HomeMy WebLinkAbout03.d. Review draft Position Paper to: (1) adopt amended and restated (a) Section 125 Cafeteria Plan, including the new Premium Conversion account language required for the transition to CalPERS Health Benefits Program, and (b) three associated Component Page 1 of 275
Item 3.d.
Algi CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
DRAFT
MEETING DATE: APRIL 16, 2019
SUBJECT: REVIEW DRAFT POSITION PAPER TO: (1)ADOPTAMENDED
AND RESTATED (A) SECTION 125 CAFETERIA PLAN, INCLUDING THE
NEW PREMIUM CONVERSION ACCOUNT LANGUAGE REQUIRED FOR
THE TRANSITION TO CALPERS HEALTH BENEFITS PROGRAM, AND (B)
THREE ASSOCIATED COMPONENT PLANS; AND (2)ADOPT NEW PLAN
DOCUMENTS FOR TWO NEW HEALTH REIMBURSEMENT
ARRANGEMENTS (HRA), ALL EFFECTIVE JULY 1, 2019
SUBMITTED BY: INITIATING DEPARTMENT:
TEJI O'MALLEY, HUMAN RESOURCES OPERATIONS - POD - HUMAN RESOURCES
MANAGER
REVIEWED BY: ANN SASAKI, DEPUTY GENERAL MANAGER
ISSUE
Board of Directors approval is required to amend the District's Section 125 Cafeteria Plan Document as
well as adopt new plan documents for two new Health Reimbursement Arrangements (HRA).
BACKGROUND
On March 21, 2019, the Board adopted resolutions in order for the District to participate in the CaIPERS
Health Benefits Program, which is governed by the Public Employees' Hospital and Medical Care Act
(PEHMCA), effective July 1, 2019. The District elected to set the employer contributions at the minimum
levels required to participate in CalPERS. As such, the District will contribute directly to CalPERS $136
per month for each active employee and $1 per month for each retiree for calendar year 2019. These
amounts will increase every year that the District participates in CalPERS. The minimum for active
employees is adjusted annually by changes in the medical care component of the Consumer Price I ndex-
Urban, and the retiree contribution is adjusted each year by 5% of the active employee contribution added
to the previous year's retiree contribution until they are the same for both active employees and retirees,
which would happen in 20 years.
The District's actual contributions will be made in accordance with the applicable provisions of the
memoranda of understanding (MO Us), which exceed the aforementioned minimum amounts. In order for
the District to adhere to the employer contributions outlined in the resolutions, the premium amounts above
and beyond the minimum must be paid through a component of the Section 125 Cafeteria Plan for active
employees and through a Health Reimbursement Arrangement (HRA)for retirees.
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Amendment to Cafeteria Plan and Component Documents
The Cafeteria Plan must be amended to include a new subsection which will allow the District to credit the
Premium Conversion account of each of the District's active employees who is enrolled in a CalPERS
health plan with a dollar amount up to or equal to the premium of the highest cost core plan minus the
minimum amounts that are outlined in the resolutions adopted by the Board. Those amounts will then be
paid to CaIPERS.
The Cafeteria Plan Document also has the following three associated "Component Plans":
a. Premium Conversion Plan
b. Health Flexible Spending Arrangement Plan
C. Dependent Care Assistance Plan
Neither the Cafeteria Plan Document nor the above Component Plan documents have been
comprehensively reviewed or updated since 2013, and they do not at present include changes previously
approved and implemented by the District. Therefore, staff used this opportunity to have the District's
employee benefits counsel, Hanson Bridgett LLP, review each of these documents in their entirety and
recommend changes.
Attachments 1-4 are red-lined versions of the amended and restated plan documents provided by Hanson
Bridgett LLP. All prior approved changes have been incorporated, along with numerous but non-
substantive changes to clean up the documents and provide clarity. The only substantive change is the
addition of Premium Conversion account language required by the transition to CalPERS Health Benefits
Program.
Attachments 5-8 are finalized versions of all four of the documents. The new Premium Conversion
account language can be found in Article 3.2.(b) of the amended and restated Cafeteria Plan Document
(Attachment 5).
Two New HRA Plans
As part of the transition to CalPERS Health Benefits Program and to implement a new benefit for certain
employees as explained below, two new HRA Plans are proposed for adoption.
Retiree-Only HRA
A new HRA plan is being implementing solely for retirees for those premium amounts above and beyond
the minimum, since no such plan existed prior to the transition to CaIPERS. It will also be utilized to
continue the reimbursements for Medicare premiums as well as for retirees who choose to waive District
coverage, purchase their own, and get reimbursed up to the maximum paid for retirees on District
coverage. See Attachment 9.
Tier 111 HRA
As an outcome of labor negotiations in 2018, the District agreed to implement a new benefit for
employees who are considered Tier I I I employees (those hired after June 30, 2009) of both the
Employees' Association, Public Employees Union, Local #1 and the Management Support/Confidential
Group (MS/CG). This benefit will be administered through a new HRA. Effective July 1, 2019, the District
will contribute 1.5-percent of these employees' base salary to an HRA that can then be utilized by the
employee for eligible medical expenses after leaving District employment. See Attachment 10.
ALT ERNAT IVES/CONSIDERAT IONS
As this item has been negotiated with the District's bargaining units, not approving this action would be in
violation of the MOUs already approved by the Board in 2018.
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FINANCIAL IMPACTS
None, as adopting this amendment to the Section 125 Plan and the new plan documents are for benefits
that have previously been approved by the Board.
COMMITTEE RECOMMENDATION
The Administration Committee reviewed this item during their April 16, 2019 meeting and recommended
RECOMMENDED BOARD ACTION
Adopt the following:
1. Amended and restated: (a) Section 125 Cafeteria Plan, including the new Premium Conversation
account language required for the CalPERS transition, and (b) three associated Component Plans;
2. New Health Reimbursement Arrangement (HRA) Plan document for retirees only; and
3. New HRA Plan Document for Tier I I I employees of Local #1 and MS/CG.
All of the above to be effective July 1, 2019.
Strategic Plan Tie-In
GOAL THREE:Be a Fiscally Sound and Effective Water Sector Utility
Strategy 2- Manage costs
GOAL FOUR: Develop and retain a highly trained and innovative workforce
Strategy 1 - Ensure adequate staffing and training to meet current and future operational levels
ATTACHMENTS:
1.Amended and Restated Section 125 Cafeteria Plan Document (Red-Lined)
2. Premium Conversation Plan Document (Red-Lined)
3. Health Flexible Spending Arrangement Plan Document (Red-Lined)
4. Dependent Care Assistance Plan Document (Red-Lined)
5.Amended and Restated Section 125 Cafeteria Plan Document
6. Premium Conversion Plan Document
7. Health Flexible Spending Arrangement Plan Document
8. Dependent Care Assistance Plan Document
9. Retiree Health Reimbursement Arrangment Plan Document
10. Tier I I I Health Reimbursement Arrangement Plan Document
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ATTACHMENT 1
CENTRAL CONTRA COSTA SANITARY DISTRICT
SECTION 125 CAFETERIA PLAN
Amended and Restated
Effective janu July 1, 232019
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TABLE OF CONTENTS
Page
INTRODUCTION ...........................................................................................................................1
ARTICLE 1: DEFINITIONS ...........................................................................................................3
1.1 Account....................................................................................................................3
1.2 Administrative Committee.......................................................................................3
1.3 Board........................................................................................................................3
1.4 COBRA....................................................................................................................3
1.5 Code.........................................................................................................................3
1.6 Compensation ..........................................................................................................3
1.7 Component Plan.......................................................................................................4
1.8 Dependent................................................................................................................4
1.9 Effective Date ..........................................................................................................4
1.10 Eligible Employee....................................................................................................5
1.11 Eligible Expense ......................................................................................................5
1.12 Employee.................................................................................................................5
1.13 Employer..................................................................................................................5
1.14 Employer Credit.......................................................................................................5
1.15 FMLA ......................................................................................................................6
1.16 Open Enrollment Period ..........................................................................................6
1.17 Participant................................................................................................................6
1.18 Period of Coverage ..................................................................................................6
1.19 Plan ..........................................................................................................................7
1.20 Plan Administrator...................................................................................................7
1.21 Plan Year..................................................................................................................7
1.22 Salary Reduction......................................................................................................7
1.23 Spouse......................................................................................................................7
ARTICLE 11: ELIGIBILITY AND PLAN PARTICIPATION.......................................................9
2.1 Commencement of Participation..............................................................................9
2.2 Termination of Participation....................................................................................9
2.3 Resumption of Participation ..................................................................................11
2.4 FMLA Leaves of Absence.....................................................................................11
2.5 Non-FMLA Leaves of Absence.............................................................................13
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ARTICLE III: PLAN FUNDING..................................................................................................15
3.1 Establishment of Accounts ....................................................................................15
3.2 Employer Credits...................................................................................................15
3.3 Salary Reduction Credits.......................................................................................16
3.4 Designation of Salary Reduction and Employer Credits to Subaccounts..............16
3.5 Time for Making Elections....................................................................................17
3.6 Change or Revocation of Elections........................................................................18
3.7 Limit on Amount Credited to DCAP Subaccount.................................................28
3.8 Limit on Amount Credited to Health FSA Subaccount.........................................28
3.9 Limit on Amount Credited to PCP Subaccount.....................................................28
3.10 Plan Administrator's Power to Modify and Suspend Elections.............................28
ARTICLE IV: BENEFITS.............................................................................................................30
4.1 General Rule..........................................................................................................30
4.2 Health FSA.............................................................................................................30
4.3 Dependent Care Expenses......................................................................................30
4.4 Premium Expenses.................................................................................................30
4.5 Cash Benefits.........................................................................................................30
ARTICLE V: PLAN ADMINISTRATION...................................................................................32
5.1 Plan Administrator.................................................................................................32
5.2 Plan Administrator's Powers and Duties...............................................................32
5.3 General Plan Administration..................................................................................34
5.4 Reliance on Information Furnished by Others.......................................................35
5.5 Indemnification by Employer................................................................................36
5.6 Discretionary Power of Plan Administrator...........................................................36
5.7 Compensation of Plan Administrator.....................................................................36
5.8 Inability to Locate Payee .......................................................................................37
ARTICLE VI: CLAIMS PROCEDURES .....................................................................................38
6.1 Claim Procedures...................................................................................................38
6.2 Appeal Procedure...................................................................................................39
6.3 Agent for Service of Process..................................................................................39
6.4 Notices...................................................................................................................40
6.5 Evidence.................................................................................................................40
ARTICLE VII: MISCELLANEOUS.............................................................................................41
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7.1 Component Plans Control......................................................................................41
7.2 Governing Law......................................................................................................41
7.3 Severability............................................................................................................41
7.4 Plan Not An Employment Contract.......................................................................41
7.5 Non-Assignability of Rights..................................................................................42
7.6 Facility of Payment................................................................................................42
7.7 Mistake...................................................................................................................42
7.8 Expenses ................................................................................................................42
7.9 Compliance With Code and Other Applicable Laws.............................................43
7.10 No Guarantee of Tax Consequences......................................................................43
7.11 Insurance Contracts................................................................................................43
ARTICLE VIII: AMENDMENT AND TERMINATION............................................................44
8.1 Amendment............................................................................................................44
8.2 Termination............................................................................................................44
ARTICLE IX: EXECUTION ........................................................................................................46
APPENDIX A 1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SECTION 125 CAFETERIA PLAN
INTRODUCTION
Effective as of Jantrar-yjuly 1, 201-32019, the Central Contra Costa Sanitary District
( the Distr-iet or t "Employer):Ibereby amends and restates the Central Contra
Costa Sanitary District Section 125 Cafeteria Plan( the "Plan)D to provide benefits
for certain of its employees. This Plan incorporates the Central Contra Costa Sanitary District
Premium Conversion,Plan "PCP"j the Central Contra Costa Sanitary District Health Flexible
Spending Arrangement;Plan ("Health FSA"j and the Central Contra Costa Sanitary District
Dependent Care Assistance Plan ("DCAP") (collectively, the "Component PlansD covering
Eligible Employees of the Employer, as listed in Appendix A of this Plan. TYirtrThe Employer
originally adopted the Plan and the Component Plans . -. 11,y effective May 1, 1989;
and Since then, the Emplo. e� amended the Plan and the Component Plans on
various occasions. The Employer most recently amended and restated the Plan and the
Component Plans effective January 1, 1999 This Ul.,n was also amended
Tranuary 1,,z , 2003, � a�y1,2-0442013,and has amended
the Plan once since then.
The Plan is the Component Plans are intended to meet;atisf
y the
applicable requirements of Code Seetionssections 105, 106, 125, and 129, and any
other Appheable Law. kgpplicable law. The Plan is specifically desig latedintended to qualify
as a"cafeteria plan"under Code Seefie section 125, whieh a low and is to be interpreted in a
manner consistent with the requirements of section 125. The Employer established the Plan to
provide Eligible Employees of an Employer- to ehoese nengmjth a choice between cash;
and certain "qualified benefits" as defined in Code
Seetionsection 125(f) and anythe regulations thereunder.
This Plan and all Component Plans listed in Appendix A are maintained for the
exclusive benefit of empleyeesthe Employer's Employees.
The provisions of this Plan shall apply only to certain employees of the Employer who
are eligible to receive benefits under at least one of the Component Plans listed in Appendix
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A. The rights and benefits, if any, of former empleyeesEmployees will be determined in
accordance with provisions of the Plan in effect on the date employment terminated.
Appendix A, Component Plans, attached to this Plan is incorporated herein by
reference and is a part hereof, and may be amended without necessity for other amendment of
this Plan.
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ARTICLE I: DEFINITIONS
When used in this Plan doetffnent, and in the Component Plan doetif efit Plans, the
following words and phrases sha4will,except as specifically_provided in the Component Plans,
have the following meanings,unless the context clearly indicates otherwise:
1.1 AppligabIe-Law
The Code as her-ein defined, E)r- afty athef law of the United States of my state ef.
1.1 Account
The bookkeeping account established for each Participant under Section 3.1. Each
Account will be comprised of a PCP Subaccount, Health FSA Subaccount, or DCAP
Subaccount (each a "Subaccount," and collectively, "Subaccounts") as described in that
section.
1.2 Administrative Committee
The committee appointed by the Board in accordance with Section 5.1.
1.3 Board
The Employer's Board of Directors.
1.4 COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
X1.5 Code
The Internal Revenue Code of 1986, as amended, as it r exists or f e time to 6 o
may be a nde l
4-.31.6 Compensation
The total eas ro efiafie wy es paid during a Plan Year f r sevviees Fendered-to an
the Employee by the Employer,as dere mine f r pufposesreported in Box 1 of Fede,..,l !n,.,,,�.o
Tax Form W-2 '
Comp plus amounts that would be included in wages but for an election by-the
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employee to ,-educe his or her- regular- eas r-effmnera ton under Code Seetionsections 125
401(k) shall be tfeated as if the employee did not make sueh (a), 132(f)(4), or 457(b).
441.7 Component Plan
A separate written plan maintained by the Employer to provide health flexible spending
arrangement benefits or dependent care assistance to Eligible Employees or to permit Eligible
Employees to pay their share of the cost of the Employer Health health insurance
benefits on a pre-tax basis. Such Component Plans are listed in Appendix A and incorporated
herein. Such Component Plans may be amended at any time without necessity for other
amendment of this Plan. Each Component Plan is governed by the terms of its plan document,
which terms shall prevail in case of any conflict between this Plan and a Component Plan.
451.8 Dependent
Any individual who is a dependent of an Eligible Employee as defined in a GomponeB
Plan undef whieh the Eligible Employee has a benefit entitlement. As r-equifed by Seetion
1001(5) of the Patient W-oteetion and AffeMable Gafe Aet and Seetion 2301(b) of the Health
Cafe and Edueation Reeeneiliation Aet of 2010, effeetive fef Plan Yeafs beg' i — -d
after- Septenibef 23, 2010, with fespeet to a Component Plan that is a gfoup health plan th
provides benefits for- an Eligible Employee's ehildr-en, the tem Dependent shall inelude
Adult Child of the Paftieipant under-the age of 26. For this purpose, an Adult Child is a sonj
daiaghter-, step son, step daughter- or- eligible festet: ehild as defined in Seetion 152(f) of the
Code or-a ehild who has been adopted by or-plaeed for-adeption with the -Pa-Aieipant. Prior-to
januafy 1, 2014, an Adult Child is an eligible Dependent only if the Adult Child does net have
Dependent as defined in the applicable Component Plan.
461.9 Effective Date
januffyJuly 1, 204-3-2019, the e eetive-date e€-tkethis amendment and restatement of
dhisthe Plan. The E ff etive Date of e^^'^ is effective. Each Component Plan is that-effective as
of the date state set forth in eaehthe Component Plan n.
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4--71.l0Eligible Employ
Any employee of the Employer-who is eligible to r-eeeive benefitsidnder-at least On
the Component Plans.
A regular Employee who is regularly scheduled to work at least 30 hours per week.
"Eligible Employee" excludes an Employee who the Employer classifies as seasonal or
temporar.
4--91.11Eligible Expense
Eligible Expenses afe detailed in AAiele Al.
An Eligible Premium Expense, Eligible Medical Expense, or Eligible Dependent Care
Expense, each as defined in the PCP, Health FSA, and DCAP, respectively.
1.12 Employee
An individual who the Employer classifies as a common-law employee, and who the
Emplo,, exports on a Form W-2. "Employee" excludes any individual who (a)the Employ
classifies as a "leased employee" (as defined in Code section 414(n)), an independent
contractor or a contract worker, or(b) performs services for the Employer, but who is paid by
a temporary or other employment staffingagency gency for the period during which the individual is
paid by such agency and not by the Employer as a common-law employee, whether or not a
court or administrative agency determines such individual is a common-law employee.
4-.91.13Employer
The Central Contra Costa Sanitary District, and any organization that is a successor
thereto.
44-91.14 Employer Gfedit-sCredit
The amounts,, er- the Employer credits
to Participants' Accounts under Section 3.2 to be
used by Participants to pay Eligible Expenses. The amounts of Employer Credits are et out in
Seel o
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shall fnean, in general an iadivi&al who.:
under the Plan,
of Code Seetien125(e)(1),Component Plans.
(a) Ferpttrposes of theHealth Fie*ible Spending highly
(b) Faf puTeses of the Dependent Cafe Assista-nee Plan, a highly eompefisated
employee within the meaning of Code Seetie„ 414(q), or his orhef!Dependents.
1.12 Open Eleetion Period
1.15 FMLA
The annualFamily and Medical Leave Act of 1993, as amended.
1.16 Open Enrollment Period
The period during the Plan Year during which Eligible Employees may elect r
to participate
in the Plan or make changes to their elections for the next Plan Year. The month o€
DeeembeiEmploer will be the Open Fleetio Period t der- determine this period each Plan
Year, which period the Administrator will make known in the Plan's open enrollment
materials.
44-31.17 Participant
An Eligible Employee who participates in the Plan min accordance with
Article II.
4441.18 Period of Coverage
poses of this Plan and the Component Plans, the twelve month per-iva
ef-iffhe Plan Year, with the following exceptions: (a) for a newly eligible Employee,
the portion of the Plan Year. The Pefied of Covefa beginning when he or she commences
participation in accordance with Section 2.1, and (b) for a Participant shall end p-ief ewho
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ceases participation, the epAop rtion of the ,
Plan.
FE)f ptifpeses of a eaf�4efia plan or-a qualified benefits plan of a , ,
feffnefSpeisels-, Year ending when his or Dependent's emplepef, the pefied of eever-age as
set fefth in sueh her participation terminates in accordance with Section 2.2.
44-51.19 Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan, the terms of
which are set forth herein, as it may be amended from time to time.
4461.20 Plan Administrator
The Employer, notwithstanding the f et that eei4ai .,a,., str- tive fitnetions f this
Plan may be delega4ed to a eommittee or , thepersons, cif any,
aqppointed by the Employer to administer the Plan in accordance with Section 5.1.
471.21 Plan Year
The twelve 12-consecutive-month period beginning each January Ilst and ending the
fe December 3 1. Reeefds of the Dl.,n shall be established and maintained O the basis
of the Plan Ye,,31 st.
44-91.22 Salary Reduction
A speeifieThc amount by which a Participant's Compensation is
reduced pursuant to the Participant's election,f fedefal i
tax and, het!ever-pefmitted,for-state and leeal ineomtax ptlfpeses. in accordance with
Article III. This amount is credited to the Participant's aeeoufAAccount, as provided in Article
III, for the sole purpose of paying Eligible Expenses.
14-91.23 Spouse
A pefsen of the opposite sex to whem the Paftieipaat is legally maffi
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The individual who is legally married to the Participant under applicable state law and
who is treated as a spouse under the Code. A civil union partner or domestic partner is not
treated as a Spouse under the Code. The DCAP more specifically defines Spouse for purposes
of that plan.
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ARTICLE II: ELIGIBILITY AND PLAN PARTICIPATION
2.1 El;
2.1 Commencement of
Coniponen4 Dlans o Participation
(a)—Each Participant in the Plan as in effect immediately before the Effective Date
shall be eligible to paftieipme in the Plan on the Effeetive Da4e,pr-evided that any stieh Eligi
Empleyeewho has not made an ele elected to eeaseterminate coverage under all ale
Component Plans.-
(b) Other-Eligible Employees sha44 will remain a Participant. On and after that date,
an individual will become eligible to paftieipate i the Pla a Participant on the first day of the
month after he or the fir-st day of the month following a ehange in st
as deser-ibed in Seetion 3.5 of the Plan, provided that the employee satisfies the efigibilk.�,�
ans of a4 least one of the Component Plans.
2.2 Paft*
Pa#i ipat e in this Plan b she becomes an Eligible Employee shall begs, upon
o 4eetions, benefieiafy designations,
of r-eimbtffsable expenses and ather- deetimeffts and infefmation as may be pr-esefibed by
Plan Administfatef!. Eaeh Eligible Employee upon par-tieipating in the Plan shall be dee
eonelusively, for- all pufposes, to have assented to the tefms and pr-evisions of this Plan and
shall be bound th
if later, when he or she submits a timely election to participate in
accordance with Article III.
2:32.2 Termination of Participation
PaftieipatieaA Participant's participation in the Plan shall to ate-a"terminates
upon the earliest of-
(a)
£(a) the last day of the Dl.,,-, y iehtl�s terminate'lcc; and
(b) the date the effipleyee is tie langef a Pai4ieipat4 tHidef at least one Component
plaft.
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An employee shall no lefiget: be a Pm4ieipant tmder- a Component Plan if
Component Plan expires without renewal or an ext—i - 'nient, or- if a subsequein
Componefit Plan.
A for-tnef Pai4ieipaiit shall not be etifided to make a iiew Salary Reduetion eleetioii for-
the remainder of the Plan Year, A fofmer- Pat4i6pant will again beeeme eligible f6r- Salary
. . �fneffts of Seetions 2.1 a-ad 2.2 above, but in no event eadief:than the beginning of
in eash for-the remainder-of the Plan Year-.
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(a) the termination of the Plan or all Component Plans;
(b) the Participant's permitted election not to participate in the Plan or all
Component Plans; or
(c) the Participant ceases to be an Eligible Employ
Termination of participation in this Plan will automatically revoke the Participant's
elections. If revocation occurs under this Section 2.2, no new election may be made by such
Participant during the remainder of the Plan Year unless otherwise permitted under the Plan.
2.3 Resumption of Participation
If a Participant terminates his or her employment for any reason, including(but not
limited to) disability, retirement, layoff, or voluntary resignation, and then is rehired or
becomes eligible once again within 30 days after termination, then the individual will be
reinstated with the same elections that he or she had before termination. If a former Participant
is rehired more than 30 days after termination of employment and is otherwise eligible_ to
participate in the Plan, then the individual may make new elections as a new hire as described
in Section 3.5(a). Despite the preceding, an election to participate in the PCP will be reinstated
only to the extent that coverage under the applicable group health plan is reinstated. If an
Employee whether or not a Participant) ceases to be an Eligible Employee for any reason
(other than for termination of employment), including(but not limited to) a reduction of hours,
and then becomes an Eligible Employee again, the Employee can participate in the Plan by
making a timely election to participate in accordance with Article III.
2.4 FMLA Leaves of Absence
(a) Health Insurance Benefits. Despite any contrary Plan provision, if a Participant
goes on a qualifying ing leave under the FMLA, then to the extent required by the FMLA, the
Employer will continue to maintain the Participant's health insurance benefits and Health FSA
benefits on the same terms and conditions as if the Participant were still an active Employ
That is, if the Participant elects to continue his or her coverage while on leave, the Employ
will continue to pay its share of the contributions for those benefits under this Plan.
The Employer may require Participants to continue all health insurance benefits and
Health FSA benefits coverage while they are on paid leave (provided that Participants on
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non-FMLA paid leave are required to continue coverage). If so, the Participant's share of the
contributions will be paid by the method normally used during any paid leave (e.g., on a pre-
tax Salary Reduction basis).
In the event of unpaid FMLA leave (or paid FMLA leave where the Employer does not
require coverage to be continued), a Participant may elect to continue his or her health
insurance benefits and Health FSA benefits during the leave. If the Participant elects to
continue coverage while on FMLA leave, then the Participant maypgy his or her share of the
contributions in one of the following waw
(i) With after-tax dollars, by sending monthly payments to the Employ
by the due date established by the Employer;
(ii) With pre-tax dollars, by having such amounts withheld from the
Participant's ongoing Compensation(if any), including unused sick days and vacation days, or
pre-paying all or a portion of the contributions for the expected duration of the leave on a pre-
tax Salary Reduction basis out of pre-leave Compensation. To pre-pay the contributions, the
Participant must make a special election to that effect prior to the date that such Compensation
would normally be made available (pre-tax dollars may not be used to fund coverage_ during
the next Plan Year); or
viii) Under another arrangement agreed pon between the Participant and the
Plan Administrator (e.g., the Plan Administrator may fund coverage during the leave and
withhold "catch-up" amounts from the Participant's Compensation on a pre-tax or after-tax
basis) pon the Participant's return.
If the Employer requires all Participants to continue health insurance benefits and
Health FSA benefits duringan n unpaid FMLA leave, then the Participant may elect to
discontinue payment of the Participant's required contributions until the Participant returns
from leave. Upon returning from leave, the Participant will be required to repay the
contributions not paid by the Participant during the leave. Payment will be withheld from the
Participant's Compensation either on a pre-tax or after-tax basis, as agreed to by the Plan
Administrator and the Participant.
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If a Participant's health insurance benefits or Health FSA benefits coverage ceases
while on FMLA leave (e.g., for non-payment of required contributions),then the Participant is
permitted to reenter the PCP or Health FSA as applicable, upon return from such leave on the
same basis as when the Participant was participatingpriorto the leave,or as otherwise required
by the FMLA. In addition, the Plan may require Participants whose health insurance benefits
or Health FSA coverage terminated during the leave to be reinstated in such coverage upon
return from a period of unpaid leave, provided that Participants who return from a period of
unpaid,non-FMLA leave are required to be reinstated in such coverage. Despite the preceding
sentence, with regard to Health FSA benefits, a Participant whose coverage ceased will be
permitted to elect whether to be reinstated in the Health FSA benefits at the same coverage
level as was in effect before the FMLA leave (with increased contributions for the remaining
period of coverage)or at a coverage level that is reduced pro rata for the period of FMLA leave
during which the Participant did not pay contributions. If a Participant elects a coverage level
that is reduced pro rata for the period of FMLA leave, then the amount withheld from a
Participant's Compensation on a pay-period-by-pay-period basis for the purpose of 12aying for
reinstated Health FSA benefits will be equal to the amount withheld on a pay-
period-by-Pay-period basis prior to the period of FMLA leave.
(b) Non-Health Benefits. If a Participant goes on a qualifying leave under the
FMLA, then entitlement to non-health benefits (such as DCAP benefits) is to be determined
by the Employer's policy for providing such benefits when the Participant is on non-FMLA
leave, as described in Section 2.5. If such policy permits a Participant to discontinue
contributions while on leave, then the Participant will, upon returning from leave, be required
to repay the contributions not paid by the Participant during the leave. Payment will be
withheld from the Participant's Compensation either on a pre-tax or after-tax basis, as may be
agreed upon by the Plan Administrator and the Participant or as the Plan Administrator
otherwise deems appropriate.
2.5 Non-FMLA Leaves of Absence
If a Participant goes on an unpaid leave of absence that does not affect efi ig bilit,
the Participant will continue to participate and the contributions due for the Participant will be
paid by pre-payment before going on leave, by after-tax contributions while on leave, or with
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catch-up contributions(on a pre-tax or after-tax basis)after the leave ends,as may be permitted
by the Plan Administrator. If a Participant goes on an unpaid leave that affects eligibility,then
the applicable election change rules in Section 3.6 will Uply.
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ARTICLE III: PLAN FUNDING
3.1 Establishment of Accounts
The Employer sh-a14-will establish and maintain an Account for each Participant a
>,,.,.1,k .,* - *t-comprised of a Health Flexible Spending Affangemea; s4aeeeffnt,-FSA
Subaccount, a DCAP Subaccount, and a Dependent Cafe Assistwiee stibaeeottnt,
Ceiwefsien s0aeeew4, and a Taxable Benefit aeeeu-n4.PCP Subaccount. The Employer
sha4lwill credit each aeea Subaccount with the amounts specified in Sections 3.2 and 3.3 in
accordance with the Participant's designation(s) made-pur-s,,ant to designations under Section
3.4.
These aeee t Accounts are for bookkeeping purposes only; any paymen enefits
under the Plan sha4will be ma&paid entirely eu+-offrom the general assets of the Employer.
No provision of this Plan will be construed to require the Employer or Plan Administrator to
maintain any fund or segregate any amount for the benefit of any Participant,and no Participant
or other person will have any claim against, right to, or security or other interest in, any fund,
account or asset of the Employer from which any payment under the Plan may be made. The
Plan does not create a trust in favor of a Participant or any person claiming on a Participant's
behalf.
3.2 Employer Credits
(a) The DistfieEmployer will credit each
FreupParticipant's Account each month with an Employer Credit equal to the amount se4
eutthat the Employer has agreed in the etiffent applicable Memorandum of Understanding:
or individual employment agreement to contribute to the Plan on the
Participant's behalf for the Participant to use to pay the cost of any benefit elected b, the
Participant under the Plan.
by the Management SuppeWGenfidenfial Group with the ametint set eut in the ettffen4
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(b) The Distr-iet wil The Employer will, each month, credit the PCP Subaccount of
each Participant who is enrolled in a Public Employees' Medical and Hospital Care Act
("PEMHCA")health plan for the month with an Employer Credit for the exclusive purpose of
payin the he applicable health plan premium. The Employer Credit will, when added to the
applicable PEMHCA minimum employer contribution paid by the Employer directly to the
California Public Employees' Retirement System on the Participant's behalf for the Plan Year,
equal the health insurance premium the Employer has agreed in the applicable Memorandum
of Understanding or individual employment agreement to pay on the Participant's behalf.
(E)-The Employer will, each month, credit the Health FSA Subaccount of each
Participant who is a Board member,
and who elects to waive coverage under the Employer's group health plans with the amount
of ou4 i the ^ nt plie.,b le Mv,ti,,.,.,,,,a„m ..fUnder-standing.
individual employment ^ pAfaetan Employer Credit equal to $41.66.
3.3 Salary Reduction Credits
Each Participant may make a written Salary Reduction election to have his or her
annual Compensation reduced,but not below zero,by an amount not to exceed the cumulative
total of the maximum limitations as stated in Plan Sections 3.7 and 3.8.
3.4 Designation of Salary Reduction and Employer !`redia ^,.-.,u*ts Credits to
Subaccounts
(a) Each Participant who elects Salary Reduction mor who is credited with
Employer Credits shall omust designate the amount (or portion of the total)
Reduction mor Employer Credits to be applied during the Plan Year to one or more of the
benefits described in Article IV, and the amounts so designated shalwill be credited to the
appropriate Subaccounts within the Participant's aeee Account.
(b) No Salary Reduction or Employer Credit amounts shat Credits will be credited
to a Participant's aceoun Account until the Participant has made such designation
made.
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(c)
Each Subaccount will be 1=edeeddebited during the Plan Year
as payments are made-te provide the designate�for any benefits to-the Par-tieipant.paid.
Amounts designated to each subaeeatinSubaccount may not be changed at any time during
the Plan Year, except under- the ...,st,,nees dere-ibe aas provided in Section 3.6.E
n o",-,,.ufsement r^r Me �aEli ig ble Medical Expenses (as defined in Section 1.3 of
the Health FSA) will be reimbursed in accordance with Article V of the Health FSA. Eligible
Dependent Care Expenses(as defined in Section 1.5 of the Employe,-14ea4t,Flexible Spending
Affa-agement Plan) DCAP)will be m-adereimbursed in accordance with SezArticle
V of the Employer-Health Flexible Spending Arrangement Plan doeument. Reimbii sement fef
inetiffedDCAP. Eligible Premium Expenses (as defined in Section 1.7 of the Employe
Dependent Gaf e Assistanee Plan)shall be made in aeeet4anee with Ai4iele V11 of the Employer-
Dependent Care Assistanee Plaii doettmefft. Payment of Membef Plan Pr-emittms (as defin
in Seel o 1.53 of the Employer Pr-emit,,,, C,,,,ye fsie Plan) shall CP will bepaid in
accordance with Article V of the Employe,-Pr-e itt C,., ver-sio Plan ,,,,,.,,m ent.PCP
3.5 Time for Making Elections
(a) Salary Reduction and benefit designation elect onselection forms must be
ladeproperly completed and submitted annually to the Plan Administrator during the Open
EleetieeEnrollment Period before the first day of each Plan Year4f. If an Eligible Employee is
then eufre„*'yinitially becomes eligible to participate in a Compenentthe Plan.. mid-
year, he or she must beadeproperly coMplete and submit a Salary Reduction and benefit
election form to the Plan Administrator within tl (30) days after an individual hire
after,he or she first becomes , the beginning of the Plan Year--Of
ehan eegli.ibg le to participate in status as deser-ibed in Seetion 3.6 of he Plan.
(b) If an Eligible Employee fails to make a timely election, the :,,,,;v;,,,,.,'he or she
will be deemed to have elected to receive cash in lieu of benefits
under the Empleyel=Health FSA, the mer
Dependentr Care Assistanee Plat -an&DCAP, or the Drom;,•m C�r�,orsio D'�rPCP as
described in Article IV.
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3.6 Change or Revocation of Elections
AExcept as provided in this section, a Participant's Salary Reduction and benefits
designatietLbenefit elections for any Period of
Coverage are irrevocable for the first pay-e11 period to whieh they app! , exeep*duration of the
Period of Coverage. Therefore,unless an exception applies, a Participant may not change anX
Salary Reduction or benefit elections for the duration of the Period of Coverage. A mid-year
election change will be permitted upon the occurrence of the events speeified below.Any srueh
change of o do ,rust be in response to and eensis an event described in this section
only if it is made on account of and corresponds with, as defined by Treasury
Deg regulations or other applicable guidance issued under Code section 125 the
appheable even event. Except as provided in subsection (a) of this section, an election change
must be made within 30 days of the occurrence of an event described in this section.
,l >:nfollmgepfty;,.l,t� Any event speeifie in Code sectio" nir�vvi(f)t-h
entitles a Pai4ieipant to speeial eafellment rights undef:a Component Plan.
(a) Special Enrollment Rights. A Participant may revoke his or her election for
group health plan coverage under the PCP during a Period of Coverage and make a new
election for the balance of the Period of Coverage that corresponds with the special enrollment
rights under a group health plan that the Participant or his or her Spouse or Dependent is
entitled to under Code section 9801(8. The Participant must make any new election within 30
days or 60 days, as gpplicable, in accordance with the notice requirement under Code section
9801(fl. Such election change will apply prospectively, unless otherwise required by Code
section 9801(f)to be retroactive.No election change may be made to the Health FSA or DCAP
under this Section 3.6(a). A special enrollment right will arise in the following circumstances:
(i) A Participant or his or her Spouse or Dependent declined to enroll in
group health plan coverage because he or she had coverage, and eli ig bility for such coverage
is subsequently lost because: (a) the coverage was provided under COBRA, and the COBRA
coverage was exhausted, or (b) the coverage was non-COBRA coverage and the coverage
terminated due to loss of eligibility for coverage or the employer contributions for the coverage
were terminated;
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(ii) A new Dependent is acquired as a result of marriage,birth, adoption, or
placement for adoption;
(iii) The Participant or Dependent becomes eligible for a state premium
assistance subsidy from a Medicaid plan or through a state children's health insurance pro_m
with respect to coverage under the group health plan; or
OV) The Participant's or Dependent's coverage under a Medicaid plan or
state children's health insurance program is terminated as a result of loss of eli ig bility for such
coverage.
(b) Change in Status. A Participant may change his or her election during a Period
of Coverage for the remainder of the Period of Coverage under the PCP, the Health FSA, and
the DCAP, as further limited below, upon a Change in Status, but only if the election change
is made on account of and corresponds with a Change in Status that affects eli ig bility for
coverage under an Employer's plan or a Spouse's or Dependent's employer's plan. Generally,
an election change corresponds with a Change in Status involving a Participant's divorce,
annulment, or legal separation from a Spouse, the death of a Spouse or Dependent, or a
Dependent's ceasing to satisfy the eli ig bili . requirements for accident or health coverage only
if the election is to cancel accident or health coverage for the individual involved in the event.
In addition, an election changee�y corresponds with a Change in Status involving a
Participant, Spouse or Dependentag ining eli ig bility for coverage under an Employ e'splan or
a Spouse's or Dependent's employ, e�plan only if the coverage for that individual becomes
effective or is increased under the Employer's plan or the Spouse's or Dependent's employ
plan. Finally, with respect to the DCAP, a Participant may change or terminate his or her
election upon a Change in Status if(i) such change or termination is made on account of and
corresponds with a Change in Status that affects eli ig bility for coverage under an employ
plan, or(ii) the election change is on account of and corresponds with a Change in Status that
affects eligibility of dependent care expenses for the tax exclusion under Code section 129. A
"Change in Status" means any of the events described below, as well as any other events
included under subsequent changes to Code section 125 or regulations issued thereunder,
which the Plan Administrator, in its sole discretion and on a uniform consistent basis,
determines are permitted under IRS regulations and under this Plan:
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(i) Legal Marital Status. An event that eh n#esA change in a Participant's
legal marital status including marriage, the Spouse's death, divorce, legal separation and
annulment.
(ii) Number of Dependents. An event that changes the number of a
Participant's ntimbef e Dependents including birth, death, adoption and placement for
adoption.
(iii) Employment Status. Any of the following events that change the
employment status of a Participant; or of a Pa-i4d6pantLshis or her Spouse or
Dependents: (a) a termination or commencement of employment,;fib) a strike or
lockout;; Uc a commencement of or a return from an unpaid leave of absence ;h a change
in worksite. addition—, +f-; and (d) when the eligibility feFconditions of the Plan, any i
Component Plan, or ^ eaf*^ria plan ^r ,,, ali ^aother employee bene€ftbenefits plan of the
empleyef:of the Pa#ieipant's Spouse or-Dependent, is eenditioned on employment stattis and
there is a ehange in the employment status of a Participant or a PaAieipantl%his or her Spouse
or Dependent depends on the employment status of that individual and there is a change in that
individual's employment status with the consequence that sthe individual becomes (or
ceases to be) eligible under such plan,
(iv) Dependent Satisfies or Geases to S fttj t. Eli ig bility Requirements. An
event that causes a Dependent to satisfy or to cease to satisfy the eligibility
requirements for ^ o ^ raor ^ Component Plan on „* of a4tai meat ^4'a particular
benefit, such as attaining a specified age, student sta or any similar circumstance.
(v) Change in Residence. A change in residence of a Participant or a
phis or her Spouse or Pepe ide*Dependents.
(vi) COBRA Eli ibg ility. If a Participant, or a Participant's Spouse or
Dependent, becomes eligible under Code section 498013, or any similar state law, for
continuation coverage in a group health plan offered by the Employer, a Participant may
increase his or her Salary Reduction to pay for such continuation coverage.
(c) Judgment, Deer-eeCertain Judgments, Decrees, or OfdefOrders
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A judgment, decree, or order resulting from a divorce, legal separation, annulment or
change in legal custody(including a qualified medical child support order as defined in section
609 of the Employee Retirement Income Security Act of 1974`` that as amended, that
requires accident or health coverage for a Participant's child (including a foster child who is
the Participant's Dependent), then the Participant may either (i) change his or her election
under the PCP or Health FSA to provide coverage for the child, provided the order requires
the Participant to provide coverage, or (ii) change his or her election under the PCP or Health
FSA to revoke coverage for the child if the order requires the Participant's Spouse, former
Spouse or another individual to provide coverage under that individual's plan and that coverage
is actually provided.
(i) Reqs deipant to provide aeeide-nt=or health eover-aged
Component Plan �qr- a Pai4ieipant's ehild or- for- a foster- ehild Who is a dependent (as defill
in seetion 152 of the Code) of the Paftieipant; or- (ii)Requir-es the Par-tieipant's Spouse,fefme
Spouse or- a-nethef individual to provide eevefage fai:the ehild. This subseetion (ii.) shall only
apply if the Par-tieipant's Spouse, faftner- Spause or- another- individual aetually provides si
aeeident or health eover-age.
(d) Entitlement to Medicare or Medicaid
If a Participant or his or her Spouse or Dependent who is enrolled in a
gyp^ o
the PCP or Health FSA becomes enrolled min Medicare Part A or Part 13
or in-Medicaid, the Participant may m&e ^ prespeetive eleet ^^ ehange*^prospectively, elect
to cancel the accident or Fe4tteehealth coverage €er(and the PCP premium conversion benefit
for that coverage) of the individual who becomes enrolled in Medicare or Medicaid-. or the
Participant's Health FSA coverage may be canceled. Despite the preceding sentence, a
cancellation of Health FSA coverage will not become effective to the extent it would reduce
future contributions to the Health FSA to a point where the total contributions for the Plan
Year are less than the amount already reimbursed for the Plan Year. If a Participant or a
Participant's Spouse or Dependent who has been enrolled in Medicare or Medicaid loses
eligibility for such coverage, athe Participant may make a prospective election to commence
or increase the accident or health coverage for t+etl- individual whe lost eove,-age ,,,,dory
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Medi .^, of Medieaidor the Participant may elect to commence or increase his or her Health
FSA coverage.
(e) Change in Cost
This ubseetion (e) sha11 not apply to the Employer- Health Flexible pending
Affa-agement Plan,
This subsection (e) applies to the PCP and, as limited below, the DCAP, but not the
Health FSA. For purposes of this subsection (e), "similar coverage" means coverage for the
same categry of benefits for the same individuals (e.g., family to family or single to single.
For example, two plans that provide major medical coverage are considered to be similar
coverage. For purposes of this definition, (1) a health FSA is not similar coverage with respect
to an accident or health plan that is not a health FSA; (2) an HMO and a PPO are considered
to be similar coverage; and (3) coverage by another employer, such as a Spouse's or
Dependent's employer, may be treated as similar coverage if it otherwise meets the
requirements of similar coverage.
(i) Automatic Changes. If the cost of a Member Pla Participant's benefits
under the D,-om;,,.ti. Genver-sion A NPCP or DCAP insignificantly increases (or decreases)
during a Plan Year^a ,, der-the*v,.. s of stie, "pro,, bmf:Na Period of Coverage,Participants
are required to make a eeffespending ehange 4acoffespondingly increase or decrease their
decrease their Salary Reduction contributions—,the. The Plan Administrator twill, in its sole
discretion and on a uniform and consistent basis, determine whether an increase or decrease is
insignificant based on all the surrounding facts and circumstances, including but not limited to
the dollar amount or percentage of the cost change. The Plan Administrator will, on a
reasonable and consistent basis, automatically mal effectuate this increase (or
decrease) in an -affected Par-tieipaiiAlsParticipants' Salary Reduction eleetiE) elections
prospectivelX.
(ii) Significant Cost Increases. If the
Plan Administrator, in its sole discretion and on a uniform and consistent basis, determines in
accordance with prevailing IRS guidance that the cost of a Participant's benefits under the PCP
or DCAP significantly increases ^ „ifi^^„+1y deef:easesa,,,.;ng ^ Plan Y^^r and, under-the
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their- eentfibutions, in during
a Period of Coverage, the Participant may:
(a) Revoke his or her Salary Reduction election for that coverage
and pfesree fi el.. elect to receive coverage prospectively_under another Component Plan,
an ;benefit option that provides similar coverage;
(b) Revoke his or her Salary Reduction election and drop coverage
if there is no other Component Plan provid rgbenefit option that provides similar coverage4s
,, ,
(c)
Correspondingly elect to increase his or her Salary Reduction contributions prospectively.
(iii) Significant Cost Decreases. If the Plan Administrator, in its sole
discretion and on a uniform and consistent basis,determines in accordance with prevailing IRS
guidance that the cost of a benefit under the PCP or DCAP significantly decreases during a
Period of Coverage:
(O(a) Participants who enrolled in another benefit may revoke their
election and prospectively^,,,,.,menee,.,,�: :r *��r �„the(''..,v.,...nent Plan with a deer-e reelect
the benefit that has decreased in cost.-;
(b)
Expenses, this stibpafagr-aph (ii) shall enly app! Employees who are otherwise eligible
participate in the Plan under Article II may prospectively elect the benefit that has decreased
in cost, subject to the terms and limitations of the benefit; or
(c) Participants enrolled in the benefit may prospectively elect to
correspondingly decrease in their Salary Reduction contributions.
(iii)(iv)Limitation on Change in Cost Provisions for DCAP. The preceding
"change-in-cost" provisions apply to the DCAP only if the cost change is imposed by a
dependent care provider who is not a Relative"relative" of the Participant. For this purpose, a
elative"relativc means an individual who is related to the Participant as described in Code
seetionsections 152(&)Rd)(2)(A) through (8*-an Qj incorporating the rules of Code
seetionsections 152(hf)(1) and 0152 4).
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(f) Change in Coverage
This subsection (f) applies to the PCP and the DCAP, but does not apply to the
Employw�Health Flexible Spending ^ffange ei4FSA. The definition of"similar coverage"
under subsection (e) of this section applies to this subsection.
