1993-001 Flexible Benefit Plan
RESOLUTION NO. 1-98
1
A RESOLUTION OF TH6 VILLAGE COUNCIL OF NORTH PALM BEACH,
FLORIDA, ADOPTING THE FLEXIBLE BENEFIT PLAN FOR THB
VILLAGE AND THE VILLAGE EMPLOYEES, AS PROVIDED FOR BY
RULES AND REGULATIONS PROMULGATED 8Y IRS SECTION 125
CAFETERIA PLAN.
BS IT RESOLVED BY THS VILLAGE COUNCIL OF NORTH PALM
BEACH, FLORIDA:
Section 1. The "Flexible Benefit Plan" attached hereto
as Exhibit A and by reference made a part hereof are hereby adopted
for the benefit for the Village and the Village employees of the
village of North Palm Beach.
Section 2. This Resolution shall take effect
January 1, 1993.
' PASSED AND ADOPTED THIS 14TH DAY OF JANUARY, 1993.
MAYOR
ATTES
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VILLAGE LER
1
VILLAGE OF NORTH PALM BEACH
FLEXIBLE BENEFIT PLAN DESCRIPTION
•Eligibility
Each employee becomes eligible to participate in the plan on the first day of the month
following the date of employment. Employees must file a written agreement electing to
participate in the Plan as is required by and on a form provided by the Plan Administrator.
•Period of Coveraee
An employee's coverage with respect to any other benefit under the Plan shall be the plan
yeaz Januazy through December, (or the remaining portion of the year in which the
employee fast becomes eligible to participate in the Plan).
•Termination of Participation
The benefits for any employee or covered dependent will terminate on the earliest of:
(a) The date the Plan is terminated;
(b) The date a specific coverage or benefit is discontinued;
(c) With respect to a covered dependent, the date such dependent ceases to be a
dependent;
(d) The date the employee ceases to qualify as a participant as a result of termination
of employment or failure to make the required contributions, if any;
(e) The date the employee terminates membership in a group or class of employees
eligible for benefits; or
(f) As provided for by roles and regulations promulgated by I.R.S.
•Changes in Elections
An employee may not revise the rate of his salary reductions or discontinue making salary
• reduction contributions except as following:
(a) The employees may file a written election form with the Plan Administrator on or
before the end of any plan year revising the rate of their contributions or
discontinuing such contributions effective as of the first regulazly scheduled pay
day of the following plan yeaz.
(b) The employee's contributions will automatically terminate as of the date his/her plan
participation temtinates.
(c) The employees may file a written election form with the Plan Administrator to
revoke any prior election and to make a new election with respect to the remaining
pomon of the plan yeaz on account of and consistent with a change in family status,
including marriage, divorce, the death of the employee's spouse or child, the birth
or adoption of a child, which revocation and new election will be effective as of the
date it is approved by the Plan Administrator.
(d) As provided for by rules and regulations promulgated by I.R.S.
PREMIUM PAYMENT BENEFITS
Your Flexible Benefits program offers a selection of coverages which permits employees to
pay the cost of the coverage for these benefits by making salary reduction contributions to
the Plan.
• Subject to the conditions and limitations of the Plan, each year each employee may elect in
writing on a form filed with the Administrator on or before the date he first becomes
eligible to participate in the Plan, and on or before the first day of any plan year thereafter,
to contribute the amount of such salary reduction to the Plan as his premium cost to any of
the following benefits:
Optional Term Life Insurance -Employee Coverage
This benefit provides group teen life insurance with Reliance Standard Life Insurance •
Company for the employee who needs or desires Life Insurance protection. Employees
may purchase Optional Life Coverage in increrrtents of $10,000 optional life insurance.
The benefit is reduced by 40% at ages 75 - 79, 55% at ages 80 - 84, 72.5% at ages 85 -
89, 80% at ages 90 - 94, 92.5% at ages 95 - 99 and 95% at age 100 or over. All
benefits are provided in addition to any other insurance coverage. Benefits will be
payable to the beneficiary(ies) designated on your enrollment form.
Please refer to your Reliance Standard Life Insurance brochure for more information.
Optional Term Life Insurance -Dependent Coverage
This benefit provides group term life insurance with Reliance Standard Life Insurance
Company for eligible dependents of the employee who need or desire Life Insurance
protection. Employees may purchase Optional Tetra Life Insurance in increments of
$10,000 for their spouse. Employees may purchase $1,000 in Term Life Insurance for
Dependent Children who are age 14 days but less but less than 6 months, and $2,500 to
$10,000 for children up to 19 yeazs (25 if full-time student), in increments of $2,500.
