HomeMy WebLinkAbout5195 RESOLUTION NO. 5 1 9 5
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, AUTHORIZING THE MAYOR
TO EXECUTE AN INTERLOCAL AGREEMENT FOR THE
EHCW VEBA TRUST COOPERATIVE
WHEREAS, Chapter 39.34 of the Revised Code of Washington permits units of
local government to cooperate with ofher units of local government to perform functions
and activities jointly on a mutually advantageous basis; and
WHEREAS, in light of this, the Cities of Auburn, Kirkland and Mount Vernon have
established the EHCW Veba Trust Cooperative ("the Cooperative") to provide certain
benefits for their employees and employees' dependents; and
WHEREAS, the Cities of Auburn, Kirkland and Mount Vernon have also agreed
to establish a process for funding and administering the employee benefits including but
not limited to making contributions to a trust established by the Cooperafive for that
purpose.
NOW, THEREFORE, ' THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, HEREBY RESOLVES as follows:
Section 1. That the Mayor is hereby authorized to execute an Interlocal
Agreement for the EHCW VEBA Trust Cooperative which agreement shall be in
substantial conformity with the agreement attached hereto as Exhibit A and
incorporated herein by this reference.
Section 2. That the Mayor is authorized to implement such administrative
procedures as may be necessary to carry out the directives of this legislation.
Resolution No 5195
December 30, 2015
Page 1 of 2
Section 3. That this Resolution shall take effect and be in full force upon
passage and signatures hereon.
�
Dated and Signed this y�day of � , 20/(o
CITY OF AUBURN
�
ANCY B CKl S, MAYOR
ATTEST:
D ielle E. Daskam, City Clerk
APP OVED AS TO FORM:
niel B. Hei , City Attorney
Resolution No 5195
December 30, 2015
Page 2 of 2
INTERLOCALAGREEF9ENT
forthe
EHCW VEBA TrustCooperative
E{ferUve January 1,1016
TABLE OF CONTEN75
IIVI'RODUCf TON............................................................................................................................1
ARIIQE I.ES'fABLISFiMENT AND�1RPOSE OFTHE COOPERATNE...................................................1
ARTIQE II. DEFINII'IONS.......................................................................:.:.........:..........................2
AR'TICLE III.Al1THORIf`f AfVD DUTIES OF THE BOARD.�:.:�.:�.:.:::�:::..:,�.�:.�::::::::..:..:................:........:3
_ __ __
ARIICL.E N.GOAL.S OF'THE COOPERAl1VE....................:.::...................:.:........................................5
ARTlQE V. MEEfINGS OF 11iE BOARD............................................................................................6
ARTIQE VI.OFFI�RS..................................................................................................................6
ARl"fQE VII.PLAN CONSULTAN'f....................................................................................................7
ARIIQE VIII.ACCOUIYT..:.............................................................................................................B
ARIICLE IX.PLAN(S)OF BENEFITS AND TRUST.......:................:..:....:.:r:::::...................................;::8
ARTICLE X. MAITERS REQUIRDVG APPROVAL :::::::_ :.. .....:.................................:..9
_ __ .... _ _.....
ARTiCLE XI.OBLIGAIIONS OF AFFIIIAI'ES......................................................................................9
ARIICLE XQ.LiA8Il1lY OF BOARD OR OFF2CER5...........................................................................10
NRl"IQE)QII.COWI'RACRIAL OBLiGAlION.......................................................................:...........1D
ARl"IQE XIV.D�UUL40N OF AN AFFRIATE...............:...:::..::::::::::::::r:::::::...................:.:..:......:..:::11
_ -
_ _ _ .
ARTICLE XV.VOWfVrARY WITHDRAWAL FROM T}iE OOOPERATIVE.................................................12
ARTlCLE XVI.IERM B�TERMINAI"!ON OFTHE COOPERAIIVE..........................................................12
ARTICLE XVII:NEVV AFfILIATES...................................................................................................13
ARTICLE XV�. MIS�LLANEOUS.....................................................................�:.:::::::::�.:�.:::.::::�::.13
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APPENDIX A- LISf OF INITIAL AFFILIATES:.::.:.:...........................................................................15
_
APPENDIX B-LISf OF AFFILIATES PS OF «DATE»....................................................................16
APPENDIXC-PLAN(5)............................................................................................................:...17
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INTRODUCTION
Thls Agreaner�, dated ]anuary 1, 2016, made by and among the legal entltles s&farth In Appen�c A
("InlUal Affillates7, affid�ed hereto and e�resry i_nmrporated hereln,esta6list�tlie EHC1N VEBA Tnut
Coop�adve(the°Cooperative'�.
WHERFAS, Chapter 39.34 of the ReNsed fnde of Washingtnn ("RL1N7 pertnits units of loml
govertunerrt bo 000perate with other uni�of loml gavemmeM to perfortn funGlons and aGivitla JolnUy
on a mudiatly advar�geous basls; arid
WHEREAS, In vlew of thls, the Initlal Affillates tiave estabOshed In full foroe and effect the Cooperative
to provlde cer�(n berrefl�for thdr empbyees and anpbyea'dependents; and
WHEREIIS, each Initlal Afflllate has also agreed tn�b�sh a prooess for funding and adminlstertng the
employee hendlts pursuant to thls Agreenenj Ind�ing, but not I[mlted tu,maldng contributlons requlred
pursuant to Ehls Agreanent to a hvst establlshed by the CooperaWe for that purpose.
NOW, THBREFORE, each ARillate, In exdiange for the mutual covenants, promises and obllgatiorts
mr�lned hereln, promises and agrees as follows:
ARTICLE I.
ESTABLISHMENT AND PURPOSE OF THE COOPERATNE
1.01 The Inldal Affillates hereby�bllsh an employee benefit cooperative, known az Me EHCW VEBA
Trust Caoperative (the "CnoperaWe7. Thls Agree�qent, and thereby t}ie CooperaUve, shall
continue In force unl�s or unUl terminated pursuaM 6o Artlde XVI. Thls Agreement Is Intended
to be an Interlocal Agreement for Washington Publlc Agendes ]dnt Purchasing Progrdm
authorized by the Washingtnn Cooperatlon Ad, RevSed Code of Washington Qiapte 39.
1.02 Tlie goveming tiody of the Coope2tive sfiall be known herelnaRer as the `Board.°The Board
shall operate pursuant to the dWes and autlrority desoibed In appUcable law, thls Agreernent,
and any duly adopted Polldes&Procedures.
1.03 1'he purpose of Ehe Cooperative Is h� make avallable and fadllmte the adminlstratlon of cer�ln
employee bendrt Cooperadves offered by the AfBllates W thelr elnployees and enptoyees'
dependents.The partles Uo Uils Agreanent a�knowledge that the piovLSlon af benefl�of the tYPe
to be proNded through the CooperaUve Is a fundion or activlry each Affiliate has the authorlty to
perfortn as descri6ed In Sectlon 39.34.030 of the RCW.
1.04 Thls Agreement Is Intended m satlsFy the agreement requfremen[s under Sectlon 3934.030
of the RCW.
1.05 The es�bllshment of the Cooperative, Induding the cmatlon of an Aomunt under Artlde VIII of
_ .thls Agreement, is not Intended by the Affillates, Jolntly or Indfvldually, to mnsdtute the
transactlon of an Insurance business wlthin the S1ate of Washington. The lntent Is to make
avellable through the CooperaNve employee benefit Plan(s) and benefit-related servl� and to
udllie the Cooperative to adifeve effidendes Induding, but not Ilmited to, reduced adminlstratl4e
costs and effidendes by providing simlWr servlces to each Affiliate.
i
ARTICLEII.
DEFlI�T[ONS
In additlon W the tertns defined eLsewhere in the Agreement, each oP the foilowing temis shall have the
mean(ng s�forth bebw:
2.01 ACCOUNT-M acaouM or a000uMs eslabl'ished and funded by the Afflllabes to:
(a) pay the joint administrative experses of and fund oertaln benefit Plan(s)g2nted by each
ABtliate in their respedive employees and employees'dependenls;and
(b) pay any oUx�r e�endfture authorized by tFie h:rms af this Agreement
An Aaount may be aommplished through another entlty and indudes the Tnst.
2.02 AFFILIA7E - A unit of loal govemment that Is remgnized as a.°puWlc agency° under Sectlon
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39:34.D20 of the R¢W and parqdpates In the CoopeiaHHve,, There are two dassiflmtlor� of
Affiliates used In this Agreanent: (1)Initlal Affi�a�, and(2) New Afflliabes. Collectlyely, tthe hyo
dassiflmtions are r�emed to as"Afrillates."
2.03 AfiREEMENT - This Irderloml Agreement for the EHCW VEBA Tnist Cooperdtive as rtiay be
art�ended from tlme to dme,fnduding all docum�in the same form execvted by AffiOates.
2.04 ALTERNATE - A person designated by an A(flliate tn act on behalF of fhe Affillate if fhe
Represeitatiye Is unavailable to do so as set forth In Section 8.01:
2.05 BENEFlCIARY-A person desigr� by a Partldpant, or by the tertns of a Plan, who Is or may
beoome en�to a bendit under that Plan.
2.06 BOARD - The gaeming 6ody of the Coop�adve establlshed pursuant to Artlde III oF the
Agreement.
2,07 CHAIRPERSOPI - A Repres�mttve who serves as the Qialrperson of the Board having been
eletted by the Board.
2.08 COOPERATNE -The entlty known az the EHGW VEBA Tnut f�operative �bAslied through
thls Agreement and authortretl under appllca6le law,ixluding Chapter 39:34 of the RCW.
2.09 EFFECTNE DATE -The Effedive Date of this Agregnent shall be the date upon whldi (1) at
least two eGgiWe public seGnr ermtl�sign the Agreement, and(2) the puhllatlon reyuirements
undei Sectlon 39.34.030 of the RCW have been satlsfled.
2.10 FISCAL YEAR -The twelve (12) mr�secutive olendar moMh period commendng ea� ]anuary
ls.
2.11 FlJND BALANCE - Exc�s of a5sets over Ilabilltles at any polnt and tlme using generalty
accepted accountlng prindples.
2.12 INIRAL AFFILIATE-M �Ilate that is an original slgnatory to this Agreement as reFlected In
Appertilx A.
2.13 NEW APFILIA7'E - An Afillated that Is not an Initlal Affillate and becnmes an AffiOate through
the process described In Artlde XVII.
2.14 PARTICIPANT-Any employee or former employee of an Affiliate, or efigible Ben�dary, who Is
or may 6ecome diglble to receJve a henefit of any type from a Plan.
z
2.15 PARTIQPAIION AGREEMENT-The document requlred tn be mmpleted and executed by a
New Afflpate through which an Aff11Wte agrees to partldpate in the Cooperative and adopts thls
Agregnent. It may Identlfy particalar,terrts. and ooriditlorts oP partldpatlon, arid proirlde other
enployer spedfic InPormatlon. M Initlal Affillate may also exeate a Parddpatian Agreement
reflectlng partialar tertns and mndltlons of parfidpatlon and otfier employer spedflc Infortnation.
Exeaited Partldpatlon Agreements shall be aGached hereto at Appendlx D.
2.16 PLAN(S)—The program(s)of beneflts made avallable through Ufe Cooperative, pursuant to this
Agreement, and permilYed to 6e prnvided under Code SecHon 501(c)(9) thFough a VEBA.
Current verslons of tlie Plan(s) available pursuant to thls Agreement shall be atladxd to this
Agre�nent es Appendlx.G. Partldpatlon In a partlalar Plan Is not auhomatic or gtiaranteed. An
Affiliate must duly adopt 4he Plan.
2.17 PLAN CONSULTANT—The person or eM1ty appdnted pursuant tn SeNon 3.02(d)who shall:
(a) Be the prindpal manager of the Cooperative;
(b) Supervlse and mntrol Me day tn day operadons of the Coop�adve;
(c) Carty out the purpose of the Caoperative � dlreCed by this Agreement and as may tie
dire�ed hom dme tn tlme by tl�e Board;and
(d) Perfortn those dutles set forth in SecHon 7.03.
2.1B POLIQES�PROCEDURES—The pofides and procedures, if any, adopted by the Board for the
uNfdrtn, smooth, and effident operatlon of the Cooperatl4e in furtl�erance of the Agreement
Once adopted,sucFi Polides&Pro�dures may be changed Gom tlme to tlme.
2.19 QUORUM—A Quorum Is the peroPnmge of possibte Represen�tJves necessary for the Board to
hold a me�ing and mnduct Cooperative buslness. A Quorum is prsent when a majority(more
than flRy percrm(50�,6)) of the Representitiv� are personally present at a duy olled meeting.
Telephordc partldpatlom m�stlWtes personal pr�ence to the exbent pertnitYed by appllode law
and as spedfled In Po�des&Preoedures.
2.20 REPRESENTATIVE — Fach �Ilahe's deslgnated IndMdual to serve and act on betialf of the
Afflliate on the Board set forth In SeRion 3.01.
2.21 RESERVES— Amount established th�ugh an acoc�ss of paymen� over expenses esta6115hed to
pay, all or In part, unexpected ms�and expens�.
2.22 TRUST — The tax exempt trus[ es�tabAshed under Code Sectlon 501(c)(9) of [he Code (a/k/a/
"VEBA'�, whlch has heen esmblLshed and/or main�lr�ed by the Cooperapve for the purpose of
funding the provls'ron of benefils �mder one or more Plan(s).
ARTICLE III.
AUTNORITY AND DUTIES OF THE BOARD
3,01 The Cooperedve shall be managed by the Board pursuant to fhe tertns aF Nls Agrer�nerrt. The
Board shall mrtslst of one Representatiye from eadi Atfiliate Oo be designated by such Affliate.
Each Affillate may also designate one Ntemate m attend and vote at any and all Board meedngs
in Ifeu of the Repr�entatlye.
3.02 The Board shall have the authority and duties tn accomplLsh the purposes set Porth in Artlde I
a6ove and, In furtherance of such authority and dutles, shall:
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(a) Esta611sh Cooperatives of beneRts and a tax exempt hust mmgnlzed under Code Sectlon
501(c)(9)(a/k/a'VEBA'�in acoordarwe with SecUon 9.02;
{b) Seek to ma�dmize the value of the Affiliates'and CooperaWNs beneflt dallars;
(c) Serve as the"Plan AdrNnistratn�' arM exerdse all authodty of the Plan Administrator as
further proylded In the Plan(s)and Tnat, Indudirg the autFiority tn Interpret the Plan(s),
adjudicate dalms for benefl� under the Plan(s), dire� the Inves4nerd of Trust assels,
and appoint an Inyeshnent advisor to manage the InyaOnent of Tnat assets;
(d) Select, enter Irrto a mntract wltf�, arxl/or hlre a Plan Coreuimnt, agents, emplayeg,
Independent wntrador,attomeys,aumtor, and such other persore as may be nmessary
to adminlster and acmmpltsh the purp�e oP the Caoperative; proNded, however, that
the Caoperative shall riot have the authoriry to enter into, mamfy, or termlriate arry
collective baigaining agreement inftfi AfliOate empltiyers;fiirtherpro4lded, howevel, that
the Board stiall retain uitlmate auttiodty and Rsptins16111ry for tlie admlNstratlon of the
Cooperative,the Plar�(s),arid the Trust;
(e) Appolnt, oommiGees, Itxluding an executive mmm(ttee, and dele�te to such
oommittee(s)arry autlarity and dutles as It dee�appropriate;
(� Carty out edumUOn and otl�er Cooperatives relatlng to health, acddent and other dairtu
management and reductlons;
(g) Direct the collection and payment of fur� tn be used for the admirdstratlon of the
CooperdWe and the provLslon of benetits under the P(an(s].
