Loading...
AG 12-061RETURN TO: Carol McNeilly EXT: 2540 CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM 1. ORIGINATING DEPTJDN: HR 2. ORIGINATING STAFF PERSON: JEAtv STANt,EY EXT: 2532 3. DATE REQ. BY: TYPE OF DOCUMENT (CHECK ONE): ❑ CONTRACTOR SELECTION DOCUMENT (E.G., RFB, RFP, RFQ) ❑ PUBLIC WORKS CONTRACT ❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT � PROFESSIONAL SERVICE AGREEMENT ❑ MAINTENANCE AGREEMENT ❑ GOODS AND SERVICE AGREEMENT ❑ HUMAN SERVICES / CDBG ❑ REAL ESTATE DOCUMENT ❑ SECURITY DOCUMENT �E.G. BOND RELATED DOCUMENTS) ❑ ORDINANCE ❑ RESOLUTION � �ONTRACTAMENDMENT (AG#):_ �,-��� _ ❑ INTERLOCAL ❑ OTHER S. PROJECT NAME: FLEXIBLE BENE$IT PLAN ADMINISTRATION 6. NAME OF CONTRACTOR: FLEX PLAN SERVICES [tvC ADDRESS: TELEPHONE E-MAIL: FAX: SIGNATURE NAME: TITLE EXHIBITS AND ATTACHMENTS: ❑ SCOPE WORK OR SERVICES ❑ COMPENSATION � INSURANCE REQUIREMENTS/CERTIFICATE ❑ ALL OTHER REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN � REQUIRED LICENSES ❑ PRIOR CONTRACT/AMENDMENTS 8. TERM: COMMENCEMENT DATE: COMPLETION DATE: 9. TOTAL COMPENSATION $ (INCLUDE EXPENSES AND SALES TAX, IF ANY� (IF CALCULATED ON HOURLY LABOR CHARGE -ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES) REIMBURSABLE EXPENSE: ❑ YES ❑ NO IF YES, MAXIMUM DOLLAR AMOUNT: $ IS SALES TAX OWED ❑ YES ❑ NO IF YES, $ PAID BY: D CONTRACTOR ❑ CITY ❑ PURCHASING: PLEASE CHARGE TO: (� I �. � 51 l� � ZO" � I I� 10. DOCUMENT/CONTRACT REVIEW INITIAL / DATE REVIEWED INITIAL ! DATE APPROVED ❑ PROJECT MANAGER ❑ DIRECTOR ❑ RISK MANAGEMENT (�F,�PL[C.�BL�) O LAW 11. COUNCIL APPROVAL (IF APPLICABLE) COMMITTEE APPROVAL DATE: COUNCIL APPROVAL DATE: 12. CONTRACT SIGNATURE ROUTING O SENT TO VENDOR/CONTRACTOR DATE SENT: DATE REC'D: ❑ ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE, LICENSES, EXHIBITS INITIAL / DATE SIGNED ❑ LAW DEPARTMENT � SIGNATORY ( AYO R DIRECTOR� ❑ CITY CLERK � ASSIGNED AG# AG# � �� -,� � � SIGNED COPY RETURNED DATE SENT: �,.�, �� � COMMENTS: 11/9 CITY OF FEDERAL WAY FLEXIBLE SPENDING ARRANGEMENT CLARIFYING AMENDMENT ARTICLE I PREAMBLE I.1 Adoprion and effective date of amendment. The Employer adopts this Amendment to the CITY OF FEDERAL WAY FLEXIBLE SPENDING ARRANGEMENT (the "Plan") to clarify processes, procedures, and tin►elines of the claims appeal process. This Amendment shall be effective upon the effective date. 1.2 Supersession of inconsistent umvisions. This Amendment shall supersede the provisions of the Plan to the extent those pmvisions aze inconsistent with the provisions of this Amendment. ARTICLE ll EFFECTIVE DATE 2.1 Effective Date, This Amendment is effective February 24, 2012. ARTICLE llI GENERAL RULES 3.1 Clarification of Flexible ,S�d'mg Arrangement A�peals Process Procedures. and Timelines. If a day care or health care flexible spending arrangement claim is denied in whole or in �rt, t6e participant will receive written notification. The notification will include the reason(s) for the denial, a descriprion of any additional information needed to process the claim, and an explanation of the claims procedur�e. The participant has 180 days after receipt of the denial to snbmit a written request for reconsiderarion of the denial to the claims adminish�ator. Any request may include documents or records in support of the appeal and the participant may review pertinent documents and submit issues and comments in writing. The claims administrator will review the appeal and provide, within 30 days, a written response (extended by reasonable time if necessary). In this response, the claims administrator will explain the reason for the decision, with reference to the provisions of the Plan on which the decision is based, if necessary. If the participant disagrees with the level one appeal decision they may submit a request for a level two appeal to be determmed by the Empioyer. The request for level two appeal must be submitted within 60 days of receipt of the level one denial notice. The participant will be notified with the final decision within 30 days after the Employer receives the appeal (extended by reasonable time if necessary). The Employer has the exclusive right to interpret the appropriate Plan provisions. I�cisions of the Employer are conclusive and binding. Both level one and level two appeals must be submitted by written request by email, fax, or mail to Flex Plan. The participant must indicate either level one or two appeal on the email, fax, or letter. Email: claims@flex-plan.com Fax: 425-451-�002 or 866-535-9227 Mail to: Flex-Plan Services, PO Box 53250, Bellewe WA 98015. This Amendment has been executed � oL01�, (date signed) Name of Em yer ' By SIGNATURE OF LOYER WI ORITY TO ADOPT � 2012 Flat-Plan Services, Inc. CERTIFICATE OF ADOPTING RESOLUTION The Fxnployer hereby certifies that the following resolutions were adopted by the Employer on February 24, 2012 and that such resolutions have not been modified or rescinded as of the date hereof; RESOLVED, that this Amendment to the CITY OF FEDERAL WAY FLEXIBLE SPEND�NG ARRANGEMENT effective February 24, 2012 presented to this meeting is hereby approved and adoptod and t�e Employer is hereby authorized and directed to execute and deliver one or more counterparts of the Amendment. RESOLVED, that because this is a clarifying amendment the Employer may notify employets of the adoption of this Amendment to the Plan by delivering to each empioyee the Participant Communication presented to this meeting, which form is hereby appcoved. The undersigned further certifies that attached hereto, are true copies of this Amendment W the Plan and the Participant Communication approved and adopted in the foregoing resolutions. �� �/ I�i �1� . � � I � � � - Date: � � 2 5 � � �.Z PARTICIPANT COMMUNICATION for the CITY OF FEDERAL WAY FLEXIBLE SPENDING ARRANGEMENT February 24, 2012 (Date Signed) (1) GerreraL This communication has information regazding the CITY OF FEDERAL WAY FLEXIBLE SPENDING ARRANGEMENT (the "Plan"). 7t�is Participant.Communication supplements the Summary Plan Description ("SPD") previously provided w you. (2) G7a��cation ojFlexib[c Spcndheg Anangement Appeals Process, Procedures, and T�nuline�. If a day caze or health care ctaim under the Plan is denied in whole or in part, you wi11 receive written notification. The notification will include the reason(s) for the denial, with reference to the specific provisions of the Plan on which the denial was based, a description of any additional information needed to process the clann and an explanation of the claims review procedure. You must submit a written request for reconsideration of the deaial to the claims administraWr within l80 days after receipt of the denial. Any such request should be accompanied by documents or records in support of your appeal. You may review pertinent documents and subroit issues and comments in writing. The elaims administrator will review the appea) and provide, within 30 days, a written response to the appeal (extended by reasonable time if necessary). In this response, the claim administrator will exptain the reason for the decision, with specific reference to the provisions of the Plan on which the decision is based if necessary. If you disagree with the level one appeal decision you may submit a request for a Ievel two appeal to be determined by the Employer. You must submit your request for level two appeal within 60 days of receipt of the level one denial notice. You will be notified with the fmal decision within 30 days after the Employer receives �e appeal (extended by reasonable time if necessary). The Employer has the exclusive right to interpret the appropriate plan provisions. Decisions of the Administrator are conclusive and binding. You must file both level one and level two appeals by submitting a written request by �ail, fax, or mail to Flex-Plan. Indicate either level one or two appeal on the email, fax, or letter. Email: cisims@flex-plan.com F'ax: 425-451-7002 or 866-535-9227 Mail to: Flex-Plan Services, PO Box 53250, Bellewe WA 98015. RETURN TO: Carol McNeilly EXT: 2540 CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM 1. ORIGINATING DEPT./D1V: 2. ORIGINATING STAFF PERSON: JEAtv STAtv[,EV EXT: 2532 3. DATE REQ. BY: — 4. TYPE OF DOCUMENT (CHECK ONE): ❑ CONTRACTOR SELECTION DOCUMENT (E.G., RFB, RFP, RFQ) ❑ PUBLIC WORKS CONTRACT ❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT �PROFESSIONAL SERVICE AGREEMENT ❑ MAINTENANCE AGREEMENT ❑ GOODS AND SERVICE AGREEMENT ❑ HUMAN SERVICES / CDBG ❑ REAL ESTATE DOCUMENT ❑ SECURITY DOCUMENT (E.G. sorm �L.aTEV �ocu►�rrTS> ❑ ORDINANCE ❑ CONTRACT AMENDMENT (AG#): ❑ OTHER ❑ RESOLUTION � INTERLOCAL 5. PROJECT NAME: FLEXIBLE BENE&IT PLAN ADMINISTRATION 6. NAME OF CONTRACTOR: FLEx rLArr sExvicES irrC ADDRESS: TELEPHONE E-MAIL: FAX: SIGNATURE NAME: TITLE 7. EXHIBITS AND ATTACHMENTS: ❑ SCOnE WORK OR SERVICES ❑ COMPENSATION ❑ INSURANCE REQUIREMENTS/CERTIFICATE ❑ ALL OTHER REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN ❑ REQUIRED LICENSES ❑ PRIOR CONTRACT/AMENDMENTS 8. TERM: COMMENCEMENT DATE: COMPLETION DATE: 9. TOTAL COMPENSATION $ (INCLUDE EXPENSES AND SALES TAX, IF ANY) (IF CALCULATED ON HOURLY LABOR CHARGE -ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES) REIMBURSABLE EXPENSE: ❑ YES ❑ NO IF YES, MAXIMUM DOLLAR AMOUNT: $ IS SALES TAX OWED ❑ YES ❑ NO IF YES, $ PAID BY: O CONTRACTOR O CITY ❑ PURCHASING: PLEASE CHARGE TO: �' I I�' ��� � 2�"' �'�' ID 10. DOCUMENT/CONTRACT REVIEW INITIAL / DATE REVIEWED INITIAL / DATE APPROVED ❑ PROJECT MANAGER ❑ DIRECTOR � RISKMANAGEMENT (iF.a�rLicasLE) ❑ LAW 11. COUNCIL APPROVAL (IF APPLICABLE� COMMITTEE APPROVAL DATE: COUNCIL APPROVAL DATE: 12. CONTRACT SIGNATURE ROUTING ❑ SENTTO VENDOR/CONTRACTOR DATE SENT: DATE REC'D: ❑ ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE, LICENSES, EXHIBITS INITIAL / DATE SIGNED ❑ LAW DEPARTMENT �SIGNATORY �MAYOR OR DIRECTOR� � d� ,C,ri �'i7, Cdt � vT �tn C/�� � ,�,7�t/hJ/Z ❑ CITY CLERK '� ASSIGNED AG# AG# I 'O(Q SIGNED COPY RETURNED DATE SENT: ��r J� COMMENTS: I1/9 CITY OF FEDERAL WAY CAFETERIA PLAN AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED fOR CITY OF FEDERAL WAY CopyrigM 2010 SunGard Ali Rights Reserved CITY OF FEDERAL WAY CAFETERIA PLAN TABLE OF CONTENTS ARTICLE t DEFINITIONS ARTiCLE II PARTICIPATiON 2.1 ELIGIBILITY ............................................................�...................................................... 2.2 EFFECTIVE DATE OF PARTICIPATfON ....................................................................... 2.3 APPLICATION TO PARTICIPATE .............................................................................:... 2.4 TERMINATION (OF PARTICIPATION .........................................:.................................. 2.5 TERMINATION OF EMPLOYMENT ................................................ ...............................5 2.6 DEATH ........................................................................................................................... � ARTICLE III CONTRIBUTIONS TO THE PLAN 3.1 SALARY REDIRECTtON ............................................................................................... 3.2 APPLICATION OF CONTRIBUTtONS ...........................................:............................... 3.3 PERIODIC CONTRIBUTIONS ....................................................................................... ARTICIE IV BENEFITS 4.1 BENEFIT OPTIONS ....................................................................................................... 4.2 HEALTH FLEXIBLE SPENDING ARRANGEMENT BENEFIT ........................................7 4_3 DAY CARE FLEXIBLE SPENDING ARRANGEMENT BENEFIT ...................................7 4.4 HEALTH INSURANCE BENEFIT .........................................••-....................................... 4.5 NONDISCRIMINATION REQUIREMENTS .................................................................... ARTICLE V PARTICIPANT ELECTIONS 5.1 INITIAL ELECTIONS ...................................................................................................... 5.2 SUBSEQUENT ANNUAL ELECTIONS .......................................................................... 5.3 FAILURE TO ELECT ...................................................................................................... 5.4 CHANGE 1N STATUS .......................................................:............................................ ARTICLE VI HEALTH FLEXIBLE SPENDING ARRANGEMENT 6.1 ESTABLISHMENT OF PLAN ....................................................................................... 6 .2 DEFINITIONS ..............................................................................................................13 6.3 FORFEITURES ............................................................................................................13 6.4 LIMITATION ON ALLOCATIONS .................................................................................14 6.5 NONDISCRIMfNATION REQUIREMENTS ............................... .............14 ...................... 6.6 COORDINATtON WITH CAFETERIA PLAN ...................... ........•..14 ............................... 6.7 HEALTH FLEXIBLE SPENDING ARRANGEMENT CLAIMS .......................................14 6.8 DEBIT AND CREDIT CARDS ................................ ..............15 ........................................ ARTICLE VI! DAY CARE FLEXIBLE SPENDING ARRANGEMENT 7.1 ESTABUSHMENT OF BENEFIT ..................................................................................17 7.2 DEFINITIONS .................................. ....17 ........................................................................ 7.3 DAY CARE fLEXiBLE SPENDiNG ACCOUNTS .........................................................18 7.4 INCREASES 1N DAY CARE FLEXIBLE SPENDING ACCOUNTS ...............:...............18 7.5 DECREASES IN DAY CARE FLEXIBLE SPENDING ACCOUNTS ..............................18 7.6 ALLOWABLE DAY CARE REIMBURSEMENT .............................. ........18 7.7 ANNUAL STATEMENT OF BENEFITS ........................................................................19 7.8 FORFE�TURES ............................................................................................................19 7.9 LfMtTATION ON PAYMENTS ...................... .................... ....19 ............ ............................ 7.10 NONDISCRIMINATION REQUIREMENTS ..................................................................19 7.11 COORDINATION WlTH CAFETERIA PLAN ................................................................20 7.12 DAY CARE FLEXIBLE SPENDING ARRANGEMENT CLAIMS ...................................20 ARTICLE VIII BENEFITS AND RIGHTS 8.1 8.2 CLAIM FOR BENEFITS ................................................................. .....21 ......................... APPLICATtON OF BENEFIT PLAN SURPLUS ............................................................22 ARTIClE IX ADM{NISTRATiON 9.1 9.2 9.3 9.4 9.5 PLAN ADMINISTRATION ............................................................................................23 EXAMINATION OF RECORDS .........................