Vision Coverage
You can purchase the Vision Service Plan or Eye Care Plan of America through yow
Flex Plan. The Vision Service Plan provides cdverage for exams and corrective
lenses Frames, which are not covered under your health insurance. The Eye Care
Plan of America provides a membership care which can be used at a variety of vision
centers, to purchase corrective eye weaz.
Please refer to the Vision Service Plan and Eye Caze Plan of America brochures for •
the benefits available under this Plan.
Cancer Coverage
You can purchase Cancer coverage with American Family Life (AFLAC) through
your Flex Plan, and pay your premium with tax-free dollars. This plan provides
coverage for procedures necessary to treat cancer, and the benefits are paid in addition
to any other insurance coverage you may have.
Please refer to the Cancer Plan brochure provided by American Family Life for the
benefits and limitations available under this Plan.
hospital Indemnity Coverage
You can purchase Hospital Indemnity coverage with American Family Life (AFLAC)
through your Flex Plan, and pay your premium with tax-free dollars. This plan
provides coverage while confined in a Hospital, and the benefits are paid in addition
to any other insurance coverage you may have.
Please refer to the Hospital Indemnity brochure provided by American Family Life
for the benefits and limitations avaIlable under this Plan.
Accident Coverage
You can purchase individual or family Group Accident Insurance with American
Home Assurance Company, and pay for the cost of the coverage with tax-free
dollazs.
With the Individual Plan, you may select any amount of Principal Sum ranging from •
$10,000 to $250,000 in multiples of $10,000. With the Family Plan, you may select
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any Principal Sum for yourself ranging from $10,000 to $250,000 in multiples of
$10,000, and then your spouse and eligible dependent children are automatically
covered as follows: your spouse is automadcally insured for a Principal Sum equal to
40% of your's and each eligible dependent child is insured for 10% of your amount.
Please refer to [he American Home Assurance Group Accident Insurance Policy for a
more detailed description of benefits and limitations.
Dependent Health Coverage
If you choose Dependent Health coverage, you have the opportunity to pay for the
coverage before taxes aze taken out of your check. This reduces your taxable income,
and thus, increases your take home pay.
Please refer to your employee benefits booklet for the benefits and limitations under your
health benefits plan.
Example: A single individual earning $20,800 and paying $500 annually for benefits:
Using after tax dollars
Income
Annual benefit
premiums
Taxable Income
Taxes (Social Sec. &
FICA) Estimated
Less annual premium
Spendable Income
$20,800
0
20,800
4,680
500
$15,620
Increase in spendable income = $113
$20,800
500
20,300
4,567
0
$15,733
You should carefully consider which is more advantageous to you. If your family income
is less than $25,000 a yeaz, you will be better off taking the credit on your income tax
return.
Using pre-tax dollars
•
FLEXIBLE SPENDING ACCOUNT (FSA)
Your program includes a benefit called a Flexible Spending Account (FSA). With the
FSA, you will be able to pay for unreimbursed medical, dental, viston and hearing •
expenses on a pre-tax basis. Normally, these expenses ate paid with after-tax money after
taxes aze taken out of your pay.
By paying for expenses on a pre-tax basis, you save on income (your take home pay) and
Social Security taxes, and you are not required to pay any taxes on the money you receive
as reimbursement.
•Ilow the FSA works
Under the FSA there aze two separate accounts: one for health caze expenses, and the
other for dependent care. At the beginning of each Plan yeaz, you may select the amount
that you want to deposit into each account. Taxes are not withheld on the money going into
these accounts.
During the Plan year, you pay health and or dependent care expenses as they occur. Once
the service is rendered, you can submit a claim form requesting reimbursement. You will
be reimbursed with pre-tax dollazs after approval of your request by the Administrator.
•FSA or Income Tax Credit
You can take a credit on your income taxes, instead of using the dependent care account for
expenses. But, you cannot take a tax credit on your income taxes if you participate in the
dependent care account.
You should carefully consider which is more advantageous to you. If your family income
is less than $25,000 a yeaz, you will be better off taking the credit on your income tax •
return. .
Medical Reimbursement Account
The Medical Reimbursement Account allows you to pay unreimbursed medical expenses
with pre-tax dollars. These expenses include:
I. Group medical, dental and group vision insurance plan deductible and co-payment
amounts.
II. Out-of-pocket expenses not covered by your major medical plan such as birth
control pills, braces, crotches, eye glasses, routine physicals, physician prescribed
weight loss programs and stop-smoking programs.
•Use it or lose it
In return for the tax break you receive on FSA contributions, IRS rules require that any
amounts left in your accounts at the end of the year be forfeited. Therefore, it is important
that you carefully estimate your expenses before making your FSA deposits.
