HomeMy WebLinkAboutITEM IV-CC(TOt U~N
' WASHINGTON
AGENDA BILL APPROVAL FORM
Agenda Subject: Resolution No. 4577
Date: March 5, 2010
Department:
Attachments:
Budget Impact:
Human Resources
Resolution No.
4577
Administrative Recommendation:
City Council adopt Resolution No. 4577.
Background Summary:
To update the Flexible Benefits Plan integrating p
revious Flex Plan changes and recent legal changes
into one legal document.
SO405-1
A3.16.6
Reviewed by Council & Committees:
Reviewed by Departments & Divisions:
❑ Arts Commission COUNCIL COMMITTEES:
❑ Building ❑ M&O
❑ Airport 9 Finance
❑ Cemetery ❑ Mayor
❑ Hearing Examiner 0 Municipal Serv.
❑ Finance ❑ Parks
❑ Human Services ❑ Planning & CD
❑ Fire ❑ Planning
❑ Park Board ❑ Public Works
❑ Legal ❑ Police
❑ Planning Comm. ❑ Other
❑ Public Works ❑ Human Resources
❑ Information Services
Action:
Committee Approval: ❑Yes ❑No
Council Approval: ❑Yes ❑No
Call for Public Hearing
Referred to Until
Tabled Until
Councilmember: Backus
Staff: Heineman
Meetinq Date: March 15, 2010
Item Number:
AU$URN * MORE THAN YOU 1MAGiNED
RESOLUTION NO. 4 5 7 7
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, APPROVING AND RATIFYING AN
UPDATED CITY OF AUBURN FLEXIBLE BENEFITS PLAN
WHEREAS, THE City of Auburn has approved and implemented a
flexible benefits plan; and
WHEREAS, minor administrative and operational changes occur over
time; and
WHEREAS, federal laws and regulations, such as the Health Insurance
Portability and Accountability Act (HIPAA), governing portions of the Flex-Plan
have recently changed; and
WHEREAS, the Flex Plan has not been formally updated since 2005;
and,
WHEREAS, integrating all previous Flex Plan changes and recent legal
changes into one legal document makes good sense for ease in interpreting the
Flex Plan, and has been completed at no cost to the City.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Purpose. The City Council hereby authorizes the adoption
of the updated City of Auburn Flexible Benefits Plan and Summary of Benefits,
in substantial conformity with the Flex Plan and Summary Plan Description
Resolution No. 4577
March 5, 2010
Page 1
attached hereto and denominated as Exhibits "A" and "B" and incorporated
herein by reference.
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of
this legislation.
Section 3. This resolution shall be in full force and effect upon
passage and signatures hereon.
DATED and SIGNED this day of 2010.
CITY OF AUBURN
PETER B. LEWIS
MAYOR
ATTEST:
Danielle E. Daskam
City Clerk
APPROVED AS TO FORM:
aniel B. Heid
City Attorney
Resolution No. 4577
March 5, 2010
Page 2
CITY OF AUBURN FLEXIBLE BENEFITS PLAN
AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED FOR
CITY OF AUBURN
Copyright 2009 SunGard
All Rights Reserved
Exhibit A- COA Flexible Benefits Plan
Resoultion 4577
CITY OF AUBURN FLEXIBLE BENEFITS PLAN
Exhibit A- COA Flexible Benefits Plan
Resoultion 4577
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY ...................................................................................................................3
2.2 EFFECTIVE DATE OF PARTICIPATION .......................................................................3
2.3 APPLICATION TO PARTICIPATE .................................................................................4
2.4 TERMINATION OF PARTICIPATION ............................................................................4
2.5 TERMINATION OF EMPLOYMENT ...............................................................................4
2.6 DEATH ...........................................................................................................................5
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 SALARY REDIRECTION ...............................................................................................5
3.2 APPLICATION OF CONTRIBUTIONS ...........................................................................6
3.3 PERIODIC CONTRIBUTIONS .......................................................................................6
ARTICLE IV
BENEFITS
4.1 BENEFIT OPTIONS .......................................................................................................6
4.2 HEALTH FLEXIBLE SPENDING ARRANGEMENT BENEFIT ........................................6
4.3 DAY CARE FLEXIBLE SPENDING ARRANGEMENT BENEFIT ...................................7
4.4 HEALTH INSURANCE BENEFIT ...................................................................................7
4.5 NONDISCRIMINATION REQUIREMENTS ....................................................................7
ARTICLE V
PARTICIPANT ELECTIONS
5.1
INITIAL ELECTIONS
...........................8
5.2
SUBSEQUENT ANNUAL ELECTIONS
...........................8
5.3
FAILURE TO ELECT
...........................8
5.4
CHANGE IN STATUS
...........................9
ARTICLE VI
HEALTH FLEXIBLE SPENDING ARRANGEMENT
6.1 ESTABLISHMENT OF PLAN .......................................................................................12
6.2 DEFINITIONS ..............................................................................................................12
Exhibit A- COA Flexible Benefits Plan
Resoultion 4577
6.3 FORFEITURES ............................................................................................................13
6.4 LIMITATION ON ALLOCATIONS .................................................................................13
6.5 NONDISCRIMINATION REQUIREMENTS ..................................................................13
6.6 COORDINATION WITH CAFETERIA PLAN ................................................................13
6.7 HEALTH FLEXIBLE SPENDING ARRANGEMENT CLAIMS .......................................14
6.8 DEBIT AND CREDIT CARDS ......................................................................................15
ARTICLE VII
DAY CARE FLEXIBLE SPENDING ARRANGEMENT
7.1
ESTABLISHMENT OF BENEFIT ..................................................................................16
7.2
DEFINITIONS ..............................................................................................................16
7.3
DAY CARE FLEXIBLE SPENDING ACCOUNTS
........................18
7.4
INCREASES IN DAY CARE FLEXIBLE SPENDING ACCOUNTS
........................18
7.5
DECREASES IN DAY CARE FLEXIBLE SPENDING ACCOUNTS
........................18
7.6
ALLOWABLE DAY CARE REIMBURSEMENT
........................18
7.7