•--........................................................23 PAYMENT OF EXPENSES ..........................................................................................23 INSURANCE CONTROL CLAUSE ...............................................................................24 INDEMNIFICATION OF ADMINISTRATOR .................................... ........24 ..................... ARTICLE X AMENDMENT OR TERMINATION OF PLAN 10 .1 AMENDMENT ......:.......................................................................................................24 10.2 TERMINATION ARTICLE XI MISCELLANEOUS 11.1 11.2 11.3 11.4 1?.5 11.6 11.7 11.8 11.9 11.10 11.11 71.12 11.13 11.14 11.15 11.'i6 11.17 11.18 11.19 .................................................. .. .24 PLAN INTERPRETATiON ............................................................................................25 GENDER AND NUMBER .............................................................................................25 WRITTENDOCUMENT ...............................................................................................25 EXCLUSfVE BENEFIT .................................................................................................25 PARTICIPANTS RIGHTS ............................................................................................25 ACTION BY THE EMPLOYER .....................................................................................25 NO GUARANTEE �F TAX CONSEQUENCES ............................................................25 INDEMNIFICi4TION OF EMPLOYER BY PARTICIPANTS ...........................................26 FUNDING....................................................:................................................................26 GOVERNINGLAW ......................................................................................................26 SEVERABlLITY............................................................................................................26 CAPTI .............. .....................................................................................................26 FAMILY AND MEDICAL LEAVE ACT (FMLA) ..............................................................26 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA)...........26 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) ...................................................................................................................27 COMPLIANCE WtTH HIPAA PRtVACY STANDARDS .................................................27 COMPLIANCE WITH HIPAA ELECTRONIC SECURITY STANDARDS .......................29 MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT .......................................29 GENETIC INFORMATION NONDISCRIMINATION ACT (GiNA) .................................29 CITY OF FEDERAL WAY CAFETERIA PLAN INTRODUCTION The Employer has amended this Pfan effective January 1, 2010, to recognize the contribution made to the Employer by its Emptoyees. Its purpose is to reward them by providing benefits for those Employees who shall qualify hereunder and their Dependents and beneficiaries. The concept of this Plan is to atlow Emp{oyees to choose among different types of benefits based on their own particular goals, desires and needs. This Plan is a restatement of a Plan which was originally effective on January 1, 1994. The Pian shall be known as Cityof Federal Way Cafeteria Plan (the "Plan"). The intention of the Employer is that the Pfan qual'�fy as a"Cafeteria Plan" within the meaning of Section 125 of the Intemal Revenue Code of 1986, as amended, and that the benefits which an Employee elects to receive under the Plan be excludable from the Employee's income under Section 125(a) and other applicable sections of the Intemal Revenue Code of 1986, as amended. The Employer also intends that, for purposes of the annual report requirement (Form 5500), this document is considered a"wrap" plan and the terms of the underlying plans for which Participants are making contributions through this Plan are hereby incorporated by reference. ARTICLE I DEFINITIONS 1.1 "Administrator" means the individual(s) or corporation appointed by the Employer to carry out the administration of the Plan. The Employer shall be empowered to appoint and remove the Administrator from time to time as it deems necessary for the proper administration of the Plan. In the event the Administrator has not been appointed, or resigns from a prior appointment, the Employer shail be deemed to be the Administrator. 1.2 "Affiliated Employer" means the Employer and any corporation which is a member of a controlled group of corporations (as defined in Code Section 414(b)) which includes the Employer; any trade or business (whether or not incorporated) wtiich is under common control (as defined in Code Section 414(c}) with the Employer; any organizat�n (whether or not incocporated) which is a member of an affiliated service group (as defined in Code Section 414(m)) which includes the Employer; and any other entity required to be aggregated with the Employer pursuant to Treasury regulations under Code Section 414(0). 1.3 "BenefiY' or "Benefit Options" means any of the optional benefit choices available to a Participant as outlined in Section 4.1. 1.4 "Cafeteria Plan Benefit Dollars" means the amount available to Participants to purchase Benefit Options as provided under Section 4.1. Each dolfar contributed to this Plan shall be converted into one Cafeteria Plan Bene�t Dotlar. 1.5 "Code" means the Intemal Revenue Code of 1986, as amended or replaced from time to time. 1.6 "Compensation" means the amounts received by the Participant from the Employer during a Plan Year. 1.7 "DependenY' means any individual who quafifies as a dependent under the self-funded plan for purposes of that plan or under Code Section 152 (as modified by Code Section 105(b)). The requirement that a Dependent child have full-time student status in order to extend coverage past a stated age will generally not apply if the child's failure to maintain fufl-time status is due to a medicalty necessary leave of absence or other change in enrollment (such as reduction of hours). If the child's treating physician certifies in w�iting that the child is suffering from a serious itlness or injury, and that the leave of absence or other change in enrollment is medically necessary, coverage may continue for up to a year after the date the medically necessary leave of absence or other change in enrollment begins. To be eligible for the extension, the chitd must be enrolled in the Ptan as a full-time student immedrately before the first day of the medically necessary leave of absence. This extension of coverage continues to apply if the manner of providing coverage under the Plan changes (such as from setf-funded to fully insured) if the changed coverage continues to provide coverage for dependent children. However, this extension does not extend coverage beyond the date that a child fails to meet the dependent eligibility requirements other than the requirement to be a full-time student. Except for a student who is on a medically necessary leave of absence, full-time student coverage continues between semester/quarters only if the student is enrolled as a full-time student in the next regular semester/quarter. If the student is not enrolled as a full-time student, coverage witl be terminated retroactively to the tast day of the attended schoolterm. Notwithstanding anything in the Plan to the contrary, the Plan will compiy with Michelle's Law. 1.8 "Effective Date" means January 1, 1994. 1.9 "Election Period" means the period immecfiately preceding the beginning of each Plan Year established by the Administrator, such period to be applied on a uniform and nondiscriminatory basis for all Employees and Participants. However, an Employee's initiat Election Period shalf be determined pursuant to Section 5.1. 1.10 "Eligible Employee" means any Employee who has satisfied the provisions of Section 2.1. An individual shal! not be an "Eligible Emptoyee" if such individual is not reported on the payroll records of the Employer as a common law employee. In particuiar, ii is expressly intended that individuals not treated as common law employees by the Employer on its payroll records are not "Eligible Employees" and are excluded from Plan participation even if a court or administrative agency determines that such individuals are common law employees and not independent contractors. 1.11 "Employee" means any person who is employed by the Employer. The term Employee shall include leased employees within the meaning of Code Section 414(n)(2). 1.12 "Employer" means City of federal Way and any successor which shatl maintain this Plan; and any predecessor which has maintained this Plan. In addition, where appropriate, the term Employer shall include any Participating, Affiliated or Adopting Employer. 1.13 "Grace Period" means, with respect to any Plan Year, the time period ending on the fifteenth day of the third calendar month after the end of such Plan Year, during which Medical F:� Expenses and Employment-f�elated Day Care Expenses incurred by a Participant wili be deemed to have been incurred during such Plan Year. 1.14 "Insurance Contract" means any contract issued by an Insurer undervuriting a Benefit. 1.15 "Msurer" means any insurance company that underwrites a Benef'd under this Plan or with respect to any self-funded benefits, the Employer. 1.16 "Key Employee" means an Employee described in Code Section 416(ix1) and the Treasury regulations thereunder. 1.17 Participant means any Eligible Employee who elects to become a Participant .. „ pursuant to Section 2.3 and has not for any reason become ineligible to participate further in the P{an. 1.18 "Plan" means this instn�ment, including all amendments thereto. 1.19 "Plan Year" means the 12-month period beginning January 1 and ending December 31. The Plan Year shall be the coverage period for the Benefits prov�ded for under this I'lan. In the event a Participant commences participation during a Plan Year, then the initial coverage period shall be that portion of the Plan Year commencing on such Participant's date of entry and ending on the last day of such Plan Year. 1.20 "Premiums" mean the Participant's cost for the self-funded Benefds described in Section 4.1. 1.21 "Premium Conversion Benefit" means the benefit established for a Participant pursuant to this Ptan to which part of his Cafeteria Ptan Benefit Dotlars may be allocated and from which Premiums of the Participant shall be paid or reimbursed. 1.22 "Salary Redirection" means the contributions made by the Employer on behatf of Participants pursuant to Section 3.1. These contributions shail be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Ptan pursuant to the Participants' elections made under Article V. 1.23 "Salary Redirection Agreement" means an agreement between the Participant and the Employer under which the Participant agrees to reduce his Compensation or to forego al{ or part of the increases in such Compensation and tv have such amounts contributed by the Employer to the Plan on the Participant's behalf. The Salary Redirection Agreement shall apply only to Compensation that has not been actually or constructively received by the Participant as of the date of the agreement (after taking this Plan and Code Section 125 into benefit) and, subsequently does not become currently available to the Participant 1.24 "Spouse" means "spouse" as defined in the self-funded plan for purposes of that plan or the legally married husband or wife of a Participant, unless legally separated by court decree. 3 ARTICLE II PARTICIPATION 2.1 EUGIBlLITY Any Eligibie Employee shali be eligible to participate hereunder as of the date he satisfies the eligibility conditions for the Employer's group medical plan, the provisions of which a�e specifically incarporated'herein by reference. However, any Eligible Employee who was a Participant in the Plan on the effective date of this amendment shall continue to be eligible to participate in the Plan. 2.2 EFFECTIVE DATE OF PARTIGIPATION An Eligible Employee shall become a Participant effective as of the first day of the month coinciding with or next following the date on which he met the eligibility requirements of Section 2.1. . 2.3 APPUCATlON TO PARTICIPATE �4n Employee who is eligible to participate in this Plan shall, during the applicable Election Period, complete an application to participate and election of benefits form which the Administrator shall furnish to the Employee. The election made on such foRn shall be irrevocable until the end of ihe applicable Plan Year unless the Participant is entitleci to change his Benefit elections pursuant to Section 5.4 hereof. An E{igible Employee shalt also be required to execute a Salary Redirection Agreement during the Election Period for the Ptan Year during which he wishes to participate in this Plan. Any such Salary Redirection Agreement shall be effective for the first pay period beginning on or after the Employee's eifective date of participation pursuaM to Section 22. Notwithstanding the foregoing, an Employee who is eligible to participate in this Plan and who is covered by the Employer's insured or self-funded Benefits under this Plan shall automatically become a Participant to the extent of the Premiums for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan. 2.4 TERMINATION OF PARTICIPATION A Participant shail no longer participate in this Plan upon the occurrence of any of the following events: � (a) Termination of employment. The Participant's termination of employment, subject to the provisions of Section 2.5; (b) Death. The Participant's death, subject to the provisions of Section 2.6; or (c) Termination of the plan. The termination of this Plan, subject to the provisions of Section 10.2. 