•Plan Administrator
If you have questions concerning your Flex Plan, or the benefits available, please contact
the Plan Administrator, McCreary Corporation, 700 Central Pazkway, Stuart, FL 34994.
You may call the Plan Administrator at 407/287-7650 or 800/431-2221.
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VILLAGE OF NORTH PALM BEACH
FLEXIBLE BENEFTI' PLAN
TABLE OF CONTENTS
•
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I INTRODUCTION ..................
II
III
IV
V
EXHIBIT A
............... 1
1.1 Purpose of the plan ..................................................................................... 1
1.2 Effective date ............................................................................................... l
1.3 Plan Administration, Plan Year ................................................................... 1
1.4 Plan Status ......................................................................... _........................ 1
1.5 Benefits ........................................................................................................ 1
PARTICII'ATION......
....... 1
2.1 Eligibility ....................................................................................................1
2.2 Period of Coverage ..................................................................................... 1
2.3 Termination of Participation ...................................................................... 1
2.4 Notice of Eligibility ................................................................................... 2
CONTIRIBUTIONS ............................................................................................. 2
3.1 Employer Contributions ...............
3.2 Employee Contributions ...............
3.3 Salary Reduction ..........................
3.4 Changes ........................................
.................................................... 2
...................................:............... 2
................................................... 2
.................................................... 2
EMPLOYEE ACCOUNTS.
....................................................... 3
4.1 Employee's Benefits Accounts ................................................................... 3
4.2 Payment of Benefits ................................................................................... 3
4.3 Designation of Beneficiaries ...................................................................... 3
ADMINISTRATION ................
................................................. 3
5.1 Administrator ............................................................................................. 3
5.2 Plan Administrator s Duties ....................................................................... 3
5.3 Information Required for Plan Administration .......................................... 4
5.4 Decision of Plan Administrator Final ......................................................... 4
5.5 Review of Benefit Detemunation ............................................................... 4
5.6 Uniform Rules ............................................................................................ 4
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• VI FUNDING, AMENDMENT, AND TERMINATION OF THE PLAN........... 4
•
VII
6.1
6.2
6.3
Funding .......................................
Amendment .................................
Temunation .................................
GENERAL PROVISIONS........
.............................................................. 4
............................................................... 4
............................................................... 4
................................. 4
7.1 Nonassignability ..............................
7.2 No Guaraniee ......................:............
7.3 Gender and Number .........................
7.4 Limitation of Liability .....................
7.5 Participant Litigation .......................
7.6 Notice, Waiver of Notice .................
7.7 Data ..................................................
7.8 Mistake of Fact ................................
7.9 Taxes ................................................
7.10 Severability ......................................
7.11 Applicable Law ................................
........................................................... 4
.......................................................... 5
.......................................................... 5
............................................................ 5
................................ .................... 5
..................................:....................... 5
.......................................................... 5
........................................................... 5
.......................................................... 5
.......................................................... 5
.......................................................... 5
Supplement -Optional Term Life Insurance Premium Payment
Benefits Under Flexible Benefit Plan ..................................................................... 6
Supplement -Dependent Term Life Insurance Premium Payment
Benefits Under Flexible Benefit Plan .................................................................... 7
Supplement -Cancer Coverage Premium Payment
Benefits Under Flexible Benefit Plan .................................................................... 8
Supplement -Dependent Medical Care Premium Payment
Benefits Under Flexible Benefit Plan .............................................:...................... 9
Supplement -Accidental Death and Dismemberment Coverage Premium Payment
Benefits Under Flexible Benefit Plan .................................................................... 10
Supplement -Child and Dependent Care Reimbursement
Benefits Under Flexible Benefit Plan ..........................................................:......... l l
Supplement -Hospital Indemnity Coverage Premium Payment
Benefits Under Flexible Benefit Plan ...................:................................................ 12
Supplement -Vision Coverage Premium Payment
Benefits Under Flexible Benefit Plan .................................................................... 13
Supplement -Health Expense Reimbursement
Benefits Under Flexible Benefit Plan .................................................................... 14
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ARTICLE I
• Introduction
1.1 Purpose of the plan. This document constitutes the Flexible Benefit Plan
(hereinafter called the Plan) for The Village of North Palm Beach (hereinafter called the
Employer). The purpose of the Plan is to provide the employees of the The Village of
North Palm Beach a choice of benefits under the Supplemental Life Insurance, Voluntary
AD & D Insurance, Vision Plan, Cancer Plan, Hospital Indemnity Plan, Reimbursement
and Dependent Child Care Plan now maintained by the Employer or as may be elected in
the future.
1.2 Effective date. The Plan is effective as of Janauary 1, 1993. The fast Plan
yeaz will end December 31, 1993, and will renew each January 1st thereafter.