(h) Imrest Funds in aaordanoe wlth the Investrnent pollcy establlshed by the Board and
consistent with appAcable Iaw;
(I) Select one ar more deposftori�For tfie funds oF the Caoperative;
Q) Cause to be purchased insurana adopted by fhe Board;
(k) Prepare, review and apprwe tfie annual b�get of the[noperative and a mortthly report
of the Flnandal affairs of Me fboperaWe;
(I) In Its msaepon, obtaln, approve and submit to each Affillate annually an au�ted report
of the flnandal afFairs of the Cooperativ� made by a certlfled publlc acmuntant within
slx (6) montlu from the end of that.Fsol Year In a�rdance with generally aaepted
auditlng standarids;
(m) Remmmend changes In policy to Nfiliates;
(n) Remmmend the compensation for all suth a9ents, employees and independent
mntrador,
(o) Cliange, amend or modify the Plan(s);
(p) Cause to 6e purchased fldelity bonds andJor fidudary Iiabidty coyerage for employees (if
any) or other persons, as required by this Agreement, as required by law, orotherwise
detertnined to be appropdate by the Board;
(q) Establish and recommend monthly and supplemenWry (if necessary) payments to the
Account;
4
(r) Review and ultlmatey rule upon employee ber�it daim dlsputes;
(s) In acoorclance with the provisiore oP Artide XVII, expel any IndNldual Afflliate from the
CooperaUve for fa➢ure tn pertortn fts odlgatlors under this Agreement; and
(t) Carry ou[ such other adlviUes as are necessarily Implied or requlred to orty oui the
purposes of the CooperaWe specified In Artlde I or the spedfic activitles enumerated in
thls Artlde III.
Wlth respect tn the above desaibed authority and dutles, the Board shall fulfill its dutles
consistent with applfmble statutory requlrements and Gmimtlons under Chapker 39.34 of the
RCW.
3.03 No one serving on the Board sfiall re[efVe arry comper�sadon (or oth� paymentj from the.
Cooperaflve for servloes on the Board.
ARTICLE IV.
GOALS OF7HECOOPERATIVE
4.01 The goals of the Cooperative shall 6e:
(a) To provide quallty beneAts for Partldpants and Benefldarla oonsistent wRh finandal
resportsiWOtles and restralnts.
(b) . To seek Inaeased dfidendes to minlm�e benefl�' ms�, Induding actual bendit
paymen[s and adminLstrative expenses.
(c) To atmin and malnmin Reserves if deemed approprlate by the Boarcl. The purpose of
the Reserves is tn have sufflderrt funds available ho pay all inarred bu[ not yet paid
claims at any given time and to minimize the ImpaQ of short tertn m5h flow fluct�Uons.
(d) To assure that all provlders of servlce are effectively dLscharging their respor►sl6ilid�.
(e) To mmply with legal requlrements and manitor tegislative devebpmenhs.
(� To maximize the ralue of the Affilfates'and Cooperadve's benefit dollars.
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ARTICLE V.
MEETiNaS OF THE BOARD
5.01 Regular meetlngs of the Board shall be held as often as ne�ssary to carry out the purpose of the
Cooperative 6ut rio less one (1) tlme each Hsml Year (refeired to as a °required regular
meetlng'�.
5.02 The tlme,date and lootlon of the req�dred regular meeting of the Board shall be deGertnlned by
the Board. The requlred regular me�ing wlll be scheduled at the beglnNng of the Flsml Year.
Additlonal meedngs may 6e s�as r�eeded.
5.03 Spedal mceUngs oF the Board may be olled by Its Chalrperson or by any two (2)
Representatlres.
5.04 Three (3) to ben (lo) buslness days wrttten notice of regular or spedal meetlngs of the Board
shall tie ghien to eadi Representative and an agenda spedfyAng the gubje� of arry spedal
meetlng shall acmmpany s� notl�. B�slness mndumed at spedal me�ings shall be Amlted to
those it�ns spedfied in the agenda.
5.05 Minubes of all meeGngs of the Board shall be taken at such meetlng with a mpy wbsequently
proNded m eadi Representative.
S.D6 All meetlngs of the Board shall be mnduUed In the rtiann� required by appllcable law. In the
eveM of a�ry mnFllct b�ween arry proviston of this Agreement and any proylsion of apPpmble
law, this Agreement shall be deemed modifled to the extent neoPSSa_ry to mmp.ly with such law.
In addipon to arry notics oP meeHngs the Chairyerson may be requlrerJ to serve under this
Agreement, 4he Chalrperson shell muse to be pubOshed any schedule or notloe of ine�ings of
the Board if,and as, requlred by law.
5.07 Each Afflpate shall be entltled tn one (1) vote on tfie Board through Its Reprnsentapye or
Altemate. No proxy 4otes or abserrtee vote5 shall be pemiltied.. Voting shall be mnducted in
aaordance wlth the Polides & Procedures es�bllshed pursuant to Sectlon 5.08 and appllcable
law. _
5.08 The Bwrd may �bllsh rules gweming i� own cunduct and procedure, cbnslatent 4rith this
Agreement. Sud� rules shall be Induded as part of ttie Polldes and Procedures af the
CooperaWe. Except az modfled by the Board pursuant tn thls SecHon or applloble law, Ro6erts
Rules of Order(latest edidon)shall goyem all meeGngs of the Board.
ARTICLE YI.
OFFIGERS
6.01 Officers must be Representatives when elected and throughout the term of oftice. Officers of the
CooperaHve shall oonsLst of a Chalrperson and other affirers as may be descritied In the Polides
& Procedur�. Tertns of office are two (2)years.T}ie Board shall dei.t officer(s) at a duly mlled
meetlng. The Chalrperson wlll be eJeded on even years and serde far two(2)corsecvtive years.
Through lts Polldes & Pracedures, the Board may from tlme to time �bllsh otiier offloa and
may elect a RepresentadVe ho serve In any of such offices. The Board may fill any vacancies
whlch may occur 1n such offices for the remalnder of a terrn.
b
ARTICLE VII.
PLAN CONSULTANT&OTHER SERVICE PROVIDERS
7.01 The Board shall mr�ad with a Plan Cons�nt whose dWes and au[horiry are desaibed In 7.03
below.
7.02 The fee of the Plan Consultant shall be detertNned by the Board and shall be payable pursuant to
the mntract 6etween Ehe Plan Consultant and the Cooperatlye unless or untll otherwise revlsed
by the Board.
7.03 The PWn Consultant shall be the prindpal operatlng manager of the Cooperative and shall
supelvLse and control dayto-day operatlons of the Cooperative and orry out the purpase of the
C�operaWe as dlrected by Uie Board. Among the dWes and autlwrity of tlie Pian Consultarrt
shall 6e the folbwing:
(a) To sign on 6ehalf of the Cooperative any IrisWment which the Board has a�thorized to
be executed, by a fortnal vote or writYen authority, and, In general,to perform ati dutl�
inddent to the office of the Plan fansul�nt and such other dutles as may be prescribed
by the Board oonsistent wltli thls Agreemerd from Gme to Bme.
(b) To make reoommendatlons regarding policy dedslons,the crnatlon of other Board offlo�
and the r�entlon of agents, employees and indeperdent coMraQor.
(c) At each regular meeting of the Boa'rd and at sudi other tlmes as requested tn do so by
the Board, Go preserd a full repoR of the Plan CoruulmnYs activitles and the fisol
conditlon of tlie Cooperative
(d) Within the wrgtrain� oF the budget approved by the Board, to make or direct
dlsMbutlor�s from the A000unt for payment of ber�fit datms and the admiNstraUve
exper�ses of the Cooperative and malntaln amrrate and detailed remrd5 and aaounfs of
all trarsaGions.
(e) Act as Ilalson with other service provlders,the Board, and Represer�tives.
(� Deposit all funds as drected by Me Board in depositnrles selected by the Board.
(g) Prepare Board agenda5 In conJunction with the Chalrpason.
(h) Monttor monthly billings 6o ensure that they are recdved In a dmely fashlon ar�d In the
oorreu amount.
(p Be readly available for consultadon with arry Inter�hed employer regarding beneflts as
determined by the Board and approved by each Affl�ate.
(j) Upon request of the Board, solidt ne.w �Iiates and/or fadlitate the so6dtatlon of new
AFfillates.
Notwithstanding the above Ilst of dWes and autharity, the 8oard, through the Polides &
Procedures, may (1) limit the dutles and authority as It deems appropriate, and (2) add to or
expand the duties and authority as It deems appropriate.
7.04 The Board shall rnntrect with a person or persons qualfied to manage the Trust.
7.05 The Board may contra� with a person or persons who shall be responsible for administrative
operatiore of the Plan, including remrdkeeping, reportlng, processing of benefit daims, and
paying the day-to-day expens�of the Cooperedve a5 autfiorized and dlreded by the Board.
�
ARTICLE VIII.
ACCOUHT
8.01 It Ls Intended that the Aanunt�In suffident funds at all tlmes ho pay the arrtidpated benefl[s
.
and ms�and the appropriate admirdstrative expenses of the Cnoperatfye:
6.02 Payments inho the Amount shall be made in amourds determined by the funding policy adopted
by the Board and tn aaordance with the payment schedule�mined by the Board.
8.03 During any Flsmll Year, the Affillate shail be required tn make payments IMo the Acrourd for
those Partldpan� and/o� Benefldarles wfthin th'e mvered classes wFio are mvereC under the
Plan(s)avalla6le tlirough such Nflllate.
8.04 If, durfng arry Hsal Year, the Plan fnnsultar� In i� dLsaetlon, de�rtnina tfiat fhe funds
ayallable In the Aomunt are Insufflderrt to meet a Plan's current or ardldpated fufure
adminL'hat)ve acpensa, the Plan Consultanf may reoommend supplem��ry paymeMS for
approval by tt�e Board. The Plan Consul�nt shall reoommend the Lotal amourn of the
suppl�nentary payments needed and a recommende� allacatlon of such amounts among the
Afrillates.
8.05 The Board, In Os discretlon, may diarge an assessment to new Afflliates ("New Ntilla[e
Au�srnent°);to mVer ail or a part of the admirdstraWe gasts to the CooperaUye oP adding the
�Itate The tem�s and mnditlons, Induding amaunt and duratlon, af a New Afflllate Assessmvrt
shall he detertnined by the 8oard.
ARTICLE DL
PLAN(S�OF BENEFIiS AIm TRUST
9.01 The Cooperative may, from dme to tlme, otfer one or more Plans to provide Ilfe, medlol,
acddent or dLsadO,ty 6en�for Affillate empbye�or enplayees'depeiden�end to have svch
Plan or Pians admlr�st�ed under thls Agreenent. The Initlal Plan shail be adopted by the Board.
Th�eafter, the Board may, from tlme to tlme, amend the Plan(s) Qndudirig the tertns and
oondidons tliereo�end adopt new or addltlonal Plans. The Board herety aiso gPants autliority to
amend the Plan(s) and adopt new or ad�tlonal Plans tn the.Plan �onsuitant fn aaordanoe with
the Pofides & Prxedures. Notwlthstanding the foregoing, the Board reserves tf?e authority to
revlew sucfi actlwts by the Plan Wnsultant and to approve or disepprove such adlons at a duly
olled meebng of the Board.
9.02 The Board, In Its dLsaedon, shall establish and malntaln a Trust for all or certaln Plan(s) made
available through thls Agreemer�t In acmrdancP wlth epplloble law. The tertns and condltiorss of
the Trust may be changed From dme to tlme by the �BOard In aaordance wlth the Trust
agreement. Pursuant to f� authority in Sectlon 3.02, the Board may hlre approprlate seMce
providers with respeU to the Trust
9.03 The Plan Consultant and Plan Supervisor shail be noGfied of any such change or new or
addiUonal Plan and/or Trust as soon as praGicable but In all eyents at least saty (60)days prior
to the effective date of the change or adoptlon oF the new or add'itlonal Plan and/or Tnrst.
9.04 The curtent Plan(s)and Trust at any Ume are attached to thls Agreement in Appendix C.
8
ARTICLE X.
MATTERS REQUIRING APPROVAL
10.01 The presence of a Quorum shall be required for the transactlon of Cooperabve bu;iness at any
duly mUed meedng of the Board. For thls purpose; presena may be In person or by telephone,
6ccept as specfflcalty ofherwise noted bebw, an a� by a maJority of the Represenmtive5 at a
meetlng at which a Quorum Is preserrt shall be the act of the Board. In the a�ence of a
Quorum, a majority of the Representatives present may adjoum any meedng from tlme to tlme
untll a Quorum is present. If a Quorum is present when a duly olled meeting of the Board ls
mn4ened, the Representadves present may cantlnue to transad business untll adjoumment,
notwltF�nding that ttie wlthdrawal of a number of RepresentaUves origlnally presen[leaves less
than required for a Quorum.
10.02 The follovuing are"spedal bislness matters" reqWring approval of seyenty-fiye percent (75%),
rounded up If a fractlon, of all Aftlliates as evldenoed by resolutlon of the goveming 6ody of each
Affillate:
(a) Amendmenis to this AgreemeM;
(b) Merger of the Cooperative with another cooperaWe; and
(c) Tertninatlon of the Cooperative.
ARTICLE XI.
OBLIGATIONS OF AFFILUITES
11.01 The obligatlons of each Affillate shall be as follows:
(a) Commit to an initlal term of partidpatlon of three(3)years.
(b) To appropdate w budget and pay promptly all payments to�e Acoount In such amounts
and by such tlmes a5 are�blished within Ehe scope of this Agreenent;
(c) To cooperate fuliy with the Plan Consultant, the Gooperative's attomeys and auditor and
any agent, employee, officer or Independent co�tractnr of the Cooperative in arry matter
relating to the purpose and powers of the CooperatiVe;
(d) To revlew all proposed chang�to a Plan prbr to the Board's final vote on such changes;
(e) To provlde a promp[ listing of any new or separated employe� in acmrdance with the
parameters set by the servl�provlders;
(� To notlfy promptly ail of its Plan PartJdpanis and Benefidaries of the withdrawal or
expulsion of such Affiliate from 4his Agreement
(g) To act prompUy on atl matters requlring Board approval and ta not withfiold such
approval unreawnably or arbitrarity; and
(h) To purchase and maintain appropda[e Insurdnce coyering 1ia611ity arising out of the
Affiliate's participation in the Cooperdtive, Induding arry liability arising from the actions
of the Affiliafe's Representative (or Altemate) acting in his/her smpe of authority under
this Agreement.
11.02 At the discretlon of the Board, non-perfortnance of Affiliate obllgatlons, wFiether In whole or in
part, may be the 6asis for a reoommendation to expel pursuant to Ntlde XN.
9
aRnc�e�.
LIABILITY OF BOARD OR OFRCERS
12.01 The Representatives, Altemates, and officers shall disdiarge their dutles solety and collectively In
the ir�temst of the Plan Partidpants and Benefidarles under the Plan,and:
(a) For the eicdusive purpose oF:
1) proNding benefi�to Partlapants and BenefiLs under the Plan; and
2) defraying reasonabie expense of administering the Plan,
(b) Nlith the care, sldll, prudence and di�gence under the arzumstances then preyalling that
a prudent p�son In a Iike opadty and famlliar wlth such matters would use in the
conduct of an er�terprise of a Iike diardcfer and wfth 6ke alms.
(c) In aaordanoe with the davments and Instruments goveming the Plan iruofar as such
docaments and Instruments are oorisisterK witfi the law.
12.02 To tfie f011est ahent pertnftted by appllrable law, the RepresentaWes, Altemates, anG oiflcers
shall not tie Iiable for any mistake In judgment or otfier aQion made,taken or omltted by them In
good faith; nor for any actlon made, taken or omitted by arry agent, employee,or independent
cordrac0or selected with reasonable mre, nor for loss incurred through inv�trnern of Coope�a9ve
funds; or fdllure to invesL No Representatlye, AlEernate or of�cer shali be Ifable fw arry ectlon
taken or amitted by any other Represeirtative, Altemate or ofticer. No Representative shail 6e
requlred to glve a bond or other sewrtty to gwrante�the taltMul perfortna�xe of his/her dutles
hereunder except as requlred by thLs Agreeriment o� by law. Ttie Coopprative may purcfiase
Insurdnce pro4imrig fidudary Iladl'dy coverdge for officers, Represenmdve 8nd/or Altemates.
ARTICLE XIII.
CONTR14Ci1JAL OBLIGATION
13.01 The obllgatloris and responslbllitles of the Affillates set forth in thls.Agreement, Induding the
obllgatlon to take no acbon Inconslstent with this Agreement, as orlginaAy w�itten or 4alidly
amended, shall rmiain a mntinuing o6Ugatlon arid r�ponsibllity of each Afflliate. This
Agreement may be enforced ln law or eguity elther by the Qooperapye itself or by any AfBliate.