4 2.5 TERMINATION OF EMPLOYMENT If a Participant's employment with the Employer is terminated for any reason other than death, his participation in the Benefit Options provided under Section 4.1 shall be governed in accordance with the following: (a) lnsurance Benefit. With regard to Benefits provided under Section 4.1, the Participant's participation in the Plan shalt eease, subject to the ParticipanYs right to continue coverage under any Insurance Contract or self-funded benefit for which premiums have already been paid. (b) Day Care FSA. With regard to ihe Day Care Flexible Spending Arrangement, the ParticipanYs participation in ihe Plan shall cease and no further Satary Redirection contributions shall be made. However, such Participant may submit claims for employment related Day Care Expense reimbursements for claims incurred through 4he remainder of the Plan Year in which such termination occurs and submitted within 90 days after the end of the Plan Year, based on the level of the Participant's Day Care Flexible Spending Arrangement as of the date of termination. (c) Health FSA With rega�d to the Health Flexible Spending Arrangement, the Participant may etect to continue his participation in the Plan. (i) If the Participant elects to continue participation in the Heafth Ftexible Spending Arrangement for the remainder of the Plan Year in which such termination occurs, the Participant may continue to seek reimbursement from the Health Flexible Spending Arrangement. The Participant shall be required to make contributions to the fund based on the elections made prior to the beginning of the Plan Year. (2) If the Participant does not elect to continue participation in the Health Flexible Spending Arrangement for the remainder of the Plan Year in which such termination occurs, the ParticipanYs participation in the Ptan shalt cease and no further Salary Redirection contributions shall be made. However, such Participant may submit clairns for expenses that were incurred during ihe portion of the Plan Year before the end of the period for which payments to the Health Flexible Spending Arrangement have atready been made for claims incurrect up to ihe date of termination and submitted within 90 days after the end of the Plan Year. (d) Health FSA treatment. In the event a Participant terminates his participation in the Health ffexible Spending Arrangement during the Plan Year, if Salary Redirections are made other than on a pro rata basis, upon termination the Participant shall be entiNed to a reimbursement for any Salary Redirection previously paid for coverage or benefits relating to the period after the date of the Participant's separation from service regardless of the Participant's claims or reimbursements as of such date. 2.6 DEATH If a Participant dies, his participation in the Plan shall cease. However, such Participant's spouse or Dependents may submit claims for expenses or benefits for the remainder of the Plan Year or until the Cafeteria Plan Benefit Dollars alloCated to each specific benefit are exhausted. In no event may reimbursements be paid to someone who is not a spouse or Dependent. 5 ARTICLE III CONTRIBUTIONS TO THE PLAN 3.1 SALARY REDIRECTION Benefits under the Plan shal! be �nanced by Salary Redirections sufficient to support Benefits that a Participant has elected hereunder and to pay the Participant's Premiums. The salary administration program of the Employer shall be revised to aliow each Participant to agree to reduce his pay during a Plan Year by an amount determined necessary to purchase the elected Bene�t Options. 7he amount of such Satary Redirection shall be specified in the Salary Redirection Agreement and shall be applicable for a Plan Year. Notwithstanding the above, for new Participanis, the Salary Redirection Agreement shall only be applicable from the first day of the pay period following the Employee's entry date up #o and including the last day of the Plan Year. These contributions shall be converted to Cafeteria Plan Benefit Dollars and allocated to the funds or accounts established under the Plan pursuant to the Participants' elections made under Article V. Any Salary Redirection shall be determined prior to the beginning of a Plan Year (subject to initial elections pursuant to Section 5.1) and prior to the end of the Election Period and shall be irrevocable for such Plan Year. However, a Participant may revoke a Benefd election or a Saiary Redirection Agreement after the Plan Year has commenced and make a new election with respect to the remainder of the Plan Year, if both the revocation and the new election are on account of and consistent with a change in status and such other permitted events as determined under Article V of the Plan and consistent with the rules and regulations of the Department of the Treasury. Salary Redirection amounts shall be contributed on a pro rata basis for each pay period during the Ptan Year. �All individual Salary Redirection Agreements are deemed to be part of this Plan and incorporated by reference hereunder. 3.2 �PLICATION OF CONTRIBUTIONS As soon as reasonably practical after each payroll period, the Empioyer shatl apply the Salary Redirection to provide the Benefrts elected by the affected Participants. Any contribution made or withheld for the Health Flexible Spending Arrangement or Day Care Flexible Spending Arrangement shall be credited to such fund or benefit. Amounts designated for the ParticipanYs Premium Expense Reimbursement Benefit shall likewise be credited to such benefit for the purpose of paying Premiums. 3.3 PERIODiC CONTRIBUTIONS Notwithstanding the requirement provided above and in other Articles of this Plan that Salary Redirections be contributed to the Plan by the Employer on behalf of an fmployee on a level and pro rata basis for each payroll period, the Employer and Administrator may implement a procedure in which Salary Redirections are contributed throughout the Plan Year on a periodic basis that is not pro rata for each payroll period. However, with regard to the Health Flexible Spending Ar�angement, the payment schedule for the required contributions may not be based on the rate or amount of reimbursements during the Plan Year. In the event Salary Redirections to the Health Flexible Spending Arrangement are not made on a pro rata basis, upon termination of participation, a Participant may be entitled to a refund of such Salary Redirections pursuant to Section 2.5. 0 ARTICLE IV BENEFITS 4.1 BENEFIT OPTIONS Each Participant may elect any one or more of the fol{owing optional Benefits: (1) Health Fiexibte Spending Arrangement (2) Day Care Flexible Spending Arrartgement In addition, each Participant shall have a sufficient portion of his Salary Redirections applied to the following Benefits untess the Participant elects not to receive such Benefits: (3) Health Insurance Benefit 4.2 HEALTH FLEXIBLE SPENDING ARRANGEMENT BENEFIT Each Participant may elect to participate in the Health flexible Spending Arrangement option, in which case Article VI shatl apply. 4.3 DAY CARE FLEXIBLE SPENDING ARRANGEMENT BENEFIT Each Participant may eleet to participate in the Day Care Flexible Spending Arrangement option, in which case Articfe Vlt shall apply. 4.4 HEALTH INSURANGE BENEFIT (a) Coverage for Participant and Dependents. Each Participant may elect to be covered under a health Contract for the Participant, his or her Spouse, and his or her Dependents. (b) Individuat Insurance Policy. In the event that any Participant shall have existing health insurance protection or desires to obtain altemative health insurance protection, the Administrator, in its sole discretion, may, upon submission of satisfactory proof of payment by the Participant, reimburse the Participant for the cost of ttie alternative insurance protection. This aRemative protection may not inctude the cost of coverage obtained through a Participant's Spouse's emptoyment. (c) Employer selects contracts. The Employer may select suitable health Contracts for use in providing this health insurance benefit, which policies will provide uniform benefits for all Participants electing this Benefit. (d) Contract incorporated by reference. The rights and conditions with respect to 4he benefits payable from such health Contract shalt be determined therefrom, and such Contract shall be incorporated herein by reference. 7 4.5 NONDISCRIMINATION REQUIREMENTS (a) Intent to be nondiscriminatory. it is the intent of this Plan to provide benefits to a classification of employees which the Secretary of the Treasury finds not to be discriminatory in favor of the group in whose favor discrimination may not occur under Code Section 125. (b) 25% concentration test. It is the intent of this Plan not to provide qualified benefits as defined under Code Section 125 to Key Employees in amounts that exceed 25% of the aggregate of such Benefits provided for all Eligible Employees under the Plan. For purposes of the preceding sentence, qualified benefits shall not include benefits which (without regard to this paragraph) are includible in gross income. (c) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination or possible taxation to Key Employees or a group of emptoyees in whose favor discrimination may not occur in violation of Code Section 125, it may, but shall not be required to, reduce contributions or non-taxable Benefits in order to assure compliance with this Section. Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner. If the Administrator decides to reduce contributions or non-taxable Benefits, it shall be done in the following manner. First, the non-taxable Benefits of the affected Participant (either an employee who is fiighly compensated or a Key Employee, whichever is applicable) who has the highest amount of non-taxable Benefits for the Plan Year shall have his non-taxable Benefits reduced until the discrimination tests set forth in this Section are satisfied or until the amount of his non-taxable Benefits equals the non-taxable Benefits of the affected Participant who has the second highest amount of non-taxabte Benefits. This process shall continue until the nondiscrimination tests set forth in this Section are satisfied. With respect to any affected Participant who has had Benefits reduced pursuant to this Section, the reduction shall be made proportionately among Health Flexible Spending Arrangement Benefits and Day Care Flexible Spending Arrangement Benefits, and once all these Benefits are expended, proportionately among setf-funded Benefits. Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited and deposited into the benefit plan surplus. ARTtCLE V PARTIClPANT ELECTfONS 5.1 INITIAL ELECTIONS An Employee who meets the eligibility requirements of Section 2.1 on the first day of, or during, a Plan Year may elect to participate in this Plan for all or the remainder of such'Plan Year, provided he elects to do so on or before his effective date of participation pursuant to Section 2.2. Notwithsfanding the foregoing, an Employee who is eligible to,participate in this Plan and who is covered by the Employer's insured or self-funded benefits under this Plan shalt automatically become a Participant to the extent of the Premiums for such insurance unless the Employee elects, during the Election Period, not to participate in the Plan. � 5.2 SUBSEQUENT ANNUAL ELECTIONS During the fJection Period prior to each subsequent Plan Year, each Participant shall be given the opportunity to elect, on an election of benefits form to be provided by the Administrator, which Spending Arrangement Benefit options he wishes to select. Any such election shaU be effective for any Benefit expenses incurred during the Plan Year which follows the end of the Election Period. With regard to subsequent annual elections, the following options shall appty: (a) A Participant or Employee who failed to initially elect to participate may elect different or new Benefits under the Plan during the Election Period; (b) A Participant may terminate his participation in the Plan by notifying the Administrator in writing during the Election Period that he dces not want to participate in the Plan for the next Plan Year; (c) An Employee who elects not to participate for the Plan Year following the Election Period will have to wa� until the next Election Period before again electing to participate in the Plan, except as provided for in Section 5.4. 5.3 FAILURE TOfLECT With regard to Benefits available under the Plan for which no Premiums apply, any Participant who faits to complete a new benefit eEection form pursuant to Section 5.2 by the end of the applicable Election Period shall be deemed to have elected not to participate in the Plan for the upcoming Plan Year. No further Salary Redirections shall therefore be authorized or made for the subsequent Plan Year for such Benefds. With regard to Benefits available under the Plan for which Premiums apply, any Participant who fails to complete a new benefit election form pursuant to Section 5.2 by the end of the applicable Election Period shaU be deemed to have made the same Benefd elections as are then in effect for the current Plan Year. The Participant shall also be deemed to have elected Salary Redirection in an amount necessary to purchase such Benefd options. 5.4 CHANGE 1N STATUS (a) Change in status defined. Any ParticipaM may change a Benefd election after the Plan Year (to which such election relates) has commenc.�d and make new elections with respect to the remainder of such Plan Year if, under the facts and circumstances, the changes are necessitated by and are consistent with a change in status which is acceptable under rules and regulations adopted by the Department of the Treasury, the provisions of which are incorporated by reference. Notwithstanding anything herein to the contrary, if the rules and regulations conflict, then such rules and regulations shall control. In general, a change in election is not consistent if the change in status is the Participant's divorce, annulment or legal separation from a Spouse, the death of a Spouse or Dependent, or a Dependent ceasing to satisfy the eligibi{ity requirements for coverage, and the Participant's election under the Plan is to cancel accident or heaRh insurance coverage for any individual other than the one involved in such event. In addition, if the Participant, Spouse or Dependent gains or loses eligibility for coverage, then a ParticipanYs election under the Plan to cease or decrease coverage for that individual under the Plan corresponds vvith that change in status ony if coverage for that individual becomes applicable or is increased under the family member plan. 9 Regardless of the consistency requirement, if the individual, the individual's Spouse, or Dependent becomes eligible for continuation coverage under the Employer's group health plan as provided in Code Section 4980B or any similar state law, then the individuai may elect to increase payments under this Plan in order to pay for the continuation coverage. However, this does not apply for COBRA eligibility due to divorce, annulment or legal separation. Any new election shall be effective at such time as fhe Administrator shatl prescribe, but not earlier than the first pay period be9inning after the election form is completed and retumed to the Administrator. For the purposes of this subsection, a change in status shall only include the following events or other events permitted by Treasury regulations: (1) Legal Marital Status: events that change a Participant's legal marital status, including marriage, divorce, death of a Spouse, legal separation or annuiment; (2) Number of Dependents: Events that change a ParticipanYs number of Dependents, including birth, adoption, placement for adoption, or death of a Dependent; (3) Employment Status: Any of the following events that change the empbymeM status of the Participant, Spouse, or Dependen� termination or commencement of employment, a strike or lockout, commenceme� or retum from an unpaid leave of absence, or a change in worksite. In addition, if the eligibility conditions of this Plan or other empbyee benefit plan of the Employer of the Participant, Spouse, or Dependent depend 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 the plan, then that change constitutes a change in employment under this subsection; (4) Dependent satisfies or ceases to satisfy the eligibility requirements: An event that causes the Participant's Dependent to satisfy or cease to satisfy the requirements for coverage due to attainment of age, student status, or any similar circumstance; and (5) Residency: A change in the place of residence of