1.3 Plan Administration. Plan Year. The Plan is administered by McCreary
Corporation (hereinafter referred to as the Plan Administrator) on the basis of a plan year
identified as ending December 31st of any succeeding year.
1.4 Plan Status. This Plan is intended to qualify as a "cafeteria plan" under
Section 125 of the Internal Revenue Code of 1954, as amended, and is to be interpreted in
a manner consistent with the requirements of Section 125.
1.5 Benefits. The Plan includes various benefits established by the Employer,
(described in supplements attached) fomting a part of the Plan. Supplements may by
• amendment be attached to and form a part of this Plan to offer additional benefit programs
to employees (hereinafter called Programs).
ARTICLE II
Participation
2.1 Eli ibility. Each employee meeting the eligibility requirements will be
eligible to participate in the Plan. Employees must file a written agreement electing to
participate in the Plan as is required by and on a form provided by the Plan Administrator.
2.2 Period of Coveraee. An employee's coverage with respect to any other
benefit under the Plan shall be the plan yeaz (or the remaining portion of the yeaz in which
the employee fast becomes eligible to participate in the Plan).
2.3 Termination of Partici ap lion. The benefits for any employee or covered
dependent will tem~inate on the eazliest of:
(a) The date the Plan is terminated;
(b) The date a specific coverage or benefit is discontinued;
(c) With respect to a covered dependent, the date such dependent ceases to be a
dependent; '
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(d) The day the employee ceases to qualify as a participant as a result of
termination of employment or failure to make the required contributions, if
• anY;
(e) The day the employee terminates membership in a group or class of
employees eligible for benefits; or
(f) IAW R&R promulgated by I.R.S.
2.4 Notice of Eligibility. The Employer shall notify employees of their
eligibility to participate in the Plan and of the terms of the Plan. Each employee will be
furnished with a copy of a summary plan description.
3.1 Emolover Contributions. The Employer will pay the administrative costs of
the Plan at such times and in such amounts as shall be necessary from its general assets.
Nothing herein shall require the Employer to segregate or set aside any funds of other
property for the purpose of paying any amounts under the Plan.
3.2 Emplovee Contributions. Employees shall make any contributions required
of them under the Plan. An employee may elect in writing on a form prepared and filed
• with the Plan Administrator on or before the date he first becomes eligible to participate in
the Plan, and on or before the first day of any plan year thereafter, to reduce his
compensation for such plan year and to contribute the amount of such salary reduction to
the Plan as his required contribution under the Plan. Pursuant to such written election
form, the employee shall also apportion his salary reduction contributions among the
benefits provided for in the Plan for which the employee or his covered dependents qualify.
In no event shall the sum of the amounts apportioned by the employee to each benefit
exceed the total amount of his salary reduction contribution over the period of the plan year.
3.3 Sam Reduction. Salary reduction contributions will be through payments
made periodically corresponding to payroll withholding beginning with the first regulazly
scheduled payday for the plan year for which the employee's written election is made (or
the first regularly scheduled payday which is on or after the date the employee first
becomes eligible to participate in the Plan if a salary reduction agreement has previously
been properly executed). The Plan Administrator will establish rules and regulations with
respect to salary reduction agreements hereunder in accordance with applicable law and
regulations issued by the Department of the Treasury under Section 125 of the Code.
Employee contributions shall be used to provide benefits under the Plan or to pay
premiums to modified of fully self-funded programs, insurance companies, health
maintenance organizations of other organizations or institutions or provider to provide such
benefits as soon as reasonably practical. All employee's salary reduction contributions
which are not used to provide plan benefits for such plan year as provided in the preceding
sentence shall not at any time be returned or repaid to employees but shall be forfeited.
3.4 Chanties. An employee may not revise the rate of his salary reductions or
discontinue making salary reduction contributions except as following:
•
2
(a) The employees may file a written election form with the Plan Administrator
on or before the end of any plan year revising the rate of their contributions
• or discontinuing such contributions effective as of the first regularly
scheduled payday of the following plan year.
(b) The employee's contributions will automatically terminate as of the date his
plan participation terminates.
(c) The employees may file a written election form with the Plan Administrator
to revoke any prior election and to make a new election with respect to the
remaining portion of a plan year on account of and consistent with a change
in family status, including marriage, divorce, the death of the employee's
spouse or child, the birth or adoption of a child, which revocation and new
election will be effective as of the date it is approved by the Plan
Administrator.
(d) As provided for by R/R promulgated by I.R.S.
For purposes of this section, any election by an employee to change the
apportionment of his salary reduction contributions among the various benefits provided
for in the Plan will be considered a revision of the rate of his contributions.