The consideratian for the dutles imposed upon the Affilfates by this Agreement is based upon the
mutual promises and agreemen� af the AffiGates set forth hereln and the advan�ges gained by
the Affillates through reduced administrative costs for the processing of employee benefit5.
13.02 Except tn the extent of tfie limited finandal payments descrlhed In Artlde VIII; no Affitlate agrees
by this Agreement tn be responsible for any dalms of any klnd agalnst any other Affiliate. The
Affiliates Intend in the aeadon of the Cooperative ta eslaWish an organizadon for,joint
admiNspatlon of employee benefits within the scnpe set forth in thls Agreement only and do not
intend to create between the Afflllates arry rdadonship oF partnership, surety, Indemnlfication or
IiabiGty for the debts of or daims against another.
io
ARTICLE XIV.
DCPULSION OF AN AFFlLIATE
14.01 Following reasonable dforts Go ir�fortnalty resolve a sitistlon, an Affi�ate may be expelled from
fhe Cooperative for failing Lo perfortn or fulfill the responsiWlitles asslgned to Afflllates under the
Agreement or for any other a�ion or fallure to act de0ermined by the Hoard to be detdmental to
the InteresCs of the Caoperative.
14.02 The expulsion of an AEfidate must be approJed by a se4enty-flve percent(75"�), iounded up if a
fra�Yton,vote of all Represer�tives, atduding the Representative of the AfRIWte whase ezpulsion
is being vated upon as evldenced by r�olutlon of the_goveming body of each Affiliate. Folbwing
reasonable aGernpts by 4he Board to resolve the situatlon, the expulsbn prooeedings set out
6elow shall be folbwed.
14.03 No Afrillate may be expelled except aRer wriften nod� from the Board of the reason for fhe
expulsion and after a masonable oppoRunity of not less than fifteen (15) days to wre. Wlthin
such fiRfteen (15) day peilod, the Affiliate may request a hearing b�ore the Board prlor to any
dedslon being made as to wheether to remmmend expulsion. The BoArd shall set the date for
such hearing, which shall not be less ttian fifteen(15)days after 0cpiration�the tlme pe�iod for
correcUon. The Board may appoir�t a hearing oflioer to owiduct sudi hearing and make
rewmmendatloru to the Boaid based upon findings of tlie fad; provlded, however,if tlie hearing
Is mnducted by a hearing offlcer, the Affiliate may request a furtiw hearing b�ore the full
Board. Such request shall be In,wriHng and addressed M the C7wlrperson. The Board or hearing
officer may recommend a dedsion at Ehe dose of the hearing or wfthln 8fteen (15) days
thereafter. The e�cpulsion of an Affiliate, following the notice and h�ring as set forth in this
Sectlon, shall be flnal when approved as spedfied In Sc�ilon 10.02 and shall bemme effective
thlrty (30) days following such approral, unless a dlfferent effective date Is agreed to by tlie
Board and the expelled Afflllate. At such a hearing, the appealing Afflliate may not voEe or tie the
hearing officer.
14.04 After expulslon, the fortner Aff Iiate shall conUnue to 6e fully IIaWe for (a) arry payment due.to
the Acoounf with respect to the perlod prior to the date of expulsion, (b) any other unfulfilled
abligatlon arLsing at any tlme attributable to the pedod priorto the date of expulston, and(c)any
oNer unfulfliled obligadon as if R nras stlll an Affil'�ate of the Cooperative.
14.D5 The Cooperative shall have no a611gadon wltli respect to expenses Incurred under a Plan by a
Partldpant or Benefidary covered through an expelled Afflliate after the effective date of such
expulsion. No daim under a Plaq by a Partlopant or Benefidary covered through an expelled
Affiliate for an expense that was incurred beFore the effective date of expulsion shall be paid IP
not presented to the Cooperative, or iis deslgnated agent, wlthin Nnety (90) days after the
effective date of e�cpuWon (I.e., any sudi claim wlll not be paid by the Plan). Except as prodded
below, the obligatlon of the Cooperative to adminisfer dalms for expenses incvrred under a Plan
hy a Partldpard or Benefldary covered through an expelled Affiliate prlor to the effective date of
expulsion ("runout daims'� shall mntlnue for such daims as may have been filed or which are
filed withln ninety (90) days after the effective da[e of the expukion of the Affliiate. Payment
and administ2tion of any clalms for ecpenses Incurred prior m the effecdve date of an AffiGate's
�cpulslon that are sutimitted for payrrient after such Nnery (90) day perlotl shall be the sole
r�ponsi6illty of the exPelled Affillata.
ii
ARTICLE XV.
VOLUMARY WITHDRAWAL FROM THE COOPERATiVE
15.01 After the initlal three (3) year commitinent, an Affiliate may wlthdraw upon one hundred and
twenty (120) deys advance wrttten notice h� the Cooperative or by such other lesser advanoe
nodce deemed reasona6le by the 6oard In Its sole dlsaetlon. Upon the Board's receipt of a
notice of withdrawal, the withdrawal of such Afflliate Is Irrevocable unless such revootlon Is
allowed at the sole discretfon of the Board. Upon an Afflllate's su6mission of a notfce of
wlthdrewal, such Aflillate forfeits all of i[s votlng rights in Its own right and as a Representative
on the Board, unles allowed tn vote on arry particular mattier at the sole dlsaepon of the Board.
The rights and duH� of the Cooperadve with respect to a withdrawing Afliliate in the
Cooperdfive shall be�set forth below.
15.02 After voluntary wtthdrawal, the fortner Affillate shaU mntlnue to be fully Ilable fior (a) arn/
paymerrt due to the Aaount with respect to the peiiod pr(or to the date of withdrawal, (6) any
other unfulfllled odigatlon arLsing at any Ume athltiulable to the period.prior tc the.date oF
withdiawal,and(c)arry other unfulfilled obilgatlon as If ft was stlll an AfHOate of the Cooperative.
15.03 The Coope2tive shall have no obllgadon with respert to, claims Inarred under a Plan by a
Partldpar�t or BeneHdary covered through a wlthdrawing Affillate afta the efieitlye date of sudi
witlxlrawal. No deim under a Plaq by a Partltlpant or Ber�efldary covered throiu�h a wlttidra�Mng
Affillafe thet was inairre� befo2 the effective date of voluntary wlthdrawal shall be pald if not
pr�erited,to the Cno�rafive, or its desfgnated agerd, witliln one hundred (wenty (120) days
aRer the effective dahe of the voluntary withdrawal p.e., any sud� dalm w10 eot be pald by the
Plan). Except as provlded helow, the o6figadon of the Cooperad4e to adminBter dafms incurred
under the Plan by a Partldpant or Benefidary mvered through a wlthdrawing Afflllate prior m the
effecdve date of withdrawal.("run-0ut dairr►s'� shall mnUnue for such dalms,as may haye been
Flled or whlch are filed wlthin one hundred twenty (120) days efter the effective date of the
voluntary withdrawal of the Affiliate. Paymerit and adminlstratlon of any dalms for expenses
incurt� prior to the effecGve date of an AffipaGe's voluntary withdrawal that are submltted for
payment after surh one hundred twenty (120) day period shall be tlie sble responsltility of the
withdrawing Affiliate.
ARTICLE X1/I.
TERM&TERMINATlOI`!OF TNE COOPERATNE
16.01 The Coaperative shall e�dst undl tertninated. The withdrawal of any Affiliate does not impa�the
contlnued existence oF the CnoperaUve Md, the Cooperad6e's condnued existenoe does not
predude an Afflllate from withdrawing.
16.02 The Cooperative shall tertninate upon the ocLUnence of any one of the Following events:
(a) A flnal detertnlnaUon by a court of competent,jurlsdlctlon, aRer all appeals have been
eichausted or tlme for appeal has explred, that the Cooperative isinvalid, contrary M law,
or Ir�solvenf; or
(b) Upon a vote of Atfillate5 described in ArGde X.
16.03 Upon terminatlon of the Cooperative, and ro the extent not preduded by applicabie law, the
rights and duties of the Cooperative to each Affiliate and the rights ancl duties of each Affiliate W
the Cooperadve shall be the same as those with respect to a withdrawing Affiliate as outlined in
Article XV.
iz
negotlallons, agreements, representatlons; covenar�ts and erarrantles, mnoeming the subJect
matter of thls Agreement, are merged into thls Agreement.
18,06 Applieable Law. The CaoperaWe shall compy wltli all noHfimtlon, regLs4�atlon, Blings or otfier
obllgadors requlred by Chapter 39;34 of the RC:1N.
18.07 ReprPSenmtive Disquallflodon. M IndlNdual shall he disqualifled from serving as, or
m�Bnuing to serve as, a Repmsen�tive oF the 8oard if such Indivldual B not employed by the.
Affiliate he/she represents.
IN WITNESS WHEREOF, ttie folbwing Inidal Afflllates have caused this A9reement to be execvted 6y
their duly authorized officers and their undersigned represenmdves as aF the date abwe written.
Cfty of IOrtcland Oty of Aubum
By: By:
Title: Title: /1�
Date: Date: �AN —4 Z��s
Gty of Mount Vemon
By' ��.(i�
Title:
Date: I�L�S� !�f
19
ARTICLE J(VII.
NE1N AFFlLIATES
17.01 Ttie Cooperative shail cor�sider appllmtlors from potentlal addltional Affliiates provlded a
mmpleteG formal appllcatlon has been submitted by the poteMlal Aff111ate.
17.02 The additlon of a new AfB�ate, induding all terms and mndltlorts of such aocep�nce, shall be
detertnlned by the Plan Consultant.
17.03 Once approved for partldpatlon by the Plan Consultant, the entlty wiil be an Affiliate upon the
completlon oF antl recelpt by the Plan Consulmnt of a Partldpatlon Agreement
17.04 Approveil neY4 Afflllates nortnally enter the Cooperative at the tieginning of As�i Year. Entry in
to the Coop�ative at other tlme3 may_tie perrnitted, the tertns and conditlons oF whlch to be
mutuaily agreed upon by the New Afflllate and the Cooperadve. In its dlsqedan, the Plan
Consulmnt may allow entry to the Cooperatiye at other times and may Impose restrlGlore,
Iimitapons, etr.wlth resped to Such entry.
ARTICLE XVIII.
MISCELLANEOUS
18.01 Notiee—My notl� requlred by thls Agreement shall tie In writlng and shall be deemed tn have
been glven when deposl0ed in a Unfted States Post Ofiice, registered or oertlfied mail, partage
prepald, retum recdpt requ�and addressed a5 follows:
(a) If to the CooperaUve: to the then current Chairperson of the Board at the addrPSS oF the
then current Plan ConsulYard.
(b) If to an Afftliate: to the addrPSS set forth on Appendix.A or to such other address as any
part ta this Agreement may from tlme to time spedfy in writing to the other parties and
tofhe CooperaHve:
Any nodoe required by this Agreement may be waived In w�itlng by the party(les) to wtam such
notice is requlred to be provided hereunder. Attendanoe by an Affilla[e at a ineetlng consdhitet
Mralver of notice to that meetlng, accept (1) where tlie Affiliate objects at the beginNng of the
meeting to the transactlon of tiusinas at the meedng bcrause the meetlng was not lawFuly
called or convened, and; (2)the Afflliate does not thereafter partldpate In the meetlng.
18.02 Seetion Headings—The section heamngs inserted In this Agreement are for cornenience only
and are not intended to and shall be cori4tnled to Iimtt, �large or affect the smpe or Intent oF
this Agreement or tlie meaning oF any provision hereof,
18.03 Validity and Savings Clause— In the event any provision of this Agreement shall be dedared
by a final judgment of a Court oF canpetent jurisdiction to be unlawFul or uncorutltutional or
Invalld as applied to any Nfipate, the lawfulness, mnstlNtlonality or ralldity of the remainder of
Ehis Agreement shall not be deerned affected the2by.
18.04 Counterparts—This Agreement and any amendmenis thereto may be eicecuted in any numher
oj munterparts which taken together mnstltute a single Ir�strument.
18.05 Endre Agreement - All the agreements, mvenants, representadore, and warranties between
the Affillates expressed or implied, ordl or written, conceming tlie subJect matter of thls
Agre�nent are mntained in this Agreement. All prior and conterriporaneous con4ersabons,
13
APPENDDCA
LIST OF If�QTi1►L AFFlLIATES
Qry of brldand
aty oF Aubum
dty of NIouM Vemon
is
APPENDIX B
LIST OF AFFILIATES AS OF Ol/OS/2016
City of brldand
City of Aubum
Gty of Mount Vemon
16
APPENDDCC
PLAN(5)
See aGached, a oopy of the m�t recEnt otfldal Plan documeqtapon each ben�it Pian(s) and the mast
rerPnt offidal Tnut documenmtlon.
n
APPENDD(D
PARTICIPATION AGREEMENTS
18
FUNDED HEALTH REIMBURSEMENT ARRANGEMENT
BASIC PL'AN DOCUMENT
c0 2015 Hi[esman&Wold,P.A.
Funtled HRA Basic Plan Document Non-ERISA(EHC)
TABLE OF CONTENTS
ARl1CLE I. INTRODUC110N ................................................................................................................1
ARTICLEII. DEFINITIONS....................................................::............::.........:.::......:..:....::.:.....::::::.�.:.2
_ __
ARTICLE III. ADOPT7NG EMPLOYERS::.:......:::.::........::::.::.....:::.:::....:::.:......:::.::.....::::.........:.....:::......:.5
ARTICLE IV. ELIGIBILITY AND PARTICIPATION OF EMPLOYEES............................................................6
ARTICLE V. BENEFITS UNDER'fHE PLAN .............................................................................................9
ARTICLE VI. CONTRIBUTfONS AND TRUST........................................................................................15
ARTICLE VII. CLAIMS DETERMWATIONS AND REVIEW OF DENIED GLAIM....::.::....:::.:.....::::.:.....:::::.::16
ARTICLE VIII. HIPAA PRIVACY AND SECURITY PROVISIONS...............................................................21
ARTICLE IX. PLAN ADMINISTRATION.................................................................................................24
ARTICLE X. PLAN AMENDMENT AND TERMINATION...........................................................................26
ARTICLE XI. GENERAL PROVISIONS .....................................:.........::::::.......::.::.....::::.:....::::.:......:.::::27
ARTICLE I.
INTRODUCTION
1.1 Establishment. An executed Adoptlon Agreement plus [his Basic Plan Document constihrte the"Plan."
The eff2ctlye date oF the Plan is set forth In the Adoption Agreement. ?he Plan and Trust are iniGally
being established a single Employer. However, it is anticipated that In the firture sponsorship of the Plan
and Trust wlll be transferred to a Joint powers entlty created by two or more publlc agencles pursuant to
the authority grented for joint or moperative action under applicable state law.
1.2 Purpose. The purpose of the Plan is to provlde certaln Employees with an opportunity to receive
reimbursement for certain Health Care Expenses as provided in this Plan. It Is the intention of the Plan
Sponsor that the benefits provided and payable under this Plan be eligibte for ezclusion from the gross
income of Participantr as provided tiy Sectlons 105(b) and 106 of the Code. In additlon, it is the
intendon of the Plan Sponsor that the Plan qualify as a Health Reimbursement Arrangement ("HRA'�
under IRS Revenue Ruling 2002-41 (]une 26, 2002)and IRS Nodce 2002-45(]une 26, 2002).
1.3 HIPAA Privacy and Security Rules. This Plan is a "covered entity"for purposes of the Privacy Rules
and Security Rules as desvibed In 9reater detail in Artlde VIII below.
1.4 Not ERISA Plan. Because It Is a governmental plan, this Plan Is not an employee welfare.benefit plan
for purposes of ERISA.
1.5 Trust. This Plan is intended to be funded through a Trust, reFlected in a sepa�ate daument.
1
ARTICLE II.
DEFINITIONS
The following words and ph2ses are used In this Plan and shall have the meanings set forth in this Article
unless a different meaning is dearh/required by the context or is defined within an Artcle.
2.1 Adoption.Agreement means the separate agreement, or portions thereof, completed and exxuted by
the Plan Sponsor setting forth the Plan Sponsors selection of options under the Plan.