the Participant. Spouse or Dependent, that would lead to a change in status (such as a loss of HMO coverage). for the Day Care Flexible Spending Arrangement, a Dependent becoming or ceasing to be a"Qualifying Dependent" as defined under Code Section 21(b) shall also qualify as a change in status. (b) Special enrollment rights. Notwithstanding subsection (a), the Participants may change an election for accident or health coverage during a Plan Year and make a new election that corresponds with the special enrollment rights provided in Code Section 9801(f), including those authorized under the provisions of the Children's Health Insurance Program Reauthorization Act of 2009 (SCHIP); provided that such Pa�ticipant meets the sixty (60) day notice requirement imposed by Code Section 9801(f) (or such longer period as may be permitted by the Plan and communicated to Participants). Such change shall 10 take place on a prospective basis, uniess otherwise required by Code Section 9801(f) to be retroactive. (c) Qualified Medical Support Order. Notwithstanding subsection (a), in the event of a judgment, decree, or order (including approvat of a property settlement) ("order") resulting from a divorce, legal separation, annulment, or change in legal custody which requires accident or health coverage for a Participant's child (including a foster child who is a Dependent of the Participant): (1) The Ptan may change an election to provide coverage for the child if the order requires coverage under the ParticipanYs plan; or (2) The Participant shall be permitted io change an election to cancel coverage for the chiid if the order requires the former Spouse to provide coverage fo� such child, under that individual's plan and such coverage is actually provideci. (d) Medicare or Medicaid. Notwithstanding subsection (a), a Participant may change elections to cancel accident or heafth coverage for the Participant or the Participant's Spouse or Dependent if the Participant or the Participant's Spouse or Dependent is enrolled in the accident or heafth coverage of the Employer and becomes entitled to coverage (i.e., enrolleci) under Part A or Part B of the Title XVIII of the Social Security Act (Medicare) or Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits unde� Section 9928 of the Social Security Act (the program for distribution of pediatric vaccines). If the Participant or the ParticipanYs Spouse or Dependent who has been entitled to Medicaid or Medicare coverage loses eligibility, that individual may prospectively elect coverage under the Plan if a benefit padcage option under the Plan provides similar coverage. {e) Cost increase or decrease. If the cost of a Benefit provided under the Plan increases or decreases ducing a Plan Year, then the Plan shall automatically increase or decrease, as the case may be, the Salary Redirections of all affected Participants for such Benefit. Altematively, if the cost of a benefd package option increases significantly, the Administrator shall permit the affected Participants to either make corresponding changes in their payments or revoke their elections and, in lieu thereof, receive on a prospective basis coverage under another benefit package option with similar coverage, or drop coverage prospectively if there is no benefit package option with simiiar coverage. A cost increase or decrease refers to an increase or decrease in the amount of elective contributions under the Plan, whether resulting from an action taken by the Participants or an action taken by the Employer. (f) Loss of coverage. if the coverage under a Benefit is significantly curtailed or ceases during a Plan Year, affected Participants may revoke their elections of such Benefit and, in lieu thereof, elect to receive on a prospective basis coverage under another plan with similar coverage, or drop coverage prospectively if no similar coverage is offered. (g) Addition of a new benefit. If, during the period of coverage, a new benefit package option or other coverage option is added, an existing benefit package option is significantly improved, or an existing benefd package option or other coverage option is eliminated, then the affected Participants may elect the newly-added option, or elect another option if an option has been eliminated 11 prospectively and make corresponding election changes with respect to other benefit package options providing similar coverage. In addition, those Eligible Emp{oyees who are not participating in the Plan may opt to become Participants and elect the new or newly improved benefit package option. {h) toss of coverage under certain other plans. A Participant may make a prospective election change to add group health coverage for the • Participant, the Participant's Spouse or Dependent if such individual loses group health coverage sponsored by a govemmental or educationa! institution, including a state children's health insurance program under the Social Securiry Act, the Indian Health Service or a health program offered by an Indian tribai government, a state health benefits risk pool, or a foreign government group health plan. {i) Change of coverage due to change under certain other plans. A Participant may make a prospective election change that is on account of and corresponds with a change made under the plan of a Spouse's, former Spouse's or DependenYs employer if (1) the cafeteria plan or other benefits plan oi the Spouse's, former Spouse's or DependenYs employer permits its participants to make a change; or (2) the cafeteria plan permits participants to make an election for a period of coverage that is different from the period of coverage under the cafeteria plan of a Spouse's, former Spouse's or DependenYs employer. (j) Change in Day Care provider. A Participant may make a prospective election change that is on account of and corresponds with a change by the Participant in the Day Care provider. The availability of Day Care services from a new childcare provider is similar to a new benefit package option becoming available. A cost change is allowable in the Day Care Flexibte Spending Arrangement only if the cost change is imposed by a Day Care provider who is not related to the Participant, as defined in Code Section 152(a)(1) through (8). (k) Health fSA cannot change due to insurance change. A Participant shal! not be permitted to change an election to the HeaRh Flexible Spending Arrangement as a result of a cost or coverage change under any heafth insurance benefits. �nc� vi HEALTH fLEXIBLE SPENDING ARRANGEMENT 8.1 ESTAB�ISHMENT OF PLAN This Health Flexible Spending Arrangement is intended to qualify as a medical reimbursement plan under Code Section 105 and shall be interpreted in a manner consistent with such Code Section and the Treasury regulations thereunder. Participants who elect to participate in this Health Flexible Spending Arrangement may submit claims for the reimbursement of Medical Expenses. All amounts reimbursed shall be periodically paid from amounts allocated to the Health Flexible Spending Arrangement. Periodic payments reimbursing Participants from the Health Ffexible Spending Arrangement shall in no event occur less frequently than monthly. 12 6.2 DEFINITIONS For the purposes of this Article and the Cafeteria Plan, the terms below have the #oilowing meaning: (a) "Hea{th Flexible Spending Arrangement" means the benefit established for Participants pursuant to this Plan to which part of their Cafeteria Plan Benefit Doilars may be atlocated and from which all allowable Medical Expenses incurred by a Participant, his or her Spouse and his or her Dependents may be reimbursed. (b) "Highly Compensated Participant" means, for the purposes of this Article and determining discriminatior� under Code Section 105(h), a participant who is: {1) one of the 5 highest paid officers; (2} a shareholder who owns (or is considered to own applying the rules of Code Section 318) more than 10 percent in value of the stock of the Employer; or (3) among the highest paid 25 percent of all Employees (other than exclusions permitted by Code Section 105(h)(3}(B) for those individuals who are not Participants). (c) Medical Expenses means any expense for medical care within .. » the meaning of the term "medical care" as defined in Code Sect�n 213(d} antl as atlowed under Code Section 105 and the rulings and Treasury reguiatlons thereunder, and not otherwise used by the Participant as a deduction in determining his tax liability under the Code. "Medical Expenses" can be incurred by the Participant, his or her Spouse and his or her Dependents. "Incurred" means, with regard to Medical Expenses, when the Participant is provided with the medical care that gives rise to the Medical Expense and not when the Participant is formally billed or charged for, or pays for, the medical care. A Participant may not be reimbursed for the cost of other health coverage such as premiums paid under plans maintained by the employer of the Participant's Spouse or individual policies maintained by the Participant or his Spouse or Dependent. A Participant may not be reimbursed for "qualified long-term care services" as defined in Code Section 7702B(c). (d) The definitions of Articte I are hereby incorporated by reference to the extent necessary to interpret and apply the provisions of this Health Flexible Spending Arrangement. 6.3 FORFEITURES The amount in the Health Flexible Spending Arrangement as of the end of any Plan Year (and after the processing of all claims for such Plan Year pursuant to Section 6.7 hereof} shall be forfeited and credited to the benefit plan surptus. In such event, the Participant shalt have no further claim to such amount for any reason, subject to Section 8.2. 13 6.4 LIMITATION ON ALLOCATIONS Notwithstanding any provision contained in this Health Flexible Spending Arrangement to the contrary, no more than $5,000 may be allocated to the Health Flexible Spending Arrangement by a Participant in or on account of any Plan Year. 6.5 NONDISCRIMINATION REQUIREMENTS (a) iM�nt to be nondiscriminatory: It is the intent of this Health Flexible Spending Arrangement not to discriminate in violation of the Code and the Treasury regulations thereunder. (b) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination under this Health Flexible Spending Arrangement, it may, but shall not be required to, reject any elections or reduce contributions or Benefits in order to assure compliance with this Section. Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner. If the Administrator decides to reject any elections or reduce contributions or Benefits, it shall be done in the following manner. First, the Benefds designated for the Health Flexible Spending Arrangement by the member of the group in whose favor discrimination may not occur pursuant to Code Section 105 that elected to contribute the highest amount to the fund for the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section or the Code are satisfied, or until the amount designated for the fund equals the amount designated for the fund by the next member of the group in whose favor discrimination may not occur pursuant to Code Section 105 who has elected the second highest contribution to the Health Flexible Spending Arrangement for the Plan Year. 7his process shall continue until the nondiscrimination tests set forth in this Section or the Code are satisfied. Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited and credited to the benefit ptan surplus. � 6.6 COORDINATION WITH CAFETERIA PLAN Ali Participants under the Cafeteria Plan are eligible to receive Benefits under this Health Flexible Spending Arrangement. The enroliment under the Cafeteria Plan shall constitute enrollment under this Health Flexible Spending Arrangement. In addition, other matters concerning contributions, elections and the like shall be govemed by the general provisions of the Cafeteria Flan. 6.7 HEALTH FtEXIBLE SPENDING ARRANGEMENT CLAIMS (a) Expenses must be incurred during Plan Year. All Medical Expenses incuRed by a Participant, his or her Spouse and his or her Dependents shalf be reimbursed during the Plan Year subject to Section 2.5, even though the submission of such a claim occurs after his participation hereunder ceases; but provided that the Medical Expenses were incurred during the applicable Plan Year. Medical Expenses are treated as having been incurred when the Participant is provided with the medical care that gives rise to the medical expenses, not when the Participant is formally billed or charged for, or pays for the medical care. (b) Reimbursement available throughout Plan Year. The Administrator shall direct the reimbursement to each eligible Participant for all 14 allowable Medical Expenses, up to a maximum of the amount designated by the Participant for the Health Flexible Spending Arrangement for the Plan Year. Reimbursements shall be made available to the Participant throughout the year without regard to the level of Cafeteria Plan 8enefit Dollars which have been altocated to the fund at any given point in time. Furthermore, a Participant shall be entitled to reimbursements oniy for amounts in excess of any payments or other reimbursements under any health care plan covering the Participant and/or his Spouse or Dependents. (c) Payments. Reimbursement payments under this Plan shall be made directly to the Participant. However, in the Administraior's discretion, payments may be made directly to the service provider. The application for payment or reimbursement shall be made to the Administrator on an acceptable form within a reasonable time of incurring the debt or paying for the service. The application shall include a written statement from an independent third party stating that the Medical Expense has been incuRed and the amount of such expense. Furthermore, the Pa�ticipant shall provide a written statement that the Medicai Expense has not been reimbursed or is not reimbursable under any other health plan coverage and, if reimbursed from the Health Flexible Spending Arrangement, such amount will not be claimed as a tax deduction. The AdminisUator shall retain a fite of all such applications. (d) Grace Period. Notwithstanding anything in this Section to the contrary, Medical Expenses incurred during the Grace Period, up to the rernaining benefit balance, shall also be deemed to have been incurred during the Plan Year to which the Grace Period relates. (e) Claims for reimbursement. Claims for the reimbursement of Medical Expenses incumed in any Plan Year shall be paid as soon after a claim has been filed as is administrativey practicable; provided however, that if a Participant faifs to submit a claim within 90 days after the end of the Plan Year, those Medical Expense claims shall not be considered for reimbursement by the Administrator. 