(i) Significant Curtailment. If coverage is "significantly curtailed" (as
defined below), Participants may elect coverage under another Plan.. benefit option that
provides similar coverage. In addition, as set forth below, if the coverage curtailment results
in a "loss of coverage" (as defined below), then Participants maY drop coverage if no similar
coverage is offered by the Employer. The Plan Administrator will, in its sole discretion and on
a uniform and consistent basis, decide, in accordance with prevailing IRS guidance, whether a
curtailment is "significant," and whether a loss of coverage has occurred.
(a) Significant Curtailment Without Loss of Coverage. i
Plan Year-, a Pai4ieipant or-the PaAieipant's Spouse or-Dependent has a signifieant etn4ailm
of eevefage under- a Gempenent Plan, tha4 is not a less of eavefage as defined by Tfeasw�
Regulations ^ other- a ^lieab e guid nee issue If the Plan Administrator determines that a
Participant's or his or her Spouse's or Dependent's coverage under Code seetien 125,
a€feeted-a plan is significantly curtailed without a loss of coverage during a Period of Coverage,
the Participant may revoke his or her Salafy Reduetien election unde the Plan fe
d+ataffected coverage, and may prospectively make a new Salai=y Reduefien eleetie elect
coverage under another Compe Plan, ' ,benefit option that provides similar coverage..
(such as an HMO, but not the Health FSA). Coverage is "significantly curtailed" only if there
is an overall reduction in coverage provided to Pa44i6pan so as to constitute reduced coverage
generally.
(b) Significant Curtailment With Loss of Coverage. Ifs the
Plan Year-, a PiAdeipant e Administrator determines that a Participant's Spettse a>
Dependent has a sign f;,ant eui4ailme t ^for his or her Spouse's or Dependent's coverage
under a Component Plan, tha4 is plan is significantly curtailed, and if such curtailment results
in a loss of coverage as defined by Treasury Regulations ^ other- ,.1;..able ,.„a,nee isswider- Code seetion 125, or- as detefmined by the Plan Administrator-, in its sole ue
,
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during a
Period of Coverage, the Participant may elect to either:
("Revoke his or her Salary R va,,etien eleeti.,, under-the Plan an
prespeetizely make—a new Salafy Re"etion election for the affected coverage ge and
prospectively elect coverage under another Component-Plan, i , benefit option that
provides similar coverage
(1) —Revoke his or-he,- Salary Redu.tio eleet o , de such
as an HMO, but not the Plan and pro 1� Health FSA);
M(2) Prospectively-drop coverage if no other Component Plan
benefit option provides similar coverage.
(,d)(c) Loss of Covera ge_For purposes of this s ag h (ii),�
subsection (f), "loss of coverage" means a complete loss of coverage under the Plan benefit
package option(including the elimination of a benefits package option,or an HMO ceasing to
be available in the area where the individual resides,
the benefits paekage option by reason of an Over-all lifetime or-annual limitation).).In addition,
the Plan Administrator may, in its sole discretion and on a uniform and consistent basis, treat
the following as a loss of coverage:
(1) A substantial decrease in the medical care providers
available under the Plan benefit option (such as a major hospital
ceasing to be a member of a preferred provider network or a substantial decrease in the number
of physicians participating in a PPO or HMO);
(2) A reduction in the benefits for a specific type of medical
condition or treatment with respect to which a Participant or the Pai4i6pantIsLhis or her Spouse
or Dependent is currently in a course of treatment; or
(3) Any other similar fundamental loss of coverage.
(d) Dependent Care Coverage Changes. A Participant may make a
prospective election change that is on account of and corresponds with a change by the
Participant in the dependent care service provider. For example: (1) if the Participant
terminates one dependent care service provider and hires a new dependent care service
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provider, then the Participant may change coverage to reflect the cost of the new service
provider; and (2) if the Participant terminates a dependent care service provider because a
relative becomes available to take care of the child at no charge,then the Participant may cancel
coverage.
(ii) Addition 9ror Significant Improvement of Ge en a Plan.. Benefit
Option. If, during a Plan Year, the Employer adds a new Eft Plan benefit option, or
significantly improves the ee idea • nder an existing Cempexeo4 Plan, agile
Employee(in ludin.these who afe no benefit option: (a)Participants who are enrolled in thea
Plan benefit option other than the newly added or significantly improved Plan
benefit option may revoke heir elections of the Plan
benefit option in which they are enrolled and prospectively make a new Salary Red
eleetien under- the D��rcever-age in the new ComponerlPaelect the newly added or
significantly improved Plan benefit option, or (b) Employees who are otherwise eligible to
participate in the Plan under Article II may elect the newly added or significantly improved
Plan benefit option on a prospective basis, subject to the terms and conditions of the Plan
benefit option. The Plan Administrator will, in its sole discretion and on a uniform and
consistent basis, decide whether there has been an addition of, or significant improvement in,
a Plan benefit option in accordance with prevailing IRS guidance.
(iii) Change in Coverage Under A*egwfan Employer Plan. A Participant
may make a prospective Salary R eduetio election change in this Plan that is on account of
and corresponds with a change made under another employer cafeteria plan or a qualified
benefits plan (including a plan of the Employer or a plan of the Spouse's or Dependent's
employer), but only if-
(a)
£(a) The other cafeteria plan or qualified benefits plan permits its
participants to make an election change that would be permitted under Treasury Regulation
regulations; or
(b) This Plan permits Participants to make an election for a Period
of Coverage that is different from the period of coverage under the other cafeteria plan or
qualified benefits plan.
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(iv) Loss of Other Group Health Coverage. If, , a
Participant or ' his or her Spouse or Dependent loses coverage under any group
health coverage sponsored by a governmental or educational institution during a Period of
Coverage, the Participant may prospectively e4eet—chane his or her election to add group
health coverage for the individual who loses
coverage.
(g) Speeial Re its For Family and l\aedig.,1 Leave
(g) FMLA Leave of Absence
A Participant taking leave of absence under the Family and Medieal Leave Ae
( 041 A)FMLA, may revoke an existing election of group health plan coverage under a
Component Plan and may make such other election for the remaining portion of the Plan Year
as may be provided for under the FMLA, as it may be amended f e time to time.
Na�withstanding the above, Eligible Employees anEVer- Dependents who afe eligible
but not enmiled in eoverage under- a Component Plan that is a group health plan are a
entitled to enfoll in the Component Plan and this Plan before the next Open Eleetion Per
under-the following eir-eumstanees.:
(i) The Eligible Employee and/or- Depeiident beeemes eligible for-
("CHIP") with r-espeet to eover-age undef!a Componeni Plan that is a group health plan and t
Eligible Empleyee r-equests eover-age ender- the Component Plan and this Plan not Wer- tha
60 days after-the date the Eligible Employee c-ffld/ef Dependent is detefmined to be eligible ferr
( The Eligible Employee's and/or-Dependent'-mss N4edieaid Ew CHIP
eover-age ts teRminated as a r-estilt of loss of eligibility for- stieh eover-age, and the Eligible
Employee f equests eever-age under- the Component Plan and this Plan not later- than 60 days
after-the date of tefmifia4ien of stieh eevefage-.
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(0(h) Other Circumstances
Any other eifeumstmeo^event approved by the Plan Administrator in a
nondiscriminatory manner which are consistent with regulations or other guidance issued by
the Secretary of the Treasury.
3.7 Limit on Amount Credited to DCAP
Subaccount
The amount credited to a Participant's Dependent faro ^ssist nee Plan s4 aeeer*
slhallDCAP Subaccount must not exceed the maximum limit as stated in Section -54.6 of the
Employer Dope, den4 !-are ^ssist nee Plan ,1o..,,.,-,e DCAP.
3.8 Limit on Amount Credited to Health Flexible Sigendine Affaaeemen4FSA
Subaccount
The annual amount credited to a Participant's Health Flexible Spena-ngefnen4
sha44FSA Subaccount must not exceed the maximum limit stated in Section 4.86 of the
Employer Health Flexible Spending Affangement Plan deeiimen..WSA.
3.9 Limit on Amount Credited to D,-v,v,;,,,v. Conversion ^ *PCP Subaccount
The annual amount credited to a Participant's Pr-en iu Conversion ^,,,,,ufA ,hal PCP
Subaccount must not exceed, the maximum limit stated in Section 5.3 of the Employe
D,-oY,.itff, Conversion Plan ,7.,etif e NPCP.
3.10 Plan Administrator's Power to Modify and Suspend Elections
Notwithstanding any othef Plan The Plan Administrator may, at any time,
require any Participant or class of Participants to amend the amount of their Salary Reductions
for a Period of Coverage if the Plan Administrator determines that such action is necessary or
advisable in order to (a) satisfy any of the Code's nondiscrimination requirements applicable
to this Plan, a Component Plan, or other cafeteria plan; (b) prevent any Employee or class of
Employees from having to recognize more income for federal income tax purposes from the
receipt of benefits hereunder than would otherwise be recognized; (c) maintain the qualified
status of benefits received under this Plan; or(d) satisfy Code nondiscrimination requirements
or other limitations applicable to the Employer's qualified plans. In the event that contributions
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need to be reduced for a class of Participants, the Plan Administrator will reduce the Salary
Reduction amounts for each affected Participant, beginning with the Participant in the class
who had elected the highest Salary Reduction amount and continuing with the Participant in
the class who had elected the next-highest Salary Reduction amount, and so forth, until the
defect is corrected.
Despite any contrarPlan provision, the Plan Administrator will suspend, modify, or
terminate any Participant's elections under the following circumstances:
(a) If the amount of any reduction agreed to is greater than the Participant's
monthly taxable pay from the Employer.
(b) In compliance with a change or revocation of an election due to a permitted
election-change it status as allowed „event under Section 3.6.
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ARTICLE IV: BENEFITS
4.1 General Rule
All Component Plan benefits., except Health Flexible Afrargem FSA
benefits, will be payable or provided under this Aftielearticle for a Plan Year only with
respect to periods during such Plan Year in which an Eligible Employee is a Participant and
has or is entitled to have amounts credited to his or her account pursuant to Sections 3.2 and
3.3, and expenses shall be reimbursed only if incurred during such periods.
4.2 Health FSA
Health Flexible Q,.on.aing ^ff ange, entFSA benefits sh"will be payable in accordance
with Article V of the Enpleyer-Health Flexible Spending ^ff,,,,,.enie„*Plan ,a,,,.,,ffle„*FSA.
4.3 Dependent Care Expenses
Amounts credited to a Participant's Dependent Care sub aeeewADCAP Subaccount for
a Plan Year sha4will be payable in accordance with Section 6-.25_1 of the Employer-Dependent
Care Assistanee Plan doetimentT)CAP.
4.4 Premium Expenses
Amounts credited to a Pr-e ,itin, Gowvefsio,, sub ntParticipant's PCP Subaccount
for a Plan Year swill be payable in accordance with Section 5.2 of the
Convey-si.r Plan aeeii�PCP.
4.5 Cash Benefits
(a) A Participant (except a Board member) may elect to receive in cash, included
in his or her paycheck, Employer Credit.,mettn: Credits to the extent permitted in Section
3.2 or amounts whielithat could otherwise be subject to Salary Reduction. TM lief of Or ;n
of cufrently taxable benefits, eribed in Appendix Such benefits sh-allwill be treated as
cash under this Plan and reported on the Participant's Form W-2 as eafningswa�es and
shaRwill be subject to payroll income and employment tax withholding.
(b) —PtIf a Participant selects Salary RedtiefienReductions, but fails to elect any
benefits provided in Sections 4.2, 4.3, or 4.4 shall not have any amounts credited to his er he f
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sub aeeetmts, N4 shall instead r-eeeive as > >
any amounts
•eh, the Participant's Salary Reduction election will be ineffective, and the Participant will
receive the amounts that would have otherwise have been subject to Salary Reduction.-
t0(b) �ppendix B, etffendy Taxable Befiefits Treated As Cash, a#aehed to this AM-
f r-ethe-afnendment of this]Plan in the form of taxable wages instead of having those amounts
credited to his or her Subaccounts.
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ARTICLE V: PLAN ADMINISTRATION
5.1 Alleeation of Plan Administration Responsibilities
5.1 Plan Administrator
The Plan and each CompanenA Plan thereunder shall be -a
Administrator is the Administrative CommitteeeensiAi*g, which is comprised of at least two
members each of whom is appointed by, and se gserves at the pleasure of,the -Employer's
board of dir-ee+^rs.Board. The Committee s"a'�will supervise the administration
of the Plan and each Component Plan. The Plan Administrator's principal duty to sentrel
and manage the odo of the Pla see that this Plan and the Component Plan the-etinde,-
named fi"eia Plans are carried out in accordance with their terms for the exclusive benefit
of individuals entitled to participate in the Plan without discriminating amongthem.
hem.
The Committee shall have sueh power and eemplete diseretion to administer-the Plan.
in ,11 of its details, ..1udi x., 1.,,f not limitedto the fell,,z,i _ riR
(a) 1atet:pr-eta4iofi of t4e Plan and Component Plans, stieh good faith inter-pr-eta4iea
to be final and eanelusive an all employees, Par-tieipants, and benefieiar-ies.
5.2 Adoption ofPlan Administrator's Powers and Duties
The Plan Administrator will have such powers as it considers necessary or appropriate
to discharge its duties under the Plan and the Component Plans. The Plan Administrator will
have the complete and exclusive right and discretion to interpret the Plan and the Component
Plans and to decide all matters thereunder, and all determinations of the Plan Administrator
will be conclusive and bindingopersons. The Plan Administer will have all of the powers
and duties necessary or appropriate to administer the Plan and the Component Plans in all their
details, including without limitation the power to:
(a) Construe and interpret the Plan and the Component Plans,including all possible
ambiguities, inconsistencies, and omissions in the Plan, the Component Plans, and related
documents,and to decide all questions of fact,questions relatingto o eli ig bility and participation,
and questions of benefits under this Plan, such good faith interpretations to be final and
conclusive on all persons;
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(b) Adopt and prescribe such procedures and regulations as in the Committee's
Ft are neeess and forms to be used by Employees and Participants to make elections
under the Plan and the Component Plans as the Committee believes in its sole discretion are
necessary or appropriate for the proper and efficient administration of the Plan and Compon
Plans and aro and consistent with the terms and purposes, of the Plan and the Component
Plans-;
(c) Enf ,.,.omen e4Enforce the Plan and the Component Plans according to it-stheir
terms and the F&Iespiggedures and regulations adopted by the EmployenAdministrative
Committee;
The Can+mi4ee may delega4e to Appoint or employ other persons
(who may be the Employer's employees), and who may include legal counsel and benefit
consultants), and to delegate in writing to such other persons any of the Plan Administrator's
specific fid-uei responsibilities of the Em,.1&yff,including responsibility for da.. -thy Plan
administration, to assist it in administering
(without limitationy
(d) the Plan and the Component
Plans;
(e) Prepare and distribute information explaining the
Plan and the Component Plans and the benefits thereunder in such manner as the Plan
Administrator determines in its sole discretion to be necessary or appropriate;
(f) Request and receive from all Employees and Participants such information as
the Plan Administrator determines in its sole discretion to be necessary or appropriate for the
proper administration of the Plan and the Component Plans;
(Otg Prepare,report, file and disclose any forms,documents mor other information
required by law to be reported or filed with any governmental agency, or to be pfepfff ed and
disclosed to empleyeesParticipants or other persons entitled to benefits under the Plan;-a*d
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f }�� Review, decide, and respond to reviewbenefit claims of
ela ms Venial^and appeals under ^ e 44the Plan and the Component Plans tmder- the
Nap-.
5.2 Administr-ative4XAie-s
The Employer-shall be r-espeasible for-the geneful administ-Fmien of the Plan,ineludift"Xit
(a) notifieation of employees of eligibility for-the-Plan;
(i) Furnish each Employee and Participant with such reports with
respect to the administration of the Plan and the Component Plans as the Plan Administrator
determines from time to time in its sole discretion to be reasonable and appropriate, including
but not limited to appropriate statements setting forth the amount of a Participant's Salary
Reductions and the amounts available to pay benefits under the Plan and the Component Plans;
(i) Receive, review, and keep on file such reports and information regarding the
benefits covered by the Plan and the Component Plans as the Plan Administrator determines
from time to time in its sole discretion to be necessary or appropriate;
(k) Sign documents for the purposes of administering the Plan and the Component
Plans, or to designate an individual or individuals to sign documents for the purposes of
administering the Plan or the Component Plans;
(1) Secure independent medical or other advice and require such evidence as it
deems necessary to decide any claim or appeal; and
(m) Maintain the books of accounts,records, and other data in the manner necessary
for proper administration of this Plan and the Component Plans and to meet any applicable
disclosure and reporting requirements.
5.3 General Plan Administration
The Plan Administrator has delegated responsibility for the day-to-day administration
of the Plan to the Employer's human resources personnel, except to the extent contractually
delegated to a third-party administrator appointed by the Plan Administrator or the Employ
This includes:
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(a) Notifying Eligible Employees of their eligibility to participate in the Plan and
in the Component Plans;
(b) Furnishing Plan enrollment doeumentsmaterials and el-aim forms and claim
forms to Eligible Employ;
(c) Determining
Emplo, e�eligibility o participate in the Plan and in the Component
Plans;
(e) —Developing and recommending to the Plan;
(d) adoption of Administrator procedures and regulations tee-necessary i-n
Employer'sthe or appropriate for the proper and efficient administration of the
and-whieh-areconsistent with the terms and purposes-,of the Plan and the Component Plans;
(e) enfereement of the Plan meording to its terms and to the rules and r-egulatiefis
adopted by the Employer;
Employer Credit amounts; and
(e) fi4agReceiving, deciding, and maintaining records of initial benefit claims,
(f) Filing or ai^�disclosing any information required by law to be r-eporte
or-filed with any governmental agency or te-be-disclosed to employees or other persons entitled
to benefits under the plan; and
(g) Administering other da,, -try Plan and Component Plan operations in
accordance with the plans' terms and the procedures and regulations adopted by the Plan
Administrator or the Employer.
5.4 Reliance on Information Furnished by Others
The Plan Administrator or its delegates may rely on the direction, information, or
election of a Participant as being proper under the Plan and will not be responsible for any act
or omission due to a Participant's direction or lack thereof. The Plan Administrator or its
delegates will also be entitled,to the extent allowed by applicable law, to rely conclusively on
all tables, valuations, certificates, opinions, reports and other information furnished by the
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Employer, actuaries, accountants, attorneys or other experts employed or engaged by the Plan
Administrator or the Employ.
5-35.5 Indemnification by
When m^i,;,,g a detef., roan,, or ^i,,,,lati njo the Plan Admin st-.,t,,r and anyone
.ting on its behalf may rely on ififefmation famished by ^ Par-t eipa- t, extent permitted bX
applicable law, the Employer, aet-u -ies, aeeettatants,i^r-eettasel agrees to the Plan, and by the
Component
'T'i'e Employer will indemnify and reimburse , to the full extort ^ ,.,hied by law, all
beardBoard members, Administrative Committee members, and per-sons to W>^,,m P!
^,a,.V iaistr-a4i e duties have been deleg to the Employer's employees who perform any plan
administration functions, for all expenses, losses, and liabilities arising from anM act or
omission in the management of the Plan„*hv,.tha s,ue, ex, cept expenses,losses,and liabilities
as may estiltresulting from thesuch persons' gross negligence or willful misconduct
per-sons.
The Employer may self insure or purchase insurance for all Plan fiduciaries employed
by the Employer— and for all persons who are trustees, employees, officers, or agents of the
Employer — to cover the potential liability of those persons with respect to their actions and
lack of aetio ^or omissions concerning this Plan or the Component Plans.
545.6 DiscretionM Power of Plan Administrator
All discretion conferred upon the Plan Administrator will be absolute. However, no
discretionary power conferred on the Plan Administrator will be exercised in a manner that
causes discrimination in favor of Highly Compensated Employees.prohibited by the Code or
the Treasury regulations. The dis tion Fy power-of Plan Administrator will be- sea
exercise its discretionary power in a non-discriminatory manner with regard to all similarly
situated eleyeesEmployees or Participants.
5.7 Compensation of Plan Administrator
Unless otherwise determined by the Employer and permitted by pplicable law, any
Plan Administrator that is also an Employee of the Employer will serve without compensation
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for services rendered in such capacity,but all reasonable expenses incurred in the performance
of their duties will be paid by the Employer.
5.8 Inability to Locate Pam
If the Plan Administrator is unable to make payment to any Participant or other person
to whom a payment is due under the Plan because it cannot ascertain the identity or
whereabouts of such Participant or other person after reasonable efforts have been made to
identify or locate such person, then such payment and all subsequent payments otherwise due
to such Participant or other person will be forfeited following a reasonable time after the date
an.. such first became due.
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ARTICLE VI: CLAIMS PROCEDURES
6.1 QaimsClaim Procedures
The Plan Administrator sha4or its delegate(further references to Plan Administrator in
this section include its delegate) must notify each Eligible Employee of his or her entitlement
to receive benefits under this Plan and shall provide each Eligible Employee with appropriate
f fms o -M+"benefit application fef sueh benefits may be ffiffideforms.
Each Eligible Employeeindividual claiming a benefit under the Plan or a Component
Plan or his or her authorized representative ("Claimant") must complete and file such benefit
application forms with the Plan Administrator..to make a benefit claim.The Plan Administrator
shaUmust review all benefit claims. The Plan Administrator
notify the elaimantClaimant in writing of its decision on the claim within X30 days
of receipt of the application. If special circumstances require any extension of time (not to
exceed ninety{90}15 days) for processing the claim, the Plan Administrator must notify the
claimant in writing of the extension prior to the expiration of the initial ninety (90) 30-day
period.
Any The Plan Administrator's denial by the Plan ^a,,-inistr-4of a benefit claim€er
bene fits �'��" must be stated in writing and mailed to the Eligible Emplo Claimant. The
denial notice sha44must state clearly in language calculated to be understood by the ale
EmpleyeeClaimant:
(a) theThe specific reason(O or reasons for the Plan Administrator's decision;
(b) r esReferences to the pertinent Plan seetionsor Component Plan
provisions;
(c) ,. The additional material or information the Participant must provide Seto
enable the Plan Administrator oto reconsider the claim or pay the premiums from the
PaAieipant'son appeal; and
(d) theThe Plan's appea6appeal procedures.
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6.2 Appeal an Procedure
Wo appeal a,.,.,;r.,has be denied by the Plan n,a,.. mist+.,, the,.,,,;m ant,,may app
the denial within sixty(60) days after-r-eeeipt of wfit4en notiee thereof by sikmitting in wfififig
claim, a Claimant must submit a written appeal of the denied claim to the Director of
Administration a ,.o,,,,est f r within 180 days after receipt of the denial notice.
A elaiman Claimant may also submit a written statement of issuescomments documents,
records and other information and comments eoaeerni-agrelating to the claim and-mayqpon
request an oppoAunity, have reasonable access to review the Plan, any Component Dlanc ies
of all documents, records, and mother peAinent doettments. if sor-e"ested, these shall
made availzbleinformation relevant to the elaiman claim. The appropriate Plan fiduciary will,
within X30)days after it-&-receipt of a eepafthe request,make that information available
to the Claimant at a convenient location during regular business hours.
if a elaimant appeals, the final deeision, with the speeifie reasons thereof shall be
f endef ed in The appropriate Plan fiduciary(one that did not decide the original claim)
must review and 4ansmitted to the elaimant by eei4ified mail within sixty (60) days of F-eeeipt
of the Fequest for-feview.decide the Claimant's appeal in a reasonable time, but not later than
60 days after he or she receives the appeal, unless special circumstances require an extension
of time for processing_. If special circumstances require an extension of time, the appropriate
Plan fiduciary will provide written notice of the extension to the
elaima Claimant before the end of the original 60-day period,and a decision shall be rendered
as soon as possible, but not later than 120 days after receipt of the request for-r-eview.appeal.
If the appropriate Plan fiduciary denies the appeal, it must notify the Claimant in writing of its
decision in writing by certified mail within 60 (120 if written notice of extension has been
given) days of receipt of the meal. The notice must be written in a manner calculated to be
understood by the Claimant and include: (a) the specific reason or reasons for the denial, and
(b) reference to the specific Plan provisions on which the denial is based. The decision of the
Dir-e,tor-of ^,,y,-inis4atio,, shat aappropriate Plan fiduciary will be final.
6.3 Agent for Service of Process
The agent for service of process for the Plan is:
Secretary of the District
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Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
6.4 Notices
Notices and documents relating to the Plan may be delivered, or mailed by registered
mail, postage prepaid, to the Administrative Committee in care of the Finance Manager,
Central Contra Costa Sanitary District, 5019 Imhoff Place, Martinez, CA 94553. Any notice
required under the Plan may be waived by the person entitled to notice.
6.5 Evidence
Evidence required of anyone under the Plan may be by certificate, affidavit, document
or other information which the person acting on it considers pertinent and reliable. The
evidence may be signed, made or presented by the proper party or parties.
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ARTICLE VII: MISCELLANEOUS
7.1 Component Plans Control
The detailed coverages provided under aeach Component Plan are set forth in that
Component Plan;in case of any conflict between the terms of this Plan doetiment and the terms
of a Component Plan, the terms of the Component Plan sha44will control.
Cei4ifiea4esEvidences of Coverage or summaries setting forth the details of the
coverages provided under the Component Plans have been of will be distributed to Eligible
Employees enrolled f r,.,ver-age under the Component Plans.
7.2 Sta4e of u-isdiefie
7.2 Governing Law
Except to the extent preempted by federal law, this Plan and each
Component Plan and all rights and duties thereunder shall be governed, construed, and
administered in accordance with the laws of the State of California.
7.3 Severability
If any provision of the Plan or a Component Plan is held invalid or unenforceable, its
invalidity or unenforceability shall not affect any other provisions of the Plan or Component
Plan, and the Plan shallor Component Plan will be construed and enforced as if such provision
had not been included herein.
7.4 Plan Not An Employment Contract
This Plan is not an employment eepAfaet. Any employment rights of a Elig;1.10
Emplo ee are neither- ealafged nor- diminished by the estab4ishment of the Plan or- any
Component Plan.
Neither this Plan nor any of the Component Plans is intended to be or will be construed
as constituting a contract or other arrangement between any Employee and the Employer
the effect that such Employee will be employed for a specific period of time.
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7.5 Non- Assi ng ability of Rights
Except as otherwise expressly permitted by a Component Plan, theifiter-eAsrdht of
per-sonsany person entitled to benefits under a Component Plan a-Fewill not be subject to their
debts or other obligations and, except as may be required by the tax withholding provisions of
the Code or any state's ineemetax a-ctlaws, may not be voluntarily or involuntarily sold,
transferred, alienated, assigned, or encumbered. Any attempt to do so will not be recognized,
except to the extent expressly permitted by a Component Plan or required by applicable law.
7.6 Pqyment
When any person entitled to benefits under the Plan or Component Plan is under legal
disability or in the Employer's opinion is in any way incapacitated so as to be unable to manage
his affairs, the Employer may cause such person's benefits to be paid to such person's legal
representative for his benefit,or to be applied for the benefit of such person in any other manner
that the Employer may determine.
X7.7 Mistaket
In the event of a mistake of faetas to the eligibility or misst temei#participation of
fan Employee, the allocations made to the account of any Participant, or the amount
of benefits paid or to be eeffeete when—paid to a Participant or other person, the Plan
Administrator will,to the extent it beee 'es kne«Hdeems administratively possible and preper
adjustpermitted under applicable law,allocate,withhold,or otherwise adjust amounts that
in its judgement will provide the Participant or other person the credits or distributions he or
she is properly entitled to under the Plan or Component Plan. made by reason thereof. The
Employer shallwill not be liable in any manner for any mistake that results from a
determination of fact made in good faith.
7.7 Cost of n a,,.mister-i, the Dl.,,,
7.8 The ewes ars Expenses
All reasonable expenses incurred by the Employer- in administering the Plan shall be
paid and the Component Plans are currently paid by forfeitures to the extent provided in
Section 5.3 of the Health FSA with respect to Health FSA benefits and Section 5.3 of the
DCAP with respect to DCAP benefits, and then by the Employer.
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7.8 SepatqfeTUns
7.9
Compliance With Code Seel ons 12-5-and
Other
Applicable Laws
This Plan; and eftehthe Component Plans are intended to meet all applicable
requirements of the Code and of all TreasMreregulations issued thereunder. This Plan and the
Component Plans will eenstitulebe construed, operated, and administered accordingly, and in
the event of any conflict between M part, clause, or provision of this Plan or the Component
Plans and the Code,the provisions of the Code will be deemed controlling, and any conflicting
part, clause, or provision of this Plan or the Component Plans will be deemed superseded to
the extent of the conflict. In addition, the Plan and the Component Plans will comply with the
requirements of all other applicable laws.
7.10 No Guarantee of Tax Consequences
Neither the Plan Administrator nor the Employer makes any commitment or guarantee
that any amounts paid to or for the benefit of a ."Participant under this Plan or a
Component Plan will be excludable from the Participant's ,gross income for federal, state, or
local income tax purposes. It will be the obligation of each Participant to determine whether
each payment under this Plan is excludable from the Participant's gross income for federal,
state, and local income tax purposes and to notify the Plan Administrator if the Participant has
any reason to believe that such payment is not so excludable.
7.11 Insurance Contracts
The Employer will have the right to(a)enter into a contract with one or more insurance
companies for the purposes of providing benefits under the Plan or a Component Plan, and(b)
to replace any of such insurance contracts.Any dividends,retroactive rate adjustments,or other
refunds of any_type that may become payable under any such insurance contract will not be
assets of the Plan or Component Plan, but will be the property of and be retained by the
Employer, to the extent permitted under applicable law.
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ARTICLE VIII: AMENDMENT AND TERMINATION
8.1 Amendment
Stibjac4The Emplo, e�y, subject to any oblig 4ienapplicable legalquirement to
meet and confer with employee greups—1representatives, amend all or any part or-all of the Plan
or of-any Component Plan may be amended in writing by the Employer- at any time or from
time to time; any eentfaet providing inswed ben and for any reason by resolution of the
Board or by an person or persons authorized by the Board to take such action.
8.2 Termination
The employ maybe so amended by the Em,.1..y subject to anygpplicable lei
requirement to meet and confer with
may be removed or ehanged by the Employer at any time and ffem time to time.
Any part or all of employeepresentatives,terminate the Plan or any Component Plan
may be r-etfeaetively amended in writing by the Employer-if sueh amendment has the effeet of
an expansion of the eligibility,paftieipa4ion of benefit pr-ovisions ,in whole or in part, at
M time and for any reason by resolution of the Board or by an person or persons authorized
by the Board to take such amendment does not dise,.;,.v,inate in favor of oe uigh4y
Compensated EffTleyees. in addition, such retfeaetive amendment must eentintie in effeet
no less than a�welve eofiseetAive mont-h pefied after- its adoption. Speeifie notiee pr-oee"r-es
Any amendment to the Plan or-any Component Plan pr-ior-to the eempletion of a twelve
action. No termination shall operate to reduce the amount of any benefit payment otherwise
payable under the Plan for ehan es ineurred prior-to the eff etive date of stleh ae„affle„*
9.2 Tem+inatien
Any Component Plan may be tefminated at a*y time by aetion of the Employer- i
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subsequent Memoi:andttm of Under-standing of eaeh employee r-epr-esenta4ion unit eliminates
a*y benefit.,.,..r en4 other-wise,.,.,able under the pla or Component Plan for charges incurred
prior to the effective date of such termination E)r s4stittAi r
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Notwithstanding the above, the Employer-r-esefves the right to terminate or-amend
Plan at a-Ry time if the Plan is deemed fiat to be in eomplia-nee with Appheable 1
ARTICLE M AMENDMENT OF THE SECTION 125 CAFETERIA PLAN
ARTICLE IX: EXECUTION
As evidence of its adoption of this amendment of this eetien 125 Caieteri and
restatement of the Plan, the Central Contra Costa Sanitary District has caused this instrument
to be signed by its e ffieefs thef:ettnde- duly authorized hel=eteofficers on this N'4 day of
Deeembef2012. 2019.
By:
President, Board of Directors
For: THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Waine ' eehf eKatie Young„ Secretary of the District
(Print Name and Title)
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APPENDIX A
Component Plans
To
Central Contra Costa Sanitary District
Section 125 Cafeteria Plan
As of the Effective Date, the following are the Component Plans included in the Plan:
1. The Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan
2. The Central Contra Costa Sanitary District Dependent Care Assistance Plan
. The Central Contra Costa Sanitary District Premium Conversion Plan
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Currently Taxable Benefits
T-Feated as Cash
The following benefits shall be tf!eated as an eleetion of eash undet!this Plan and taxab
the Par-tieipant in aeoeManee with Pr-opesed Treasury Regulation Seetion 1.125 2, QA 4(b) and
i. individual Tenn Life insufaiiee
$75> >
btit
promptly to iaitia4e eavefage. This ift addition to the ifistir-anee presently pfovided by
the Distr-iet's gr-o" eovefage.
inust submit evidenee of payment of metnber-ship fees.
Z Tuition Dv.w,l.,,,-c.omov,4
order-to r-eeeive r-eimbtifsemefit.
4 bone T-efm Gar-e instir-anee
eligibility r-equir-emetits may apply.
4.3.
of employment prior- to the end of the Plan Year-, to the extent the Efnployer- has dwing
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stieh Plan Year-paid pr-emittms for-a"of gie�qr-egoiag taxable befiefits ifi an afnettat whieh
exeeeds the amount of Salary Reduetion eentr-ibutions made by the Paftieipanl for- sueh
Plan Year-, the Effipleyer- shall withhold stieh evefpayment ffom the Pai4i6pant's final
payeheel.
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ATTACHMENT 2
CENTRAL CONTRA COSTA SANITARY DISTRICT
PREMIUM CONVERSION PLAN
(A Component Plan of
the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan)
Amended and Restated
Effective July 1, 2019
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TABLE OF CONTENTS
Page
INTRODUCTION ...........................................................................................................................1
ARTICLE 1: DEFINITIONS ...........................................................................................................2
ARTICLE 11: SCOPE OF THE PLAN............................................................................................4
ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION......................................................5
ARTICLE IV: PLAN FUNDING....................................................................................................8
ARTICLE V: BENEFITS..............................................................................................................10
ARTICLE VI: GENERAL PROVISIONS....................................................................................12
ARTICLE VII: EXECUTION.......................................................................................................13
APPENDIXA............................................................................................................................. A-1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
PREMIUM CONVERSION PLAN
INTRODUCTION
Effective as of january 1998july 1, 2019, the Central Contra Costa Sanitary District
( the "Errtployer):Lbereby amends and restates the Central Contra Costa Sanitary
District Premium Conversion Plan( the"Premium Conversion Plan)")to allow Eligible
Employees of the Employer to elect to pay their share of the cost of the Employer Group Health
P4anPlans on a pre-tax basis, as provided herein and in accordance with the terms of the Central
Contra Costa Sanitary District Section 125 Plan cher-einafte,.Seel o '''c D'ap'.Cafeteria Plan(the
"Section 125 Plan"). The Employeroriginally adopted the Section 125 Plan effective May 1, 1989.
The Employer most recently amended and restated the Plan effective January 1998.
This Premium Conversion Plan is a Component Plan of the Section 125 Plan and, except
to the extent otherwise expressly provided herein, is governed by the rules and regulations of the
Section 125 Plan. The Premium Conversion Plan is intended to convert employee premiums to
employer paid premiums within the meaning of Section 106(b) of the Code and to meet the
requirements of any other applieable-provisions of t4eapplicable law.
Appendix A,Me wrEmployer Group Health Plans, attached to this Premium Conversion
Plan is incorporated herein by reference and is a part hereof and may be amended without necessity
for other amendment afto this Premium Conversion Plan.
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ARTICLE I: DEFINITIONS
The definitions in the Section 125 Plan apply to this Component Plan as well as the
following additions.definitions specific to the Premium Conversion Plan:
1.1 Dependent
Any individual who meets the definition of Dependent in a Menibef Plan undef!whieh the
Eligible Employee has a benefit entitlement.
1.2 Eligible Employee
An empleyee who is eligible to par-tieipate in at least one of the Member Plans and w
An individual who with respect to the Participant is: a) a dependent as defined in Code
section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof; (b)
child(as defined in Code section 152(f)(1))who as of the end of the calendar year has not attained
age 27; and(c)a child to whom Code section 152(e)gpplies(regarding certain children of divorced
or separated parents who receive more than half of their support for the calendar year from one or
both parents and are in the custody of one or both parents for more than half of the calendar).
1.2 Effective Date
July 1, 2019, the date this amendment and restatement of the Plan is effective.
1.3 Eligible Premium Expense
AnyA premium or other amount an Eligible Employee must pay for
coverage under an Employer Group Health Plan.
1.4 Merl wEmployer Group Health Plan
Aseparate written plan-A plan that the Employer maintains for Employees and their
eligible dependents, which provides health benefits through a group insurance policy or self-
funded benefit plan(e.g., medical, dental and vision benefits). The Employer Group Health Plans
currently maintained by the Employer
benefits. Stleh Member-Plans are listed in Appendix A, whiek. The Employer may substitute, add,
subtract, or revise the menu of such plans or the benefits, terms and conditions of an.. such
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at any time.Any such substitution,addition,subtraction or revision will be aniende communicated
to Participants and will automatically be incorporated by reference under the Premium Conversion
Plan. The Emplo,, e�y amend Appendix A without necessity for mother amendment efto this
Premium Conversion Plan. The *e:ms of the plan doetff eats of sueh sueplans shall govem The
operation of the Member- Plans, and each Employer Group Health Plan will be governed by the
terms of the Employer Group Health Plan and, in Easethe event of ffiwa conflict between those
terms and the terms of the ARo.,-ber Plans and this Premium Conversion Plan or the Section 125
Plan, the terms of the Mem1wEmployer Group Health Plan sh-allwill govern.
1.5 Memcee,.Plan PTemitim. PTen �
The amount an Eligible Employee is r-equir-ed to pay as a eendition of eever-age ttader
Member-Plan(s) to w-hieh an employee and Pependen4s, if any, are enti
1.5 Participant
An individual who has met the eligibility requirements under Section 3.1, elected to
participate in accordance with Section 3.2, and whose participation has not terminated under
Section 3.3.
1.6 Section 125 Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan.-, as amended.
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ARTICLE II: SCOPE OF THE PLAN
Subject to the conditions and limitations set forth in this Premium Conversion Plan
errand in the Section 125 Plan, each Participant twill have his or her share of Eligible
Premium Expenses paid under the Premium Conversion Plan in lieu of an equal amount of
Compensation.
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ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION
3.1 Eligibili
3.1 Commencement of any-of4he
Member-P'.,,,s „Participation
Each Participant in the Premium Conversion Plan as in effect before the Effective Date
shall be el' who has not elected to terminate coverage under the Premium Conversion Plan
will remain a Participant. On and after that date, an individual will become a Participant in the
Premium Conversion Plan on the first day of the month after her or she becomes an Eligible
ble
Employee or, if later, when he or she makes a timely election to participate in the Premium
Conversion Plan provided tha4 any sueh Eligible Employee has not made
,
an lection to cease eoverage under- all applieable Member-Plansin accordance with Article III of
the Section 125 Plan.
(a) Othef Eligible Employees shall be eligible to pat4ieipate in the Pr-emitnn
Conver-sion Plan following date of hire, provided that the empleyee satisfies the eligibil4y
of a4 least one of the Membef Plans.
3.2 Election to Participate
_Subject to the conditions and limitations set forth in thmisthe Premium Conversion Plan
doetiment ander the Section 125 Plan, each Eligible Employee may elect to have his or her
r,rori.be f Plan Dr-emi nt Eligible Premium Expenses paid under the Premium Conversion Plan in
lieu of an equal amount of eempensatienCompensation. An Eligible Employee can elect to
participate in the Premium Conversion Plan by electing(a)to receive benefits under the Employ
Group Health Plans described in Appendix A; and (b) to pay for his or her share of the
contributions for those benefits on a pre-tax Salary Reduction basis or with Employer Credits.
Unless an exception applies (as described in Section 3.6 of the Section 125 Plan), the election is
irrevocable for the duration of the Period of Coverage to which it relates. Despite any contrary
Premium Conversion Plan provision,benefits under the Employer Group Health Plans are subject
to the terms and conditions of the Group Health Plans, and no changes can be made with respect
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to such plans (such as mid-year changes in election) if such changes are not permitted under the
applicable Employer Group Health Plan.
3.3 if aPat4ki t ; on a paid Authorized Leave of and his or-mer Salary
Reduetion-elections remain effeetive, s(he) shall centinueTermination of Participation
A Participant's participation in the Premium Conversion Plan will terminate upon the
earliest of.
(a) the termination of the Premium Conversion Plan or the Section 125 Plan;
(O(b) the Participant's permitted election not to participate in the Premium
Conversion Plan..; or
(c) the Participant ceases to be an Eligible Employ
3.3 Termination of ,
participation in this Premium Conversion Plan shallwill automatically revoke the Participant's
elections. Benefits under any Group Health Plan will terminate on the last day of the Plan Year,
An empleyee shall ne longer-be a Pa44i6pant under-the Plan if the Memer-andam of Undetzstanding
as of the dates) specified in the Plan expires
without renewal or- an extension agr-eement, or- if the s4sequefit Memer-andtim of Under-standing
of eaeh o ,.laye0 „t„4;,.,, unit eliminates sueh sueComponent-Pla
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D einst.4efne„t of F or Group Health Plan. If revocation occurs under this Section 3.3,
no new election may be made b,, s�Participant during the remainder of
the Plan Year unless otherwise permitted under the Plan.
3.4 Resumption of Participation
A former Participant's participation in the Premium Conversion Plan sh"will be reinstated
eensistein accordance with the pfevisieiis of Section 2.43 of the Section 125 Plan.
3.5 Leaves of Absence
See Sections 2.4 and 2.5 of the Section 125 Plan.- for rules regarding the effect of a leave
of absence on a Participant's participation in the Premium Conversion Plan.
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ARTICLE IV: PLAN FUNDING
4.1 Establishment of Accounts
Section 3.1 of the Section 125 Plan, which provides for the establishment of
aeeetintsAccounts and sub aeeatints shall Subaccounts, will also apply to tlristhe Premium
Conversion Plan.
4.2 Employer Credits
Each Eligible Emplo. e�y, in accordance with Article III of the Section 125 Plan, elect
to apply any Employer Credits to his or her Account under Section 3.2 of the Section 125 Plan to
pay Eligible Premium Expenses under the Premium Conversion Plan.
4.3 Salary Reduction Credits Eaeh Paftieipant must .,take
Each Eligible Emplo. e�y, in accordance with Article III of the Section 125 Plan, make
a timely written Salary Reduction election to have his or her annual Compensation reduced, but
not below zero, by all or a portion of the amount of ,womb,,- Pla Eli ig ble Premium sueh
empleyeeExpense he or she is required to pay of a pet4 e ther-ee for coverage under the Employ
Group Health Plan(s). The amount of Salary Reduction will be credited to the Participant's
aeeettatPCP Subaccount until it is paid out for such coverage. The amount of the Salary Reduction
contribution for a Participant's portion of the Eligible Premium Expense is equal to the amount set
forth by the Employer in the annual enrollment materials. In the event an Eligible Employee does
not fequestfails to timely elect to participate in d+isthe Premium Conversion Plan, s(he)-skall or
she will receive his or her Compensation without any reduction for t+isthe Premium Conversion
Plan, and will be required to pay any required Member- PlanEliibg le PremiumExpense through
after-tax payroll withholding.
44.4 Time for Salafy Reduefiens te BeginMaking Elections
', The timing of an Eligible Employee's Salary Reduction
election to participate in the Premium Conversion Plan shall begin an the dateis ,governed by
Section 3.5 of the first payfell pefied of theSection 125 Plan
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The Salafy Re&etiea for- an indivi"al hired after- t4e beginning of the Plan Year shall
begin as seen as pr-aefieable.
4-.34.5 Change or Revocation of Salary Ao.a,,etio., Elections
A Participant's Salary Reduction election for any Plan-Y-earPeriod of Coverage may not be
changed or revoked after the first payroll period to which it applies,except under the circumstances
described in Section 3.6 of the Section 125 Plan of, additionally,
below..
(a) The sttbstantial iner-ease in the Member--Plan Pr-emium tinder-a Member-Pla
on a pfaspeetive basis eover-age undef another- Employer- maintained health plan with simil
eevrage
('�ne signific-ant etiftailment or-eessmien of eover-ageunder- a Member-P ars
on a pr-espeetive basis eover-age under- another- -Empleyer- maintained health plan with sim
eevrage
44.6 Plan Administrator's Power to Modify or Suspend Elections
Section 3.10 of the Section 125 Plan_,which previlesdescribes the circumstances in which
the Plan Administrator Chas the power to modify or suspend Salary Roth,,,*.,, eleetions
shaffReductions, will also apply to this Premium Conversion Plan.
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deef!eased during the Plan Year,
ARTICLE V: BENEFITS
5.1 General Rule
The-provisions of Section 4.1 of the Section 125 Plan document twill also apply to this
Premium Conversion Plan.
5.2 Eligible Premium
Expenses
Amounts credited to a Participant's Pr-e ,:,,m Gaiwer-sior Plan ik aeeOU*t sha! PCP
Subaccount will be applied to pay the amount of any Member-Pla Eligible Premium Expense for
employee and>,opo„ao„*Employer Group Health Plan coverage for the Participant and his or her
Spouse and Dependents otherwise payable by the Participant during the DPeriod of
Coverage under the applicable Member-Plaftshmployer Group Health Plan.
5.3 Limit on the Amount of Salcey Reductio to be- Credited to the
!''l.,,yersio Plan PCP Subaccount
The annual Salary Reduetion of amount credited to a
Conversion Plan shat Participant's PCP Subaccount must not exceed the ��m�total of all
Member- Plan Premium Eligible Premium Expenses under all Mex WFEmployer Group Health
Plans in whiehcovering the Participant, peuse and his or her Spouse and Dependents, ' ,_Lor
the Period of Coverage.
5.4 Benefits Provided Under the Employer Group Health Plans
Group health benefits will be provided by the Employer Group Health Plans in accordance
with their governing documents, and not this Plan. The types and amounts of benefits, the
requirements for participating in the Employer Group Health Plans, and the other terms and
conditions of coverage and benefits of such plans are eeveredset forth in their ,governing
documents. All claims to receive benefits under the Employer Group Health Plans will be subject
to and governed by the terms and conditions of the Employer Group Health Plans and the rules,
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regulations, policies, and procedures adopted in accordance with those plans, as may be amended
from time to time.