• 4.1 Employee's Benefits Accounts. For the purpose of providing employees
with the choice of which one or more of the benefits under the Plan are to be provided to
the employee, the Plan Administrator shall establish with respect to each employee an
account to reflect each benefit elected by the employee (hereinafter called the Benefits
Accounts).
4.2 Payment of Benefits. Benefits payable under the Plan for or on behalf of an
employee or covered dependent shall be paid monthly.
4.3 Designation of Beneficiaries. Each employee or covered dependent from
time to time may name any person to whom the employee's or covered dependent's
benefits under the Plan are to be paid if the employee of covered dependent dies before he
receives all such benefits. Appropriate forms will be provided for this purpose.
ARTICLE V
Administration
5.1 Administrator. The Plan Administrator is responsible for the day-to-day
operations of the Plan.
• 5.2 Plan Administrator's Duties. Except as otherwise provided the Plan
Administrator shall have the following powers, rights and duties:
(a) To adopt rules of procedure.
• (b) To construe and interpret the Plan.
(c) To furnish the Employer with information.
(d) To make a detemmination as to a benefit.
(e) To enroll employees.
(f) To report after the end of each plan year to the employer.
The Plan Administrator shall have no power to modify any of the terms of the Plan.
5.3 Information Required for Plan Administration. The informmation furnished
to the Administrator by the Employer as to an employee's periods of employment,
temminations, leaves of absence, reemployment and compensation will be conclusive for all
persons.
5.4 Recision of Plan Administrator Final. Subject to applicable law, any
decision on any matter within the discretion. of the Plan Administrator made in good faith
shall be binding.
5.5 Review of Benefit Determination. If a claim is denied, the Plan
Administrator shall within 90 days furnish a written notice specifying the reasons for the
denial.
• 5.6 Uniform Rules. The Plan Administrator shall apply uniform rules to all
employees.
ARTICLE VI
Funding. Amendment. and Termination of the Plan
G.1 in .The Plan shall be maintained on an unfunded basis.
6.2 Amendment. The Employer shall have the right from time to time, to
amend, in whole or in part, any or all of the provisions of this Plan.
6.3 Termination. The Employer shall have the right to tertinate this Plan.
ARTICLE VII
S'ienera] Provisions
7.1 Nonassignabilitv. Benefits under the Plan are not in any way subject to the
• debts of other obligations of the persons entitled thereto and may not voluntarily or
involuntarily be sold, transferred or assigned.
4
7.2 No Guarantee. Neither the establishment of the Plan nor any modification
• thereof, nor the creation of any fund or account, nor the payment of any benefits shall be
construed as giving to any employee or other person any legal or equitable right against the
Employer or Administrator except as herein provided.
7.3 Gender and Number. Words denoting the masculine gender shall include
the feminine and neutral genders and the singular shall include the plural and plural shall
include the singular wherever required by the contract.
7.4 Limitation of Liability. Except for its or their willful misconduct or gross
neglect, neither the Employer nor the Administrator shall in any way be subject to any legal
liability to any employee for any cause or reason or thing whatsoever in connection with
this Plan.
7.5 Participant Litigation. In any action any person having or claiming to have
an interest in this Plan shall not be necessary parties to such action and shall not be entitled
to any notice except as required by applicable law.
7.6 Notice. Waiver of Notice. Each participant must ftle with the Plan
Administrator in writing his post office address. Any communication, statement or notice
addressed to such a person at his last post office address as filed with the Plan
Administrator will be binding upon such person for all purposes of the Plan, and the
Employer shall not be obliged to search for or ascertain the whereabouts of any such
person. Any notice required under the Plan may be waived by the person entitled to notice.
7.7 p~(h. Each employee or covered dependent must furnish the Employer such
• documents, evidence or information as the Employer considers necessary or desirable for
the purpose of administering the Plan.
7.8 Mistake of Fact. Any mistake shall be corrected when it becomes known
and adjustment made by reason thereof.
7.9 Taxes. The Employer or any other organization providing benefits under
the Plan may withhold from any payment such amount as may be required to wmply with
the Internal Revenue Code.
7.10 Severability. Any provisions held illegal for any reason, shall not effect the
remaining provisions of the Plan.
7.11 Applicable Law. The Plan shall be construed according to the Internal
Revenue Code of 1954, as amended. The Plan is intended to meet the requirements of
Section 125. The Plan shall be construed according to the laws of the State of Florida.
Any c}ranges promulgated by Federal and/or state statute, rule or regulation are
automatically incorporated into this Plan by reference, and this Plan is hereby adopting the
minimum requirements of such statute, rule, or regulation unless said requirements are
permissive and this Plan addresses the subject matter directly or indirectly.