6.8 DEBIT AND CREDIT CARDS Participants may, subject to a procedure estabfished by the Administrator and applied in a uniform nondiscriminatory manner, use debit and/or credit (stored value) cards ("cards") provided by the Administrator and the Plan for payment of Medical Expenses, subject to the following terms: (aj Card only for medical expenses. Each Participant issued a carci shall certify that such card shall only be used for Medical Expenses. The Participant shall also certify that any Medical Expense paid with the card has not already been reimbursed by any other plan covering health benefits and that the Participant wilt not seek reimbursement from any other plan covering health benefits. (b) Card issuance. Such card shall be issued upon the Participant's Effective Date of Participation and reissued for each Plan Year the Participant remains a Participant in the Health Flexible Spending Arrangement. Such card shal{ be automatically cancelled upon the Pa�ticipant's death o� termination of employment, or if such Participant has a change in status that resuks in the Participant's withdrawai from the Health Flexible Spending Arrangement. 15 (c) Maximum dollar amount available. The dollar amount of coverage available on the card shall be the amount elected by the Participant for the Plan Year. The maximum dollar amount of coverage available shall be the maximum amount for the Plan Year as set forth in Sect�on 6.4. (d) Only available for use with certain service providers. The cards shall onty be accepted by such merchants and service providers as have been approved by the Administrator. (e) Card use. The cards shall only be used for Medical Expense purchases at these providers, including, but not limited to, the following: (1) Capayments for doctor and other medical care; (2) Purchase of drugs; (3) Purchase of inedical items such as eyeglasses, syringes, crutches, etc. (� Substantiation. Such purchases by the cards shall be subject to substantiation by the Administrator, usually by submission of a receipt from a service provider describing the service, the date and the amount. The Administrator shall also foflow the requirements set forth in Revenue Ruling 2003-43 and Notice 2006-69. All charges shall be conditional pending confirmation and substantiation. (g) Correction methods. If such purchase is later determined by the Administrator to not qual'ify as a Medical Expense, the Administrator, in its discretion, shali use one of the following correction methods to make the Plan whole. Until the amount is repaid, the Administrator shall take further action to ensure that further violations of the terms of the card do not occur, up to and including denial oi access to the card. (1) Repayment of the improper amount by the Participant; {2) Withholding the improper payment from the ParticipanYs wages or other compensation to the extent consistent with applicab{e federal or state 1aw; (3) Claims substitution or offset of future claims until the amount is repaid; and (4) if subsections (1) through (3) fail to recover the amount, consistent with the Employer's business practices, the Employer may treat the amount as any other business indebtedness. 16 ARTICLE VII DAY CARE FLEXIBLE SPENDING ARRANGEMENT 7.1 ESTABLISHMENT OF BENEFlT This Day Care Flexible Spending Arrangement is intended to qualify as a program under Code Section 129 and shalt be interpreted in a manner consistent with such Code Section. Participants who etect to participate in th+s program may submit �claims (or the reimbursement of Employment-Related Day Care Expenses. All amounts reimbursed shall be paid from amounts a{located to the ParticipanYs Day Care Flexible Spending Arrangement. 7.2 DEFINITIONS For the purposes of this Articte and the Cafeteria Plan ihe terms below shall have the following meaning: � (a) Day Care Flexibte Spending Arrangement" means the benefit established for a Participant pursuant to this Article to which part of his Cafeteria . Plan Benefit Dollars may be allocated and from which Employment-Related Day Care Expenses of the Participant may be reimbursed for the care of the Qualifying Dependents of Participants. (b) "Eamed Income" means eamed income as defined under Code Section 32(c)(2), but excluding such amounts paid or incurred by the Empbyer for Day Care assistance to the Participant. {c) "Employment-Related Day Care Expenses" means the amounts paid for expenses of a Participant for those services which if paid by the Participant would be considered emptoyment related expenses under Code Section 21(b)(2). Generally, they shall include expenses for household services and for the care of a Qualifying Dependent, to 4he extenl that such expenses are incurred to enable the Participant to be gainfully employed for any period for which there are one or more Qualifying Dependents with respect to such Participant. Employment-Related Day Care Expenses are treated as having been incurred when the Participant's Qualifying Dependents are provided with tMe Day Care that gives rise to the Employment-Related Day Care Expenses, not when the Participant is formally billed or charged for, or pays for the Day Care. The determination of whether an amount qualifies as an Employment-Related Day Care Expense shall be made subject to the foltowing rules: { 1) If such amounts are paid for expenses incurred outside the Participant's household, they shall constitute Employment-Related Day Care Expenses only if incurred for a Qualifying Dependent as defined in Section 7.2(dx1) (or deemed to be, as described in Section 7.2(dx1) pursuant to Section 7.2(d)(3)), or for a Qualifying Dependent as defined in Section 7.2(d)(2) (or deemed to be, as described in Section 7.2(dx2) pursuant to Section 7.2(d)(3)) who regularly spends at least 8 hours per day in the Participant's household; {2) 1f the expense is incurred outside the Pa�ticipant's home at a facility that provides care for a fee, payment, or grant for more than 6 individuals who do not regutarly reside at the facility, the facility must 17 comply with ail applicable state and local laws and regulations, including licensing requirements, if any; and (3) Employment-Related Day Care Expenses of a Participant shall not include amounts paid or incurred to a child of such Participant who is under the age of 19 or to an individual who is a Dependent of such Participant or such ParticipanYs Spouse. (d) "Qualifying DependenY' means, for Day Care Flexible Spending Arrangement purposes, (1) a ParticipanYs Dependent (as defined in Code Section 152(ax1)) who has not attained age 13; (2) a Dependent or the Spouse of a Participant who is physically or mentally incapable of caring for himself or herself and has the same principal place of abode as the Participant for more than one-half of such taxable year; or (3) a child that is deemed to be a Qualifying Dependent described in paragraph (1} or (2) above, whichever is appropriate, pursuant to Code Section 21(eX5). (e) The definitions of A�ticle I are hereby incorporated by reference to the extent necessary to interpret and apply the provisions of this Day Care Flexible Spending Arrangement. 7.3 DAY CARE FLEXIBLE SPENDING ACCOUNTS The Administrator shall establish a Day Care Flexible Spending Arcangement for each Participant who elects to apply Cafeteria Ptan Benefit Dollars to Day Care Flexible Spending Arrangement benefits. 7.4 INCREASES 1N DAY CARE fLEXIBLE SPENDING ACCOUNTS A Participant's Day Care Flexible Spending Arrangement shall be increased each pay period by the portion of Cafeteria Plan Benefit Dotlars that he has elected #o apply toward his Day Care Flexible Spending Arrangement pursuant to elections made under Article V hereof. 7.5 DECREASES IN DAY CARE FLEXIBLE SPENDING ACCOUNTS A ParticipanYs Day Care Flexible Spending Arrangement shall be reduced by the amount of any Employment-Related Day Care Expense reimbursements paid or incurred on behalf of a Participant pursuant to Section 7.12 hereof. 7.6 ALLOWABLE DAY CARE REIMBURSEMENT Subject to limitations contained in Section 7.9 of this Program, and to the extent of the amount contained in the ParticipanYs Day Care Flexible Spending Arirangement, a Participant who incurs Employment-Related Day Care Expenses shafl be entitled to receive from the Employer full reimbursement for the entire amount of such expenses incurred during the Plan Year or portion thereof during which he is a Participant. 18 7.7 ANNUAL STATEMENT OF BENEFITS On or before January 31 st of each calendar year, the Employer shall furnish to each Empioyee who was a Participant and received benefits under Section 7.6 during the prior calendar year, a statement of all such benefits paid to or on behatf of such Participant during the prior calendar year. 7.8 fORFE1TURES The amount in a ParticipanYs Day Care flexible Spending ARangement as of the end of any Ptan Year (and after the processing of all claims for such Plan Year pursuant to Section 7.12 hereof) shall be forfeited and credited to the benefit plan surplus. In such event, the Participant shall have no further claim to such amour►t for any reason. 7.9 LlMITATION ON PAYMENTS . Notwithstanding any provision contained in this Article to the contrary, amounts paid from a ParticipanYs Day Care Flexible Spending Arrangement in or on account of any taxable year of the Participant shall not exceed the lesser of the Earned lncome limitation described in Code Section 129(b) or $5,000 ($2,500 if a separate tax retum is fiied by a Participant who is married as determined under the rules of paragraphs (3) and (4) of Code Section 21(e}). 7.10 NONDISCRIMINATtON REQUIREMENTS (a) IMent to be nondiscriminatory. It is the iMent of this Day Care l�lexible Spending Arrangement that contributions or benefits not discriminate in favor of the group of employees in whose favor discrimination may not occur under Code Section 129(d). (b} 25% test for shareholders. It is the intent of this Day Care Flexible Spending Arrangement that not more than 25 percent of the amounts paid by the Employer for Day Care assistance during the Plan Year wil{ be provided for fhe class of individuals who are shareholders or owners (or their Spouses or Dependents), each of whom (on any day of the Plan Year) owns more than 5 percent of the stock or of the capital or profits interest in the Employer. (c) Adjustment to avoid test failure. If the Administrator deems it necessary to avoid discrimination or possible taxation to a group of empbyees in whose favor discrimination may not occur in violation of Code Section 129 it may, but shatl not be required to, reject any elections or reduce contributions ar non-taxable benefits in order to assure compliance with this Section. Any act taken by the Administrator under this Section shall be carried out in a uniform and nondiscriminatory manner. If the Administrator decides to reject any elections or reduce contributions or Benefits, it shall be done in the following manner. First, the Benefds designated for the Day Care Flexible Spending Arrangement by the affected Participant that elected to contribute the highest amount to such benefit for the Plan Year shall be reduced until the nondiscrimination tests set forth in this Section are sati�ed, or until the amount designated for the benefit equals the amount designated for the benefit of the affected Participant who has elected the second highest contribution to the Day Care Flexibte Spending Arrangement for the Plan Year. This process shal) continue until the nondiscrimination tests set forth in this Section are satisfied. 19 Contributions which are not utilized to provide Benefits to any Participant by virtue of any administrative act under this paragraph shall be forfeited. 7.11 COORDINATION WITH CAFETERIA PLAN Alt Participants under the Cafeteria Plan are eligible to receive Benefits under this Day Care Flexible Spending Arrangement. The enrollment and termination of pa�ticipation under the Cafeteria Plan shall constitute enrollment and termination of participation under this Day Care Flexible Spending Arrangement. In addition, other matters concerning contributions, elections and the like shall be govemed by the general provisions of the Cafeteria Plan. 7.12 DAY CARE fLEXIBLE SPENDING ARRANGEMENT CLAtMS The Administrator shall direct the payment of all such Day Care claims to the Participant upon the presentation to the Administrator of documentation of such expenses in a form satisfactory to the Administrator. However, in the Administrator's discretion, payments may be made directly to the service provider. In its discretion in administering the Plan. the Administrator may utilize forms and require documentation of costs as may be necessary to verify the claims submitted. At a minimum, the form shatl include a statement f�om an independent third party as proof that the expense has been incurred and the amount of such expense. In addition, the Administrator may require that each Participant who desires to receive reimbursement under this Program for Employment-Related Day Care Expenses submit a statement which may contain some or all of the following information: (a) The Dependent or Dependents fo� whom the services were performed; (b) The nature of the services periormed far the Participant, the cost of which he wishes reimbursement: (c) The relationship, 'rf any, of the person performing the services to the Participant; (d) if the services are being performed by a child of the Participant, the age of the child; (e) A statement as to where the services were performed; (f) If any of the services were performed outside the home, a statement as to whether the Dependent for whom such services were perforrned spends at least 8 hours a day in the ParticipanYs household; (g) If the services were being perFormed in a day care center, a statement: (1) that the day care center complies with all applicab{e laws and regulations of the state of residence, (2) that the day care center provides care for more than 6 individuals (other than individuals residing at the center), and (3) of the amount of fee paid to the provider. 20 (h) If the Participant is married, a statement containing the following: (1) the Spouse's salary or wages if he or she is employed, or (2) if the Participant's Spouse is not employed, that (i) he or she is incapacitated, or (ii) fie or she is a full-time student attending an educationaf institution and the months during the year which he or she attended such institution. (i) Grace Period. Notwithstanding anything in this Section to the contrary, Employment-Related Day Care Expenses incurred during the Grace Period, up to the remaining benefit balance, shall also be deemed to have been incurred during the Plan Year to which the Grace Period relates. (j) Claims for reimbursement. If a Participant fails to submit a Gaim within 90 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator. ARTICLE VIII BENEFITS AND RIGHTS 8.1 CLAIAA FOR'BENEFITS (a) Insurance claims. Any claim for Benefits undervvritten by the self-funded plan shall be made to the Employer. Ifthe Employer denies any claim, the Participant or beneficiary shall follow the Employer's claims review procedure. (b) Day Care Flexible Spending Arrangement or Health Flezible Spending Arrangement claims. Any claim for Day Care Flexible Spending Arrangement or Health Flexible Spending Arrangement Benefds shall be made to the Administrator. For the Health Flexible Spending Arrangement, if a Participant fails to submit a clairn within 90 days after the end of the Plan Year, those claims shall not be considered for reimbursement by the Administrator. For the Day Care Flexible Spending Arrangement, if a Participant fails to submit a claim within 90 days after the end of the Plan Year, those elaims shall not be considered for reimbursement by the Administrator. If the Administrator denies a claim, the Administrator may provide notice to the Participant or beneficiary, in writing, within 90 days after the claim is filed uniess special circumstances require an extension of time for processing the claim. The notice of a denial of a claim shall be written in a manner calculated to be understood by the claimant and shall set forth: (1) specific references to the pertinent Plan provisions on which the denial is based; (2) a description of any additional material or information necessary for the claimant to perFect the claim and an explanation as to why such infoRnation is necessary; and (3) an explanation of the Plan's claim procedure. 