5.5 Group Health Benefits; COBRA
Notwithstanding any provision to the contrary in this Plan, to the extent required by
COBRA,a Participant and his or her Spouse and Dependents,as applicable,whose health coverage
terminates under an Employer Group Health Plan because of a COBRA qualifying in event who
is a qualified beneficiary as defined under COBRA), will be given the opportunity to continue on
a self-pay basis the same health coverage that he or she had under the applicable Employer Group
Health Plan the day before the qualifying event for the periods prescribed by COBRA. Such
continuation coverage will be subject to all conditions and limitations under COBRA.
Contributions for COBRA coverage under an Employer Group Health Plan may be paid
on a pre-tax basis for current Employees receiving taxable compensation(as may be permitted by
the Plan Administrator on a uniform and consistent basis, but may not be prepaid from
contributions in one Plan Year to provide coverage that extends into a subsequent Plan Year)where
COBRA coverage arises either (a) because the Employee ceases to be eligible because of a
reduction in hours; or (b) because the Employee's Dependent ceases to satisfy the eligibility
requirements for coverage. For all other individuals (e.g., Employees who cease to be eligible
because of retirement, termination of employment, or layoff), contributions for COBRA coverage
for Employer Group Health Plan benefits will be paid on an after-tax basis (unless as may be
otherwise permitted by the Plan Administrator on a uniform and consistent basis, but may not be
prepaid from contributions in one Plan Year to provide coverage that extends into a subsequent
Plan Year).
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ARTICLE VI: GENERAL PROVISIONS
6.1 Administration of the Premium Conversion Plan
The Premium Conversion Plan shAwill be administered in accordance with the provisions
set forth in Article V of the Section 125 Plan.
6.2 Claims Procedures
The claims and appeals procedures set forth in Article VI of the Section 125 Plan shallwill
also apply to this Premium Conversion Plan, provided that the claims for Employer Group Health
Plan benefits will be administered in accordance with and claims procedures for the Employer
Group Health Plans as set forth in their governing plan documents.
6.3 Miscellaneous Provisions
of the Premium!-'..,,yersio Plan The miscellaneous provisions described in Article VII of
the Section 125 Plan sh"will also apply to this Premium Conversion Plan.
6.4 Amendment and Termination
Subject to Article VIII of the Pr-emit,,.., Goiwer-sio Section 125 Plan-T-he, the Employer
may amend or terminate this Premium Conversion Plan in whole or in part at
any time, subjeet to the tenns of Artiele N1111 of the Seetion 125 Plan. in addition,
Plan is tefminated and replaeed with another plan that provides similar benefits, Salary Reduetion
a-metints that wer-e designated te pay Member- Plan Pr-emitims for- the terminated plan will be
applied instead to pay Pr-emitims for-the new plan. if a Member-Plan is teffflifiated and not f:epla
with anethef plan tha4 provides similaf benefits, Salafy Reduetion amauflts will tefminate as e
end of the menth,rentin whieh the Member ber Pla is tefmin to . and for any reason by resolution of the
Board or by any person or persons authorized by the Board to take such action.
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Alember Plans
To e
Central Contra Costa Sanitary Distrie
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AMENDMENT OF T-14E PREMIUM CONVERSION PLAN
ARTICLE VII: EXECUTION
As evidence of its amendment of this amendment and restatement of the Premium
Conversion Plan,the Central Contra Costa Sanitary District has caused this instrument to be signed
by its offieefs tner- el—duly authorized l eofficers on this day of
i999 2019.
By:
President, Board of Directors (Date)
For: THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Katie Young, Secretary of the District
(Print Name and Title)
{�13
Approved as to f4m:
Ken4on L. Alm
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APPENDIX A
Employer Group Health Plans
To the
Central Contra Costa Sanitary District Eetinsel
Premium Conversion Plan
As of the Effective Date, the following Employer Group Health Plans are offered under the
Premium Conversion Plan:
1. Health Insurance under the Public Employees' Medical and Hospital Care Act("CalPERS
Health"
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ATTACHMENT 3
CENTRAL CONTRA COSTA SANITARY
DISTRICT HEALTH FLEXIBLE SPENDING ARRANGEMENT PLAN
(A Component Plan of
the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan)
Amended and Restated
Effective jantia July 1, 204-3
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2019
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TABLE OF CONTENTS
Page
INTRODUCTION...........................................................................................................................1
ARTICLE I: DEFINITIONS ...........................................................................................................2
1.1 Dependent................................................................................................................2
1.2 Effective Date..........................................................................................................3
1.3 Eligible Medical Expense........................................................................................3
1.4 Grace Period.............................................................................................................3
1.5 Health FSA...............................................................................................................3
1.6 Health FSA Subaccount...........................................................................................4
1.7 HIPAA.....................................................................................................................6
1.8 Participant................................................................................................................6
1.9 Run-Out Period........................................................................................................6
1.10 Section 125 Plan ......................................................................................................6
ARTICLE II: SCOPE OF THE PLAN............................................................................................7
ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION......................................................8
3.1 Eligibility to Participate...........................................................................................8
3.2 Election to Participate..............................................................................................8
3.3 Termination of Participation....................................................................................8
3.4 Resumption of Participation ....................................................................................9
3.5 Leaves of Absence...................................................................................................9
ARTICLE IV: PLAN FUNDING..................................................................................................10
4.1 Establishment of Accounts ....................................................................................10
4.2 Employer Credits...................................................................................................11
4.3 Salary Reduction Credits.......................................................................................11
4.4 Time for Making Salary Reduction Elections .......................................................11
4.5 Change or Revocation of Elections........................................................................11
4.6 Limit on Amount Credited to Health FSA.............................................................12
4.7 Plan Administrator's Power to Modify Elections..................................................12
ARTICLE V: BENEFITS..............................................................................................................13
5.1 Health Care Reimbursement..................................................................................13
5.2 Maximum Reimbursement Available; Uniform Coverage....................................13
5.3 Forfeitures..............................................................................................................13
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5.4 Grace Period...........................................................................................................14
5.5 Receiving Health Care Reimbursement.................................................................15
ARTICLE VI: POST-PARTICIPATION REIMBURSEMENTS; COBRA.................................16
6.1 General Rule ..........................................................................................................16
6.2 COBRA Continuation Coverage............................................................................18
ARTICLE VII: CLAIMS PROCEDURES....................................................................................22
7.1 General Reimbursement Procedures......................................................................22
7.2 Substantiation of Expenses....................................................................................24
7.3 Claims and Appeals Procedures.............................................................................25
ARTICLE VIII: GENERAL PROVISIONS .................................................................................26
8.1 Administration of the Health FSA.........................................................................26
8.2 Miscellaneous Provisions.......................................................................................26
8.3 Amendment and Termination of the Health FSA..................................................26
8.4 Coordination of Benefits Under the Health FSA...................................................26
8.5 HIPAA Compliance...............................................................................................27
ARTICLE IX: EXECUTION ........................................................................................................28
APPENDIXA ........................................................................................................................A-1
APPENDIXB .........................................................................................................................B-1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
HEALTH FLEXIBLE SPENDING ARRANGEMENT PLAN
INTRODUCTION
The Central Contra Costa Sanitary District ( the "Employer)" hereby amends
and restates the Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan
( the "Health FSA ")effective laffffiafyJuly 1, X 2019. The Health FSA P4an-is
intended to qualify as a bealtkself-insured medical reimbursement plan under Seeti-aiisection
105(b) of the intemalInternal Revenue Code of 44"1986, as amended( the "Code)-,:I
and is to be interpreted in a manner consistent with the requirements of Seetiei3section 105(b). The
purpose of the Health FSA-P4an is to allow Eligible Employees of the Employer to elect to receive
health care reimbursement benefits for medical care as defined in Seetiei3section 213(d) of the
Code which are excludable from gross income under Seetia section 105(b) of the Code as
provided herein and in accordance with the terms of the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan( the "Section 125 ',' Plan" . The uealt>, FSA
wasEmployer originally adopted the Health FSA effective May 1, 1989 and was pfeviettsly. Since
then, the Emplo. e� amended the Health FSA on various occasions. The Employer most
recently amended and restated the Health FSA effective April 1, '°°5, January 1, 1998,
1, 2003, OEteber- 17, 2003 and jwmafy-TZ0442013.
This Health FSA P4avis a Component Plan of the Section 125 C Plan and, except
to the extent otherwise expressly provided herein, is governed by the rules and regulations of the
Section 125 r' a-Plan.
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ARTICLE I: DEFINITIONS
The definitions in the Section 125 ' Plan apply to this Component Plan as well as
the following additionsdefinitions specific to the Health FSA:
1.1 Dependent
Any individual who falls within the definition of Dependen4 in Seetion 152 of the Code
ineluding btit not limited to:
(a) n Pa Aieipant's Speuse net legally separated from the Partie nt;
Eaehofa rurrrCipz'1nt's C inrreiiwho has ivczxrcainccrthe—age-m�2-6;
age 19 andvvho eentinues to be dependent on the Participant for- stippeA will eontintie to qualify
as a Dependent aftef stieh ehild has attained the ., of 76
1.2 Eligible Empleyges
Any employee of the Employer- r-epr-esented by the Management Stipport Cenfiden4ial
Group or- the Management Gt!oup of the Genefal > >
and any
Health Flexible Spending Affa-ngement.Any pefsen who peffafffis setwiee for-the Ewleyef sel
as a-n independent eantr-aeter-shall net be an Eligible Employee,
1.3 Expefienee-Gai-a
An individual who with respect to the Participant is (a) a dependent as defined in Code
section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(l)(B) thereof; (b)
child ,as defined in Code section 152(f)(1))who as of the end of the calendar year has not attained
age 27; and(c)a child to whom Code section 152(e)applies(regarding certain children of divorced
or separated parents who receive more than half of their support for the calendar,year from one or
both parents and are in the custody of one or both parents for more than half of the calendar).
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1.2 Effective Date
July 1, 2019, the date this amendment and restatement of the Plan is effective.
1.3 Eligible Medical Expense
An expense incurred during the Period of Coverage or related Grace Period for which the
election is in force by a Participant or his or her Spouse or Dependent for"medical care"as defined
in Code section 213(d)(including,for example,amounts paid for hospital,doctor,and dental bills),
but only to the extent the Participant or other person incurringthe certifies that he or she
has not been reimbursed (and that he or she will not seek reimbursement) for the expense under
M other plan covering health benefits. For this purpose, a medical care expense is incurred at the
time the medical care or serviceig ving rise to the expense, not when the Participant is formally
billed, charged, or pays for the medical care. "Eligible Medical Expense" excludes: (a) premium
payments for other health coverage, including but not limited to health insurance premiums for
Mother plan (whether or not sponsored by the Employer); (b) any expense incurred for drugs or
medications obtained without a prescription, other than insulin; (c) any expense incurred for
cosmetic surgery or other similar procedures, unless the surgery or procedure is necessary to
ameliorate a deformity, arising from, or directly related to, a congenital abnormality, a personal
injury resulting from an accident or trauma, or disfiguring disease; (d)long-term care services; and
(e) any other expense excluded under Appendix A or otherwise under the terms of the Plan.
1.4 Grace Period
The exees iperiod that begins immediately following the close of D o,,hied Premiums paid-
and
aidand ineeme (if any) ora Plan Year under the Health FSA D'"" evef the and that ends on the day
that is two months plus 15 days following the close of that Plan Year.
4,41.5 Health FSAPlan's
for the Dl.,,, Year.
1.5 Health Flexible Spendine AtTaneement Man
The Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan.
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1.6 Health FSA Subaccount
The bookkeeping entry to record amounts withheld from a Participant's Compensation and
that are available for a future reimbursement of a Participant's Eligible Medical Expenses. No
money will actually be allocated to or held under any individual Participant's Health FSA
Subaccount. A Health FSA Plan is a benefit program thaides Eligible Employees wig
Subaccount will be maintained by the
Plan Administrator for accountingpurposes, and will not be representative of any identifiable trust
assets. No interest will be credited to or paid on amounts credited to the Participant's Health FSA
Subaccount.
1.6 Eligible Nledieal
(a) when the Paffieipant is fefmally billed er-ehafged fef or-pays fef-the fnedieal ear-e;
6f
(e) during t4e Period of Cover-age if stieh ex. euffed after-paffieipation has
1.7 Maxinvum Reil tbtff&effyent
of Cover-age,
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1.8 Period of Cove
The twelve fnonth period eoiaeidei4 with the Plan Yea-F dtwing whieh Qtlalif�ifig Medieal
Expeases inetiffed by a Pai4ieipaiit afe eligible for-eovefage ttiidef the Health FSA-Plan. The Pefied
of Cover-age tinder-this Health FSA Plan shall be the twelve moiith pet:iod beginning jwma4=y 1 and
The Period of Gover-age for- a PaAieipant shall efid prior- to the end of the �Welve me
period if the t c`k"time, tepay Eq#ife
1.9 D,-o ; D.,..t
Employer- Credits. Also, the Paftieipa-n4s who have beeome eligible for- and eleeted GOBR-4
eofitifmatioa eover-age as otttliaed in Ai4iele V! of this Health FSA Plan and who afe f:eqtiir-ed to
pay for-stieh COBRAeover-age piffstia,tet to Seetio ti G
paid for- over- the eettnter- dfugs and medieines provided ptir-stiant to a e
addition, nt fn >
Medieal Expenses will also ifielttde othef ever- the eotifiter-medieal items listed in Attaehfnent A,
Attaehfnent A fnay be amended 4om time to tifne by the Plan Adfninistfator-in its sole diser-efiofi
(1) for-..-hiel, the Pato;..;,-a*4 ; ofr-eifnbttr-sedp „t to any ed x..,1 ,.olie�7
m,
ra
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(2) whieh have been inetiffed and paid by or- on behalf of t4e Pai4ieipant or- -a
Paffieipant's Spotise of Dependent.
(b) Qualifying Medieal Expenses shall not ifieltide expenses not vefifiable ti
Seetion 6.1 of this Health FSA Plan,
(e) Qualifying Medieal Expenses shall not ifielude -premiums paid by a Pat4i6pant o
Dependent for-eover-age tinder-the Employer's or-a+vy othef employer's group health plan of under-
an individual plan.
the Pefiod of Cover-age tinder-the Health FSA Pla+v,
1.7 HIPAA
The Health Insurance Portability and Accountability Act of 1996, as amended.
1.8 Participant
An individual who has met the eligibility requirements under Section 3.1, elected to
participate in accordance with Section 3.2, and whose participation has not terminated under
Section 3.3.
1.9 Run-Out Period
The period during which expenses incurred during a Plan Year or the related Grace Period
must be submitted to be eligible for reimbursement. The Run Out Period for a Plan Year ends 90
days after the last day of that Plan Year.
4421.10 Section 125 C Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan:, as amended.
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ARTICLE II: SCOPE OF THE PLAN
Subject to the conditions and limitations set forth in this Health Flexible
FSA and in the Section 125 Cafeteria Plan,each Participant may elect
to receive payment under the Health FSA Plan-for his or her r��Eligible Medical Expenses
in lieu of an equal amount of cash.
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ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION
3.1 Eligibility to Participate
The eligibility provisions of Seetion 2.1 of the Seetien 125 Gafker-ia Plan shall app"
this Health FSA Plan.
Each Employee is eligible to participate in the Health FSA on the first day of the month
after he or she becomes an Eligible Employee. The Employee's commencement of participation in
the Health FSA is conditioned on the Employee timely electing to participate in the Health FSA
in accordance with Section 3.2.
3.2 Election to Participate
An Eligible Employees mayEmployee can elect to participate in the Health FSA Plan by
by electing in accordance with Article III of the Section 125 Plan (a) to
receive benefits in the form of reimbursements for Eligible Medical Expenses from the Health
FSA; (b) to pay his or her contribution for such Health FSA benefits on pre-tax Salary Reduction
Plan basis or with Employer Credits; and by(c) designating the amount of Salary Reduction and
Employer Credits to be allocated to the Health FSA Plan s„1. ace,,•„*Subaccount for the Period of
Coverage, as provided in Seotions 3.2 and 3.Section 3.4 of the Section 125 Plan. Unless an
exception applies ,as described in Section 3.6 of the Section 125 Cafeteria Pla Plan
election is irrevocable for the duration of the Period of Coverage to which it relates.
3.3 Termination of Participation
Pa-Aieipafien in this Heakh FSA Plan shall tefminate on the earlier- of the last day of the
period fef whieh the last Required Pr-emittm is paid by the PaAieipant to the Health FSA Plan of
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Reinstateff.or* of A Participant's participation in the Health FSA will terminate upon the
earliest of.
(a) the termination of the Health FSA or the Section 125 Plan;
(b) the Participant's permitted election not to participate in the Health FSA;
(c) the Participant ceases to be an Eligible Employee; or
(d) the last day of the Plan Year, unless the Participant elects to continue to participate
in the next Plan Year.
Termination of participation will automatically revoke the Participant's elections. If
revocation occurs under this Section 3.3, no new election may be made by such Participant during
the remainder of the Plan Year unless otherwise permitted under the Health FSA. A Participant
and his or her Spouse and covered Dependents may be entitled to COBRA coverage in accordance
with Article VI if coverage under this Health FSA is lost because of a COBRA qualify event.
vent.
3.4 Resumption of Participation
34Former Participants
FeEmin the Health FSA Plan shallwill be reinstated eensistein
accordance with the pfevisions of Section 2.43 of the Section 125 r Plan.
3.5 Leaves of Absence
See Sections 2.4 and 2.5 of the Section 125 Plan for rules regarding the effect of a leave of
absence on a Participant's participation in the Health FSA.
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ARTICLE IV: PLAN FUNDING
4.1 Establishment of Accounts
Section 3.1 of the Section 125 ' Plan which provides for the establishment of
aeeetmtsAccounts and siib ,,,.,ants shat Subaccounts will, as modified by this section, also apply
to thisthe Health FSA. The Plan Administrator will establish and maintain a Health FSA
Subaccount with respect to each Participant for each Plan Year or other Period of Coverage for
which the Participant elects to participate in the Health FSA, but it will not create a separate fund
or otherwise segregate assets for this purpose. The Subaccount so established will merely be a
recordkeeping account with the purpose of keeping track of contributions and determining
forfeitures under Section 5.3.
4.2 Employer-Gr-edi6
(a) Crediting of Subaccounts. A Participant's Health FSA Subaccount for a Plan Year
or other Period of Coverage will be credited periodically such with an amount equal
to the Participant's Salary Reductions and Employer Credits elected to be allocated to the
Subaccount.
(b) Debiting of Subaccounts. A Participant's Health FSA Subaccount for a Plan Year
or other Period of Coverage will be debited for any reimbursement of Eligible Medical Expenses
incurred during such Period of Coverage (or for reimbursement of Eligible Medical Expenses
incurred during any Grace Period to which he or she is entitled as provided in Section 5.4).
(c) Available Amount Not Based on Credited Amount. As described in Section 5.2,
the amount available for reimbursement of Eligible Medical Expenses is the Participant's annual
benefit amount, reduced by prior reimbursements for Eligible Medical Expenses incurred during
the Plan Year or other Period of Coverage; it is not based on the amount credited to the Health
FSA Subaccount at a particular point in time. Thus, a Participant's Health FSA Subaccount may
have a negative balance during a Plan Year or other Period of Coverage,but the aggregate amount
of reimbursement will in no event exceed the maximum dollar amount elected by the Participant
under this Plan.
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4.2 Employer Credits pfevided under Seetion 3-.2
Each Eligible Employee may, in accordance with Article III of the Section 125 Cafeteri
Plan shall be . ;hale, fider this Healtt, FSA P! Plan. elect to apply Employer Credits to his or
her Account under Section 3.2 of the Section 125 Plan to the Health FSA to reimburse Eligible
Medical Expenses the extent permitted under that section.
4.3 Salary Reduction Eleetio Preee4ufesCredits
In accordance with Section 3.4 of the Section 125 Cafeteria Plan,each Participant sh"will
designate the amount of Salary Reduction Cepitribtitiens and Employer Credits
amountscontributions to be available during the Period of Coverage for Quali l5fingEligible
Medical Expense reimbursements under the Health FSA . Contributions will be withheld from
each Participant's Compensation, and an equivalent amount will be credited to the Participant's
Health FSA Subaccount (although no actual assets will be set aside in that account or any
account). A Participant's contributions for each Plan Year will equal the annual benefit amount
elected by the Participant on his or her election form for the Plan Year and may not exceed the
maximum annual dollar limit for the Health FSA in effect under Section 4.6 for the Plan Year.
4.4 Time for Making Salary Reduction Elections
The timing fel=of Salary Reduction elections under the Health FSA Plan x
shall'^"must be
consistent with the timing etttline for making such elections described in Section 3.5 of the Section
125 Cafeteria-Plan.
4.5 Change or Revocation of Elections
of-a-A Participant's Salary Reduction election, shall also apply to this Health FSA
4.6 r,,ntir,,,,tio of Required n „ cop,,ra4i,,, 4,,m Seryie-e
A Partieip nt who s ,.,,jos fiern the s of the E,ti,,.loyer d,,,.;, g the for any Period of
Coverage may
as oti4lined in Ardele 3A of this Health FSA Plan.
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If-,not be changed or revoked after , the Pa-14ieipafA fails to eleet
Part ,.;pant shall ora ., of the era , f4hethe first payroll period f whieh v o,,hied D,.o,riums were
last paid, and Medieal Expenses inetiffed after- the end of stieh pef:ied shall fiet be eligible fe-r-
tifso,, ea o which it applies, except under the circumstances described in Section 3.6 of the
Section 125 Plan.
4.7 Experience Gains
if the Health FSA Plan has an Exper-ienee Gain with r-espeet to a Period of Coverage,
Expe6enee Gain shall be returned to the Running Expense Fund of the Efflpleyef!.
44.6 Limit on Amount Credited to Health SA
Effective for the Plan Ve-arsYear beginning on and after-January 1, 204-32019, the annual
Salary Reduction amount credited to a Participant's Health Flexible Spending nffange, ent P
sub aeeetmt shanFSA Subaccount must not exceed $2,500-700. In subsequent years, the
limitation set forth in this Section 4.86 will be adjusted for cost of living increases as set forth in
section 125(0(J2) of the Code.
4.94.7 Plan Administrator's Power to Modify Elections
Section 3.10 of the Section 125r-tea Plan which provides the Plan Administrator with
the power to modify Salary Reduction elections shall also apply to this Health FSA _
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ARTICLE V: BENEFITS
5.1 Health Care Reimbursement
A Participant may receive reimbursement under the Health FSA for Eligible Medical
Expenses incurred during the Period of Coverage to which the Participant's participation election
applies. In addition, certain individuals may receive a reimbursement for Eligible Medical
Expenses incurred during the Grace Period immediately following the close of a Plan Year in
accordance with Section 5.4.Eligible Medical Expenses will be reimbursed only if incurred during
the Period of Coverage or, if applicable, during the Grace Period immediately following the end
of a Plan Year. Eligible Medical Expenses will not be reimbursed for any Plan Year or related
Grace Period,unless the Participant applies for such reimbursement before the end of the Run-Out
Period.
5.2 Maximum Reimbursement Available; Uniform Coverage
The maximum dollar amount elected by the Participant for reimbursement of Eligible
Medical Expenses incurred during a Period of Coverage, reduced by prior reimbursements during
the Period of Coverage (Grace Period reimbursements for a prior Plan Year are not counted), will
be available at all times during the Period of Coverage, regardless of the actual amounts credited
to the Participant's Health FSA Subaccount pursuant to Section 4.1. Despite the preceding, no
reimbursement will be available for Eligible Medical Expenses incurred after coverage under this
Health FSA has terminated, unless the Participant has elected COBRA.
5.3 Forfeitures
Except as otherwise provided below(regarding_ certain individuals who may be reimbursed
from prior Plan Year Health FSA amounts for expenses incurred during a Grace Period), if any
balance remains in the Participant's Health FSA Subaccount for a Period of Coverage after all
reimbursements have been made for the Period of Coverage, then such balance will not be carried
over to reimburse the Participant for Eligible Medical Expenses incurred during a subsequent Plan
Year. The Participant will forfeit all rights with respect to such balance. All forfeitures under this
Plan will be used as follows: (a) first, to offset any losses experienced by the Employer during the
Plan Year as a result of making reimbursements (i.e.,providing Health FSA benefits)with respect
to all Participants in excess of the contributions paid by such Participants through SaIM
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Reductions; (b) second, to reduce the cost of administering the Health FSA during the Plan Year
or the subsequent Plan Year (all such administrative costs will be documented by the Plan
Administrator); and (c) third, to provide increased benefits or compensation to Participants in
subsequent years in any weighted or uniform fashion the Plan Administrator deems appropriate,
consistent with applicable regulations. In addition, any Health FSA Subaccount benefit payments
that are unclaimed (e.g., uncashed benefit checks) by the close of the Plan Year following the
Period of Coverage in which the Eligible Medical Expense was incurred will be forfeited and
applied as described above.
5.4 Grace Period
The Health FSA has a Grace Period that follows the end of the Plan Year during
amounts that the Participant has allocated to his or her Health FSA Subaccount that are unused at
the end of the Plan Year may be used to reimburse Eligible Medical Expenses incurred during the
Grace Period.
To take advantage of the Grace Period, a Participant must be (a) a Participant on the last
day of the Plan Year to which the Grace Period relates, or (b)aqualified beneficiary (as defined
under COBRA) who is receiving COBRA coverage under the Health FSA on the last day of the
Plan Year to which the Grace Period relates.
Eligible Medical Expenses incurred during a Grace Period and approved for reimbursement
will be paid first from available amounts that were remaining at the end of the Plan Year to which
the Grace Period relates, and then from any amounts that are available to reimburse expenses
incurred during the current Plan Year. Claims will be paid in the order in which they are received.
Previous claims will not be reprocessed or recharacterized so as to change the order in which they
were received.
Expenses incurred during a Grace Period must be submitted before the end of the Run-Out
Period. Any unused amounts from a Plan Year to which the Grace Period relates that are not used
to reimburse Eligible Medical Expenses incurred either during the Plan Year or during the related
Grace Period will be forfeited if not submitted for reimbursement before the end of the Run-Out
Period. A Participant may not use Health FSA amounts to reimburse Eligible Dependent Care
Expenses, as defined in the Central Contra Costa Sanitary District Dependent Care Assistance
Plan.
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5.5 Receiving Health Care Reimbursement
Payment will be made to the Participant in cash as a reimbursement for Eligible Medical
Expenses incurred by the Participant (or his or her Spouse or Dependents) while he or she is a
Participant during the Plan Year for which the Participant's election is effective, but only if the
substantiation requirements of Section 7.2 are satisfied. However, if the Plan Administrator so
permits, the Participant may choose to make payment for an Eligible Medical Expense with an
electronic payment card arrangement.
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ARTICLE VI: POST-PARTICIPATION REIMBURSEMENTS; COBRA
5,46.1 General Rule
prior- r-eiffibtir-sefnents diffing the same Period of Cover-age) shall be available at all times dwing
the Period of Govefage in whieh--.
(a) an Eligible Employee is a Pat4ieipa+4 and has of is entitled to have amou*ts er-e
to his or-her-Health FSA s4 aeeetifit piffstiant to Seetions 3.2 and 3.3 of the Seetion 125 Gafeter-i-a
Pte;er
(b) with r-espeet to a Paftieipant who has beewne eligible for- and eleeted COBRA
COBRA eover-age as ottflined ift AAiele V! of this Health FSA Plan.
Qualifying Medieal Expenses shall be r-eifyibttr-sed only if ineuffed dtir-ing the Period o
the Paftieipant applies for-stteh rviffibtffsemeat within thift-y(30) days after-the end of stieh Per-i
ofr o
5.2 v o;,v.>,twseYnents
Pat4ieipant for- all medieal and den4a! expenses (as defined in Seetion 213(d) of the Code)-,
medieal and dental ex. I be not other-wise paid or-r-eimbtir-sed tifider-any other-medieal-of
dental plan or-pokey or-by any govefnmefital ageney or- other-ageney.
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5.3 Limitation of Benefits for-Ge4ain ladividtta6
The benefits provided ttader- this HeaM FSA fna-y be lifnited for- eei4aia -Pa-14ieipaftts i
ARTICLE E t71. CONTINUATION TION !''l1VE A!''L`
Federal legislation(COBRA)requires tha4 eei4aifi Paftieipan4s(Qttalified Befiefieiar-ies)-be
Event oeetffs. Gontif�ued eover-age must also be made available widef applieable provisions of
6.1 Definitionof �=€d Befle€icjfF
Plan ofi the day before a Qttafif�ifig Event.A ehild bom to or-plaeed for-adoption with an Employee
Pm4ieipant during the period of COBRA eover-age is also a Qttalified Benefieiafy.
Dependent who was enr-olled in this Health FSA Plan tinder- the provisions of COBRA after- the
date of the initial Qttalifying Event, or-any Qttalified Benefieiafy who deelined COBRA eover-ag-e
when first eligible and who was later-ear-oiled in this Health FSA Plan "Fing a COBRA period.
For-Employee Partieipants,the even4s ifi stibpar-agr-aph(a), and for-Dependetit Pa#ieipants-,
Benefieiaf:y the fight to retain eovefuge tinder-this Health FSA Plan and whieh wotild eatise sti
eover-age to otherwise efidi
When a Participant ceases to be a Participant under Section
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3.3, the Participant's Salary Reductions and election to participate will terminate. The Participant
will not be able to receive reimbursements for Eligible Medical Expenses incurred after the end of
the day on which the Participant's employment terminates or the Participant otherwise ceases to
be eligible. However, such Participant or the Participant's estate) y claim reimbursement for
any Eligible Medical Expenses incurred during the Period of Coverage prior to the date that the
Participant ceases to be eligible, provided that the Participant (or the Participant's estate,) files a
claim within 90 days after the date that the Participant ceases to be a Participant.
6.2 COBRA Continuation Coverage
Notwithstanding any provision to the contrary in this Health FSA, to the extent required
by COBRA, a Participant and his or her Spouse and Dependents, as applicable, whose coverage
terminates under the Health FSA because of a COBRA ying event (and who is a qualified
beneficiary as defined under COBRA)will be given the opportunity to continue on a self-paw
the same coverage that he or she had under the Health FSA the day before the qualifying event for
the periods prescribed by COBRA. Specifically, such individuals will be eligible for COBRA
continuation coverage only if, under Section 4.1, they have a positive Health FSA Subaccount
balance at the time of a COBRA qualifying event(taking into account all claims submitted before
the date of the qualifyin_ event). Such individuals will be notified if they are eligible for COBRA
continuation coverage.
If COBRA is elected, it will be available only for the remainder of the Plan Year in which
the qualifying event occurs. COBRA coverage for the Health FSA will cease at the end of the Plan
Year and cannot be continued for the next Plan Year. Notwithstanding the preceding sentence, a
Qualified beneficiary who has coverage on the last day of the Plan Year may be entitled to
reimbursement of Eligible Medical Expenses incurred during the Grace Period following that Plan
Year in accordance with Section 5.4. COBRA continuation coverage will be subject to all
conditions and limitations under COBRA.
Contributions for coverage for Health FSA benefits may be paid on a pre-tax basis for
current Employees receiving taxable compensation(as may be permitted by the Plan Administrator
on a uniform and consistent basis, but may not be prepaid from contributions in one Plan Year to
provide coverage that extends into a subsequent Plan Year) where COBRA coverage arises either
(a) because the Employee ceases to be eligible because of a reduction of hours, or(b)because the
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Employee's Dependent ceases to satisfy the eligibility requirements for coverage. For all other
individuals (e.g., Employees who cease to be eligible because of retirement, termination of
employment, or layoff), contributions for COBRA coverage for Health FSA benefits must be paid
on an after-tax basis (unless permitted otherwise by the Plan Administrator on a uniform and
consistent basis, but may not be prepaid from contributions in one Plan Year to provide coverage
that extends into a subsequent Plan Year).
(a) —If COBRA is not elected,the qualified beneficiarscoverage under the yrs
,,,1 .,,bons of Seel o 3.1 of thsHealth FSA Plan,
( Death efaemployee Partie t.
tw ee or legal separ-ation ftem an employeeParticipant,
(d) Cessation of a ehild's dependent status undef the Health FSA Plan in aeeer-danee
with Seetion 1.1 of this Health FSA Plan.
tem}employee PaAieipanl's-entitlement to Medicare
6.3 Termination. of COBRA Cover-a
Oreo elected, COBRA eevefage-will eontinue until the earliest of the f ile'y ing dates-
(a) The iast day of the Plan Yeaf dtffing whieh the Qualifying Event eeetiffed; Of.
(b) The date all Employer- spenser-ed health flexible spending affangeffients afe
to ated
(e) The date the Emplayef does net r-eeeive timely payinent of -d
(d) r...eend on the date the
tmder- any ethef health flexible spefiding affa-agement (this date tnay vaFy fer- different members
of the safne family); er.-
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6.4
if dufing the period of any COBRA eover-age, as set fefth above, this Health FSA Plan
ehanged for-Eligible Effiployees,the same eha-nges will be applied to similarly situa
6.5 Cost of COBRA
The eest of COBRA eever-age shall be paid by(or-on behalf of)the Paf4ieipant or-Quali
0
his or-her-Period of G&ver-age.
To eleet COBRA eevefage-
qify
the Effmiever-withiii 60 days aftef the later- of(14 the date of the EmalifyifiR eveiit; ef (2) the da4
qualified beneficiM would otherwise end beea- se o f4he
lose coverage.
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(a) The Effipleyer- shall notify the aff-eeted pafties of their- right to eleet COBRA
6.7 Eleetion of COBRA Cover-age
eleetion period will begin ofi of before the da+e of a Qualifying Event and etid 60 days after- the
later-of(1) the date that eover-age tinder-this Health FSA Plan wotild othefwise efid beeattse of the
Qualifying Event, or-(2)the date the Qttalified Benefieiafy is sent fiotiee of his of her-right to eleet
COBRA eover-age. Cover-agewill tefmiiiate after-t4e Qtialifying Event a-ad then will be reinstated
6.8
> >
offered in a diff-er-efit fnanner-than as speeified in this Health FSA Plan, the Health FSA Plan shall
be deemed afnended to eomply with the mini !fnents of Applieable Law and shall - -1
npplieable r afiy ear-lief thaf the latest dater rod by stieh>Iaw
ti o FN ar n
Notwithstandifig anythifig in the Health FSA Plan to the eofitfafy, to the extent r-e"ifed
eover-age tinder- the Health FSA in aeeor-danee with pr-oeedw-es established by the Plan
n,am ifiistr-ator-that are eofisistefit with FN4 n
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ARTICLE VII: CLAIMS PROCEDURES
in addition to the provisions outlined in the Seetions below, the elaims pf:eeedu
AAiele V! of the Seetion 125 Gafker-ia Plan shall apply for-this Health FSA Plan as well.
7.1 Claims S4st-antiatien
The Health FSA Plan shall r-eimbtwse a Qualifying Medieal Expense only if the Pa-i4i
pr-evides a wr-44en statement 4efn an indepeadent third pai4y sta4ifig when the expense was
statement that the Qiialifying Medieal Expense has not been r-eiffibur-sed of is fiat r-eimbet:sable
tinder-a*y- other-health plan eover-age-.
-Pa44ieipaat who fails to supply additional doeumenta4ion by januafy 31 of the fellowing-Plan V
shall be deemed not to have r-eqtiested feimbuf:semeat for-the amotints in question. No Pat4i6pan
shall have any rights or-be entitled to any r-eimbur-sement under-the Health FSA Plan unless a elaim
7,27.1 General Reimbursement Procedures
PaftieipapAs may elai ^ Participant must apply for reimbursement by submitting a request
fsf: r-eimbur-sement fefm in writiniz to the Plan Administrator or- designated third p
administfa4er, in the event that a Paftieipan4 does not "alify for- r-eimbur-sement of the amoufA
eleetea a,, i . in such form as the Plan Year-, the differ-enee beoween theafnetw4 eleeted and the
^^*,d^' ,-eiff,1.twsement shall be f fi *ea at Administrator mayprescribe, no later than the end of
the Plan Year Pafti.ipai s have tinfil the date s veifiea in Seeti,n 5.1 here, of theRun-Out Period
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following the close of the Plan Year in which
the Eligible ble Medical Expe wsesExpense was incurred dur-ift that for a Plan Year,
.3 Speeifie Reimbur-sepaent PFeEedufes
Participant „r,lo,- the Health FSA
Plan sha44who ceases to be
as of any paffieular-time for-prior-r-eiffibiffsements for-the same Pefied of Govefage). The Health
FSA Plan shall not make a&anee r-eimbur-sefnefits of fittur-e or- pr-ojeeted Qualifying Mediea4
Expense
The Maxifnufn Reiffibur-sefnent at any paf4iettlar-time dtifing the Period of Cover-age shall
not eeli ig ble to the extent to w-hieh the PaAieipant has paid the Re"ifed Pr-emitlms
eover-age under-the Health FSA Plan. Similafly, the pay-meat sehe"le for-the Re"ifed Pfemittims
for- eover-age under- the Health FSA Plan shail not be based on the r-a4e or- ametint of ifietiff
Expenses dtffing the Period of Cover-age.
Reimbur-sement shall be paid fie Fner-e than monthly or- la4ef when the total ametint e
Applieable ba-vv.
(b) Pat4ieipants have tin4i!the date speeified in Seetion 5.1 hef:ein of the following
Year-to sttbmit elaitns for-r-eimbur-sement of Qualifying Medieal E"eftses illetiffed EI-Hfiflg a Peri
of Covefage,
7.4 Doeumen4a4ion�eet m
The Plan Administrator- will pr-eeess and r-eview all elaim fefffls that afe submitted b
P-c'lffiEipc'ans-Txcseepe of the Plan Administr-ater-'s,c-cccvcwiaricspeccvparticlpate, this Health
FSA Plan is to detetq:nine-.t
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(a) whethef the PaAieipant's expenses are Qualifying Medieal Expenses, and
(b) whether- the ' must be done no later
than 90 days after the date that eligibility ceases, as described in Section 6.1) and must provide the
substantiation required doetimentation,
The-Section 7.2 or as otherwise requested by the Plan Administrator may-
7.2
7.2 Substantiation of Expenses
The reimbursement request any feasenable infefma4ien needed to sttbstafi4ia4e a elaim.
described in Section 7.1 must include:
(a) the person(s) on whose behalf Eligible Medical Expenses have been incurred;
(b) the nature and date of the expenses so incurred;
(c) the amount of the requested reimbursement;
(d) a statement that such expenses have not otherwise been reimbursed and that the
Participant will not seek reimbursement through any other source; and
(e) other such details about the expenses that may be requested by the Plan
Administrator in the reimbursement request form or
otherwise (e.g., a statement from a medical practitioner that the expense is to treat a specific
medical condition, documentation that a medicine or drug was prescribed, or a more detailed
certification from the Participant).
The reimbursement request must be accompanied by bills, invoices, or other statements
from an independent ' third
party showing that the Eligible Medical Expenses have been incurred and showing the amounts of
such expenses, along with any additional documentation the Plan Administrator may request. If
the Health FSA is accessible by an electronic payment card(e.g., debit card, credit card, or similar
arrangement),the Participant will be required to comply with mandatory substantiation procedures
and other mandatory terms and conditions that will govern the Participant's use of the electronic
payment card in accordance with Code section 125 and applicable IRS guidance.
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7.3 Claims and Appeals Procedures
See Article VI of the Section 125 Plan for procedures for processing claims and meals of
denied claims.
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ARTICLE VIII: GENERAL PROVISIONS
8.1 Administration of the Health FSA
The Health FSA P4ffl+-,ha44will be administered in accordance with provisions set forth in
Article V of the Section 125 Cafeteria Plan.
8.2 Miscellaneous Provisions of the Healt1, Flexible c „a;,, n,.,.,,,, ,v,entT4&a
The miscellaneous provisions described in Article VII of the Section 125 r a-Plan
twill also apply to this Health FSA .
8.3 Amendment and Termination of the Health Flexible en _
P4a-nFSA
TnrSubject to Article VIII of the Section 125 Plan,the Employer may
amend or terminate this Health FSA grin whole or in part at any time, s4jeet te the tefms and
for any reason by resolution of Ardele �'T�rthe Seetie„ '�Cafeteria P! he Board or by M
person or persons authorized by the Board to take such action.
The Health FSA Plan may be tei:mifiated at a*y time by aefien of the Employer- if the
Plan has expired withetit r-efiewal or-an extension agreement, or- if a s4sequent Memor-andtffn o
,Under-standing of eaeh employee r-epresenta4ion tmit eliminates the Health FSA Plan,
ARTICLE 1X; AMENDMENT OF T-14E HEALTH FLEXIBLE SPENDING
ARRANGEMENT PLAN
8.4 Coordination of Benefits Under the Health FSA
The Health FSA is intended to pay benefits solely for otherwise unreimbursed medical
expenses. Accordingly, it will not be considered a group health plan for coordination of benefits
purposes, and its benefits will not be taken into account when determining benefits payable under
Mother plan.
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8.5 HIPAA Compliance
The Health FSA will comply with the applicable requirements of HIPAA in accordance
with the rules set out in Appendix B.
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ARTICLE IX: EXECUTION
As evidence of its amendment and restatement of this Health Flexible
Affangement- FSA,the Central Contra Costa Sanitary District has caused this instrument to be
signed by its e ffleers thee-ounde,.duly authorized lereteofficers on this M'_day of Deeember-,
204-2 , 2019.
By:
President, Board of Directors
For: THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Elan e Boehm Katie Young, Secretary of the District
(Print Name and Title)
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A TT A!"'IIIV ENTAPPENDIX A
GENERAI,MEDICAL CARE ITEMS
EXPENSES NOT REIMBURSABLE
FROM THE HEALTH CARE SPENDING ACCOUNTFSA
The Central Contra Costa Sanitary District Health Flexible Spendinggement Plan ("Health
FSA") document contains the general rules governing what expenses are reimbursable. This
Appendix A, as referenced in the Health FSA document, specifies certain expenses that are
excluded under this Health FSA with respect to reimbursement from the Health FSA — that is,
expenses that are not reimbursable, even if they meet the definition of"medical care"under Code
section 213(d) and may otherwise be reimbursable under the regulations governing health FSAs.
Exclusions: The following expenses are not reimbursable from the Health FSA, even if they
the definition of"medical care" under Code Section 213(d) and may otherwise be reimbursable
under legal requirements applicable to health FSAs:
• Premiums for other health coverage, • Costs for sending a problem child to a
including but not limited to premiums for special school for benefits that the child
any other plan (whether or not sponsored may receive from the course of study and
by the Employer) disciplinary methods
• Long-term care services • Social activities, such as dance lessons
• Cosmetic surgery or other similar (even if recommended by a physician for
procedures,unless the surgery or general health improvement)
procedure is necessary to ameliorate a • Bottled water
deformity arising from, or directly related • Cosmetics,toiletries,toothpaste, etc.
to, a congenital abnormality, a personal
injury resulting from an accident or • Uniforms or special clothing, such as
trauma, or a disfiguring disease. "Cosmetic maternity clothing
surgery"means any procedure that is . Automobile insurance premiums
directed at improving the patient's
appearance and does not meaningfully • Transportation expenses of any kind,
promote the proper function of the body or including transportation expenses to
prevent or treat illness or disease. receive medical care
• The salary expense of a nurse to care for a • Marijuana and other controlled substances
healthy newborn at home that are in violation of federal laws, even if
• Funeral and burial expenses
prescribed by a physician
• Any item that does not constitute "medical
• Household and domestic help (even if care" as defined under Code section 213(d)
recommended by a qualified physician due
to an Employee's or Dependent's inability • Any item that is not reimbursable due to
to perform physical housework) any other applicable law or regulations
• Custodial care
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• Medicines or drugs (other than insulin)
that have not been prescribed
Medieal Expenses will inelude the ever- the eettnter-("OTC") medieal itefns listed below.
Band ids
Bandages
0 Cen4aet lens .leaning solution
Cmtehes
D;,,,.nestie deyi es used i diagnesi g and tfea4ing illness and disease
Fir-.t aid kits
Gauze pads
ineentinenee supplies
Liquid adhesive for-small euts
OTC eentr-aeeptives
Pr-epaney test kits
Reading glasses
Rubbing aleohe4
Thefmometers
A-2
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OVER THE COUNTER DRUGS AND MEDICINES
REIMBURSABLE THROUGH
14EALT-H CARE SPENDING ACCOUNT
ONLY 1F PROVIDED PURSUANT TO A DOCTOR'S PRESCRIPTION
Nledieal Expeiises will ineltide the following over- the eotmter- di-dgs and medieines if they
order-for-a fnedieine or-dpdg that fneets the legal r-eqttir-efnents of a pr-esefiption in the sta4e in whieh
the Faedieal expeiise is ifiettffed and that is issued by am ifidivi"al who is legally aidt4or-ized to
—sue p.-sefiption ifi that state.
2. BenGay or siinilar-pf!oduets for-niusele or joint pain;
3. btig bite medieatio*;-
4. Calamine lotion-,
o. ,
7. first aid er-eafn and ru,,etif e;
8. hemofrhoid medication;
,
10. etio,, sieknesss pills;
i nieotine gtifnor- atehe
13. Pedialyte for-ififa-PA dehydr-
15. Visine and similar-eye prodttetccs-an
1. waft fe or t feat.ient
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APPENDIX B
HIPAA COMPLIANCE
B.1 Provision of Protected Health Information to Employer
Members of the Employer's workforce have access to the individually identifiable health
information of Plan participants for administrative functions of the Health FSA. When this health
information is provided from the Health FSA to the Employer, it is Protected Health Information
(PHI). The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its
implementing regulations restrict the Employer's ability to use and disclose PHI. The following
HIPAA definition of PHI applies for purposes of this Appendix B:
Protected Health Information. Protected health information means information that is created or
received by the Health FSA and relates to the past, present, or future physical or mental health or
condition of a participant;the provision of health care to a participant; or the past,present,or future
payment for the provision of health care to a participant; and that identifies the participant or for
which there is a reasonable basis to believe the information can be used to identify the participant.
Protected health information includes information of persons living or deceased.
