c o v e r a g e d u r i n g t h e n e x t P l a n Y e a r ) ; o r
" u n d e r a n o t h e r a r r a n g e m e n t a g r e e d u p o n b e t w e e n t h e P a r t i c i p a n t a n d t h e P l a n A d m i n i s t r a t o r ( e . g . , t h e P l a n
A d m i n i s t r a t o r m a y f u n d c o v e r a g e d u r i n g t h e l e a v e a n d w i t h h o l d " c a t c h - u p " a m o u n t s f r o m t h e P a r t i c i p a n t ' s C o m p e n s a t i o n
P a g e 6
on a pre -tax or after -tax basis) upon the Participant's return.
If the Employer requires all Participants to continue Health Insurance Benefits during an unpaid FMLA leave, then the
Participant may elect to discontinue payment of the Participant's required Contributions until the Participant returns from
leave. Upon returning from leave, the Participant will be required to repay the Contributions not paid by the Participant
during the leave. Payment shall be withheld from the Participant's Compensation either on a pre -tax or after -tax basis,
as agreed to by the Plan Administrator and the Participant.
If a Participant's Health Insurance Benefits coverage ceases while on FMLA leave (e.g., for non - payment of required
contributions), then the Participant is permitted to re -enter the Medical Insurance Benefits upon return from such leave
on the same basis as when the Participant was participating in the Plan prior to the leave, or as otherwise required by
the FMLA. In addition, the Plan may require Participants whose Health Insurance Benefits coverage terminated during
the leave to be reinstated in such coverage upon return from a period of unpaid leave, provided that Participants who
return from a period of unpaid, non -FMLA leave are required to be reinstated in such coverage.
(b) Non - Health Benefits. If a Participant goes on a qualifying leave under the FMLA, then entitlement to non - health
benefits is to be determined by the Employer's policy for providing such Benefits when the Participant is on non -FMLA
leave, as described in Section 3.5. If such policy permits a Participant to discontinue contributions while on leave, then
the Participant will, upon returning from leave, be required to repay the Contributions not paid by the Participant during
the leave. Payment shall be withheld from the Participant's Compensation either on a pre -tax or after -tax basis, as may
be agreed upon by the Plan Administrator and the Participant or as the Plan Administrator otherwise deems appropriate.
3.5 Non -FMLA Leaves of Absence
If a Participant goes on an unpaid leave of absence that does not affect eligibility, then the Participant will continue to
participate and the Contributions due for the Participant will be paid by pre - payment before going on leave, by after -tax
contributions while on leave, or with catch -up contributions after the leave ends, as may be determined by the Plan
Administrator. If a Participant goes on an unpaid leave that affects eligibility, then the election change rules detailed in
Article IV will apply.
ARTICLE IV. Method and Timing of Elections; Irrevocability of Elections
4.1 Elections When First Eligible
An Employee who first becomes eligible to participate in the Plan mid -year may elect to commence participation in one
or more Benefits on the first day of the month after the eligibility requirements have been satisfied, provided that an
Election Form /Salary Reduction Agreement is submitted to the Plan Administrator before the first day of the month in
which participation will commence. An Employee who does not elect benefits when first eligible may not enroll until the
next Open Enrollment Period, unless an event occurs that would justify a mid -year election change, as described in
Article IV.
The Employer reserves the right, within its discretion, to allow or require any or all of the election procedures detailed in
this Article 4.1 to be performed electronically.
Benefits shall be subject to the additional requirements, if any, specified in the Medical Insurance Plan. The provisions of
this Plan are not intended to override any exclusions, eligibility requirements, or waiting periods specified in any
Insurance Plans.
Page 7
4.2 Elections During Open Enrollment Period
During each Open Enrollment Period with respect to a Plan Year, the Plan Administrator shall provide an Election
Form /Salary Reduction Agreement to each Employee who is eligible to participate in this Plan. The Election Form /Salary
Reduction Agreement shall enable the Employee to elect to participate in the various Components of this Plan for the
next Plan Year and to authorize the necessary Salary Reductions to pay for the Benefits elected. The Election
Form /Salary Reduction Agreement must be returned to the Plan Administrator on or before the last day of the Open
Enrollment Period, and it shall become effective on the first day of the next Plan Year. If an Eligible Employee fails to
return the Election Form /Salary Reduction Agreement during the Open Enrollment Period, then the Employee may not
elect any Benefits under this Plan until the next Open Enrollment Period, unless an event occurs that would justify a
mid -year election change, as described in Article IV.
The Employer reserves the right, within its discretion, to allow or require any or all of the election procedures detailed in
this Article 4.2 to be performed electronically.
4.3 Failure of Eligible Employee to File an Election Form /Salary Reduction Agreement
If an Eligible Employee fails to file an Election Form /Salary Reduction Agreement within the time period described in
Sections 4.1 and 4.2, then the Employee may not elect any Benefits under the Plan (a) until the next Open Enrollment
Period; or (b) until an event occurs that would justify a mid -year election change, as described in Article IV. If an
Employee who fails to file an Election Form /Salary Reduction Agreement is eligible for Medical Insurance Benefits and
has made an effective election for such Benefits, then the Employee's share of the Contributions for such Benefits will
be paid with after -tax dollars outside of this Plan until such time as the Employee files, during a subsequent Open
Enrollment Period (or after an event occurs that would justify a mid -year election change as described in Article IV), a
timely Election Form /Salary Reduction Agreement to elect Premium Payment Benefits. Until the Employee files such an
election, the Employer's portion of the Contribution will also be paid outside of this Plan.
4.4 Irrevocability of Elections
Unless an exception applies (as described in this Article IV), a Participant's election under the Plan is irrevocable for the
duration of the Period of Coverage to which it relates.
Unless otherwise noted in this section, a Participant's election under the Plan is irrevocable for the duration of the Period
of Coverage to which it relates. In other words, unless an exception applies, the Participant may not change any
elections for the duration of the Period of Coverage regarding:
• Participation in this Plan;
• Salary Reduction amounts; or
• election of particular Benefit Package Options.
4.5 Procedure for Making New Election If Exception to Irrevocability Applies
(a) Timeframe for Making New Election. A Participant (or an Eligible Employee who, when first eligible under Section 3.1
or during the Open Enrollment Period, declined to be a Participant) may make a new election within 30 days of the
occurrence of an event described in Section 4.6 or 4.7, as applicable, but only if the election under the new Election
Form /Salary Reduction Agreement is made on account of and is consistent with the event and if the election is made
within any specified time period (e.g., for Sections 4.7(d) through 4.7Q), within 30 days after the events described in such
Page 8
Sections unless otherwise required by law). Notwithstanding the foregoing, a Change in Status (e.g., a divorce or a
dependent's losing student status) that results in a beneficiary becoming ineligible for coverage under the Medical
Insurance Plan shall automatically result in a corresponding election change, whether or not requested by the
Participant within the normal 30 -day period.
(b) Effective Date of New Election. Elections made pursuant to this Section 4.5 shall be effective for the balance of the
Period of Coverage following the change of election unless a subsequent event allows for a further election change.
Except as provided in Section 4.7(e) for HIPAA special enrollment rights in the event of birth, adoption, or placement for
adoption, all election changes shall be effective on a prospective basis only (i.e., election changes will become effective
no earlier than the first day of the next calendar month following the date that the election change was filed, but, as
determined by the Plan Administrator, election changes may become effective later to the extent that the coverage in the
applicable Benefit Package Option commences later).
4.6 Change in Status Defined
A Participant may make a new election upon the occurrence of certain events as described in Section 4.7, including a
Change in Status, for the applicable Component. "Change in Status" means any of the events described below, as well
as any other events included under subsequent changes to Code § 125 or regulations issued thereunder, which the
Plan Administrator, in its sole discretion and on a uniform and consistent basis, determines are permitted under IRS
regulations and under this Plan:
(a) Legal Marital Status. A change in a Participant's legal marital status, including marriage, death of a Spouse, divorce,
legal separation, or annulment;
(b) Number of Dependents. Events that change a Participant's number of Dependents, including birth, death, adoption,
and placement for adoption;
(c) Employment Status. Any of the following events that change the employment status of the Participant or his or her
Spouse or Dependents: (1) a termination or commencement of employment; (2) a strike or lockout; (3) a
commencement of or return from an unpaid leave of absence; (4) a change in worksite; and (5) if the eligibility conditions
of this Plan or other employee benefits plan of the Participant or his or her Spouse or Dependents depend on the
employment status of that individual and there is a change in that individual's status with the consequence that the
individual becomes (or ceases to be) eligible under this Plan or other employee benefits plan, such as if a plan only
applies to salaried employees and an employee switches from salaried to hourly -paid, union to non - union, or full -time to
part-time (or vice versa), with the consequence that the employee ceases to be eligible for the Plan;
(d) Dependent Eligibility Requirements. An event that causes a Dependent to satisfy or cease to satisfy the Dependent
eligibility requirements for a particular benefit, such as attaining a specified age, student status, or any similar
circumstance; and
(e) Change in Residence. A change in the place of residence of the Participant or his or her Spouse or Dependents.
4.7 Events Permitting Exception to Irrevocability Rule
A Participant may change an election as described below upon the occurrence of the stated events for the applicable
Component of this Plan:
(a) Open Enrollment Period. A Participant may change an election during the Open Enrollment Period.
(b) Termination of Employment. A Participant's election will terminate under the Plan upon termination of employment in
accordance with Sections 3.2 and 3.3, as applicable.
Page 9
(c) Leaves of Absence. A Participant may change an election under the Plan upon FMLA leave in accordance with
Section 3.4 and upon non -FMLA leave in accordance with Section 3.5.
(d) Change in Status. A Participant may change his or her actual or deemed election under the Plan upon the
occurrence of a Change in Status (as defined in Section 4.6), but only if such election change is made on account of and
corresponds with a Change in Status that affects eligibility for coverage under a plan of the Employer or a plan of the
Spouse's or Dependent's employer (referred to as the general consistency requirement). A Change in Status that affects
eligibility for coverage under a plan of the Employer or a plan of the Spouse's or Dependent's employer includes a
Change in Status that results in an increase or decrease in the number of an Employee's family members (i.e., a
Spouse and /or Dependents) who may benefit from the coverage.
(1) Loss of Spouse or Dependent Eligibility, Special COBRA Rules. For a Change in Status involving a Participant's
divorce, annulment or legal separation from a Spouse, the death of a Spouse or a Dependent, or a Dependent's ceasing
to satisfy the eligibility requirements for coverage, a Participant may only elect to cancel accident or health insurance
coverage for (a) the Spouse involved in the divorce, annulment, or legal separation; (b) the deceased Spouse or
Dependent; or (c) the Dependent that ceased to satisfy the eligibility requirements. Canceling coverage for any other
individual under these circumstances would fail to correspond with that Change in Status. Notwithstanding the foregoing,
if the Participant or his or her Spouse or Dependent becomes eligible for COBRA (or similar health plan continuation
coverage under state law) under the Employer's plan (and the Participant remains a Participant under this Plan in
accordance with Section 3.2), then the Participant may increase his or her election to pay for such coverage (this rule
does not apply to a Participant's Spouse who becomes eligible for COBRA or similar coverage as a result of divorce,
annulment, or legal separation).
(2) Gain of Coverage Eligibility Under Another Employer's Plan. For a Change in Status in which a Participant or his or
her Spouse or Dependent gains eligibility for coverage under a cafeteria plan or qualified benefit plan of the employer of
the Participant's Spouse or Dependent as a result of a change in marital status or a change in employment status, a
Participant may elect to cease or decrease coverage for that individual only if coverage for that individual becomes
effective or is increased under the Spouse's or Dependent's employer's plan. The Plan Administrator may rely on a
Participant's certification that the Participant has obtained or will obtain coverage under the Spouse's or Dependent's
employer's plan, unless the Plan Administrator has reason to believe that the Participant's certification is incorrect.