•
• Optional Tetrn Life Insurance Premium Payment
Benefits Under Flexible Benefit Plan
1. puroo,~g. The purpose of this Supplement is to perntit employees to pay the
cost of coverage under the Optional Term Life Insurance Plan by making salary reduction
contributions to the Plan. This Supplement constitutes the Optional Tetra Life Insurance
Plan of the Employer. The benefit provided under this supplement is a "premium payment
benefit." The specific provisions of the Optional Tenn Life Insurance Plan as set forth in a
contract or policy issued by a company shall be considered a part of the Plan and
incorporated herein by reference.
2. Amount of Premium Pavmpnt Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in writing on a form filed with
the Plan Administrator on or before the date he fast becomes eligible to participate in the
Plan, and on or before the first day of any plan year thereafter, to reduce his compensation
or to forego an increase in his compensation and to contribute the amount of such salary
reduction to the Plan as his optional term life insurance premium cost. The amount of
optional term life insurance included in the Plan may not excsred $50,000.
~~
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6
Sunolement
~) Optional Dependent Term Life Insurance Premium Payment
Benefits Undcr Flexible Benefit Plan
1. purnose. The purpose of this Supplement is to permit employees to pay the
cost of coverage under the Opaonal Dependent Term Life Insurance Plan by making salary
reduction contributions to the Plan. This Supplement constitutes the Optional Dependent
Term Life Insurance Plan of the Employer. The benefit provided under this supplement is
a "premium payment benefit." The spectfic provisions of the Optional Dependent Term
Life Insurance Plan as set forth in a contract or policy issued by a company shall be
considered a part of the Plan and incorporated herein by reference.
2, Amn„nt of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in wnang on a form filed with
the Plan Administrator on or before the date he first becomes eligible to participate in the
Plan, and on or before the first day of any plan year thereafter, to reduce hts compensation
or to forego an increase in his compensaaon and to contribute the amount of such salary
reduction to the Plan as his optional dependent term life insurance premium cost. The
amount of optional Dependent term life insurance included in the Plan may not exceed
$2,000.
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7
SUPPLEMENT
Cancer Coverage Payment
•~ Benefits Under Flexible Benefit Plan
1. PuFpose• The purpose of this Supplement is to pernrit employees to pay
the cost of coverage under the Cancer Insurance Plan by making salary reduction
contributions to the Plan. This supplement constitutes the Cancer Insurance Plan of the
Employer. The benefit provided under this supplement is a "premium payment benefit."
The specific provisions of the Cancer Insurance Plan as set forth in a contract or policy
issued by a company shall be considered a part of the Plan and incorporated herein by
reference.
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in writing on a form filed with
the Plan Administrator on or before the date he fast becomes eligible to participate in the
plan, and on or before the first day of any plan year thereafter, to reduce his compensadon
or to forego an increase in his compensation and to contribute the amount of such salary
reduction to the Plan as his Cancer Insurance premium cost. The term "Cancer Insurance
premium cost," as used in the Plan, means the employee's cost of the Cancer Insurance
coverage.
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• Dependent Medical Care Premium Payment
Benefits Under Flexible Benefit Plan
1. rPi pose. The purpose of this Supplement is to permit employees to pay the
cost of coverage under the Dependent Medical Care Plan by making salary reduction
contributions to the Plan. This Supplement constitutes the Dependent Medical Care Plan of
the Employer. The benefit provided under this Supplement is a "premium payment
benefit". The specific provisions of the Dependent Medical Care Plan as set forth in a
contract or policy issued by a company shall be considered a part of the Plan and
incorporated herein by reference.
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in writing on a form filed with
the Plan Administrator on or before the date he first becomes eligible to participate in the
Plan, and on or before the fast day of any flan year thereafter, to reduce his compensadon
or to forego an increase in his compensation and to contribute the amount of such salary
reduction to the Plan as his Dependent Medical Care premium cost. The term "dependent
medical care premium cost", as used in the Plan, means the employee's cost of the
Dependent Medical Care Coverage.
•
•
,~ipolement
• Accidental Death and Dismemberment Coverage Paytnent
Benefits Under Flexible Benefit Plan
1. p~ose• The purpose of this Supplement is to permit employees to pay
the cost of coverage under the Accidental Death and Dismemberment (AD & D) Insurance
Plan by making salary reduction contributions to the Plan. This supplement constitutes the
AD & D Insurance Plan of the Employer. The benefit provided under this supplement is a
"premium payment benefit." The specific provisions of the AD & D Insurance Plan as set
forth in a contract or policy issued by a company shall be considered a part of the Plan and
incorporated herein by reference.