21 (c) Appeal. Within 60 days after receipt of the above material, the claimant shall have a reasonable opportunity to appeal the claim denial to the Administrator for a full and fair review. The claimant or his duly authorized representative may: (1) request a review upon written notice to the Administrator; (2) review pertinent documents; and {3) submit issues and comments in writing. (d} Review of appeat. A decision on the review by the Administrator will be made not iater than 60 days after receipt of a request for review, unless special circumstances require an extension of time for processing (such as the need to hold a hearing), in which event a decision should be rendered as soon as possible, but in no event later than 120 days after such receipt. The decision of the Administrator shall be written and shal! include specific reasons for the decision, written in a manner calculated to be understood by the claimant, with spec�c references to the pertinent Plan provisions on which the decision is based. (e) forfeitures. Any balance remaining in the ParticipanYs Day Care Flexible Spending Arrangement or Health Flexible Spending Arrangement as of the end of the time for claims reimbursement for each Plan Year and Grace Period (ff applicable) shall be forfeited and deposited in the benefit p{an surplus of the Employer pursuant to Section 6.3 or Section 7.8, whichever is applicable, unless the Participant had made a claim for such Plan Year, in writing, which has been denied or is pending; in which event the amount of the claim shall be held in his benefit until the claim appeal procedures set #orth above have been satisfied or the claim is paid. If any such ciaim is denied on appeal, the amount held beyond the end of the Plan Year shall be forfeited and credited to the benefit plan surplus. 8.2 APPUCATION OF BENEFIT PLAN SURPLUS Any forfeited amounts credited to the benefit plan surplus by virtue of the failure of a Participant to incur a qualified expense or seek reimbursement in a timely manner may, but need not be, separately accounted for after the close of the Plan Year (or after such further time spec�ed herein for the filing of ctaims) in which such forfeitures arose. In no event shall such amounts be carried over to reimburse a Participant for expenses incurred during a subsequent Plan Year for the same or any other Benefit available under the Ptan; nor shall amounts forfeited by a particular Participant be made available to such Participant in any other form or manner, except as permitted by Treasury regulations. Amounts in the benefit plan surplus shall be used to defray any administrative costs and experience losses or used to provide additional benefits under the Plan. 22 ARTICLE IX ADMINISTRATION 9.1 PLAN ADMINISTRATION The operation of the Plan shall be under the supervision of the Administrator. It shall be a principal duty of the Administrator to see that the Plan is carried out in accordance with its terms, and for the exclusive benefit of Employees entitled to participate in the Plan. The Administrator shall have full power #o administer the Pian in all of its details, subject, however, to the pertinent provisions of the Code. The Administrator's powers shall include, but shall not be limited to the following authority, in addition to all other powers provided by this Plan: (a) To make and enforce such rutes and regulations as the Administrator deems necessary or proper for the e�cient administration of the Plan; (b) To interpret the Plan, the Administrator's interpretations thereof in good faith to be final and conclusive on all persons claiming benefits by operation of the Plan; (c) To decide all questions conceming the Plan and the eligibility of any person to participate in the Plan and to receive benefits Provided by operation of the Plan; (d) To reject etections or to limit contributions or'Benef�ts for certain highly compensated participants ff it deems such to be desirable in orde� to avoid discrimination under the Plan in violation of applicable provisions of the Caie; (e) To provide Emptoyees with a reasonable notification of their benefits available by operation of the Plan; (f) To approve reimbursement requests and to authorize the payment of benefits; (g) To appoint such agents, counsel, accountants, consultants, and actuaries as may be required to assist in administering the Plan. Any procedure, discretionary act, interpretation or construction taken by the Administrator shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall c�ntinue to comply with the terms of Code Section 125 and the Treasury regulations thereunder. 9.2 EXAMINATION OF RECORDS The Administrator shall make available to each Participant, Eligible Employee and any other Emptoyee of the fmpbyer such records as pertain to their interest under the Plan #or examination at reasonable times during normal business hours. 9.3 PAYMENT OF EXPENSES Any reasonable administrative expenses shall be paid by the Employer unless the Emptoyer determines that administrative costs shall be borne by the Participants under the Plan or by any Trust Fund which may be established hereunder. The Administrator may impose reasonable conditions for payments, provided that such conditions shall not discriminate in favor of highly compensated employees. 23 9.4 INSURANGE CONTROL CLAUSE In the event of a conflict between the terrns of this Plan and the terms of an Insurance Contract of an independent third parry Insurer whose product is then being used in conjunction with this Plan, the terms of the Insurance Contract shall cor�trol as to those Participants receiving coverage under such Insurance Contract. For this purpose, the Insurance Contracf shall control in defining the persons eligible for insurance, the dates of their eligibiiity, the conditions which must be satisfied to become insured, 'rf any, the benefits Participants are entitled to and the circumstances under which insurance terminates. 9.5 INDEMNIFICATION OF ADMINISTRATOR The Employer agrees to indemnify and to defend to the fullest extent peRnitted by law any Employee serving as the Administrator or as a member of a committee designated as Administrator (including any Employee or former Employee who previously served as Administrator or as a member of such committee) against all liabilities, damages, costs and expenses (including attorney's fees and amounts paid in settlement of any claims approved by the Employer) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith. ARTICLE X AMENDMENT OR TERMINATI�N OF PLAN 10.1 AMENDMENT The Employer, at any time or from time to time, may amend any or aN of the provisions of the Plan without the consent of any Employee or Participant. No amendment shall have the effect of modifying any bene�t election of any Participant in effect at the time of such amendment, unless such amendment is made to comply with Federal, state or local laws, statutes or regulations. 10.2 TERMINATION The Employer is establishing this Plan with the intent that it will be maintained for an indefinite period of time. Notwithstanding the foregoing, the Employer reserves the right to terminate this Plan, in whole or in part, at any time.ln the event the Plan is terminated, no further contributions shall be made. Benefits under any Contract shall be paid in accordance with the terms of the Contract. No further additions shall be made to the Health Flexible Spending Arrangement or Day Care Flexible Spending Arrangement, but all payments from such fund shall cor►tinue to _ be made according to the elections in effect until 90 days after the termination date of the Plan. Any amounts remaining in any such fund or benefit as of the end of such period shall be forfeited and deposited in the benefit plan surplus after the expiration of the filing period. 24 ARTICLE XI MISCELLANEOUS 11.1 PLAN INTERPRETATION Atl provisions of this Ptan shall be interpreted and applied in a uniforrn, nondiscriminatory manner. This Plan shail be read in its entirery and not severed except as provided in Section 11.11. 11.2 GENDER AND NUMBER Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where they would so apply, and whenever any words are used herein in the singular or plural form, they shall be construecf as though they were also used in the other form in all cases where they would so apply. 11.3 WRITTEN DOCUMENT ' This Plan, in conjunction with any separate written document which may be required by law, is intended to satisfy the written Plan requirement of Code Section 125 and any Treasury regulations thereunder relating to cafeteria plans. 11.4 EXCLUSIVE BENEFIT This Plan shall be maintained for the exclusive benefit of the Employees who participate in the Plan. 11.5 PARTICIPANTS RIGHTS This Plan shall not be deemed to constitute an employment contract beiween the Employer and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect which such discharge shall have upon him as a Participant of this Plan. 11.6 ACTION BY THE EMPLOYER W henever the Employer under the terms of the Plan is pem'►itted or required to do or perform any act or matter or thing, it shall be done and performed by a person duy authorized by its legally constituted authority. 71.7 NO GUARANTEE OF TAX CONSEQUENCES Neither the Administrator nor the Employer makes any commitment or guarantee that any amounts paid to or for the benefit of a Participant under the Plan will be excludable from the PacticipanYs gross income for fecferal or state income tax purposes, or that any other federal or state tax treatment wip apply to or be available to any Pa�ticipant. It shall be the obligation of each Participanf to determine whether each payment under the Plan is excludable from the Participant's gross income for federal and state income tax purposes, and to notify the Employer if the Participanf has reason to believe that any such payment is not so excludable. Notwithstanding the foregoing, the rights of Participants under this Plan shafl be legaliy enforceable. 25 11.8 INDEMNIFtCAT10N OF EMPLOYER BY PARTiCIPANTS If any Participant receives one or more payments or reimbursements under the Plan that are not for a permitted Benefit, such Participant shall indemnify and reimburse the Empioyer for any liability it may incur for failure to withhold federal or state income tax or Social Security tax from such payments or reimbursements. However, such indemnfication and reimbursement shatl not exceed the amount of additional federal and state income tax (plus any penalties) that the Participant would have owed if the payments or reimbursements had been made to the Participant as regular cash compensation, plus the ParticipanYs share of any Social Security tax that would have been paid on such compensation, less any such additionat income and Social Security tax actually paid by the Participant. 11.9 fUNDtNG Unless otherwise required by law, contributions to the Plan need not be placed in trust or dedicated to a specific Benefit, but may instead be considered general assets of the Employer. Furthermore, and unless othervvise required by law, nothing herein shall be construed to require the Employer or the Administrator to maintain any fund or segregate any amount for the benefit of any Participant, and no Participant or other person shall have any claim against, right to, or security or other interest in, any fund, benefit or asset of the Employer from which any payment under the Plan may be made. 11.10 GOVERNING LAW This Plan is governed by the Code and tF►e Treasury reguiat�ns issued thereunder (as they might be amended from time to time}. In no event shall the Employer guarantee the favorable tax treatment sought by this Ptan. To the extent not preempted by Federat law, the p�ovisions of this Plan shall be construed, enforced and administered according to the laws of the State of Washington. 11.11 SEVERABIlIIY 1f any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability shall not affe�t any other provisions of the Plan, and the Plan shall be construed and enforced as if such provision had not been included herein. 11.12 CAPTIONS The captions contained herein are inserted ony as a matter of convenience and for reference, and in no way define, limit, enlarge or describe the scope or intent of the Plan, nor in any way shall affect the Plan or the construction of any provision thereof. 11.13 fAAAILY AND MEDICAL LFr4VE ACT (FMLA) Notwithstanding anything in the Plan to the contrary, in the event any benefit under this Plan becomes subject to the requirements of the Family and Medical Leave Ad and regulations thereunder, this Plan shall be operated in accordance with Regulation 1.125-3. 11.14 HEALTH tNSURANCE PORTABtUTY AND ACCOUNTABILITY ACT (HIPAA) Notwithstanding anything in this Pian to the contrary, this Phan shall be operated in accordance with HIPAA and regulations thereunder. m 11.15 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA) Nofin+ithstanding any provision of this Plan to the contrary, contributions, benefds and service credit with respect to qualified military service shall be provided in accordance with the Uniform Services Employment And Reempbyment Rights Act (USERRA) and the regulations thereunder. 