ANNUAL STATEMENT OF BENEFITS
........................18
7.8
FORFEITURES
........................18
7.9
LIMITATION ON PAYMENTS
........................18
7.10
NONDISCRIMINATION REQUIREMENTS
........................18
7.11
COORDINATION WITH CAFETERIA PLAN
........................19
7.12
DAY CARE FLEXIBLE SPENDING ARRANGEMENT CLAIMS
........................19
ARTICLE VIII
BENEFITS AND RIGHTS
8.1 CLAIM FOR BENEFITS ...............................................................................................20
8.2 APPLICATION OF BENEFIT PLAN SURPLUS ............................................................22
ARTICLE IX
ADMINISTRATION
9.1 PLAN ADMINISTRATION ............................................................................................22
9.2 EXAMINATION OF RECORDS ....................................................................................23
9.3 PAYMENT OF EXPENSES ..........................................................................................23
9.4 INSURANCE CONTROL CLAUSE ...............................................................................23
9.5 INDEMNIFICATION OF ADMINISTRATOR .................................................................23
ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
10.1 AMENDMENT ..............................................................................................................23
Exhibit A- COA Flexible Benefits Plan
Resoultion 4577
10.2 TERMINATION ............................................................................................................24
ARTICLE XI
MISCELLANEOUS
11.1 PLAN INTERPRETATION ............................................................................................24
11.2 GENDER AND NUMBER .............................................................................................24
11.3 WRITTEN DOCUMENT ...............................................................................................24
11.4 EXCLUSIVE BENEFIT .................................................................................................24
11.5 PARTICIPANT'S RIGHTS ............................................................................................24
11.6 ACTION BY THE EMPLOYER .....................................................................................25
11.7 EMPLOYER'S PROTECTIVE CLAUSES .....................................................................25
11.8 NO GUARANTEE OF TAX CONSEQUENCES ............................................................25
11.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS ...........................................25
11.10 FUNDING .....................................................................................................................25
11.11 GOVERNiNG LAW ......................................................................................................26
11.12 SEVERABILITY ............................................................................................................26
11.13 CAPTIONS ...................................................................................................................26
11.14 FAMILY AND MEDICAL LEAVE ACT (FMLA) ..............................................................26
11.15 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA) ...........26
11.16 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
(USERRA) ...................................................................................................................26
11.17 COMPLIANCE WITH HIPAA PRIVACY STANDARDS .................................................26
11.18 COMPLIANCE WITH HIPAA ELECTRONIC SECURITY STANDARDS .......................28
Exhibit A- COA Flexible Benefits Plan
Resoultion 4577
CITY OF AUBURN FLEXIBLE BENEFITS PLAN
INTRODUCTION
The Employer has amended this Plan effective January 1, 2010, to recognize the
contribution made to the Employer by its Employees. Its purpose is to reward them by providing
benefits for those Employees who shall qualify hereunder and their Dependents and
beneficiaries. The concept of this Plan is to allow Employees to choose among different types of
benefits based on their own particular goals, desires and needs. This Plan is a restatement of a
Plan which was originally effective on May 1, 2005. The Plan shall be known as City of Auburn
Flexible Benefits Plan (the "Plan").
The intention of the Employer is that the Plan qualify as a"Cafeteria Plan" within
the meaning of Section 125 of the Internal Revenue Code of 1986, as amended, and that the
benefits which an Employee elects to receive under the Plan be excludable from the
Employee's income under Section 125(a) and other applicable sections of the Internal Revenue
Code of 1986, as amended.
The Employer also intends that, for purposes of the annual report requirement
(Form 5500), this document is considered a"wrap" plan and the terms of the underlying plans
for which Participants are making contributions through this Plan are hereby incorporated by
reference.
ARTICLE I
DEFINITIONS
1.1 "Administrator" means the individual(s) or corporation appointed by the
Employer to carry out the administration of the Plan. The Employer shall be empowered to
appoint and remove the Administrator from time to time as it deems necessary for the proper
administration of the Plan. In the event the Administrator has not been appointed, or resigns
from a prior appointment, the Employer shall be deemed to be the Administrator.
1.2 "Affiliated Employer" means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which is under
common control (as defined in Code Section 414(c)) with the Employer; any organization
(whether or not incorporated) which is a member of an affiliated service group (as defined in
Code Section 414(m)) which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to Treasury regulations under Code Section 414(0).
1.3 "Benefit" or "Benefit Options" means any of the optional benefit choices
available to a Participant as outlined in Section 4.1.
1.4 "Cafeteria Plan Benefit Dollars" means the amount available to Participants to
purchase Benefit Options as provided under Section 4.1. Each dollar contributed to this Plan
shall be converted into one Cafeteria Plan Benefit Dollar.
1.5 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.6 "Compensation" means the amounts received by the Participant from the
Employer during a Plan Year.