The Employer will have access to PHI from the Health FSA only as permitted under this Appendix
B or as otherwise required or permitted by HIPAA. HIPAA and its implementing regulations were
modified by the Health Information Technology for Economic and Clinical Health Act(HITECH
Act), the statutory_provisions of which are incorporated herein by reference.
B.2 Permitted Disclosure of Enrollment/Disenrollment Information
The Health FSA may disclose to the Employer information on whether the individual is
participating in the Health FSA.
B.3 Permitted Uses and Disclosure of Summary Health Information
The Health FSA may disclose Summary Health Information to the Employer, provided that the
Employer requests the Summary Health Information for the purpose of modifying, amending, or
terminating the Health FSA.
"Summary Health Information"means information(a)that summarizes the claims history, claims
expenses, or type of claims experienced by individuals for whom a plan sponsor had provided
health benefits under a health plan; and b) from which the information described at 42 CFR
Section 164.514(b)(2)(i)has been deleted, except that the geographic information described in 42
CFR Section 164.514(b)(2)(i)(B) need only be aggregated to the level of a five-digit ZIP code.
B.4 Permitted and Required Uses and Disclosure of PHI for Plan Administration
Purposes
Unless otherwise permitted by law, and subject to the conditions of disclosure described in Section
B.5 and obtaining written certification pursuant to Section B.7, the Health FSA may disclose PHI
to the Employer, provided that the Employer uses or discloses such PHI only for plan
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administration purposes. "Plan administration purposes" means administration functions
performed by the Employer on behalf of the Health FSA, such as quality assurance, claims
processing, auditing, and monitoring. Plan administration functions do not include functions
performed by the Employer in connection with any other benefit or benefit plan of the Employ
and they do not include any employment-related functions.
Notwithstanding the provisions of this Health FSA to the contrary, in no event will the Employ
be permitted to use or disclose PHI in a manner that is inconsistent with 45 CFR Section
164.504(f).
B.5 Conditions of Disclosure for Plan Administration Purposes
The Emplo, eragrees that with respect to any PHI (other than enrollment/disenrollment
information and Summary Health Information, which are not subject to these restrictions)
disclosed to it by the Health FSA, the Employer will:
• not use or further disclose the PHI other than as permitted or required by the Health
FSA or as required by law;
• ensure that any agent, including a subcontractor,to whom it provides PHI received
from the Health FSA agrees to the same restrictions and conditions that apply to
the Employer with respect to PHI;
• not use or disclose the PHI for employment-related actions and decisions or in
connection with any other benefit or employee benefit plan of the Employ
• report to the Health FSA any use or disclosure of the information that is inconsistent
with the uses or disclosures provided for of which it becomes aware;
• make available PHI to comply with HIPAA's right to access in accordance with 45
CFR Section 164.524;
• make available PHI for amendment and incorporate any amendments to PHI in
accordance with 45 CFR Section 164.526;
• make available the information required to provide an accounting of disclosures in
accordance with 45 CFR Section 164.528;
• make its internal practices, books, and records relating to the use and disclosure of
PHI received from the Health FSA available to the Secretary of Health and Human
Services for purposes of determining compliance by the Plan with HIPAA's privacy
requirements;
• if feasible, return or destroy all PHI received from the Health FSA that the
Employer still maintains in any form and retain no copies of such information when
no longer needed for the purpose for which disclosure was made, except that, if
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such return or destruction is not feasible, limit further uses and disclosures to those
purposes that make the return or destruction of the information infeasible; and
• ensure that the adequate separation between the Health FSA and the Emploeri.e.,
the "firewall")required in 45 CFR Section 504(f)(2)(iii) is satisfied.
The Employer further agrees that if it creates, receives, maintains, or transmits any electronic PHI
(other than enrollment/disenrollment information and Summary Health Information,which are not
subject to these restrictions) on behalf of the Health FSA, it will implement administrative,
physical, and technical safeguards that reasonably and appropriately protect the confidentiality,
intim ity, and availability of the electronic PHI, and it will ensure that any agents (including
subcontractors) to whom it provides such electronic PHI agree to implement reasonable and
appropriate security measures to protect the information. The Employer will report to the Health
FSA any security incident of which it becomes aware.
B.6 Adequate Separation Between Plan and Employer
The Employer will allow the following persons access to PHI: the Human Resources Director, the
Plan Administrator, and any other Employee who needs access to PHI in order to perform plan
administration functions that the Employer performs for the Health FSA (such as quality
assurance, claims processing, auditing, and monitoring,).No other persons will have access to PHI.
These specified employees (or classes of employ) will only have access to and use PHI to the
extent necessary to perform the plan administration functions that the Employer performs for the
Health FSA.In the event that any of these specified employees does not comply with the provisions
of this section, that employee will be subject to disciplinary action by the Employer for non-
compliance pursuant to the Employer's employee discipline and termination procedures.
The Employer will ensure that the provisions of this Section B.6 are supported by reasonable and
appropriate security measures to the extent that the designees have access to electronic PHI.
B.7 Certification of Plan Sponsor
The Health FSA will disclose PHI to the Employer only upon the receipt of a certification by the
Employer that the Plan incorporates the provisions of 45 CFR Section 164.504(f)(2)(ii), and that
the Employer agrees to the conditions of disclosure set forth in Section B.5. Execution of the
Health FSA by the Employer will serve as the required certification.
B.8 Privacy Official
The Employer will designate a Privacy Official, who will be responsible for the Health FSA's
compliance with HIPAA. The Privacy Official may contract with or otherwise utilize the services
of attorneys, accountants, brokers, consultants, or other third party experts as the Privacy Official
deems necessary or advisable. In addition and notwithstanding any provision of this Health FSA
to the contrary, the Privacy Official will have the authority to and be responsible for:
• accepting and verifying the accuracy and completeness of any certification
provided by the Employer under this Appendix;
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• transmitting the certification to anyparties as may be necessary to permit them
to disclose PHI to the Employer;
• establishingaplementing policies and procedures with respect to PHI that are
designed to ensure compliance by the Health FSA with the requirements of HIPAA;
• establishing and overseeing proper training of personnel who will have access to
PHI; and
• any other duty, o�ponsibih y that the Privacy Official,in his or her sole capacity,
deems necessary or appropriate to comply with the provisions of HIPAA and the
purposes of this Appendix B.
B.9 Interpretation and Limited Applicability
This Appendix serves the sole purpose of complying with the requirements of HIPAA and will be
interpreted and construed in a manner to effectuate this purpose. Neither this Appendix nor the
duties, powers, responsibilities, and obligations listed herein will be taken into account in
determining the amount or nature of the benefits provided to M person covered under the Health
FSA,nor will they inure to the benefit of any third parties. To the extent that any of the provisions
of this Appendix B are no longer required by HIPAA or do not apply to the Health FSA because
the Health FSA is otherwise excepted from HIPAA,they will be deemed deleted and will have no
force or effect.
B.10 Service Performed for the Employer
Notwithstanding any other provisions of this Health FSA to the contrary, all services performed
by a business associate for the Health FSA in accordance with the applicable service agreement
will be deemed to be performed on behalf of the Health FSA and subject to the administrative
simplification provisions of HIPAA contained in 45 CFR Parts 160 through 164, except services
that relate to eli_ig bility and enrollment in the Health FSA. If a business associate of the Health
FSA performs any services that relate to efi ig bility and enrollment in the Health FSA, these
services will be deemed to be performed on behalf of the Employer in its capacity as the Health
FSA sponsor and not on behalf of the Health FSA.
B-4
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ATTACHMENT 4
CENTRAL CONTRA COSTA SANITARY DISTRICT
DEPENDENT CARE ASSISTANCE PLAN
(A Component Plan of
the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan)
Amended and Restated
Effective Janthffyjuly 1, X32019.
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TABLE OF CONTENTS
Page
ARTICLE 1: DEFINITIONS ...........................................................................................................2
1.1 DCAP.......................................................................................................................2
1.2 DCAP Subaccount...................................................................................................2
1.3 Dependent................................................................................................................2
1.4 Earned Income.........................................................................................................4
1.5 Eligible Dependent Care Expense ...........................................................................5
1.6 Grace Period.............................................................................................................5
1.7 Participant................................................................................................................5
1.8 Qualifying Dependent Care Services.......................................................................6
1.9 Qualifying Individual...............................................................................................6
1.10 Run-Out Period........................................................................................................6
1.11 Section 125 Plan ......................................................................................................7
1.12 Spouse......................................................................................................................7
1.13 Student.....................................................................................................................7
ARTICLE 11: SCOPE OF THE PLAN............................................................................................8
ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION......................................................9
3.1 Eligibility.................................................................................................................9
3.2 Election for Participation.........................................................................................9
3.3 Termination of Participation....................................................................................9
3.4 Reinstatement of Former Participant.....................................................................10
ARTICLE IV: PLAN FUNDING..................................................................................................12
4.1 Establishment of Accounts ....................................................................................12
4.2 Employer Credits...................................................................................................12
4.3 Salary Reduction Credits .......................................................................................13
4.4 Time for Making Salary Reduction Elections .......................................................13
4.5 Change or Revocation of Elections........................................................................13
4.6 Limit on Amount Credited to the DCAP...............................................................13
4.7 Plan Administrator's Power to Modify Elections..................................................15
ARTICLE V: BENEFITS..............................................................................................................16
5.1 Dependent Care Reimbursement...........................................................................16
5.2 Maximum Amount Available................................................................................17
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5.3 Forfeitures..............................................................................................................17
5.4 Grace Period...........................................................................................................18
5.5 Receiving Health Care Reimbursement.................................................................18
5.6 Post-Participation Reimbursements.......................................................................19
ARTICLE VI: CLAIMS PROCEDURES .....................................................................................20
6.1 General Reimbursement Procedures......................................................................20
6.2 Substantiation of Expenses....................................................................................21
6.3 Claims and Appeals Procedures.............................................................................22
ARTICLE VII: GENERAL PROVISIONS...................................................................................23
7.1 Administration of the Dependent Care Assistance Plan........................................23
7.2 Miscellaneous Provisions.......................................................................................23
7.3 Amendment and Termination of the Dependent Care Assistance Plan.................23
ARTICLE VIII: EXECUTION......................................................................................................24
ii
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CENTRAL CONTRA COSTA SANITARY DISTRICT
DEPENDENT CARE ASSISTANCE PLAN
INTRODUCTION
Effective as of Januar-yjuly 1, 20 32019, the Central Contra Costa Sanitary District
(tithe "Employer):IjLereby amends and restates the Central Contra Costa Sanitary
District Dependent Care Assistance Plan ( the "DCAP)"�to allow Eligible Employees
of the Employer to elect to receive dependent care assistance benefits which are excludible from
gross income under Seetiensection 129(a) of the Internal Revenue Code of 1986, as amended
(tithe "Code)-,:I as provided herein and in accordance with the terms of the Central
Contra Costa Sanitary District Section '125 Cafeteria Plan( the "Section 125 C
Plan)-.:I. The Employer originally adopted the DCAP effective as-ef
januaryMay 1,2003 1989. Since then,the Employer has amended the DCAP on various occasions.
The Employer most recently amended and restated the DCAP effective January 1, 1998 an
2013.
This DCAP is a Component Plan of the Section 125 G Plan and,except to the extent
otherwise expressly provided herein, is governed by the rules and regulations of the Section 125
rPlan. The DCAP is intended to qualify as a dependent care assistance program within
the meaning of Seetiensection 1290 of the Code, and to-nwetwill be interpreted in a manner
consistent with the requirements of .section 129.
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ARTICLE I: DEFINITIONS
The definitions in the Section 125 Gamma Plan apply to this Component Plan as well;
as the following additionsdefinitions specific to the DCAP:
1.1 DCAP
The Central Contra Costa Sanitary District Dependent Care Assistance Plan.
1.2 DCAP Subaccount
The bookkeeping entry to record amounts withheld from a Participant's Compensation and
that are available for a future reimbursement of a Participant's Eligible Dependent Care Expenses.
No money will actually be allocated to or held under any individual Participant's DCAP
Subaccount. A DCAP Subaccount will be maintained by the Plan Administrator for accounting
purposes, and will not be representative of any identifiable trust assets.No interest will be credited
to or paid on amounts credited to the Participant's DCAP Subaccount.
441.3 Dependent
Means an individtial who is any of the fellowingi.
an Eligible Employee's adopted ehild or-eligible fester-ehild(as defined in Seetion 152(0(1) of the
Code), or-an Eligible Employee's brother-, sister-, stepkether-, or-stepsister-, of!deseendant of any 4
the .,i o
>Tna
(i) ry
�ef age 13—,- and
(ii)Has same pr-ineipal pl ee of of as Eligible Employee roi mere
than e half of the taxable ear-; and
(;;;) Has not ovided ever eine half his or-ier-ewft suppeft for-the ealcirc` af!`y'cirr
in which the Eligible Employee's taxable year-begins.
(b) An Eligible Employee's-
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> >
seti of dattghter- of a brother- or- sistef of the Eligible Effiployee; brother- or- sister- of the fathef ef
mother- of the Eligible Efnployee; son in > >
brother- in law, or-sister- ifi law of the Eligible Effiployee; or-
(ii) An indivi"al (other-than an individtial who a4 a+vy tifne "r-ing the taxa
Employee) who, f6f the taxable yeaf of the Eligible -Effiployee, has the same pfiiieipal plaee ef
Wovided that stieh indivi"al in (b)(i) of (b)(ii) also meets all of the fell
(A) is physie.,lly o mentally ; p b.le of',..,,ing fof himself of hefself.
alb
(T1T1) Ove f half owhose suppoft was feeeiye accrffofn the Eligi�ic
Employee for-the ealefidaf yeaf in whieh the Eligible Employee's ta*able yeaf begins; an
(G) Has the same pfifieipal plaee of abode as the Eligible Employee fef
mere than e half of the taxable eai;-an
(m) Has n of loss than the o v ptio, „ „�, , def Seel of
� than,-,
15 1(d) of the Code(whieh is $3,900 for-2011) in the ealendaf yeaf in whieh the Eligible Employ
taxable yeaf begins; and
(E) is net a qttallfyifig eh l,l of afiy othef taxpayef.
( An Eligible Employee's Sponse who:
(i)issp ysieal of mentally ineapcble ofeafifig f hifnself of hefself
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(ii) Has the saRie pr-ineipal plaee of abode as the Eligible Employee for- more
than one half of the twiable year,
1.3 Dependent Care
The expenses speeified ifi Af4iele R1 her-eifi that qualify as Eligible Expenses.
A Qualifying Individual.
1.4 Earned Income
Wages, salar-ies, tips and other- employee eoffipensation, pitts fiet eafaings from self
ametints r-eeeived as a x tfmity,as r-eif4tifsefnefft of Eligible Expenses tinder-this DCA-P
a sWdefA or- ineapable of ear-ing for- hifnself or- her-self shall be deefned, for- eaeh fnoi#h dtifing
gainfitily employed and to have Eafned ifieeme of fiet less than the following(or-stieh other-ame
as fnay be pet4nitted by applieable law):
200 pef:month, if the, eniPley e has y e epcn�cnci the a ��r
,i1DDlV ,
o
f:month, if the employee has two or-more Dependen4s for-the Plan Yea1.5 Eligible Empleyges
Gfetip, the Managemei+t Gf:ottp or- the General Manager-, the Seer-etafy of the Distfiet, and any
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DGAP. Any per-son who per-fofms sefviee for- an Employer- solely as am independent eefAfaetef
shall not be am Eligible Employee.
1.6 Expefie*ee-Gai+i
The exeess of DGAP Contributions paid ever-the Plan's total elaifn r-eimbtffsemeffts a
reasonable admiais4a4ive eests for-t4e Plan Year,
1.7 laetiffed Expenses
Will have the meaning given such term in Code section 129(e)(2).
1.5 Eligible Dependent Care€2�errse�E2ipense
An expense that is an employment-related expense under Code section 21(b)(2) that is
incurred by the Paftieipant during the Plan Year, Expenses af!e not tr-ea4ed as having been ineurfed
when the for the care of a Qualifying Individual and that is necessary for gainful employment of
the Participant and Spouse, if any, and expenses for incidental household services, if paid for by
the Participant
addition, expenses afe not treated to obtain Qualifyingpendent Care Services. An Eligible
ble
Dependent Care Expense excludes a payment to a)an individual with respect to whom a personal
exemption is allowable under Code section 151(c) to a Participant or his or her Spouse; bL
Participant's Spouse; (c) a Participant's child (as defined in Code section 152(f)(1) who is under
age 19 at the end of the Plan Year in which the expense was incurred); or (d)aparent of a
Participant's under-age-13 qualifying child. Eligible Dependent Care Expenses are eligible for
reimbursement under this DCAP.
1.6 Grace Period
The period that begins immediately following the close of a Plan Year under the DCAP
and that ends on the day that is two months plus 15 days following the close of that Plan Year.
1.7 Participant
An individual who has met the eligibility requirements under Section 3.1, elected to
participate in accordance with Section 3.2, and whose participation has not terminated under
Section 3.3.
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1.8 Qualifying Dependent Care Services
Services that are both (1) related to the care of a Qualifying Individual that enables the
Participant and Spouse to remainaig nfully employed, and(2)performed:
(a) in the Participant's home, or
(b) outside the Participant's home for (i) the care of a Participant's qualifying child
who is under age 13, or (ii) the care of any other Qualifying Individual who regularly spends at
least eight hours per day in the Participant's home.
If the services are provided by a dependent care center(i.e.,a facility that provides care for
more than six individuals not residing at the facility and that receives a fee, payment, or grant for
such services),then the center must comply with all applicable state and local laws and regulations.
1.9 Qualifying Individual
An individual who with respect to the Participant is (a) a tax dependent as defined in Code
Section 152 who is under the age of 13 and who is the Participant's qualifying child as defined in
Code section 152(a)(1); (b) a tax dependent as defined in Code Section 152, but determined
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof, who is physically or mentally
incapable of self-care and who has the same principal place of abode as the Participant for more
than half of the year; or(c) a Spouse who is physically or mentally incqpable of self-care, and who
has the same principal place of abode as the Participant for more than half of the year.
Notwithstanding the foregoing, in the case of divorced or separated parents, a Qualifying
Individual who is a child will, as provided in Code section 21(e)(5), be treated as a Qualifying
Individual of the custodial parent (within the meaning of Code section 152(e)) and will not be
treated as a Qualifying Individual with respect to the noncustodial parent.
1.10 Run-Out Period
The period during which expenses incurred during a Plan Year t or the related
Grace Period must be submitted to be eligible for reimbursement. The Run Out Period for a Plan
Year ends 90 days after the last day of that Plan
the E ffeetive Date of the Year.
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1.11 Section 125 Plan
the
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan, as amended.
1.9 Premium Payer-s,
Effiployef GF-edits.
1.12 Spouse
The individual who is legally married to the Participant under applicable state law and who
is treated as a spouse under the Code, excluding any individual who (a) is legally separated from
the Participant under a divorce or separate maintenance decree; or (b) although married to the
Participant,files a separate federal income tax return,maintains a principal residence separate from
the Participant during the last six months of the taxable year, and does not furnish more than half
of the cost of maintaining the principal place of abode of the Participant.
1.13 Student
An individual who, during each of five or more calendar months during the Plan Year, is a
full-time student at any educational organization that normally maintains a regular facul . and
curriculum and normally has an enrolled student body in attendance at the location where its
educational activities are regularly carried on.
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ARTICLE II: SCOPE OF THE PLAN
Subject to the conditions and limitations set forth in this Dependent Caro ^ssist nee Plan
doetiment-DCAP and in the Section 125 r^k4wi-a-Plan, each Participant may elect to receive
reimbursement under the DCAP for his or her EligibleDependent Care Expenses in lieu of an
equal amount of cash.
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ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION
3.1 Eligibility
The eligibility pmvisions of Seetion 2.1 of the Seetion 125 Cafeteria Plan shall apply to
this DCnn
Each Employee is eligible to participate in the DCAP on the first day of the month after he
or she becomes an Eligible Employee. The Employee's commencement of participation in the
DCAP is conditioned on the Employee timely electing to participate in the DCAP in accordance
with Section 3.2.
3.2 Election for Participation
An Eligible Employees nayLnIplo, e� elect to participate in the DCAP by submitting
ally ., Saha . Redtietio eleeti,,, r^,..v, to the Eri,,.l,yerelecting in accordance with Article III
of the Section 125 Cafeteria Plan-,Plan (a) to receive benefits in the form of reimbursements for
Eligible Dependent Care Expenses from the DCAP; (b) to pay his or her contribution for such
DCAP benefits on a pre-tax Salary Reduction basis or with Employer Credits; and byLc)
designating the amount of Salary Reduction and Employer Credits to be allocated to the DCAP
sub aeee Subaccount for the Period of Coverage, as provided in Section 3.4 of the Section 125
Gafkefia Plan. Unless an exception applies (as described in Section 3.6 of the Section 125 Planj
any such election is irrevocable for the duration of the Period of Coverage to which it relates.
3.3 Termination of Participation
A Participant's participation in fl+isthe DCAP sha 4will terminate e -gp.9n the
earliest of.
(a) the termination of the DCAP or the Section 125 Plan;
(b) the Participant's permitted election not to participate in the DCAP;
(c) the Participant ceases to be an Eligible Employee;
(-a)(dLthe last day of the Plan Year. Dependent Caro Expenses inetiffed after- stleh date
shall not be eligible fat: r-eimbtifsemen , unless the Participant elects to continue to participate in
the next Plan Year.
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An employee shall no longer- be a Pa#ieipant tinder- this DGAP if the Memor-andtim o
r-enewal or-an extensieff agreement.
Termination of participation will automatically revoke the Participant's elections. If
revocation occurs under this Section 3.3, no new election may be made by such Participant during
the remainder of the Plan Year unless otherwise permitted under the DCAP.
3.4 Reinstatement of Former Participant
Former Participants of the DCAP sha44wi11 be reinstated consistent with the provisions of
Section 2.43 of the Section 125 G Plan.
ARTICLE All DEPENDENT CARE EXPEN
4.1 Dependent Cafe Expeases are a-metints paid by a Paftieipant for- expenses for- the
eare of a Dependent whieh are ifiettffed to enable the Paftieipa-nt to be gainfully employed by
-Employer-for-any period for-w-hieh he or-she has one or-fner-e Dependents,provided t
a-r-e ifiettrFed for- the eafe of a ehild as defined in Seetion 1.!(a), or- of another-Dependent defin
•
(i) r-eseives azee, payment o—giant f,. providing sen4,.o for any of t
operatedindividuals (regardless of whether-stieh faeilivy is
(; ) pr-ov� o inere than six individuals
(iii) provides eare for mare than six individuals (other tha individuals who
reside at the f4eility) and eemplies with the appheable State and local goveminen4 laws an-,
;-egula*aans-, a
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4.2 Dependent Care E*penses shall in no evefit ifieltide amotifits paid by a Pa44ieipa*t
(a) with Fespeet to whom a dedtietiofi is allowable to the Pai4i6pant or- the Spatise
(b) who is a ehild (withifi the meatiifig of Seetieti 152 (f)(1) of the Gode) of
afe paid.
4.3 Dependent Care Expenses shall ifi no evefit ifieltide amotifits paid by a N44i6pan4
3.5 Leaves of Absence
See Sections 2.4 and 2.5 of the Section 125 Plan for rules re ag rding the effect of a leave of
absence on a Participant's participation in the DCAP.
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ARTICLE E v: ARTICLE IV: PLAN FUNDING
5,44.1 Establishment of Accounts
Section 3.1 of the Section 125 raf�a-Plan which provides for the establishment of
Accounts and—1. ,,,,,., -ts shallSubaccounts will, as modified by this section, also apply
to 9 sthe DCAP. The Plan Administrator will establish and maintain a DCAP Subaccount with
respect to each Participant who has elected to participate in the DCAP, but it will not create a
separate fund or otherwise segregate assets for this purpose. The Subaccount so established will
merely be a recordkeeping account with the purpose of keeping track of contributions and
determining forfeitures under Section 5.3.
(a) Crediting of accounts. A Participant's DCAP Subaccount for a Period of Coverage
will be credited periodically during such Period of Coverage with an amount equal to the
Participant's Salary Reductions elected to be allocated to the Subaccount.
(b) Debiting of accounts.A Participant's DCAP Subaccount will be debited during each
Period of Coverage for any reimbursement of Eligiblependent Care Expenses incurred during
the Period of Coverage (or for reimbursement of Eligible Dependent Care Expenses incurred
during any Grace Period to which he or she is entitled as provided in Section 5.4).
W(c) Available Amount is Based on Credited Amount. As described in Section 5.2, the
amount available for reimbursement of Eligible Dependent Care Expenses may not exceed the
year-to-date amount credited to the Participant's DCAP Subaccount,less an prior reimbursements
(i.e., it is based on the amount credited to the DCAP Subaccount at a particular point in time).
Thus, a Participant's DCAP Subaccount may not have a negative balance during a Period of
Coverage.
5--24.2 Employer Credits
Each Eligible Employee may, in accordance with Article III of the Section 125 Plan, elect
to apply Employer Credits oto his or her Account under Section 3.2 of the Section 125
Cafker-i Plan shall be^vail bleeplan to the DCAP to reimburse Eligible Dependent Care Expenses
the extent permitted under th�Dthat section.
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X34.3 Salary Reduction Eleetio Pr-eee'u Fe Credits
In accordance with Ai4iele nSection 3.4 of the Section 125 G Plan,each Participant
shal4will designate the amount of Salary Reduction contributions to be available during the Nan
Y-effPeriod of Coverage for Eligible Dependent Care Expense reimbursements under the DCAP.
Contributions will be withheld from each Participant's Compensation, and an equivalent amount
will be credited to the Participant's DCAP Subaccount(although no actual assets will be set aside
in that account or any other account). A Participant's contributions for each Plan Year will equal
the annual benefit amount elected by the Participant on his or her election form for the Plan Year
and may not exceed the maximum annual benefit limits for the DCAP set forth in Section 4.6 for
the applicable Plan Year.
x:44.4 Time for Making Salary Reduction Elections
The timing€e1=of Salary Reduction elections under the DCAP shallmust be consistent with
the timing outline for making such elections described in Section 3.5 of the Section 125 r'�A
Plan.
5-.-54.5 Chanfze or Revocation of c„'.,M.D oa,,,do Eleet o Elections
A Participant's Salary Reduction election for any Period of Coverage may not be changed
or revoked after the first payroll period to which it applies, except under the circumstances
described in Section 3.6 of the Section 125 Gaaf Plan
r-eveeation of a Salary Redu do eleet o shall also apply to this DCAP
4.6 Limit on Amount Credited to the DCAP
The maximum annual benefit amount that a Participant may elect to receive under this
DCAP in the form of reimbursements for Eli ig ble Dependent Care Assistanee XaaExpenses
incurred in any Period of Coverage is$5,000 or,if lower,the maximum amount that the Participant
has reason to believe will be excludable from his or her income at the time the election is made as
a result of the applicable statutory limit for the Participant. The applicable statutory limit for a
Participant is the smallest of the following amounts:
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Year-, eembined with any other-dependent ear-e assistanee r-eeeived thr-otigh an employment r-elat
plan by the Pat4ieipa+vt or-his or-her- Spettse, may not e,:��eeed the lesser-
(a) the Participant's Earned Income for the calendar year;
(b) the Earned Income of the Participant's Spouse for the calendar year for this
purpose, a Spouse who is not employed during a month in which the Participant incurs an Eligible_
Dependent Care Expense and is either (i) ph. shy or mentally incqpable of self-care, or (iii
Student will be deemed to have Earned Income in the amount specified in Code section 21(d)(2));
or
(c) either$5,000($or$2,500 i€for the calendar year, as applicable below:
(i) The amount is $5,000 for the calendar year if one of the following applies:
La) the Participant is married and files a Feder-a! laceljoint federal income tax return
separately from his or-her-Spetise), ; (b)the Participant is married,files a separate federal income
tax return, and meets the following conditions: (1) the Participant maintains as his or her home a
household that constitutes (for more than half of the taxable year) the principal abode of a
Qualifying Individual (i.e., the Dependent for whom the Participant is eligible to receive
reimbursements under the DCAP); (2)the Participant furnishes over half of the cost of maintaining
such household during the taxable year; and(3) during the last six months of the taxable ,year, the
Participant's Spouse is not a member of such household (i.e., the Spouse maintained a separate
residence); or (c) the Participant is single or is the head of the household for federal income tax
purposes.
(b) The amounts is $2,500 for the , ef
v.j ii , calendar year
the Participant is married. Hevvevems eet to the im,,w, DCAP P Sa n eduetie ount o
$5,000 per-Plan Yeaf, the applieable speeial limit in Code Seetion 2 1(d) applies if the Pa-Aieipan4's
Meuse is and resides with the Spouse, but files a Ad! time student or- is physieally or- fneatall�7
ineapable of ear-ing fef himself or-her-self separate federal income tax return.
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if the Plan has an Exper-ienee Gain w44 r-espeet to a Plan Yeaf, sueh Exper-ienee Gain shall
be fvt-ttmed to the Running Expense Fund of t4e Employer,
X74.7 Plan Administrator's Power to Modify Elections
Section 3.10 of the Section 125 C Plan which provides the Plan Administrator with
the power to modify Salary Reduction elections shall also apply to this DCAP.
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ADT1C ti V1: ARTICLE V: BENEFITS
6.1 Genefal-Ritle
The provisions of Seetion 4.1 of the Seetion 125 Cafetefia Plan deewnent shall also apply
to this DCAP-.
6.2 Dependent Cafe Expense Reimbufsemen4.s
Dependent Cafe Expenses inetiffed duting sueh Plan Year- and not other-wise feimbut!sed or- paid
undef any other-plan et!pfegam.
Paffieipant ,whe r-eeeived Dependent Cafe Expense feimbut!sements undef this Affiele during th
ti 3 Limitation �,4'
Benefits findividuals
r Ceftai
o�
The benefits provided under- this DCAP may be limited for- eeftain Par-tieipants
129(d)(3).
5.1 Dependent Care Reimbursement
A Participant may receive reimbursement under the DCAP for Eligible Dependent Care
Expenses incurred during the Period of Coverage to which the Participant's participation election
applies. In addition,certain individuals may receive a reimbursement for Eligible Dependent Care
expenses incurred during the Grace Period immediately following the close of a Plan Year in
accordance with Section 5.4. Eligible Dependent Care Expenses will be reimbursed only if
incurred during the Period of Coverage or, if applicable, during the Grace Period immediately
following the end of a Plan Year. Eligible Dependent Care Expenses will not be reimbursed for
any Plan Year or related Grace Period, unless the Participant applies for such reimbursement
before the end of the Run-Out Period.
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5.2 Maximum Amount Available
The maximum dollar amount elected by the Participant for reimbursement of Eligible
Dependent Care Expenses incurred during a Period of Coverage,reduced by prior reimbursements
during the Period of Coverage_(,Grace Period reimbursements for a prior Plan Year are not
counted), will only be available during the Period of Coverage to the extent of the actual amounts
credited to the Participant's DCAP Subaccount pursuant to Section 4.1.No reimbursement will be
made to the extent that such reimbursement would exceed the balance in the Participant's DCAP
Subaccount (that is, the year-to-date amount that has been withheld from the Participant's
Compensation for reimbursement for Eligible Dependent Care Expenses for the Period of
Coverage, less any_prior reimbursements).
5.3 Forfeitures
Except as otherwise provided below(regarding certain individuals who may be reimbursed
from prior Plan Year DCAP amounts for expenses incurred during a Grace Period), if any balance
remains in the Participant's DCAP Subaccount for a Period of Coverage after all reimbursements
have been made for the Period of Coverage,then such balance will not be carried over to reimburse
the Participant for Eligible Dependent Care Expenses incurred during a subsequent Plan Year. The
Participant will forfeit all rights with respect to such balance. All forfeitures under this DCAP will
be used as follows: (a) first,to offset any losses experienced by the Employer during the Plan Year
as a result of making reimbursements (i.e., providing DCAP benefits) with respect to all
Participants in excess of the contributions paid by such Participants throughry Reductions;
(b) second, to reduce the cost of administering the DCAP during the Plan Year or the subsequent
Plan Year (all such administrative costs will be documented by the Plan Administrator); andc�
third, to provide increased benefits or compensation to Participants in subsequent years in any
weighted or uniform fashion the Plan Administrator deems appropriate, consistent with applicable
regulations. In addition, any DCAP Subaccount benefit payments that are unclaimed (e.g.,
uncashed benefit checks)by the close of the Plan Year following the Period of Coverage in which
the Eligible Dependent Care Expense was incurred will be forfeited and applied as described
above.
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5.4 Grace Period
The DCAP has a Grace Period that follows the end of the Plan Year during which amounts
that the Participant has allocated to his or her DCAP Subaccount that are unused at the end of the
Plan Year may be used to reimburse Eligiblependent Care Expenses incurred during the Grace
Period.
To take advantage of the Grace Period, a Participant must be a Participant on the last day
of the Plan Year to which the Grace Period relates.
Eligible Dependent Care Expenses incurred during a Grace Period and approved for
reimbursement will be paid first from available amounts that were remaining at the end of the Plan
Year to which the Grace Period relates, and then from any amounts that are available to reimburse
expenses incurred during the current Plan Year. Claims will be paid in the order in which they are
received. Previous claims will not be reprocessed or recharacterized so as to change the order in
which they were received.
Expenses incurred during a Grace Period must be submitted before the end of the Run-Out
Period. Any unused amounts from a Plan Year to which the Grace Period relates that are not used
to reimburse Eligible Dependent Care Expenses incurred either during the Plan Year or during the
related Grace Period will be forfeited if not submitted for reimbursement before the end of the
Run-Out Period. A Participant may not use DCAP amounts to reimburse Eligible Medical
Expenses, as defined in the Central Contra Costa Sanitary District Health Flexible Spending
Arrangement Plan.
5.5 Receiving Health Care Reimbursement
Payment will be made to the Participant in cash as a reimbursement for Eligible Dependent
Care Expenses incurred by the Participant (or his or her Spouse or Dependents) while he or she is
a Participant during the Plan Year for which the Participant's election is effective, but only if the
substantiation requirements of Section 6.2 are satisfied. However, if the Plan Administrator so
permits, the Participant may choose to make payment for an Eligible Dependent Care Expense
with an electronic payment card arrangement.
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5.6 Post-Participation Reimbursements
When a Participant ceases to be a Participant under Section 3.3, the Participant's Salary
Reductions and election to participate will terminate. The Participant will not be able to receive
reimbursements for Eligible Dependent Care Expenses incurred after the end of the day on which
the Participant's employment terminates or the Participant otherwise ceases to be eligible.
However, such Participant (or the Participant's estate) may claim reimbursement for any Eligible
Dependent Care Expenses incurred during the Period of Coverage prior to the date that the
Participant ceases to be eligible, provided that the Participant (or the Participant's estate) files a
claim within 90 days after the date that the Participant ceases to be a Participant.
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ARTICLE E V 4 ARTICLE VI: CLAIMS PROCEDURES
in addition to the provisions outlined in the Seetions below, the elaims procedures M.
Ar-tiele V! of the 125 Cafeteria Plan shall apply for this DCAP P ., well.
7.1 Claims Substantiation
The DCAP shall reinaburse a Dependent Care Expense only if the PaFtieipant provides a-
written statement 4om an independent third party stating when the exx . etfffed and t
aniount of sueh expense. in addition, the PartieipanA must provide a written statement that t
Dependent Care Expense has not been reimbut!sed or- is not reimbufsable under any
dependent eare assistanee plan.
be t!etumed to the Partieipant by the Plan Administrator for ftifther- doeumentation. Eae.h.
Par-tieipant who fails to supply additional doetimen4ation by januafy 31 of the following Plan Y
shall be deetned not to have requested reinibur-sement f6r-the aniounts in question. No PartieipanA
shall have any rights E)r-be entitled to any reinabursement under-the DCAP unless a elaim form is
submitted as speeified.
7,26.1 General Reimbursement Procedures
Participant must apply for reimbursement by submitting
a request for- ,-eim.tffsefnent f f, in writing to the Plan Administrators in such form as the
Plan Administrator shall pay r-eimbiir-sements affer-ed under- Seefien 6.2 efily to the ext
maxiffyam allowed by law.The Plan Administfatef shall pay i:eimbufsefflents as seen as pr-aetiea
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r-eimbiffsements shall be _prescribe,no later than the end of the Plan Year-and used
as provided in Seetion 5.7 of this DGAP.
(e) Paftieipants have tinfil January 31 of Run-Out Period following the close of the
Plan Year tosuint—^'aims for- reiffibiffsement of in which the Eligible Dependent Care
€"eExpense was incurred dtffing a Plan Year,
7.3 DooAmenta4ien�ee
exce t that are 4mitte
by Paftieipa+4s. The seepe of the Plan Administ+ater-'s review W44 r-espeet to t4is PGAP is to
auto
whethet:the Pai4ieipant's expenses appe for a Participant who ceases to be eligible to
participate,this must be done no later than 90 days after the date that eligibility ceases,as described
in Section 5.6) and must provide the substantiation required Section 6.2 or as otherwise requested
by the Plan Administrator or its designee.
6.2 Substantiation of Expenses
The reimbursement request described in Section 6.1 must include:
(a) the person(s) on whose behalf Eligible Dependent Care Expenses-awl have been
incurred;
(b) —whether the Paftieipant's elaiin the nature and date of the expenses so incurred;
(c) the amount of the requested reimbursement;
(d) the name of the person, organization or entity to whom the expense was or is to be
paid;
(e) a statement that such expenses have not otherwise been reimbursed and that the
Participant will not seek reimbursement through any other source;
(f) the Participant's certification that he or she has no reason to believe that the
reimbursement requested, added to his or her other reimbursements to date for Eligiblependent
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Care Expenses incurred during the same calendar year, will exceed the applicable statutory limit
for the Participant as described in Section 4.6; and
(g) other such details about the expenses that may be requested by the Plan
Administrator in the reimbursement request form icor otherwise(e.g.,a more detailed certification
from the Participant).
The application will be accompanied by bills, invoices, or other statements
from an independent third party showing that the Eligible Dependent Care Expenses have been
incurred and showing the amounts of such expenses, along with any additional documentation that
the Plan Administrator may request. If the DCAP is accessible by an electronic payment card(e.g.,
debit card, credit card, or similar arrangement), the Participant will be required to comply with
mandatory substantiation procedures and other mandatory terms and conditions that willogyern
the Participant's use of the electronic payment card in accordance with Code section 125 and
applicable IRS guidance.
elaim..
The Plan Administfater- shall not be r-espeasible for- tmdeAaking any independent in
6.3 Claims and Appeals Procedures
See Article VI of the Section 125 Plan for procedures for processing claims and appeals of
denied claims.
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ARTICLE 17771: ARTICLE VII: GENERAL PROVISIONS
8,47.1 Administration of the Dependent Care Assistance Plan
The DCAP shallwili be administered in accordance with provisions set forth in Article V
of the Section 125 G Plan.
8,27.2 Miscellaneous Provisions
The miscellaneous provisions described in Article VII of the Section 125 ' Plan
shallwill also apply to this DCAP.
837.3 Amendment and Termination of the Dependent Care Assistance Plan
Subject to Article VIII of the Section 125 Plan,the Employer the fight4emay
amend or terminate this DCAP in whole or in part at any time, subJeet to the tenter fele Vill
of the Seeta21—afetefia Plan.
The DCAP P m ay be*o,-, inane and for any 4mereason by aetien-e€resolution of the Board
or by apy person or persons authorized bX the Employer-if the Memer-andum of Un er-sta ding of
Board to take such DGAP has expire
eaeh employee representation unit eliminates sueh sueDCA reaction.
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AMENDMENT OF T-14E DEPENDENT CARE ASSISTANCE PLAN
ARTICLE VIII: EXECUTION
As evidence of its amendment and restatement of this Dependent Cafe Assistanee
Wa-nDCAP, the Central Contra Costa Sanitary District has caused this instrument to be signed by
its o ffieer-s thereunder duly authorized lereteofficers on this N*_ day of Deeefnbe2012.
, 2019.
By:
President, Board of Directors
For:
THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Elaine BeehmeKatie Young„ Secretary of the District
(Print Name and Title)
Appovedasto f :
Kenteff L. Alm.
Dist-Fiet Counsel
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FATTACHMENT 5
CENTRAL CONTRA COSTA SANITARY DISTRICT
SECTION 125 CAFETERIA PLAN
Amended and Restated
Effective July 1, 2019
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TABLE OF CONTENTS
Page
INTRODUCTION ...........................................................................................................................1
ARTICLE 1: DEFINITIONS ...........................................................................................................3
1.1 Account....................................................................................................................3
1.2 Administrative Committee.......................................................................................3
1.3 Board........................................................................................................................3
1.4 COBRA....................................................................................................................3
1.5 Code.........................................................................................................................3
1.6 Compensation ..........................................................................................................3
1.7 Component Plan.......................................................................................................3
1.8 Dependent................................................................................................................4
1.9 Effective Date ..........................................................................................................4
1.10 Eligible Employee....................................................................................................4
1.11 Eligible Expense ......................................................................................................4
1.12 Employee.................................................................................................................4
1.13 Employer..................................................................................................................4
1.14 Employer Credit.......................................................................................................5
1.15 FMLA ......................................................................................................................5
1.16 Open Enrollment Period ..........................................................................................5
1.17 Participant................................................................................................................5
1.18 Period of Coverage ..................................................................................................5
1.19 Plan ..........................................................................................................................5
1.20 Plan Administrator...................................................................................................5
1.21 Plan Year..................................................................................................................5
1.22 Salary Reduction......................................................................................................6
1.23 Spouse......................................................................................................................6
ARTICLE 11: ELIGIBILITY AND PLAN PARTICIPATION.......................................................7
2.1 Commencement of Participation..............................................................................7
2.2 Termination of Participation....................................................................................7
2.3 Resumption of Participation ....................................................................................7
2.4 FMLA Leaves of Absence.......................................................................................8
2.5 Non-FMLA Leaves of Absence.............................................................................10
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ARTICLE III: PLAN FUNDING..................................................................................................11
3.1 Establishment of Accounts ....................................................................................11
3.2 Employer Credits...................................................................................................11
3.3 Salary Reduction Credits.......................................................................................12
3.4 Designation of Salary Reduction and Employer Credits to Subaccounts..............12
3.5 Time for Making Elections....................................................................................12
3.6 Change or Revocation of Elections........................................................................13
3.7 Limit on Amount Credited to DCAP Subaccount.................................................21
3.8 Limit on Amount Credited to Health FSA Subaccount.........................................21
3.9 Limit on Amount Credited to PCP Subaccount.....................................................21
3.10 Plan Administrator's Power to Modify and Suspend Elections.............................21
ARTICLE IV: BENEFITS.............................................................................................................23
4.1 General Rule..........................................................................................................23
4.2 Health FSA.............................................................................................................23
4.3 Dependent Care Expenses......................................................................................23
4.4 Premium Expenses.................................................................................................23
4.5 Cash Benefits.........................................................................................................23
ARTICLE V: PLAN ADMINISTRATION...................................................................................24
5.1 Plan Administrator.................................................................................................24
5.2 Plan Administrator's Powers and Duties...............................................................24
5.3 General Plan Administration..................................................................................26
5.4 Reliance on Information Furnished by Others.......................................................26
5.5 Indemnification by Employer................................................................................27
5.6 Discretionary Power of Plan Administrator...........................................................27
5.7 Compensation of Plan Administrator.....................................................................27
5.8 Inability to Locate Payee .......................................................................................27
ARTICLE VI: CLAIMS PROCEDURES .....................................................................................29
6.1 Claim Procedures...................................................................................................29
6.2 Appeal Procedure...................................................................................................29
6.3 Agent for Service of Process..................................................................................30
6.4 Notices...................................................................................................................30
6.5 Evidence.................................................................................................................30
ARTICLE VII: MISCELLANEOUS.............................................................................................31
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7.1 Component Plans Control......................................................................................31
7.2 Governing Law......................................................................................................31
7.3 Severability............................................................................................................31
7.4 Plan Not An Employment Contract.......................................................................31
7.5 Non-Assignability of Rights..................................................................................31
7.6 Facility of Payment................................................................................................32
7.7 Mistake...................................................................................................................32
7.8 Expenses ................................................................................................................32
7.9 Compliance With Code and Other Applicable Laws.............................................32
7.10 No Guarantee of Tax Consequences......................................................................33
7.11 Insurance Contracts................................................................................................33
ARTICLE VIII: AMENDMENT AND TERMINATION............................................................34
8.1 Amendment............................................................................................................34
8.2 Termination............................................................................................................34
ARTICLE IX: EXECUTION ........................................................................................................35
APPENDIX A 1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
SECTION 125 CAFETERIA PLAN
INTRODUCTION
Effective as of July 1, 2019, the Central Contra Costa Sanitary District (the
"Employer") hereby amends and restates the Central Contra Costa Sanitary District Section
125 Cafeteria Plan (the "Plan") to provide benefits for certain of its employees. This Plan
incorporates the Central Contra Costa Sanitary District Premium Conversion Plan ("PCP"),
the Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan
("Health FSA"), and the Central Contra Costa Sanitary District Dependent Care Assistance
Plan ("DCAP") (collectively, the "Component Plans") covering Eligible Employees of the
Employer, as listed in Appendix A of this Plan. The Employer originally adopted the Plan and
the Component Plans effective May 1, 1989. Since then, the Employer has amended the Plan
and the Component Plans on various occasions. The Employer most recently amended and
restated the Plan and the Component Plans effective January 1, 2013, and has amended the
Plan once since then.
The Plan and the Component Plans are intended to satisfy the applicable requirements
of Code sections 105, 106, 125, and 129, and any other applicable law. The Plan is specifically
intended to qualify as a "cafeteria plan" under Code section 125, and is to be interpreted in a
manner consistent with the requirements of section 125. The Employer established the Plan to
provide Eligible Employees with a choice between cash and certain "qualified benefits" as
defined in Code section 125(f) and the regulations thereunder.
This Plan and all Component Plans listed in Appendix A are maintained for the
exclusive benefit of the Employer's Employees.
The provisions of this Plan shall apply only to certain employees of the Employer who
are eligible to receive benefits under at least one of the Component Plans listed in Appendix
A. The rights and benefits, if any, of former Employees will be determined in accordance with
provisions of the Plan in effect on the date employment terminated.