11.16 COMPLIANCE WITH HIPAA PRIVACY STANDARDS (a) Application. If the Health flexibte Spending Arrangement under this Cafeteria Plan is subject to the Standards for Privacy of Individualiy Identifiabie Health Information (45 CFR Part 164, the "Privacy Standards"), then this Section shall apply. (b) Disclosure of PHI. The Pian shail not disclose Proteded Heatth Information to any member of the Employer's workforce unless each of the conditions set out in this Section are met. "Protected Health Information" shall have the same definition as set forth in the Privacy Standards but generally shall mean individually ident�able information about the past, present or future physical or mental health or condition of an individual, including information about treatment or payment for treatment. (c) PHI disclosed for administrative purposes. Protected Health Information discbsed to members of the Employer's workforce shaN be used or disc{osed by them only fot purposes of P1an administrative functions. The Plan's administrative functions shall include all Ptan payment functions and heaith care operations. The terms "payment" and "health care operations" shall have the same definitions as set out in the Privacy Standards, but the term "payment" generally shall mean activities taken fo deteRnine or futfill Ptan responsibitities with respect to eligibility, coverage, provision of benefits, or reimbursement for heafth care. (d) PHI disclosed to certain workforce members. The Plan shall disclose Pratected Health Information only to members of the Employer's workforce who are authorized to receive such Protected Health Information, and only to the extent and in the minimum amount necessary for that person to perform his or her duties with respect to tMe Plan. "Members of the Empbyer's workforce" shall refer to all employees and other persons under the control of the Emptoyer. The Employer shatl keep an updated list�of those authorized to receive Protected Health Information. (1) An authori2ed member of the Employer's workforce who receives P�otected Health Information shatl use or disclose the Protected HeaRh Information only to the extent necessary to perforrn his or her duties with respect to the Plan. (2) In the event that any member of the Employer's workfores uses or discloses Protected Heatth Information other than as permitted by this Section and the Privacy Standards, the incident shall be reported to the Plan's privacy o�cer. The privacy o�cer shall take appropriate action, including: (i) investigation of the incident to determine whether the breach occurred inadvertentiy, through negligence or deliberately; 27 whether there is a pattern of breaches; and the degree of harm caused by the breach; (ii) appropriate sanctions against the persons causing the breach which, depending upon the nature of the breach, may include oral or written reprimand, additional training, or termination of employment; (iii) mitigation of any harm caused by the breach, to the extent practicable; and (iv) documentation ot the incident and all actions taken to resotve the issue and mitigaie any damages. (e} Certification. The Employer must provide certification to the Plan that it agrees to: (1) Not use or further disclose the information other than as permitted or required by the Plan documents or as required by law; (2) Ensure that any agent or subcontractor, to whom it provides Protected Health Information received from the Plan, agrees to the same restrictions and conditions that apply to the Employer with respect to such information; (3) Not use or disclose Protected Heafth Inforrnation for employment- related actions and decisions or in connection with any other benefit or employee benefit plan of the Employer; (4) Report to the Plan any use or disclosure of the Protected HeaRh Information of which it becomes aware that is inconsistent with the uses or disclosures permitted by this Section, or required by law; (5) Make available Protected Health Information to individual Plan members in accordance with Section 164.524 of the Privacy Standards; (6) Make available Protected Heafth Information for amendment by individual Plan members and incorporate any amendments to Protected Health Information in accordance with Section 164.526 of the Privacy Standards; (7) Make available the Protected Health Information required to provide an accounting of disclosures to individual Plan members in accordance with Section 164.528 of the Privacy Standards; (8) Make its intemal practices, books and records relating to the use and disclosure of Protected Health Information received from the Plan available to the Department of Heafth and Huma� Services for purposes of determining compliance by the Plan with the Privacy Standards; (9) If feasible, retum or destroy all Protected Health Information received from the Ptan 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 discfosures to those 28 purposes that make the return or destruction of the information infeasible; and (10) Ensure the adequate separation between the Plan and members of the Employer's workforce, as r�uired by Section 164.5Q4(fl(2)(iii) of the Privacy Standards and set out in {d) above. 11.17 COMPLIANCE WITH HIPAA ELECTRONtC SECURITY STANDARDS Under the Security Standards for the Protection of Electronic Protected Heafth Information (45 CFR Part 164.300 et seq., the "Security Standards"): (a) Implementation. The Employer agrees to implement reasonable and appropriate administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of Etectronic Proteded Health Information that the Employer creates, maintains or transmits on behalf of the Plan. "Electronic Protected Heafth Information" sha{I have the same definition as set out in ihe Security Standards, but generally shall mean Protected Healih InfoRnation that is transmitted by or maintained in electronic media. (b) Agents or subcontractors shall meet securi#y standards. The Employer shall ensure that any agent or subcontractor to whom it provides Electronic Protected Health Information shall agree, in writing. to implement reasonable and appropriate security measures to protect the Electronic Protected Health Information. (c) Employer shalf ensure security standards. The Err�loyer shall snsure that reasonable and appropriate security measures are implemented to comply with the conditions and requirements set forth in Section 11.16. 11.18 MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT Notwithstanding anything in ihe Plan to the contrary, the Plan will comply with the Mental Health Parity and Addifion Equity Act and ERISA Section 712. 11.19 GfNETIC INFORMATION NONDISCRIMINATION ACT (GIN� NotHrithstanding anything in the Plan to the contrary, the Plan will comply with the Genetic Information Nondiscrimination A�t. P�'7 IN WITNESS WHEREOF, this Ptan document is hereby executed this � day of Ciry of Federal Way gy ,�,�i! Gn �• [J. IJCv►, C�, y�.. " 7' ",i�U��l.f �ir � fMPLOYER �/� � ADOPTING RESOLUTION The undersigned Principal of City of Federal Way (the Emp loy r) hereby certifies that the following resolutions were duly adopted by the Employer on '� 1_�.�ZbIQ , and that such resolutions have not been modified or rescinded as of the date hereof: RESOLVED, that the form of amended Cafeteria Plan including a'Day Care Flexible Spending Arrangement and Health Flexible Spending Arrangement effective January 1, 2010, presented to this meeting is hereby approved and adopted and that the duly authorized agents of the Employer are hereby authorized and directed to execute and deliver to the Administrator of the Plan one or more counterparts of the Plan. RESOLVED, that the Administrator shall be instructed to take such actions that are deemed necessary and proper in order to implement the Plan, and to set up adequate accounting and administrative procedures to provide benefits under the Plan. RESOLVED, that the duly authorized agents of the Emptoyer shall act as soon as possible to notify the employees of the Employer of the adoption of the Cafeteria Plan by delivering to sach employee a copy of fhe summary description of the Plan in the form of the Summary Plan Description presentecf to this meeting, which form is hereby approved. The undersigned further cert�es that attached hereto as Exhibits A and B, respectively, are true copies of Ciry of Federal Way Cafeteria Plan as amended and restated and the Summary Plan Description approved and adopted in the foregoing resolutions. �iv� �/•l.,�J�k/'� c:7i /7'�Y'►��✓���u Ch��f Principal Date: ��� � 2O1� CITY OF FEDERAL WAY CAFETERIA PLAN SUMMARY PLAN DESCRIPTION TABLE OF CONTENTS I ELIGIBILITY 1. When can 1 become a participant in the Plan?............•-• .............................. 2. What are the eligibiliry requirements for our Plan? ...................................... 3. When is my entry date? ............................................................................... 4. What must I do to enroll in the Plan? ........................................................... I I OPERATION 1. How does this Plan operate? ............................................................... ........................1 ........................2 ........................2 ........................2 ................2 III CONTRiBUTIONS 1. How much of my pay may the Employer redirect? ...........................................................•.....2 2. What happens to conVibutions macle to the Plan? ................................................................2 3. When must I decide which accounts I want to use? ..............................................................3 4. When is the election period for our Plan? .............................................................................. 5. May I change my elections during the Plan Year? .................................................................3 6. May I make new elections in future Plan Years? •• ..............•-•................................................4 IV BENEFITS 1. What benefits are available? ................................................................................................. • V BENEFIT PAYMENTS 1. When will I receive payments from my accounts? .................................................................6 2. What happens if I don't spend atl Ptan contributions during the Ptan Year? ...........................6 3. Family and Medical Leave Act (FMLA) ..........................................................................•....... 4. Uniformed Services Employrnent and Reemployment Rights Act ..........................................7 5. What happens if I te�rninate employment? ............................................................................ 6. Will my Social Securiry benefits be affected? ........................................................................8 VI HIGHLY COMPENSATED AND KEY EMPLOYEES 1. Do fimitations apply to highly compensated employees? .......................................................8 i V�� PLAN ACCOUNTING 1. Periodic Staternents ......................:....................................................................................... VIII GENERAL INFORMATION ABOUT OUR PLAN 1. General Plan information .............:........................................................................................ 2 . Employer Information ............................................................................................................ 3. Pian Administrator (nformation .............................................................................................. 4. Service of Legal Process ....................................................................................................... 5. Type of Administration ...............................................•-..............................................:........... 6. Claims Submission .............................................................................................................. IX ADDITIONAL PLAN INFORMATION 1. Claims Process ..........................................................:........................................................ X SUMMARY CITY OF FEDERAL WAY CAFETERIA PLAN INTRODUCTtON We have amended the "Fiexible Benefds Pian" that we previously established for you and other eligible employees. Under this Plan, you wil{ be able to choose among certain benefits that we make available. The benefits that you may choose are outlined in this Summary Plan Description. We will also tell you about other important information conceming the amended Plan, such as the rules you must satisfy before you can join and the laws #hat protect your rights. One of the most important features oi our Plan is thai the benefits being offered are generally ones that you are already paying for, but normally with money that has first been subject to income and Social Security taxes. Urxfer our Plan, these same expenses will be paid for with a portion of your pay before federal income or Social Security taxes are wiihheld. This means that you wili pay tess tax and have more money to spend and save. Read this Summary Plan Description carefully so that you understand the provisions of our amended Plan and the benefits you will receive. This SPD describes the Plan's benefits and obligations as contained �n the legal Plan documenl, which govems the operation of the Ptan. The Ptan document is written in much more technicat and precise language. If the non-technical language in this SPD and the technical, legal language of the Plan document conflict, the Plan document always govems. Also, if there is a conflict between an insurance contrad and either the Plan document or this Summary Plan Description, the insurance contract will control. If you wish to receive a copy of the legal Plan document, please contact the Administrator. Th,is SPD describes the current provisions of the Plan which are designed to comply with applicable legal requirements. The Plan is subject to federat laws, such as the Intemal Revenue Code and other federal and state laws which may affect your rights. The provisions of the Plan are subject to revision due to a change in laws or due to pronouncements by the Interna{ Revenue Service (IRS) or other federal agencies. We may also amend or terminate this Plan. If the provisions of the Plan that are described in this SPD change, we will notifjr you. We have attempted to answer most af the questions you may have regarding your benefits in the Plan. If this SPD does not answer all of your questions, please contact the Administrator (or other plan representative). The name and address of the Administrator can be found in the Article of this SPD entitled "General tnformation About the Plan." 1 fLIGIBILIIY 1. When can 1 become a participant in the Plan? Before you become a Plan member {referred to in this Summary Plan Description as a "Participant"), there are certain rules which you must satisfy. First, you must meet the eligibility requirements and be an active employee. After that, the next step is to actually join the Plan on the "entry date" that we have established for all employees. The "entry date" is defined in Question 3 below. You v�rill also be required to complete certain application forms before you can enroll in the Health Flexible Spending Arrangement or Day Care Flexible Spending Arrangement. 04/10 2. What are the eligibility requirements for our Plan? You will be eligible to join the Plan once you have satisfied the conditions for coverage under our group medical plan. Of course, if you were already a participant before this amendment, you will remain a participant. 3. When is my entry date? Once you have met the eligibility requirements, your entry date will be the first day of the month coinciding with or following the date you met the eligibility requirements. 