(e) HIPAA Special Enrollment Rights. If a Participant or his or her Spouse or Dependent is entitled to special enrollment
rights under a group health plan (other than an excepted benefit), as required by HIPAA under Code § 9801(f), then a
Participant may revoke a prior election for group health plan coverage and make a new election (including, when
required by HIPAA, an election to enroll in another benefit package under a group health plan), provided that the
election change corresponds with such HIPAA special enrollment right. As required by HIPAA, a special enrollment right
will arise in the following circumstances:
• a Participant or his or her Spouse or Dependent declined to enroll in group health plan coverage because he or she
had coverage, and eligibility for such coverage is subsequently lost because: (1) the coverage was provided under
COBRA and the COBRA coverage was exhausted; or (2) the coverage was non -COBRA coverage and the coverage
terminated due to loss of eligibility for coverage or the employer contributions for the coverage were terminated; or
• a new Dependent is acquired as a result of marriage, birth, adoption, or placement for adoption.
An election to add previously eligible Dependents as a result of the acquisition of a new Spouse or Dependent child shall
be considered to be consistent with the special enrollment right. An election change on account of a HIPAA special
enrollment attributable to the birth, adoption, or placement for adoption of a new Dependent child may, subject to the
provisions of the underlying group health plan, be effective retroactively (up to 30 days).
For purposes of this Section 4.7(e), the term "loss of eligibility" includes (but is not limited to) loss of eligibility due to
legal separation, divorce, cessation of dependent status, death of an employee, termination of employment, reduction of
Page 10
hours, or any loss of eligibility for coverage that is measured with reference to any of the foregoing; loss of coverage
offered through an HMO that does not provide benefits to individuals who do not reside, live, or work in the service area
because an individual no longer resides, lives, or works in the service area (whether or not within the choice of the
individual), and in the case of HMO coverage in the group market, no other benefit package is available to the individual;
a situation in which an individual incurs a claim that would meet or exceed a lifetime limit on all benefits; and a situation
in which a plan no longer offers any benefits to the class of similarly situated individuals that includes the individual.
(f) Certain Judgments, Decrees and Orders. If a judgment, decree, or order (collectively, an "Order ") resulting from a
divorce, legal separation, annulment, or change in legal custody (including a QMCSO) requires accident or health
coverage (including an election for Health FSA Benefits) for a Participant's child (including a foster child who is a
Dependent of the Participant), then a Participant may (1) change his or her election to provide coverage for the child
(provided that the Order requires the Participant to provide coverage); or (2) change his or her election to revoke
coverage for the child if the Order requires that another individual (including the Participant's Spouse or former Spouse)
provide coverage under that individual's plan and such coverage is actually provided.
(g) Medicare and Medicaid. If a Participant or his or her Spouse or Dependent who is enrolled in a health or accident
plan under this Plan becomes entitled to (i.e., becomes enrolled in) Medicare or Medicaid (other than coverage
consisting solely of benefits under Section 1928 of the Social Security Act providing for pediatric vaccines), then the
Participant may prospectively reduce or cancel the health or accident coverage of the person becoming entitled to
Medicare or Medicaid. Furthermore, if a Participant or his or her Spouse or Dependent who has been entitled to
Medicare or Medicaid loses eligibility for such coverage, then the Participant may prospectively elect to commence or
increase the accident or health coverage of the individual who loses Medicare or Medicaid eligibility.
(h) Change in Cost. For purposes of this Section 4.7(h), "similar coverage" means coverage for the same category of
benefits for the same individuals (e.g., family to family or single to single). For example, two plans that provide major
medical coverage are considered to be similar coverage.
(1) Increase or Decrease for Insignificant Cost Changes. Participants are required to increase their elective contributions
(by increasing Salary Reductions) to reflect insignificant increases in their required contribution for their Benefit Package
Option(s), and to decrease their elective contributions to reflect insignificant decreases in their required contribution.
The Plan Administrator, in its sole discretion and on a uniform and consistent basis, will determine whether an increase
or decrease is insignificant based upon all the surrounding facts and circumstances, including but not limited to the
dollar amount or percentage of the cost change. The Plan Administrator, on a reasonable and consistent basis, will
automatically effectuate this increase or decrease in affected employees' elective contributions on a prospective basis.
(2) Significant Cost Increases. If the Plan Administrator determines that the cost charged to an Employee of a
Participant's Benefit Package Option(s) significantly increases during a Period of Coverage, then the Participant may (a)
make a corresponding prospective increase in his or her elective contributions (by increasing Salary Reductions); (b)
revoke his or her election for that coverage, and in lieu thereof, receive on a prospective basis coverage under another
Benefit Package Option that provides similar coverage; or (c) drop coverage prospectively if there is no other Benefit
Package Option available that provides similar coverage. The Plan Administrator, in its sole discretion and on a uniform
and consistent basis, will decide whether a cost increase is significant in accordance with prevailing IRS guidance.
(3) Significant Cost Decreases. If the Plan Administrator determines that the cost of any Benefit Package Option
significantly decreases during a Period of Coverage, then the Plan Administrator may permit the following election
changes: (a) Participants enrolled in that Benefit Package Option may make a corresponding prospective decrease in
their elective contributions (by decreasing Salary Reductions); (b) Participants who are enrolled in another Benefit
Package Option may change their election on a prospective basis to elect the Benefit Package Option that has
decreased in cost Medical Insurance Plan); or (c) Employees who are otherwise eligible under Section 3.1 may elect the
Benefit Package Option that has decreased in cost on a prospective basis, subject to the terms and limitations of the
Benefit Package Option. The Plan Administrator, in its sole discretion and on a uniform and consistent basis, will decide
whether a cost decrease is significant in accordance with prevailing IRS guidance.
Page 11
(i) Change in Coverage. The definition of "similar coverage" under Section 12.4(h) applies also to this Section 12.4(1).
(1) Significant Curtailment. If coverage is "significantly curtailed" (as defined below), Participants may elect coverage
under another Benefit Package Option that provides similar coverage. In addition, as set forth below, if the coverage
curtailment results in a "Loss of Coverage" (as defined below), then Participants may drop coverage if no similar
coverage is offered by the Employer. The Plan Administrator in its sole discretion, on a uniform and consistent basis, will
decide, in accordance with prevailing IRS guidance, whether a curtailment is "significant," and whether a Loss of
Coverage has occurred.
(a) Significant Curtailment Without Loss of Coverage. If the Plan Administrator determines that a Participant's coverage
under a Benefit Package Option under this Plan (or the Participant's Spouse's or Dependent's coverage under his or her
employer's plan) is significantly curtailed without a Loss of Coverage (for example, when there is a significant increase in
the deductible, the co -pay, or the out -of- pocket cost - sharing limit under an accident or health plan during a Period of
Coverage, the Participant may revoke his or her election for the affected coverage, and in lieu thereof, prospectively
elect coverage under another Benefit Package Option that provides similar coverage. Coverage under a plan is deemed
to be "significantly curtailed" only if there is an overall reduction in coverage provided under the plan so as to constitute
reduced coverage generally.
(b) Significant Curtailment With a Loss of Coverage. If the Plan Administrator determines that a Participant's Benefit
Package Option coverage under this Plan (or the Participant's Spouse's or Dependent's coverage under his or her
employer's plan) is significantly curtailed, and if such curtailment results in a Loss of Coverage during a Period of
Coverage, then the Participant may revoke his or her election for the affected coverage and may either prospectively
elect coverage under another Benefit Package Option that provides similar coverage or drop coverage if no other
Benefit Package Option providing similar coverage is offered by the Employer.
(c) Definition of Loss of Coverage. For purposes of this Section 4.7(i)(1), a "Loss of Coverage" means a complete loss of
coverage (including the elimination of a Benefit Package Option, an HMO ceasing to be available where the Participant
or his or her Spouse or Dependent resides, or a Participant or his or her Spouse or Dependent losing all coverage under
the Benefit Package Option by reason of an overall lifetime or annual limitation). In addition, the Plan Administrator, in its
sole discretion, on a uniform and consistent basis, may treat the following as a Loss of Coverage:
• a substantial decrease in the medical care providers available under the Benefit Package Option (such as a major
hospital ceasing to be a member of a preferred provider network or a substantial decrease in the number of physicians
participating in the PPO for the Medical Insurance Plan or in an HMO);
• a reduction in benefits for a specific type of medical condition or treatment with respect to which the Participant or his
or her Spouse or Dependent is currently in a course of treatment; or
• any other similar fundamental loss of coverage.
(2) Addition or Significant Improvement of a Benefit Package Option. If during a Period of Coverage the Plan adds a new
Benefit Package Option or significantly improves an existing Benefit Package Option, the Plan Administrator may permit
the following election changes: (a) Participants who are enrolled in a Benefit Package Option other than the newly
added or significantly improved Benefit Package Option may change their elections on a prospective basis to elect the
newly added or significantly improved Benefit Package Option; and (b) Employees who are otherwise eligible under
Section 3.1 may elect the newly added or significantly improved Benefit Package Option on a prospective basis, subject
to the terms and limitations of the Benefit Package Option. The Plan Administrator, in its sole discretion and on a
uniform and consistent basis, will decide whether there has been an addition of, or a significant improvement in, a
Benefit Package Option in accordance with prevailing IRS guidance.
(3) Loss of Coverage Under Other Group Health Coverage. A Participant may prospectively change his or her election
to add group health coverage for the Participant or his or her Spouse or Dependent, if such individual(s) loses coverage
Page 12
under any group health coverage sponsored by a governmental or educational institution, including (but not limited to)
the following: a state children's health insurance program (SCHIP) under Title XXI of the Social Security Act; a medical
care program of an Indian Tribal government (as defined in Code § 7701(a)(40)), the Indian Health Service, or a tribal
organization; a state health benefits risk pool; or a foreign government group health plan, subject to the terms and
limitations of the applicable Benefit Package Option(s).
(4) Change in Coverage Under Another Employer Plan. A Participant may make a prospective election change that is on
account of and corresponds with a change made under an employer plan (including a plan of the Employer or a plan of
the Spouse's or Dependent's employer), so long as (a) the other cafeteria plan or qualified benefits plan permits its
participants to make an election change that would be permitted under applicable IRS regulations; or (b) the Plan
permits Participants to make an election for a Period of Coverage that is different from the plan year under the other
cafeteria plan or qualified benefits plan. For example, if an election is made by the Participant's Spouse during his or her
employer's open enrollment to drop coverage, the Participant may add coverage to replace the dropped coverage. The
Plan Administrator, in its sole discretion and on a uniform and consistent basis, will decide whether a requested change
is on account of and corresponds with a change made under the other employer plan, in accordance with prevailing IRS
guidance.
A Participant entitled to change an election as described in this Section 4.7 must do so in accordance with the
procedures described in Section 4.5.
Q) CHIP Special Enrollment Rights
Notwithstanding anything else in this document to the contrary, special enrollment rights shall be made available as a
result of a loss of eligibility for Medicaid or for coverage under a state children's health insurance program (SCHIP) or as
a result of eligibility for a state premium assistance subsidy under the plan from Medicaid or SCHIP.
4.8 ** *Reserved * **
4.9 Election Modifications Required by Plan Administrator
The Plan Administrator may, at any time, require any Participant or class of Participants to amend the amount of their
Salary Reductions for a Period of Coverage if the Plan Administrator determines that such action is necessary or
advisable in order to (a) satisfy any of the Code's nondiscrimination requirements applicable to this Plan or other
cafeteria plan; (b) prevent any Employee or class of Employees from having to recognize more income for federal
income tax purposes from the receipt of benefits hereunder than would otherwise be recognized; (c) maintain the
qualified status of benefits received under this Plan; or (d) satisfy Code nondiscrimination requirements or other
limitations applicable to the Employer's qualified plans. In the event that contributions need to be reduced for a class of
Participants, the Plan Administrator will reduce the Salary Reduction amounts for each affected Participant, beginning
with the Participant in the class who had elected the highest Salary Reduction amount and continuing with the
Participant in the class who had elected the next - highest Salary Reduction amount, and so forth, until the defect is
corrected.
