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HomeMy WebLinkAboutAgreement_General_01/08/2015 Section 125 Plan Summary Plan Description and Plan Document Introduction The Section 125 Plan is a program that permits eligible employees to use tax -free income, rather than after -tax income, to pay premiums for certain Qualified Benefit Programs. The purpose is to reduce the actual cost of participating in the Qualified Benefit Programs. The Section 125 Plan consists of this Summary Plan Description and Plan Document in addition to the accompanying Adoption Agreement, which is incorporated by reference into this document. Authg The Section 125 Plan is authorized and governed by Section 125 of the Internal Revenue Code of 1986, as amended, and other related Sections of the Internal Revenue Code. Definitions a. Adoption Agreement - A document containing specific information about the Section 125 Plan as it applies to the employer and its employees. The Adoption Agreement along with this Summary Plan Description and Plan Document make up the Section 125 Plan. b. Employee - A person engaged in the conduct of business for the Employer; excluding sole proprietors, partners, and 2% or greater shareholders in an S- corporation, independent contractors and other classes of individuals specified in the Adoption Agreement such as members of collective bargaining units, if any. c. EmFoyer - The entity or entities defined in the Adoption Agreement. d. Highly Compensated Employee - Any Employee defined as such by Section 4140 of the Internal Revenue Code. e. Key Employee - Any Employee defined as such by Section 416(1)(1) of the Internal Revenue Code f. Open Enrollment - A period of time during which an eligible employee may select benefits for the coming Plan Year. g. Participant - An employee paying for Qualified Benefit Programs with tax -free income under the Section 125 Section 125 Plan. 1 h. Payroll Deduction - The process of withholding premiums or employee contributions for Qualified Benefit Programs from Employees' paychecks. Payroll Deduction cannot occur if the Employee is not actively receiving income from the Employer that would otherwise be taxable. L Plan - The Section 125 Plan as defined by this document and the Adoption Agreement incorporated into the Plan by reference. j. Plan Administrator - The entity that makes decisions regarding the operation of the Section 125 Plan. The Plan Administrator is the Employer. k. Plan Sponsor - The entity that makes the Section 125 Plan available to employees The Plan Sponsor is the Employer. 1. Plan Year - The Plan Year is a fixed period of time, usually twelve months, during which employees may not change benefits unless a qualifying event occurs. The Plan Year is defined in the Adoption Agreement. See "Changing Benefits" for more information about Qualifying Events. m. Qualified Benefit Programs - Employer - sponsored insurance policies and/or self - insurance programs that Section 125 allows employees to fund with tax -free income. n. Qualifying Event - An event which results in a change in eligibility in a Qualified Benefit Plan or an external plan, as defined by Section 125 of the Internal Revenue Code, that creates an opportunity for employees to change participation in the Section 125 Plan and the underlying Qualified Benefit Programs. See the section on Qualifying Events for more information. o. Tax -free - Exempt from federal income taxes, FICA taxes (Medicare and Social Security), and state and local income taxes where permissible Eligibility Employees eligible to participate in any or all of the Qualified Benefit Programs and pay their share of qualified insurance premiums via payroll deduction are eligible to participate in the Section 125 Plan. Oualified Benefit Programs The Qualified Benefit Programs are the insurance plans selected by the employer in the Adoption Agreement. The premiums for each Qualified Benefit Program will be paid with tax -free income up to the lesser of the actual premium or the maximum allowed by the Internal Revenue Code. 2 Qualified Benefit Programs are those listed in the Adoption Agreement and may include any or all of the following: • Employer - provided accident and sickness coverage such as medical, dental, vision, accidental death and dismemberment, disability, and certain cancer, dread disease, hospital indemnity, hospital sickness, critical illness and intensive care policies under Sections 105 and 106 of the Internal Revenue Code. • Employee contributions to a Health Savings Account (HSA) authorized under Section 223 of the Internal Revenue Code. • Employee group term life insurance in amounts up to $50,000 of coverage, including any employer- provided coverage under Section 79 of the Internal Revenue Code. (Dependent life insurance is not eligible.) This plan does not offer any benefit that defers the receipt of compensation. Participants may not use one Plan Year's contributions to purchase benefits in a subsequent Plan Year, or to carryover unused benefits from year to year. The Qualified Benefit Programs included in the Section 125 Plan are listed in the Adoption