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Appendix A, Component Plans, attached to this Plan is incorporated herein by
reference and is a part hereof, and may be amended without necessity for other amendment of
this Plan.
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ARTICLE I: DEFINITIONS
When used in this Plan and in the Component Plans, the following words and phrases
will, except as specifically provided in the Component Plans, have the following meanings,
unless the context clearly indicates otherwise:
1.1 Account
The bookkeeping account established for each Participant under Section 3.1. Each
Account will be comprised of a PCP Subaccount, Health FSA Subaccount, or DCAP
Subaccount (each a "Subaccount," and collectively, "Subaccounts") as described in that
section.
1.2 Administrative Committee
The committee appointed by the Board in accordance with Section 5.1.
1.3 Board
The Employer's Board of Directors.
1.4 COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
1.5 Code
The Internal Revenue Code of 1986, as amended.
1.6 Compensation
The total wages paid during a Plan Year to the Employee by the Employer, as reported
in Box 1 of Form W-2,plus amounts that would be included in wages but for an election under
Code sections 125(a), 132(f)(4), or 457(b).
1.7 Component Plan
A separate written plan maintained by the Employer to provide health flexible spending
arrangement benefits or dependent care assistance to Eligible Employees or to permit Eligible
Employees to pay their share of the cost of the Employer group health insurance benefits on a
pre-tax basis. Such Component Plans are listed in Appendix A and incorporated herein. Such
Component Plans may be amended at any time without necessity for other amendment of this
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Plan. Each Component Plan is governed by the terms of its plan document, which terms shall
prevail in case of any conflict between this Plan and a Component Plan.
1.8 Dependent
Dependent as defined in the applicable Component Plan.
1.9 Effective Date
July 1, 2019, the date this amendment and restatement of the Plan is effective. Each
Component Plan is effective as of the date set forth in the Component Plan.
1.10 Eligible Employee
A regular Employee who is regularly scheduled to work at least 30 hours per week.
"Eligible Employee" excludes an Employee who the Employer classifies as seasonal or
temporary.
1.11 Eligible Expense
An Eligible Premium Expense, Eligible Medical Expense, or Eligible Dependent Care
Expense, each as defined in the PCP, Health FSA, and DCAP, respectively.
1.12 Employee
An individual who the Employer classifies as a common-law employee, and who the
Employer reports on a Form W-2. "Employee" excludes any individual who (a)the Employer
classifies as a "leased employee" (as defined in Code section 414(n)), an independent
contractor or a contract worker, or(b)performs services for the Employer, but who is paid by
a temporary or other employment staffing agency for the period during which the individual is
paid by such agency and not by the Employer as a common-law employee, whether or not a
court or administrative agency determines such individual is a common-law employee.
1.13 Employ
The Central Contra Costa Sanitary District, and any organization that is a successor
thereto.
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1.14 Employer Credit
The amounts the Employer credits to Participants' Accounts under Section 3.2 to be
used by Participants to pay Eligible Expenses under the Component Plans.
1.15 FMLA
The Family and Medical Leave Act of 1993, as amended.
1.16 Open Enrollment Period
The period during the Plan Year during which Eligible Employees may elect to
participate in the Plan or make changes to their elections for the next Plan Year. The Employer
will determine this period each Plan Year, which period the Administrator will make known
in the Plan's open enrollment materials.
1.17 Participant
An Eligible Employee who participates in the Plan in accordance with Article I1.
1.18 Period of Coverage
The Plan Year, with the following exceptions: (a) for a newly eligible Employee, the
portion of the Plan Year beginning when he or she commences participation in accordance
with Section 2.1, and (b) for a Participant who ceases participation, the portion of the Plan
Year ending when his or her participation terminates in accordance with Section 2.2.
1.19 Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan, the terms of
which are set forth herein, as it may be amended from time to time.
1.20 Plan Administrator
The Employer or the persons, if any, appointed by the Employer to administer the Plan
in accordance with Section 5.1.
1.21 Plan Year
The 12-consecutive-month period beginning each January 1 st and ending December
31 st.
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1.22 Salary Reduction
The amount by which a Participant's Compensation is reduced pursuant to the
Participant's election in accordance with Article III.This amount is credited to the Participant's
Account, as provided in Article III, for the sole purpose of paying Eligible Expenses.
1.23 Spouse
The individual who is legally married to the Participant under applicable state law and
who is treated as a spouse under the Code. A civil union partner or domestic partner is not
treated as a Spouse under the Code. The DCAP more specifically defines Spouse for purposes
of that plan.
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ARTICLE II: ELIGIBILITY AND PLAN PARTICIPATION
2.1 Commencement of Participation
Each Participant in the Plan as in effect immediately before the Effective Date who has
not elected to terminate coverage under all Component Plans will remain a Participant. On and
after that date, an individual will become a Participant on the first day of the month after he or
she becomes an Eligible Employee or, if later, when he or she submits a timely election to
participate in accordance with Article III.
2.2 Termination of Participation
A Participant's participation in the Plan terminates upon the earliest of-
(a)
£(a) the termination of the Plan or all Component Plans;
(b) the Participant's permitted election not to participate in the Plan or all
Component Plans; or
(c) the Participant ceases to be an Eligible Employee.
Termination of participation in this Plan will automatically revoke the Participant's
elections. If revocation occurs under this Section 2.2, no new election may be made by such
Participant during the remainder of the Plan Year unless otherwise permitted under the Plan.
2.3 Resumption of Participation
If a Participant terminates his or her employment for any reason, including (but not
limited to) disability, retirement, layoff, or voluntary resignation, and then is rehired or
becomes eligible once again within 30 days after termination, then the individual will be
reinstated with the same elections that he or she had before termination. If a former Participant
is rehired more than 30 days after termination of employment and is otherwise eligible to
participate in the Plan, then the individual may make new elections as a new hire as described
in Section 3.5(a). Despite the preceding, an election to participate in the PCP will be reinstated
only to the extent that coverage under the applicable group health plan is reinstated. If an
Employee (whether or not a Participant) ceases to be an Eligible Employee for any reason
(other than for termination of employment), including(but not limited to) a reduction of hours,
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and then becomes an Eligible Employee again, the Employee can participate in the Plan by
making a timely election to participate in accordance with Article III.
2.4 FMLA Leaves of Absence
(a) Health Insurance Benefits. Despite any contrary Plan provision, if a Participant
goes on a qualifying leave under the FMLA, then to the extent required by the FMLA, the
Employer will continue to maintain the Participant's health insurance benefits and Health FSA
benefits on the same terms and conditions as if the Participant were still an active Employee.
That is, if the Participant elects to continue his or her coverage while on leave, the Employer
will continue to pay its share of the contributions for those benefits under this Plan.
The Employer may require Participants to continue all health insurance benefits and
Health FSA benefits coverage while they are on paid leave (provided that Participants on
non-FMLA paid leave are required to continue coverage). If so, the Participant's share of the
contributions will be paid by the method normally used during any paid leave (e.g., on a pre-
tax Salary Reduction basis).
In the event of unpaid FMLA leave(or paid FMLA leave where the Employer does not
require coverage to be continued), a Participant may elect to continue his or her health
insurance benefits and Health FSA benefits during the leave. If the Participant elects to
continue coverage while on FMLA leave, then the Participant may pay his or her share of the
contributions in one of the following ways:
(i) With after-tax dollars, by sending monthly payments to the Employer
by the due date established by the Employer;
(ii) With pre-tax dollars, by having such amounts withheld from the
Participant's ongoing Compensation(if any), including unused sick days and vacation days, or
pre-paying all or a portion of the contributions for the expected duration of the leave on a pre-
tax Salary Reduction basis out of pre-leave Compensation. To pre-pay the contributions, the
Participant must make a special election to that effect prior to the date that such Compensation
would normally be made available (pre-tax dollars may not be used to fund coverage during
the next Plan Year); or
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(iii) Under another arrangement agreed upon between the Participant and the
Plan Administrator (e.g., the Plan Administrator may fund coverage during the leave and
withhold "catch-up" amounts from the Participant's Compensation on a pre-tax or after-tax
basis) upon the Participant's return.
If the Employer requires all Participants to continue health insurance benefits and
Health FSA benefits during an unpaid FMLA leave, then the Participant may elect to
discontinue payment of the Participant's required contributions until the Participant returns
from leave. Upon returning from leave, the Participant will be required to repay the
contributions not paid by the Participant during the leave. Payment will be withheld from the
Participant's Compensation either on a pre-tax or after-tax basis, as agreed to by the Plan
Administrator and the Participant.
If a Participant's health insurance benefits or Health FSA benefits coverage ceases
while on FMLA leave(e.g., for non-payment of required contributions),then the Participant is
permitted to reenter the PCP or Health FSA as applicable, upon return from such leave on the
same basis as when the Participant was participating prior to the leave,or as otherwise required
by the FMLA. In addition, the Plan may require Participants whose health insurance benefits
or Health FSA coverage terminated during the leave to be reinstated in such coverage upon
return from a period of unpaid leave, provided that Participants who return from a period of
unpaid,non-FMLA leave are required to be reinstated in such coverage. Despite the preceding
sentence, with regard to Health FSA benefits, a Participant whose coverage ceased will be
permitted to elect whether to be reinstated in the Health FSA benefits at the same coverage
level as was in effect before the FMLA leave (with increased contributions for the remaining
period of coverage)or at a coverage level that is reduced pro rata for the period of FMLA leave
during which the Participant did not pay contributions. If a Participant elects a coverage level
that is reduced pro rata for the period of FMLA leave, then the amount withheld from a
Participant's Compensation on a pay-period-by-pay-period basis for the purpose of paying for
reinstated Health FSA benefits will be equal to the amount withheld on a pay-period-by-pay-
period basis prior to the period of FMLA leave.
(b) Non-Health Benefits. If a Participant goes on a qualifying leave under the
FMLA, then entitlement to non-health benefits (such as DCAP benefits) is to be determined
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by the Employer's policy for providing such benefits when the Participant is on non-FMLA
leave, as described in Section 2.5. If such policy permits a Participant to discontinue
contributions while on leave, then the Participant will, upon returning from leave, be required
to repay the contributions not paid by the Participant during the leave. Payment will be
withheld from the Participant's Compensation either on a pre-tax or after-tax basis, as may be
agreed upon by the Plan Administrator and the Participant or as the Plan Administrator
otherwise deems appropriate.
2.5 Non-FMLA Leaves of Absence
If a Participant goes on an unpaid leave of absence that does not affect eligibility, then
the Participant will continue to participate and the contributions due for the Participant will be
paid by pre-payment before going on leave, by after-tax contributions while on leave, or with
catch-up contributions(on a pre-tax or after-tax basis)after the leave ends,as may be permitted
by the Plan Administrator. If a Participant goes on an unpaid leave that affects eligibility,then
the applicable election change rules in Section 3.6 will apply.
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ARTICLE III: PLAN FUNDING
3.1 Establishment of Accounts
The Employer will establish and maintain an Account for each Participant comprised
of a Health FSA Subaccount, a DCAP Subaccount, and a PCP Subaccount. The Employer will
credit each Subaccount with the amounts specified in Sections 3.2 and 3.3 in accordance with
the Participant's designations under Section 3.4.
Accounts are for bookkeeping purposes only; benefits under the Plan will be paid
entirely from the general assets of the Employer. No provision of this Plan will be construed
to require the Employer or Plan Administrator to maintain any fund or segregate any amount
for the benefit of any Participant, and no Participant or other person will have any claim
against, right to, or security or other interest in, any fund, account or asset of the Employer
from which any payment under the Plan may be made. The Plan does not create a trust in favor
of a Participant or any person claiming on a Participant's behalf.
3.2 Employer Credits
(a) The Employer will credit each Participant's Account each month with an
Employer Credit equal to the amount that the Employer has agreed in the applicable
Memorandum of Understanding or individual employment agreement to contribute to the Plan
on the Participant's behalf for the Participant to use to pay the cost of any benefit elected by
the Participant under the Plan.
(b) The Employer will, each month, credit the PCP Subaccount of each Participant
who is enrolled in a Public Employees' Medical and Hospital Care Act ("PEMHCA") health
plan for the month with an Employer Credit for the exclusive purpose of paying the applicable
health plan premium. The Employer Credit will, when added to the applicable PEMHCA
minimum employer contribution paid by the Employer directly to the California Public
Employees' Retirement System on the Participant's behalf for the Plan Year, equal the health
insurance premium the Employer has agreed in the applicable Memorandum of Understanding
or individual employment agreement to pay on the Participant's behalf.
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(c) The Employer will, each month, credit the Health FSA Subaccount of each
Participant who is a Board member, and who elects to waive coverage under the Employer's
group health plans with an Employer Credit equal to $41.66.
3.3 Salary Reduction Credits
Each Participant may make a written Salary Reduction election to have his or her
annual Compensation reduced,but not below zero,by an amount not to exceed the cumulative
total of the maximum limitations as stated in Plan Sections 3.7 and 3.8.
3.4 Designation of Salary Reduction and Employer Credits to Subaccounts
(a) Each Participant who elects Salary Reduction or who is credited with Employer
Credits must designate the Salary Reduction or Employer Credits to be applied during the Plan
Year to one or more of the benefits described in Article IV, and the amounts so designated will
be credited to the appropriate Subaccounts within the Participant's Account.
(b) No Salary Reduction or Employer Credits will be credited to a Participant's
Account until the Participant has made such designation.
(c) Each Subaccount will be debited during the Plan Year for any benefits paid.
Amounts designated to each Subaccount may not be changed during the Plan Year, except as
provided in Section 3.6.
Eligible Medical Expenses (as defined in Section 1.3 of the Health FSA) will be
reimbursed in accordance with Article V of the Health FSA.Eligible Dependent Care Expenses
(as defined in Section 1.5 of the DCAP) will be reimbursed in accordance with Article V of
the DCAP. Eligible Premium Expenses (as defined in Section 1.3 of the PCP) will be paid in
accordance with Article V of the PCP.
3.5 Time for Making Elections
(a) Salary Reduction and benefit election forms must be properly completed and
submitted annually to the Plan Administrator during the Open Enrollment Period before the
first day of each Plan Year. If an Eligible Employee initially becomes eligible to participate in
the Plan mid-year,he or she must properly complete and submit a Salary Reduction and benefit
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election form to the Plan Administrator within 30 days after he or she first becomes eligible to
participate in the Plan.
(b) If an Eligible Employee fails to make a timely election,he or she will be deemed
to have elected to receive cash in lieu of benefits under the Health FSA,the DCAP, or the PCP
as described in Article IV.
3.6 Change or Revocation of Elections
Except as provided in this section, a Participant's Salary Reduction and benefit
elections for any Period of Coverage are irrevocable for the duration of the Period of Coverage.
Therefore, unless an exception applies, a Participant may not change any Salary Reduction or
benefit elections for the duration of the Period of Coverage. A mid-year election change will
be permitted upon the occurrence of an event described in this section only if it is made on
account of and corresponds with, as defined by Treasury regulations or other applicable
guidance issued under Code section 125,the event. Except as provided in subsection(a)of this
section, an election change must be made within 30 days of the occurrence of an event
described in this section.
(a) Special Enrollment Rights. A Participant may revoke his or her election for
group health plan coverage under the PCP during a Period of Coverage and make a new
election for the balance of the Period of Coverage that corresponds with the special enrollment
rights under a group health plan that the Participant or his or her Spouse or Dependent is
entitled to under Code section 9801(f). The Participant must make any new election within 30
days or 60 days, as applicable, in accordance with the notice requirement under Code section
9801(f). Such election change will apply prospectively, unless otherwise required by Code
section 9801(f)to be retroactive.No election change may be made to the Health FSA or DCAP
under this Section 3.6(a). A special enrollment right will arise in the following circumstances:
(i) A Participant or his or her Spouse or Dependent declined to enroll in
group health plan coverage because he or she had coverage, and eligibility for such coverage
is subsequently lost because: (a) the coverage was provided under COBRA, and the COBRA
coverage was exhausted, or (b) the coverage was non-COBRA coverage and the coverage
terminated due to loss of eligibility for coverage or the employer contributions for the coverage
were terminated;
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(ii) A new Dependent is acquired as a result of marriage,birth, adoption, or
placement for adoption;
(iii) The Participant or Dependent becomes eligible for a state premium
assistance subsidy from a Medicaid plan or through a state children's health insurance program
with respect to coverage under the group health plan; or
(iv) The Participant's or Dependent's coverage under a Medicaid plan or
state children's health insurance program is terminated as a result of loss of eligibility for such
coverage.
(b) Change in Status. A Participant may change his or her election during a Period
of Coverage for the remainder of the Period of Coverage under the PCP, the Health FSA, and
the DCAP, as further limited below, upon a Change in Status, but only if the election change
is made on account of and corresponds with a Change in Status that affects eligibility for
coverage under an Employer's plan or a Spouse's or Dependent's employer's plan. Generally,
an election change corresponds with a Change in Status involving a Participant's divorce,
annulment, or legal separation from a Spouse, the death of a Spouse or Dependent, or a
Dependent's ceasing to satisfy the eligibility requirements for accident or health coverage only
if the election is to cancel accident or health coverage for the individual involved in the event.
In addition, an election change generally corresponds with a Change in Status involving a
Participant, Spouse or Dependent gaining eligibility for coverage under an Employer's plan or
a Spouse's or Dependent's employer's plan only if the coverage for that individual becomes
effective or is increased under the Employer's plan or the Spouse's or Dependent's employer's
plan. Finally, with respect to the DCAP, a Participant may change or terminate his or her
election upon a Change in Status if(i) such change or termination is made on account of and
corresponds with a Change in Status that affects eligibility for coverage under an employer's
plan, or(ii) the election change is on account of and corresponds with a Change in Status that
affects eligibility of dependent care expenses for the tax exclusion under Code section 129. A
"Change in Status" means any of the events described below, as well as any other events
included under subsequent changes to Code section 125 or regulations issued thereunder,
which the Plan Administrator, in its sole discretion and on a uniform consistent basis,
determines are permitted under IRS regulations and under this Plan:
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(i) Legal Marital Status. A change in a Participant's legal marital status
including marriage, the Spouse's death, divorce, legal separation and annulment.
(ii) Number of Dependents. An event that changes the number of a
Participant's Dependents including birth, death, adoption and placement for adoption.
(iii) Employment Status. Any of the following events that change the
employment status of a Participant or his or her Spouse or Dependents: (a) a termination or
commencement of employment; (b) a strike or lockout; (c) a commencement of or a return
from an unpaid leave of absence; (c) a change in worksite; and (d) when the eligibility
conditions of the Plan, a Component Plan, or other employee benefits plan of the Participant
or his or her Spouse or Dependent depends on the employment status of that individual and
there is a change in that individual's employment status with the consequence that the
individual becomes (or ceases to be) eligible under such plan.
(iv) Dependent Eli ig bility Requirements. An event that causes a Dependent
to satisfy or to cease to satisfy the eligibility requirements for a particular benefit, such as
attaining a specified age or any similar circumstance.
(v) Change in Residence. A change in residence of a Participant or a his or
her Spouse or Dependents.
(vi) COBRA Eli ibg ility_. If a Participant, or a Participant's Spouse or
Dependent, becomes eligible under Code section 498013, or any similar state law, for
continuation coverage in a group health plan offered by the Employer, a Participant may
increase his or her Salary Reduction to pay for such continuation coverage.
(c) Certain Judgments, Decrees, or Orders
A judgment, decree, or order resulting from a divorce, legal separation, annulment or
change in legal custody(including a qualified medical child support order as defined in section
609 of the Employee Retirement Income Security Act of 1974, as amended) that requires
accident or health coverage for a Participant's child (including a foster child who is the
Participant's Dependent), then the Participant may either (i) change his or her election under
the PCP or Health FSA to provide coverage for the child, provided the order requires the
Participant to provide coverage, or(ii)change his or her election under the PCP or Health FSA
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to revoke coverage for the child if the order requires the Participant's Spouse, former Spouse
or another individual to provide coverage under that individual's plan and that coverage is
actually provided.
(d) Entitlement to Medicare or Medicaid
If a Participant or his or her Spouse or Dependent who is enrolled in the PCP or Health
FSA becomes enrolled in Medicare Part A or Part B or Medicaid, the Participant may
prospectively elect to cancel the accident or health coverage(and the PCP premium conversion
benefit for that coverage) of the individual who becomes enrolled in Medicare or Medicaid or
the Participant's Health FSA coverage may be canceled. Despite the preceding sentence, a
cancellation of Health FSA coverage will not become effective to the extent it would reduce
future contributions to the Health FSA to a point where the total contributions for the Plan
Year are less than the amount already reimbursed for the Plan Year. If a Participant or a
Participant's Spouse or Dependent who has been enrolled in Medicare or Medicaid loses
eligibility for such coverage, the Participant may make a prospective election to commence or
increase the accident or health coverage for that individual or the Participant may elect to
commence or increase his or her Health FSA coverage.
(e) Change in Cost
This subsection (e) applies to the PCP and, as limited below, the DCAP, but not the
Health FSA. For purposes of this subsection (e), "similar coverage" means coverage for the
same category of benefits for the same individuals (e.g., family to family or single to single).
For example, two plans that provide major medical coverage are considered to be similar
coverage. For purposes of this definition, (1) a health FSA is not similar coverage with respect
to an accident or health plan that is not a health FSA; (2) an HMO and a PPO are considered
to be similar coverage; and (3) coverage by another employer, such as a Spouse's or
Dependent's employer, may be treated as similar coverage if it otherwise meets the
requirements of similar coverage.
(i) Automatic Changes. If the cost of a Participant's benefits under the PCP
or DCAP insignificantly increases or decreases during a Period of Coverage, Participants are
required to correspondingly increase or decrease their decrease their Salary Reduction
contributions. The Plan Administrator will, in its sole discretion and on a uniform and
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consistent basis, determine whether an increase or decrease is insignificant based on all the
surrounding facts and circumstances, including but not limited to the dollar amount or
percentage of the cost change. The Plan Administrator will, on a reasonable and consistent
basis, automatically effectuate this increase or decrease in affected Participants' Salary
Reduction elections prospectively.
(ii) Significant Cost Increases. If the Plan Administrator, in its sole
discretion and on a uniform and consistent basis,determines in accordance with prevailing IRS
guidance that the cost of a Participant's benefits under the PCP or DCAP significantly
increases during a Period of Coverage, the Participant may:
(a) Revoke his or her Salary Reduction election for that coverage
and elect to receive coverage prospectively under another benefit option that provides similar
coverage;
(b) Revoke his or her Salary Reduction election and drop coverage
if there is no other benefit option that provides similar coverage; or
(c) Correspondingly elect to increase his or her Salary Reduction
contributions prospectively.
(iii) Significant Cost Decreases. If the Plan Administrator, in its sole
discretion and on a uniform and consistent basis,determines in accordance with prevailing IRS
guidance that the cost of a benefit under the PCP or DCAP significantly decreases during a
Period of Coverage:
(a) Participants who enrolled in another benefit may revoke their
election and prospectively elect the benefit that has decreased in cost;
(b) Employees who are otherwise eligible to participate in the Plan
under Article II may prospectively elect the benefit that has decreased in cost, subject to the
terms and limitations of the benefit; or
(c) Participants enrolled in the benefit may prospectively elect to
correspondingly decrease in their Salary Reduction contributions.
(iv) Limitation on Change in Cost Provisions for DCAP. The preceding
"change-in-cost" provisions apply to the DCAP only if the cost change is imposed by a
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dependent care provider who is not a"relative" of the Participant. For this purpose, "relative"
means an individual who is related to the Participant as described in Code sections
152(d)(2)(A)through(G), incorporating the rules of Code sections 152(f)(1) and 152(f)(4).
(f) Change in Coverage
This subsection (f) applies to the PCP and the DCAP, but does not apply to the Health
FSA. The definition of"similar coverage" under subsection (e) of this section applies to this
subsection.
(i) Significant Curtailment. If coverage is "significantly curtailed" (as
defined below), Participants may elect coverage under another Plan benefit option that
provides similar coverage. In addition, as set forth below, if the coverage curtailment results
in a "loss of coverage" (as defined below), then Participants may drop coverage if no similar
coverage is offered by the Employer. The Plan Administrator will, in its sole discretion and on
a uniform and consistent basis, decide, in accordance with prevailing IRS guidance,whether a
curtailment is "significant," and whether a loss of coverage has occurred.
(a) Significant Curtailment Without Loss of Coverage. If the Plan
Administrator determines that a Participant's or his or her Spouse's or Dependent's coverage
under a plan is significantly curtailed without a loss of coverage during a Period of Coverage,
the Participant may revoke his or her election for the affected coverage, and may prospectively
elect coverage under another Plan benefit option that provides similar coverage (such as an
HMO,but not the Health FSA). Coverage is"significantly curtailed"only if there is an overall
reduction in coverage provided so as to constitute reduced coverage generally.
(b) Significant Curtailment With Loss of Coverage. If the Plan
Administrator determines that a Participant's or his or her Spouse's or Dependent's coverage
under a plan is significantly curtailed, and if such curtailment results in a loss of coverage
during a Period of Coverage, the Participant may elect to either:
(1) Revoke his or her election for the affected coverage and
prospectively elect coverage under another Plan benefit option that provides similar coverage
(such as an HMO, but not the Health FSA); or
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(2) Prospectively drop coverage if no other Plan benefit
option provides similar coverage.
(c) Loss of Coverage. For purposes of this subsection (f), "loss of
coverage" means a complete loss of coverage under the Plan benefit option (including the
elimination of a benefits package option or an HMO ceasing to be available in the area where
the individual resides). In addition, the Plan Administrator may, in its sole discretion and on a
uniform and consistent basis, treat the following as a loss of coverage:
(1) A substantial decrease in the medical care providers
available under the Plan benefit option (such as a major hospital ceasing to be a member of a
preferred provider network or a substantial decrease in the number of physicians participating
in a PPO or HMO);
(2) A reduction in the benefits for a specific type of medical
condition or treatment with respect to which a Participant or his or her Spouse or Dependent
is currently in a course of treatment; or
(3) Any other similar fundamental loss of coverage.
(d) Dependent Care Coverage Changes. A Participant may make a
prospective election change that is on account of and corresponds with a change by the
Participant in the dependent care service provider. For example: (1) if the Participant
terminates one dependent care service provider and hires a new dependent care service
provider, then the Participant may change coverage to reflect the cost of the new service
provider; and (2) if the Participant terminates a dependent care service provider because a
relative becomes available to take care of the child at no charge,then the Participant may cancel
coverage.
(ii) Addition or Significant Improvement of a Plan Benefit Option. If,
during a Plan Year,the Employer adds a new Plan benefit option, or significantly improves an
existing Plan benefit option: (a) Participants who are enrolled in a Plan benefit option other
than the newly added or significantly improved Plan benefit option may revoke their elections
of the Plan benefit option in which they are enrolled and prospectively elect the newly added
or significantly improved Plan benefit option, or(b) Employees who are otherwise eligible to
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participate in the Plan under Article II may elect the newly added or significantly improved
Plan benefit option on a prospective basis, subject to the terms and conditions of the Plan
benefit option. The Plan Administrator will, in its sole discretion and on a uniform and
consistent basis, decide whether there has been an addition of, or significant improvement in,
a Plan benefit option in accordance with prevailing IRS guidance.
(iii) Change in Coverage Under an Employer Plan. A Participant may make
a prospective election change that is on account of and corresponds with a change made under
another employer cafeteria plan or a qualified benefits plan(including a plan of the Employer
or a plan of the Spouse's or Dependent's employer),but only if:
(a) The other cafeteria plan or qualified benefits plan permits its
participants to make an election change that would be permitted under Treasury regulations;
or
(b) This Plan permits Participants to make an election for a Period
of Coverage that is different from the period of coverage under the other cafeteria plan or
qualified benefits plan.
(iv) Loss of Other Group Health Coverage. If a Participant or his or her
Spouse or Dependent loses coverage under any group health coverage sponsored by a
governmental or educational institution during a Period of Coverage, the Participant may
prospectively change his or her election to add group health coverage for the individual who
loses coverage.
(g) FMLA Leave of Absence
A Participant taking leave of absence under the FMLA,may revoke an existing election
of group health plan coverage under a Component Plan and may make such other election for
the remaining portion of the Plan Year as may be provided for under the FMLA.
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(h) Other Circumstances
Any other event approved by the Plan Administrator in a nondiscriminatory manner
which are consistent with regulations or other guidance issued by the Secretary of the Treasury.
3.7 Limit on Amount Credited to DCAP Subaccount
The amount credited to a Participant's DCAP Subaccount must not exceed the
maximum limit as stated in Section 4.6 of the DCAP.
3.8 Limit on Amount Credited to Health FSA Subaccount
The annual amount credited to a Participant's Health FSA Subaccount must not exceed
the maximum limit stated in Section 4.6 of the Employer Health FSA.
3.9 Limit on Amount Credited to PCP Subaccount
The annual amount credited to a Participant's PCP Subaccount must not exceed, the
maximum limit stated in Section 5.3 of the PCP.
3.10 Plan Administrator's Power to Modify and Suspend Elections
The Plan Administrator may,at any time,require any Participant or class of Participants
to amend the amount of their Salary Reductions for a Period of Coverage if the Plan
Administrator determines that such action is necessary or advisable in order to (a) satisfy any
of the Code's nondiscrimination requirements applicable to this Plan, a Component Plan, or
other cafeteria plan; (b)prevent any Employee or class of Employees from having to recognize
more income for federal income tax purposes from the receipt of benefits hereunder than would
otherwise be recognized; (c) maintain the qualified status of benefits received under this Plan;
or (d) satisfy Code nondiscrimination requirements or other limitations applicable to the
Employer's qualified plans. In the event that contributions need to be reduced for a class of
Participants, the Plan Administrator will reduce the Salary Reduction amounts for each
affected Participant, beginning with the Participant in the class who had elected the highest
Salary Reduction amount and continuing with the Participant in the class who had elected the
next-highest Salary Reduction amount, and so forth,until the defect is corrected.
Despite any contrary Plan provision, the Plan Administrator will suspend, modify, or
terminate any Participant's elections under the following circumstances:
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(a) If the amount of any reduction agreed to is greater than the Participant's
monthly taxable pay from the Employer.
(b) In compliance with a change or revocation of an election due to a permitted
election-change event under Section 3.6.
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ARTICLE IV: BENEFITS
4.1 General Rule
All Component Plan benefits, except Health FSA benefits,will be payable or provided
under this article for a Plan Year only with respect to periods during such Plan Year in which
an Eligible Employee is a Participant and has or is entitled to have amounts credited to his or
her account pursuant to Sections 3.2 and 3.3,and expenses shall be reimbursed only if incurred
during such periods.
4.2 Health FSA
Health FSA benefits will be payable in accordance with Article V of the Health FSA.
4.3 Dependent Care Expenses
Amounts credited to a Participant's DCAP Subaccount for a Plan Year will be payable
in accordance with Section 5.1 of the DCAP.
4.4 Premium Expenses
Amounts credited to a Participant's PCP Subaccount for a Plan Year will be payable in
accordance with Section 5.2 of the PCP.
4.5 Cash Benefits
(a) A Participant (except a Board member) may elect to receive in cash, included
in his or her paycheck, Employer Credits (to the extent permitted in Section 3.2), or amounts
that could otherwise be subject to Salary Reduction. Such benefits will be treated as cash under
this Plan and reported on the Participant's Form W-2 as wages and will be subject to payroll
income and employment tax withholding.
(b) If a Participant elects Salary Reductions,but fails to elect any benefits provided
in Sections 4.2, 4.3, or 4.4, the Participant's Salary Reduction election will be ineffective, and
the Participant will receive the amounts that would have otherwise been subject to Salary
Reduction in the form of taxable wages instead of having those amounts credited to his or her
Subaccounts.
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ARTICLE V: PLAN ADMINISTRATION
5.1 Plan Administrator
The Plan Administrator is the Administrative Committee,which is comprised of at least
two members each of whom is appointed by, and serves at the pleasure of, the Board. The
Committee will supervise the administration of the Plan and each Component Plan. The Plan
Administrator's principal duty is to see that this Plan and the Component Plans are carried out
in accordance with their terms for the exclusive benefit of individuals entitled to participate in
the Plan without discriminating among them.
5.2 Plan Administrator's Powers and Duties
The Plan Administrator will have such powers as it considers necessary or appropriate
to discharge its duties under the Plan and the Component Plans. The Plan Administrator will
have the complete and exclusive right and discretion to interpret the Plan and the Component
Plans and to decide all matters thereunder, and all determinations of the Plan Administrator
will be conclusive and binding on all persons. The Plan Administer will have all of the powers
and duties necessary or appropriate to administer the Plan and the Component Plans in all their
details, including without limitation the power to:
(a) Construe and interpret the Plan and the Component Plans,including all possible
ambiguities, inconsistencies, and omissions in the Plan, the Component Plans, and related
documents,and to decide all questions of fact,questions relating to eligibility and participation,
and questions of benefits under this Plan, such good faith interpretations to be final and
conclusive on all persons;
(b) Adopt and prescribe such procedures and regulations and forms to be used by
Employees and Participants to make elections under the Plan and the Component Plans as the
Committee believes in its sole discretion are necessary or appropriate for the proper and
efficient administration, and consistent with the terms and purposes, of the Plan and the
Component Plans;
(c) Enforce the Plan and the Component Plans according to their terms and the
procedures and regulations adopted by the Administrative Committee;
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(d) Appoint or employ other persons (who may be the Employer's employees, and
who may include legal counsel and benefit consultants), and to delegate in writing to such
other persons any of the Plan Administrator's specific responsibilities,including responsibility
for day-to-day Plan administration, to assist it in administering the Plan and the Component
Plans;
(e) Prepare and distribute information explaining the Plan and the Component
Plans and the benefits thereunder in such manner as the Plan Administrator determines in its
sole discretion to be necessary or appropriate;
(f) Request and receive from all Employees and Participants such information as
the Plan Administrator determines in its sole discretion to be necessary or appropriate for the
proper administration of the Plan and the Component Plans;
(g) Prepare, report, file and disclose any forms, documents or other information
required by law to be reported or filed with any governmental agency, or to be disclosed to
Participants or other persons entitled to benefits under the Plan;
(h) Review, decide, and respond to benefit claims and appeals under the Plan and
the Component Plans;
(i) Furnish each Employee and Participant with such reports with respect to the
administration of the Plan and the Component Plans as the Plan Administrator determines from
time to time in its sole discretion to be reasonable and appropriate, including but not limited to
appropriate statements setting forth the amount of a Participant's Salary Reductions and the
amounts available to pay benefits under the Plan and the Component Plans;
0) Receive, review, and keep on file such reports and information regarding the
benefits covered by the Plan and the Component Plans as the Plan Administrator determines
from time to time in its sole discretion to be necessary or appropriate;
(k) Sign documents for the purposes of administering the Plan and the Component
Plans, or to designate an individual or individuals to sign documents for the purposes of
administering the Plan or the Component Plans;
(1) Secure independent medical or other advice and require such evidence as it
deems necessary to decide any claim or appeal; and
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(m) Maintain the books of accounts,records,and other data in the manner necessary
for proper administration of this Plan and the Component Plans and to meet any applicable
disclosure and reporting requirements.
5.3 General Plan Administration
The Plan Administrator has delegated responsibility for the day-to-day administration
of the Plan to the Employer's human resources personnel, except to the extent contractually
delegated to a third-party administrator appointed by the Plan Administrator or the Employer.
This includes:
(a) Notifying Eligible Employees of their eligibility to participate in the Plan and
in the Component Plans;
(b) Furnishing Plan enrollment materials and forms and claim forms to Eligible
Employees;
(c) Determining Employees' eligibility to participate in the Plan and in the
Component Plans;
(d) Developing and recommending to the Plan Administrator procedures and
regulations necessary or appropriate for the proper and efficient administration, and consistent
with the terms and purposes, of the Plan and the Component Plans;
(e) Receiving, deciding, and maintaining records of initial benefit claims;
(f) Filing or disclosing any information required by law to be filed with any
governmental agency or disclosed to employees or other persons entitled to benefits under the
plan; and
(g) Administering other day-to-day Plan and Component Plan operations in
accordance with the plans' terms and the procedures and regulations adopted by the Plan
Administrator or the Employer.
5.4 Reliance on Information Furnished by Others
The Plan Administrator or its delegates may rely on the direction, information, or
election of a Participant as being proper under the Plan and will not be responsible for any act
or omission due to a Participant's direction or lack thereof. The Plan Administrator or its
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delegates will also be entitled,to the extent allowed by applicable law,to rely conclusively on
all tables, valuations, certificates, opinions, reports and other information furnished by the
Employer, actuaries, accountants, attorneys or other experts employed or engaged by the Plan
Administrator or the Employer.
5.5 Indemnification by Employ
To the extent permitted by applicable law, the Employer agrees to indemnify and
reimburse all Board members, Administrative Committee members, and the Employer's
employees who perform any plan administration functions, for all expenses, losses, and
liabilities arising from any act or omission in the management of the Plan, except expenses,
losses, and liabilities resulting from such persons' gross negligence or willful misconduct.
The Employer may self insure or purchase insurance for all Plan fiduciaries employed
by the Employer— and for all persons who are trustees, employees, officers, or agents of the
Employer — to cover the potential liability of those persons with respect to their actions or
omissions concerning this Plan or the Component Plans.
5.6 Discretionary Power of Plan Administrator
All discretion conferred upon the Plan Administrator will be absolute. However, no
discretionary power conferred on the Plan Administrator will be exercised in a manner that
causes discrimination prohibited by the Code or the Treasury regulations. The Plan
Administrator will exercise its discretionary power in a non-discriminatory manner with regard
to all similarly situated Employees or Participants.
5.7 Compensation of Plan Administrator
Unless otherwise determined by the Employer and permitted by applicable law, any
Plan Administrator that is also an Employee of the Employer will serve without compensation
for services rendered in such capacity,but all reasonable expenses incurred in the performance
of their duties will be paid by the Employer.
5.8 Inability to Locate Pam
If the Plan Administrator is unable to make payment to any Participant or other person
to whom a payment is due under the Plan because it cannot ascertain the identity or
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whereabouts of such Participant or other person after reasonable efforts have been made to
identify or locate such person, then such payment and all subsequent payments otherwise due
to such Participant or other person will be forfeited following a reasonable time after the date
any such payment first became due.
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ARTICLE VI: CLAIMS PROCEDURES
6.1 Claim Procedures
The Plan Administrator or its delegate(further references to Plan Administrator in this
section include its delegate) must notify each Eligible Employee of his or her entitlement to
receive benefits under this Plan and shall provide each Eligible Employee with appropriate
benefit application forms.
Each individual claiming a benefit under the Plan or a Component Plan or his or her
authorized representative ("Claimant") must complete and file such benefit application forms
with the Plan Administrator to make a benefit claim. The Plan Administrator must review all
benefit claims. The Plan Administrator notify the Claimant in writing of its decision on the
claim within 30 days of receipt of the application. If special circumstances require any
extension of time(not to exceed 15 days)for processing the claim,the Plan Administrator must
notify the claimant in writing of the extension prior to the expiration of the initial 30-day
period.
The Plan Administrator's denial of a benefit claim must be stated in writing and mailed
to the Claimant. The denial notice must state clearly in language calculated to be understood
by the Claimant:
(a) The specific reason or reasons for the Plan Administrator's decision;
(b) References to the pertinent Plan or Component Plan provisions;
(c) The additional material or information the Participant must provide to enable
the Plan Administrator to reconsider the claim on appeal; and
(d) The Plan's appeal procedures.
6.2 Appeal Procedure
To appeal a denied claim, a Claimant must submit a written appeal of the denied claim
to the Director of Administration within 180 days after receipt of the denial notice.A Claimant
may also submit a written comments documents,records and other information and comments
relating to the claim and, upon request, have reasonable access to copies of all documents,
records,and other information relevant to the claim. The appropriate Plan fiduciary will,within
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30 days after receipt the request, make that information available to the Claimant at a
convenient location during regular business hours.
The appropriate Plan fiduciary(one that did not decide the original claim)must review
and decide the Claimant's appeal in a reasonable time, but not later than 60 days after he or
she receives the appeal, unless special circumstances require an extension of time for
processing. If special circumstances require an extension of time, the appropriate Plan
fiduciary will provide written notice of the extension to the Claimant before the end of the
original 60-day period, and a decision shall be rendered as soon as possible, but not later than
120 days after receipt of the appeal. If the appropriate Plan fiduciary denies the appeal, it must
notify the Claimant in writing of its decision in writing by certified mail within 60 (120 if
written notice of extension has been given) days of receipt of the appeal. The notice must be
written in a manner calculated to be understood by the Claimant and include: (a) the specific
reason or reasons for the denial, and(b) reference to the specific Plan provisions on which the
denial is based. The decision of the appropriate Plan fiduciary will be final.
6.3 Agent for Service of Process
The agent for service of process for the Plan is:
Secretary of the District
Central Contra Costa Sanitary District
5019 Imhoff Place
Martinez, CA 94553
6.4 Notices
Notices and documents relating to the Plan may be delivered, or mailed by registered
mail, postage prepaid, to the Administrative Committee in care of the Finance Manager,
Central Contra Costa Sanitary District, 5019 Imhoff Place, Martinez, CA 94553. Any notice
required under the Plan may be waived by the person entitled to notice.
6.5 Evidence
Evidence required of anyone under the Plan may be by certificate, affidavit, document
or other information which the person acting on it considers pertinent and reliable. The
evidence may be signed, made or presented by the proper party or parties.
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ARTICLE VII: MISCELLANEOUS
7.1 Component Plans Control
The detailed coverages provided under each Component Plan are set forth in the
Component Plan; in case of any conflict between the terms of this Plan and the terms of a
Component Plan, the terms of the Component Plan will control.
Evidences of Coverage or summaries setting forth the details of the coverages provided
under the Component Plans will be distributed to Eligible Employees enrolled under the
Component Plans.
7.2 Governing Law
Except to the extent preempted by federal law,this Plan and each Component Plan and
all rights and duties thereunder shall be governed, construed, and administered in accordance
with the laws of the State of California.
7.3 Severability
If any provision of the Plan or a Component Plan is held invalid or unenforceable, its
invalidity or unenforceability shall not affect any other provisions of the Plan or Component
Plan, and the Plan or Component Plan will be construed and enforced as if such provision had
not been included herein.
7.4 Plan Not An Employment Contract
Neither this Plan nor any of the Component Plans is intended to be or will be construed
as constituting a contract or other arrangement between any Employee and the Employer to
the effect that such Employee will be employed for a specific period of time.
7.5 Non-Assi_ng ability of Rights
Except as otherwise expressly permitted by a Component Plan, the right of any person
entitled to benefits under a Component Plan will not be subject to their debts or other
obligations and, except as may be required by the tax withholding provisions of the Code or
any state's tax laws, may not be voluntarily or involuntarily sold, transferred, alienated,
assigned, or encumbered. Any attempt to do so will not be recognized, except to the extent
expressly permitted by a Component Plan or required by applicable law.
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7.6 Facility of Pam
When any person entitled to benefits under the Plan or Component Plan is under legal
disability or in the Employer's opinion is in any way incapacitated so as to be unable to manage
his affairs, the Employer may cause such person's benefits to be paid to such person's legal
representative for his benefit,or to be applied for the benefit of such person in any other manner
that the Employer may determine.
7.7 Mistake
In the event of a mistake as to the eligibility or participation of an Employee, the
allocations made to the account of any Participant, or the amount of benefits paid or to be paid
to a Participant or other person, the Plan Administrator will, to the extent it deems
administratively possible and permitted under applicable law, allocate,withhold, or otherwise
adjust amounts that in its judgement will provide the Participant or other person the credits or
distributions he or she is properly entitled to under the Plan or Component Plan. made by
reason thereof. The Employer will not be liable in any manner for any mistake that results from
a determination of fact made in good faith.
7.8 Expenses
All reasonable expenses incurred in administering the Plan and the Component Plans
are currently paid by forfeitures to the extent provided in Section 5.3 of the Health FSA with
respect to Health FSA benefits and Section 5.3 of the DCAP with respect to DCAP benefits,
and then by the Employer.
7.9 Compliance With Code and Other Applicable Laws
This Plan and the Component Plans are intended to meet all applicable requirements of
the Code and of all Treasury regulations issued thereunder.This Plan and the Component Plans
will be construed, operated, and administered accordingly, and in the event of any conflict
between any part, clause, or provision of this Plan or the Component Plans and the Code, the
provisions of the Code will be deemed controlling, and any conflicting part, clause, or
provision of this Plan or the Component Plans will be deemed superseded to the extent of the
conflict. In addition, the Plan and the Component Plans will comply with the requirements of
all other applicable laws.
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7.10 No Guarantee of Tax Consequences
Neither the Plan Administrator nor the Employer makes any commitment or guarantee
that any amounts paid to or for the benefit of a Participant under this Plan or a Component Plan
will be excludable from the Participant's gross income for federal, state, or local income tax
purposes.It will be the obligation of each Participant to determine whether each payment under
this Plan is excludable from the Participant's gross income for federal, state, and local income
tax purposes and to notify the Plan Administrator if the Participant has any reason to believe
that such payment is not so excludable.
7.11 Insurance Contracts
The Employer will have the right to(a)enter into a contract with one or more insurance
companies for the purposes of providing benefits under the Plan or a Component Plan, and(b)
to replace any of such insurance contracts.Any dividends,retroactive rate adjustments,or other
refunds of any type that may become payable under any such insurance contract will not be
assets of the Plan or Component Plan, but will be the property of and be retained by the
Employer, to the extent permitted under applicable law.
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ARTICLE VIII: AMENDMENT AND TERMINATION
8.1 Amendment
The Employer may, subject to any applicable legal requirement to meet and confer with
employee representatives,amend all or any part of the Plan or any Component Plan at any time
or from time to time and for any reason by resolution of the Board or by an person or persons
authorized by the Board to take such action.
8.2 Termination
The employer may, subject to any applicable legal requirement to meet and confer with
employee representatives, terminate the Plan or any Component Plan, in whole or in part, at
any time and for any reason by resolution of the Board or by an person or persons authorized
by the Board to take such action. No termination shall operate to reduce the amount of any
benefit payment otherwise payable under the Plan or Component Plan for charges incurred
prior to the effective date of such termination.