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in writing on a form filed with
the Plan Administrator on or before the date he fast becomes eligible to participate in the
plan, and on or before the first day of any plan year thereafter, to reduce his compensation
or to forego an increase in his compensation and to contribute the amount of such salary
reduction to the Plan as his AD & D Insurance premium cost. The term "AD & D
Insurance premium cost;' as used in the Plan, means the employee's cost of the Accidental
Death and Dismemberment Insurance coverage.
•
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10
Supplement
• Child and Dependent Care Reimbursement
Benefits Under Flexible Benefit Plan
1. Pu ose• The purpose of this Supplement is to provide for the
reimbursement of certain child and dependent care expenses to employees. This
supplement constitutes the child and dependent expense reimbursement plan of the
Employer. The benefit provided under this supplement is a "reimbursement benefit."
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in writing on a form filed with
the Plan Administrator on or before the date he fast becomes eligible to participate in the
plan, and on or before the first day of any plan year thereafter, to be reimbursed from the
Employer for child and dependent care costs (as deffined in paragraph 3) incurred during
that year with respect to him and to his family unit (as defined in paragraph 4) to the extent
that such costs do not exceed an amount equal to the lesser of:
(a) the total child and dependent care costs paid by the employee and
attributable to child and dependent care services rendered during that plan year and
regardless of whether such costs are paid by the employee during such plan year;
or
(b) the amount allocated by the participant to this benefit.
• 3. o t The term "child and dependent care costs," as used in the Plan,
means amounts paid by the employee for child and dependent care for in-house or on-site
day care for at-home day care provided by third parties meeting applicable state law
requirements and the qualifications set forth in Section 44A of the Code. In no event shall
child and dependent care costs include costs for any person not included within the
meaning of "qualifying individual" as defined in Section 44A (c) (1) of the Code.
4. Manner of Makine~yments_ As of the last day of each month, the
Employer shall reimburse each employee for the portion of the child and dependent care
costs that is payable to him under paragraph 2, provided that the Plan Administrator
receives evidence acceptable to it that such child and dependent care costs have been paid
by the employee or any other member of the family unit and the Plan Administrator receives
a signed statement from the employee that he has not and will not in the future deduct such
costs as expennes on his individual Federal or state income tax returns.
5. Non-duolication of Benefits. An employee shall not be reimbursed for
child and dependent care costs under this Plan to the extent that such costs are paid to or for
the benefit of the employee, or to or for the benefit of any individual included in his family
unit, under the provisions of any other Plan.
•
11
Supplement
• Hospital Indemnity Coverage Payment
RenPfits Under Flexible Benefit Plan_
1. Purpose. The purpose of this Supplement is to permit employees to pay
the cost of coverage under the Hospital Indetnity Insurance Plan by making salary
reduction contributions to the Plan. This supplement constitutes the Hospital Indemnity
lnsurance Plan of the Employer. The benefit provided under this supplement is a
"premium payment benefit." The specific provisions of the Hospital Indemnity Insurance
Plan as set forth in a contract or policy issued by a company shall be considered a part of
the Plan and incorporated herein by reference.
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee tray elect in writing on a form filed with
the Plan Administrator on or before the date he fast becomes eligible to participate in the
plan, and on or before the first day of any plan year thereafter, to reduce his compensation
or to forego an increase in his compensation and to contribute the amount of such salary
reduction to the Plan as his Hospital Indemnity Insurance premium cost. The term
"Hospital Indemnity Insurance premium cost," as used in the Plan, means the employee's
cost of the Hospital Indemnity Insurance coverage.
•
•
12
Sup In ement
• Vision Coverage Payment
Benefits Under Flexible Benefit Plan
1. Pufpose• The purpose of this Supplement is to permit employees to pay
the cost of coverage under the Vision Plan by malting salary reduction contributions to the
Plan. This supplement constitutes the Vision Plan of the Employer. The benefit provided
under this supplement is a "premium payment benefit." The specific provisions of the
Vision Plan as set forth in a contract or policy issued by a company shall be considered a
part of the Plan and incorporated herein by reference.
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in writing on a form filed with
the Plan Administrator on or before the date he first becomes eligible to participate in the
plan, and on or before the first day of any plan year thereafter, to reduce his compensation
or to forego an increase in his compensation and to contribute the amount of such salary
reduction to the Plan as his Vision Plan premium cost. The term "Vision Plan premium
cost," as used in the Plan, means the employee's cost of the Vision Plan coverage.
•
•
13
Supplement
• Health Expense Reimbursement
Rrnrfit~ lJnder Flexible Benet`it Plan
1. Purpose. The purpose of this Supplement is to provide for the
reimbursement of certain medical, dental, and vision expenses to employees. This
supplement constitutes the medical/dental vision reimbursement plan of the Employer. The
benefit provided under this supplement is a "reimbursement benefit."