ARTICLE V. Benefits Offered and Method of Funding
5.1 Benefits Offered
Page 13
When first eligible or during the Open Enrollment Period as described under Article IV, Participants will be given the
opportunity to elect Premium Payment Benefits, as described in Article VI.
5.2 Employer and Participant Contributions
(a) Employer Contributions. For Participants who elect Insurance Benefits described in Article VI, the Employer may
contribute a portion of the Contributions as provided in the open enrollment materials furnished to Employees and /or on
the Election Form /Salary Reduction Agreement.
(b) Participant Contributions. Participants who elect any of the Medical Insurance Benefits described in Article VI may
pay for the cost of that coverage on a pre -tax Salary Reduction basis, or with after -tax deductions, by completing an
Election Form /Salary Reduction Agreement.
5.3 Using Salary Reductions to Make Contributions
(a) Salary Reductions per Pay Period. The Salary Reduction for a pay period for a Participant is, for the Benefits elected,
(1) an amount equal to the annual Contributions for such Benefits (as described in Section 6.2 for Premium Payment
Benefits; (2) an amount otherwise agreed upon between the Employer and the Participant; or (3) an amount deemed
appropriate by the Plan Administrator (i.e., in the event of shortage in reducible Compensation, amounts withheld and
the Benefits to which Salary Reductions are applied may fluctuate).
(b) Considered Employer Contributions for Certain Purposes. Salary Reductions are applied by the Employer to pay for
the Participant's share of the Contributions for the Premium Payment Benefits are considered to be Employer
contributions.
(c) Salary Reduction Balance Upon Termination of Coverage. If, as of the date that any elected coverage under this
Plan terminates, a Participant's year -to -date Salary Reductions exceed or are less than the Participant's required
Contributions for the coverage, then the Employer will, as applicable, either return the excess to the Participant as
additional taxable wages or recoup the due Salary Reduction amounts from any remaining Compensation.
(d) After -Tax Contributions for Premium Payment Benefits. For those Participants who elect to pay their share of the
Contributions for any of the Medical Insurance Benefits with after -tax deductions, both the Employee and Employer
portions of such Contributions will be paid outside of this Plan.
5.4 Funding This Plan
All of the amounts payable under this Plan shall be paid from the general assets of the Employer, but Premium Payment
Benefits are paid as provided in the applicable insurance policy. Nothing herein will be construed to require the
Employer or the Plan Administrator to maintain any fund or to segregate any amount for the benefit of any Participant,
and no Participant or other person shall have any claim against, right to, or security or other interest in any fund,
account, or asset of the Employer from which any payment under this Plan may be made. There is no trust or other fund
from which Benefits are paid. While the Employer has complete responsibility for the payment of Benefits out of its
general assets (except for Premium Payment Benefits paid as provided in the applicable insurance policy), it may hire
an unrelated third -party paying agent to make Benefit payments on its behalf. The maximum contribution that may be
made under this Plan for a Participant is the total of the maximums that may be elected as Employer and Participant
Contributions for Premium Payment Benefits, as described in Section 6.2.
Page 14
ARTICLE VI. Premium Payment Component
6.1 Benefits
The only Insurance Benefits that are offered under the Premium Payment Component are benefits under the Medical,
Dental , Vision , Accidental Death & Dismemberment, Group Term Life , Hospital Indemnity Insurance Plan(s).
Notwithstanding any other provision in these Plan(s), these benefits are subject to the terms and conditions of the
Insurance Plan(s), and no changes can be made with respect to such Insurance Benefits under this Plan (such as
mid -year changes in election) if such changes are not permitted under the applicable Insurance Plan. An Eligible
Employee can (a) elect benefits under the Premium Payment Component by electing to pay for his or her share of the
Contributions for Medical Insurance Benefits on a pretax Salary Reduction basis (Premium Payment Benefits); or (b)
elect no benefits under the Premium Payment Component and to pay for his or her share of the Contributions, if any, for
Medical Insurance Benefits with after -tax deductions outside of this Plan. Unless an exception applies (as described in
Article IV), such election is irrevocable for the duration of the Period of Coverage to which it relates.
The Employer may at its discretion offer cash in lieu of benefits for Participants who do not choose Insurance Benefits.
6.2 Contributions for Cost of Coverage
The annual Contribution for a Participant's Premium Payment Benefits is equal to the amount as set by the Employer,
which may or may not be the same amount charged by the insurance carrier.
6.3 Insurance Benefits Provided Under Insurance Plans
Insurance Benefits will be provided by the Insurance Plans, not this Plan. The types and amounts of Insurance Benefits,
the requirements for participating in the Insurance Plans, and the other terms and conditions of coverage and benefits of
the Insurance Plans are set forth in the Insurance Plans. All claims to receive benefits under the Insurance Plans shall
be subject to and governed by the terms and conditions of the Insurance Plans and the rules, regulations, policies, and
procedures adopted in accordance therewith, as may be amended from time to time.
6.4 Health Insurance Benefits; COBRA
Notwithstanding any provision to the contrary in this Plan, to the extent required by COBRA, a Participant and his or her
Spouse and Dependents,as applicable, whose coverage terminates under the Health Insurance Benefits because of a
COBRA qualifying event (and who is a qualified beneficiary as defined under COBRA), shall be given the opportunity to
continue on a self -pay basis the same coverage that he or she had under the Health Insurance Plan(s) the day before
the qualifying event for the periods prescribed by COBRA.
Such continuation coverage shall be subject to all conditions and limitations under COBRA. Contributions for COBRA
coverage for Health Insurance Benefits may be paid on a pre -tax basis for current Employees receiving taxable
compensation (as may be permitted by the Plan Administrator on a uniform and consistent basis, but may not be
prepaid from contributions in one Plan Year to provide coverage that extends into a subsequent Plan Year) where
COBRA coverage arises either (a) because the Employee ceases to be eligible because of a reduction in hours; or (b)
because the Employee's Dependent ceases to satisfy the eligibility requirements for coverage. For all other individuals
(e.g., Employees who cease to be eligible because of retirement, termination of employment, or layoff), Contributions for
COBRA coverage for Health Insurance Benefits shall be paid on an after -tax basis (unless may be otherwise permitted
by the Plan Administrator on a uniform and consistent basis, but may not be prepaid from contributions in one Plan Year
to provide coverage that extends into a subsequent Plan Year).
Page 15
ARTICLES VII. — XII. ***RESERVED * **
ARTICLE XIII. Appeals Procedure
13.1 Procedure If Benefits Are Denied Under This Plan
If a claim for reimbursement under this Plan is wholly or partially denied, then claims shall be administered in
accordance with the claims procedure set forth in the summary plan description for this Plan. The Committee acts on
behalf of the Plan Administrator with respect to appeals.
13.2 Claims Procedures for Insurance Benefits
Claims and reimbursement for Insurance Benefits shall be administered in accordance with the claims procedures for
the Insurance Benefits, as set forth in the plan documents and /or summary plan description(s) for the Insurance Plan(s).
ARTICLE XIV. Recordkeeping and Administration
14.1 Plan Administrator
The administration of this Plan shall be under the supervision of the Plan Administrator. It is the principal duty of the Plan
Administrator to see that this Plan is carried out, in accordance with its terms, for the exclusive benefit of persons
entitled to participate in this Plan without discrimination among them.
14.2 Powers of the Plan Administrator
The Plan Administrator shall have such duties and powers as it considers necessary or appropriate to discharge its
duties. It shall have the exclusive right to interpret the Plan and to decide all matters thereunder, and all determinations
of the Plan Administrator with respect to any matter hereunder shall be conclusive and binding on all persons. Without
limiting the generality of the foregoing, the Plan Administrator shall have the following discretionary authority:
(a) to construe and interpret this Plan, including all possible ambiguities, inconsistencies, and omissions in the Plan and
related documents, and to decide all questions of fact, questions relating to eligibility and participation, and questions of
benefits under this Plan (provided that, notwithstanding the first paragraph in this Section 14.2, the Committee shall
exercise such exclusive power with respect to an appeal of a claim under Section 13.1);
(b) to prescribe procedures to be followed and the forms to be used by Employees and Participants to make elections
pursuant to this Plan;
(c) to prepare and distribute information explaining this Plan and the benefits under this Plan in such manner as the Plan
Page 16
Administrator determines to be appropriate;
(d) to request and receive from all Employees and Participants such information as the Plan Administrator shall from
time to time determine to be necessary for the proper administration of this Plan;
(e) to furnish each Employee and Participant with such reports with respect to the administration of this Plan as the Plan
Administrator determines to be reasonable and appropriate, including appropriate statements setting forth the amounts
by which a Participant's Compensation has been reduced in order to provide benefits under this Plan;
(f) to receive, review, and keep on file such reports and information regarding the benefits covered by this Plan as the
Plan Administrator determines from time to time to be necessary and proper;
(g) to appoint and employ such individuals or entities to assist in the administration of this Plan as it determines to be
necessary or advisable, including legal counsel and benefit consultants;
(h) to sign documents for the purposes of administering this Plan, or to designate an individual or individuals to sign
documents for the purposes of administering this Plan;
(i) to secure independent medical or other advice and require such evidence as it deems necessary to decide any claim
or appeal; and
Q) to maintain the books of accounts, records, and other data in the manner necessary for proper administration of this
Plan and to meet any applicable disclosure and reporting requirements.
14.3 Reliance on Participant, Tables, etc.
The Plan Administrator may rely upon the direction, information, or election of a Participant as being proper under the
Plan and shall not be responsible for any act or failure to act because of a direction or lack of direction by a Participant.
The Plan Administrator will also be entitled, to the extent permitted by law, to rely conclusively on all tables, valuations,
certificates, opinions, and reports that are furnished by accountants, attorneys, or other experts employed or engaged by
the Plan Administrator.
14.4 ** *Reserved***
14.5 Fiduciary Liability
To the extent permitted by law, the Plan Administrator shall not incur any liability for any acts or for failure to act except
for their own willful misconduct or willful breach of this Plan.
14.6 Compensation of Plan Administrator
Unless otherwise determined by the Employer and permitted by law, any Plan Administrator that is also an Employee of
the Employer shall serve without compensation for services rendered in such capacity, but all reasonable expenses
incurred in the performance of their duties shall be paid by the Employer.
14.7 Bonding
The Plan Administrator shall be bonded to the extent required by ERISA.
Page 17
14.8 Insurance Contracts
The Employer shall have the right (a) to enter into a contract with one or more insurance companies for the purposes of
providing any benefits under the Plan; and (b) to replace any of such insurance companies or contracts at its discretion.
Any dividends, retroactive rate adjustments, or other refunds of any type that may become payable under any such
insurance contract shall not be assets of the Plan but shall be the property of and be retained by the Employer, to the
extent that such amounts are less than aggregate Employer contributions toward such insurance.
14.9 Inability to Locate Payee
If the Plan Administrator is unable to make payment to any Participant or other person to whom a payment is due under
the Plan because it cannot ascertain the identity or whereabouts of such Participant or other person after reasonable
efforts have been made to identify or locate such person, then such payment and all subsequent payments otherwise
due to such Participant or other person shall be forfeited following a reasonable time after the date any such payment
first became due.
14.10 Effect of Mistake
In the event of a mistake as to the eligibility or participation of an Employee, the allocations made to the account of any
Participant, or the amount of benefits paid or to be paid to a Participant or other person, the Plan Administrator shall, to
the extent that it deems administratively possible and otherwise permissible under Code § 125 or the regulations issued
thereunder, cause to be allocated or cause to be withheld or accelerated, or otherwise make adjustment of, such
amounts as it will in its judgment accord to such Participant or other person the credits to the account or distributions to
which he or she is properly entitled under the Plan. Such action by the Plan Administrator may include withholding of
any amounts due to the Plan or the Employer from Compensation paid by the Employer.