Agreement. The benefits, rules and limitations of the Qualified Benefit Program(s) are described in separate insurance policies, certificates, or other appropriate documents. Copies of such documents can be obtained from the Employer. This document is not intended to provide specific information about the Qualified Benefit Programs. Except as expressly provided herein, nothing contained in the Plan shall be construed to alter the terms of the Qualified Benefit Programs or policies of the vendors of those programs or to provide any benefits other than those provided by the Qualified Insurance Plans and the policies of the vendor. The Employer may add, change or cancel Qualified Benefit Programs at any time without prior notice. Enrolling in Benefits, Changing Benefits, Cancelina Benefits Section 125 of the Internal Revenue Code allows employees to elect to participate in Qualified Benefit Programs and change or cancel this election off • During the open enrollment immediately preceding each Plan Year; or • When an employee experiences a Qualifying Event. The employer may establish a reasonable deadline for submission of requests during the annual open enrollment period. Benefit changes requested during the Open Enrollment Period will take effect on the first day of the coming Plan Year. If a benefit change is requested at a time other than the Open Enrollment Period, the employee must have experienced one or more of the Qualifying Events. The requested change must be submitted within 30 days of the Qualifying Event and must be consistent with the event. Benefit 3 changes must take effect after such choices are communicated to the employer using a properly completed form, on the date specified by the employer in the Adoption Agreement. Changes in benefits may never be retroactive. 4aaWing Events The Qualifying Events are as follows: • Marriage or Divorce; • Gaining a Dependent due to Birth, Attaining Minimum Age, Court Order, Decree or Judgement; • Losing a Dependent due to Death, Attaining Maximum Age, Court Order, Decree or Judgement; • Becoming eligible for Medicare or Medicaid, or losing eligibility for Medicare or Medicaid; • Beginning or Ending an Unpaid Leave of Absence, including a leave under the Family Medical Leave Act (FLMA); • Changes in eligibility due to changes in employment of the employee, spouse or dependents; • Open enrollment for spouse's benefit plan(s); • Special enrollment rights under the Health Insurance Portability and Accountability Act (HIPAA) following the loss of other health coverage or if the person becomes the spouse or dependent of an employee through birth, marriage, adoption or placement for adoption; • The annual Affordable Care Act open enrollment period; or • Other Qualifying Events permitted by Section 125, as amended, if any. The Qualifying Event must result in the employee, spouse or dependent becoming eligible or losing eligibility for insurance coverage. Requested changes in Qualified Benefit Programs must be "on account of the event and consistent with the event. Ceasing Participation Employees will cease participation in the Section 125 Plan when: • Participation in the Qualified Benefit Programs ceases; • The employee ceases paying the premiums via payroll deduction; • Eligibility to participate in the Section 125 Plan ceases; or • The Section 125 Plan terminates. No action is required of the employee. Ceasing participation in the Section 125 Plan does not prevent participation in the Qualified Benefit Programs as permitted under the Family Medical Leave Act (FU LA) or the Consolidated Omnibus Budget Reconciliation Act (COBRA). 4 Plan Funding Employee tax -free premium contributions for Qualified Benefit Programs will be treated as employer funds for the purposes of the Section 125 Plan. The employee's taxable salary is reduced by the amount of the qualified premiums and the employer uses this money to pay the premiums. This is the mechanism that allows the employee to avoid paying taxes on the premiums. Participants may not contribute more than 100% the total compensation derived from the employer. If the employee elects to waive participation in one or more of the Qualified Benefit Plans in accordance with the applicable rules stated herein, the employee may retain the corresponding portion of his/her income (cash). The employer may also contribute toward the cost of the Qualified Benefit Programs, but such contribution is not required. Nondiscrimination Rules The Section 125 Plan shall not discriminate in favor of Highly Compensated or Key employees in its benefits or its operation. No more than 25% of the aggregate (total) tax -free premiums paid under the Section 125 Plan may be paid by Key Employees. The Employer may amend the Plan, terminate the Plan, or modify the participation levels of Highly Compensated or Key employees to bring the Plan into compliance with the nondiscrimination rules. Plan Administration The Employer serves in the role of both Plan Sponsor and Plan Administrator. The Employer may establish reasonable rules and procedures affecting the operation of the plan as long as such