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ARTICLE IX: EXECUTION
As evidence of its adoption of this amendment and restatement of the Plan, the Central
Contra Costa Sanitary District has caused this instrument to be signed by its duly authorized
officers on this day of , 2019.
By:
President, Board of Directors
For: THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Katie Young, Secretary of the District
(Print Name and Title)
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APPENDIX A
Component Plans
To
Central Contra Costa Sanitary District
Section 125 Cafeteria Plan
As of the Effective Date, the following are the Component Plans included in the Plan:
1. The Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan
2. The Central Contra Costa Sanitary District Dependent Care Assistance Plan
3. The Central Contra Costa Sanitary District Premium Conversion Plan
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ATTACHMENT 6
CENTRAL CONTRA COSTA SANITARY DISTRICT
PREMIUM CONVERSION PLAN
(A Component Plan of
the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan)
Amended and Restated
Effective July 1, 2019
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TABLE OF CONTENTS
Page
INTRODUCTION ...........................................................................................................................2
ARTICLE 1: DEFINITIONS ...........................................................................................................3
ARTICLE 11: SCOPE OF THE PLAN............................................................................................5
ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION......................................................6
ARTICLE IV: PLAN FUNDING....................................................................................................8
ARTICLE V: BENEFITS..............................................................................................................10
ARTICLE VI: GENERAL PROVISIONS....................................................................................12
ARTICLE VII: EXECUTION.......................................................................................................13
APPENDIXA............................................................................................................................. A-1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
PREMIUM CONVERSION PLAN
INTRODUCTION
Effective as of July 1, 2019, the Central Contra Costa Sanitary District (the "Employer")
hereby amends and restates the Central Contra Costa Sanitary District Premium Conversion Plan
(the "Premium Conversion Plan") to allow Eligible Employees of the Employer to elect to pay
their share of the cost of the Employer Group Health Plans on a pre-tax basis, as provided herein
and in accordance with the terms of the Central Contra Costa Sanitary District Section 125
Cafeteria Plan (the "Section 125 Plan"). The Employer originally adopted the Section 125 Plan
effective May 1, 1989. The Employer most recently amended and restated the Plan effective
January 1998.
This Premium Conversion Plan is a Component Plan of the Section 125 Plan and, except
to the extent otherwise expressly provided herein, is governed by the rules and regulations of the
Section 125 Plan. The Premium Conversion Plan is intended to convert employee premiums to
employer paid premiums within the meaning of Section 106(b) of the Code and to meet the
requirements of any other provisions of applicable law.
Appendix A, Employer Group Health Plans, attached to this Premium Conversion Plan is
incorporated herein by reference and is a part hereof and may be amended without necessity for
other amendment to this Premium Conversion Plan.
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ARTICLE I: DEFINITIONS
The definitions in the Section 125 Plan apply to this Component Plan as well as the
following definitions specific to the Premium Conversion Plan:
1.1 Dependent
An individual who with respect to the Participant is: (a) a dependent as defined in Code
section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof; (b) a
child(as defined in Code section 152(f)(1))who as of the end of the calendar year has not attained
age 27;and(c)a child to whom Code section 152(e)applies(regarding certain children of divorced
or separated parents who receive more than half of their support for the calendar year from one or
both parents and are in the custody of one or both parents for more than half of the calendar year).
1.2 Effective Date
July 1, 2019, the date this amendment and restatement of the Plan is effective.
1.3 Eligible Premium Expense
A premium or other amount an Eligible Employee must pay for coverage under an
Employer Group Health Plan.
1.4 Employer Group Health Plan
A plan that the Employer maintains for Employees and their eligible dependents, which
provides health benefits through a group insurance policy or self-funded benefit plan (e.g.,
medical, dental and vision benefits). The Employer Group Health Plans currently maintained by
the Employer are listed in Appendix A. The Employer may substitute, add, subtract, or revise the
menu of such plans or the benefits, terms and conditions of any such plans at any time. Any such
substitution, addition, subtraction or revision will be communicated to Participants and will
automatically be incorporated by reference under the Premium Conversion Plan. The Employer
may amend Appendix A without necessity for any other amendment to this Premium Conversion
Plan. The operation of each Employer Group Health Plan will be governed by the terms of the
Employer Group Health Plan and, in the event of a conflict between those terms and the terms of
the Premium Conversion Plan or the Section 125 Plan, the terms of the Employer Group Health
Plan will govern.
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1.5 Participant
An individual who has met the eligibility requirements under Section 3.1, elected to
participate in accordance with Section 3.2, and whose participation has not terminated under
Section 3.3.
1.6 Section 125 Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan, as amended.
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ARTICLE II: SCOPE OF THE PLAN
Subject to the conditions and limitations set forth in this Premium Conversion Plan and in
the Section 125 Plan, each Participant will have his or her share of Eligible Premium Expenses
paid under the Premium Conversion Plan in lieu of an equal amount of Compensation.
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ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION
3.1 Commencement of Participation
Each Participant in the Premium Conversion Plan as in effect before the Effective Date
who has not elected to terminate coverage under the Premium Conversion Plan will remain a
Participant. On and after that date, an individual will become a Participant in the Premium
Conversion Plan on the first day of the month after her or she becomes an Eligible Employee or,
if later, when he or she makes a timely election to participate in the Premium Conversion Plan in
accordance with Article III of the Section 125 Plan.
3.2 Election to Participate
-Subject to the conditions and limitations set forth in the Premium Conversion Plan and the
Section 125 Plan,each Eligible Employee may elect to have his or her Eligible Premium Expenses
paid under the Premium Conversion Plan in lieu of an equal amount of Compensation.An Eligible
Employee can elect to participate in the Premium Conversion Plan by electing (a) to receive
benefits under the Employer Group Health Plans described in Appendix A; and (b) to pay for his
or her share of the contributions for those benefits on a pre-tax Salary Reduction basis or with
Employer Credits. Unless an exception applies (as described in Section 3.6 of the Section 125
Plan), the election is irrevocable for the duration of the Period of Coverage to which it relates.
Despite any contrary Premium Conversion Plan provision, benefits under the Employer Group
Health Plans are subject to the terms and conditions of the Group Health Plans, and no changes
can be made with respect to such plans (such as mid-year changes in election) if such changes are
not permitted under the applicable Employer Group Health Plan.
3.3 Termination of Participation
A Participant's participation in the Premium Conversion Plan will terminate upon the
earliest of:
(a) the termination of the Premium Conversion Plan or the Section 125 Plan;
(b) the Participant's permitted election not to participate in the Premium
Conversion Plan; or
(c) the Participant ceases to be an Eligible Employee.
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Termination of participation in this Premium Conversion Plan will automatically revoke
the Participant's elections. Benefits under any Group Health Plan will terminate as of the date(s)
specified in the Group Health Plan. If revocation occurs under this Section 3.3, no new election
may be made by such Participant during the remainder of the Plan Year unless otherwise permitted
under the Plan.
3.4 Resumption of Participation
A former Participant's participation in the Premium Conversion Plan will be reinstated in
accordance with Section 2.3 of the Section 125 Plan.
3.5 Leaves of Absence
See Sections 2.4 and 2.5 of the Section 125 Plan for rules regarding the effect of a leave of
absence on a Participant's participation in the Premium Conversion Plan.
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ARTICLE IV: PLAN FUNDING
4.1 Establishment of Accounts
Section 3.1 of the Section 125 Plan,which provides for the establishment of Accounts and
Subaccounts, will also apply to the Premium Conversion Plan.
4.2 Employer Credits
Each Eligible Employee may, in accordance with Article III of the Section 125 Plan, elect
to apply any Employer Credits to his or her Account under Section 3.2 of the Section 125 Plan to
pay Eligible Premium Expenses under the Premium Conversion Plan.
4.3 Salary Reduction Credits
Each Eligible Employee may, in accordance with Article III of the Section 125 Plan, make
a timely written Salary Reduction election to have his or her annual Compensation reduced, but
not below zero, by all or a portion of the Eligible Premium Expense he or she is required to pay
for coverage under the Employer Group Health Plan(s). The amount of Salary Reduction will be
credited to the Participant's PCP Subaccount until it is paid out for such coverage. The amount of
the Salary Reduction contribution for a Participant's portion of the Eligible Premium Expense is
equal to the amount set forth by the Employer in the annual enrollment materials. In the event an
Eligible Employee fails to timely elect to participate in the Premium Conversion Plan, he or she
will receive his or her Compensation without any reduction for the Premium Conversion Plan, and
will be required to pay any required Eligible Premium Expense through after-tax payroll
withholding.
4.4 Time for Making Elections
The timing of an Eligible Employee's Salary Reduction election to participate in the
Premium Conversion Plan is governed by Section 3.5 of the Section 125 Plan.
4.5 Change or Revocation of Elections
A Participant's Salary Reduction election for any Period of Coverage may not be changed
or revoked after the first payroll period to which it applies, except under the circumstances
described in Section 3.6 of the Section 125 Plan.
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4.6 Plan Administrator's Power to Modify or Suspend Elections
Section 3.10 of the Section 125 Plan,which describes the circumstances in which the Plan
Administrator has the power to modify or suspend Salary Reductions, will also apply to this
Premium Conversion Plan.
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ARTICLE V: BENEFITS
5.1 General Rule
Section 4.1 of the Section 125 Plan document will also apply to this Premium Conversion
Plan.
5.2 Eligible Premium Expenses
Amounts credited to a Participant's PCP Subaccount will be applied to pay the amount of
any Eligible Premium Expense for Employer Group Health Plan coverage for the Participant and
his or her Spouse and Dependents otherwise payable by the Participant during the Period of
Coverage under the applicable Employer Group Health Plan.
5.3 Limit on the Amount Credited to the PCP Subaccount
The annual amount credited to a Participant's PCP Subaccount must not exceed the total
of all Eligible Premium Expenses under all Employer Group Health Plans covering the Participant
and his or her Spouse and Dependents for the Period of Coverage.
5.4 Benefits Provided Under the Employer Group Health Plans
Group health benefits will be provided by the Employer Group Health Plans in accordance
with their governing documents, and not this Plan. The types and amounts of benefits, the
requirements for participating in the Employer Group Health Plans, and the other terms and
conditions of coverage and benefits of such plans are set forth in their governing documents. All
claims to receive benefits under the Employer Group Health Plans will be subject to and governed
by the terms and conditions of the Employer Group Health Plans and the rules, regulations,
policies, and procedures adopted in accordance with those plans, as may be amended from time to
time.
5.5 Group Health Benefits; COBRA
Notwithstanding any provision to the contrary in this Plan, to the extent required by
COBRA,a Participant and his or her Spouse and Dependents,as applicable,whose health coverage
terminates under an Employer Group Health Plan because of a COBRA qualifying event(and who
is a qualified beneficiary as defined under COBRA), will be given the opportunity to continue on
a self-pay basis the same health coverage that he or she had under the applicable Employer Group
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Health Plan the day before the qualifying event for the periods prescribed by COBRA. Such
continuation coverage will be subject to all conditions and limitations under COBRA.
Contributions for COBRA coverage under an Employer Group Health Plan may be paid
on a pre-tax basis for current Employees receiving taxable compensation(as may be permitted by
the Plan Administrator on a uniform and consistent basis, but may not be prepaid from
contributions in one Plan Year to provide coverage that extends into a subsequent Plan Year)where
COBRA coverage arises either (a) because the Employee ceases to be eligible because of a
reduction in hours; or (b) because the Employee's Dependent ceases to satisfy the eligibility
requirements for coverage. For all other individuals (e.g., Employees who cease to be eligible
because of retirement, termination of employment, or layoff), contributions for COBRA coverage
for Employer Group Health Plan benefits will be paid on an after-tax basis (unless as may be
otherwise permitted by the Plan Administrator on a uniform and consistent basis, but may not be
prepaid from contributions in one Plan Year to provide coverage that extends into a subsequent
Plan Year).
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ARTICLE VI: GENERAL PROVISIONS
6.1 Administration of the Premium Conversion Plan
The Premium Conversion Plan will be administered in accordance with the provisions set
forth in Article V of the Section 125 Plan.
6.2 Claims Procedures
The claims and appeals procedures set forth in Article VI of the Section 125 Plan will also
apply to this Premium Conversion Plan,provided that the claims for Employer Group Health Plan
benefits will be administered in accordance with and claims procedures for the Employer Group
Health Plans as set forth in their governing plan documents.
6.3 Miscellaneous Provisions
The miscellaneous provisions described in Article VII of the Section 125 Plan will also
apply to this Premium Conversion Plan.
6.4 Amendment and Termination
Subject to Article VIII of the Section 125 Plan,the Employer may amend or terminate this
Premium Conversion Plan in whole or in part at any time and for any reason by resolution of the
Board or by any person or persons authorized by the Board to take such action.
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ARTICLE VII: EXECUTION
As evidence of its amendment of this amendment and restatement of the Premium
Conversion Plan,the Central Contra Costa Sanitary District has caused this instrument to be signed
by its duly authorized officers on this day of 92019.
By:
President, Board of Directors (Date)
For: THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Katie Young, Secretary of the District
(Print Name and Title)
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APPENDIX A
Employer Group Health Plans
To the
Central Contra Costa Sanitary District
Premium Conversion Plan
As of the Effective Date, the following Employer Group Health Plans are offered under the
Premium Conversion Plan:
1. Health Insurance under the Public Employees' Medical and Hospital Care Act ("CalPERS
Health")
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ATTACHMENT 7
CENTRAL CONTRA COSTA SANITARY
DISTRICT HEALTH FLEXIBLE SPENDING ARRANGEMENT PLAN
(A Component Plan of
the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan)
Amended and Restated
Effective July 1, 2019
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TABLE OF CONTENTS
Page
INTRODUCTION...........................................................................................................................1
ARTICLE I: DEFINITIONS ...........................................................................................................2
1.1 Dependent................................................................................................................2
1.2 Effective Date..........................................................................................................2
1.3 Eligible Medical Expense........................................................................................2
1.4 Grace Period.............................................................................................................3
1.5 Health FSA...............................................................................................................3
1.6 Health FSA Subaccount...........................................................................................3
1.7 HIPAA.....................................................................................................................3
1.8 Participant................................................................................................................3
1.9 Run-Out Period........................................................................................................3
1.10 Section 125 Plan ......................................................................................................3
ARTICLE II: SCOPE OF THE PLAN............................................................................................4
ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION......................................................5
3.1 Eligibility to Participate...........................................................................................5
3.2 Election to Participate..............................................................................................5
3.3 Termination of Participation....................................................................................5
3.4 Resumption of Participation ....................................................................................6
3.5 Leaves of Absence...................................................................................................6
ARTICLE IV: PLAN FUNDING....................................................................................................7
4.1 Establishment of Accounts ......................................................................................7
4.2 Employer Credits.....................................................................................................7
4.3 Salary Reduction Credits.........................................................................................8
4.4 Time for Making Salary Reduction Elections .........................................................8
4.5 Change or Revocation of Elections..........................................................................8
4.6 Limit on Amount Credited to Health FSA...............................................................8
4.7 Plan Administrator's Power to Modify Elections....................................................8
ARTICLE V: BENEFITS................................................................................................................9
5.1 Health Care Reimbursement....................................................................................9
5.2 Maximum Reimbursement Available; Uniform Coverage......................................9
5.3 Forfeitures................................................................................................................9
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5.4 Grace Period...........................................................................................................10
5.5 Receiving Health Care Reimbursement.................................................................1 l
ARTICLE VI: POST-PARTICIPATION REIMBURSEMENTS; COBRA.................................12
6.1 General Rule ..........................................................................................................12
6.2 COBRA Continuation Coverage............................................................................12
ARTICLE VII: CLAIMS PROCEDURES....................................................................................14
7.1 General Reimbursement Procedures......................................................................14
7.2 Substantiation of Expenses....................................................................................14
7.3 Claims and Appeals Procedures.............................................................................15
ARTICLE VIII: GENERAL PROVISIONS .................................................................................16
8.1 Administration of the Health FSA.........................................................................16
8.2 Miscellaneous Provisions.......................................................................................16
8.3 Amendment and Termination of the Health FSA..................................................16
8.4 Coordination of Benefits Under the Health FSA...................................................16
8.5 HIPAA Compliance...............................................................................................16
ARTICLE IX: EXECUTION ........................................................................................................17
APPENDIXA ........................................................................................................................A-1
APPENDIXB .........................................................................................................................B-1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
HEALTH FLEXIBLE SPENDING ARRANGEMENT PLAN
INTRODUCTION
The Central Contra Costa Sanitary District (the "Employer") hereby amends and restates
the Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan (the
"Health FSA") effective July 1, 2019. The Health FSA is intended to qualify as a self-insured
medical reimbursement plan under section 105(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), and is to be interpreted in a manner consistent with the requirements of
section 105(b). The purpose of the Health FSA is to allow Eligible Employees of the Employer to
elect to receive health care reimbursement benefits for medical care as defined in section 213(d)
of the Code which are excludable from gross income under section 105(b)of the Code as provided
herein and in accordance with the terms of the Central Contra Costa Sanitary District Section 125
Cafeteria Plan(the"Section 125 Plan").The Employer originally adopted the Health FSA effective
May 1, 1989. Since then, the Employer has amended the Health FSA on various occasions. The
Employer most recently amended and restated the Health FSA effective January 1, 2013.
This Health FSA is a Component Plan of the Section 125 Plan and, except to the extent
otherwise expressly provided herein, is governed by the rules and regulations of the Section 125
Plan.
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ARTICLE I: DEFINITIONS
The definitions in the Section 125 Plan apply to this Component Plan as well as the
following definitions specific to the Health FSA:
1.1 Dependent
An individual who with respect to the Participant is (a) a dependent as defined in Code
section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof; (b) a
child(as defined in Code section 152(f)(1))who as of the end of the calendar year has not attained
age 27;and(c)a child to whom Code section 152(e)applies(regarding certain children of divorced
or separated parents who receive more than half of their support for the calendar year from one or
both parents and are in the custody of one or both parents for more than half of the calendar year).
1.2 Effective Date
July 1, 2019, the date this amendment and restatement of the Plan is effective.
1.3 Eligible Medical Expense
An expense incurred during the Period of Coverage or related Grace Period for which the
election is in force by a Participant or his or her Spouse or Dependent for"medical care"as defined
in Code section 213(d)(including,for example,amounts paid for hospital,doctor,and dental bills),
but only to the extent the Participant or other person incurring the expense certifies that he or she
has not been reimbursed (and that he or she will not seek reimbursement) for the expense under
any other plan covering health benefits. For this purpose, a medical care expense is incurred at the
time the medical care or service giving rise to the expense, not when the Participant is formally
billed, charged, or pays for the medical care. "Eligible Medical Expense" excludes: (a) premium
payments for other health coverage, including but not limited to health insurance premiums for
any other plan(whether or not sponsored by the Employer); (b) any expense incurred for drugs or
medications obtained without a prescription, other than insulin; (c) any expense incurred for
cosmetic surgery or other similar procedures, unless the surgery or procedure is necessary to
ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal
injury resulting from an accident or trauma, or disfiguring disease; (d)long-term care services; and
(e) any other expense excluded under Appendix A or otherwise under the terms of the Plan.
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1.4 Grace Period
The period that begins immediately following the close of a Plan Year under the Health
FSA and that ends on the day that is two months plus 15 days following the close of that Plan
Year.
1.5 Health FSA
The Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan.
1.6 Health FSA Subaccount
The bookkeeping entry to record amounts withheld from a Participant's Compensation and
that are available for a future reimbursement of a Participant's Eligible Medical Expenses. No
money will actually be allocated to or held under any individual Participant's Health FSA
Subaccount. A Health FSA Subaccount will be maintained by the Plan Administrator for
accounting purposes, and will not be representative of any identifiable trust assets.No interest will
be credited to or paid on amounts credited to the Participant's Health FSA Subaccount.
1.7 HIPAA
The Health Insurance Portability and Accountability Act of 1996, as amended.
1.8 Participant
An individual who has met the eligibility requirements under Section 3.1, elected to
participate in accordance with Section 3.2, and whose participation has not terminated under
Section 3.3.
1.9 Run-Out Period
The period during which expenses incurred during a Plan Year or the related Grace Period
must be submitted to be eligible for reimbursement. The Run Out Period for a Plan Year ends 90
days after the last day of that Plan Year.
1.10 Section 125 Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan, as amended.
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ARTICLE II: SCOPE OF THE PLAN
Subject to the conditions and limitations set forth in this Health FSA and in the Section 125
Plan, each Participant may elect to receive payment under the Health FSA for his or her Eligible
Medical Expenses in lieu of an equal amount of cash.
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ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION
3.1 Eligibility to Participate
Each Employee is eligible to participate in the Health FSA on the first day of the month
after he or she becomes an Eligible Employee. The Employee's commencement of participation in
the Health FSA is conditioned on the Employee timely electing to participate in the Health FSA
in accordance with Section 3.2.
3.2 Election to Participate
An Eligible Employee can elect to participate in the Health FSA by electing in accordance
with Article III of the Section 125 Plan (a) to receive benefits in the form of reimbursements for
Eligible Medical Expenses from the Health FSA; (b)to pay his or her contribution for such Health
FSA benefits on pre-tax Salary Reduction basis or with Employer Credits; and(c) designating the
amount of Salary Reduction and Employer Credits to be allocated to the Health FSA Subaccount
for the Period of Coverage,as provided in Section 3.4 of the Section 125 Plan.Unless an exception
applies (as described in Section 3.6 of the Section 125 Plan), any such election is irrevocable for
the duration of the Period of Coverage to which it relates.
3.3 Termination of Participation
A Participant's participation in the Health FSA will terminate upon the earliest of.
(a) the termination of the Health FSA or the Section 125 Plan;
(b) the Participant's permitted election not to participate in the Health FSA;
(c) the Participant ceases to be an Eligible Employee; or
(d) the last day of the Plan Year,unless the Participant elects to continue to participate
in the next Plan Year.
Termination of participation will automatically revoke the Participant's elections. If
revocation occurs under this Section 3.3, no new election may be made by such Participant during
the remainder of the Plan Year unless otherwise permitted under the Health FSA. A Participant
and his or her Spouse and covered Dependents may be entitled to COBRA coverage in accordance
with Article VI if coverage under this Health FSA is lost because of a COBRA qualifying event.
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3.4 Resumption of Participation
Former Participants in the Health FSA will be reinstated in accordance with Section 2.3 of
the Section 125 Plan.
3.5 Leaves of Absence
See Sections 2.4 and 2.5 of the Section 125 Plan for rules regarding the effect of a leave of
absence on a Participant's participation in the Health FSA.
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ARTICLE IV: PLAN FUNDING
4.1 Establishment of Accounts
Section 3.1 of the Section 125 Plan which provides for the establishment of Accounts and
Subaccounts will, as modified by this section, also apply to the Health FSA. The Plan
Administrator will establish and maintain a Health FSA Subaccount with respect to each
Participant for each Plan Year or other Period of Coverage for which the Participant elects to
participate in the Health FSA, but it will not create a separate fund or otherwise segregate assets
for this purpose. The Subaccount so established will merely be a recordkeeping account with the
purpose of keeping track of contributions and determining forfeitures under Section 5.3.
(a) Crediting of Subaccounts. A Participant's Health FSA Subaccount for a Plan Year
or other Period of Coverage will be credited periodically during such period with an amount equal
to the Participant's Salary Reductions and Employer Credits elected to be allocated to the
Subaccount.
(b) Debiting of Subaccounts. A Participant's Health FSA Subaccount for a Plan Year
or other Period of Coverage will be debited for any reimbursement of Eligible Medical Expenses
incurred during such Period of Coverage (or for reimbursement of Eligible Medical Expenses
incurred during any Grace Period to which he or she is entitled as provided in Section 5.4).
(c) Available Amount Not Based on Credited Amount. As described in Section 5.2,
the amount available for reimbursement of Eligible Medical Expenses is the Participant's annual
benefit amount, reduced by prior reimbursements for Eligible Medical Expenses incurred during
the Plan Year or other Period of Coverage; it is not based on the amount credited to the Health
FSA Subaccount at a particular point in time. Thus, a Participant's Health FSA Subaccount may
have a negative balance during a Plan Year or other Period of Coverage,but the aggregate amount
of reimbursement will in no event exceed the maximum dollar amount elected by the Participant
under this Plan.
4.2 Employer Credits
Each Eligible Employee may, in accordance with Article III of the Section 125 Plan, elect
to apply Employer Credits to his or her Account under Section 3.2 of the Section 125 Plan to the
Health FSA to reimburse Eligible Medical Expenses the extent permitted under that section.
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4.3 Salary Reduction Credits
In accordance with Section 3.4 of the Section 125 Plan, each Participant will designate the
amount of Salary Reduction contributions to be available during the Period of Coverage for
Eligible Medical Expense reimbursements under the Health FSA. Contributions will be withheld
from each Participant's Compensation, and an equivalent amount will be credited to the
Participant's Health FSA Subaccount (although no actual assets will be set aside in that account
or any other account).A Participant's contributions for each Plan Year will equal the annual benefit
amount elected by the Participant on his or her election form for the Plan Year and may not exceed
the maximum annual dollar limit for the Health FSA in effect under Section 4.6 for the Plan Year.
4.4 Time for Making Salary Reduction Elections
The timing of Salary Reduction elections under the Health FSA must be consistent with
the timing for making such elections described in Section 3.5 of the Section 125 Plan.
4.5 Change or Revocation of Elections
A Participant's Salary Reduction election for any Period of Coverage may not be changed
or revoked after the first payroll period to which it applies, except under the circumstances
described in Section 3.6 of the Section 125 Plan.
4.6 Limit on Amount Credited to Health FSA
Effective for the Plan Year beginning January 1,2019,the annual Salary Reduction amount
credited to a Participant's Health FSA Subaccount must not exceed $2,700. In subsequent years,
the limitation set forth in this Section 4.6 will be adjusted for cost of living increases as set forth
in section 125(1)(2) of the Code.
4.7 Plan Administrator's Power to Modify Elections
Section 3.10 of the Section 125 Plan which provides the Plan Administrator with the power
to modify Salary Reduction elections shall also apply to this Health FSA.
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ARTICLE V: BENEFITS
5.1 Health Care Reimbursement
A Participant may receive reimbursement under the Health FSA for Eligible Medical
Expenses incurred during the Period of Coverage to which the Participant's participation election
applies. In addition, certain individuals may receive a reimbursement for Eligible Medical
Expenses incurred during the Grace Period immediately following the close of a Plan Year in
accordance with Section 5.4.Eligible Medical Expenses will be reimbursed only if incurred during
the Period of Coverage or, if applicable, during the Grace Period immediately following the end
of a Plan Year. Eligible Medical Expenses will not be reimbursed for any Plan Year or related
Grace Period,unless the Participant applies for such reimbursement before the end of the Run-Out
Period.
5.2 Maximum Reimbursement Available; Uniform Coverage
The maximum dollar amount elected by the Participant for reimbursement of Eligible
Medical Expenses incurred during a Period of Coverage, reduced by prior reimbursements during
the Period of Coverage (Grace Period reimbursements for a prior Plan Year are not counted), will
be available at all times during the Period of Coverage, regardless of the actual amounts credited
to the Participant's Health FSA Subaccount pursuant to Section 4.1. Despite the preceding, no
reimbursement will be available for Eligible Medical Expenses incurred after coverage under this
Health FSA has terminated, unless the Participant has elected COBRA.
5.3 Forfeitures
Except as otherwise provided below(regarding certain individuals who may be reimbursed
from prior Plan Year Health FSA amounts for expenses incurred during a Grace Period), if any
balance remains in the Participant's Health FSA Subaccount for a Period of Coverage after all
reimbursements have been made for the Period of Coverage, then such balance will not be carried
over to reimburse the Participant for Eligible Medical Expenses incurred during a subsequent Plan
Year. The Participant will forfeit all rights with respect to such balance. All forfeitures under this
Plan will be used as follows: (a) first,to offset any losses experienced by the Employer during the
Plan Year as a result of making reimbursements (i.e.,providing Health FSA benefits)with respect
to all Participants in excess of the contributions paid by such Participants through Salary
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Reductions; (b) second, to reduce the cost of administering the Health FSA during the Plan Year
or the subsequent Plan Year (all such administrative costs will be documented by the Plan
Administrator); and (c) third, to provide increased benefits or compensation to Participants in
subsequent years in any weighted or uniform fashion the Plan Administrator deems appropriate,
consistent with applicable regulations. In addition, any Health FSA Subaccount benefit payments
that are unclaimed (e.g., uncashed benefit checks) by the close of the Plan Year following the
Period of Coverage in which the Eligible Medical Expense was incurred will be forfeited and
applied as described above.
5.4 Grace Period
The Health FSA has a Grace Period that follows the end of the Plan Year during which
amounts that the Participant has allocated to his or her Health FSA Subaccount that are unused at
the end of the Plan Year may be used to reimburse Eligible Medical Expenses incurred during the
Grace Period.
To take advantage of the Grace Period, a Participant must be (a) a Participant on the last
day of the Plan Year to which the Grace Period relates, or (b) a qualified beneficiary (as defined
under COBRA) who is receiving COBRA coverage under the Health FSA on the last day of the
Plan Year to which the Grace Period relates.
Eligible Medical Expenses incurred during a Grace Period and approved for reimbursement
will be paid first from available amounts that were remaining at the end of the Plan Year to which
the Grace Period relates, and then from any amounts that are available to reimburse expenses
incurred during the current Plan Year. Claims will be paid in the order in which they are received.
Previous claims will not be reprocessed or recharacterized so as to change the order in which they
were received.
Expenses incurred during a Grace Period must be submitted before the end of the Run-Out
Period. Any unused amounts from a Plan Year to which the Grace Period relates that are not used
to reimburse Eligible Medical Expenses incurred either during the Plan Year or during the related
Grace Period will be forfeited if not submitted for reimbursement before the end of the Run-Out
Period. A Participant may not use Health FSA amounts to reimburse Eligible Dependent Care
Expenses, as defined in the Central Contra Costa Sanitary District Dependent Care Assistance
Plan.
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5.5 Receiving Health Care Reimbursement
Payment will be made to the Participant in cash as a reimbursement for Eligible Medical
Expenses incurred by the Participant (or his or her Spouse or Dependents) while he or she is a
Participant during the Plan Year for which the Participant's election is effective, but only if the
substantiation requirements of Section 7.2 are satisfied. However, if the Plan Administrator so
permits, the Participant may choose to make payment for an Eligible Medical Expense with an
electronic payment card arrangement.
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ARTICLE VI: POST-PARTICIPATION REIMBURSEMENTS; COBRA
6.1 General Rule
When a Participant ceases to be a Participant under Section 3.3, the Participant's Salary
Reductions and election to participate will terminate. The Participant will not be able to receive
reimbursements for Eligible Medical Expenses incurred after the end of the day on which the
Participant's employment terminates or the Participant otherwise ceases to be eligible. However,
such Participant (or the Participant's estate) may claim reimbursement for any Eligible Medical
Expenses incurred during the Period of Coverage prior to the date that the Participant ceases to be
eligible,provided that the Participant(or the Participant's estate) files a claim within 90 days after
the date that the Participant ceases to be a Participant.
6.2 COBRA Continuation Coverage
Notwithstanding any provision to the contrary in this Health FSA, to the extent required
by COBRA, a Participant and his or her Spouse and Dependents, as applicable, whose coverage
terminates under the Health FSA because of a COBRA qualifying event (and who is a qualified
beneficiary as defined under COBRA)will be given the opportunity to continue on a self-pay basis
the same coverage that he or she had under the Health FSA the day before the qualifying event for
the periods prescribed by COBRA. Specifically, such individuals will be eligible for COBRA
continuation coverage only if, under Section 4.1, they have a positive Health FSA Subaccount
balance at the time of a COBRA qualifying event(taking into account all claims submitted before
the date of the qualifying event). Such individuals will be notified if they are eligible for COBRA
continuation coverage.
If COBRA is elected, it will be available only for the remainder of the Plan Year in which
the qualifying event occurs. COBRA coverage for the Health FSA will cease at the end of the Plan
Year and cannot be continued for the next Plan Year. Notwithstanding the preceding sentence, a
qualified beneficiary who has coverage on the last day of the Plan Year may be entitled to
reimbursement of Eligible Medical Expenses incurred during the Grace Period following that Plan
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Year in accordance with Section 5.4. COBRA continuation coverage will be subject to all
conditions and limitations under COBRA.
Contributions for coverage for Health FSA benefits may be paid on a pre-tax basis for
current Employees receiving taxable compensation(as may be permitted by the Plan Administrator
on a uniform and consistent basis, but may not be prepaid from contributions in one Plan Year to
provide coverage that extends into a subsequent Plan Year)where COBRA coverage arises either
(a) because the Employee ceases to be eligible because of a reduction of hours, or(b)because the
Employee's Dependent ceases to satisfy the eligibility requirements for coverage. For all other
individuals (e.g., Employees who cease to be eligible because of retirement, termination of
employment, or layoff), contributions for COBRA coverage for Health FSA benefits must be paid
on an after-tax basis (unless permitted otherwise by the Plan Administrator on a uniform and
consistent basis, but may not be prepaid from contributions in one Plan Year to provide coverage
that extends into a subsequent Plan Year).
If COBRA is not elected, the qualified beneficiary's coverage under the Health FSA will
end on the date the qualified beneficiary would otherwise lose coverage.
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ARTICLE VII: CLAIMS PROCEDURES
7.1 General Reimbursement Procedures
A Participant must apply for reimbursement by submitting a request in writing to the Plan
Administrator in such form as the Plan Administrator may prescribe, no later than the end of the
Run-Out Period following the close of the Plan Year in which the Eligible Medical Expense was
incurred (except that for a Participant who ceases to be eligible to participate, this must be done
no later than 90 days after the date that eligibility ceases, as described in Section 6.1) and must
provide the substantiation required Section 7.2 or as otherwise requested by the Plan Administrator
or its designee.
7.2 Substantiation of Expenses
The reimbursement request described in Section 7.1 must include:
(a) the person(s) on whose behalf Eligible Medical Expenses have been incurred;
(b) the nature and date of the expenses so incurred;
(c) the amount of the requested reimbursement;
(d) a statement that such expenses have not otherwise been reimbursed and that the
Participant will not seek reimbursement through any other source; and
(e) other such details about the expenses that may be requested by the Plan
Administrator in the reimbursement request form or otherwise (e.g., a statement from a medical
practitioner that the expense is to treat a specific medical condition,documentation that a medicine
or drug was prescribed, or a more detailed certification from the Participant).
The reimbursement request must be accompanied by bills, invoices, or other statements
from an independent third party showing that the Eligible Medical Expenses have been incurred
and showing the amounts of such expenses, along with any additional documentation the Plan
Administrator may request. If the Health FSA is accessible by an electronic payment card (e.g.,
debit card, credit card, or similar arrangement), the Participant will be required to comply with
mandatory substantiation procedures and other mandatory terms and conditions that will govern
the Participant's use of the electronic payment card in accordance with Code section 125 and
applicable IRS guidance.
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7.3 Claims and Appeals Procedures
See Article VI of the Section 125 Plan for procedures for processing claims and appeals of
denied claims.
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ARTICLE VIII: GENERAL PROVISIONS
8.1 Administration of the Health FSA
The Health FSA will be administered in accordance with provisions set forth in Article V
of the Section 125 Plan.
8.2 Miscellaneous Provisions
The miscellaneous provisions described in Article VII of the Section 125 Plan will also
apply to this Health FSA.
8.3 Amendment and Termination of the Health FSA
Subject to Article VIII of the Section 125 Plan,the Employer may amend or terminate this
Health FSA in whole or in part at any time and for any reason by resolution of the Board or by any
person or persons authorized by the Board to take such action.
8.4 Coordination of Benefits Under the Health FSA
The Health FSA is intended to pay benefits solely for otherwise unreimbursed medical
expenses. Accordingly, it will not be considered a group health plan for coordination of benefits
purposes, and its benefits will not be taken into account when determining benefits payable under
any other plan.
8.5 HIPAA Compliance
The Health FSA will comply with the applicable requirements of HIPAA in accordance
with the rules set out in Appendix B.
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ARTICLE IX: EXECUTION
As evidence of its amendment and restatement of this Health FSA,the Central Contra Costa
Sanitary District has caused this instrument to be signed by its duly authorized officers on this
day of , 2019.
By:
President, Board of Directors
For: THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Katie Young, Secretary of the District
(Print Name and Title)
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APPENDIX A
MEDICAL EXPENSES NOT REIMBURSABLE FROM THE HEALTH FSA
The Central Contra Costa Sanitary District Health Flexible Spending Arrangement Plan ("Health
FSA") document contains the general rules governing what expenses are reimbursable. This
Appendix A, as referenced in the Health FSA document, specifies certain expenses that are
excluded under this Health FSA with respect to reimbursement from the Health FSA — that is,
expenses that are not reimbursable, even if they meet the definition of"medical care"under Code
section 213(d) and may otherwise be reimbursable under the regulations governing health FSAs.
Exclusions: The following expenses are not reimbursable from the Health FSA,even if they meet
the definition of"medical care" under Code Section 213(d) and may otherwise be reimbursable
under legal requirements applicable to health FSAs:
• Premiums for other health coverage, • Costs for sending a problem child to a
including but not limited to premiums for special school for benefits that the child
any other plan (whether or not sponsored may receive from the course of study and
by the Employer) disciplinary methods
• Long-term care services • Social activities, such as dance lessons
• Cosmetic surgery or other similar (even if recommended by a physician for
procedures, unless the surgery or general health improvement)
procedure is necessary to ameliorate a • Bottled water
deformity arising from, or directly related • Cosmetics,toiletries,toothpaste, etc.
to, a congenital abnormality, a personal
injury resulting from an accident or • Uniforms or special clothing, such as
trauma, or a disfiguring disease. "Cosmetic maternity clothing
surgery"means any procedure that is • Automobile insurance premiums
directed at improving the patient's
appearance and does not meaningfully • Transportation expenses of any kind,
promote the proper function of the body or including transportation expenses to
prevent or treat illness or disease. receive medical care
• The salary expense of a nurse to care for a • Marijuana and other controlled substances
healthy newborn at home that are in violation of federal laws, even if
• Funeral and burial expenses
prescribed by a physician
• Any item that does not constitute "medical
• Household and domestic help (even if care" as defined under Code section 213(d)
recommended by a qualified physician due
to an Employee's or Dependent's inability • Any item that is not reimbursable due to
to perform physical housework) any other applicable law or regulations
• Custodial care
• Medicines or drugs (other than insulin)
that have not been prescribed
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APPENDIX B
HIPAA COMPLIANCE
B.1 Provision of Protected Health Information to Employer
Members of the Employer's workforce have access to the individually identifiable health
information of Plan participants for administrative functions of the Health FSA. When this health
information is provided from the Health FSA to the Employer, it is Protected Health Information
(PHI). The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its
implementing regulations restrict the Employer's ability to use and disclose PHI. The following
HIPAA definition of PHI applies for purposes of this Appendix B:
Protected Health Information. Protected health information means information that is created or
received by the Health FSA and relates to the past, present, or future physical or mental health or
condition of a participant;the provision of health care to a participant;or the past,present,or future
payment for the provision of health care to a participant; and that identifies the participant or for
which there is a reasonable basis to believe the information can be used to identify the participant.
Protected health information includes information of persons living or deceased.
The Employer will have access to PHI from the Health FSA only as permitted under this Appendix
B or as otherwise required or permitted by HIPAA. HIPAA and its implementing regulations were
modified by the Health Information Technology for Economic and Clinical Health Act(HITECH
Act), the statutory provisions of which are incorporated herein by reference.
B.2 Permitted Disclosure of Enrollment/Disenrollment Information
The Health FSA may disclose to the Employer information on whether the individual is
participating in the Health FSA.
B.3 Permitted Uses and Disclosure of Summary Health Information
The Health FSA may disclose Summary Health Information to the Employer, provided that the
Employer requests the Summary Health Information for the purpose of modifying, amending, or
terminating the Health FSA.
"Summary Health Information"means information(a)that summarizes the claims history, claims
expenses, or type of claims experienced by individuals for whom a plan sponsor had provided
health benefits under a health plan; and (b) from which the information described at 42 CFR
Section 164.514(b)(2)(i)has been deleted, except that the geographic information described in 42
CFR Section 164.514(b)(2)(i)(B) need only be aggregated to the level of a five-digit ZIP code.
B.4 Permitted and Required Uses and Disclosure of PHI for Plan Administration
Purposes
Unless otherwise permitted by law, and subject to the conditions of disclosure described in Section
B.5 and obtaining written certification pursuant to Section B.7, the Health FSA may disclose PHI
to the Employer, provided that the Employer uses or discloses such PHI only for plan
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administration purposes. "Plan administration purposes" means administration functions
performed by the Employer on behalf of the Health FSA, such as quality assurance, claims
processing, auditing, and monitoring. Plan administration functions do not include functions
performed by the Employer in connection with any other benefit or benefit plan of the Employer,
and they do not include any employment-related functions.
Notwithstanding the provisions of this Health FSA to the contrary, in no event will the Employer
be permitted to use or disclose PHI in a manner that is inconsistent with 45 CFR Section
164.504(f).
B.5 Conditions of Disclosure for Plan Administration Purposes
The Employer agrees that with respect to any PHI (other than enrollment/disenrollment
information and Summary Health Information, which are not subject to these restrictions)
disclosed to it by the Health FSA, the Employer will:
• not use or further disclose the PHI other than as permitted or required by the Health
FSA or as required by law;
• ensure that any agent, including a subcontractor,to whom it provides PHI received
from the Health FSA agrees to the same restrictions and conditions that apply to
the Employer with respect to PHI;
• not use or disclose the PHI for employment-related actions and decisions or in
connection with any other benefit or employee benefit plan of the Employer;
• report to the Health FSA any use or disclosure of the information that is inconsistent
with the uses or disclosures provided for of which it becomes aware;
• make available PHI to comply with HIPAA's right to access in accordance with 45
CFR Section 164.524;
• make available PHI for amendment and incorporate any amendments to PHI in
accordance with 45 CFR Section 164.526;
• make available the information required to provide an accounting of disclosures in
accordance with 45 CFR Section 164.528;
• make its internal practices, books, and records relating to the use and disclosure of
PHI received from the Health FSA available to the Secretary of Health and Human
Services for purposes of determining compliance by the Plan with HIPAA's privacy
requirements;
• if feasible, return or destroy all PHI received from the Health FSA that the
Employer still maintains in any form and retain no copies of such information when
no longer needed for the purpose for which disclosure was made, except that, if
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such return or destruction is not feasible, limit further uses and disclosures to those
purposes that make the return or destruction of the information infeasible; and
• ensure that the adequate separation between the Health FSA and the Employer(i.e.,
the "firewall")required in 45 CFR Section 504(f)(2)(iii) is satisfied.
The Employer further agrees that if it creates, receives, maintains, or transmits any electronic PHI
(other than enrollment/disenrollment information and Summary Health Information,which are not
subject to these restrictions) on behalf of the Health FSA, it will implement administrative,
physical, and technical safeguards that reasonably and appropriately protect the confidentiality,
integrity, and availability of the electronic PHI, and it will ensure that any agents (including
subcontractors) to whom it provides such electronic PHI agree to implement reasonable and
appropriate security measures to protect the information. The Employer will report to the Health
FSA any security incident of which it becomes aware.
B.6 Adequate Separation Between Plan and Employer
The Employer will allow the following persons access to PHI: the Human Resources Director, the
Plan Administrator, and any other Employee who needs access to PHI in order to perform plan
administration functions that the Employer performs for the Health FSA (such as quality
assurance, claims processing, auditing, and monitoring).No other persons will have access to PHI.
These specified employees (or classes of employees) will only have access to and use PHI to the
extent necessary to perform the plan administration functions that the Employer performs for the
Health FSA.In the event that any of these specified employees does not comply with the provisions
of this section, that employee will be subject to disciplinary action by the Employer for non-
compliance pursuant to the Employer's employee discipline and termination procedures.
The Employer will ensure that the provisions of this Section 13.6 are supported by reasonable and
appropriate security measures to the extent that the designees have access to electronic PHI.
B.7 Certification of Plan Sponsor
The Health FSA will disclose PHI to the Employer only upon the receipt of a certification by the
Employer that the Plan incorporates the provisions of 45 CFR Section 164.504(f)(2)(ii), and that
the Employer agrees to the conditions of disclosure set forth in Section 13.5. Execution of the
Health FSA by the Employer will serve as the required certification.
B.8 Privacy Official
The Employer will designate a Privacy Official, who will be responsible for the Health FSA's
compliance with HIPAA. The Privacy Official may contract with or otherwise utilize the services
of attorneys, accountants, brokers, consultants, or other third party experts as the Privacy Official
deems necessary or advisable. In addition and notwithstanding any provision of this Health FSA
to the contrary, the Privacy Official will have the authority to and be responsible for:
• accepting and verifying the accuracy and completeness of any certification
provided by the Employer under this Appendix;
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• transmitting the certification to any third parties as may be necessary to permit them
to disclose PHI to the Employer;
• establishing and implementing policies and procedures with respect to PHI that are
designed to ensure compliance by the Health FSA with the requirements of HIPAA;
• establishing and overseeing proper training of personnel who will have access to
PHI; and
• any other duty or responsibility that the Privacy Official,in his or her sole capacity,
deems necessary or appropriate to comply with the provisions of HIPAA and the
purposes of this Appendix B.
B.9 Interpretation and Limited Applicability
This Appendix serves the sole purpose of complying with the requirements of HIPAA and will be
interpreted and construed in a manner to effectuate this purpose. Neither this Appendix nor the
duties, powers, responsibilities, and obligations listed herein will be taken into account in
determining the amount or nature of the benefits provided to any person covered under the Health
FSA,nor will they inure to the benefit of any third parties. To the extent that any of the provisions
of this Appendix B are no longer required by HIPAA or do not apply to the Health FSA because
the Health FSA is otherwise excepted from HIPAA,they will be deemed deleted and will have no
force or effect.
B.10 Service Performed for the Employer
Notwithstanding any other provisions of this Health FSA to the contrary, all services performed
by a business associate for the Health FSA in accordance with the applicable service agreement
will be deemed to be performed on behalf of the Health FSA and subject to the administrative
simplification provisions of HIPAA contained in 45 CFR Parts 160 through 164, except services
that relate to eligibility and enrollment in the Health FSA. If a business associate of the Health
FSA performs any services that relate to eligibility and enrollment in the Health FSA, these
services will be deemed to be performed on behalf of the Employer in its capacity as the Health
FSA sponsor and not on behalf of the Health FSA.