ARTICLE XV. General Provisions
15.1 ** *Reserved * **
15.2 No Contract of Employment
Nothing herein contained is intended to be or shall be construed as constituting a contract or other arrangement
between any Employee and the Employer to the effect that such Employee will be employed for any specific period of
time. All Employees are considered to be employed at the will of the Employer.
15.3 Amendment and Termination
This Plan has been established with the intent of being maintained for an indefinite period of time. Nonetheless, the
Employer may amend or terminate all or any part of this Plan at any time for any reason and any such amendment or
termination will automatically apply to the Related Employers that are participating in this Plan.
15.4 Governing Law
Page 18
This Plan shall be construed, administered, and enforced according to the laws of the State of Florida, to the extent not
superseded by the Code, ERISA, or any other federal law.
15.5 Code and ERISA Compliance
It is intended that this Plan meet all applicable requirements of the Code , ERISA (if ERISA is applicable) and of all
regulations issued thereunder. This Plan shall be construed, operated, and administered accordingly, and in the event of
any conflict between any part, clause, or provision of this Plan and the Code and /or ERISA (if ERISA is applicable), the
provisions of the Code and ERISA (if ERISA is applicable) shall be deemed controlling, and any conflicting part, clause,
or provision of this Plan shall be deemed superseded to the extent of the conflict.
15.6 No Guarantee of Tax Consequences
Neither the Plan Administrator nor the Employer makes any commitment or guarantee that any amounts paid to or for
the benefit of a Participant under this Plan will be excludable from the Participant's gross income for federal, state, or
local income tax purposes. It shall be the obligation of each Participant to determine whether each payment under this
Plan is excludable from the Participant's gross income for federal, state, and local income tax purposes and to notify the
Plan Administrator if the Participant has any reason to believe that such payment is not so excludable.
15.7 Indemnification of Employer
If any Participant receives one or more payments or reimbursements under this Plan on a tax -free basis and if such
payments do not qualify for such treatment under the Code, then such Participant shall indemnify and reimburse the
Employer for any liability that it may incur for failure to withhold federal income taxes, Social Security taxes, or other
taxes from such payments or reimbursements.
15.8 Non - Assignability of Rights
The right of any Participant to receive any reimbursement under this Plan shall not be alienable by the Participant by
assignment or any other method and shall not be subject to claims by the Participant's creditors by any process
whatsoever. Any attempt to cause such right to be so subjected will not be recognized, except to the extent required by
law.
15.9 Headings
The headings of the various Articles and Sections are inserted for convenience of reference and are not to be regarded
as part of this Plan or as indicating or controlling the meaning or construction of any provision.
15.10 Plan Provisions Controlling
In the event that the terms or provisions of any summary or description of this Plan are in any construction interpreted as
being in conflict with the provisions of this Plan as set forth in this document, the provisions of this Plan shall be
controlling.
15.11 Severability
Page 19
Should any part of this Plan subsequently be invalidated by a court of competent jurisdiction, the remainder of the Plan
shall be given effect to the maximum extent possible.
IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing instrument comprising the Town
of Gulstream Salary Reduction Plan, Town of Gulstream has caused this Plan to be executed in its name and on its
behalf, on this , day of 20
Town of Gulstream
By:
Its: %ro ,Y,, ALA-4 1 v F r
Related Employers That Have Adopted This Plan,
With the Approval of Town of Gulstream
Appendix A
Page 20
NOTE: THE FOLLOWING RESOLUTION IS INTENDED AS A
SAMPLE RESOLUTION OF ADOPTION FOR THE PLAN
SPONSOR'S BUSINESS RECORDS. THE PLAN SPONSOR IS
FREE TO REMOVE, CHANGE OR OTHERWISE AMEND THE
LANGUAGE IN THIS DOCUMENT TO SUIT ITS PARTICULAR
CIRCUMSTANCES.
THE TOWN OF G U LSTREAM
CAFETERIA PLAN
SUMMARY PLAN DESCRIPTION
Introduction
Town of Gulstream sponsors the Town of Gulstream Cafeteria Plan (the "Cafeteria Plan ") that allows eligible Employees
to choose from a menu of different benefits paid for with pre -tax dollars. (Such plans are also commonly known as
"salary reduction plans" or "Section 125 plans ").
This Summary Plan Description ( "SPD ") describes the basic features of the Cafeteria Plan, how it generally operates
and how Employees can gain the maximum advantage from it.
PLEASE NOTE: This SPD is for general informational purposes only. It does not describe every detail of the Cafeteria
Plan. If there is a conflict between the Cafeteria Plan documents and this SPD, then the Cafeteria Plan documents will
control.
Cafeteria Plan
CAF Q -1. How do I pay for Town of Gulstream benefits on a pre -tax basis?
You may elect to pay for benefits on a pre -tax basis by entering an election with the Employer. At the Employer's option,
this may be done with a traditional "paper" salary reduction agreement or it may be done in electronic form. Whatever
medium is used, it shall be referred to as a Salary Reduction Agreement for purposes of this SPD.
If you elect to pay for benefits on a "pre -tax" basis, you agree to a salary reduction to pay for your share of the cost of
coverage with pretax funds instead of receiving a corresponding amount of your regular pay that would otherwise be
subject to taxes.
Example CAF Q-1 (a): Sally is paid an annual salary of $30,000. Sally elects to pay for $2,000 worth of benefits for the
Plan Year on a "pre -tax" basis. By doing so, she is electing to reduce her salary, and therefore also her taxable income,
by $2,000 for the year to $28,000.
From then on, you must pay contributions for such coverage by having that portion deducted from each paycheck on a
pre -tax basis (generally an equal portion from each paycheck, or an amount otherwise agreed to or as deemed
appropriate by the Plan Administrator).
Example CAF Q-1 (b): Using the same facts from Example Q-1 (a), suppose Sally is paid 26 times a year (bi- weekly).
Because she has elected $2,000 in benefits, she will have $76.92 deducted from each paycheck for the year ($2,000
divided by 26 paychecks equals $76.92).
CAF Q -2. What benefits may be elected under the Cafeteria Plan?
The Cafeteria Plan includes the following benefit plans:
The Premium Payment Component permits an Employee to pay for his or her share of contributions for insurance plans
with pretax dollars. Under the Town of Gulstream Cafeteria Plan, these benefits may include:
• Accidental Death & Dismemberment
• Dental
• Group Term Life
• Hospital Indemnity
• Medical
Page 2
OV/� 0 I
If you select any or all of these benefits, you will likely pay all or some of the contributions; the Employer may contribute
some or no portion of them. The applicable amounts will be described in documents furnished separately to you as
necessary from time to time.
The Employer may at its own discretion offer cash in lieu of benefits for participants who do not choose benefits. If the
Employer does choose this option, participants will be informed through other communications.
CAF Q -3. Who can participate in the Cafeteria Plan?
Employees who are working 35 Hours per week or more are eligible to participate in the Cafeteria Plan following 0 days
of employment with the Employer, provided that the election procedures in CAF Q -5 are followed.
An "Employee" is any individual who the Employer classifies as a common -law employee and who is on the Employer's
W -2 payroll.
Please note: "Employee" does not include the following:
(a) any leased employee (including but not limited to those individuals defined as leased employees in Code § 414(n)) or
an individual classified by the Employer as a contract worker, independent contractor, temporary employee, or casual
employee for the period during which such individual is so classified, whether or not any such individual is on the
Employer's W -2 payroll or is determined by the IRS or others to be a common -law employee of the Employer;
(b) any individual who performs services for the Employer but who is paid by a temporary or other employment or
staffing agency for the period during which such individual is paid by such agency, whether or not such individual is
determined by the IRS or others to be a common -law employee of the Employer;
(c) any employee covered under a collective bargaining agreement;
(d) any individual considered "self- employed" by the IRS because of an ownership interest in Town of Gulstream;
CAF Q-4. What tax savings are possible under the Cafeteria Plan?
You may save both federal income tax and FICA (Social Security /Medicare) taxes by participating in the Town of
Gulstream Cafeteria Plan.
Example CAF Q4(a): Suppose Sally pays 15% in federal income taxes for the year. With an annual salary of $30,000,
that could mean as much as $4,500 in federal income taxes, plus $2,295 in FICA taxes (calculated at 7.65% of income).
But by electing $2,000 of cafeteria plan benefits for the year, Sally lowers her income by $2,000, meaning she is only
taxed on $28,000. This comes out to $4,200 in income tax plus $2,142 in FICA tax. That's a $453 tax savings for the
year.
(Caution: This example is intended to illustrate the general effect of "pre- taxing" benefits through a cafeteria plan. It
does not take into account the effects of filing status, tax exemptions, tax deductions and other factors affecting tax
liability. Furthermore, the amount of the contributions used in this example is not meant to reflect your actual
contributions. It is also not intended to reflect specifically upon your particular tax situation. You are encouraged to
consult with your accountant or other professional tax advisor with regard to your particular tax situation, especially with
regard to state and local taxes.)
CAF 0-5. When does participation begin and end in the Cafeteria Plan?
After you satisfy the eligibility requirements, you can become a Participant on the first day of the next calendar month by
Page 3
electing benefits in a manner such as described in CAF Q -1. An eligible Employee who does not elect benefits will not
be able to elect any benefits under the Cafeteria Plan until the next Open Enrollment Period (unless a "Change in
Election Event' occurs, as explained in CAF Q -7).
An Employee continues to participate in the Cafeteria Plan until (a) termination of the Cafeteria Plan; or (b) the date on
which the Participant ceases to be an eligible Employee (because of retirement, termination of employment, layoff,
reduction of hours, or any other reason). However, for purposes of pre- taxing COBRA coverage for Health Insurance
Benefits, certain Employees may be able to continue eligibility in the Cafeteria Plan for certain periods. See CAF Q -8
and CAF Q -12 for more information about this as information about how termination of participation affects your
Benefits.
CAF Q -6. What is meant by "Open Enrollment Period" and "Plan Year "?
The "Open Enrollment Period" is the period during which you have an opportunity to participate under the Cafeteria Plan
by electing to do so. (See Q -5.) You will be notified of the timing and duration of the Open Enrollment Period, which for
any new Plan Year generally will occur during the quarter preceding the new Plan Year.
The Plan Year for the Town of Gulstream Cafeteria Plan is the period beginning on October 01 2010 and ending on
September 30 2011.
CAF Q -7. Can I change my elections under the Cafeteria Plan during the Plan Year?
Except in the case of HSA elections, you generally cannot change your election to participate in the Cafeteria Plan or
vary the salary reduction amounts that you have selected during the Plan Year (this is known as the "irrevocability rule ").
Of course, you can change your elections for benefits and salary reductions during the Open Enrollment Period, but
those election changes will apply only for the following Plan Year.
However, there are several important exceptions to the irrevocability rule, many of which have to do with events in your
personal or professional life that may occur during the Plan Year.
Here are the exceptions to the irrevocability rule:
1. Leaves of Absence
You may change an election under the Cafeteria Plan upon FMLA and non -FMLA leave only as described in CAF Q -14.
2. Change in Status.
If one or more of the following Changes in Status occur, you may revoke your old election and make a new election,
provided that both the revocation and new election are on account of and correspond with the Change in Status (as
described in item 3 below). Those occurrences that qualify as a Change in Status include the events described below,
as well as any other events that the Plan Administrator, in its sole discretion and on a uniform and consistent basis,
determines are permitted under IRS regulations:
- a change in your legal marital status (such as marriage, death of a Spouse, divorce, legal separation, or annulment);
- a change in the number of your Dependents (such as the birth of a child, adoption or placement for adoption of a
Dependent, or death of a Dependent);
• any of the following events that change the employment status of you, your Spouse, or your Dependent and that affect
benefits eligibility under a cafeteria plan (including this Cafeteria Plan) or other employee benefit plan of you, your
Spouse, or your Dependents. Such events include any of the following changes in employment status: termination or
commencement of employment; a strike or lockout; a commencement of or return from an unpaid leave of absence; a
Page 4
chl- nge in worksite; switching from salaried to hourly -paid, union to non - union, or full -time to part -time (or vice versa);
incurring a reduction or increase in hours of employment; or any other similar change that makes the individual become
(or cease to be) eligible for a particular employee benefit;
• an event that causes your Dependent to satisfy or cease to satisfy an eligibility requirement for a particular benefit
(such as attaining a specific age, ceasing to be a student, or a similar circumstance); or
• a change in your, your Spouse's, or your Dependent's place of residence.