rules are consistent with all laws and regulations and are applied consistently. The Employer may change the Section 125 Plan at any time, including administrative rules and procedures, without prior notice. The Employer may suspend or terminate the Section 125 Plan at any time, without prior notice. The Employer may amend the Section 125 Plan retroactively to enable the Plan to qualify under Section 125 of the Internal Revenue Code. No such amendment shall deprive any Participant of any benefit to which he or she is entitled under this Plan with respect to previously paid premiums for Qualified Benefit Programs, except as provided under the nondiscrimination rules. Neither the Employer nor any agent of the Employer or the Plan represent or guarantee that the Plan will qualify under the Internal Revenue Code at any time, nor is the Employer obligated to amend any aspect of the Plan which results in failure to meet the requirements of the Internal Revenue Code. Suecific Plan Information 5 Information specific to the Section 125 Plan provided by the Employer is included in the Adoption Agreement that is part of this document. Other Important Information Participation in the Section 125 Plan does not create an employment contract between the Employer and the Employee, nor does the Section 125 Plan serve as an inducement or consideration for the employment of any Employee or Participant. The Section 125 Plan does not give the Employee or Participant the right to be retained by the Employer, nor does it interfere with the right of the Employer to discharge the Employee of Participant at any time. The Employee or Participant, upon dismissal or voluntary termination shall have no right or interest in the Plan unless such right is expressly stated by the Plan. Any Employee may request a copy of the Section 125 Plan. No benefit under the Section 125 Plan may be assigned to another party. Indemnification of Persons Acting on Behalf of the Emplover The Employer agrees to indemnify and reimburse, to the fullest extent permitted by law, its current and former governing board (if any), management and/or other employees acting for the Employer, for any and all expenses, liabilities or losses arising out of any act or omission relating to the performance of services for or for the management and administration of the Plan. Headings The headings in this Plan have been included for convenience or reference only and are to be ignored in any construction of the provisions herein. Gender and Number In the construction of the Plan, the masculine shall include the feminine or neuter, and the singular shall include the plural and vice versa in all cases where such meanings would be appropriate. Governing Law This Plan shall be construed, enforced and administered according to the laws of the state specified in the Adoption Agreement. 6 IN WI SS WHEREOF, the Employer has caused this Plan to be executed on this day oIL , 20. By: Printed Name: Title: nl ATTEST: � 1Q Q e Cl erK- - Title: l 1 ' , Q •• Gb O �.. � � m .. W �'• Rpp9A FD � SECTION 125 PLAN ADOPTION AGREEMENT Plan Sponsor: Village of Tequesta Federal Tax ID Number: 59- 6044081 Vil age of Nuesta hereby adopts the Village of Tequesta Section 125 Plan (Plan) on This Section 125 Plan Adoption Agreement along with the Summary Plan D sc ption and Plan Document are intended to satisfy the 'written plan' requirement of Section 125 of the Internal Revenue Code. This Adoption Agreement represents an amendment and restatement of the Village of Tequesta Premium Conversion Plan sponsored by Village of Tequesta with the effective date of October 1, 2010. Effective Date The Original Effective Date of the Plan is April 1, 2004. The Effective Date of this Adoption Agreement is October 1, 2014. Plan Number The Plan Number is 502. Plan Year The Plan Year shall be twelve -month periods beginning each October 1. Participation Rules Eligible employees must enroll to participate in the Premium Conversion Plan. A properly completed form must be submitted to the Plan Sponsor within the designated time periods. Participation begins with participation in the medical insurance plan following the submission to the Plan Sponsor of a properly completed form, if such form is required by the Plan Sponsor. Additional participation rules are included in the Summary Plan Description and Plan Document. Qualified Benefit Programs Qualified Benefit Programs shall include: • Medical Insurance • Dental Insurance • Vision Insurance • Cancer /Dread Disease Insurance • Hospital Indemnity • Hospital Sickness • Critical Illness • Intensive Care • Health Care Flexible Spending Account • Dependent Care Flexible Spending Account Agent for Service of Legal Process The Mayor of the Village of Tequesta Village of Tequesta 345 Tequesta Drive Tequesta, FL 33469 561 -575 -6200 Governing Law This Plan shall be construed, enforced and administered according to the laws of the State of F � ature o Autho ' ed epresentative of Village of Tequesta Ps'sub B t t utan Typed or p4ted name of Authorized Representative. M q31or Title of Au orized Representative. l — T 15 Date of Signature