Exhibit A- COA Flexible Benefits Plan
Resoultion 4577
CITY OF AUBURN FLEXIBLE BENEFITS PLAN
SUMMARY PLAN DESCRIPTION
Exhibit B- Summary of Benefits
Resoultion 4577
TABLE OF CONTENTS
I
ELIGIBILITY
1. When can I become a participant in the Plan? .......................................................................1
2. What are the eligibility requirements for our Plan? ................................................................2
3. When is my entry date? .........................................................................................................2
4. What must I do to enroll in the Plan? .....................................................................................2
OPERATION
1. How does this Plan operate? .................................................................................................2
III
CONTRIBUTIONS
1. How much of my pay may the Employer redirect? .................................................................2
2. What happens to contributions made to the Plan? ................................................................2
3. When must I decide which accounts I want to use? ..............................................................3
4. When is the election period for our Plan? ..............................................................................3
5. May I change my elections during the Plan Year? .................................................................3
6. May I make new elections in future Plan Years? ...................................................................4
IV
BENEFITS
1. What benefits are available?
........................................................4
V
BENEFIT PAYMENTS
1. When will I receive payments from my accounts?
2. What happens if I don't spend all Plan contributions during the Plan
3. Family and Medical Leave Act (FMLA)
4. Uniformed Services Employment and Reemployment Rights Act....,
5. What happens if I terminate employment?
6. Will my Social Security benefits be affected?
....................................6
Year? ...........................6
....................................7
....................................7
....................................7
....................................8
VI
HIGHLY COMPENSATED AND KEY EMPLOYEES
1. Do limitations apply to highly compensated employees? .......................................................8
Exhibit B- Summary of Benefits
Resoultion 4577
VII
PLAN ACCOUNTING
1. Periodic Statements ..............................................................................................................8
VIII
GENERAL INFORMATION ABOUT OUR PLAN
1. General Plan Information ......................................................................................................9
2. Employer Information ............................................................................................................9
3. Plan Administrator Information ..............................................................................................9
4. Service of Legal Process .......................................................................................................9
5. Type of Administration ...........................................................................................................9
6. Claims Submission ..............................................................................................................10
IX
ADDITIONAL PLAN INFORMATION
1. Claims Process ...................................................................................................................10
X
SU M MARY
Exhibit B- Summary of Benefits
Resoultion 4577
CITY OF AUBURN FLEXIBLE BENEFITS PLAN
INTRODUCTION
We have amended the "Fiexible Benefits Plan" that we previously established for you
and other eligible employees. Under this Plan, you will be able to choose among certain benefits
that we make available. The benefits that you may choose are outlined in this Summary Plan
Description. We will also tell you about other important information concerning the amended
Plan, such as the rules you must satisfy before you can join and the laws that protect your
rights.
One of the most important features of our Plan is that the benefits being offered are
generally ones that you are already paying for, but normally with money that has first been
subject to income and Social Security taxes. Under our Plan, these same expenses will be paid
for with a portion of your pay before Federal income or Social Security taxes are withheld. This
means that you will pay less tax and have more money to spend and save.
Read this Summary Plan Description carefully so that you understand the provisions of
our amended Plan and the benefits you will receive. This SPD describes the Plan's benefits and
obligations as contained in the legal Plan document, which governs the operation of the Plan.
The Plan document is written in much more technical and precise language. If the non-technical
language in this SPD and the technical, legal language of the Plan document conflict, the Plan
document always governs. Also, if there is a conflict between an insurance contract and either
the Plan document or this Summary Plan Description, the insurance contract will control. If you
wish to receive a copy of the legal Plan document, please contact the Administrator.
This SPD describes the current provisions of the Plan which are designed to comply with
applicable legal requirements. The Plan is subject to federal laws, such as the Internal Revenue
Code and other federal and state laws which may affect your rights. The provisions of the Plan
are subject to revision due to a change in laws or due to pronouncements by the Internal
Revenue Service (IRS) or other federal agencies. We may also amend or terminate this Plan. If
the provisions of the Plan that are described in this SPD change, we will notify you.
We have attempted to answer most of the questions you may have regarding your
benefits in the Plan. If this SPD does not answer all of your questions, please contact the
Administrator (or other plan representative). The name and address of the Administrator can be
found in the Article of this SPD entitled "General Information About the Plan."
I
ELIGIBILITY
1. When can I become a participant in the Plan?
Before you become a Plan member (referred to in this Summary Plan Description as a
"Participant"), there are certain rules which you must satisfy. First, you must meet the eligibility
requirements and be an active employee. After that, the next step is to actually join the Plan on
the "entry date" that we have established for all employees. The "entry date" is defined in
Question 3 below. You will also be required to complete certain application forms before you
can enroll in the Health Flexible Spending Arrangement or Day Care Flexible Spending
Arrangement.
Exhibit B- Summary of Benefits
Resoultion 4577
2. What are the eligibility requirements for our Plan?
You will be eligible to join the Plan once you have satisfied the conditions for coverage
under our group medical plan. Of course, if you were already a participant before this
amendment, you will remain a participant.
3. When is my entry date?
Once you have met the eligibility requirements, your entry date will be the first day of the
month coinciding with or following the date you met the eligibility requirements.
4. What must I do to enroll in the Plan?
Before you can join the Plan, you must complete an application to participate in the Plan.
The application includes your personal choices for each of the benefits which are being offered
under the Plan. You must also authorize us to set some of your earnings aside in order to pay
for the benefits you have elected.
However, if you are already covered under any of the insured benefits, you will
automatically participate in this Plan to the extent of your premiums unless you elect not to
participate in this Plan.
11
OPERATION
How does this Plan operate?
Before the start of each Plan Year, you will be able to elect to have some of your
upcoming pay contributed to the Plan. These amounts will be used to pay for the benefits you
have chosen. The portion of your pay that is paid to the Plan is not subject to Federal income or
Social Security taxes. In other words, this allows you to use tax-free dollars to pay for certain
kinds of benefits and expenses which you normally pay for with out-of-pocket, taxable dollars.
However, if you receive a reimbursement for an expense under the Plan, you cannot claim a
Federal income tax credit or deduction on your return. (See the Article entitled "General
Information About Our Plan" for the definition of "Plan Year.")
III
CONTRIBUTIONS
1. How much of my pay may the Employer redirect?
Each year, we will automatically contribute on your behalf enough of your compensation
to pay for the insurance coverage provided unless you elect not to receive any or all of such
coverage. You may also elect to have us contribute on your behalf enough of your
compensation to pay for any other benefits that you elect under the Plan. These amounts will be
deducted from your pay over the course of the year.