3. Change in Status —Other Requirements.
If you wish to change your election based on a Change in Status, you must establish that the revocation is on account of
and corresponds with the Change in Status. The Plan Administrator, in its sole discretion and on a uniform and
consistent basis, shall determine whether a requested change is on account of and corresponds with a Change in
Status. As a general rule, a desired election change will be found to be consistent with a Change in Status event if the
event affects coverage eligibility.
In addition, you must satisfy the following specific requirements in order to alter your election based on that Change in
Status:
• Loss of Spouse or Dependent Eligibility, Special COBRA Rules. For Health Insurance Benefits, a special rule governs
which type of election changes are consistent with the Change in Status. For a Change in Status involving your divorce,
annulment, or legal separation from your Spouse, the death of your Spouse or your Dependent, or your Dependent's
ceasing to satisfy the eligibility requirements for coverage, you may elect only to cancel the accident or health benefits
for the affected Spouse or Dependent. A change in election for any individual other than your Spouse involved in the
divorce, annulment, or legal separation, your deceased Spouse or Dependent, or your Dependent that ceased to satisfy
the eligibility requirements would fail to correspond with that Change in Status.
However, if you, your Spouse, or your Dependent elects COBRA continuation coverage under the Employer's plan
because you ceased to be eligible because of a reduction of hours or because your Dependent ceases to satisfy
eligibility requirements for coverage, and if you remain a Participant under the terms of this Cafeteria Plan, then you may
in certain circumstances be able to increase your contributions to pay for such coverage. See CAF Q -12.
• Gain of Coverage Eligibility Under Another Employer's Plan. For a Change in Status in which you, your Spouse, or
your Dependent gains eligibility for coverage under another employer's cafeteria plan (or qualified benefit plan) as a
result of a change in your marital status or a change in your, your Spouse's, or your Dependent's employment status,
your election to cease or decrease coverage for that individual under the Cafeteria Plan would correspond with that
Change in Status only if coverage for that individual becomes effective or is increased under the other employer's plan.
4. Special Enrollment Rights. In certain circumstances, enrollment for Health Insurance Benefits may occur outside
the Open Enrollment Period, as explained in materials provided to you separately describing the Health Insurance
Benefits. When a special enrollment right explained in those separate documents applies to your Medical Insurance
Benefits, you may change your election under the Cafeteria Plan to correspond with the special enrollment right. Special
enrollments may also be available as a result of a loss of eligibility for Medicaid or for coverage under a state children's
health insurance program (SCHIP) or as a result of eligibility for a state premium assistance subsidy under the plan from
Medicaid or SCHIP.
5. Certain Judgments, Decrees, and Orders. If a judgment, decree, or order from a divorce, separation, annulment,
or custody change requires your child (including a foster child who is your Dependent) to be covered under the Health
Insurance Benefits, you may change your election to provide coverage for the child. If the order requires that another
individual (such as your former Spouse) cover the child, then you may change your election to revoke coverage for the
child, provided that such coverage is, in fact, provided for the child.
Page 5
6.Nedicare or Medicaid. If you, your Spouse, or your Dependent becomes entitled to (i.e., becomes enrolled in)
Medicare or Medicaid, then you may reduce or cancel that person's accident or health coverage under the Medical
Insurance Plan. Similarly, if you, your Spouse, or your Dependent who has been entitled to Medicare or Medicaid loses
eligibility for such coverage, then you may elect to commence or increase that person's accident or health coverage.
7. Change in Cost. If the cost charged to you for your Health Insurance Benefits significantly increases during the Plan
Year, then you may choose to do any of the following: (a) make a corresponding increase in your contributions; (b)
revoke your election and receive coverage under another benefit package option (if any) that provides similar coverage,
or elect similar coverage under the plan of your Spouse's employer; or (c) drop your coverage, but only if no other
benefit package option provides similar coverage. Coverage under another employer plan, such as the plan of a
Spouse's or Dependent's employer, may be treated as similar coverage if it otherwise meets the requirements of similar
coverage.) If the cost of Health Insurance significantly decreases during the Plan Year, then the Plan Administrator may
permit the following election changes: (a) if you are enrolled in the benefit package option that has decreased in cost,
you may make a corresponding decrease in your contributions; (b) if you are enrolled in another benefit package option
(such as the HMO option under the Medical Insurance Plan), you may change your election on a prospective basis to
elect the benefit package option that has decreased in cost (such as the PPO option under the Medical Insurance Plan);
or (c) if you are otherwise eligible, you may elect the benefit package option that has decreased in cost on a prospective
basis, subject to the terms and limitations of the benefit package option.
For insignificant increases or decreases in the cost of benefits, however, the Plan Administrator will automatically adjust
your election contributions to reflect the minor change in cost.
The Plan Administrator generally will notify you of increases or decreases in the cost of Health Insurance benefits.
Change in Coverage. You may also change your election if one of the following events occurs:
• Significant Curtailment of Coverage. If your Health Insurance Benefits coverage is significantly curtailed without a loss
of coverage (for example, when there is an increase in the deductible under the Medical Insurance Benefits), then you
may revoke your election for that coverage and elect coverage under another benefit package option that provides
similar coverage. (Coverage under a plan is significantly curtailed only if there is an overall reduction of coverage under
the plan generally —loss of one particular physician in a network does not constitute significant curtailment.) If your
Health Insurance Benefits coverage is significantly curtailed with a loss of coverage (for example, if you lose all
coverage under the option by reason of an overall lifetime or annual limitation), then you may either revoke your election
and elect coverage under another benefit package option that provides similar coverage, elect similar coverage under
the plan of your Spouse's employer, or drop coverage, but only if there is no option available under the plan that
provides similar coverage. (The Plan Administrator generally will notify you of significant curtailments in Medical
Insurance Benefits coverage.
• Addition or Significant Improvement of Cafeteria Plan Option. If the Cafeteria Plan adds a new option or significantly
improves an existing option, then the Plan Administrator may permit Participants who are enrolled in an option other
than the new or improved option to elect the new or improved option. Also, the Plan Administrator may permit eligible
Employees to elect the new or improved option on a prospective basis, subject to limitations imposed by the applicable
option.
• Loss of Other Group Health Coverage. You may change your election to add group health coverage for you, your
Spouse, or your Dependent, if any of you loses coverage under any group health coverage sponsored by a
governmental or educational institution (for example, a state children's health insurance program or certain Indian tribal
programs).
• Change in Election Under Another Employer Plan. You may make an election change that is on account of and
corresponds with a change made under another employer plan (including a plan of the Employer or a plan of your
Spouse's or Dependent's employer), so long as (a) the other cafeteria plan or qualified benefits plan permits its
participants to make an election change permitted under the IRS regulations; or (b) the Cafeteria Plan permits you to
Page 6
make an election for a period of coverage (for example, the Plan Year) that is different from the period of coverage
under the other cafeteria plan or qualified benefits plan, which it does.
For example, if an election to drop coverage is made by your Spouse during his or her employer's open enrollment, you
may add coverage under the Cafeteria Plan to replace the dropped coverage.
CAF Q -8. What happens if my employment ends during the Plan Year or I lose eligibility for other reasons?
If your employment with the Employer is terminated during the Plan Year, then your active participation in the Cafeteria
Plan will cease and you will not be able to make any more contributions to the Cafeteria Plan for Insurance Benefits.
See CAF Q -12 for information on your right to continued or converted group health coverage after termination of your
employment.
For purposes of pre- taxing COBRA coverage for Health Insurance Benefits, certain Employees may be able to continue
eligibility in the Cafeteria Plan for certain periods. See CAF Q -12.
If you are rehired within the same Plan Year and are eligible for the Cafeteria Plan, then you may make new elections,
provided that you are rehired more than 30 days after you terminated employment. If you are rehired within 30 days or
less during the same Plan Year, then your prior elections will be reinstated.
If you cease to be an eligible Employee for reasons other than termination of employment, such as a reduction of hours,
then you must complete the waiting period described in CAF Q -3 before again becoming eligible to participate in the
Plan.
CAF Q-9. 'RESERVED'
CAF Q -10. How long will the Cafeteria Plan remain in effect?
Although the Employer expects to maintain the Cafeteria Plan indefinitely, it has the right to amend or terminate all or
any part of the Cafeteria Plan at any time for any reason. It is also possible that future changes in state or federal tax
laws may require that the Cafeteria Plan be amended accordingly.
CAF Q -11. What happens if my claim for benefits is denied?
Insurance Benefits
The applicable insurance company will decide your claim in accordance with its claims procedures. If your claim is
denied, you may appeal to the insurance company for a review of the denied claim. If you don't appeal on time, you will
lose your right to file suit in a state or federal court, as you will not have exhausted your internal administrative appeal
rights (which generally is a prerequisite to bringing a suit in state or federal court). For more information about how to file
a claim and for details regarding the medical insurance company's claims procedures, consult the claims procedure
applicable under that plan or policy, as described in the plan document or summary plan description for the Insurance
Plan.
Appeals.
If your claim is denied in whole or part, then you (or your authorized representative) may request review upon written
application to the "Committee" (the Benefits Committee that acts on behalf of the Plan Administrator with respect to
appeals). Your appeal must be made in writing within 180 days after your receipt of the notice that the claim was denied.
If you do not appeal on time, you will lose the right to appeal the denial and the right to file suit in court. Your written
appeal should state the reasons that you feel your claim should not have been denied. It should include any additional
facts and /or documents that you feel support your claim. You will have the opportunity to ask additional questions and
Page 7
make written comments, and you may review (upon request and at no charge) documents and other information
relevant to your appeal.
Decision on Review.
Your appeal will be reviewed and decided by the Committee or other entity designated in the Plan in a reasonable time
not later than 60 days after the Committee receives your request for review. The Committee may, in its discretion, hold a
hearing on the denied claim. Any medical expert consulted in connection with your appeal will be different from and not
subordinate to any expert consulted in connection with the initial claim denial. The identity of a medical expert consulted
in connection with your appeal will be provided. If the decision on review affirms the initial denial of your claim, you will
be furnished with a notice of adverse benefit determination on review setting forth:
- the specific reason(s) for the decision on review;
• the specific Plan provision(s) on which the decision is based;
• a statement of your right to review (upon request and at no charge) relevant documents and other information;
• if an "internal rule, guideline, protocol, or other similar criterion" is relied on in making the decision on review, then a
description of the specific rule, guideline, protocol, or other similar criterion or a statement that such a rule, guideline,
protocol, or other similar criterion was relied on and that a copy of such rule, guideline, protocol, or other criterion will be
provided free of charge to you upon request;
and
- a statement of your right to bring suit under ERISA § 502(a) (where applicable).CAF Q -12. What is "Continuation
Coverage" and how does it work?
COBRA
If you have elect Health Insurance Benefits under this Plan, you may have certain rights to the continuation of such
benefits after a "Qualifying Event' (e.g., a termination of employment). See Appendix B of this SPD for a detailed
description of your rights to "continuation coverage" under COBRA.
USERRA
Continuation and reinstatement rights may also be available if you are absent from employment due to service in the
uniformed services pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
More information about coverage under USERRA is available from the Plan Administrator.
CAF Q -13. How will participating in the Cafeteria Plan affect my Social Security and other benefits?
Participating in the Cafeteria Plan will reduce the amount of your taxable income, which may result in a decrease in your
Social Security benefits and /or other benefits which are based on taxable income. However, the tax savings that you
realize through Cafeteria Plan participation will often more than offset any reduction in other benefits. If you are still
unsure, you are encouraged to consult with your accountant or other tax advisor.