2. Amount of Premium Payment Benefit. Subject to the conditions and
limitations of the Plan, each year each employee may elect in wnang on a form filed with
the Plan Administrator on or before the date he fast becomes eligible to participate in the
plan, and on or before the first day of any plan year thereafter, to be reimbursed from the
Employer for health care costs (as deffined in paragraph 3) incurred during that year with
respect to him and to his family unit (as defined in pazagraph 4) to the extent that such costs
do not exceed an amount equal to the lesser of:
(a) the total health care costs paid by the employee and attributable to
health services rendered during that plan year and regardless of whether such costs
are paid by the employee during such plan year, or
(b) the amount allocated by the participant to this benefit.
3, Health Care Coctc The term "health care costs," as used in the Plan,
• means amounts paid by the employee because of deductible amounts, coinsurance
provisions, exlusions from coverage or as a result of any other provision of the Employer's
health caze plan to the extent that such amount, if paid or reimbursed under such plans,
would be excluded from the employee's taxable income. In no event shall health care costs
include any item which is not included within the meaning of "medical care" as defined in
Section 213 (d) of the Code for the employee and his family unit.
4. Family Unit. The term "family unit," as applied to any~articipant, means
the employee, his spouse and such of his children as are dependents wtth the meaning of
the Employer's health care plan.
5. Manner of Making Payments As of the last day of each month, the
Employer shall reimburse each employee for the protion of his family unit's health caze
costs that is payable to him under paragraph 2, provided that the Plan Administrator
receives evidence acceptable to it that such health care costs have been paid by the employee
or any other member of the family unit and the Plan Administrator receives a signed
statement from the employee that he has not and will not in the future deduct such costs as
expenses on his individual Federal or state income tax returns.
6. Non-duplication of Benefits An employee shall not be reimbursed for
health care costs under this Plan to the extent that such costs are paid to or for the benefit of
any individual included in his family unit, under the provisions of any
other Plan.
• ~
14
C
C
M~CREARY CORPORATION
November 18,1992
Shaukat Khan, Finance Director
Village of North Palm Beach
501 U. S. Highway #1
North Palm Beach, FL 33408
Re: IRS Section 125 Cafeteria Plan
Dear Mr. Khan:
This letter will confirm our recent discussions concerning a Cafeteria Plan for the
employees of the Village of North Palm Beach.
We have reviewed the current costs of dependent care and it appears that the
Cafeteria Plan will save a total of $24,000 between the Village and your
employees. We calculated this amount by taking one half of the annual cost for
dependent medical coverage. This amounts to approximately $80,000. The
Village will save the cost of Social Security matching funds and the employees
will save the same amount as well as federal income tax. Using 7.65% for Social
Security and 15% for income taxes, the Village is looking at a savings of 7.65% of
that amount and the employee is looking at a savings of 22.65% of the dollars
spent in the Cafeteria Plan.
This is the minimal amount of savinQS just considering your dependent health
insurance costs. The Village and the employee will also save on any other funds
which pass through the plan. We will convert your existing payroll deduction
plans as well as offer your employees additional tax free benefits such as life
insurance for the employee and their dependents; accidental death and disability
insurance for the employee and their families; dental insurance; cancer insurance;
disability income insurance; vision and eye care plans. In addition to these
products permitted by law to be offered under the Cafeteria Plan, you will also
have available for all of your employees both a medical reimbursement plan and
a dependent care plan. These latter will enable the employee to pay deductible
and other out-of-pocket medical expenses using pretax dollars as well as to pay
for dependent care expenses using pretax dollars. Any additional funds through
these programs will also result in the tax savings described above to both the
Village and the employee.
700 Central Parkway, Stuart, Florida 34994 • (407) 287-7650 • FAX (407) 287-1387
Shaukat Khan, Finance Director
November 18,1992
Page 2
•
We will provide you with a Plan Document and sample forms in a separate
mailing. We plan to meet with your Department Heads prior to the time we
meet with your employees for enrollment in the plan. We will also provide you
with a detailed explanation of the plan to be furnished to each employee prior to
the enrollment period.
We recommend that you begin the plan on January 1 so that the plan year
corresponds with your medical plan calendar year deductible. This will facilitate
employees selecting amounts to be included in their reimbursement and
dependent care accounts. The total rnsts for administrative services to the
Village will be approximately $1,800 per year.
We look forward to working with you in this regard. Please call if you need
additional information prior to the above mentioned meetings.
Very truly yours,
William T. McCreary
• WTM/pjs
• i p,,,i