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ATTACHMENT 8
CENTRAL CONTRA COSTA SANITARY DISTRICT
DEPENDENT CARE ASSISTANCE PLAN
(A Component Plan of
the Central Contra Costa Sanitary District
Section 125 Cafeteria Plan)
Amended and Restated
Effective July 1, 2019.
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TABLE OF CONTENTS
Page
ARTICLE 1: DEFINITIONS ...........................................................................................................2
1.1 DCAP.......................................................................................................................2
1.2 DCAP Subaccount...................................................................................................2
1.3 Dependent................................................................................................................2
1.4 Earned Income.........................................................................................................2
1.5 Eligible Dependent Care Expense ...........................................................................2
1.6 Grace Period.............................................................................................................3
1.7 Participant................................................................................................................3
1.8 Qualifying Dependent Care Services.......................................................................3
1.9 Qualifying Individual...............................................................................................3
1.10 Run-Out Period........................................................................................................4
1.11 Section 125 Plan ......................................................................................................4
1.12 Spouse......................................................................................................................4
1.13 Student.....................................................................................................................4
ARTICLE 11: SCOPE OF THE PLAN............................................................................................5
ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION......................................................6
3.1 Eligibility.................................................................................................................6
3.2 Election for Participation.........................................................................................6
3.3 Termination of Participation....................................................................................6
3.4 Reinstatement of Former Participant.......................................................................7
ARTICLE IV: PLAN FUNDING....................................................................................................8
4.1 Establishment of Accounts ......................................................................................8
4.2 Employer Credits.....................................................................................................8
4.3 Salary Reduction Credits .........................................................................................8
4.4 Time for Making Salary Reduction Elections .........................................................9
4.5 Change or Revocation of Elections..........................................................................9
4.6 Limit on Amount Credited to the DCAP.................................................................9
4.7 Plan Administrator's Power to Modify Elections..................................................10
ARTICLE V: BENEFITS..............................................................................................................11
5.1 Dependent Care Reimbursement...........................................................................11
5.2 Maximum Amount Available................................................................................11
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5.3 Forfeitures..............................................................................................................11
5.4 Grace Period...........................................................................................................12
5.5 Receiving Health Care Reimbursement.................................................................13
5.6 Post-Participation Reimbursements.......................................................................13
ARTICLE VI: CLAIMS PROCEDURES .....................................................................................14
6.1 General Reimbursement Procedures......................................................................14
6.2 Substantiation of Expenses....................................................................................14
6.3 Claims and Appeals Procedures.............................................................................15
ARTICLE VII: GENERAL PROVISIONS...................................................................................16
7.1 Administration of the Dependent Care Assistance Plan........................................16
7.2 Miscellaneous Provisions.......................................................................................16
7.3 Amendment and Termination of the Dependent Care Assistance Plan.................16
ARTICLE VIII: EXECUTION......................................................................................................17
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CENTRAL CONTRA COSTA SANITARY DISTRICT
DEPENDENT CARE ASSISTANCE PLAN
INTRODUCTION
Effective as of July 1, 2019, the Central Contra Costa Sanitary District (the "Employer")
hereby amends and restates the Central Contra Costa Sanitary District Dependent Care Assistance
Plan (the "DCAP") to allow Eligible Employees of the Employer to elect to receive dependent
care assistance benefits which are excludible from gross income under section 129(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), as provided herein and in accordance
with the terms of the Central Contra Costa Sanitary District Section 125 Cafeteria Plan (the
"Section 125 Plan"). The Employer originally adopted the DCAP effective May 1, 1989. Since
then, the Employer has amended the DCAP on various occasions. The Employer most recently
amended and restated the DCAP effective January 1, 2013.
This DCAP is a Component Plan of the Section 125 Plan and,except to the extent otherwise
expressly provided herein, is governed by the rules and regulations of the Section 125 Plan. The
DCAP is intended to qualify as a dependent care assistance program within the meaning of section
129 of the Code, and will be interpreted in a manner consistent with the requirements of section
129.
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ARTICLE I: DEFINITIONS
The definitions in the Section 125 Plan apply to this Component Plan as well as the
following definitions specific to the DCAP:
1.1 DCAP
The Central Contra Costa Sanitary District Dependent Care Assistance Plan.
1.2 DCAP Subaccount
The bookkeeping entry to record amounts withheld from a Participant's Compensation and
that are available for a future reimbursement of a Participant's Eligible Dependent Care Expenses.
No money will actually be allocated to or held under any individual Participant's DCAP
Subaccount. A DCAP Subaccount will be maintained by the Plan Administrator for accounting
purposes, and will not be representative of any identifiable trust assets.No interest will be credited
to or paid on amounts credited to the Participant's DCAP Subaccount.
1.3 Dependent
A Qualifying Individual.
1.4 Earned Income
Will have the meaning given such term in Code section 129(e)(2).
1.5 Eligible Dependent Care Expense
An expense that is an employment-related expense under Code section 21(b)(2) that is
incurred for the care of a Qualifying Individual and that is necessary for gainful employment of
the Participant and Spouse, if any, and expenses for incidental household services, if paid for by
the Participant to obtain Qualifying Dependent Care Services. An Eligible Dependent Care
Expense excludes a payment to (a) an individual with respect to whom a personal exemption is
allowable under Code section 151(c) to a Participant or his or her Spouse; (b) a Participant's
Spouse; (c) a Participant's child (as defined in Code section 152(f)(1) who is under age 19 at the
end of the Plan Year in which the expense was incurred); or (d) a parent of a Participant's under-
age-13 qualifying child. Eligible Dependent Care Expenses are eligible for reimbursement under
this DCAP.
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1.6 Grace Period
The period that begins immediately following the close of a Plan Year under the DCAP
and that ends on the day that is two months plus 15 days following the close of that Plan Year.
1.7 Participant
An individual who has met the eligibility requirements under Section 3.1, elected to
participate in accordance with Section 3.2, and whose participation has not terminated under
Section 3.3.
1.8 Qualifying Dependent Care Services
Services that are both (1) related to the care of a Qualifying Individual that enables the
Participant and Spouse to remain gainfully employed, and(2)performed:
(a) in the Participant's home, or
(b) outside the Participant's home for (i) the care of a Participant's qualifying child
who is under age 13, or (ii) the care of any other Qualifying Individual who regularly spends at
least eight hours per day in the Participant's home.
If the services are provided by a dependent care center(i.e.,a facility that provides care for
more than six individuals not residing at the facility and that receives a fee, payment, or grant for
such services),then the center must comply with all applicable state and local laws and regulations.
1.9 Qualifying Individual
An individual who with respect to the Participant is (a) a tax dependent as defined in Code
Section 152 who is under the age of 13 and who is the Participant's qualifying child as defined in
Code section 152(a)(1); (b) a tax dependent as defined in Code Section 152, but determined
without regard to subsections (b)(1), (b)(2), and (d)(1)(13) thereof, who is physically or mentally
incapable of self-care and who has the same principal place of abode as the Participant for more
than half of the year; or(c)a Spouse who is physically or mentally incapable of self-care, and who
has the same principal place of abode as the Participant for more than half of the year.
Notwithstanding the foregoing, in the case of divorced or separated parents, a Qualifying
Individual who is a child will, as provided in Code section 21(e)(5), be treated as a Qualifying
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Individual of the custodial parent (within the meaning of Code section 152(e)) and will not be
treated as a Qualifying Individual with respect to the noncustodial parent.
1.10 Run-Out Period
The period during which expenses incurred during a Plan Year or the related Grace Period
must be submitted to be eligible for reimbursement. The Run Out Period for a Plan Year ends 90
days after the last day of that Plan Year.
1.11 Section 125 Plan
The Central Contra Costa Sanitary District Section 125 Cafeteria Plan, as amended.
1.12 Spouse
The individual who is legally married to the Participant under applicable state law and who
is treated as a spouse under the Code, excluding any individual who (a) is legally separated from
the Participant under a divorce or separate maintenance decree; or (b) although married to the
Participant,files a separate federal income tax return,maintains a principal residence separate from
the Participant during the last six months of the taxable year, and does not furnish more than half
of the cost of maintaining the principal place of abode of the Participant.
1.13 Student
An individual who, during each of five or more calendar months during the Plan Year, is a
full-time student at any educational organization that normally maintains a regular faculty and
curriculum and normally has an enrolled student body in attendance at the location where its
educational activities are regularly carried on.
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ARTICLE II: SCOPE OF THE PLAN
Subject to the conditions and limitations set forth in this DCAP and in the Section 125
Plan, each Participant may elect to receive reimbursement under the DCAP for his or her Eligible
Dependent Care Expenses in lieu of an equal amount of cash.
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ARTICLE III: ELIGIBILITY AND PLAN PARTICIPATION
3.1 Eligibility
Each Employee is eligible to participate in the DCAP on the first day of the month after he
or she becomes an Eligible Employee. The Employee's commencement of participation in the
DCAP is conditioned on the Employee timely electing to participate in the DCAP in accordance
with Section 3.2.
3.2 Election for Participation
An Eligible Employee can elect to participate in the DCAP by electing in accordance with
Article III of the Section 125 Plan(a)to receive benefits in the form of reimbursements for Eligible
Dependent Care Expenses from the DCAP; (b) to pay his or her contribution for such DCAP
benefits on a pre-tax Salary Reduction basis or with Employer Credits; and (c) designating the
amount of Salary Reduction and Employer Credits to be allocated to the DCAP Subaccount for
the Period of Coverage, as provided in Section 3.4 of the Section 125 Plan. Unless an exception
applies (as described in Section 3.6 of the Section 125 Plan), any such election is irrevocable for
the duration of the Period of Coverage to which it relates.
3.3 Termination of Participation
A Participant's participation in the DCAP will terminate upon the earliest of:
(a) the termination of the DCAP or the Section 125 Plan;
(b) the Participant's permitted election not to participate in the DCAP;
(c) the Participant ceases to be an Eligible Employee; or
(d) the last day of the Plan Year,unless the Participant elects to continue to participate
in the next Plan Year.
Termination of participation will automatically revoke the Participant's elections. If
revocation occurs under this Section 3.3, no new election may be made by such Participant during
the remainder of the Plan Year unless otherwise permitted under the DCAP.
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3.4 Reinstatement of Former Participant
Former Participants of the DCAP will be reinstated consistent with the provisions of
Section 2.3 of the Section 125 Plan.
3.5 Leaves of Absence
See Sections 2.4 and 2.5 of the Section 125 Plan for rules regarding the effect of a leave of
absence on a Participant's participation in the DCAP.
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ARTICLE IV: PLAN FUNDING
4.1 Establishment of Accounts
Section 3.1 of the Section 125 Plan which provides for the establishment of Accounts and
Subaccounts will, as modified by this section, also apply to the DCAP. The Plan Administrator
will establish and maintain a DCAP Subaccount with respect to each Participant who has elected
to participate in the DCAP, but it will not create a separate fund or otherwise segregate assets for
this purpose. The Subaccount so established will merely be a recordkeeping account with the
purpose of keeping track of contributions and determining forfeitures under Section 5.3.
(a) Crediting of accounts. A Participant's DCAP Subaccount for a Period of Coverage
will be credited periodically during such Period of Coverage with an amount equal to the
Participant's Salary Reductions elected to be allocated to the Subaccount.
(b) Debiting of accounts.A Participant's DCAP Subaccount will be debited during each
Period of Coverage for any reimbursement of Eligible Dependent Care Expenses incurred during
the Period of Coverage (or for reimbursement of Eligible Dependent Care Expenses incurred
during any Grace Period to which he or she is entitled as provided in Section 5.4).
(c) Available Amount is Based on Credited Amount. As described in Section 5.2, the
amount available for reimbursement of Eligible Dependent Care Expenses may not exceed the
year-to-date amount credited to the Participant's DCAP Subaccount,less any prior reimbursements
(i.e., it is based on the amount credited to the DCAP Subaccount at a particular point in time).
Thus, a Participant's DCAP Subaccount may not have a negative balance during a Period of
Coverage.
4.2 Employer Credits
Each Eligible Employee may, in accordance with Article III of the Section 125 Plan, elect
to apply Employer Credits to his or her Account under Section 3.2 of the Section 125 Plan to the
DCAP to reimburse Eligible Dependent Care Expenses the extent permitted under that section.
4.3 Salary Reduction Credits
In accordance with Section 3.4 of the Section 125 Plan, each Participant will designate the
amount of Salary Reduction contributions to be available during the Period of Coverage for
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Eligible Dependent Care Expense reimbursements under the DCAP. Contributions will be
withheld from each Participant's Compensation, and an equivalent amount will be credited to the
Participant's DCAP Subaccount(although no actual assets will be set aside in that account or any
other account). A Participant's contributions for each Plan Year will equal the annual benefit
amount elected by the Participant on his or her election form for the Plan Year and may not exceed
the maximum annual benefit limits for the DCAP set forth in Section 4.6 for the applicable Plan
Year.
4.4 Time for Making Salary Reduction Elections
The timing of Salary Reduction elections under the DCAP must be consistent with the
timing for making such elections described in Section 3.5 of the Section 125 Plan.
4.5 Change or Revocation of Elections
A Participant's Salary Reduction election for any Period of Coverage may not be changed
or revoked after the first payroll period to which it applies, except under the circumstances
described in Section 3.6 of the Section 125 Plan.
4.6 Limit on Amount Credited to the DCAP
The maximum annual benefit amount that a Participant may elect to receive under this
DCAP in the form of reimbursements for Eligible Dependent Care Expenses incurred in any Period
of Coverage is $5,000 or, if lower, the maximum amount that the Participant has reason to believe
will be excludable from his or her income at the time the election is made as a result of the
applicable statutory limit for the Participant. The applicable statutory limit for a Participant is the
smallest of the following amounts:
(a) the Participant's Earned Income for the calendar year;
(b) the Earned Income of the Participant's Spouse for the calendar year (for this
purpose, a Spouse who is not employed during a month in which the Participant incurs an Eligible
Dependent Care Expense and is either (i) physically or mentally incapable of self-care, or (ii) a
Student will be deemed to have Earned Income in the amount specified in Code section 21(d)(2));
or
(c) either$5,000 or$2,500 for the calendar year, as applicable below:
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(i) The amount is $5,000 for the calendar year if one of the following applies:
(a) the Participant is married and files a joint federal income tax return; (b) the Participant is
married, files a separate federal income tax return, and meets the following conditions: (1) the
Participant maintains as his or her home a household that constitutes (for more than half of the
taxable year) the principal abode of a Qualifying Individual (i.e., the Dependent for whom the
Participant is eligible to receive reimbursements under the DCAP); (2) the Participant furnishes
over half of the cost of maintaining such household during the taxable year; and(3) during the last
six months of the taxable year, the Participant's Spouse is not a member of such household (i.e.,
the Spouse maintained a separate residence); or (c) the Participant is single or is the head of the
household for federal income tax purposes.
(ii) The amounts is$2,500 for the calendar year if the Participant is married and
resides with the Spouse,but files a separate federal income tax return.
4.7 Plan Administrator's Power to Modify Elections
Section 3.10 of the Section 125 Plan which provides the Plan Administrator with the power
to modify Salary Reduction elections shall also apply to this DCAP.
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ARTICLE V: BENEFITS
5.1 Dependent Care Reimbursement
A Participant may receive reimbursement under the DCAP for Eligible Dependent Care
Expenses incurred during the Period of Coverage to which the Participant's participation election
applies. In addition,certain individuals may receive a reimbursement for Eligible Dependent Care
expenses incurred during the Grace Period immediately following the close of a Plan Year in
accordance with Section 5.4. Eligible Dependent Care Expenses will be reimbursed only if
incurred during the Period of Coverage or, if applicable, during the Grace Period immediately
following the end of a Plan Year. Eligible Dependent Care Expenses will not be reimbursed for
any Plan Year or related Grace Period, unless the Participant applies for such reimbursement
before the end of the Run-Out Period.
5.2 Maximum Amount Available
The maximum dollar amount elected by the Participant for reimbursement of Eligible
Dependent Care Expenses incurred during a Period of Coverage,reduced by prior reimbursements
during the Period of Coverage (Grace Period reimbursements for a prior Plan Year are not
counted), will only be available during the Period of Coverage to the extent of the actual amounts
credited to the Participant's DCAP Subaccount pursuant to Section 4.1.No reimbursement will be
made to the extent that such reimbursement would exceed the balance in the Participant's DCAP
Subaccount (that is, the year-to-date amount that has been withheld from the Participant's
Compensation for reimbursement for Eligible Dependent Care Expenses for the Period of
Coverage, less any prior reimbursements).
5.3 Forfeitures
Except as otherwise provided below(regarding certain individuals who may be reimbursed
from prior Plan Year DCAP amounts for expenses incurred during a Grace Period), if any balance
remains in the Participant's DCAP Subaccount for a Period of Coverage after all reimbursements
have been made for the Period of Coverage,then such balance will not be carried over to reimburse
the Participant for Eligible Dependent Care Expenses incurred during a subsequent Plan Year. The
Participant will forfeit all rights with respect to such balance. All forfeitures under this DCAP will
be used as follows: (a)first,to offset any losses experienced by the Employer during the Plan Year
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as a result of making reimbursements (i.e., providing DCAP benefits) with respect to all
Participants in excess of the contributions paid by such Participants through Salary Reductions;
(b) second, to reduce the cost of administering the DCAP during the Plan Year or the subsequent
Plan Year (all such administrative costs will be documented by the Plan Administrator); and (c)
third, to provide increased benefits or compensation to Participants in subsequent years in any
weighted or uniform fashion the Plan Administrator deems appropriate, consistent with applicable
regulations. In addition, any DCAP Subaccount benefit payments that are unclaimed (e.g.,
uncashed benefit checks)by the close of the Plan Year following the Period of Coverage in which
the Eligible Dependent Care Expense was incurred will be forfeited and applied as described
above.
5.4 Grace Period
The DCAP has a Grace Period that follows the end of the Plan Year during which amounts
that the Participant has allocated to his or her DCAP Subaccount that are unused at the end of the
Plan Year may be used to reimburse Eligible Dependent Care Expenses incurred during the Grace
Period.
To take advantage of the Grace Period, a Participant must be a Participant on the last day
of the Plan Year to which the Grace Period relates.
Eligible Dependent Care Expenses incurred during a Grace Period and approved for
reimbursement will be paid first from available amounts that were remaining at the end of the Plan
Year to which the Grace Period relates, and then from any amounts that are available to reimburse
expenses incurred during the current Plan Year. Claims will be paid in the order in which they are
received. Previous claims will not be reprocessed or recharacterized so as to change the order in
which they were received.
Expenses incurred during a Grace Period must be submitted before the end of the Run-Out
Period. Any unused amounts from a Plan Year to which the Grace Period relates that are not used
to reimburse Eligible Dependent Care Expenses incurred either during the Plan Year or during the
related Grace Period will be forfeited if not submitted for reimbursement before the end of the
Run-Out Period. A Participant may not use DCAP amounts to reimburse Eligible Medical
Expenses, as defined in the Central Contra Costa Sanitary District Health Flexible Spending
Arrangement Plan.
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5.5 Receiving Health Care Reimbursement
Payment will be made to the Participant in cash as a reimbursement for Eligible Dependent
Care Expenses incurred by the Participant (or his or her Spouse or Dependents) while he or she is
a Participant during the Plan Year for which the Participant's election is effective, but only if the
substantiation requirements of Section 6.2 are satisfied. However, if the Plan Administrator so
permits, the Participant may choose to make payment for an Eligible Dependent Care Expense
with an electronic payment card arrangement.
5.6 Post-Participation Reimbursements
When a Participant ceases to be a Participant under Section 3.3, the Participant's Salary
Reductions and election to participate will terminate. The Participant will not be able to receive
reimbursements for Eligible Dependent Care Expenses incurred after the end of the day on which
the Participant's employment terminates or the Participant otherwise ceases to be eligible.
However, such Participant (or the Participant's estate) may claim reimbursement for any Eligible
Dependent Care Expenses incurred during the Period of Coverage prior to the date that the
Participant ceases to be eligible, provided that the Participant (or the Participant's estate) files a
claim within 90 days after the date that the Participant ceases to be a Participant.
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ARTICLE VI: CLAIMS PROCEDURES
6.1 General Reimbursement Procedures
A Participant must apply for reimbursement by submitting a request in writing to the Plan
Administrator in such form as the Plan Administrator may prescribe, no later than the end of the
Run-Out Period following the close of the Plan Year in which the Eligible Dependent Care
Expense was incurred (except that for a Participant who ceases to be eligible to participate, this
must be done no later than 90 days after the date that eligibility ceases, as described in Section 5.6)
and must provide the substantiation required Section 6.2 or as otherwise requested by the Plan
Administrator or its designee.
6.2 Substantiation of Expenses
The reimbursement request described in Section 6.1 must include:
(a) the person(s) on whose behalf Eligible Dependent Care Expenses have been
incurred;
(b) the nature and date of the expenses so incurred;
(c) the amount of the requested reimbursement;
(d) the name of the person, organization or entity to whom the expense was or is to be
paid;
(e) a statement that such expenses have not otherwise been reimbursed and that the
Participant will not seek reimbursement through any other source;
(f) the Participant's certification that he or she has no reason to believe that the
reimbursement requested, added to his or her other reimbursements to date for Eligible Dependent
Care Expenses incurred during the same calendar year, will exceed the applicable statutory limit
for the Participant as described in Section 4.6; and
(g) other such details about the expenses that may be requested by the Plan
Administrator in the reimbursement request form or otherwise (e.g., a more detailed certification
from the Participant).
The application will be accompanied by bills, invoices, or other statements from an
independent third parry showing that the Eligible Dependent Care Expenses have been incurred
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and showing the amounts of such expenses, along with any additional documentation that the Plan
Administrator may request. If the DCAP is accessible by an electronic payment card (e.g., debit
card, credit card, or similar arrangement), the Participant will be required to comply with
mandatory substantiation procedures and other mandatory terms and conditions that will govern
the Participant's use of the electronic payment card in accordance with Code section 125 and
applicable IRS guidance.
6.3 Claims and Appeals Procedures
See Article VI of the Section 125 Plan for procedures for processing claims and appeals of
denied claims.
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ARTICLE VII: GENERAL PROVISIONS
7.1 Administration of the Dependent Care Assistance Plan
The DCAP will be administered in accordance with provisions set forth in Article V of the
Section 125 Plan.
7.2 Miscellaneous Provisions
The miscellaneous provisions described in Article VII of the Section 125 Plan will also
apply to this DCAP.
7.3 Amendment and Termination of the Dependent Care Assistance Plan
Subject to Article VIII of the Section 125 Plan,the Employer may amend or terminate this
DCAP in whole or in part at any time and for any reason by resolution of the Board or by any
person or persons authorized by the Board to take such action.
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ARTICLE VIII: EXECUTION
As evidence of its amendment and restatement of this DCAP, the Central Contra Costa
Sanitary District has caused this instrument to be signed by its duly authorized officers on this
day of , 2019.
By:
President, Board of Directors
For:
THE CENTRAL CONTRA COSTA SANITARY DISTRICT
ATTEST:
By:
(Sign Name) Date
Katie Young, Secretary of the District
(Print Name and Title)
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ATTACHMENT 9
CENTRAL CONTRA COSTA SANITARY DISTRICT
RETIREE HEALTH REIMBURSEMENT ARRANGEMENT
Effective July 1, 2019
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TABLE OF CONTENTS
PAGE
ARTICLE I ESTABLISHMENT AND PURPOSE OF THE PLAN .................................................. 1
ARTICLE II DEFINITIONS............................................................................................................ 1
ARTICLE III ELIGIBILITY, PARTICIPATION, AND COVERAGE .................................................3
ARTICLE IV VESTING AND BENEFITS ......................................................................................4
ARTICLE V BENEFIT FUNDING..................................................................................................4
ARTICLE VI ADMINISTRATION OF THE PLAN ..........................................................................5
ARTICLE VII AMENDMENT AND TERMINATION OF THE PLAN ..............................................6
ARTICLE VIII GENERAL PROVISIONS.......................................................................................7
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CENTRAL CONTRA COSTA SANITARY DISTRICT
RETIREE HEALTH REIMBURSEMENT ARRANGEMENT
Effective July 1, 2019
ARTICLE I
ESTABLISHMENT AND PURPOSE OF THE PLAN
The Central Contra Costa Sanitary District (the Employer) provides post-retirement health
benefits to its Eligible Retirees. The Employer hereby establishes this Central Contra Costa
Sanitary District Retiree Health Reimbursement Arrangement (the Plan), effective July 1, 2019
(the Effective Date) to enable Eligible Retirees and eligible Beneficiaries to pay for the health
care benefits described herein.
The Plan is intended to qualify as a health reimbursement arrangement within the meaning of
Internal Revenue Service Notice 2002-45, and it is intended that the benefits under the Plan be
tax-free to the maximum extent permitted under the Internal Revenue Code and the regulations
issued thereunder. The Plan will be administered and interpreted to accomplish that objective.
Capitalized terms used in this Plan that are not otherwise defined have the meanings set forth in
Article II.
ARTICLE II
DEFINITIONS
2.1 "Beneficiary" means an Eligible Retiree's or Employee's surviving family member who
qualifies as an "annuitant" under California Government Code section 22760(c) or (h).
2.2 "Board of Directors" means the governing body of the Employer.
2.3 "CaIPERS" means the California Public Employees' Retirement System which
administers CaIPERS Health.
2.4 "CaIPERS Health" means the health care program made available by the Employer to
Eligible Retirees under the Public Employees' Medical and Hospital Care Act (PEMHCA),
codified under sections 22750 - 22948 of the California Government Code, which program
provides health insurance under various coverage options from which covered individuals may
select.
2.5 "CCCERA" means the Contra Costa County Employees' Retirement Association in
which the Employer is a participating agency.
2.6 "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
2.7 "Code" means the Internal Revenue Code of 1986 and the Treasury Regulations and
guidance issued thereunder, as amended.
2.8 "Effective Date" means July 1, 2019.
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2.9 "Eligible Retiree" means an Employee who has met the eligibility requirements in
Article III and Appendix A. An individual's status as an Eligible Retiree will be determined solely
by the Employer.
2.10 "Employee" means a person whom the Employer classifies as a common-law
employee and who is on the Employer's W-2 payroll, but does not include the following: (a) any
leased employee (including but not limited to those individuals defined as leased employees in
Code Section 414(n) or an individual classified by the Employer as a contract worker,
independent contractor, temporary employee, or casual employee for the period during which
such individual is so classified, whether or not any such individual is on the Employer's W-2
payroll or is determined by the IRS or others to be a common-law employee of the Employer;
and (b) any individual who performs services for the Employer but who is paid by a temporary or
other employment or staffing agency for the period during which such individual is paid by such
agency, whether or not such individual is determined by the IRS or others to be a common-law
employee of the Employer.
2.11 "Employer" means the Central Contra Costa Sanitary District.
2.12 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as
amended.
2.13 "MEC" means the minimum employer contribution required to be made by the Employer
directly to CaIPERS for an Eligible Retiree's coverage under CaIPERS Health using the
"unequal method" described in California Government Code Section 22892(c). Under that
method, the minimum employer contribution for each Eligible Retiree will be $1 per month for
2019, and increased annually to 5% of the minimum employer contribution for active employees
($136 per month in 2019, and adjusted annually in accordance with California Government
Code Section 22892) multiplied by the number of the Employer's years of participation in
CaIPERS Health until the minimum employer contribution for retirees and active employees is
equal (i.e., after 20 years of participation). The MEC is a separate benefit from the
reimbursement benefits available under this Plan. The Employer pays the MEC directly to
CalPERS on behalf of Eligible Retirees.
2.14 "Plan" means this Central Contra Costa Sanitary District Retiree Health Reimbursement
Arrangement, as set forth herein and amended from time to time.
2.15 "Plan Administrator" means the Employer unless the Employer designates another
person or organization to hold the position of Plan Administrator. The Employer may
alternatively designate another person or organization to perform certain duties assigned to the
Plan Administrator under this Plan.
2.16 "Plan Year" means the calendar year (i.e., the 12-month period commencing January 1
and ending on December 31).
2.17 "Trust" means the legal entity that the Employer may establish and/or adopt to hold any
assets it has irrevocably set aside to pay benefits under the Plan.
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ARTICLE III
ELIGIBILITY, PARTICIPATION, AND COVERAGE
3.1 Eligibility. Only Eligible Retirees are eligible to participate in the Plan. An individual will
become an Eligible Retiree under the Plan only upon meeting all of the following requirements.
a) The individual satisfies any applicable minimum age and service requirements
set out under Appendix A at retirement under CCCERA in accordance with
Section 3.1(b).
b) The individual retired under CCCERA directly from the Employer within 120 days
after his or her employment with the Employer terminated. If the Employee
retires under CCCERA from any other governmental agency (or retires under any
other governmental retirement plan and not under CCCERA), he or she will not
meet this requirement.
C) Upon retiring, the individual must be eligible for coverage under CalPERS Health
as a retiree and must be entitled to the MEC.
3.2 No Benefits Unless Eligible. An Employee will not have any interest under the Plan
unless he or she meets all of the requirements under Section 3.1. Any person who does not
meet these requirements will not be entitled to any benefits under the Plan.
3.3 Commencement of Participation. Each Eligible Retiree on the Effective Date will
participate in the Plan beginning on that date. Each person who becomes an Eligible Retiree
after the Effective Date will begin participation in the Plan when he or she becomes an Eligible
Retiree.
3.4 Period of Coverage. Participation in the Plan is tied to the Eligible Retiree's enrollment
in CalPERS Health as a retiree. Coverage under this Plan for an Eligible Retiree will begin on
the first day of the calendar month that coverage under CalPERS Health as a retiree begins.
3.5 Termination of Participation. An Eligible Retiree's participation in the Plan terminates
upon the earlier of:
a) the date he or she ceases to be an Eligible Retiree;
b) the date that the Eligible Retiree is reemployed by the Employer, except as
provided in Section 3.6; or
C) the Eligible Retiree's death, except benefits may continue to the Eligible Retiree's
Beneficiary in accordance with Appendix A, Section A.4.
3.6 Reemployed Retirees. If the Employer reemploys an Eligible Retiree, any benefits
provided under the Plan to that Eligible Retiree will cease effective on the reemployment date
and his or her Plan participation will cease. The Eligible Retiree will be entitled to benefits under
the Plan upon subsequent termination of employment only if he or she is then eligible under this
Article I II. If, however, after the reemployment date, the reemployed Eligible Retiree is entitled
to continued receipt of retirement benefits under CCCERA as a retiree of the Employer and
continues to be eligible for both the MEC and retiree coverage under CalPERS Health, any
benefits provided under the Plan to that Eligible Retiree will continue uninterrupted.
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ARTICLE IV
VESTING AND BENEFITS
4.1 Amount of Benefits. Each Eligible Retiree will be entitled to receive Employer-funded
health care reimbursements as specified in Appendix A and paid in accordance with Section
4.2. The maximum benefit on behalf of an Eligible Retiree for any calendar month will be the
amount established and set forth in Appendix A. In no event, however, will the benefit paid in
any calendar month on behalf of any Eligible Retiree be greater than the Eligible Retiree's
actual out-of-pocket premium cost for CaIPERS Health coverage for that calendar month. An
Eligible Retiree may at any time decline benefits under the Plan by notifying the Employer.
4.2 Reimbursements Under the Plan. Benefits under the Plan will be provided in the form
of monthly reimbursements of the health care coverage premium costs incurred by the Eligible
Retiree (or Beneficiary) for the coverage under the CaIPERS Health option that the Eligible
Retiree has elected for the applicable Plan Year, up to the maximum amount specified in
Appendix A. In addition, the Plan will reimburse the Medicare Part A and Part B premium costs
incurred by a Tier I or Tier II Eligible Retiree or his or her eligible dependents as set forth in
Appendix A. Finally, in lieu of the Any such premium costs may not be paid or reimbursed from
any other source and must be substantiated in accordance with Section 4.3. Under no
circumstances will unused amounts for one calendar month be applied to costs in any
subsequent calendar month and no unused amounts may roll over to any subsequent Plan
Year. The Eligible Retiree will be solely responsible for paying the coverage cost of any
amounts that are not reimbursed under this Plan or otherwise paid by the Employer.
4.3 Substantiation of Expenses. Reimbursements of health care premium expenses
under the Plan for an Eligible Retiree's (or a Beneficiary's) individual coverage under CaIPERS
Health or Medicare must be properly documented and substantiated at the time and in the
manner determined by the Plan Administrator. The Plan Administrator has authority to establish
rules and procedures to be followed by individuals in filing applications for benefits, for
furnishing and verifying proofs necessary to establish their rights to benefits under the Plan, or
for any other reason it deems necessary for the efficient administration of the Plan. Upon
satisfactory documentation and substantiation, the Plan Administrator will direct payment to the
Eligible Retiree (or Beneficiary) as soon as administratively feasible.
ARTICLE V
BENEFIT FUNDING
5.1 Employer Contributions. All benefits under the Plan will be paid by Employer
contributions and earnings thereon. Employee contributions are not permitted. In addition, the
Employer may set aside contributions and related earnings to pre-fund benefits under the Plan.
In determining the amount of any such contributions, the Employer may engage an actuary to
conduct actuarial experience studies and periodic actuarial valuations of the Plan benefits and
to recommend to the Employer the amount of contributions that are needed in order to fund the
Plan's benefits.
5.2 Trust. The Employer may establish or adopt a Trust to receive and invest assets set
aside by the Employer to pay benefits under the Plan. The Trust may specifically provide,
among other things, for the investment and reinvestment of the Trust assets and the income
thereof, the management of the Trust assets, the responsibilities and immunities of the trustee,
removal of the trustee and appointment of a successor, accounting by the trustee and the
disbursement of the Trust assets. The trustee will, in accordance with the terms of the Trust,
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accept and receive all contributions paid to it from time to time, and shall hold, invest, reinvest
and manage such moneys and any increment, increase, earnings and income thereof for the
exclusive benefit of Eligible Retirees and Beneficiaries and for the payment of reasonable
expenses of administering the Plan.
ARTICLE VI
ADMINISTRATION OF THE PLAN
6.1 Plan Administrator. The administration of this Plan will be under the supervision of the
Plan Administrator. It is the principal duty of the Plan Administrator to see that this Plan is
carried out, in accordance with its terms, for the exclusive benefit of persons entitled to
participate in this Plan.
6.2 Powers of the Plan Administrator. The Plan Administrator will have such duties and
powers as it considers necessary or appropriate to discharge its duties. It will have the
exclusive right to interpret the Plan and to decide all matters thereunder, and all determinations
of the Plan Administrator with respect to any matter hereunder will be conclusive and binding on
all persons. Without limiting the generality of the foregoing, the Plan Administrator will have the
following discretionary authority:
a) to construe and interpret the Plan, including all possible ambiguities,
inconsistencies, and omissions in the Plan and related documents, and to decide
all questions of fact, questions relating to eligibility and participation, and
questions of benefits under the Plan;
b) to prescribe procedures to be followed and the forms to be used by Eligible
Retirees and Beneficiaries to claim reimbursements under the Plan;
C) to prepare and distribute information explaining the Plan and the benefits under
the Plan in such manner as the Plan Administrator determines to be appropriate;
d) to request and receive from all Eligible Retirees and Beneficiaries such
information as the Plan Administrator will from time to time determine to be
necessary for the proper administration of the Plan;
e) to furnish each Eligible Retiree and Beneficiary with such reports with respect to
the administration of the Plan as the Plan Administrator determines to be
reasonable and appropriate;
f) to receive, review, and keep on file such reports and information regarding the
benefits covered by the Plan as the Plan Administrator determines from time to
time to be necessary and proper;
g) to appoint and employ such individuals or entities to assist in the administration
of the Plan as it determines to be necessary or advisable, including legal counsel
and benefit consultants;
h) to sign documents for the purposes of administering the Plan, or to designate an
individual or individuals to sign documents for the purposes of administering the
Plan;
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i) to secure or require such evidence as it deems necessary to decide any claim for
benefits under the Plan; and
j) to maintain the books of accounts, records, and other data in the manner
necessary for proper administration of the Plan and to meet any applicable
disclosure and reporting requirements.
6.3 Fiduciary Duties. Each Plan fiduciary shall discharge its duties solely in the interest of
Eligible Retirees and Beneficiaries and for the exclusive purpose of providing benefits under the
Plan, or defraying reasonable expenses of administering the Plan. Each Plan fiduciary, in
carrying out such duties and responsibilities, shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting in a like capacity
and familiar with such matters would use. A fiduciary may serve in more than one fiduciary
capacity and may employ one or more persons to render advice with regard to its fiduciary
responsibilities. If the fiduciary is serving as such without compensation, all expenses
reasonably incurred by such fiduciary will be paid by the Employer. The Employer may,
however, elect to have those expenses paid from Trust assets.
6.4 Provision for Third-Party Plan Service Providers. The Plan Administrator, subject to
approval of the Employer, may employ the services of such persons as it may deem necessary
or desirable in connection with the operation of the Plan. Unless otherwise provided in the
service agreement, obligations under the Plan shall remain the obligation of the Employer or
Plan Administrator, as applicable.
6.5 Inability to Locate Payee. If the Plan Administrator is unable to make payment to any
person to whom a payment is due under the Plan because it cannot ascertain the identity or
whereabouts of such person after reasonable efforts have been made to identify or locate such
person, then such payment and all subsequent payments otherwise due to such person will be
forfeited following a reasonable time after the date any such payment first became due.
6.6 COBRA and HIPAA Compliance. The Plan will comply with the applicable
requirements of COBRA, and with the applicable requirements of HIPAA in accordance with the
rules set out in Appendix B.
ARTICLE VII
AMENDMENT AND TERMINATION OF THE PLAN
7.1 No Vested Rights. The Employer may at any time amend or terminate the Plan as
provided in Sections 7.2 and 7.3. Nothing in the Plan is intended to or will be construed to
entitle any Eligible Retiree or other person to vested or non-terminable benefits.
7.2 Amendment of the Plan. The Employer may amend all or any part of this Plan at any
time for any reason by resolution of the Board of Directors or by any person or persons
authorized by the Board of Directors to take such action. Any such amendment will supersede
and override any claim to "vested rights" that any person may otherwise have with respect to
benefits under the Plan.
7.3 Termination of the Plan.
a) The Employer has established the Plan with the expectation that it will be
continued, but continuance is not a contractual or other obligation of the
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Employer and no employee of the Employer or other person will have any vested
right to continuance of the Plan or to continuance of any Employer contributions
to the Plan. The Employer reserves the right at any time to terminate the Plan
without prejudice and for any reason, and such termination will supersede and
override any claim to "vested rights" that any person may otherwise have with
respect to benefits under the Plan. Such decision to terminate the Plan will be
made in writing and must be approved by the Board of Directors.
b) If the Plan is terminated, the Employer shall direct the trustee to compute the
value of the Plan assets under the Trust as of the date of termination. Those
assets will continue to be held in the Trust, and will be distributed to pay any
remaining benefits owed under the Plan until those benefits are satisfied.
C) The "partial termination" rules of the Code that apply to qualified retirement plans
will not apply under this Plan, and no action will be taken with respect to this Plan
in connection with any event or events that would be a partial termination for a
qualified plan.
7.4 Compliance with Labor Laws. Notwithstanding Sections 7.1 through 7.3, all
amendments to the Plan or any person's benefits under the Plan will conform with any
applicable requirements of the Meyers-Milias-Brown Act, including but not limited to any meet-
and-confer requirements.
7.5 Determination of Effective Date of Amendment or Termination. Any such
amendment, discontinuance or termination will be effective as of the date the Employer
determines.
7.6 Assets After Termination. Any assets remaining in the Trust after all benefits owed
under the Plan and all Plan expenses have been paid will revert to the Employer unless
otherwise determined by the Employer.
7.7 Limitation of Obligations. The Employer must provide all benefits accrued by Eligible
Retirees or Beneficiaries under the Plan through its termination. Once those benefits are
satisfied, the Employer will not have any remaining obligations to provide any benefit under the
Plan. No one will accrue benefits under the Plan after its termination.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Governing Law. The provisions of the Plan will be construed, administered and
enforced according to applicable federal law and, to the extent not preempted, the laws of the
State of California.
8.2 Requirement for Proper Forms. All communications in connection with the Plan made
by an Eligible Retiree or Beneficiary will become effective only when duly executed on any
forms as may be required and furnished by, and filed with, the Employer or Plan Administrator,
as applicable.
8.3 No Guarantee of Tax Consequences. This Plan is intended to permit an Eligible
Retiree or Beneficiary to obtain reimbursement benefits under this Plan on a nontaxable basis.
Neither the Employer nor any Plan Administrator, however, makes any warranty or other
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representation as to whether any benefits under the Plan will be treated as excludable from
gross income for federal, state, or local income tax purposes. If for any reason it is determined
that any amount paid for the benefit of an Eligible Retiree or Beneficiary is includable in gross
income for federal, state or local income tax purposes, then under no circumstances will the
recipient have any recourse against the Employer or Plan Administrator with respect to any
increased taxes or other losses or damages suffered by the Eligible Retiree or Beneficiary as a
result thereof. To the extent required by the Code, the Employer will follow the tax withholding
and reporting requirements applicable to benefits paid under this Plan to or for a non-dependent
domestic partner.
8.4 Compliance With Code and Other Applicable Laws. It is intended that this Plan meet
all applicable requirements of the Code and all regulations and guidance issued thereunder.
This Plan will be construed, operated and administered accordingly, and in the event of any
conflict between any part, clause, or provision of this Plan and the Code, the provisions of the
Code will be deemed controlling, and any conflicting part, clause, or provision of this Plan will be
deemed superseded to the extent of the conflict. In addition, the Plan will comply with the
requirements of all other applicable laws.
8.5 Headings. The headings of the various articles and sections are inserted for
convenience of reference and are not to be regarded as part of the Plan or as indicating or
controlling the meaning or construction of any provision.
8.6 Severability. Should any part of this Plan subsequently be invalidated by a court of
competent jurisdiction, the remainder of the Plan will be given effect to the maximum extent
possible.
8.7 Administration Expenses. The Employer will pay the reasonable expenses of
administering the Plan, including but not limited to the reasonable compensation of any counsel,
accountants, and other agents hired by the Employer, Plan Administrator, or Board of Directors,
as well as any other expenses incurred in administering the Plan. The Employer may, however,
elect to have those expenses paid from Trust assets.
8.8 Effect of Mistake. In the event of a mistake as to the eligibility or participation of an
individual, or the allocations made with respect to any Eligible Retiree, or the amount of
distributions made or to be made to an Eligible Retiree or other person, the Employer or Plan
Administrator will, to the extent it deems possible, cause to be allocated or cause to be withheld
or accelerated, or otherwise make adjustment of, such amounts as will in its judgment accord to
such Eligible Retiree or other person that to which he or she is properly entitled under the Plan.
8.9 No Contract of Employment. The Plan does not provide any person with any right to
be retained in the Employer's employment or service. An Eligible Retiree's sole rights under the
Plan are limited to those described in this document.
8.10 Plan Provisions Controlling. The Plan encompasses the benefits provided by the
Employer to Eligible Retirees. In the event that the terms or provisions of any summary or
description of this Plan are interpreted as being in conflict with the provisions of this Plan as set
forth in this document, the provisions of this Plan will be controlling.
8.11 Non-Assignability of Rights. The right of any Eligible Retiree or Beneficiary to receive
any reimbursement under this Plan will not be alienable by the Eligible Retiree or Beneficiary by
assignment or any other method and will not be subject to claims by his or her creditors by any
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process whatsoever. Any attempt to cause such right to be so subjected will not be recognized,
except to the extent required by law.
8.12 Provisions Applicable During Periods of Military Service. Notwithstanding any Plan
provision to the contrary, contributions, benefits, and service credit with respect to qualified
military service will be provided as required by any law concerning veterans' rights.
To record the adoption of the Plan, the Employer's authorized representative hereby executes
this document on this day of 2018.
Central Contra Costa Sanitary District
By:
Title:
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APPENDIX A: RETIREE BENEFITS
Each Eligible Retiree is eligible to receive Employer-funded health care reimbursements as
specified in this Appendix A and paid in accordance with Section 4.2. The MEC is a separate
benefit from the reimbursement benefits available under this Plan. The Employer pays the MEC
directly to CalPERS on behalf of Eligible Retirees.
A.1 Tier I: Employees hired before May 1, 1985
Each Employee hired by the Employer before May 1, 1985 will become an Eligible Retiree only
if(a) the sum of his or her age plus years of Employer service is equal to at least 65, and (b) he
or she has reached age 50 and completed at least ten years of continuous Employer service.
Each Eligible Retiree described in the preceding sentence will be eligible to receive a monthly
premium reimbursement benefit under the Plan of up to:
a) 100% of the monthly premium for the highest-cost Core Plan (Kaiser Permanente
Plan or Health Net SmartCare Plan for Eligible Retirees and eligible dependents
who younger than age 65; Kaiser Permanente Senior Advantage Plan or United
Healthcare Group Medicare Advantage PPO Plan for Eligible Retirees and
eligible dependents who are age 65 or older) with the highest such premium for
the Eligible Retiree and his or her eligible dependents, minus
b) the MEC.
A.2 Tier II: Employees hired on or after May 1, 1985 and on or before June 30, 2009
Each Employee hired by the Employer on or after May 1, 1985, and on or before June 30, 2009,
will become an Eligible Retiree only if(a) the sum of his or her age plus years of Employer
service is equal to at least 65, and (b) he or she has reached age 50 (age 55 for Management
and MS/CG Employees hired after April 18, 2003) and completed at least ten years of
continuous Employer service. Each Eligible Retiree described in the preceding sentence will be
eligible to receive a monthly premium reimbursement under the Plan of up to:
a) 100% of the monthly premium for the Core Plan with the highest such premium
for the Eligible Retiree or his or her eligible dependents who are younger than
age 65, plus
b) 50% of the monthly premium for the Core Plan with the highest such premium,
for the Eligible Retiree or his or her eligible dependents who are age 65 or older,
minus
C) the MEC.