CAF Q -14. How do leaves of absence (such as under FMLA) affect my benefits?
FMLA Leaves of Absence.
If the Employer is subject to the federal Family and Medical Leave Act of 1993 and you go on a qualifying leave under
the FMLA, then to the extent required by the FMLA your Employer will continue to maintain your Health Insurance
Page 8
Benefits on the same terms and conditions as if you were still active (that is, your Employer will continue to pay its share
of the contributions to the extent that you opt to continue coverage). Your Employer may require you to continue all
Medical Insurance Benefits coverage while you are on paid leave (so long as Participants on non -FMLA paid leave are
required to continue coverage). If so, you will pay your share of the contributions by the method normally used during
any paid leave (for example, on a pre -tax salary- reduction basis).
If you are going on unpaid FMLA leave (or paid FMLA leave where coverage is not required to be continued) and you
opt to continue your Insurance Benefits, then you may pay your share of the contributions in one of three ways: (a) with
after -tax dollars while on leave; (b) with pretax dollars to the extent that you receive compensation during the leave, or
by pre - paying all or a portion of your share of the contributions for the expected duration of the leave on a pre -tax salary
reduction basis out of your pre -leave compensation, including unused sick days and vacation days (to pre -pay in
advance, you must make a special election before such compensation normally would be available to you (but note that
prepayments with pre -tax dollars may not be used to pay for coverage during the next Plan Year); or (c) by other
arrangements agreed upon by you and the Plan Administrator (for example, the Plan Administrator may pay for
coverage during the leave and withhold amounts from your compensation upon your return from leave).
If your Employer requires all Participants to continue Insurance Benefits during the unpaid FMLA leave, then you may
discontinue paying your share of the required contributions until you return from leave. Upon returning from leave, you
must pay your share of any required contributions that you did not pay during the leave. Payment for your share will be
withheld from your compensation either on a pre -tax or after -tax basis, depending on what you and the Plan
Administrator agree to.
If your Health Insurance coverage ceases while you are on FMLA leave (e.g., for non - payment of required
contributions), you will be permitted to re -enter such Benefits, as applicable, upon return from such leave on the same
basis as when you were participating in the Plan before the leave or as otherwise required by the FMLA. You may be
required to have coverage for such Benefits reinstated so long as coverage for Employees on non -FMLA leave is
required to be reinstated upon return from leave.
If you are commencing or returning from FMLA leave, then your election for non - health benefits provided under this
Plan, if any, will be treated in the same way as under your Employer's policy for providing such Benefits for Participants
on a non -FMLA leave (see below). If that policy permits you to discontinue contributions while on leave, then upon
returning from leave you will be required to repay the contributions not paid by you during leave. Payment will be
withheld from your compensation either on a pre -tax or after -tax basis, as agreed to by the Plan Administrator and you
or as the Plan Administrator otherwise deems appropriate.
Non -FMLA Leaves of Absence.
If you go on an unpaid leave of absence that does not affect eligibility, then you will continue to participate and the
contribution due from you (if not otherwise paid by your regular salary reductions) will be paid by pre - payment before
going on leave, with after -tax contributions while on leave, or with catch -up contributions after the leave ends, as
determined by the Plan Administrator. If you go on an unpaid leave that does affect eligibility, then the Change in Status
rules will apply.
Premium Payment Benefits
PREM Q -1. What are "Premium Payment Benefits "?
As described in CAF Q -1, if you elect Premium Payment Benefits you will be able to pay for your share of contributions
for Insurance Benefits with pre -tax dollars by electing to do so. Because the share of the contributions that you pay will
be with pre -tax funds, you may save both federal income taxes and FICA (Social Security) taxes. See Q -4.
Page 9
PREM Q -2. How are my Premium Payment Benefits paid?
As described in CAF Q -1 and in PREM Q -1, if you select an Insurance Plan described in CAF Q -2, then you may be
required to pay a portion of the contributions. When you complete the Election Form /Salary Reduction Agreement, if you
elect to pay for benefits on a pre -tax basis you agree to a salary reduction to pay for your share of the cost of coverage
(also known as contributions) with pre -tax funds instead of receiving a corresponding amount of your regular pay that
would otherwise be subject to taxes. From then on, you must pay a contribution for such coverage by having that portion
deducted from each paycheck on a pre -tax basis (generally an equal portion from each paycheck, or an amount
otherwise agreed to or as deemed appropriate by the Plan Administrator).
The Employer may contribute all, some, or no portion of the Premium Payment Benefits that you have selected, as
described in documents furnished separately to you from time to time.
Miscellaneous
MISC Q -1What are my ERISA Rights?
The Cafeteria Plan is not an ERISA welfare benefit plan under the Employee Retirement Income Security Act of 1974
(ERISA). The SPDs of the various benefits components of the Plan will describe your rights under ERISA, if applicable,
under that component.
Regardless, a participant in the Cafeteria Plan, you are entitled to certain rights and protections under ERISA. ERISA
provides that all participants shall be entitled to:
- Examine, without charge, at the Plan Administrator's office and at other specified locations (such as worksites) all
documents governing the Plan, including insurance contracts, and a copy of the latest annual report (Form 5500 Series),
if any, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee
Benefits Security Administration;
- Obtain, upon written request to the Administrator, copies of documents governing the operation of the Plan, including
insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series)
and updated summary plan description. The Plan Administrator may make a reasonable charge for the copies); and
- Receive a summary of the Plan's annual financial report, if any. The Plan Administrator is required by law to furnish
each participant with a copy of this summary annual report.
COBRA and HIPAA Rights. You have a right to continue your Health Insurance Plan coverage for yourself if there is a
loss of coverage under the plan as a result of a qualifying event. You or your dependents may have to pay for such
coverage. Review this SPD and the documents governing the plan on the rules governing your COBRA continuation
coverage rights.
You have rights regarding reduction or elimination of exclusionary periods of coverage for preexisting conditions under
your group health plan, if you have creditable coverage from another plan. You should be provided a certificate of
creditable coverage, free of charge, from your group health plan or health insurance issuer when you lose coverage
under the plan, when you become entitled to elect COBRA continuation coverage, when your COBRA continuation
coverage ceases, if you request it before losing coverage, or if you request it up to 24 months after losing coverage.
Without evidence of creditable coverage, you may be subject to a preexisting condition exclusion for 12 months (18
months for late enrollees) after your enrollment date in your coverage.
HIPAA Privacy Rights. Under another provision of HIPAA, group health plans are required to take steps to ensure that
Page 10
certain "protected health information" (PHI) is kept confidential. You may receive a separate notice from the Employer
(or medical insurers) that outlines its health privacy policies.Fiduciary Obligations. In addition to creating rights for
participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefits
plan. The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the
interest of you and other participants.
No Discrimination. No one, including your employer or any other person, may fire you or otherwise discriminate against
you in any way to prevent you from obtaining a plan benefit or exercising your rights under ERISA.
Right to Review. If your claim for a benefit is denied or ignored in whole or in part, you have a right to know why this
was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within
certain time schedules.
Enforcing Your Rights.M Under ERISA, there are steps that you can take to enforce these rights. For instance, if you
request a copy of plan documents or the latest annual report (if any) from the plan and do not receive them within 30
days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the
materials and pay you up to $110 a day until you receive them, unless the materials were not sent because of reasons
beyond the control of the Plan Administrator. If you have a claim for benefits that is denied or ignored in whole or in part,
then you may file suit in a state or federal court (but only if you have first filed your claim under the plan's claims
procedures and, if applicable, filed a timely appeal of any denial of your claim).
If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will
decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued
to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your
claim is frivolous.
Assistance With Your Questions. If you have any questions about your plan, you should contact the Plan Administrator.
If you have any questions about this statement or about your rights under ERISA or HIPAA, or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits
Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution
Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits Security Administration
MISC Q -2. What other general information should I know?
This MISC Q -2 contains certain general information that you may need to know about the Plan.
Plan Information
Official Name of the Plan: Town of Gulstream Cafeteria Plan
Plan Number: 501
Effective Date: October 01 2010.
Plan Year: October 01 to September 30. Your Plan's records are maintained on this period of time
Type of Plan: Welfare plan providing various insurance benefits
Employer /Plan Sponsor Information
Name and Address:
Page 11
Town of Gulstream
100 Sea Rd
Gulstream, FL, 33483
Federal employee tax identification number (EIN): 596002370
Plan Administrator Information
Name, Address, and business telephone number:
Town of Gulstream
100 Sea Rd
Gulstream, FL, 33483
Attention: Human Resources Manager
Telephone: 561 - 276 -5116
Agent for Service of Legal Process
The name and address of the Plan's agent for service of legal process is:
Town of Gulstream
100 Sea Rd
Gulstream, FL, 33483
Attention: Benefits Committee
Qualified Medical Child Support Order
The Health Insurance Plans will provide benefits as required by any qualified medical child support order (QMCSO), as
defined in ERISA § 609(a). The Plan has detailed procedures for determining whether an order qualifies as a QMCSO.
Participants and beneficiaries can obtain, without charge, a copy of such procedures from the Plan Administrator.
Newborns' and Mothers' Health Protection Act of 1996
Group health plans and health insurance issuers generally may not, under federal law, restrict
benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours
following a vaginal delivery or to less than 96 hours following a cesarean section. However, federal law generally does
not prohibit the mother's or newborn's attending provider, after consulting with the mother, from discharging the mother
or her newborn earlier than 48 hours (or 96 hours, as applicable). In any case, plans and issuers may not, under federal
law, require that a provider obtain authorization from the plan or the issuer for prescribing a length of stay not in excess
of 48 hours (or 96 hours).
Page 12
'Affiliated Employers * **
Appendix A
Page 13
Appendix B
COBRA CONTINUATION COVERAGE RIGHTS under the Town of Gulstream Cafeteria Plan
(the "Plan ")
The following paragraphs generally explain COBRA coverage when it may become available to you and your family,
and what you need to do to protect the right to receive it. PLEASE READ THE FOLLOWING CAREFULLY
The Town of Gulstream Cafeteria Plan has group health insurance components and you may be enrolled in one or more
of these components. COBRA (and the description of COBRA coverage contained in this SPD) applies only to the group
health plan benefits offered under the Plan and not to any other benefits offered under the Plan or by Town of
Gulstream. The Plan provides no greater COBRA rights than what COBRA requires— nothing in this SPD is intended to
expand your rights beyond COBRA's requirements.
What Is COBRA Coverage?
COBRA coverage is a continuation of Plan coverage when coverage would otherwise end because of a life event known
as a "qualifying event." Specific qualifying events are listed below in the section entitled "Who Is Entitled to Elect
COBRA ?"
COBRA coverage may become available to "qualified beneficiaries"
After a qualifying event occurs and any required notice of that event is properly provided to Town of Gulstream, COBRA
coverage must be offered to each person losing Plan coverage who is a "qualified beneficiary." You, your spouse, and
your dependent children could become qualified beneficiaries and would be entitled to elect COBRA if coverage under
the Plan is lost because of the qualifying event. (Certain newborns, newly adopted children, and alternate recipients
under QMCSOs may also be qualified beneficiaries. This is discussed in more detail in separate paragraphs below.)
Who Is Entitled to Elect COBRA?
We use the pronoun "you" in the following paragraphs regarding COBRA to refer to each person covered under the Plan
who is or may become a qualified beneficiary.
Qualifying events for the covered employee
If you are an employee, you will be entitled to elect COBRA if you lose your group health coverage under the Plan
because either one of the following qualifying events happens:
• your hours of employment are reduced; or
• your employment ends for any reason other than your gross misconduct.