2.2 Authorized Representative means, for the daims and appeal procedures, the person entitled to act on
behalf of the daimant with resped to a beneft claim or appeal. In order for the Plan to recognize a
person as an Authorized Represenfative, written notlfication to Uiat affect signed by the daimant and
notarizetl must be received by the Plan. An assignment for purposes of payment is not designatlon oF an
"Authorized RepresentaGve."
2.3 Basic Plan Dowment means this document, which together with an executed AdopHon Agreement
constitutes the Plan for the Plan Sponsor.
2.4 Claims Administrator means the person or entity designated by and under contract with the Plan
Administrator to perform certain administrative fundions, induding, but not limited to, claims
administration and recordkeeping.
2.5 Claims Run-obt Period means the period of time following the end of a Plan Yea� (Section 5:3) or the
termination of a PartJcipanj's partidpation In the Plan (Sectlon 5.7) during which the Particlpant may
submit claims to the Plan for expenses incurred during the Plan Year or the Partidpant's partidpation (as
Che case may be).
2.6 Code means the Intemal Revenue Code of 1986, as amended from time to tlme.
2.7 Covered Indi4idual means a Participant, Dependent of a Partidpant and the Spouse of a Partidpant,
and any other person appropriately coveretl under the Plan.
2.8 Dependent means as defined in fhe Adop[ion Agreement.
2.9 Employee means any person employed by an Employer and on the Employers W-2 payroll on or aRer
the Effective Date. Eriiployee does no[include the following:
(a) Any self-employed individual as described in Section 401(c) of the Code;
(b) Any employee included within a unit of employees covered by a collective bargaining agreement
unless such agreement expressly provides for coverage of the employee under this Plan;
(c) Any employee who is a nonresident alien and rxeives no earned Income from the Employer from
sources within the Unl[ed States;
(d) Any employee who is a leased employee as defined in Seclion 414(n)(2) of the Code;
(e) An individual classiFled by the Employer as a contract worker, independent contractor, temporary
employee, or casual employee, whether or not any such persons are on the Employer's W-2
payroll or are determined by the IRS or others to be common-law employees of the Employer;
and
(� Any individuai who performs services for the Employer but who is paid by a temporary or other
employment or stafFng agency such as"Kelly,""Manpower,"etc., whether or not such individuals
are determined by the IRS or others to be common-law employees of the Employer.
2
2.10 Employer means an entity that(a) satlsfes any conditlons descrlbed in the Adoption Agreement; (b) has
been approved by the Plan Administrator for participation in the Plan; and (c) has entered into a
Participation Agreement.
2.11 Employer Contribution means a nonelective contribudon made by an Employer on behalf of itr Eligible
Employees in accortlance with Section 6.1. The Employer Contribution is an amount that has not been
achially or cnnstructively received by the Participant, and it is made available to the Participant
exdusively for reimbursement of eligible expenses under tlie Plan. Employer ConMbutions may include
mandatory salary reductlon contributlons.
Z.12 Entry Date means the date as of which an Employee becomes a Participant in this Plan as set forth in
the Adoption Agreement.
2.13 ePHI means PHI maintained or transmitted in electronic media, induding, but not limited to, electronic
storage media (I.e., hard drives, digital memory medium) and transmisslon media used to exchange
infortnadon in electronlc storage media (i.e., internet, ex[ranet, and other networks). PHI transmitted via
facsimile and telephone is not considereil to be transmissions via electronic medla.
2.14 ERISA means the Employee Retirement Income Security Act of 1974 and regulations thereunder, as
amended from time to time.
2.15 HC Account means"health care account"and is the record keeping account established under the Plan
for each Participant.
2.16 Health Care Expense means as defined in the Adoption Agreement, provided it Is defined no more
broadly than the description in IRS ReVenue Ruling 2002-41 and IRS Notice 2002-45. No[withstanding
the foregoing, if the Employer sponsors a cafeteria plan, Health Care Ezpense shall not include premiums
that may be pald on a pre-tax basls In accordance with the terms of such cafeteria plan, which may
include premiums for major medi�l coverage provided by the Employer and premiums for coverage
under an insurance contract, health maintenance organization agreement, or other benefit agreement
providing coverage issued on a non-group, individual basis. To the extent Health Care Expense is defineii
in the Adoption Agreement to inGude premiums for qualifed long-term care insurance, the amount of
su� premium that will qualify as a Health Care Expense shall be Iimited to the portion that constitutes
"eligible long-term care premiums"as defined In Section 213(d)(10) of the Code. "Health Care Expense"
may include over-the-counter drugs and medidne (other than insulin) only if such drug or medicine has
been prescribed, as required by Sectlon 106(�of the Cotle. Notwithstanding the foregoing, If thie Plan Is
an inte9rated HRA and the group medical plan in which a Participant is enrolled does not provide at least
60%o minimum value, then, during the period of time in which such a Partidpant is receiving wntributions
to the Plan, Health Care Expense for such a Participant shall be defined no more broadly than allowed
under applicable law.
2.17 HIPAA means the Health Insurance Portability and Accountability Act of 1996 and regulations
thereunder, as amended from Eime to time.
2.18 Health Reimbursement Arrangement ("HRA") means the Employer-funded medical reimbursement
program within the meaning of IRS Revenue Ruling 2002-41 (June 26, 2002) anii IRS Notice 2002-45
(June 26, 2002).
2.19 Highly Compensated Individual means an individual who is (1) one of the 5 highest paid officers of
an Employer, or (2) among the highest paid 25 percent of an Employer's Employees, except (1)
Employees who have not completed 3 years of service, (2) Employees who have not attained age 25, (3)
part-time or seasonal Employees, (4) Employees not induded in the plan who are induded under a
collective bargaining agreement, and (5) Employees who are nonresident aliens and who receive no
eamed income from a source within the United States.
2.20 Limited Scope Health Care Expense means, unless provided otherwise in the Adoption Agreement, a
3
Health Care 6cpense for dental or vision care that qualifes as an expense for medical care under Section
213(d) oF the Code. "Limited Scope Health Care Expense" may inclutle o4erthe-counter drugs and
medicine only if such drug or medicine has been prescribed, as required by Section 306(�of the Code.
2.21 Managing Body means the person or persons with authority to make decisions for an Employer.
2.22 Participant means any Employee (or former Employee) who is or may become eligible to receive'a
benefit through this Plan, or wtiose beneficiary may be eligible to receive any such tieneftr pursuant to
Article.IV. In addition, Partidpant includes persons"deemed"to be Participants unGer a specifc proVislon
of this Plan.
2.23 Participation A9reement means an agreement entered into by an Employer and the Plan
Administrator pursuant to which the Employer agrees to participate in the Plan and Trust and be bound
by their terms.
2.24 PHI means health Information that:
(a) Is created or received by a health care provider, health plan, or health care clearingliouse;
(b) Relates to the past, present, or Future physical or mental health or condition of an individual
(including "genetic information" as that term is defined in the Genedc Information
Nondiscrimination Act of 2008); the provision of health care to an Individual; or the past, present,
or future payment for the provision of health care to an indlvldual; and
(c) Either identiFles the individual or reasonably could be used to identify the indi4idual.
2.25 Plan means this Plan as may be amended from time to time. It consists of z completed Adoption
Agreement plus the Basic Plan Document. The name of the Plan is specified in the Adoption Agreement.
2:26 Plan Administrator means the entity, person or persons determined under Section 9.1.
2.27 Plan Sponsor means the entity that has established this Plan liy completing and eiiecuting the Adoptlon
Agreement or the entity that has responsibility for maintaining the Plan. The Plan Sponsor is idenUfied in
the Adoption Agreement.
2.28 Plan Year means the twelve (12) month period beginning and ending as indicated in the Adoptlon
Agreement. The iniGal plan Year may be a "short" Plan Year beginning and ending as indicated in the
Adoption Agreement The records of the Plan will be kept based upon the Plan Year.
2.29 Privacy Rules means the Standards of PrYUacy of lndividually Identifiab/e Health Info�mation at 45
C.F.R. part 160 and part 164 at subparts P,and E.
230 Security Incident means "security incident" as defined in 45 GF.R. Sectlon 164:304, which generally
defines "security incident" to include at[empted or successful unauthorized access, use, disclosure,
modification, or destruction of ePHI.
2.31 Security Rules means the Securiry Standards and Implementatlon Specifications at 45 C.F.R. Part 160
and Part 164, subpart C.
2:32 Spouse means"Spouse"as defined in the Adoption Agreement.
2:33 Trust means the trust identified in the Adoption Agreement, created for the purpose of accepting and
holding Employer Contributions, and limited other contributions, made under the Plan.
2.34 7rustee means the person or persons identifed as a"Trustee"under the Trust.
4
ARTICLE III.
ADOPTING EMPLOYERS
3.1 Adoption of Plan. Upon approval by the Plan Administrator, an employer may adopt the Plan by
resolution duly adopted by itr Managing Body, as represented and warranted in the Participation
Agreement, and upon execution of a Participation Agreement,
3.2 Employer Withdrawal. In the event two or more Employers participate in the Plan and the Trust, the
following rules shiall gbvem the withdrawal of an Employer.
(a) Voluntary. Any Employer may, upon ninety (90) days advance written notice to the Plan
Administrator, withdraw from the Plan and the Trust.
(b) Involuntary. The Plan Administrator may expel an Employer From the Trust for cause upon ten
(10) days written notice and failure to correct any act or omission constituting cause.
The Plan Administrator reserves the right to notify all impacted Covered Indivlduals of an Employer's
withdrawal. If an Employers participaGon in the Plan and Trust terminates as provided he�ein, Trust
assets attriliutable to the withdrawing Employer shall be handled In accordance with the proQisions of the
Trust.
5
ARTICLE IV.
ELIGIBILITY AND PARTICIPATION OF EMPLOYEES
4.1 Eligibility Requirementr. Each Employee shall be eligible to partidpate In this Plan upon meeting tlie
eligibility requirements set forth in the Adoption Agreement and the Employer's Partidpation Agreement.
4.2 Participant Status. An Erriployee who has met the eligibiliry requirements described in Section 4.1
shall become a Participant as of the Employee's Entry Date.
43 Condition;of Participation. As a mndition of participation and receipt of benefits under this Plan, the
Participant agrees to:
(a) Observe all Plan rules and regulations;
(b) Consent to inquiries by the Claims Administrator and Plan Administrator with resped to any
provider of services involved in a claim under this Plan;
(c) Submit[o the Plan Administrator all notifcations, reports, bills, and other informatlon required by
the Plan or which the Claims Administrator and Plan Administrator may reasonably require; and
(d) Cooperate with all reasonable requests of the Claims Administrator and Plan Administrator that
may be necessary for the proper administrafion of Ehe Plan.
Failure to do so relieves the Plan, Plan Administrator, Claims Administrator, and Plan Sponsor of any
obligatlons uncler this Plan with respect to.that Partidpant and any others claiming entltlement to benefts
under this Plan through that Participant and shall result in the termination of the ParticipanCs
participation in [he Plan.
4.4 Coverage Options. The Plan consists of one or more of the following coverage optlons as described
below.
(a) One or more of the following coverage options, as indicated in the Adoptlon Ag�eement, are
available under the Plan:
(i) Full Scope Option. Participants may receive reimbursement for Health Care Expenses
incurred by themselves and their Spouses and Dependents.
(ii) Limited Scope Optioa. Participants may receive reimbursement for only Limited Scope
Health Care Ezpenses incurred by themselves and their Spouses and Dependents.
(iii) Suspended Account Option. Participants may receive no reimbursements from their
HC Accoun[s. However, the balance of the Participant's HC Account will be preserved for
use in subsequent Plan Years.
(b) PaRicipants will be covered under the "Full Scope Option" unless the Partidpant elects In wri[ing
and in a manner speciFled by the Plan Administrator to participate in another available coverage
option. Notwithstanding the foregoing, if provided iri the Adoption Ag�eement, Participants
enrolled in a high dedudible health plan (as defined in Section 223 of the Code) sponsbred by
the Employer shall automatically be enrolled in the coverage option specified in the Adoption
Agreement. If an election of coverage options is required, such an election shall be eFFedive on
a Plan Year basis, sfiall be made prior to the beginning of the Plan Year, shall be ir�evocable
during tlie Plan Year, and sliall automaticalry renew for subsequent Plan Yea�s unless the
Participant makes an election (in the manner specified above) to participate in a different
coverage option for such sutisequent Plan Year.
(c) If a Participant changes coverage options, the following rules apply with respect to claims for
6
reimbursement under the Plan:
(i) Expenses will be eligible for reimbursement under the Plan in accordance with the
coverage option in whicli the Participant is enrolled at the time the expense is incurred.
For example, if a Participant who is enrolled in the "Limited Scope Option" incurs an
expense for something other than a Limited Scope Health Care Expense, that expense
cannot be reimbursed under the Plan at any time In the future (e.g., If the Participant
subsequently becomes covered under the°FUII Scope Option'�.
(ii) Notwithstanding the foregoing, unless provided otherwise in the Adoption Agreement, a
Health Care Expense incurred while the Participant is covered under the "Full Scope
OpUon" will not be reimbursed if the claim fo`r such expense is submitted aRer the
Participant has become covered under anbther coverage option and such expense Is not
reimbursable under tFie new coverage option. For example, if a Participant incurs an
expense for something other than a LimiteG Scope Health Care Expense while covered
under the "Full Scope Option;' that expense cannot be reimbursed if the clalm Is
submitted after the Participant becomes covered under the"Limited Scope Option."
4.5 Waiver of Participation. A Partidpant may elect to permanently waive future participation in and
reimbursements under this Plan(the"opt out election"). The opportunity to make an opt out election will
be made available annually and upon termination of the Participant's employment with the Employer. An
opt out election shall be made in accordance with procedures established by the Plan Administrator. If
the opt out election is rriade during the election opportunity provided annually, the opt out election will
be effective as of the last day oF the Plan Year in which it is made. If the opt out election is made during
the election opportunity provided upon termination of empioyment, the opt out election will be effective
on the date spedfied in the Adoption Agreement. If a Participant makes an opt out election, no
reimbursements will be provided by the Plan to that Parficipant for eligible expenses incurced aRer the
effective date of[he opt out election. However, unless othenvise prohibited by appli�ble law (including
regulatory guidance), a Participant making an opt out election may contlnue to submit claims for eligible.
expenses incurred prior[o the effective date of the opt out election untll the close of the applicable cJaim
Daims Run-out Period.
4.6 Termination of Contributions. Unless, provided otherwise in the Adoption Agreement, a Participant.
shall cease to be eligible to receive contributions under thls Plan at midnlght of fhe earliest of the
following dates:
(a) The date of the death of the Participant;
(b) The date of termination of the Partidpant's employment with the Empioyer;
(c) The date of the Partidpant's failure to meet the eligibility requirements of Section 4.1, as may be
amended from time [o time in accordance with Article X;
(d) The date on which the Participant's Employer ceases to participate In the Plan and Trust;or
(e) The date of termination of the Plan in accordance with Article X.
Termination of contributions under this Plan shall not prevent a former Participant from recelving
continuation coverage required by applicable law.
7
4.7 Terminatian of Participation. Unless provided otherwise in the Adoption Agreement, a Participant
automatically ceases to be a Participant at midnight of the earliest of the following dates:
(a) The date of the termination of the Participant's employment with the Employer;
(b) The date of the death of the Participant;
(c) The date the balance of the Participant's HC Account reaches zero, if no further contributions will
be made to said account under Article 4I;
(d) The date on which the Participant's Employer ceases to participate in the Plan and Trust; or
(e) The date of termination of the Plan in accordance with Article X:
Participation may also terminate for cause, including for failing to comply with the conditions of
partdpation described in Section 4.3 and/or for making fraudulent or Improper clalms. In certain cases,
if particlpation is terminated for cause, the Participant's coverage may be terminated retroac[Ively to the
date on which the event giving rise to the cause occurred. Terminatlon of participation in this Plan shall
not prevent a fortner Pardcipant from receiving continuation coyerage required 6y appliqble law.
8
ARTICLE V.
BENEFITS UNDER THE PLAN
5.1 BeneFts. The Plan shall reimburse Health Care Expenses and Limited Smpe Health Care Expenses in
accordance with Section 4.4 and this Article V.