2. What happens to contributions made to the Plan?
Before each Plan Year begins, you will select the benefits you want and how much of
the contributions should go toward each benefit. It is very important that you make these
choices carefully based on what you expect to spend on each covered benefit or expense
Exhibit B- Summary of Benefits
Resoultion 4577
during the Plan Year. Later, they wili be used to pay for the expenses as they arise during the
Plan Year.
3. When must I decide which accounts I want to use?
You are required by Federal law to decide before the Plan Year begins, during the
election period (defined below). You must decide two things. First, which benefits you want and,
second, how much should go toward each benefit.
If you are already covered by any of the insured benefits offered by this Plan, you will
automatically become a Participant to the extent of the premiums for such insurance unless you
elect, during the election period (defined below), not to participate in the Plan.
4. When is the election period for our Plan?
You will make your initial election on or before your entry date. (You should review
Section I on Eligibility to better understand the eligibility requirements and entry date.) Then, for
each following Plan Year, the election period is established by the Administrator and applied
uniformly to all Participants. It will normally be a period of time prior to the beginning of each
Plan Year. The Administrator will inform you each year about the election period. (See the
Article entitled "General Information About Our Plan" for the definition of Plan Year.)
5. May I change my elections during the Plan Year?
Generally, you cannot change the elections you have made after the beginning of the
Plan Year. However, there are certain limited situations when you can change your elections.
You are permitted to change elections if you have a"change in status" and you make an
election change that is consistent with the change in status. Currently, Federal law considers
the following events to be a change in status:
Marriage, divorce, death of a spouse, legal separation or annulment;
Change in the number of dependents, including birth, adoption, placement for adoption,
or death of a dependent;
Any of the following events for you, your spouse or dependent: termination or
commencement of employment, a strike or lockout, commencement or return from an
unpaid leave of absence, a change in worksite, or any other change in employment status
that affects eligibility for benefits;
One of your dependents satisfies or ceases to satisfy the requirements for coverage due
to change in age, student status, or any similar circumstance; and
A change in the place of residence of you, your spouse or dependent that would lead to
a change in status, such as moving out of a coverage area for insurance.
In addition, if you are participating in the Day Care Flexible Spending Arrangement, then
there is a change in status if your dependent no longer meets the qualifications to be eligible for
Day Care.
There are detailed rules on when a change in election is deemed to be consistent with a
change in status. In addition, there are laws that give you rights to change health coverage for
you, your spouse, or your dependents. If you change coverage due to rights you have under the
Exhibit B- Summary of Benefits
Resoultion 4577
law, then you can make a corresponding change in your elections under the Plan. If any of
these conditions apply to you, you should contact the Administrator.
If the cost of a benefit provided under the Plan increases or decreases during a Plan
Year, then we will automatically increase or decrease, as the case may be, your salary
redirection election. If the cost increases significantly, you will be permitted to either make
corresponding changes in your payments or revoke your election and obtain coverage under
another benefit package option with similar coverage, or revoke your election entirely.
If the coverage under a Benefit is significantly curtailed or ceases during a Plan Year,
then you may revoke your elections and elect to receive on a prospective basis coverage under
another plan with similar coverage. In addition, if we add a new coverage option or eliminate an
existing option, you may elect the newly-added option (or elect another option if an option has
been eliminated) and make corresponding election changes to other options providing similar
coverage. If you are not a Participant, you may elect to join the Plan. There are also certain
situations when you may be able to change your elections on account of a change under the
plan of your spouse's, former spouse's or dependent's employer.
These rules on change due to cost or coverage do not apply to the Health Flexible
Spending Arrangement, and you may not change your election to the Health Flexible Spending
Arrangement if you make a change due to cost or coverage for insurance.
You may not change your election under the Day Care Flexible Spending Arrangement if
the cost change is imposed by a Day Care provider who is your relative.
6. May I make new elections in future Plan Years?
Yes, you may. For each new Plan Year, you may change the elections that you
previously made. You may also choose not to participate in the Plan for the upcoming Plan
Year. If you do not make new elections during the election period before a new Plan Year
begins, we will assume you want your elections for insured benefits only to remain the same
and you will not be considered a Participant for the non-insured benefit options under the Plan
for the upcoming Plan Year.
IV
BENEFITS
What benefits are available?
Under our Plan, you can choose to receive your entire compensation or use a portion to
pay for the following benefits or expenses during the year:
Health Flexible Spending Arrangement:
The Health Flexible Spending Arrangement enables you to pay for expenses allowed
under Sections 105 and 213(d) of the Internal Revenue Code which are not covered by our
insured medical plan and save taxes at the same time. The Health Flexible Spending
Arrangement allows you to be reimbursed by the Employer for out-of-pocket medical, dental
and/or vision expenses incurred by you and your dependents.
Drug costs, including "over-the-counter" drugs may be reimbursed. You may not,
however, be reimbursed for the cost of other health care coverage maintained outside of the
Exhibit B- Summary of Benefits
Resoultion 4577
Plan, or for long-term care expenses. A list of covered expenses is available from the
Administrator.
The most that you can contribute to your Health Flexible Spending Arrangement each
Plan Year is $3,600. In order to be reimbursed for a health care expense, you must submit to
the Administrator an itemized bill from the service provider. We will also provide you with a debit
or credit card to use to pay for medical expenses, such as co-pays, deductibles, medical
equipment and drug costs. The Administrator will provide you with further details. Amounts
reimbursed from the Plan may not be claimed as a deduction on your personal income tax
return. Reimbursement from the fund shall be paid at least once a month. Expenses under this
Plan are treated as being "incurred" when you are provided with the care that gives rise to the
expenses, not when you are formally billed or charged, or you pay for the medical care.