A.3 Tier III: Employees hired after June 30, 2009
Each Employee hired by the Employer after June 30, 2009, will become an Eligible Retiree only
if(a) the sum of his or her age plus years of Employer service is equal to at least 70, and (b) he
or she has reached age 55 and has completed at least ten years of continuous Employer
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service. Each Eligible Retiree described in the preceding sentence will be eligible to receive a
monthly premium reimbursement benefit under the Plan of up to:
a) 50% of the monthly premium for the Core Plan with the highest such premium for
the Eligible Retiree and his or her spouse or domestic partner, minus
b) the MEC.
A.4 Beneficiaries
If an Eligible Retiree dies, or if an Employee who is eligible to retire dies prior to retirement,
benefits will be provided under the Plan to the Eligible Retiree's or Employee's Beneficiary, if
any, but only if the individual is (a) eligible for coverage under CaIPERS Health, and (b) entitled
to the MEC from the Employer. Benefits will be provided under the Plan to such Beneficiary
only during such periods that he or she meets these two requirements. The Beneficiary will not
be entitled to any benefits under the Plan for any period he or she does not meet these two
requirements. In the case of an Employee who is eligible to retire, but dies prior to retirement,
the Employee's date of death will be deemed his or her date of retirement for the sole purpose
of determining his or her Beneficiary's reimbursement benefit amount, if any, under this Section
A.4. The Beneficiary will be eligible for the same reimbursement benefit that applied to the
Eligible Retiree or would have applied to the Employee had the Employee retired on his or her
date of death.
A.5 Medicare Premium Reimbursement
The Plan will reimburse the costs incurred by a Tier I or Tier II Eligible Retiree or his or eligible
dependents for Medicare Part A or Part B premiums upon satisfactory documentation and
substantiation of the expenses under Section 4.3; provided, however, that the Plan will not
reimburse any portion of such premium attributable to penalties or increased costs due to the
individual's failure to timely enroll in Medicare. The Plan will not reimburse any Medicare
premium expenses incurred by Tier III Eligible Employees or their eligible dependents.
A.6 Reimbursement of Non-CaIPERS Health Insurance Premiums
Notwithstanding any contrary Plan provision, if an Eligible Retiree does not enroll in CaIPERS
Health (or if an Employee who upon termination of employment with the Employer satisfies the
eligibility requirements for Tier I, Tier II, or Tier III and fails to satisfy the eligibility requirements
for CaIPERS Health) and instead enrolls in non-CaIPERS Health insurance coverage, the Plan
will, in lieu of reimbursement of the cost of CalPERS Health premiums described above,
reimburse the costs incurred by the individual for the non-CaIPERS Health premiums for the
individual and his or her spouse or eligible dependents (as applicable based on the tier for
which the individual is eligible) up to the applicable percentage (based on the tier for which the
individual is eligible) of the monthly premium for the Core Plan with the highest such premium
upon satisfactory documentation and substantiation of the expenses under Section 4.3.
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APPENDIX B: HIPAA COMPLIANCE
B.1 Provision of Protected Health Information to Employer
Members of the Employer's workforce have access to the individually identifiable health
information of Plan participants for administrative functions of the Plan. When this health
information is provided from the Plan to the Employer, it is Protected Health Information (PHI).
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its implementing
regulations restrict the Employer's ability to use and disclose PHI. The following HIPAA
definition of PHI applies for purposes of this Appendix A:
Protected Health Information. Protected health information means information that is created or
received by the Plan and relates to the past, present, or future physical or mental health or
condition of a participant; the provision of health care to a participant; or the past, present, or
future payment for the provision of health care to a participant; and that identifies the participant
or for which there is a reasonable basis to believe the information can be used to identify the
participant. Protected health information includes information of persons living or deceased.
The Employer will have access to PHI from the Plan only as permitted under this Appendix A or
as otherwise required or permitted by HIPAA. HIPAA and its implementing regulations were
modified by the Health Information Technology for Economic and Clinical Health Act (HITECH
Act), the statutory provisions of which are incorporated herein by reference.
B.2 Permitted Disclosure of Enrollment/Disenrollment Information
The Plan may disclose to the Employer information on whether the individual is participating in
the Plan.
B.3 Permitted Uses and Disclosure of Summary Health Information
The Plan may disclose Summary Health Information to the Employer, provided that the
Employer requests the Summary Health Information for the purpose of modifying, amending, or
terminating the Plan.
"Summary Health Information" means information (a) that summarizes the claims history, claims
expenses, or type of claims experienced by individuals for whom a plan sponsor had provided
health benefits under a health plan; and (b)from which the information described at 42 CFR
Section 164.514(b)(2)(i) has been deleted, except that the geographic information described in
42 CFR Section 164.514(b)(2)(i)(B) need only be aggregated to the level of a five-digit ZIP
code.
B.4 Permitted and Required Uses and Disclosure of PHI for Plan Administration
Purposes
Unless otherwise permitted by law, and subject to the conditions of disclosure described in
Section B.5 and obtaining written certification pursuant to Section B.7, the Plan may disclose
PHI to the Employer, provided that the Employer uses or discloses such PHI only for Plan
administration purposes. "Plan administration purposes" means administration functions
performed by the Employer on behalf of the Plan, such as quality assurance, claims processing,
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auditing, and monitoring. Plan administration functions do not include functions performed by
the Employer in connection with any other benefit or benefit plan of the Employer, and they do
not include any employment-related functions.
Notwithstanding the provisions of this Plan to the contrary, in no event will the Employer be
permitted to use or disclose PHI in a manner that is inconsistent with 45 CFR Section
164.504(f).
B.5 Conditions of Disclosure for Plan Administration Purposes
The Employer agrees that with respect to any PHI (other than enrollment/disenrollment
information and Summary Health Information, which are not subject to these restrictions)
disclosed to it by the Plan, the Employer will:
not use or further disclose the PHI other than as permitted or required by the
Plan or as required by law;
• ensure that any agent, including a subcontractor, to whom it provides PHI
received from the Plan agrees to the same restrictions and conditions that apply
to the Employer with respect to PHI;
not use or disclose the PHI for employment-related actions and decisions or in
connection with any other benefit or employee benefit plan of the Employer;
• report to the Plan any use or disclosure of the information that is inconsistent with
the uses or disclosures provided for of which it becomes aware;
make available PHI to comply with HIPAA's right to access in accordance with 45
CFR Section 164.524;
• make available PHI for amendment and incorporate any amendments to PHI in
accordance with 45 CFR Section 164.526;
• make available the information required to provide an accounting of disclosures
in accordance with 45 CFR Section 164.528;
• make its internal practices, books, and records relating to the use and disclosure
of PHI received from the Plan available to the Secretary of Health and Human
Services for purposes of determining compliance by the Plan with HIPAA's
privacy requirements;
• if feasible, return or destroy all PHI received from the Plan that the Employer still
maintains in any form and retain no copies of such information when no longer
needed for the purpose for which disclosure was made, except that, if such
return or destruction is not feasible, limit further uses and disclosures to those
purposes that make the return or destruction of the information infeasible; and
• ensure that the adequate separation between the Plan and the Employer (i.e.,
the "firewall"), required in 45 CFR Section 504(f)(2)(iii) is satisfied.
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The Employer further agrees that if it creates, receives, maintains, or transmits any electronic
PHI (other than enrollment/disenrollment information and Summary Health Information, which
are not subject to these restrictions) on behalf of the Plan, it will implement administrative,
physical, and technical safeguards that reasonably and appropriately protect the confidentiality,
integrity, and availability of the electronic PHI, and it will ensure that any agents (including
subcontractors) to whom it provides such electronic PHI agree to implement reasonable and
appropriate security measures to protect the information. The Employer will report to the Plan
any security incident of which it becomes aware.
B.6 Adequate Separation Between Plan and Employer
The Employer will allow the following persons access to PHI: the Human Resources Director,
the Plan Administrator, and any other Employee who needs access to PHI in order to perform
Plan administration functions that the Employer performs for the Plan (such as quality
assurance, claims processing, auditing, and monitoring). No other persons will have access to
PHI. These specified employees (or classes of employees) will only have access to and use
PHI to the extent necessary to perform the plan administration functions that the Employer
performs for the Plan. In the event that any of these specified employees does not comply with
the provisions of this Section, that employee will be subject to disciplinary action by the
Employer for non-compliance pursuant to the Employer's employee discipline and termination
procedures.
The Employer will ensure that the provisions of this Section B.6 are supported by reasonable
and appropriate security measures to the extent that the designees have access to electronic
PHI.
B.7 Certification of Plan Sponsor
The Plan will disclose PHI to the Employer only upon the receipt of a certification by the
Employer that the Plan incorporates the provisions of 45 CFR Section 164.504(f)(2)(ii), and that
the Employer agrees to the conditions of disclosure set forth in Section B.S. Execution of the
Plan by the Employer will serve as the required certification.
B.8 Privacy Official
The Employer will designate a Privacy Official, who will be responsible for the Plan's compliance
with HIPAA. The Privacy Official may contract with or otherwise utilize the services of attorneys,
accountants, brokers, consultants, or other third party experts as the Privacy Official deems
necessary or advisable. In addition and notwithstanding any provision of this Plan to the
contrary, the Privacy Official will have the authority to and be responsible for:
• accepting and verifying the accuracy and completeness of any certification
provided by the Employer under this Appendix;
• transmitting the certification to any third parties as may be necessary to permit
them to disclose PHI to the Employer;
• establishing and implementing policies and procedures with respect to PHI that
are designed to ensure compliance by the Plan with the requirements of HIPAA;
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• establishing and overseeing proper training of personnel who will have access to
PHI; and
• any other duty or responsibility that the Privacy Official, in his or her sole
capacity, deems necessary or appropriate to comply with the provisions of
HIPAA and the purposes of this Appendix B.
B.9 Interpretation and Limited Applicability
This Appendix serves the sole purpose of complying with the requirements of HIPAA and will be
interpreted and construed in a manner to effectuate this purpose. Neither this Appendix nor the
duties, powers, responsibilities, and obligations listed herein will be taken into account in
determining the amount or nature of the benefits provided to any person covered under the
Plan, nor will they inure to the benefit of any third parties. To the extent that any of the
provisions of this Appendix A are no longer required by HIPAA or do not apply to the Plan
because the Plan is otherwise excepted from HIPAA, they will be deemed deleted and will have
no force or effect.
B.10 Service Performed for the Employer
Notwithstanding any other provisions of this Plan to the contrary, all services performed by a
business associate for the Plan in accordance with the applicable service agreement will be
deemed to be performed on behalf of the Plan and subject to the administrative simplification
provisions of HIPAA contained in 45 CFR Parts 160 through 164, except services that relate to
eligibility and enrollment in the Plan. If a business associate of the Plan performs any services
that relate to eligibility and enrollment in the Plan, these services will be deemed to be
performed on behalf of the Employer in its capacity as Plan Sponsor and not on behalf of the
Plan.
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ATTACHMENT 10
CENTRAL CONTRA COSTA SANITARY DISTRICT
HEALTH REIMBURSEMENT ARRANGEMENT
FOR TIER III EMPLOYEES REPRESENTED BY
THE MANAGEMENT SUPPORT/CONFIDENTIAL GROUP
AND THE PUBLIC EMPLOYEES UNION, LOCAL 1
Effective July 1, 2019
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TABLE OF CONTENTS
PAGE
ARTICLE I ESTABLISHMENT AND PURPOSE OF THE PLAN ..................................................1
ARTICLE II DEFINITIONS............................................................................................................1
ARTICLE III ELIGIBILITY AND PARTICIPATION ........................................................................3
ARTICLE IV CONTRIBUTIONS AND FUNDING..........................................................................4
ARTICLE V VESTING AND BENEFITS .......................................................................................4
ARTICLE VI APPEALS PROCEDURE.........................................................................................7
ARTICLE VII PLAN ADMINISTRATION .......................................................................................8
ARTICLE VIII AMENDMENT AND TERMINATION OF THE PLAN .............................................9
ARTICLE IX GENERAL PROVISIONS.......................................................................................10
APPENDIX A: HIPAA COMPLIANCE......................................................................................A-1
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CENTRAL CONTRA COSTA SANITARY DISTRICT
HEALTH REIMBURSEMENT ARRANGEMENT
FOR TIER III EMPLOYEES REPRESENTED BY
THE MANAGEMENT SUPPORT/CONFIDENTIAL GROUP
AND THE PUBLIC EMPLOYEES UNION, LOCAL 1
Effective July 1, 2019
ARTICLE I
ESTABLISHMENT AND PURPOSE OF THE PLAN
The Central Contra Costa Sanitary District (the Employer) hereby establishes this Central
Contra Costa Sanitary District Health Reimbursement Arrangement for Tier II I Employees
Represented by the Management Support/Confidential Group and the Public Employees Union,
Local 1 (the Plan), effective July 1, 2019 (the Effective Date) to enable Eligible Employees to,
upon termination of employment with the Employer, obtain reimbursement of post-employment
Medical Care Expenses.
The Plan is intended to qualify as a health reimbursement arrangement within the meaning of
Internal Revenue Service Notice 2002-45, and it is intended that the benefits under the Plan be
tax-free to the maximum extent permitted under the Internal Revenue Code and the regulations
issued thereunder. The Plan will be administered and interpreted to accomplish that objective.
Capitalized terms used in this Plan that are not otherwise defined have the meanings set forth in
Article II.
ARTICLE II
DEFINITIONS
2.1 "Board of Directors" means the governing body of the Employer.
2.2 "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
2.3 "Code" means the Internal Revenue Code of 1986 and the Treasury Regulations and
guidance issued thereunder, as amended.
2.4 "Dependent" means (a) a dependent as defined in Code Section 152, determined
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof, and (b) any child (as defined
in Code Section 152(f)) of the Participant who as of the end of the taxable year has not attained
age 27.
2.5 "Effective Date" means July 1, 2019.
2.6 "Eligible Employee" is defined in Section 3.1
2.7 "Employee" means a person whom the Employer classifies as a common-law
employee and who is on the Employer's W-2 payroll, but does not include the following: (a) any
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leased employee (including but not limited to those individuals defined as leased employees in
Code Section 414(n)) or an individual classified by the Employer as a contract worker,
independent contractor, temporary employee, or casual employee for the period during which
such individual is so classified, whether or not any such individual is on the Employer's W-2
payroll or is determined by the IRS or others to be a common-law employee of the Employer;
and (b) any individual who performs services for the Employer but who is paid by a temporary or
other employment or staffing agency for the period during which such individual is paid by such
agency, whether or not such individual is determined by the IRS or others to be a common-law
employee of the Employer.
2.8 "Employer" means the Central Contra Costa Sanitary District.
2.9 "Employer Contributions" means the amounts the Employer contributes to
Participants' HRA Accounts in accordance with Section 4.1.
2.10 "FMLA" means the Family Medical Leave Act of 1993, as amended.
2.11 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, as
amended.
2.12 "HRA Account" means an account described in Section 5.7.
2.13 "PEU Local 1" means the Central Contra Costa Sanitary District Employees'
Association, Public Employees Union, Local 1, the formally recognized exclusive employee
representative for all regular and permanent-intermittent General Employees.
2.14 "Medical Care Expenses" are defined in Section 5.5(b).
2.15 "MS/CG" means the Management Support/Confidential Group, the formally recognized
exclusive employee representative for all regular Employees, other than General Employees,
Management Employees, and Executive Management Employees, who are currently
designated by resolution of the Board of Directors.
2.16 "Participant" means an Eligible Employee who has satisfied the requirements to
participate in the Plan in Section 3.2 and whose participation in the Plan has not terminated
under Section 3.5.
2.17 Period of Coverage" is defined in Section 5.3.
2.18 "Plan" means this Central Contra Costa Sanitary District Health Reimbursement
Arrangement for Tier III Employees Represented by the Management Support/Confidential
Group and the Public Employees Union, Local 1, as set forth herein and amended from time to
time.
2.19 "Plan Administrator" means the Employer unless the Employer designates another
person or organization to hold the position of Plan Administrator. The Employer may
alternatively designate another person or organization to perform certain duties assigned to the
Plan Administrator under this Plan.
2.20 "Plan Year" means the calendar year (i.e., the 12-month period commencing January 1
and ending on December 31).
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2.21 "Trust" means the legal entity that the Employer establishes or adopts to hold any
assets it has irrevocably set aside to pay benefits under the Plan in accordance with Section
4.3.
2.22 "USERRA" means the Uniformed Services Employment and Reemployment Rights Act
of 1994, as amended.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Eligible Employee. "Eligible Employee" means each regular or probationary full-time
Employee who is:
a) represented by the PEU Local 1 or the MS/CG or successor associations; and
b) hired by the Employer after June 30, 2009.
3.2 Commencement of Participation. Each Eligible Employee on the Effective Date will
participate in the Plan on that date. Each other Employee will become a Participant, eligible to
have Employer Contributions made to an HRA Account under Section 4.1, when he or she
becomes an Eligible Employee.
3.3 No Benefits Unless Eligible. An Employee will not have any interest under the Plan
unless and until he or she satisfies all of the requirements under Section 3.1. Any person who
does not satisfy these requirements will not be entitled to any benefits under the Plan.
3.4 Termination of Participation. A Participant's participation in the Plan terminates upon
the earliest of:
a) the Participant's ceasing to be an Eligible Employee or exhaustion of his or her
HRA Account, whichever occurs later;
b) the Participant's death without a surviving spouse or Dependent; or
C) the Plan's termination date.
3.5 Reemployment. If the Employer reemploys a Participant, the Participant's coverage
and any reimbursements provided under the Plan to that Participant will cease upon
reemployment. The Participant will not be entitled to coverage or any reimbursements under the
Plan until his or her subsequent termination of employment. If the Participant is reemployed as
an Eligible Employee, he or she will resume participation in the Plan upon reemployment solely
for purposes of eligibility to have Employer Contributions made to an HRA Account under
Section 4.1 until his or her subsequent termination of employment. If a Participant is reemployed
in an ineligible classification (e.g., part-time, temporary, or a classification represented by
different bargaining unit) he or she will again have to satisfy the requirements in Section 3.1
before he or she can resume participation in the Plan for purposes of eligibility to have Employer
Contributions made to an HRA Account under Section 4.1.
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ARTICLE IV
CONTRIBUTIONS AND FUNDING
4.1 Employer Contributions. Each month, the Employer will contribute an Employer
Contribution to the HRA Account of each Participant who is an Eligible Employee during the
month equal to 1.5% of the Participant's base salary for the month.
4.2 Employee Contributions. Employee contributions are not permitted under the Plan.
4.3 Trust. The Employer will establish or adopt a tax-exempt irrevocable Trust to hold Plan
assets. The Trust will specifically provide, among other things, for the investment and
reinvestment of the Trust assets and the income thereof, the management of the Trust assets,
the responsibilities and immunities of the trustee, removal of the trustee and appointment of a
successor, accounting by the trustee and the disbursement of the Trust assets. The trustee will,
in accordance with the terms of the Trust, accept and receive all contributions paid to it by the
Employer, and shall hold, invest, reinvest and manage such moneys and any increment,
increase, earnings and income thereof for the exclusive benefit of Participants and their
spouses and Dependents and for the payment of reasonable expenses of administering the
Plan.
4.4 Participant-Directed Investments. Each Participant may, at the time and manner
prescribed by the Plan Administrator, direct the trustee to invest the Participant's HRA Account
in specific assets, investment funds or other investments permitted under the Trust. If a
Participant fails to designate the permitted assets, investment fund or other investments in
which his or her HRA Account is invested, his or her HRA Account will be invested in the
investment fund designated by the Plan Administrator. Upon the Participant's death, the
Participant's surviving spouse will have the same right to direct the investment of, and receive
benefits from, the Participant's HRA Account. If the Participant does not have a surviving
spouse or upon the surviving spouse's death, the Participant's Dependents will have the same
right to direct the investment of, and receive benefits from, in shares designated by the
Participant in writing at the time and manner prescribed by the Plan Administrator, of the
Participant's HRA Account. If the Participant properly designates those shares, and the number
of the Participant's Dependents subsequently changes, the Participant must make a new
designation in the same manner. If the Participant fails to properly designate those shares,
either initially or subsequently upon a change in the number of his or her Dependents, the
Participant's Dependents will have the same right to direct the investment of, and receive
benefits from, equal shares of the Participant's HRA Account. To the maximum extent permitted
by law, no Plan fiduciary, including the Employer, the trustee, or the Plan Administrator, will be
liable for any losses which are the direct and necessary result of investment instructions by a
Participant or his or her spouse or Dependents. Any fees or expenses incurred in connection
with a Participant's investment direction and any fees or expenses associated with a particular
investment option, including but not limited to brokerage, investment advisor and management
fees, will be charged to the Participant's HRA Account.
ARTICLE V
VESTING AND BENEFITS
5.1 Vesting. A Participant's HRA Account is immediately 100% non-forfeitable to the extent
of contributions made to such HRA Account.
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5.2 Benefit Eligibility. A Participant will not become eligible to receive reimbursements
under the Plan until he or she terminates employment with the Employer. Upon termination of
employment, a Participant will be eligible to receive reimbursements under the Plan during a
Period of Coverage.
5.3 Period of Coverage. Each Participant's Period of Coverage for reimbursements begins
when he or she terminates District employment and ends if and when he or she is reemployed
by the Employer. Therefore, Medical Care Expenses incurred by a Participant before such
termination or during any reemployment will not be eligible for reimbursement under the Plan.
5.4 Benefits. The Plan will reimburse each eligible Participant's Medical Care Expenses up
to the unused amount in the Participant's HRA Account as set forth and adjusted under Section
5.6.
5.5 Eligible Medical Care Expenses. Under the HRA Account, a Participant may receive
reimbursement for Medical Care Expenses incurred during a Period of Coverage.
a) Incurred. A Medical Care Expense is incurred at the time the medical care or
service giving rise to the expense is furnished, and not when the individual
incurring the expense is formally billed for, is charged for, or pays for the medical
care. Medical Care Expenses incurred before a Participant first becomes covered
by the Plan are not eligible.
b) Medical Care Expenses Generally. "Medical Care Expenses" means expenses
incurred by a Participant or his or her spouse or Dependents for medical care, as
defined in Code section 213(d) (including, for example, amounts for certain
hospital, doctor, and dental bills), but will exclude expenses that are described in
Section 5.5(c). Reimbursements due for Medical Care Expenses incurred by the
Participant or the Participant's spouse or Dependents will be charged against the
Participant's HRA Account.
C) Medical Care Expenses Exclusions. "Medical Care Expenses" exclude
(1) unprescribed medicines or drugs (other than insulin), without regard to
whether such medicine or drug could be obtained without a prescription,
(2) qualified long-term care services, (3) cosmetic surgery or other similar
procedures, unless the surgery or procedure is necessary to ameliorate a
deformity arising from, or directly related to, a congenital abnormality, a personal
injury resulting from an accident or trauma, or a disfiguring disease (for this
purpose, "cosmetic surgery" means any procedure that is directed at improving
the patient's appearance and does not meaningfully promote the proper function
of the body or prevent or treat illness or disease), and (4) any other expense that
does not constitute "medical care" as defined under Code section 213(d) or is
otherwise excluded under the terms of the Plan. "Qualified long-term care
services" means necessary diagnostic, preventative, therapeutic, curing, treating,
mitigating and rehabilitative services, and "maintenance or personal care
services," which are: (1) required by a "chronically ill" individual; and (2) provided
pursuant to a plan of care prescribed by a licensed health care practitioner. An
individual is "chronically ill" if, within the previous 12 months, a licensed health
care practitioner has certified that the individual either: (1) is unable to perform at
least two daily living activities (eating, toileting, transferring, bathing, dressing,
and continence) without substantial assistance from another individual for at least
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90 days; or (2) requires substantial supervision to protect the individual from
threats to health and safety due to severe cognitive impairment. "Maintenance or
personal care services" means services the primary purpose of which are to
provide a chronically ill individual with needed assistance with his or her
disabilities (including protection from threats to health and safety due to severe
cognitive impairment).
d) Cannot Be Reimbursed or Reimbursable From Another Source. Medical Care
Expenses may be reimbursed from the Participant's HRA Account only to the
extent that the Participant or other individual incurring the expense is not
reimbursed for the expense (nor is the expense reimbursable) through any other
health plan, other insurance, or any other accident or health plan. If only a portion
of a Medical Care Expense has been reimbursed elsewhere, the HRA Account
may reimburse the remaining portion of such expense if it otherwise meets the
requirements of this Article V.
5.6 Maximum Benefits. No reimbursement will be made to the extent that such
reimbursement would exceed the Participant's HRA Account balance.
5.7 Establishment of Account. The Plan Administrator will establish and maintain an HRA
Account for each Participant. The "HRA Account" so established will be a separate
recordkeeping account which will be credited with any Employer Contributions and any
attributable investment income and gains, and debited with any allocable expenses, investment
losses and reimbursements.
5.8 Carryover and Forfeitures. If any balance remains in the Participant's HRA Account at
the end of a Plan Year after all reimbursements have been made for the Plan Year, the unused
balance will be carried over to reimburse the Participant for Medical Care Expenses incurred
during a subsequent Plan Year. However, any balance that remains in an individual's HRA
Account after he or she has ceased to be a Participant under Section 3.4 (e.g., because the
individual has died without any surviving spouse or Dependents) and after all reimbursements
have been made for any Medical Care expenses incurred before then will be forfeited. In
addition, any benefit payments that are unclaimed (e.g., uncashed benefit checks) by the close
of the Plan Year following the Plan Year in which the Medical Care Expense was incurred will
be forfeited.
5.9 Reimbursement Procedure
a) Timing. Within 30 days after receipt by the Plan Administrator of a
reimbursement claim from a Participant, the Employer will reimburse the
Participant for the Participant's Medical Care Expenses (if the Plan Administrator
approves the claim), or the Plan Administrator will notify the Participant that his or
her claim has been denied (see Article VII regarding procedures for claim denials
and appeals procedures). The 30-day time period may be extended for an
additional 15 days for matters beyond the control of the Plan Administrator,
including in cases where a reimbursement claim is incomplete. The Plan
Administrator will provide written notice of any extension, including the reasons
for the extension, and will allow the Participant 45 days in which to complete an
incomplete reimbursement claim.
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b) Claims Substantiation. A Participant who seeks benefits may apply for
reimbursement by submitting an application in writing to the Plan Administrator in
such form as the Plan Administrator may prescribe, within two years of the date
the Medical Care Expense was incurred, setting forth:
(i) the individual on whose behalf Medical Care Expenses have been
incurred;
(ii) the nature and date of the Medical Care Expenses so incurred;
(iii) the amount of the requested reimbursement; and
(iv) a statement that such Medical Care Expenses have not otherwise been
reimbursed and are not reimbursable through any other source.
The application shall be accompanied by bills, invoices, or other statements from
an independent third party (e.g., a hospital, physician, or pharmacy) showing that
the Medical Care Expenses have been incurred and the amounts of such
Medical Care Expenses, together with any additional documentation that the
Plan Administrator may request.
C) Claims Denied. For reimbursement claims that are wholly or partially denied, see
the appeals procedure in Article VI.
5.10 Reimbursements After Termination of Participation. When a Participant ceases to
be a Participant under Section 3.4, the Participant will not be eligible to receive reimbursements
for Medical Care Expenses incurred after his or her participation terminates. However, such
Participant (or the Participant's estate) may claim reimbursement for any Medical Care
Expenses incurred during the Period of Coverage prior to termination of participation, provided
that the Participant (or the Participant's estate) files a claim within two years of the date the
Medical Care Expense was incurred.
ARTICLE VI
APPEALS PROCEDURE
6.1 Notice of Denied Claims. If a claim for reimbursement under this Plan is wholly or
partially denied, the Plan Administrator or its designee will issue a notice of claim denial to the
claimant setting forth:
a) the reason(s) for the denial and the Plan provisions on which the denial is based;
b) a description of any additional information necessary for the claimant to perfect
his or her claim, why the information is necessary, and the time limit for
submitting the information; and
C) a description of the claimant's right to request the documentation relevant to his
or her claim.
6.2 Appeals of Denied Claims. If a claim for benefits is denied under Section 6.1, the
claimant or his or her duly authorized representative may, at the claimant's sole expense,
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appeal the denial by submitting written notice of such appeal to the Plan Administrator within
180 days of the receipt of written notice of the denial.
The Plan Administrator will notify the claimant of the decision on the appeal within 60 days of
receipt of the appeal. The notice of decision on the appeal must be made in writing. If the
decision on the appeal is not furnished within the time specified above, the appeal of the claim
will be deemed denied. If the claimant's appeal is denied (or deemed denied), the Plan
Administrator's decision will be final and binding on all persons.
ARTICLE VII
PLAN ADMINISTRATION
7.1 Plan Administrator. The administration of this Plan will be under the supervision of the
Plan Administrator. It is the principal duty of the Plan Administrator to see that this Plan is
carried out, in accordance with its terms, for the exclusive benefit of persons entitled to
participate in this Plan.
7.2 Powers of the Plan Administrator. The Plan Administrator will have such duties and
powers as it considers necessary or appropriate to discharge its duties. It will have the exclusive
right to interpret the Plan and to decide all matters thereunder, and all determinations of the
Plan Administrator with respect to any matter hereunder will be conclusive and binding on all
persons. Without limiting the generality of the foregoing, the Plan Administrator will have the
following discretionary authority:
a) to construe and interpret the Plan, including all possible ambiguities,
inconsistencies, and omissions in the Plan and related documents, and to decide
all questions of fact, questions relating to eligibility and participation, and
questions of benefits under the Plan;
b) to prescribe procedures to be followed and the forms to be used by Participants
and their spouses and Dependents to claim reimbursements under the Plan;
C) to prepare and distribute information explaining the Plan and the benefits under it
in such manner as the Plan Administrator determines to be appropriate;
d) to request and receive from all Participants and their spouses and Dependents
such information as the Plan Administrator will from time to time determine to be
necessary for the proper administration of the Plan;
e) to furnish each Participant and his or her spouse and Dependents with such
reports with respect to the administration of this Plan as the Plan Administrator
determines to be reasonable and appropriate;
f) to receive, review, and keep on file such reports and information regarding the
benefits covered by the Plan as the Plan Administrator determines from time to
time to be necessary and proper;
g) to appoint and employ such individuals or entities to assist in the administration
of the Plan as it determines to be necessary or advisable, including legal counsel
and benefit consultants;
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h) to sign documents for the purposes of administering the Plan, or to designate an
individual or individuals to sign documents for the purposes of administering the
Plan;
i) to secure or require such evidence as it deems necessary to decide any claim for
benefits under the Plan; and
j) to maintain the books of accounts, records, and other data in the manner
necessary for proper administration of the Plan and to meet any applicable
disclosure and reporting requirements.
7.3 Fiduciary Duties. Each Plan fiduciary shall discharge its duties solely in the interest of
Participants and their spouses and Dependents and for the exclusive purpose of providing
benefits under the Plan, or defraying reasonable expenses of administering the Plan. Each Plan
fiduciary, in carrying out such duties and responsibilities, shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use. A fiduciary may serve in more than one
fiduciary capacity and may employ one or more persons to render advice with regard to its
fiduciary responsibilities. If the fiduciary is serving as such without compensation, all expenses
reasonably incurred by such fiduciary will be paid by the Employer. The Employer may,
however, elect to have those expenses paid from Trust assets.
7.4 Provision for Third-Party Plan Service Providers. The Plan Administrator, subject to
approval of the Employer, may employ the services of such persons as it may deem necessary
or desirable in connection with the operation of the Plan. Unless otherwise provided in the
service agreement, obligations under this Plan shall remain the obligation of the Employer or
Plan Administrator, as applicable.
7.5 Inability to Locate Payee. If the Plan Administrator is unable to make payment to any
person to whom a payment is due under the Plan because it cannot ascertain the identity or
whereabouts of such person after reasonable efforts have been made to identify or locate such
person, then such payment and all subsequent payments otherwise due to such person will be
forfeited by the close of the Plan Year following the Plan Year in which the Medical Care
Expense was incurred .
7.6 COBRA and HIPAA Compliance. The Plan will comply with the applicable
requirements of COBRA, and with the applicable requirements of HIPAA in accordance with the
rules set out in Appendix A.
ARTICLE VIII
AMENDMENT AND TERMINATION OF THE PLAN
8.1 Compliance with Labor Laws. All amendments to or any person's benefits under the
Plan or termination of the Plan will conform with any applicable requirements of the Meyers-
Milias-Brown Act, including but not limited to any meet-and-confer requirements.
8.2 No Vested Rights. The Employer may at any time amend or terminate the Plan as
provided in Sections 8.3 and 8.4. Nothing in the Plan is intended to or will be construed to give
any Participant or other person to a vested right to continuance of the Plan or to continue
receiving Employer Contributions.
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8.3 Amendment of the Plan. The Employer may amend all or any part of this Plan at any
time for any reason by resolution of the Board of Directors or by any person or persons
authorized by the Board of Directors to take such action. Any such amendment will supersede
and override any claim to "vested rights" that any person may otherwise have with respect to
benefits under the Plan.
8.4 Termination of the Plan.
a) The Employer has established the Plan with the expectation that it will be
continued, but continuance is not a contractual or other obligation of the
Employer and no employee of the Employer or other person will have any vested
right to continuance of the Plan or to continuance of any Employer contributions
to the Plan. The Employer reserves the right at any time to terminate the Plan
without prejudice and for any reason, and such termination will supersede and
override any claim to "vested rights" that any person may otherwise have with
respect to benefits under the Plan. Such decision to terminate the Plan will be
made in writing and must be approved by the Board of Directors.
b) If the Plan is terminated, the Employer shall direct the trustee to compute the
value of the Plan assets under the Trust as of the date of termination. Those
assets will continue to be held in the Trust, and will be distributed to pay any
remaining benefits owed under the Plan until those benefits are satisfied.
C) The "partial termination" rules of the Code that apply to qualified retirement plans
will not apply under this Plan, and no action will be taken with respect to this Plan
in connection with any event or events that would be a partial termination for a
qualified plan.
8.5 Determination of Effective Date of Amendment or Termination. Any such
amendment, discontinuance or termination will be effective as of the date the Employer
determines.
8.6 Assets After Termination. Any assets remaining in the Trust after all benefits owed
under the Plan and all Plan expenses have been paid will revert to the Employer unless
otherwise determined by the Employer.
8.7 Limitation of Obligations. The Employer must continue to provide reimbursements for
eligible expenses incurred by Participants or their spouses and Dependents under the Plan until
the Participant's account balance has been exhausted, but all contributions to the Plan will
cease upon Plan termination. No one will accrue any additional contributions under the Plan
after its termination.
ARTICLE IX
GENERAL PROVISIONS
9.1 Governing Law. The provisions of the Plan will be construed, administered and
enforced according to applicable federal law and, to the extent not preempted, the laws of the
State of California.
9.2 Requirement for Proper Forms. All communications in connection with the Plan made
by a Participant or his or her spouse or Dependent will become effective only when duly
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executed on any forms as may be required and furnished by, and filed with, the Employer or
Plan Administrator, as applicable.
9.3 No Guarantee of Tax Consequences. This Plan is intended to permit Participants or
their spouses or Dependents to obtain reimbursement benefits under this Plan on a nontaxable
basis, and the Plan will be interpreted and administered consistent with that intent. Neither the
Employer nor any Plan Administrator, however, makes any warranty or other representation as
to whether any benefits under the Plan will be treated as excludable from gross income for
federal, state, or local income tax purposes. If for any reason it is determined that any amount
paid for the benefit of a Participant or his or her spouse or Dependent is includable in gross
income for federal, state or local income tax purposes, then under no circumstances will the
recipient have any recourse against the Employer or Plan Administrator with respect to any
increased taxes or other losses or damages suffered by the recipient as a result thereof. To the
extent required by the Code, the Employer will follow the tax withholding and reporting
requirements applicable to benefits paid under this Plan to or for a non-dependent domestic
partner.
9.4 Compliance With Code and Other Applicable Laws. It is intended that the Plan meet
all applicable requirements of the Code and all regulations and guidance issued thereunder.
The Plan will be construed, operated and administered accordingly, and in the event of any
conflict between any part, clause, or provision of the Plan and the Code, the provisions of the
Code will be deemed controlling, and any conflicting part, clause, or provision of the Plan will be
deemed superseded to the extent of the conflict. In addition, the Plan will comply with the
requirements of all other applicable laws.
9.5 Headings. The headings of the various articles and sections are inserted for
convenience of reference and are not to be regarded as part of the Plan or as indicating or
controlling the meaning or construction of any provision.
9.6 Severability. Should any part of the Plan subsequently be invalidated by a court of
competent jurisdiction, the remainder of the Plan will be given effect to the maximum extent
possible.
9.7 Administration Expenses. The Employer will pay the reasonable expenses of
administering the Plan, including but not limited to the reasonable compensation of any counsel,
accountants, and other agents hired by the Employer, Plan Administrator, or Board of Directors,
as well as any other expenses incurred in administering the Plan. The Employer may, however,
elect to have those expenses paid from Trust assets.
9.8 Effect of Mistake. In the event of a mistake as to the eligibility or participation of an
individual, or the allocations made with respect to any Participant, or the amount of distributions
made or to be made to a Participant or other person, the Employer or Plan Administrator will, to
the extent it deems possible, cause to be allocated or cause to be withheld or accelerated, or
otherwise make adjustment of, such amounts as will in its judgment accord to such Participant
or other person that to which he or she is properly entitled under the Plan.
9.9 No Contract of Employment. The Plan does not provide any person with any right to
be retained in the Employer's employment or service. A Participant's sole rights under the Plan
are limited to those described in this document.
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9.10 Plan Provisions Controlling. The Plan encompasses the benefits provided by the
Employer to Participants. In the event that the terms or provisions of any summary or
description of the Plan are interpreted as being in conflict with the provisions of the Plan as set
forth in this document, the provisions of the Plan will be controlling.
9.11 Non-Assignability of Rights. The right of any Participant or spouse or Dependent to
receive any reimbursement under this Plan will not be alienable by the Participant or spouse or
Dependent by assignment or any other method and will not be subject to claims by his or her
creditors by any process whatsoever. Any attempt to cause such right to be so subjected will not
be recognized, except to the extent required by law.
9.12 Compliance with Other Federal Laws. Notwithstanding any Plan provision to the
contrary, contributions, benefits, and service credit with respect to qualified military service and
FMLA leaves of absence will be provided as required by USERRA or the FMLA, as applicable.
To record the adoption of the Plan, the Employer's authorized representative hereby executes
this document on this day of 2019.
Central Contra Costa Sanitary District
By:
Title:
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APPENDIX A: HIPAA COMPLIANCE
A.1 Provision of Protected Health Information to Employer
Members of the Employer's workforce have access to the individually identifiable health
information of Plan participants for administrative functions of the Plan. When this health
information is provided from the Plan to the Employer, it is Protected Health Information (PHI).
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its implementing
regulations restrict the Employer's ability to use and disclose PHI. The following HIPAA
definition of PHI applies for purposes of this Appendix A:
Protected Health Information. Protected health information means information that is created or
received by the Plan and relates to the past, present, or future physical or mental health or
condition of a participant; the provision of health care to a participant; or the past, present, or
future payment for the provision of health care to a participant; and that identifies the participant
or for which there is a reasonable basis to believe the information can be used to identify the
participant. Protected health information includes information of persons living or deceased.
The Employer will have access to PHI from the Plan only as permitted under this Appendix A or
as otherwise required or permitted by HIPAA. HIPAA and its implementing regulations were
modified by the Health Information Technology for Economic and Clinical Health Act (HITECH
Act), the statutory provisions of which are incorporated herein by reference.
A.2 Permitted Disclosure of Enrollment/Disenrollment Information
The Plan may disclose to the Employer information on whether the individual is participating in
the Plan.
A.3 Permitted Uses and Disclosure of Summary Health Information
The Plan may disclose Summary Health Information to the Employer, provided that the
Employer requests the Summary Health Information for the purpose of modifying, amending, or
terminating the Plan.
"Summary Health Information" means information (a) that summarizes the claims history, claims
expenses, or type of claims experienced by individuals for whom a plan sponsor had provided
health benefits under a health plan; and (b)from which the information described at 42 CFR
Section 164.514(b)(2)(i) has been deleted, except that the geographic information described in
42 CFR Section 164.514(b)(2)(i)(B) need only be aggregated to the level of a five-digit ZIP
code.
A.4 Permitted and Required Uses and Disclosure of PHI for Plan Administration
Purposes
Unless otherwise permitted by law, and subject to the conditions of disclosure described in
Section A.5 and obtaining written certification pursuant to Section A.7, the Plan may disclose
PHI to the Employer, provided that the Employer uses or discloses such PHI only for Plan
administration purposes. "Plan administration purposes" means administration functions
performed by the Employer on behalf of the Plan, such as quality assurance, claims processing,
auditing, and monitoring. Plan administration functions do not include functions performed by
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the Employer in connection with any other benefit or benefit plan of the Employer, and they do
not include any employment-related functions.
Notwithstanding the provisions of this Plan to the contrary, in no event will the Employer be
permitted to use or disclose PHI in a manner that is inconsistent with 45 CFR Section
164.504(f).
A.5 Conditions of Disclosure for Plan Administration Purposes
The Employer agrees that with respect to any PHI (other than enrollment/disenrollment
information and Summary Health Information, which are not subject to these restrictions)
disclosed to it by the Plan, the Employer will:
• not use or further disclose the PHI other than as permitted or required by the
Plan or as required by law;
• ensure that any agent, including a subcontractor, to whom it provides PHI
received from the Plan agrees to the same restrictions and conditions that apply
to the Employer with respect to PHI;
• not use or disclose the PHI for employment-related actions and decisions or in
connection with any other benefit or employee benefit plan of the Employer;
• report to the Plan any use or disclosure of the information that is inconsistent with
the uses or disclosures provided for of which it becomes aware;
• make available PHI to comply with HIPAA's right to access in accordance with 45
CFR Section 164.524;
• make available PHI for amendment and incorporate any amendments to PHI in
accordance with 45 CFR Section 164.526;
• make available the information required to provide an accounting of disclosures
in accordance with 45 CFR Section 164.528;
• make its internal practices, books, and records relating to the use and disclosure
of PHI received from the Plan available to the Secretary of Health and Human
Services for purposes of determining compliance by the Plan with HIPAA's
privacy requirements;
• if feasible, return or destroy all PHI received from the Plan that the Employer still
maintains in any form and retain no copies of such information when no longer
needed for the purpose for which disclosure was made, except that, if such
return or destruction is not feasible, limit further uses and disclosures to those
purposes that make the return or destruction of the information infeasible; and
• ensure that the adequate separation between the Plan and the Employer (i.e.,
the "firewall"), required in 45 CFR Section 504(f)(2)(iii) is satisfied.
The Employer further agrees that if it creates, receives, maintains, or transmits any electronic
PHI (other than enrollment/disenrollment information and Summary Health Information, which
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are not subject to these restrictions) on behalf of the Plan, it will implement administrative,
physical, and technical safeguards that reasonably and appropriately protect the confidentiality,
integrity, and availability of the electronic PHI, and it will ensure that any agents (including
subcontractors) to whom it provides such electronic PHI agree to implement reasonable and
appropriate security measures to protect the information. The Employer will report to the Plan
any security incident of which it becomes aware.
A.6 Adequate Separation Between Plan and Employer
The Employer will allow the following persons access to PHI: the Human Resources Manager,
the Plan Administrator, and any other Employee who needs access to PHI in order to perform
Plan administration functions that the Employer performs for the Plan (such as quality
assurance, claims processing, auditing, and monitoring). No other persons will have access to
PHI. These specified employees (or classes of employees) will only have access to and use
PHI to the extent necessary to perform the plan administration functions that the Employer
performs for the Plan. In the event that any of these specified employees does not comply with
the provisions of this section, that employee will be subject to disciplinary action by the
Employer for non-compliance pursuant to the Employer's employee discipline and termination
procedures.
The Employer will ensure that the provisions of this Section A.6 are supported by reasonable
and appropriate security measures to the extent that the designees have access to electronic
PHI.
A.7 Certification of Plan Sponsor
The Plan will disclose PHI to the Employer only upon the receipt of a certification by the
Employer that the Plan incorporates the provisions of 45 CFR Section 164.504(f)(2)(ii), and that
the Employer agrees to the conditions of disclosure set forth in Section B.S. Execution of the
Plan by the Employer will serve as the required certification.
A.8 Privacy Official
The Employer will designate a Privacy Official, who will be responsible for the Plan's compliance
with HIPAA. The Privacy Official may contract with or otherwise utilize the services of attorneys,
accountants, brokers, consultants, or other third party experts as the Privacy Official deems
necessary or advisable. In addition and notwithstanding any provision of this Plan to the
contrary, the Privacy Official will have the authority to and be responsible for:
• accepting and verifying the accuracy and completeness of any certification
provided by the Employer under this Appendix;
• transmitting the certification to any third parties as may be necessary to permit
them to disclose PHI to the Employer;
• establishing and implementing policies and procedures with respect to PHI that
are designed to ensure compliance by the Plan with the requirements of HIPAA;
• establishing and overseeing proper training of personnel who will have access to
PHI; and
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• any other duty or responsibility that the Privacy Official, in his or her sole
capacity, deems necessary or appropriate to comply with the provisions of
HIPAA and the purposes of this Appendix A.
A.9 Interpretation and Limited Applicability
This Appendix serves the sole purpose of complying with the requirements of HIPAA and will be
interpreted and construed in a manner to effectuate this purpose. Neither this Appendix nor the
duties, powers, responsibilities, and obligations listed herein will be taken into account in
determining the amount or nature of the benefits provided to any person covered under the
Plan, nor will they inure to the benefit of any third parties. To the extent that any of the
provisions of this Appendix A are no longer required by HIPAA or do not apply to the Plan
because the Plan is otherwise excepted from HIPAA, they will be deemed deleted and will have
no force or effect.
A.10 Service Performed for the Employer
Notwithstanding any other provisions of this Plan to the contrary, all services performed by a
business associate for the Plan in accordance with the applicable service agreement will be
deemed to be performed on behalf of the Plan and subject to the administrative simplification
provisions of HIPAA contained in 45 CFR Parts 160 through 164, except services that relate to
eligibility and enrollment in the Plan. If a business associate of the Plan performs any services
that relate to eligibility and enrollment in the Plan, these services will be deemed to be
performed on behalf of the Employer in its capacity as Plan Sponsor and not on behalf of the
Plan.
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