5.2 Health Care ("HC") Account. The Participant's HC Account wlll be credited with the Employer
Contribution. A Participant's HC Account will be decreased from time to tlme In the amount of payments
made to the Partidpant for beneftr.
5.3 Claims for Reimbursement. A Participant may obtain reimbursement of Eligible Expenses by
submitting a paper daim or through an eiectronic payment card as desvibed below.
(a) Pape�Claims. A Participant may make a daim by completlng a claim form and submitting such
fortn to the Claims Administrator setting forth at least the following:
(1) the amount, date and nature of the expense, including the identity of the individual who
incurred the expense;
(2) the name of the person or entity to which the expense was paid or Is owed;
(3) the Participant's statement tha[the expense has not been relm6ursed and the Participant
will not seek reimbursement for the expense; and
(4) such other inFormation as the Claims Administrator may require.
Such daim Form shall be attompanied by such bills, invoices, rxeipts, explanations of benefts
("EOB'� issued by a health plan, or other statements from an Independent third party as is
necessary to establish that an Eligible Expense has been incurred and the amount of the
expense. The Clalms Administrator is entitled to rely on the informatlon provided on the dalm
form in processing claims under this Plan. A clalm must be submi[ted for payment within the
[ime penod indicated in the Adoption Agreement. Where circumstances beyond the Partidpant's
control prevent submission wi[hin the described time frame, notice of a daim with an explanation
of the circumstances may be aaepted by the Claims Administrator as a timely filing. Claims shall
be determined in aaordance with Article VII.
(b) Electronic Payment Card. A Participant may recelve reimbursement of an Eligible Expense by
use of an electronic payment nrd at the time the Eliglbie Expense Is Incurred. The use of the
electronic payment card shall be subject following conditfons:
(1) The electronic payment card will be deactivated when a Participant's participation in the
Plan terminates.
(2) The balance of the electronic payment card shall be limited to 90% of the balance of the
Participant's HC Account.
(3) A Participant must certify in writlng prior to issuance of the electronic payment card that:
(i) the eledronic paymen[card will be used only for Eligible Expenses that have not
been reimtiursed under any other plan covering similar benefits; and
(ii) the Partidpant will not seek reimbursement for any expense paid with the
electronic payment card under any other plan covering benefits.
The electronic payment card shall inclutle a statement providing that each use of the
card shall constitute a reaffirmatlon of the certificatlon.
9
(4) The electronic payment card may be used only at merchantr who are health care
providers (e.g., dodor's office, hospital, pharmacy, etc.) or other merchants identified in
appllcable IRS guidance.
(5) Each time the electronic payment card is used, a Participant shall obtaln and retain a
third party statement from the health care provider containing the info�matlon necessa_ry
to substantiate that the expense paid by the card was an Eligible Expense.
(6) Claims shall be substantiated if one of the following conditions is satisFed:
(i) The Participant provides, upon request by the Claims Administrator (or Iks
designee),the third party statement with respect to the claim.
(ii) The payment was made to a merchant who is a heal[h care provlder and it
matches a specific co-payment the Participant has under a group medical or
group dental plan sponsored by the Plan Sponsor or a multiple of that co-
payment of not more than five (5) times the dollar amount of the co-payment.
(iii) The payment was made to a merchant who Is a health care provider and is For
an expense with the same amount, duration, and health care provider as a
previously approved expense under this Plan.
(iv) The payment was made to a merchant who is a health care provider and the
electronic claim file with respect to the expense is accompanied by an electronic
or written confirrriatlon from the health care provider that verifes the nature and
amount of the expense and that the expense Is an Ellgible Expense.
(v) The electronic payment card is used at a mercfiant(of any kind) that participates
in an inventory inforrnation approval system developed by the drd provider that
venfies, at ttie time of purchase, that the goods being purchased consfitute
medical care.
(7) Spedal rules apply to the use of the electronic payment card to purchase over-the-
counter drugs and medidnes other than insulin. Notwithstanding the rules descrlbeG
above regartling the use of the card to purchase medical care, the card may be used to
purchase such over-[he-counter drugs and medicines only in the foliowing dreumstances:
(i) At any 90% pharmacy if the expense is subsWntiated after the purchase in
accordance with paragraph (6)(i) above.
(ii) At drug stores, pharmacies, non-health care merchants fhat have pharmacies,
and mail order or web-based merchants that sell prescription drugs if(a)the
cardholder presents the prescription to the pharmadst; (b) the pharmadst
assigns a presaiption number and dispenses the o4er-the-counte�drug or
medidne in accordance with applicable law; (c)the phartnacy re[ains a record of
the transaction, induding the name on prescription, prescription number, date,
and the amount of the purchase; (d) the pharmacys records are accessible by
the employer or its agent; (e)the debi[card system does not allow over-the-
counter drugs or medicines without a prescripGon number; and (� the ezpense is
substantiated in accordance with the standard rules described above in
, paragreph (6).
(iii) At merchants having healthcare related merdiant codes(other than merchants
described in item ii above) if the expense is substantiated in accordance with the
standard rules described above in paragraph (6).
10
(8) A Participant shall repay the Plan for a paymen[ with respect to any clalm no[
subs[antiated (and therefore not ellglble for reimbursement) as requlred above. The
Flan shall handle unsubstantlated claims as requlred under the Code and applicable
reguladons.
(9) The use of an electronic payment card does no[ mnstltute a °cJaim" under the claims
procedures.
5.4 Incurred Expenses.
(a) Reimbursement for Incurred Expenses. An expense is "incurred" when the Participant Is
provided with the care glving rlse to the ellgible expense, not when the servlce Is billed or paid.
The Plan provldes relmbursements only for Incurred expenses; reimbursements shall not be
made forfuture projected expenses.
(b) Expenses Incurred After Participadon Begins. To be reimbursable, the Particlpan[ must
have incurred an eligible expense after his/her Entry Date. Notwithstanding anything herein to
the contrary, if (1) an Employer sponsored or partldpated in a health reimbursement
arrangement prlor to partldpaUng In thls Plan (the "predecessor HRA'�, and (2) the account
balances of such Employer's Employees and fortner Employees under the predecessor HRA have
been transferred or mntributed to this Plan (as described in the Erimployers PartiGpatlon
Agreement), then for purposes of the rule described in this Section 5.2(b) this Plan shall be
treated as a successor of tFie predecessor HRA and a Participant's Entry Date shall be the date on
which he/she began partidpatlon In tt�e predecessor HRA.
(c) Post-Employment Plans. In addltlon to the foregoing, If provided In the Adoption Agreement,
the Participant must have incurred the eliglble expense after tertninatlon oF employment with
his/her Employer or such other event identified In [he Adoption Agreement. Notwiths[anding the
foregoing, if the Adoption Agreement provides ttia[ eligible expenses must be incurced aRer
termination oF employment antl a Participant with an HC Account balance Is rehired by an
Employer aRer having terminated employment, then any eligible expenses incurred by the
Participant (or the Participant's Spouse or Dependents) during the Partidpant's period of
reemployment by the Employer shall not be eligible for reimbursement under the Plan. The
restriction on reimbursements described In the preceding sentence shall apply regardless of: (1)
the length of the period of time between the initial separatlon from service and the
reemployment; (2) the nature of the Partiapant's employment upon rehire (e.g., whether the
Participant is rehired on part-Ume, temporary, seasonal, etc. basis); and (3) any other fador
(e.g., vestlng status, the number oF hours per week the Participant is reemployed to work, etc.).
Upon such reemployed Participants subsequent tertnination of employment with the Employer,
the Participant shall again become eligible to receive reimbursementr from his or her HC Account
for eligible expenses incurred after his or her reemployment ends.
5.5 Timing of Reimbursement. Participantr shall be reimbursed weekly.
5.6 Maximum Reimbursement. The maximum reimbursement a Participant may receive at any time shall
be the amount of the Participant's HC Account balance at the Ume the reimbursement reques[ is
processed. The maicimum reimbursement requirements apply to the Participant, Spouse, and
Dependents on an aggregate basis, not an indiyidual basis. If a Participant's claim is for an amount that is
more than the Participant's current HC Account balance, the excess, unreimbursed paR of [he claim will
be carned Into the subsequent month(s), to be pald as the balance of the ParticlpanYs HC Atcount
becomes adequate. Notwithstanding the foregoing, the excess, unreimbursed portion of a claim will not
be carried over into the subsequent month(s) if no further contributions will be made to the Participant's
HC Account under Artide VI.
11
5.7 Termination of Participation.
(a) Termination of Employment. Notwithstanding anything herein to the conVary, unless
specifically provided otherwise in the Adoptlon Agreement, the former Partidpant may contlnue
to access the HC Account following terminatlon of employment for purposes of obtaining
reimbursement of eligible expenses. Such access shall condnue until the eariiest to occur of the
events identified in Section 4.7(b), (c), (d), or (e). Such access shall also be provided to those
Individuals, if any, who at the time of the termination of the Participant's participatlon were Ehe
Participant's Spouse or Dependents. Such access to the Participant's HC Account by a Spouse
and Dependents shall cease upon the earlier of the date of termination of the Participant's access
orthe date tlie Spouse ceases to be a Spouse orthe Dependent ceases to be a Dependent, as
the case may be. If continuatlon coverage is required by applicable law, the access described In
this Section 5.7(a) shall be provided only if offered as and selectetl in lieu oF such continuatlon
coverage.
(b) Death.
I. Notwithstanding anything herein to the contrary, unless specifcally provided otherwise in
the Adoptlon Agreement, in the event a PartidpanYs partidpation in the Plan terminates
because of the Participant's death, the Partidpant has no surviving Spouse or
Dependents, and tlie fortner Participant Incurred a Health Care Expense prior to the
ParticipanYs death that would have heen reimbursable out of the Partldpant's HC
Account but that has not heen submitted for reimbursement, the deceased Par[icipant's
estate may submit such Health Care Expense for reimbursement in accordance with
Section 5.3. A certified copy of the deceased ParticipanYs death certifica[e and proof
that the person ading upon behalf of such ParticipanYs estate Fias authority to do so
must be submitted with such claims.
il. Notwithstanding anythfng hereln to the contrary, unless specifically provided otherwise in
the Adopt'ion Agreement, the deceased Partidpant's surviving Spouse, if any, may
continue to access the Participant's HC Account for purposes of obtaining reimbursement
of Health Care Expenses until the earlier of: (1) the date on which the HC Account
balance reaches zero; or (2) the date on which the surviving Spouse dies. No claim shall
be paid to a surviving Spouse pursuant to this subsection (ii) unless a certified copy of
the deceased PaRicipant's death certificate has been provided to the Claims
Administrator. If continuation coverage is required by applicable law, the access
described in this Sedion 5.7(b)(ii) shall be provided only if offered as and selec[ed in lieu
of such mntlnuatlon coverage.
iii. Notwithstanding anything hereln to the contrary, unless spxlfically provided otherwlse In
the Adoptlon Agreement, [he deceased Parficipant's surviving Dependents, if any, may
contlnue [o access the Partidpant's HC Account for purposes of obtaining reimbursement
of Health Care Expenses until the earlfer of: (1) the date on which the HC Account
balance reaches zero; or (2) the date the last surviving Dependent dies. No claim shall
be paid to a surviving Dependent pursuant to this subsection (iii) unless a certified copy
of the deceased Participant's death ceRificate has been provided to the qaims
Administrator. If continuation coverage is required by applicable law, the access
described in this SecGon 5.7(b)(iii)shall be provided only if offered as and selected in lieu
of such mntinuation coverage.
iv. No one other than the PaRiclpanYs Spouse and Dependents may have access to the
Participant's HC Account Following the Participant's death.
12
5.8 Nondiscriminatlon. This Plan Is intended to he nondiscriminatory and to meet the nondlscrlminatlon
requfrements under applicable sections of the Code. If the Plan Administrator or an Employer determines
before or during any Plan Year, that [he Plan may fail to saGS(y any nondiscrimination requlrement
imposed by the Code or any limi[atlon on benefts provided to Highly CompensateG Individuals, the Plan
Adminishator or Employer shall take such actlon as the Plan Administrator or Employer deems
appropriat:, under rules uniformly applicable to similarly situated Partidpants, to assure compliance with
such requirements or limitatlon.
5.9 HC Account Forfeitures. Unless provided otherwise in the Adoptlon Agreement, any amount
remaining In a PartidpanYs HC Account shall be forteited following the later to occur of: (1) the
termination of Partidpant's partldpation in the Plan (induding, but not limited to, the PartidpanYs
eleRion to opt out under Section 4.5), (2) the tertninatlon of any condnuadon coverage provided tiy the
Plan under applicable law, or (3) the terminaHon of any coverage provided by tFie Plan in lieu of
continuatlon coverage required by applicable law; provided that where partidpation or coverage is
tertninated because of the death of the Fartidpant, forfeiture shall not occur until the expiratlon of the
tlme period contained In Section 5:3 for the submission of daims. Notwithstanding the forgoing, a
Partidpant's HC Aaount shall also be forfeited if: (i) the balance of the HC acmunt is less than $25, (ii)
no further contributions shall be made ro the HC Account, and (iii) no daim has been submifted by the
Partiapant for a period of six(6) months. In additlon, the portlon of the PartidpanYs HC Account that is
not vested shall be forteited upon the Partldpant's termination of employment. A Participan['s interest in
his/her HC Account shall vest as provided in the Adoption Agreement. Forfeited amounts shall be used
for the purposes described in the AdopGon Agreement. However, e)icept as allowed under the Trust, no
amountr will revert to an Employer. If the Adoption Agreement indicates that forfeitures shall be
contributed to the HC Accounts of other Partcipants,the following rules shall appiy. ForFeltures occurring
during a Plan Year shall be held in a separate subaccount until the close of the Plan Year. Immediately
following the close of the Plan Year, the forfeitures shall be contributed to the HC Accounts of all
Participants employed by the Employer of the Participant who experienced the forfeiture on the last day
of such Plan Year in the manner provided in the Adoption Agreement (i.e., on a per capita or pro rata
basis). To the extent the full balance of the forfeiture subaccount pnnot be allocated as provlded In the
Adoption Agreement (e.g„ because the balance does not diyide evenly among the number of
Participants), any balance remaining shall be held in the forfeiture subaccount until the enG of the
subsequent Plan Year and allocated at that time.
5.10 Medical Support Orders. Notwithstanding any provislon of this Plan to the contrary this Plan shall
recognize medical child support orders as required under applicable state law or under the Child Support
Performance and Incentive Act of 1998. Partidpantr involved in a divorce or child custody matter should
be directed to have their legal counsel contact the Pian Administrator.
5.11 Coordination with tafeteria Plan. To tfie exten[ a Particlpant's Employer also sponsors a medical
reimbursement program as part of its cafeteria plan wi[hin the meaning of Section 125 of the Code, a
Participant parUtlpates In the medical reimbursement program, and the ParUCipan[ or a Covered
[ndivldual rnvered [hrough such a Participant incurs an eligible ezpense that is also eligible for
reimbursement under the medical reimbursement program, which program pays first is descnbed in the
Adoption Agreement.
13
5.12 Further Limitations on Benefits.
(a) This Plan does not cover expenses incurred for any loss caused by or resulting from Injury or
disease for which benefits are payable under any worker's compensation law or other employer,
union, association or governmental sponsored group insurance plan.
(b) This Plan does riot cover expenses incurred for any loss caused by or resultlng from Injury or
disease for which benefits are received by the Partidpant, the Partdpant's Spouse or the
Participant's Dependent under any health and accident insurance policy or program, whether or
not premiums are paid by tlie Employer or by the Partidpant, the Partiopant's Spouse or the
Participant's Dependent child.
(c) Amountr relmbursed under a dependent care assistance program desaibed in Section 129 of the
Code shall not be reimbursed under this Plan.
(d) Other limitadons, if any, as set forth in the Adoptlon Agreement.
14
ARTICLE VI.
CONTRIBUTIONS;AND TRUST
6.1 Employer Contributions. An Employer shall make a fixed wntributlon per Partldpant as provided in
the Emptoyer's Participatfon Agreement. Notwithscanding anything herein to the contrary, an Employer
shall not he required to make contrfbutlons for Partiupants who are not the Employers Employees or
former Employees.
6.2 No Employee Contributions. Except for contributions required for contlnuatlon coverege as described
In Article XII, no contributions other than Employer Contributions are required nor will they be accepted.