Newborns' and Mothers' Health Protection Act: Group health plans generally may not,
under Federal law, restrict benefits for any hospital length of stay in connection with childbirth
for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than
96 hours following a cesarean section. However, Federal law generally does not prohibit the
mother's or newborn's attending provider, after consulting with the mother, from discharging the
mother or her newborn earlier than 48 hours (or 96 hours as applicable). In any case, plans and
issuers may not, under Federal law, require that a provider obtain authorization from the plan or
the issuer for prescribing a length of stay not in excess of 48 hours (or 96 hours).
Day Care Flexible Spending Arrangement:
The Day Care Flexible Spending Arrangement enables you to pay for out-of-pocket,
work-related dependent day-care cost with pre-tax dollars. If you are married, you can use the
Benefit if you and your spouse both work or, in some situations, if your spouse goes to school
full-time. Single employees can also use the Benefit.
An eligible dependent is someone for whom you can claim expenses on Federal Income
Tax Form 2441 "Credit for Child and Day Care Expenses." Children must be under age 13.
Other dependents must be physically or mentally unable to care for themselves. Day Care
arrangements which qualify include:
(a) A Dependent (Day) Care Center, provided that if care is provided by the facility
for more than six individuals, the facility complies with applicable state and local laws:
(b) An Educational Institution for pre-school children. For older children, only
expenses for non-school care are eligible; and
(c) An "Individual" who provides care inside or outside your home: The "Individual"
may not be a child of yours under age 19 or anyone you claim as a dependent for
Federal tax purposes.
You should make sure that the Day Care expenses you are currently paying for qualify
under our Plan. The law places limits on the amount of money that can be paid to you in a
calendar year from your Day Care Flexible Spending Arrangement. Generally, your
reimbursements may not exceed the lesser of: (a) $5,000 (if you are married filing a joint return
or you are head of a household) or $2,500 (if you are married filing separate returns); (b) your
taxable compensation; (c) your spouse's actual or deemed earned income (a spouse who is a
full time student or incapable of caring for himself/herself has a monthly earned income of $250
for one dependent or $500 for two or more dependents). Also, in order to have the
reimbursements made to you from this Benefit be excludable from your income, you must
Exhibit B- Summary of Benefits
Resoultion 4577
provide a statement from the service provider including the name, address, and in most cases,
the taxpayer identification number of the service provider on your tax form for the year, as well
as the amount of such expense as proof that the expense has been incurred. In addition,
Federal tax laws permit a tax credit for certain Day Care expenses you may be paying for even
if you are not a Participant in this Plan. You may save more money if you take advantage of this
tax credit rather than using the Day Care Flexible Spending Arrangement under our Plan. Ask
your tax adviser which is better for you. •
Premium Conversion Benefit:
A Premium Conversion Benefit allows you to use tax-free dollars to pay for certain
Premiums under various insurance programs that we offer you. These Premiums include:
Health care premiums under our insured group medical plan.
Long Term Care (Buy Up)
These premiums are deducted from your paycheck pretax, and cannot be claimed under
the Health Care FSA.
The Administrator may terminate or modify Plan benefits at any time, subject to the
provisions of any insurance contracts providing benefits described above. We will not be liable
to you if an insurance company fails to provide any of the benefits described above. Also, your
insurance will end when you leave employment, are no longer eligible under the terms of any
insurance policies, or when insurance terminates.
Any benefits to be provided by insurance will be provided only after (1) you have
provided the Administrator the necessary information to apply for insurance, and (2) the
insurance is in effect for you.
V
BENEFIT PAYMENTS
1. When will I receive payments from my accounts?
During the course of the Plan Year, you may submit requests for reimbursement of
expenses you have incurred. Expenses are considered "incurred" when the service is
performed, not necessarily when it is paid for. The Administrator will provide you with
acceptable forms for submitting these requests for reimbursement. If the request qualifies as a
benefit or expense that the Plan has agreed to pay, you will receive a reimbursement payment
soon thereafter. Remember, these reimbursements which are made from the Plan are generally
not subject to federal income tax or withholding. Nor are they subject to Social Security taxes.
Requests for payment of insured benefits should be made directly to the insurer. You will only
be reimbursed from the Day Care Flexible Spending Arrangement to the extent that there are
sufficient funds in the Benefit to cover your request.
2. What happens if I don't spend all Plan contributions during the Plan Year?
If you have not spent all the amounts in your Health Flexible Spending Arrangement or
Day Care Flexible Spending Arrangement by the end of the Plan Year, you may continue to
incur claims for expenses during the "Grace Period." The "Grace Period" extends 2 1/2 months
after the end of the Plan Year, during which time you can continue to incur claims and use up all
amounts remaining in your Health Flexible Spending Arrangement or Day Care Flexible
Spending Arrangement.
Exhibit B- Summary of Benefits
Resoultion 4577
Any monies left at the end of the Plan Year and the Grace Period will be forFeited.
Obviously, qualifying expenses that you incur late in the Plan Year or during the Grace Period
for which you seek reimbursement after the end of such Plan Year and Grace Period will be
paid first before any amount is forfeited. For the Health Flexible Spending Arrangement, you
must submit claims no later than 90 days after the end of the Plan Year. For the Day Care
Flexible Spending Arrangement, you must submit claims no later than 90 days after the end of
the Plan Year. Because it is possible that you might forfeit amounts in the Plan if you do not fully
use the contributions that have been made, it is important that you decide how much to place in
each Benefit carefully and conservatively. Remember, you must decide which benefits you want
to contribute to and how much to place in each Benefit before the Plan Year begins. You want
to be as certain as you can that the amount you decide to place in each Benefit will be used up
entirely.