Qualifying events for the covered spouse
If you are the spouse of an employee, you will be entitled to elect COBRA if you lose your group health coverage under
the Plan because any of the following qualifying events happens:
• your spouse dies;
• your spouse's hours of employment are reduced;
• your spouse's employment ends for any reason other than his or her gross misconduct;
Page 14
" y o u b e c o m e d i v o r c e d o r l e g a l l y s e p a r a t e d f r o m y o u r s p o u s e . A l s o , i f y o u r s p o u s e ( t h e e m p l o y e e ) r e d u c e s o r
e l i m i n a t e s y o u r g r o u p h e a l t h c o v e r a g e i n a n t i c i p a t i o n o f a d i v o r c e o r l e g a l s e p a r a t i o n , a n d a d i v o r c e o r l e g a l s e p a r a t i o n
l a t e r o c c u r s , t h e n t h e d i v o r c e o r l e g a l s e p a r a t i o n m a y b e c o n s i d e r e d a q u a l i f y i n g e v e n t f o r y o u e v e n t h o u g h y o u r
c o v e r a g e w a s r e d u c e d o r e l i m i n a t e d b e f o r e t h e d i v o r c e o r s e p a r a t i o n .
Q u a l i f y i n g e v e n t s f o r d e p e n d e n t c h i l d r e n
I f y o u a r e t h e d e p e n d e n t c h i l d o f a n e m p l o y e e , y o u w i l l b e e n t i t l e d t o e l e c t C O B R A i f y o u l o s e y o u r g r o u p h e a l t h
c o v e r a g e u n d e r t h e P l a n b e c a u s e a n y o f t h e f o l l o w i n g q u a l i f y i n g e v e n t s h a p p e n s :
" y o u r p a r e n t - e m p l o y e e d i e s ;
" y o u r p a r e n t - e m p l o y e e ' s h o u r s o f e m p l o y m e n t a r e r e d u c e d ;
" y o u r p a r e n t - e m p l o y e e ' s e m p l o y m e n t e n d s f o r a n y r e a s o n o t h e r t h a n h i s o r h e r
g r o s s m i s c o n d u c t ;
" y o u s t o p b e i n g e l i g i b l e f o r c o v e r a g e u n d e r t h e P l a n a s a " d e p e n d e n t c h i l d . "
E l e c t i n g C O B R A a f t e r l e a v e u n d e r t h e F a m i l y a n d M e d i c a l L e a v e A c t ( F M L A )
U n d e r s p e c i a l r u l e s t h a t a p p l y i f a n e m p l o y e e d o e s n o t r e t u r n t o w o r k a t t h e e n d o f a n F M L A l e a v e , s o m e i n d i v i d u a l s
m a y b e e n t i t l e d t o e l e c t C O B R A e v e n i f t h e y w e r e n o t c o v e r e d u n d e r t h e P l a n d u r i n g t h e l e a v e . C o n t a c t T o w n o f
G u l s t r e a m f o r m o r e i n f o r m a t i o n a b o u t t h e s e s p e c i a l r u l e s .
S p e c i a l s e c o n d e l e c t i o n p e r i o d f o r c e r t a i n e l i g i b l e e m p l o y e e s w h o d i d n o t e l e c t C O B R A
C e r t a i n e m p l o y e e s a n d f o r m e r e m p l o y e e s w h o a r e e l i g i b l e f o r f e d e r a l t r a d e a d j u s t m e n t a s s i s t a n c e ( T A A ) o r a l t e r n a t i v e
t r a d e a d j u s t m e n t a s s i s t a n c e ( A T A A ) a r e e n t i t l e d t o a s e c o n d o p p o r t u n i t y t o e l e c t C O B R A f o r t h e m s e l v e s a n d c e r t a i n
f a m i l y m e m b e r s ( i f t h e y d i d n o t a l r e a d y e l e c t C O B R A ) d u r i n g a s p e c i a l s e c o n d e l e c t i o n p e r i o d o f 6 0 d a y s o r l e s s ( b u t
o n l y i f t h e e l e c t i o n i s m a d e w i t h i n s i x m o n t h s a f t e r P l a n c o v e r a g e i s l o s t ) .
W h e n I s C O B R A C o v e r a g e A v a i l a b l e ?
W h e n t h e q u a l i f y i n g e v e n t i s t h e e n d o f e m p l o y m e n t , r e d u c t i o n o f h o u r s o f e m p l o y m e n t , o r d e a t h o f t h e e m p l o y e e , t h e
P l a n w i l l o f f e r C O B R A c o v e r a g e t o q u a l i f i e d b e n e f i c i a r i e s . Y o u n e e d n o t n o t i f y T o w n o f G u l s t r e a m o f a n y o f t h e s e
q u a l i f y i n g e v e n t s .
C a u t i o n :
Y o u s t o p b e i n g e l i g i b l e f o r c o v e r a g e a s d e p e n d e n t c h i l d w h e n e v e r y o u f a i l t o s a t i s f y a n y p a r t o f t h e p l a n ' s d e f i n i t i o n o f
d e p e n d e n t c h i l d .
Y o u m u s t n o t i f y t h e p l a n a d m i n i s t r a t o r o f c e r t a i n q u a l i f y i n g e v e n t s b y t h i s d e a d l i n e
F o r t h e o t h e r q u a l i f y i n g e v e n t s ( d i v o r c e o r l e g a l s e p a r a t i o n o f t h e e m p l o y e e a n d s p o u s e o r a d e p e n d e n t c h i l d ' s l o s i n g
e l i g i b i l i t y f o r c o v e r a g e a s a d e p e n d e n t c h i l d ) , a C O B R A e l e c t i o n w i l l b e a v a i l a b l e t o y o u o n l y i f y o u n o t i f y T o w n o f
G u l s t r e a m i n w r i t i n g w i t h i n 6 0 d a y s a f t e r t h e l a t e r o f ( 1 ) t h e d a t e o f t h e q u a l i f y i n g e v e n t ; o r ( 2 ) t h e d a t e o n w h i c h t h e
q u a l i f i e d b e n e f i c i a r y l o s e s ( o r w o u l d l o s e ) c o v e r a g e u n d e r t h e t e r m s o f t h e P l a n a s a r e s u l t o f t h e q u a l i f y i n g e v e n t .
N o C O B R A e l e c t i o n w i l l b e a v a i l a b l e u n l e s s y o u f o l l o w t h e P l a n ' s n o t i c e p r o c e d u r e s a n d m e e t t h e n o t i c e d e a d l i n e
I n p r o v i d i n g t h i s n o t i c e , y o u m u s t u s e t h e P l a n ' s f o r m e n t i t l e d " N o t i c e o f Q u a l i f y i n g E v e n t F o r m " a n d y o u m u s t f o l l o w t h e
P a g e 1 5
notice procedures specified in the section below entitled "Notice Procedures." If these procedures are not followed or if
the notice is not provided to Town of Gulstream during the 60 -day notice period, YOU WILL LOSE YOUR RIGHT TO
ELECT COBRA.
How to elect COBRA
To elect COBRA, you must complete the Election Form that is part of the Plan's COBRA election notice and mail or
hand - deliver it to Town of Gulstream. An election notice will be provided to qualified beneficiaries at the time of a
qualifying event. You may also obtain a copy of the Election Form from Town of Gulstream.
Deadline for COBRA election
If mailed, your election must be postmarked (or if hand - delivered, your election must be received by the individual at the
address specified on the Election Form) no later than 60 days after the date of the COBRA election notice provided to
you at the time of your qualifying event (or, if later, 60 days after the date that Plan coverage is lost). IF YOU DO NOT
SUBMIT A COMPLETED ELECTION FORM BY THIS DUE DATE, YOU WILL LOSE YOUR RIGHT TO ELECT
COBRA.
Independent election rights
Each qualified beneficiary will have an independent right to elect COBRA.
Any qualified beneficiary for whom COBRA is not elected within the 60 -day election period specified in the Plan's
COBRA election notice WILL LOSE HIS OR HER RIGHT TO ELECT COBRA COVERAGE.
Special Considerations in Deciding Whether to Elect COBRA
In considering whether to elect COBRA, you should take into account that a failure to elect COBRA will affect your future
rights under federal law. First, you can lose the right to avoid having preexisting condition exclusions applied to you by
other group health plans if you have more than a 63 -day gap in health coverage, and election of COBRA may help you
not have such a gap. Second, you will lose the guaranteed right to purchase individual health insurance policies that do
not impose such preexisting condition exclusions if you do not get COBRA coverage for the maximum time available to
you. Finally, you should take into account that you have special enrollment rights under federal law. You have the right
to request special enrollment in another group health plan for which you are otherwise eligible (such as a plan
sponsored by your spouse's employer) within 30 days after your group health coverage under the Plan ends because of
one of the qualifying events listed above. You will also have the same special enrollment right at the end of COBRA
coverage if you get COBRA coverage for the maximum time available to you.
Length of COBRA Coverage
COBRA coverage is a temporary continuation of coverage. The COBRA coverage periods described below are
maximum coverage periods.
COBRA coverage can end before the end of the maximum coverage period for several reasons, which are described in
the section below entitled "Termination of COBRA Coverage Before the End of the Maximum Coverage Period."
Death, divorce, legal separation, or child's loss of dependent status
When Plan coverage is lost due to the death of the employee, the covered employee's divorce or legal separation, or a
dependent child's losing eligibility as a dependent child, COBRA coverage under the Plan's Medical and Dental
components can last for up to a total of 36 months.
If the covered employee becomes entitled to Medicare within 18 months before his or her termination of employment or
Page 16
reduction of hours.
When Plan coverage is lost due to the end of employment or reduction of the employee's hours of employment, and the
employee became entitled to Medicare benefits less than 18 months before the qualifying event, COBRA coverage
under the Plan's Medical and Dental components for qualified beneficiaries (other than the employee) who lose
coverage as a result of the qualifying event can last until up to 36 months after the date of Medicare entitlement. For
example, if a covered employee becomes entitled to Medicare eight months before the date on which his employment
terminates, COBRA coverage for his spouse and children who lost coverage as a result of his termination can last up to
36 months after the date of Medicare entitlement, which is equal to 28 months after the date of the qualifying event (36
months minus eight months). This COBRA coverage period is available only if the covered employee becomes entitled
to Medicare within 18 months BEFORE the termination or reduction of hours.
Termination of employment or reduction of hours
Otherwise, when Plan coverage is lost due to the end of employment or reduction of the employee's hours of
employment, COBRA coverage under the Plan's Medical and Dental components generally can last for only up to a total
of 18 months.
Extension of Maximum Coverage Period
If the qualifying event that resulted in your COBRA election was the covered employee's termination of employment or
reduction of hours, an extension of the maximum period of coverage may be available if a qualified beneficiary is
disabled or a second qualifying event occurs. You must notify Town of Gulstream of a disability or a second qualifying
event in order to extend the period of COBRA coverage. Failure to provide notice of a disability or second qualifying
event will eliminate the right to extend the period of COBRA coverage.
Disability extension of COBRA coverage
If a qualified beneficiary is determined by the Social Security Administration to be disabled and you notify Town of
Gulstream in a timely fashion, all of the qualified beneficiaries in your family may be entitled to receive up to an
additional 11 months of COBRA coverage, for a total maximum of 29 months. This extension is available only for
qualified beneficiaries who are receiving COBRA coverage because of a qualifying event that was the covered
employee's termination of employment or reduction of hours. The disability must have started at some time before the
61 st day after the covered employee's termination of employment or reduction of hours and must last at least until the
end of the period of COBRA coverage that would be available without the disability extension (generally 18 months, as
described above). Each qualified beneficiary will be entitled to the disability extension if one of them qualifies.
You must notify Town of Gulstream of a qualified beneficiary's disability by this deadline
The disability extension is available only if you notify Town of Gulstream in writing of the Social Security Administration's
determination of disability within 60 days after the latest of:
• the date of the Social Security Administration's disability determination;
• the date of the covered employee's termination of employment or reduction of hours; and
• the date on which the qualified beneficiary loses (or would lose) coverage under the terms of the Plan as a result of the
covered employee's termination of employment or reduction of hours.
You must also provide this notice within 18 months after the covered employee's termination of employment or reduction
of hours in order to be entitled to a disability extension.
No disability extension will be available unless you follow the Plan's notice procedures and meet the notice deadline
Page 17
In providing this notice, you must use the Plan's form entitled "Notice of Disability Form" and you must follow the notice
procedures specified in the section below entitled "Notice Procedures."