6.3 Trust. All contributions shall be held In the Trust. The investment of the asse[s of the Trust shall be
directed as provided in the Adoption Agreement. Notwithstanding the foregoing, the Investment of any
assetr of the Trust that constitute forfeitures shall be direeted by the Plan Administrator until such time, if
any, that such forfeiNres are allocated to the HC Acmuntr of other Participants.
15
ARTICLE VII.
CLAIMS DETERMINATIONS AND REVIEW OF DENIED CUIIM
The following procedures apply:
7.1 Generel Provisions. All ciaims and appeals will be adjudioted in a manner so that the independence
and Impartiaiity of the persons involved in making the determination are ensured. Decisions regarding
hiring, compensatlon, termination, and similar matters with respect to ariy individual involved In the
determination (e.g., a claims ad)udicator or medical expert) shall riot be based upon the likelihood that
the indiyidual will support a denial oF benefts.
7.2 Initial Claim Determination.
(a) Time Frame for Decision. The Plan must determine the clalm within thirty(30) days of receipt
of the daim.
(b) Extension of Time. If the Plan is not able to determine the daim withln this time period due to
matters tieyond its control, the Plan may take an additlonal period of up to fifteen (15) days to
determine the claim. If thls additional time will be needetl, the Plan must notlfy the daimant or
the claimant's Authorized Representative prior to the explredon of the inttlal thirty (30) day tlme
period for detertnining the claim. This extension is only available once.
Notification: The notlfication of the need for the extension must include a description of the
"matters beyond the Plan's control"that justiry the extension and the date by whidi a decision is
expected.
(c) Incomplete Claims. There is no special rule iF a claim is incomplete. Incomplete claims can be
addressed through the extension of time described above. If the reason for the extenslon Is the
failure to provide necessary information and the claimant is appropriately notified, the Plan's
period of time to make a dedsion Is"tolled."
Tolling: TFie period of bme in which the Plan must determine a claim is suspended from the
date upon which notifcatlon of the missing necessary infortnadon is sent until the date uDon
which the claimant responds.
Notification: For this purpose, notification can be made orally to the claimant or the health
care professional, unless the daimant requests wntten notice.
The notlfication will include a time frame in which the necessary infortnation must be provided.
Once the necessary information has been provided, the Plan must dedde the claim within the
extension described above. If the requested information Is not provided within thie qme
specifed, tlie clalm may be decided without that information.
7.3 Decision.
(a) Notification of Decision. Written (or electronic) notificatlon of the Plan's determinatlon must
be provided to the daimant or the daimant's Authonzed Representative. Such nodfcaHOn must
be provided only where tfie decision Is adverse. The notifcation will be provided in a culturally
and linguistically appropnate manner in acwrdance with 45 CFR § 147.136, to the extent such
regulation applies to the Plan.
16
"Adverse"means:
• A denial, reduction, or termination of a benefit;
• A failure to provide or make payment(in whoie or in part) for a benefit; or
• A resdsslon of coverage under the Plan, which is a cancellation or
discontinuance of coverage under the Plan that has retroactive effed other
than a cancellation or discontinuance aftributable to a failure to timely pay or
make re ulred remiums or contributions toward covera .
(b) Adverse Decision. For adverse clalm determina[ions,the no[ification shail at a minimum:
• Include inFormation su�cient to identify the claim involved, Including the date of service,
the identity of the health care provider, and the daim amount, and to inform the
daimant of the right to recelve, upon request, the diagnosis and treatment codes (if any)
and their corresponding meanings upon request;
• State the specific reason(s) for the determination, including the denial code (if any) and
its corresponding meaning, and describe the Plan's standard, if any, used to make 4he
determination;
• Reference specific Plan provision(s)upon which the determination is based;
• Describe additional material or information necessary to complete tlie claim and why
such information Is necessary;
• Desaibe the internal appeals and external review processes (if any) available under the
Plan, including how to initiate an appeal and the procedures and time limits applicable to
an appeal;
• Disclose any intemal rule, guidelines, protocol or similar criterion relied on In maWng the
adverse determination (or state that such Information will be provided free of cliarge
upon request);
• Where tFie dedsion involves scientifc or clinical judgment, disclose either (1) an
explanation of the sdentifc or dinical judgment applying the terms of the Plan to
claimant's medical circumstances, or (2) a statement that such explanation will be
provided at no charge upon request; and
• Disclose the availability of and contact Information For any applicable office of health
insurance consumer assistance or ombudsman established to assist individuals with the
intemal claims and appeals and external review processes(if any).
Notice of the adverse determination may tie provided in written or elecVOnic fortn. Electronic
notices will be provided in a form that complies with applicable legal requirements.
(c) Not Adverse Decision. For claim determinations that are not adverse, notite will be provided
that informs the claimant or tlie claimanCs Authorized Representatlye the claim has been
ac�epted.
7.4 Access to Relevant Documents.
In order (1) to evaluate whether to request review of an adverse determination, and (2) if review Is
requested, to prepa�e for such review, the claimant or the claimant's Authorized Representative will have
access to all relevant documents.
Relevant: A docOment, record or other information is "relevant" if it was relied upon in making the
determinaGon, or was submitted to the Plan, considered by tFie Plan, or generated in the course of
malting the beneft determination withbut regard to whetFier it was relied upon.
17
7.5 Appealing a Denied Claim.
If a Gaim is denied, in whole or part, the claimant or the claimant's Authorized Represen[a[ive may
request the denied claim be reviewed.
(a) Requesting Review. The claimant or the claimant's Authorized Representative has a period of
one-hundred eighty (180) days to appeal the claim determination. The appeal request must be
in writing and should be sent to the address speciFled in the notification oF adverse decision
described above.
(b) Full and Fair Reyiew. The clamant will FiaOe the right to re4iew the daim file and to present
evidence and testimony. The claimant will be provided, free of charge, with new or addidonal
evidence considered, relied upon, or genereted by the Plan in connection with the clalm as soon
as possible and sufficiently in advance of the date on which the notice of fnal intemal adverse
benefit determination is required to give the claimant a reasonable opportuniry to respond prior
to that date. Before the Plan issues a final internal adverse benefit determinatlon based on a
new or additional rationale, the claimant will be provided, free of charge, with the rationale as
soon as possible and suffidenUy in advance of the date on which the notice of fnal internal
adverse benefit determined is required to give the claimant a reasonable opportunity to respond
prior to that date. The review of the adJerse beneft determinations will tak'e into account all new
inFormation, whether or not presented or available at the initial determination, No deference will
be afforded to the initial determination.
(c) Consultation with Independent Medical Expert. [n the case of a claim denied on the
grounds of a medical judgment, a health professional with appropriate training and experience
will be consulted. The health care professional who is consulted on appeal will riot be the
individual who was consulted, iF any, during the initial determination or a subortlinate of ttiat
individual.
Disclosure: If the advice of a medical or vocational expert was obtained by the Plan In
connection with the claim denial, the names of each such expert shall be provided, regardless of
whether the advice was relied upon.
(d) Time Frame for Decision. If claimant or the claimanYs Authorized Representative requests a
review of a denied clalm within the time frame described above, the Plan Administrator shall
review the claim and make a determination no later than sixty (60) days from the date the
review request was received.
(e) Decision. The review of the claim will be conducted by the Plan Administratoc It will be made
by a person tlifferent from the person who made the initial determination and such person will
not be a subordinate of fhe origlnal decision makec The informatlon in the adminlstrative record
shall be reviewed. Additional Information submitted shall be considered. The decision shall be
based upon that information plus the terms of the Plan anii past interpretations of the same and
similar Plan provisions. The Plan may rely upon protocols, guidelines, or other criterion.
(� Notifcation of Decision. Written (or electronic) notification of the Plan's determination must
be provided to the claimant or the claimant's Authorized Representative. Such notification must
be provided whether the decision is adverse or not adverse. The notifcation will be provided in a
culturally and linguistically appropriate manner in accordance with 45 CFR § 147.136, to the
extent such regulation applies to the Plan.
18
"Adverse"means:
• A denial, reduction, or tertninadon of a benefit;
• A failure to provide or make payment(in whole or In part)for a benefi[, or
• A resdssion of coverage under the Plan, which is a cancelladon or
discontinuance of coverage under the Flan that has retroactive effect other
than a cancellatlon or disconfinuance atfibutable to a failure to tlmely pay or
make re uired remiums or conhibutlons toward covera e.
(g) Adverse Decislon. For adverse appeal determinations, the notiFlcation shall reFlect at least the
following:
• Indude information suffdent to IdenUfy [he claim involved, Including the date of service,
the identity of the heatth care provider, and the dalm amount, and to inform the
claimant of the right to receive, upon request, the diagnosis and treatrnent codes (if any)
and their corresponding meanings upon request;
. Contain a discussion of the determination, including the speaflc reason(s) for the
detertnlnatlon, the denlal code (if any) and its corresponding meaning, and the Plan's
standard, if any, used to make the detertninadon;
• Reference spxific Plan provision(s) upon which the detertnination Is based;
• Describe tHe external review process(if any) available under the Plan;
• Disclose any internal rules, guidelines, protocol or similar criterion relied on in making the
adverse determination (or state that such infortnation will be provided free of charge
upon request);
• A statement Indicating entltlement to receive upon request, and without charge,
reasonable access to or copies of all documents, rxords or otlier infomiatlon relevant to
the determinatlon;
• Where [he dedslon involves soentific or clinical judgment, disGose either (1) an
explanation of the sdentlfic or dinical judgment applying the tertns of the Plan to
claimant's mediol drcumstances, or (2) a statement that such explanation will be
provided at no charge upon request; and
• Disdose the availability of and contac[ information for any applicable office of health
insurance consumer assistance or ombudsman established to assist individuals with the
external review prxess (if any).
Notice of the adverse determinatlon may be provided in written or electronic form. Electronic
notices will be provided In a form that complies with appli�able legal requirements.
(h) Not Adverse Decision. For daim determinations [lia[ are not adverse, notice will be provided
that infortns the clalmant or the daimant's Authorized Representative the dedsion has heen
reversed, and the daim accepted.
19
7.6 Deemed Exhaustion. If the Plan fails to adhere to the requirementr described in 45 CFR §
147.136(b)(2), the daimant will be deemed to have exhausted the internal claims and appeals process as
provided In 45 CFR § 147.136(b)(2)(ii)(F), to the extent such regulation applies[o the Plan.
7.7 External Review. The Plan will provide any applicable extemal review process that may be required to
be provided by a health reimbursement arrangement under 45 CFR § 147.136, to the extent such
regulation applies to the Plan.
20
artnc�e vin.
HIPAA PRNACY%1ND SECURITY PROVISIONS
The Privacy Rules and Security Rules under HIPAA apply to the Plan.
8.1 Use a�d Disclosure of PHI. The Plan will use PHI to the ex[ent allowed by, and in accordance with,
the uses and disclosures pertnitted by HIPAA. Spxifirally, the Plan will use and disdose PHI for purposes
related to health care treatment, payment for health care and health care ope2tlons. The Plan wlll also
use and disclose PHI as required by law and as permitted by authoriza[ion of the subJect of PHI. If tlie
Plan discloses PHI to the Plan Sponsor in aaordance with this Ar[icle VIII, the Plan Sporisor may use and
further disclosure PHI for the same purposes and in the same situatlons as the Plan may use antl disdose
PHI, provided that sudi use or disclosure is for Plan adminlstration functions perfortned by the Plan
Spbnsor for the Plan or is required by law or permitted by authorization. All uses and disdosures of PHI,
whether by the Plan or by the Plan Sponsor, shall be Iimited to the minimum PHI necessary to accomplish
the intended purpose of the use or disclosure in accordance wlth HIPAA. Notwithstanding the foregoing,
neither the Plan nor the Plan Sponsor shall use PHI that is genetic Information in a manner that Is
prohlbited by the Genetic Informatlon Nondiscriminatlon Act of 2008.
(a) Payment Includes activifies undertaken by the Plan to obtain premlums or determine or fulfill Its
responsibility for coverage and provislon of Plan beneflts that refate to an individual to whom
health care Is provlded. These activities Include, tiut are not Ilmited to, the following:
(1) Determination of eligibility, coverage and cost shanng amounts (for example, cost of a
beneft, plan mazimums and co-Payments as determined for an Individual's daim);
(2) Coordination of benefits;
(3) AdJudication of health benefits dalms (including appeals and other payment disputes);
(4) Subrogation of health benefit daims;
(5) Establishing employee contributlons;
(6) Risk adjusting amounts due based on enrollee health status and demographic
characteristics;
(7) Billing,collection adivities and related health care data proc8ssing;
(8) Claims management and related health care data processing, including auditing
paymentr, investigating and resolving payment disputes and responding to participant
inquiries about paymentr;
(9) Obtaining payment under a con[rac[ for reinsurance (including stop-loss and excess of
loss insurance);
(SO) Medical necessity reviews or reviews of appropriateness of care or justification of
charges;
(11) Utilization review, induding pre-certificadon, preauthorizatlon, concurrent reyiew and
retrospective review;
(12) Disclosure to consumer reporting agendes retated to the collection of premiums or
reimbursemen[ (the following PHI may be disclosed for payment purposes: name and
address, date of birth, Social Security number, payment history, account number and
name and address of prbvider and/or health Plan); and
21
(13) Reimbursement to the Plan.
(b) Health care operations include, but are not limited [o,the following activities:
(1) Qualiryassessment;
(2) Poputation-based activities relating to improving heafth or redudng health care costs,
protocol development, �se management and care mordination, disease management,
contacting health care providers and patients with information about treatment
alternaUves and related functlons;
(3) RaGng provider and Plan performance, induding accreditatlon, certiFlotion, iicensing or
credentialing adivities;
(4) Underwriting, premium rating and other activities relating to the creation, renewal or
replacement of a contract of health insurance or health benefits, and ceding, securing or
placing a contrad for reinsurance of risk relating to health care claims (induding stop-
lossinsurance and excess oflossinsurance);
(5) Conducting or artanging for medical review, legal services and auditing function,
Induding fraud and abuse detection and compliance progrems;
(6) Business planning and development, sudi as conduding wst-management and planning-
related analyses related to managing and operating the Plan, incJuding formulary
development and administration, development or improvement of payment me[hods or
coverage polides;
(7) Business management and general administration activities of the Plan, induding, but not
limited to:
a. Management ac[ivities relating to the implementation of and compliance with
HIPAA's administrative simpliflcatlon requlrements;
b. Customer service, including data analyses for pollcyholders;
(8) Resolutlon of internal grievances; and
(9) Due diligence in connection with the sale or transfer of assets to a potential successor in
interest, if the potential successor in interest is a covered entiry under HIPAA or following
completion of the sale or transfer, wlll become a covered entiry.
8.2 Plan Sponsor's Obli9ations under the Privacy Rules. Under the Privacy Rules, the Plan may not
disclose PHI to the Plan Sponsor unless the Plan Sponsor certlfies that the Plan document has been
amended to provide that the Plan will make such disclosures only upon receipt of a certlficatlon from the
Plan Sponwr that [he Plan has been amended [o indude certaln conditlons to the Plan Sponsors receipt
of PHI antl that Plan Sponsor agrees to [hose conditions. By adopting this Plan document, tlie Plan
Sponsor certifies that the Plan has been amended as required by the Privacy Rules and that it agrees to
the following conditions, thereby allowing the Plan to disclose PHI to the Plan Sponsor. The Plan Sponsor
ag�ees to:
(a) Not use or further disclose PHI other than as permitted or required by the Plan document or as
required by law;
(b) Ensure that any agentr, including a subcontractor, to whom the Plan provides PHI received from
the Plan agree to the same restrictions and conditions that apply to the Plan Sponsor with
resped to such PHI;
22
(c) Not use or disclose PHI for employment related actions and decisions unless authorized by an
individual;
(d) Not use or disclose PHI in connection with any other benefit or employee benefit pian of the Plan
Sponsor unless authorized by an individual;
(e) Report to the Plan any PHI use or discJosure of which It becomes aware that is inconsistent with
the uses or disclosures permitted hereunder and/or may constitute a "tireach" as that term Is
definedin HIPAA;
(� Make PHI available for access by the individual who is the subject of the PHI in accordance with
HIPAA;
(g) Make PH] available for amendment and incorporate any amendments to PHI in aaordance with
HIPAA;
(h) Make available the informaGon required to provide an acmunting of disclosures in accordance
with HIPAA;
(i) Make internal practices, books and records relating to the use and disclosure of PHI received
from Plan available to the HHS SeQetary for the purposes of determining the Plan's comptiance
with HIPAA; and
(j) If feasible, retum or destroy all PHI received for the Plan that the Plan Sponsor sdll maintains in
any form, and retaln no mpies of such PHI when no longer needed for the purpose for which
disclosure was made (or if retum or destruction is not feasible, limit further uses and disclosures
to those purposes that make the return or destruction infeasible).