3. Family and Medical Leave Act (FMLA)
If you take leave under the Family and Medical Leave Act, you may revoke or change your
existing elections for health insurance and the Health Flexible Spending Arrangement. If your
coverage in these benefits terminates, due to your revocation of the benefit while on leave or due
to your non-payment of contributions, you will be permitted to reinstate coverage for the remaining
part of the Plan Year upon your return. For the Health Flexible Spending Arrangement, you may
continue your coverage or you may revoke your coverage and resume it when you return. You
can resume your coverage at its original level and make payments for the time that you are on
leave. For example, if you elect $1,200 for the year and are out on leave for 3 months, then return
and elect to resume your coverage at that level, your remaining payments will be increased to
cover the difference - from $100 per month to $150 per month. Alternatively your maximum
amount will be reduced proportionately for the time that you were gone. For example, if you elect
$1,200 for the year and are out on leave for 3 months, your amount will be reduced to $900. The
expenses you incur during the time you are not in the Health Flexible Spending Arrangement are
not reimbursable.
If you continue your coverage during your unpaid leave, you may pre-pay for the
coverage, you may pay for your coverage on an after-tax basis while you are on leave, or you and
your Employer may arrange a schedule for you to "catch up" your payments when you return.
4. Uniformed Services Employment and Reemployment Rights Act (USERRA)
If you are going into or returning from military service, you may have special rights to
health care coverage under your Health Flexible Spending Arrangement under the Uniformed
Services Employment and Reemployment Rights Act of 1994. These rights can include extended
health care coverage. If you may be affected by this law, ask your Administrator for further details.
5. What happens if I terminate employment?
If you terminate employment during the Plan Year, your right to benefits will be
determined in the following manner:
(a) You will remain covered by insurance, but only for the period for which premiums
have been paid prior to your termination of employment.
(b) You will still be able to request reimbursement for qualifying Day Care expenses
for the remainder of the Plan Year from the balance remaining in your Day Care Benefit
at the time of termination of employment. However, no further salary redirection
Exhibit B- Summary of Benefits
Resoultion 4577
contributions will be made on your behalf after you terminate. You must submit claims
within 90 days after the end of the Plan Year in which termination occurs.
(c) You may elect to continue your participation in the Health Flexible Spending
Arrangement for the remainder of the Plan Year.
(d) If you elect to continue your participation in the Health Flexible Spending
Arrangement, you must continue to make any required contributions to the Plan.
(e) If you elect not to continue participation in the Health Flexible Spending
Arrangement, participation will cease and no further salary redirection contributions will
be contributed on your behalf. You will be able to submit claims for health care
expenses. However, you will be able to submit claims for health care expenses that were
incurred before the end of the period for which payments to the Health Flexible Spending
Arrangement have already been made. You must submit claims within 90 days after the
end of the Plan Year in which termination occurs.
6. Will my Social Security benefits be affected?
Your Social Security benefits may be slightly reduced because when you receive
tax-free benefits under our Plan, it reduces the amount of contributions that you make to the
Federal Social Security system as well as our contribution to Social Security on your behalf.
VI
HIGHLY COMPENSATED AND KEY EMPLOYEES
1. Do limitations apply to highly compensated employees?
Under the Internal Revenue Code, highly compensated employees and key employees
generally are Participants who are officers, shareholders or highly paid. You will be notified by
the Administrator each Plan Year whether you are a highly compensated employee or a key
employee.
If you are within these categories, the amount of contributions and benefits for you may
be limited so that the Plan as a whole does not unfairly favor those who are highly paid, their
spouses or their dependents. Federal tax laws state that a plan will be considered to unfairly
favor the key employees if they as a group receive more than 25% of all of the nontaxable
benefits provided for under our Plan.
Plan experience will dictate whether contribution limitations on highly compensated
employees or key employees will apply. You will be notified of these limitations if you are
affected.
VII
PLAN ACCOUNTING
1. Periodic Statements
The Administrator will provide you with a statement of your Benefit periodically during
the Plan Year that shows your Benefit balance. It is important to read these statements carefully
so you understand the balance remaining to pay for a benefit. Remember, you want to spend all
the money you have designated for a particular benefit by the end of the Plan Year.
Exhibit B- Summary of Benefits
Resoultion 4577
vin
GENERAL INFORMATION ABOUT OUR PLAN
Plan.
This Section contains certain general information which you may need to know about the
1. General Plan Information
City of Auburn Flexible Benefits Plan is the name of the Plan.
Your Employer has assigned Plan Number 501 to your Plan.
The provisions of your amended Plan become effective on January 1, 2010. Your Plan
was originally effective on May 1, 2005.
Your Plan's records are maintained on a twelve-month period of time. This is known as
the Plan Year. The Plan Year begins on January 1 and ends on December 31, except for the
first Plan Year which began on May 1.
2. Employer Information
Your Employer's name, address, and identification number are:
City of Auburn
25 West Main St
Auburn, Washington 98001
91-6001228
3. Plan Administrator Information
The name, address and business telephone number of your Plan's Administrator are:
City of Auburn
25 West Main St
Auburn, Washington 98001
(253) 931-3040
The Administrator keeps the records for the Plan and is responsible for the
administration of the Plan. The Administrator will also answer any questions you may have
about our Plan. You may contact the Administrator for any further information about the Plan.
4. Service of Legal Process
The name and address of the Plan's agent for service of legal process are:
City of Auburn
25 West Main St
Auburn, Washington 98001
5. Type of Administration
The type of Administration is Employer Administration.
Exhibit B- Summary of Benefits
Resoultion 4577
6. Claims Submission
Claims for expenses should be submitted to:
Flex-Plan Services, Inc
PO Box 53250
Bellevue, WA 98015
IX
ADDITIONAL PLAN INFORMATION
1. Claims Process
You should submit all reimbursement claims during the Plan Year. For the Health
Flexible Spending Arrangement, you must submit claims no later than 90 days after the end of
the Plan Year. For the Day Care Flexible Spending Arrangement, you must submit claims no
later than 90 days after the end of the Plan Year. Any claims submitted after that time will not be
considered.