If these procedures are not followed or if the notice is not provided to Town of Gulstream during the 60 -day notice period
and within 18 months after the covered employee's termination of employment or reduction of hours, then there will be
no disability extension of COBRA coverage.
Second qualifying event extension of COBRA coverage
An extension of coverage will be available to spouses and dependent children who are receiving COBRA coverage if a
second qualifying event occurs during the 18 months (or, in the case of a disability extension, the 29 months) following
the covered employee's termination of employment or reduction of hours. The maximum amount of COBRA coverage
available when a second qualifying event occurs is 36 months. Such second qualifying events may include the death of
a covered employee, divorce or legal separation from the covered employee, or a dependent child's ceasing to be
eligible for coverage as a dependent under the Plan. These events can be a second qualifying event only if they would
have caused the qualified beneficiary to lose coverage under the Plan if the first qualifying event had not occurred. (This
extension is not available under the Plan when a covered employee becomes entitled to Medicare after his or her
termination of employment or reduction of hours.)
You must notify Town of Gulstream of a second qualifying event by this deadline
This extension due to a second qualifying event is available only if you notify Town of Gulstream in writing of the second
qualifying event within 60 days after the date of the second qualifying event.
No extension will be available unless you follow the Plan's notice procedures and meet the notice deadline
In providing this notice, you must use the Plan's form entitled "Notice of Second Qualifying Event Form" (you may obtain
a copy of this form from Town of Gulstream at no charge), and you must follow the notice procedures specified in the
section below entitled "Notice Procedures." If these procedures are not followed or if the notice is not provided to Town
of Gulstream during the 60 -day notice period, then there will be no extension of COBRA coverage due to a second
qualifying event.
Termination of COBRA Coverage Before the End of the Maximum Coverage Period
COBRA coverage will automatically terminate before the end of the maximum
period if:
• any required premium is not paid in full on time;
• a qualified beneficiary becomes covered, after electing COBRA, under another group health plan (but only after any
exclusions of that other plan for a preexisting condition of the qualified beneficiary have been exhausted or satisfied);
• a qualified beneficiary becomes entitled to Medicare benefits (under Part A, Part B, or both) after electing COBRA;
• the employer ceases to provide any group health plan for its employees; or
• during a disability extension period, the disabled qualified beneficiary is determined by the Social Security
Administration to be no longer disabled (COBRA coverage for all qualified beneficiaries, not just the disabled qualified
beneficiary, will terminate).
COBRA coverage may also be terminated for any reason the Plan would terminate coverage of a participant or
beneficiary not receiving COBRA coverage (such as fraud).
Page 18
You must notify Town of Gulstream if a qualified beneficiary becomes entitled to Medicare or obtains other group health
plan coverage
You must notify Town of Gulstream in writing within 30 days if, after electing COBRA, a qualified beneficiary becomes
entitled to Medicare (Part A, Part B, or both) or becomes covered under other group health plan coverage. In addition, if
you were already entitled to Medicare before electing COBRA, notify Employer of the date of your Medicare entitlement
at the address shown in the section below entitled "Notice Procedures."
You must notify Town of Gulstream if a qualified beneficiary ceases to be disabled
If a disabled qualified beneficiary is determined by the Social Security Administration to no longer be disabled, you must
notify Town of Gulstream of that fact within 30 days after the Social Security Administration's determination.
Cost of COBRA Coverage
Each qualified beneficiary is required to pay the entire cost of COBRA coverage. The amount a qualified beneficiary may
be required to pay may not exceed 102% (or, in the case of an extension of COBRA coverage due to a disability, 150 %)
of the cost to the group health plan (including both employer and employee contributions) for coverage of a similarly
situated plan participant or beneficiary who is not receiving COBRA coverage. The amount of your COBRA premiums
may change from time to time during your period of COBRA coverage and will most likely increase over time. You will be
notified of COBRA premium changes.
Payment for COBRA Coverage
How premium payments must be made
All COBRA premiums must be paid by check. Your first payment and all monthly payments for COBRA coverage must
be mailed or hand - delivered to the individual at the payment address specified in the election notice provided to you at
the time of your qualifying event. However, if the Plan notifies you of a new address for payment, you must mail or
hand - deliver all payments for COBRA coverage to the individual at the address specified in that notice of a new address.
When premium payments are considered to be made
If mailed, your payment is considered to have been made on the date that it is postmarked. If hand - delivered, your
payment is considered to have been made when it is received by the individual at the address specified above. You will
not be considered to have made any payment by mailing or hand - delivering a check if your check is returned due to
insufficient funds or otherwise.
First payment for COBRA coverage
If you elect COBRA, you do not have to send any payment with the Election Form. However, you must make your first
payment for COBRA coverage not later than 45 days after the date of your election. (This is the date your Election Form
is postmarked, if mailed, or the date your Election Form is received by the individual at the address specified for delivery
of the Election Form, if hand - delivered.) See the section above entitled "Electing COBRA Coverage."
Your first payment must cover the cost of COBRA coverage from the time your coverage under the Plan would have
otherwise terminated up through the end of the month before the month in which you make your first payment. (For
example, Sue's employment terminates on September 30, and she loses coverage on September 30. Sue elects
COBRA on November 15. Her initial premium payment equals the premiums for October and November and is due on
or before December 30, the 45th day after the date of her COBRA election.)
You are responsible for making sure that the amount of your first payment is correct. You may contact Town of
Page 19
Gulstream using the contact information provided below to confirm the correct amount of your first payment. Claims for
reimbursement will not be processed and paid until you have elected COBRA and made the first payment for it.
If you do not make your first payment for COBRA coverage in full within 45 days after the date of your election you will
lose all COBRA rights under the Plan.
Monthly payments for COBRA coverage
After you make your first payment for COBRA coverage, you will be required to make monthly payments for each
subsequent month of COBRA coverage. The amount due for each month for each qualified beneficiary will be disclosed
in the election notice provided to you at the time of your qualifying event. Under the Plan, each of these monthly
payments for COBRA coverage is due on the first day of the month for that month's COBRA coverage. If you make a
monthly payment on or before the first day of the month to which it applies, your COBRA coverage under the Plan will
continue for that month without any break. Town of Gulstream will not send periodic notices of payments due for these
coverage periods (that is, we will not send a bill to you for your COBRA coverage —it is your responsibility to pay your
COBRA premiums on time).
Grace periods for monthly COBRA premium payments
Although monthly payments are due on the first day of each month of COBRA coverage, you will be given a grace
period of 30 days after the first day of the month to make each monthly payment. Your COBRA coverage will be
provided for each month as long as payment for that month is made before the end of the grace period for that payment.
However, if you pay a monthly payment later than the first day of the month to which it applies, but before the end of the
grace period for the month, your coverage under the Plan will be suspended as of the first day of the month and then
retroactively reinstated (going back to the first day of the month) when the monthly payment is received. This means that
any claim you submit for benefits while your coverage is suspended may be denied and may have to be resubmitted
once your coverage is reinstated.
If you fail to make a monthly payment before the end of the grace period for that month you will lose all rights to COBRA
coverage under the Plan.
More Information About Individuals Who May Be Qualified Beneficiaries
Children born to or placed for adoption with the covered employee during a period of COBRA coverage
A child born to, adopted by, or placed for adoption with a covered employee during a period of COBRA coverage is
considered to be a qualified beneficiary provided that, if the covered employee is a qualified beneficiary, the covered
employee has elected COBRA coverage for himself or herself. The child's COBRA coverage begins when the child is
enrolled in the Plan, whether through special enrollment or open enrollment, and it lasts for as long as COBRA coverage
lasts for other family members of the employee. To be enrolled in the Plan, the child must satisfy the otherwise
applicable Plan eligibility requirements (for example, regarding age).
Alternate recipients under QMCSOs
A child of the covered employee who is receiving benefits under the Plan pursuant to a qualified medical child support
order (QMCSO) received by Town of Gulstream during the covered employee's period of employment with Town of
Gulstream is entitled to the same rights to elect COBRA as an eligible dependent child of the covered employee.
NOTICE PROCEDURES
Town of Gulstream Welfare Benefits Plan (the Plan)
WARNING: If your notice is late or if you do not follow these notice procedures you and all related qualified
Page 20
beneficiaries will lose the right to elect COBRA (or will lose the right to an extension of COBRA coverage as applicablgI
Notices Must Be Written and Submitted on Plan Forms
Any notice that you provide must be in writing and must be submitted on the Plan's required form (the Plan's required
forms are described above in this SPD, and you may obtain copies from Town of Gulstream without charge). Oral
notice, including notice by telephone, is not acceptable. Electronic (including e- mailed or faxed) notices are not
acceptable.
How, When, and Where to Send Notices
You must mail or hand - deliver your notice to:
Human Resources Manager
Town of Gulstream
100 Sea Rd
Gulstream, FL, 33483
However, if a different address for notices to the Plan appears in the Plan's most recent summary plan description, you
must mail or hand - deliver your notice to that address (if you do not have a copy of the Plan's most recent summary plan
description, you may request one from Town of Gulstream).
If mailed, your notice must be postmarked no later than the last day of the applicable notice period. If hand - delivered,
your notice must be received by the individual at the address specified above no later than the last day of the applicable
notice period. (The applicable notice periods are described in the paragraphs above entitled "You must notify the plan
administrator of certain qualifying events by this deadline," "You must notify Town of Gulstream of a qualified
beneficiary's disability by this deadline," and "You must notify ABC Company of a second qualifying event by this
deadline. ")
Information Required for All Notices
Any notice you provide must include (1) the name of the Plan (Town of Gulstream Welfare Benefits Plan); (2) the name
and address of the employee who is (or was) covered under the Plan; (3) the name(s) and address(es) of all qualified
beneficiary(ies) who lost coverage as a result of the qualifying event; (4) the qualifying event and the date it happened;
and (5) the certification, signature, name, address, and telephone number of the person providing the notice.
Additional Information Required for Notice of Qualifying Event
If the qualifying event is a divorce or legal separation, your notice must include a copy of the decree of divorce or legal
separation. If your coverage is reduced or eliminated and later a divorce or legal separation occurs, and if you are
notifying Town of Gulstream that your Plan coverage was reduced or eliminated in anticipation of the divorce or legal
separation, your notice must include evidence satisfactory to Town of Gulstream that your coverage was reduced or
eliminated in anticipation of the divorce or legal separation.
Additional Information Required for Notice of Disability
Any notice of disability that you provide must include (1) the name and address of the disabled qualified beneficiary; (2)
the date that the qualified beneficiary became disabled; (3) the names and addresses of all qualified beneficiaries who
are still receiving COBRA coverage; (4) the date that the Social Security Administration made its determination; (5) a
copy of the Social Security Administration's determination; and (6) a statement whether the Social Security
Administration has subsequently determined that the disabled qualified beneficiary is no longer disabled.
Additional Information Required for Notice of Second Qualifying Event
Page 21
Any notice of a second qualifying event that you provide must include (1) the names and addresses of all qualified
beneficiaries who are still receiving COBRA coverage; (2) the second qualifying event and the date that it happened;
and (3) if the second qualifying event is a divorce or legal separation, a copy of the decree of divorce or legal separation.
Who May Provide Notices
The covered employee, a qualified beneficiary who lost coverage due to the qualifying event described in the notice, or a
representative acting on behalf of either may provide notices. A notice provided by any of these individuals will satisfy
any responsibility to provide notice on behalf of all qualified beneficiaries who lost coverage due to the qualifying event
described in the notice.
THIS CONCLUDES THE SUMMARY OF YOUR CONTINUATION COVERAGE RIGHTS UNDER COBRA. PLEASE
CONTACT THE HUMAN RESOURCES OFFICE (OR THE EQUIVALENT THEREOF) OF TOWN OF GULSTREAM IF
YOU HAVE ANY QUESTIONS OR NEED MORE INFORMATION.
Page 22