8.3 Plan Sponsors Obligations under Security Rules. If the Plan Sponsor creates, receives, maintains,
or transmits ePHI (other than enrollment and disenrollment information and Summary Health
Infortnatlon, which are not subject to these restrictlons), the Plan Sponsor will:
(a) Implement administretive, physical, and technical safeguards that reasonably and appropriately
protect the confidentiality, integrity, and avallability of ePHI;
(b) Ensure that any agents, including subcontractors, who create, receive, maintain, or transmit ePHI
on behalf of Plan Sponsor implement reasonable and appropriate security measures to protect
the ePH1;
(c) Report to the Plan any Securiry Incident of which it becomes aware; and
(d) Implement reasonable and appropriate securiry measures to ensure that only those persons
identlfed in Section 8.4 have access to ePHI and that such access is limited to the purposes
identifed in Sedion 8.5.
8.4 Adequate separation between the Plan and the Plan Sponsor must be maintained. In
accordance with HIPAA, only the representatives and agents oF the Plan Sponsor who are involved in the
administration of the Plan may be given access to PHI and ePHI.
8.5 Limitation of PHI and ePHI Access and Disclosure. The persons described in Section 6:4 above
may only have access to, and use and disclose, PHI and ePHI for Plan administration functions that the
Plan Sponsor perForms for the Plan.
8.6 Noncompliance Issues. If tlie person described in Section 8.4 above does not comply with this Plan
document, the Plan Sponsor shall provide a mechanism for resolving issues of noncompliance, including,
but not limited to, disciplinary action against such person.
23
ARTICLE IX.
PLAN ADMINISTRATION
9.1 Plan Administrator.
(a) The Plan Administrator shall be responsible for the generel supervision of the Plan and shall have
authority to control and manage the operation and administration of the Plan. The Plan
Administrator shall perform any and all acts necessary or appropriate for the proper management
and administration of the Plan.
(b) The Plan Sponsor shall be the Plan Administrator unless it designates a person or persons other
than itself to be the Pian Administrator. The Plan Sponsor shall also be the Flan Administrator if
the person or persons so designated cease to be fhe Plan Administrator.
(c) The Plan Administrator may designate an individual or entlty to act on its behalf with respect to
certain powers, duties, and/or responsibilities regarding the operetion and administration of this
Plan.
9.2 Plan Administrator Absolute Authority. Any and all questions or controyersies of whatever
character, arising in any manner in connection with the Plan or the operetion thereof, shall be submitted
to the Plan Administrator and shall be considered and determined by the Plan Administrator. l7ie Plan
Administrator shall have the sole and absolute discretion to construe and interpret the Plan, induding but
not Iimlted consideration of any and all of the provisions, rules, regulatlons, or procedures used to
interpret the Plan. Benefits under the Plan shall be paid only If the Plan Administrator determines in itr
sole and absolute discretion that the claimant is entitled to such benefits. To the extent any Plan
Administrator duties are delegated to others, the Plan Administrator retains the ultimate right and
responsibility, in its sole and absolute disQetion, to ultimately dedde all appeals. Any exercise by the
Plan Administrator (or itr delegate) of the Plan Administrator's sole and absolute discretionary authority
with resped to the constructipn and interpretation oF the Plan, including but not limifed to eligibility for
coverage and entitlement to beneftr, shall be fnal and binding.
9.3 Agent for Service of Legal Process. The dgent for service of legal process for the Plan is the Plan
Administrator.
9.4 Allocation of Responsibility for Administration. The Plan Administrator shall have the sole
responsibiliry for the administration of this Plan as is specifically described in this Plan. The designated
representatives oF the Plan Administrator shall have only those specific powers, duties, responsibllities,
and obligaGons as are specifically given to them under this Plan. The Plan Administrator warrants that
any direcdons given, info�mation furnished, or action takeh by it shall be in accordance with the
provisions of the Plan authorizing or providing for such direction, information or adion. It is intended
under thls Plan that the Plan Administrator shall be responsible for the proper exercise of its own powers,
duties, responsibilitles, and obligatlons under this Plan and shall not be responsible for any ad o� failure
to ac[ of an Employee or Employer. Neitlier the Plan Adminis[rator nor the Plan Sponsor makes any
guarantee to any Participant in any manner for any loss or other event because of the Par[icipant's
participation in this Plan.
9.5 Rules and Decisions. Except as othervvise specifcally provided in the Plan, the Plan Administrator may
adopt such rules and procedures as it deems necessary, desirable, or appropriate. All rules and decisions
oF the Plan Administrator shall be uniformly and consistently applied to all PartiGpantr in similar
circumstances. When making a determination or calculatlon, the Plan Administretor shall be entitled to
rely upon information furnished by a Participant, the Employer, or legal counsel, or other entity ac[ing on
behalf of the Employer or the Plan Administrator.
9.6 Records and Reports. The Plan Administrator shall be responsible for complying with all reporting,
fling and disclosure recjuirements for the Plan.
24
9.7 Authorization of Benefit Payments. The Plan AdminisVator (or the Claims Administrator as Itr
designee)shall Issue directions to the Trustee conce�ning atl benefitr which are to be paid from the Tnist,
pursuant to the provisions of the Plan, and warrants that all such directions are in acmrdance with the
Plan.
9.8 Other Powers and Duties of the Adminlstrator. The Plan Administra[or sliall also have such other
duties.and powers as may be necessary to discharge itr duties under the Plan including, but not limited
to,the following:
(a) Discretion to construe and interpret the Plan In a non-discriminatory manner, to decide all
quesfions of eligibility and to determine all quesEions arising In the administratlon and appllcaEion
of the Plan;
(b) To receive from the Emptoyer and from Participants such information as shall be necessary for
the proper administratiori of the Plan;
(c) To furnish the Plan Sponsor, upon request, such annual reports with respect to the
admfnistration of the Plan as are reasonable and appropriate; and
(d) To appoint individuals to assist in the administration of the Plan and any other agents the Plan
Administrator deems advisable Including fegal and actuarial counsel. The Plan Administrator shall
not have the power to add to, subtract from, or modify any of the terms of the Plan, to change
or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of
eligibility for a benefit under this Plan.
25
ARTICLE X.
PLAN AMENDMENT AND TERMINATION
30.1 Amendment by Plan Sponsor. The Plan Sponsor reserves the right to amend, alter, or wholly revlse
this Plan or the Adoption Agreement, prospectively or retrospectively, at any time, and the interest of
eadi Participant is subject to the powers w reserved. The Plan Sponwr expressly may amend, alter or
wholly revise this Plan or the Adoption Agreement if it determines it necessary or desirable, with or
withou[ retroactive effeR, to comply with the law. Such changes shall not afFect any rlght to benefits
tfiat accrued prior to such amendrtients. Such amendment shall be made in wridng and shall be
dellvered prorriptly to the Claims Administrator, Plan Administrator,and Trustee.
30:2 Plan Sponsor's Right_to Terminate. Although the Plan Sponwr expects the Plan to tie malntained for
-- .
an indefinite dme, the Plan Sponsor reserves the right to terminate the Plan or any portion.of the Plan at
any time. Such terminafion shall not affect any right to benefitr that acvued prior to such tertninalion.
Such adion shall be made in wriEing and shall be delivered to the Claims Administrator, Plan
Administretor, and Trustee at least ninety(90)days prior to the efFective date of the tertnination.
26
ARTICLE XI.
GENERAL PROVISIONS
11.1 No Reversion to the Plan Administrator, Plan Sponsor, or Employer. Except as specifiolly
allowed under the Trust, no part of [he corpus or Income of the Trust shall revert to the Plan
Administretor, the Plan Sponsor, or an Employer, or be used for or diverted to, purposes other than the
exclusive benefit of participants and other persons entitled to benefitr under the Plan.
11.2 Persons Dealing With Trust. No person dealing with the Trust shall be required to see to the
applicafion of any money paid or property delivered to the Trust, or to determine whether or not the
Trust Is acting pursuant to any authority granted to them under[he Trust.
11.3 Non-Alienation of Beneftr. Benefts payable under this Plan shall not be subject to anddpadon,
alienatlon, sale, transfer, execution, or levy of any kind either voluntary or involuntary, including any such
liability which is for alimony or other payments for the support of a spouse or former spouse, or for any
other relative of the Participant, prior to actually being received by the person enGtled to the benefit
under the terms of the Plan, and any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwlse dispose of any right to benefits payable under the Plan shall be vold. The
Plan Sponwr, Plan Administrator and/or Claims Administrator shall not in any manner be made liable for,
or subject to, the debts, contrects, liabilities, engagements or torts of any person entitled to benefits
under the Plan.
11.4 Acdon by Plan Sponsor. Whenever the Plan Sponsor, under the terms of this Plan, Is permitted or
requlred to do or perform any act or matter or thing, it shall be done and performed by the Plan Sponsor
or such representatives of the Plan Sponsor as it may designate.
11.5 No Guarentee of Tax Consequences. Notwithstanding any provision In this Plan to the contrary, this
Plan makes no commitment or guarantee that any amountr paid to or on behalf of a Partidpant under
this Plan will be excludable From the Partidpant's gross income for federal or state income tax purposes.
It shall be tl�e obligatlon of each Participant to determine whether each payment Is excludable from the
Participant's gross income for federal and state income tax purposes, and to noGfy the Plan Administrator
If the Participant has reason to belleve that any such payment Is not so excludable.
11.6 Compensation and Expenses. The cost of administering the Plan and Trust shall be paid as described
in the Adoptfon Agreement.
11.7 Governing Law. This Plan shall be construed and enforced according to the laws of the State identified
In the Adoption Agreement, except to the extent preempted by federal law.
11.9 Family and Medical Leave Act of 1993 ("FMLA"). Notwithstanding any provision of this Plan to the
conhary, this Plan shall be operated and maintained in a manner consistent with FMLA,to the extent the
Employer is subject to such law.
11.9 Newboms' and Mothers' Health Protection Act("NMHPA'�, Notwiths[anding any provision of this
Plan to the contrary, this Plan shall be operated and maintained in a manner consistent with NMHPA.
Federal law requires the following statement be included in the Plan document, verbatim:
Under Federal law, group health plans and health insurance issuers offering group health insurance
generally may not restrid benefts 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 less than 96 hours
following a cesarean sedion. However, the plan or Issuer may pay for a shorter stay if the attending
physician (e.g., your physician, nurse, or midwife, or a physician assistant), aFter consultation with the
mother, discharges the mother or newborn earlier. Also, under federal law, plans and issuers may not
set the level of beneFtr or out-of-pocket costs so that any later poRion of the 48-hour(or 96-hour) stajr
is treated in a manner less favorable to the mother or newbom than any earlier portion of the stay. In
addition, a plan or issuer may not, under federal law, require tFia[ a physician or other health care
27
provider obtain authorization for pres�ribing a length of stay of up 48 hours (or 96 hours). However, to
use certain providers or faGliUes, or to reduce your out-of-paket costs, you may be required to obtain
precertifcation. For information on pre-certificatlon, con[act your Plan Administrator.
11.10 1Alomen's Health and Cancer Rights Act of 1998 ("WHCRA"). Notwlthstanding any provision of
this Plan to the contrary, this Plan shall be operated and maintained in a manner consistent with WHCRA.
11.11 Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Notwithstanding any
provision of this Plan to the contrary, this Plan shall be operated and malntained in a manner consistent
with COBRA. The Plan Administrator may, within the parameters of the law, establish uniform policies by
which to provide such continuation coverage required by COBRA antl such polides shall be inco�porated
herein by reference.
11.12 Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA").
Notwithstanding any provision of this Plan to the mntrary, this Pian shall be operated and maintained in a
manner consistent with USERRA. The Plan Administrator may, within the parameters of the law, establish
uniform polides by which to provide such continuaGon cove2ge required by USERRA and suct� policles
shall be incorporated hereln by reFerence.
11.13 Plan Not a Contract of Employment. The Plan is not an employment agreement and does not assure
the continued employment of any Employee or Participant for any period of time. Nothing con�ined In
the Plan shall interfere with the Employer's right to discharge an Employee at any tlme, regardless of the
effect such discharge may have upon the individual as a PaRicipant In this Plan.
11.14 Erroneous Payments. If the Plan makes a payment for benefits In excess of the benefitr required by
the Plan or makes a payment to or on behalf of an individual who Is not currently covered by the Plan,
the Plan shall be entitled to recover such erroneous payment from the redplent thereof.
11.15 Medicare Sewndary Payer. The Plan shall comply with the Medicare secondary payer rules found in
42 U.S.C. § 1395y. In general, the Plan shall pay benefitr primary to Mediqre If any one of the following
conditions is satisfied: (a) any Employer employed twenry (20) or more employees for each working day
in at least twenty (20) weeks in either the calendar year in which the daim Is made or the preceding
calendar year, the Partidpant Is employed by the Employer, and the Participant is actually covered by
Medicare by reason of ohtaining the age of 65; (b) any Employer emPloyed 300 or more employees on at
least 50%of its regular husiness days during the calendar year preceding the year in which the cJaim was
made, tFie Participant is employed by the Employer, and the Participant is actually covered by Medicare
by reason of disabiliry; and (c) the Participant is entitled to Medicare by reason of end stage renal disease
and the claim is made during the thirty (30) month period beginning In the first month in which such
Participant is entitled to benefitr under Medicare (regarilless of whether heJshe applies for such beneflts).
In all other cases, the Plan shall pay beneftr secondary to Medi�are. Nohvithstanding the foregoing, in
the case oF age-based Medicare coverage, the Plan may pay benefitr secondary to Medicare with respect
to any Partidpant employed by an Employer that employed fewer than twenty (20) employees for each
working day in a[least twenty (20) weeks in either the calendar year in which the claim is made or the
preceding ralendar year, provided the Plan has elec[ed in accordance with applicable law to not have the
Medicare secondary payer rules apply with respect to such PaRicipants.
11.16 Medicare PaR D. The Plan shall cooperate with Medicare Part D prescription drug plans (and Covered
Individuals who are enrolled in such plans) with respect to coordinatlon of benefits between [he Plan and
the Medicare Part D pfan, including the provision of information to the Medicare Part D plan (or the
Covered Individuals) regarding tl�e benefits provided under the Plan for costs covered by the Medicare
Part D plan. Covered Individuals enrolled in Medicare PaR D plans shall cooperate with tPie Plan so that
fhe Plan may perform its obligations under this subsection.
11.17 Exhaustion of Administretive Remedies; Statute of Limitations. For all claims subject to the
administrative procedures desQibed in Article VII, exhaustion of those administretiye procedures is
required prior to the initiatlon of a legal action. Thereafter, unless specifically provided otherwise in the
28
Adoption Agreement, legal action by a Particlpan[, or someone on behaif of a Participant, must be.
initiated within one (1) year of receipt of the written notification of denial upon appeal. To the extent
exhaustion of the appeal process is not required, a Participant, or someone on behalf of the Partidpant,
must inl[iate legal action within one (1) year of having submitted the initial claim request to the Plan
Administrator, or its designee. No legal action may be lirought tiy a Partidpant, or someone on behalf of
the Partidpant, after expiration of the applicable limitations period. This Section 11.17 shall apply Eo the
extent fhe provisions hereof are not prohibited by applicable law.
11.18 Michelle's Law. Notwithstanding any provision of this Plan to the contrary, this Plan shall be operated
and maintained In a manner as required by Michelle's Law.