Claims that are insured will be handled in accordance with procedures contained in the
insurance policies. All other general requests should be directed to the Administrator of our
Plan. If a Day Care or medical expense claim under the Plan is denied in whole or in part, you
or your beneficiary will receive written notification. The notification will include the reasons for
the denial, with reference to the specific provisions of the Plan on which the denial was based, a
description of any additional information needed to process the claim and an explanation of the
claims review procedure. Within 60 days after denial, you or your beneficiary may submit a
written request for reconsideration of the denial to the Administrator.
Any such request should be accompanied by documents or records in support of your
appeal. You or your beneficiary may review pertinent documents and submit issues and
comments in writing. The Administrator will review the claim and provide, within 60 days, a
written response to the appeal. (This period may be extended an additional 60 days under
certain circumstances.) In this response, the Administrator will explain the reason for the
decision, with specific reference to the provisions of the Plan on which the decision is based.
The Administrator has the exclusive right to interpret the appropriate plan provisions. Decisions
of the Administrator are conclusive and binding.
X
SUMMARY
The money you earn is important to you and your family. You need it to pay your bills,
enjoy recreational activities and save for the future. Our flexible benefits plan will help you keep
more of the money you earn by lowering the amount of taxes you pay. The Plan is the result of
our continuing efforts to find ways to help you get the most for your earnings.
If you have any questions, please contact the Administrator.
Exhibit B- Summary of Benefits
Resoultion 4577
APPENDIX I TO THE FLEXIBLE BENEFITS PLAN SUMMARY PLAN DESCRIPTION
We understand that medical information about you and your health is personal. We are
committed to protecting medical information about you. This summary applies to all of
the personal health information we maintain with regard to the Plan. Your doctor or
health care provider will have different policies or notices regarding the doctor's use and
disclosure of your medical information created in the doctor's office or clinic. During the
course of providing you with coverage under the Plan, the Plan will have access to
information about you that is deemed to be "protected health information", or PHI, by the
Health Insurance Portability and Accountability Act of 1996, or HIPAA. The following is a
summary of procedures adopted by the Employer to ensure that both Employer and any
third party service providers treat your PHI with the level of protection required by
H I PAA.
This summary will provide you with a general overview of the ways in which we may use and
disclose medical information about you. We also describe your rights and certain obligations
we have regarding the use and disclosure of inedical information.
We are required by law to:
• make sure that medical information that identifies you is kept private;
• give you this notice of our legal duties and privacy practices with respect to medical
information about you; and
• follow the terms of the notice that is currently in effect.
Your PHI will be disclosed to certain employees of Employer who assist in administration of the
Plan. These individuals may only use your PHI for Plan administration functions including those
described below, provided they do not violate the provisions set forth herein. Any employee of
Employer who violates the rules for handling PHI established herein will be subject to adverse
disciplinary action. Employer will establish a mechanism for resolving privacy issues and will
take prompt corrective action to cure any violations.
By adoption of the SPD, Employer has certified that it will comply with the privacy procedures
summarized herein and detailed in any separate privacy notice. Employer may not use or
disclose your PHI other than as summarized herein or as required by law. Any agents or
subcontractors who are provided your PHI must agree to be bound by the restrictions and
conditions concerning your PHI found herein. Your PHI may not be used by Employer for any
employment-related actions or decisions or in connection with any other benefit or employee
benefit plan of Employer. Employer must report to the Plan any uses or disclosures of your PHI
of which the Employer becomes aware that are inconsistent with the provisions set forth herein.
HOW WE MAY USE AND DISCLOSE MEDICAL INFORMATION ABOUT YOU.
The following categories describe different ways that we use and disclose medical information
for purposes of Plan administration. For each category of uses or disclosures we will explain
what we mean and try to give some examples. Not every use or disclosure in a category will
be listed. However, all of the ways we are permitted to use and discfose information will fall
within one of the categories.
Exhibit B- Summary of Benefits
Resoultion 4577
For Pavment (as described in applicable requlations). We may use and disclose medical
information about you to determine eligibility for Plan benefits, to facilitate payment for the
treatment and services you receive from health care providers, to determine benefit
responsibility under the Plan, or to coordinate Plan coverage.
For Health Care Operations (as described in applicable requlations). We may use and disclose
medical information about you for other Plan operations. These uses and disclosures are
necessary to run the Plan.
As Required Bv Law. We will disclose medical information about you when required to do so by
federal, state, or local law.
To Avert a Serious Threat to Health or Safetv. We may use and disclose medical information
about you when necessary to prevent a serious threat to your health and safety or the health
and safety of the public or another person. Any disclosure, however, would only be to someone
able to help prevent the threat.
SPECIAL SITUATIONS
Disclosure to Health Plan Sponsor. Information may be disclosed to another health plan
maintained by Employer for purposes of facilitating claims payments under that plan. In
addition, medical information may be disclosed to Employer personnel solely for purposes of
administering benefits under the Plan.
Orqan and Tissue Donation. If you are an organ donor, we may release medical information to
organizations that handle organ procurement or organ, eye, or tissue transplantation or to an
organ donation bank, as necessary to facilitate organ or tissue donation and transplantation.
Militarv and Veterans. If you are a member of the armed forces, we may release medical
information about you as required by military command authorities.
Workers' Compensation. We may release medical information about you for workers'
compensation or similar programs.
Public Health Risks. We may disclose medical information about you for public health activities
(e.g., to prevent or control disease, injury, or disability).
Health Oversiqht Activities. We may disclose medical information to a health oversight agency
for activities authorized by law.
Lawsuits and Disputes. If you are involved in a lawsuit or a dispute, we may disclose medical
information about you in response to a court or administrative order. We may also disclose
medical information about you in response to a subpoena, discovery request, or other lawful
process by someone else involved in the dispute, but only if efforts have been made to tell you
about the request or to obtain an order protecting the information requested.
Law Enforcement. We may release medical information if asked to do so by a law enforcement
official for law enforcement purposes.
Exhibit B- Summary of Benefits
Resoultion 4577
Coroners, Medical Examiners and Funeral Directors. We may release medical information to a
coroner or medical examiner. We may also release medical information about patients of the
hospital to funeral directors as necessary to carry out their duties.
National Securitv and Intelliqence Activities. We may release medical information about you to
authorized federal officials for intelligence, counterintelligence, and other national security
activities authorized by law.
Inmates. If you are an inmate of a correctional institution or under the custody of a law
enforcement ofFicial, we may release medical information about you to the correctional
institution or law enforcement official.
YOUR RIGHTS REGARDING MEDICAL INFORMATION ABOUT YOU.
You have the following rights regarding medical information we maintain about you:
Riqht to Inspect and Copv. You have the right to inspect and copy medical information that may
be used to make decisions about your Plan benefits. To inspect and copy medical information
that may be used to make decisions about you, you must submit your request in writing to
Personnel/Benefits Office, except as otherwise set forth in any separate Privacy Notice
provided to you by Employer. If you request a copy of the information, we may charge a fee for
the costs of copying, mailing or other supplies associated with your request.
We may deny your request to inspect and copy in certain very limited circumstances. HIPAA
provides several important exceptions to your right to access your PHI. For example, you will
not be permitted to access psychotherapy notes or information compiled in anticipation of, or for
use in, a civil, criminal, or administrative action or proceeding. Employer will not allow you to
access your PHI if these or any of the exceptions permitted under HIPAA apply. If you are
denied access to medical information, you may request that the denial be reviewed.
Right to Amend. If you feel that medical information we have about you is incorrect or incomplete,
you may ask us to amend the information. You have the right to request an amendment for as
long as the information is kept by or for the Plan.
To request an amendment, your request must be made in writing and submitted to your human
resources department. In addition, you must provide a reason that supports your request.
We may deny your request for an amendment if it is not in writing or does not include a reason
to support the request. In addition, we may deny your request if you ask us to amend
information that:
• Is not part of the medical information kept by or for the Plan;
• Was not created by us, unless the person or entity that created the information is no
longer available to make the amendment;
• Is not part of the information which you would be permitted to inspect and copy; or
• Is accurate and complete.
Exhibit B- Summary of Benefits
Resoultion 4577
Employer must act on your request for an amendment of your PHI no later than 60 days after
receipt of your request. Employer may extend the time for making a decision for no more than
30 days, but it must provide you with a written explanation for the delay. If Employer denies
your request, it must provide you a written explanation for the denial and an explanation of your
right to submit a written statement disagreeing with the denial.
Riqht to an Accountinq of Disclosures. You have the right to request an "accounting of
disclosures" (other than disclosures you authorized in writing) where such disclosure was made
for any purpose other than treatment, payment, or health care operations. You will be notified of
where you can obtain an accounting of disclosure in the separate Privacy Notice. Your request
must state a time period that may not be longer than six years and may not include dates before
April 2003. Your request should indicate in what form you want the list (for example, on paper
or electronically). The first list you request within a 12-month period will be free. For additional
lists, we may charge you for the costs of providing the list. We will notify you of the cost
involved and you may choose to withdraw or modify your request at that time before any costs
are incurred.
Note that HIPAA provides several important exceptions to your right to an accounting of the
disclosures of your PHI. For example, Employer does not have to account for disclosures of
your PHI (i) to carry out treatment, payment or healthcare operations, (ii) to correctional
institutions or law enforcement officials, or (iii) for national security or intelligence purposes.
Employer will not include in your accounting any of the disclosures for which there is an
exception under HIPAA. Employer must act on your request for an accounting of the
disclosures of your PHI no later than 60 days after receipt of the request. Employer may extend
the time for providing you an accounting by no more than 30 days, but it must provide you a
written explanation for the delay. You may request one accounting in any 12-month period free
of charge. Employer will impose a fee for each subsequent request within the 12-month period.
Riqht to Request Confidential Communications. You have the right to request that we
communicate with you about medical matters in a certain way or at a certain location. For
example, you can ask that we only contact you at work or by mail.
To request confidential communications, you must make your request in writing to your human
resources department. We will not ask you the reason for your request. We will accommodate
all requests we deem reasonable. Your request must specify how or where you wish to be
contacted.
When Employer no longer needs PHI disclosed to it by the Plan, for the purposes for which the
PHI was disclosed, Employer must, if feasible, return or destroy the PHI that is no longer
needed. If it is not feasible to return or destroy the PHI, Employer must limit further uses and
disclosures of the PHI to those purposes that make the return or destruction of the PHI
infeasible.
CHANGES TO THIS SUMMARY AND THE SEPARATE PRIVACY NOTICE
We reserve the right to change this summary and the separate Privacy Notice that may be
provided to you. We reserve the right to make the revised or changed notice effective for
medical information we already have about you as well as any information we receive in the
future. The notice will contain the effective date on the front page.
Exhibit B- Summary of Benefits
Resoultion 4577
COMPLAINTS
If you believe your privacy rights have been violated, you may file a complaint with the Plan or
with the Secretary of the Department of Health and Human Services. To file a complaint with
the Plan, contact your human resources department except as otherwise provided in any
separate Privacy Notice. All complaints must be submitted in writing.
You will not be penalized for filing a complaint.
OTHER USES OF MEDICAL INFORMATION.
Other uses and disclosures of inedical information not covered by this notice or the laws that
apply to us will be made only with your written permission. If you provide us permission to use
or disclose medical information about you, you may revoke that permission, in writing, at any
time. If you revoke your permission, we will no longer use or disclose medical information about
you for the reasons covered by your written authorization. We are unable to take back any
disclosures we have already made with your permission and that we are required to retain our
records of the care that we provided to you.
Exhibit B- Summary of Benefits
Resoultion 4577