11,19 Health Care Reform. TYie Plan is intended to be exempt from the provisions of the Patlent Protedion
and Affordable Health Care Act ("PPACA'�, as amended liy the Health Care and Education Reconciliation
Act ("Reconciliation Act'�, to the fullest extent allowed by law. The Plan may be exempt from one or
more provisions of PPACA for the following reasons:
(a) If provided in the Adoption Agreement, the Plan is intended to be a grandfathered plan within
the meaning of section 1251 oF PPACJI.
(b) If, to be eligible to receive contributions under the Plan, a Particfpant must be covered under an
employer-sponsbred group medical plan (whether sponsored liy the Plan Sponsor, an Employer,
or another employer), tlien the Plan is intended to be an integrated HRA as deFned unde'r
applicable regulatory guidance.
(c) If expenses must be incurred after the Participant's termination of employment with an Employer
to be reimbursable under the Plan (as provided in Section 5.4), the Plan is intended to rnver
fewer than two current Employees of the Employers(i.e., the Plan is a"retiree-only'HRA).
(d) If provided in the Adoption Agreement, the Plan is Intended to be an excepted benefit unGer the
HIPAA porta6ility rules.
For purposes of the foregoing, to the extent necessary to ensure the Plan is either an integrated HRA, a
retiree-only HRA, or an excepted benefit under HIPAA, the Plan described in this document shall be
disaggregated into separate plans each of which will be either an integreted HRA, a retiree�nly HRA, or
an eicc8pted benefit under HIPAA. In the event such disa9gregation is necessary, each disaggregated
plan shall be treated and operated as a sepa�ate plan for all purposes.
29
EMPLOYERS HEALTH COALITION VEBA
PARTICIPATION AGREEMENT
This Participation Agreement Is entered Into by and between City of Auburn ("Employer'� and the
Plan Administrator of the EHC VEBA HRA(the"Plan'�to reFlect the parties'agreement regarding the
Employer's participation in the Plan and the EHC VEBA Trust(the"TrusY�. The parties hereby agree as
follows:
1. Beneflts. The Employer hereby agrees to partidpate in the Plan and Trust for the purpose of
providing mverage under the Plan to its eligible employees. The Plan Administrator mnsents[o
such partidpation. The Employer agrees to comply with the terms and conditions of the Plan and
Trust as well as of[his Participation Agreement. The Employer further agrees that the Plan
Administrator shall have power to construe the provisions of the Plan and Trust, and agrees to
abide by the declslons of the Plan Administrator and Its authorized representatives with respect
to the maintenance and administration of the Plan and Trust to the extent such decision Is made
In good faith antl in accordance with the Plan and Trust.
2. Eligibility. In addition to satls(ying the eligiblllty requirements desvibed In the Plan, employees
of the Employer must satisfy the following conditions to become participants in the Plan:
� Employment Classification(e.g., union, part-time, full-time)(Describe):
The plan benefitr both active and terminated employees
� Coverage under a specified group medical plan (Descnbe):
Union members OR Employees covered under EmploYer Group Health Plan
❑ Coverege under the group medical plan sponsored by the Employer
❑ Other(Oescribe):
3. Contri6utions. The Employer will make the following contributlons to tFie Plan and Trust:
One Time Contribu[lon:
� Amount(Descnbe):
The amount of the eligible employee's£nal account balance under the HRA/VEBA
administered 6y HRA VEBA Seivice Group will be transferred to the Plan.
❑ Restridions, If any(Oescnbe):
Contributed on (Identi�y Date): On or around)anuary 1, 2016
1
Recurrinq ConMhutlons:
�Amount(Desrribe):
See attached Accumulated Sick Leave Reimbursement Schedule
❑ Per month
❑ Per quarter
❑ Per year
� Other(Descnbe): Semi-monthly
❑ Restridions, if any(Descnbe):
� Annual Contributlon of Accumulated Paid Time Off,Vacation, or Sick l,eave(Descnbe):
See attachment
� Contribution of Accumulatetl Paid Time Off,Vacation, or Sick Leave Upon Termination of
Employment(Descr/be): See attachment
4. Participation of Retirees, Notwithstanding anything in the Plan to the contrary with respect to
tertnination of mntributions and participation in the Plan, if provided below,fortner employees of
the Employer may condnue to receive contributions[o the Plan and/or continue to partidpate in
the Plan despite the fact their employment with the Employer has terminated.
� N/A- no retlree coverage provided.
❑ Retiree coverage shall be provided as follows(Descn6e e/igible reG'rees and terms
and condidons of their continued panc�lpation):
5. Administrative Fees. Administrative fees of the Plan and Trust Incurred with respect
to individuals partidpatlng in the Plan through the Employer shall be paid as follows:
❑ Fixed fees shall be paid by the Employer; asset-based fees shall 6e charged to the
Pardcipant and paid from the PaRicipant's HC Account.
❑ All fees shall be paid by the Employer.
� All fees shall be charged to the Participant and paid from the Participant's HC
Account.
❑ Other(Descnbe):
6. Cooperation with Service Providers. The Employer shall cooperate with all third parties
providing services to the Plan and Trust. The Employer stiall provide to such service providers
any and all informatlon reasonably requested for the purpose of erirolling eligible employees into
the Plan, allocatlng contributions to participant accountr, and the like.
7. Obligations With Respect to COBRA. The Plan Administrator acknowfedges tha[the Plan is
responsible for providing COBRA coverage to eligible covered employees and their eligible
2
dependentr under the Public Health Services Ad. To enable the Plan to satisfy itr COBRA
obligatlons, the Employer will notlfy the Plan Administrator within 30 days of the following
"qualifying eventr"(as that term is defined under COBRA) with respect[o its employees rnvered
by the Plan: (1) the death of the covered employee; or(2)[he termination (ofher than by
reason of such employees'gross misconduct),or reductlon of hours,of the covered employees'
employment. The Employer agrees to comply with any stahrtory changes in itr nodficatlon
obligatlons that become effective during the term of this Agreement The Employer agrees to
indemnify the Plan agalnst all losses that the Plan and/or the Plan Administrator incurs as a result
of the Employer's failure to comply with Itr notifi�atlon obligatlons set forth in this Section 7.
8. Plan and Trust Obligations. The Employer untlerstands that the Plan and Trust shall not be
obligated to provide benefits to any eligible employee of Employer unless and until the Plan
Administrator accepts this Agreement by signing where indicated below.
9. Amendment. This Agreement may be amended at any time by the writtem m�sent of the
Employer and the Plan Administrator.
10. Term. The provlsions of this Agreement shall become effective as of]anuary 1, 2016, and shall
remain in effect until the Employer ceases partcipaGon in the Plan and Tnist in aaordance with
the terms thereof.
11. Authority. This Agreement is the valid and binding obligation of the Employer, enforceable.ln
acmrdance with itr terms. The adoption oF the Plan and execution and perFormance of this
Agreement has been duly authorized by all necessary actlon of the Employer's goveming body.
�he Employer has the full Iegal rlght, power and authority to enter Into and pertorm the
Agreement. Each party represents that this Agreement has been executed by a duty authonzed
representaUve.
IN WITNE55 WHEREOF,the Employer and the Unlon hereby execute this Agreement effective
as of[he date speciFled In Section 10 above.
EMPLOYER PLAN ADMINISTRATOR
By: By:
Title � � T[le
3
Teamsters Union Local No. 117
. Semi-monthly Contributions
• The Gty will contribu[e 2.75°r8 of Ihe employee's semi�mon[hly base salary.
• Employecs are required m tontribute 1%of their semi-monthly base salary.
Accumulated Sick leave Reimbursement
All employees eligible for sick leav?reimburszment will vo[e on [he percen[a;e oF reimbursemen[[o be
mn[ribu[ed the follorJing year. The Union wlll notify the City by November 30`"the percen[age to be
con[ribu[ed.
When an employee has accumulated 960 hours of sick leave, sick leave shall continu=ro accumulate ac the
normal ra:e of a hours per pay period until the end of[he calendar year a[which time all sick leav2
accurriulated by the employee in excess of 960 hours shall be paid at 25%of the employee's then nourly rate
and contrlbu[ed to[he VEBA/HRA based upon[he percentage vored upon as described above.
All employees who are eligible to receive sick leave cash out upon retirement or termina[ion of employment in
good s[anding shall Vansfer the voted upon percen[age to the VEBA/HRA.
International Pssociation of Machinistsand Aerospace Workers Local 160 � � - . -
- �• ' Semi-monthly Contributions ��� � � � . - - . . . -- _ �
- . -She Ciry will make a contribution to match the employee's firsbl%base wages..� _ - ., . .� -� �
, ;.•: . Employees are required to contribu[e 3% . . .. .- - . - -
� Annual Accumiilafed Sick�Leave�Reimbursement � ' � . - � . - -. , . ��
' Wlien�an employee has accumulated 960 hoyrs of sick leave,sick leave shall continue to accumulate a[the .
- normal ra[e of 8 hours per month until[he end of the calendar year at which[ime all sick leave accumulated in
excess of 960 how's shall be�refmhursed a[25%of the employee's ihen hourly base ra[e and contributed to .
theVEBA/HRA. � - � " � - - �
Police Sergeants'�ASSOCiation
• Available ro Commissioned LEOFF II employees that do no[have a military medical retirem2nt plan.
• Seml-monthly con[ributlons
• Employees are required to contribu[e 1%base pay period salary,
Annual Ac[umiilated Sick Leave Relmbursemen[
When an einployee accumula[es 960 hours of sick leavq the sick leave shall continue [o accumula[e a[[he
normal rate of 8 hours per month until the end of the calendar year at which time all sid<leave accumulated in
escess of 960 hours shall be reimbursed at 25'%G of the employ=z's then hourly base re:_and mn[rlbuted to
[hz VE6A/HRF.
A¢uriula�ed 5'ck Le��ie Rei�iburseme�t at Separ��ion of Emplovmzn[
Emoloyees hired prior ro 12/1/93, upon retirement, d^ath or termination oF good standing shall con[rlbu[=
reimburszo unused sicl<leavz in th: followin;mannec
Years o`SPrvi[e Percenc of Acuu?d Sick L_ave
0-4 years 0'.��(2scept dzath in [he Ilne o`ciu:y, 259�;)
5—15 years ?5".5
15—24 years 50?�
25 y=ars and over 10095
er;plo7ees hlred aFer 11/30'93 shall cun.rib���.=reimb�.irsed unu;zcl sid:l:ave��,p to a n�axiin�.vn of 950 houri
v=ar o`Servi,e °zrcznt ot A,.cru=d S��k Leave
0—Completion of 14 years 0%
14 years and over 35%upon re6rement,death or disabiliry reUremen[
25 yzars and over 4545 wich a minimum of 480 hours o`bank sick leave upon
separatfon of employment in good standing.
Police Management Association - � . - .. : - . � . �- � '
. • Available to Commissioned_LEOFF II employees belonging toYhe Police Management Assoc.
bargaining unit who do not have a military niedical retirement plan.
• Bi-monthly Contributions
• 7he City will contribute 2%of employee's base pay period salary.
• Employees are required to contribute 2%of their base annual salary .
� Annual Accumulated -Sitk Leave Reimbursement � �. - � � �
When an employee accumulates 960 hours of sick leave,[he sick leave shall continue to accumula[e :
at the normal rate of 8 hours per month until the end of the calendar year at which time all sick
leave atcumulated in excess of 960 houis shall be reimtiursed at 25%of the employee;s then hou�ly . ;
raEe and contributed 4o the VEBA/HRA:
: ��Accumulated5id<Leave�Reimburseriientat5epa�a4ion�ofErrioloJmen[ � � : _
Upon retirement;death,or,terminetion of good,standing;'employees shall be reimbursed at'current !
rate of pay for unused.actrued sick leave up to a maximuin of 960 houis in accordance wrth fhe'
, _ ..
following schedule tiased on continuous years of iervice: These reimbursements will be'made into
� � the VEBA/HRA.:� . � .. � � . . .. � .' - � - � .
�Years of Service � - Peicent of Accrued Sick Leave . - - - -�
� 0-4 years , - 0%(except deafh in the line of duty,25%) _ � � � ,
� 5-14 years � � � - . � . 25Yo . .. ' - .
. � 15-24 years � . � � , 50% - . . � � . . . . . ..
25 years and over . 100% � - . .� - - . � �
� Employees hired inm the Commissioned Oflicers Guild or the Auhum Police Management Associatiodafter �
Novem6er 30,�1993 shall not be subjec[to the above sick leave cash out pro4isions but shall be reimbursed for �
35%of accumula[zd and unused sick leave upon seperation of employment in good standing,retirement, -
d2ath,or disability retirement. This reimbursement will be contributed to[he VEBA/HRA.
Employees hired inco[he Commissioned Orticers Guild or the Auburn Polite Management Assoc(ation after
November 30, 1993 with a minimum of 480 hours of acamula[ed and unused sick leave and a minimum of 25
years of service shall be reimbursed for 45Y of accumida[ed and unused sick leave upon separation of
employment in good standing, retirement,death,or disa6ility retiremenL This reimbursement will be
con,ributed m the VEBA/HRA.
Commanders are relmbursed for 10091 of accumulated and unused sick leave. This reimbursemen[will be
con[ribu[ed to[he HRA/VEBA.
Police Guild
• Semi-monthly Contribu[ions
• The City will make a contribution of 1%oF base pay period salary
• Employees are required to contribu[e 1°/a base annual salary
Annual Acwmulated Sick Leave Reimbursemen[
When an employee has accumulated 960 hours of sick leave,sick leave shall be continue to
accumulate at Ihe normal rate of 8 hours per mon[h imtil the end of the calendar year at which time
all sicl<time accumulated by the employee in excess of 9fi0 hours shall be paid at 25%of the
employee's then hourly base rate and contributed to the HRA/VEBA.
Actumulated Sick Leave Reimbursement at Retiremen[
All employees covered by this collective 6argaining agreement who retire from the City oF Auburn
will [ransfer unused accumulated sick leave to the VEBA/HRA. The members ofthe Commissioned
Unit who are eligible to retire each year will vote on the provlsion each year prior to the year in
which they will retire.The Guild will notify HR of the result of the vo[e (yes or no on the provision
and the percentage of contribution) by Novem6er 30`".
For employees hired into the collective bargaining unit prior to December 1, 1993 upon retirement,
death or termination of good standing the employee shali be reimbursed a[ current rete of pay for
unused a[crued sick leave up to a maximum of 960 hours in at[ordance with the following schedule
based on continuous years of service. These reimbursements will be made into[he VEBA/HRA.
Years of Servi[e �o of Accrued Unused Sick Leave
0-4 years 0% (except death in line of duty; 25%)
5-14 years 25°0
15-24 years 50%
25 years and over 100°�
Employees hired into the collective bargaining unit aker November 30, 1993, shall be reimbursed at
[he curren[rate oF pay for unused accrued sick leave up to a maximum of 960 hours in accordance
with the follo�,ving schedule based om m�tinuous years oF service. These reimbursements�vill be
made into the VEBA/HRA.
Years of Service °lo of Atcrued Unused Sldc Leave
0-14 years 0%
iC yzars 35°/, Upon retirement, d2ath or diiabillty re[irement
25 years and over 45°0�Vith a minimum of 480 hours of banked, unused sick
leave upon separation from employment in good standing
Unaffiliated Employee>
• Semi-monthly Cantribu[ion
• Upper mana;ement empioyees will make a 3'.6 employee contribution
• General unaffiliated employees will make a 1.5`S employee contribution
• The Ciry uiill make a 2°� contribution for all eli;iole unaffiliated employees
Applicable to employees hirzd on or after 1/1/1985
Annual Accumula[ed Sick Leave Reimbursement
Employ=es�vho hav: exceeded an aaumula[ion oF 9c0 hours o(sid� le�ve and woidd oth=rviisz lose
thz e�ce>s a[ th� end of the calendar year, the Ciry v;ili poy an employee 25`'6 of[h=_ actum�dated
and unused sid�, le�v=_ovzr 950 houn on record as of Deczinber 31 oF ea�h year and contribute it to
[he VEBA/HRA. , . � - � � � - . ., � -� �
Atcumuiated Sick Leave Reimbursement at Seoaration of Emplovment�.� � � . _
� When�separating from employment,employees who have i�n excess of 960 hours accrued aTthe :
time of separation will be reimbursed at 25%of.the difference between the accrued amount and ,
4601iours. This reimbursement will be confri6uted to[he VEBA/HRA.