4. What must f do to enroll in the Plan? Before you can join the Plan, you must complete an application to participate in the Plan. The application includes your personal choices for each of the benefits which are being offered under the Plan. You must also authorize us to set some of your eamings aside in order to pay for the benefits you have elected. However, if you are already covered under any of the insured benefits, you will automatically participate in this Plan to the extent of your premiums unless you elect not to participate in this Plan. 11 OPERATlON L How dces this Plan operate? Before the start af each Plan Year, you will be able to elect to have some of your upcoming pay contributed to the Plan. These amounts will be used to pay for the benefits you have chosen. The portion of your pay that is paid to the Plan is not subject to Federal income or Social Security taxes. In other words, this allows you to use tax-free dollars fo pay for certain kinds of benefits and expenses which you normally pay for with out-of-pocket, taxable dollars. However, if you receive a reimbursement for an expense under the Plan, you cannot claim a Federal income tax credit or deduction on your return. {See the Article entitled "Genera! Information About Our Plan" for the definition of "Plan Year.") 1{I CONTRIBUTIONS L How much of my pay may the Employer redirect? Each year, we will automatically contribute on your behalf enough of your compensation to pay for the coverage provided unless you elect not to receive any or all of such coverage. You may also elect to have us contribute on your behalf enough of your compensation to pay for any other benefits that you elect under the Plan. These amour�ts will be deducted from your pay over the course of the year. 2. What happens to contributions made to the Plan? Before each Plan Year begins, you will select the benefds you want and how much of the contributions should go toward each benefit. It is very important that you make these choices carefully based on what you expect to spend on each covered benefit or expense 2 04/10 during the Plan Year. Later, they will be used to pay for the expenses as they arise during the Plan Year. 3. When must i decide which accounts 1 want to use? You are required by federal law to decide before the Plan Year begins, during the etection period (defined below). You must decide two things. First, which benefits you want and, second, how much should go toward each benefit. If you are already covered by any of the insured benefits offered by this Plan, you will automaticalfy become a Participant to the extent of the premiums for such insurance uniess you elect, during the election period (defined below), not to participate in the Plan. 4. When is the election period for our Plan? You will make your initial election on or before your entry date. (You should review Section 1 on Eligibility to better understand the eligibility requirements anct entry date.) Then, for each following Plan Year, the election period is estabfished by the Administrator and applied uniformly to all Participants. It will normally be a period of time prior to the beginning of each Plan Year. The Administrator wiD inform you each year about the election period. (See the Article entitled "General Information About Our Plan" for the definition of Plan Year.) 5. May I change my elections during the P{an Year? Generally, you cannot change the elections you have made after the beginning of the Plan Year. However, there are certain limited situations when you can change your elections. You are permitted to change elections if you have a"change in status" and �you make an election change fhat is consistent with the change in status. Currerrtly, federal law considers the following events to be a change in status: — Marriage, divorce, death of a spouse, legal separation or annulment; — Change in the number of dependents, including birth, adoption, placement for adoption, or death of a dependeM; — Any of the following ever�ts for you, your spouse or dependent: termination or commencement of employment, a strike or lockout, commencement or retum from an unpaid leave of absence, a change in worksite, or any other change in employment status that affects eligibility for benefits; — One of your dependents satisfies or ceases to satisfy the requiremerits for coverage due to change in age, student status, or any similar circumstance; and — A change in the place of residence of you, your spouse or dependent that would lead to a change in status, such as moving out of a coverage area for insurance. In addition, if you are pa�ticipating in the Day Care Flexible Spending Arrangement, then there is a change in status if your dependent no longer meets the qualifications to be eligible for Day Care. There are detaited rules on when a change in election is deemed to be consistent with a change in status. In addition, there are laws that give you rights to change health coverage for you, your spouse, or your dependents. If you change coverage due to rights you have under the 04/10 law, then you can make a corresponding change in your elections under the Plan. If any of these conditions apply to you, you should contact the Administrator. If tMe eost of a benefit provided under the Plan increases or decreases during a Plan Year, then we will automatically increase or decrease, as the case may be, your salary redirection election. If the cost increases significantly, you wiN be permitted to either make corresponding changes in your payments or revoke your election and obtain coverage under another benefit package option with similar coverage, or revoke your election entirely. If the coverage under a Benefif is significantly curtailed or ceases during a Plan Year, then you may revoke your etections and elect to receive on a prospective basis coverage under another plan with similar coverage. In addition, if we add a new coverage option o� eliminate an existing option, you may elect the newly-added option (or elect another optron if an option has been eliminated) and make corresponding election changes to other options providing similar coverage. If you are not a Participant, you may elect to join the Plan. There are. also certain situations when you may be able to change your elections on account of a change under the plan of your spouse's, former spouse's or dependenYs employer. These rules on char�e due to cost or coverage do not apply to the Health Flexible Spending Arrangement, and you may not change your election to the Health Flexible Spending Arrangement if you make a change due to cost or coverage for insurance. You may not change your election under the Day Care Flexible Spending Arrar�ement if the cost change is imposed by a Day Care provider who is your retative. 6. May I make new elections in future Plan Years? Yes, you may. For each new Plan Year, you may change the elections that you previously made. You may also choose not to participate in the Plan for the upcoming Plan Year. If you do not make new elections during the election period before a new Plan Year begins, we will assume you want your elections for insured or self-funded benefits only to remain the same and you will not be considered a Participant for the non-insured benefd options under the Plan for the upcoming Plan Year. IV BENEFITS 1. What benefits are available? Under our Plan, you can choose to receive your entire compensat�n or use a portion to pay for the following benefits or expenses during the year: Hea{th Flexible Spending Arrangement: The Health Flexible Spending Amangement enables you to pay for expenses allowed under Sections 105 and 213(d) of the �nternal Revenue Code wh�h are not cover�ed by our medical plan or privately held insurance policies and save taxes at the same time. The Health Flexible Spending Arrangement allows you to be reimbursed by the Employer for out-of-podcet medical, dental and/or vision expenses incurred by you and your dependents. Drug costs, including "over-the-courrter" drugs may be reimbursed. You may not, however, be reimbursed for the cost of other health care coverage maintained outside of the 4 04l10 Plan, or for long-term care expenses. A list of covered expenses is available from the Administrator. The most that you can contribute to your Health Flexible Spending Arrar�ement each Plan Year is $5,000. In order #o be reimbursed for a heatth care expense, you must submit to the Administrator an itemized bill from the service provider. We witl also provide you with a debit or credit card to use to pay for medical expenses, such as co-pays, deductibles, medical equipment and drug costs. The Administrator will provide you with further details. Amounts reimbursed from the Plan may not be claimed as a deduction on your personal income tax retum. Reimbursement from the fund sha{I be paid at least once a month. Expenses under this Plan are Veated as being "incurred" when you are provided with the care that gives rise to the expenses, not when you are formally billed or charged, or you pay for the medical care. Newboms' and Mothers' Health Protection Act: Group health plans generally may r�t, under Federal law, restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less ihan 96 hours folbwing a cesarean section. However, Federal law generally does not prohibit the mother's or newbom's attending provider, after consulting with the mother, from discharging the mother or her newborn earlier than 48 hours (or 96 hours as applicable). In any case, plans and issuers may not, under Federa) law, require that a provider obtain authorization from the plan or the issuer for prescribing a length of stay not in excess of 48 hours (or 96 hours). Day Care Flexible Spending Arrangement: The Day Care Flexible Spending Arrangement enables you to pay for out-of-pockei, work-re{ated dependent day-care cost with pre-tax dollars. If you are married, you can use the benefit if you and your spouse both work or, in some situations, if your spouse goes to school full-time. Single employees can also use #he benefit. An eligible dependent is someone for whom you can claim expenses on Federal Income Tax Fonn 2441 "Credit for Child and Day Care Expenses." Children must be under age 13. Other dependents must be physicalty or rnentally unabie to care for themselves. Day Care a�rangements which qualify incfude: (a) A Dependent (Day) Care Center, provided that if care is provided by the facility for more than six individuals, the #acility complies with applicable state and local laws: (b) An Educational Institution for pre-school children. For older children, only expenses for non-school care are eligible; and (c) An "Individual" who provides care inside or outside your home: The "Individual" may not be a child of yours under age 19 or anyone you claim as a depencient for Federal tax purposes. You should make sure that the Day Ca�e expenses you are currently paying for qualify under our Plan. The law ptaces limits on the amount of money that can be paid to you in a calendar year from your Day Care Flexible Spending Arrangement. Generally, your reimbursements may not exceed the lesser of: (a) $5,000 (if you are married filing a joint retum or you are head of a household) or $2,500 (if you are married filing separate returns); (b) your taxable compensation; (c) your spouse's actual or deemed earned income (a spouse who is a full time student or incapable of caring for himself/herself has a monthly eamed income of $250 for one dependent or $500 for two or more dependents). Also, in order to have the reimbursements made to you from this benefit be excludable from your income, you must 5 04/10 provide a statement from the service provider including the name, address, and in most cases, the taxpayer identification number of the service provider on your tax form for the year, as well as the amount of such expense as proof that the expense has been incurred. In addition, Federal tax laws permit a tax credit for certain Day Care expenses you may be paying for even if you are not a Participant in this Plan. You may save more money if you take advantage of this tax credit rather than using the Day Care Flexible Spending Arrangement under our Plan. Ask your tax adviser which is better for you. Premium Conversion BenefR: A Premium Conversion Benefit allows you to use tax-free dollars to pay for certain premiums under various insurance programs that we offer you. These premiums include: — Health care premiums under our self-funded medical plan. -- Heafth care premiums under privately held insurance policies. The Administrator may terminate or modify Plan benefits at any time, subject to the provisions of any contracts providing benefits described above. Also, your coverage will end when you leave employment, are no longe� eligible under the terms of any coverage, or when coverage terminates. Any benefits to be provided by insurance will be provided onty after (1) you have provided the Administrator the necessary inforr»ation to apply for insurance, and (2) the insurance is in effect for you. "Privately held insurance policies" do not include coverage obtained through a spouse's employment. Cost of these policies will only be reimbursed on adequate proof of coverage. V BENEFIT PAYMENTS 1. When wiH I receive payments from my accounts? During the course of the Plan Year, you may submit requests for reimbursement of expenses you have incurred. Expenses are considered "incurred" when the service is performed, not necessarily when it is paid for. The Administrator will provide you with acceptable forms for submitting these requests for reimbursement.lf the request qualifies as a benefit or expense that the Plan has agreed to pay, you will receive a reimbursement payment soon thereafter. Remember, these reimbursements which are made from the Plan are generalty not subject to federat income tax or withholding. Nor are they subject to Social Security taxes. The provisions of the insurance contracts will control what benefits will be paid and when. You will only be reimbursed from the Day Care Flexibte Spending Arrangement to the extent that there are sufficient funds in the Benefit to cover your request. ` 2. What happens if 1 don't spend all Plan contributions during the Plan Year? tf you have not spent all the amounts in your Health Flexible Spending Arrangement or Day Care Flexibte Spending Arrangement by the end of the Plan Year, you may cor�tinue to incur claims for expenses during the "Grace Period." The "Grace Period" extends 2 1/2 months after the end of the Plan Year, during which time you can continue to incur claims and use up all amounts remaining in your Health Flexible Spending A�rangement or Day Care Flexible Spending Arrangement. 6 04/10 Any monies left at the end of the Plan Year and the Grace Period wiil be forfeited. Obviously, qualifying expenses that you incur late in the Plan Year or during the Grace Period for which you seek reimbursement after the end of such Plan Year and Grace Period will be paid first before any amount is forfeited. For the Health Flexible Spending Arrangement, you must submit claims no later than 90 days after the end of the Plan Year. For the Day Care Flexible Spending Arrangement, you must submit claims no later than 90 days after the end of the Plan Year. Because it is possible that you might forfeit amounts in the Plan if you do not fully use the contributions that have been made, it is important that you decide how much to place in each benefit carefutly and conservatively. Remember, you must decide which benefits you want to contribute to and how much to place in each benefit before the Plan Year begins. You want to be as certain as you can that the amount you decide to place in each benefit will be used up entirely. 3. Family and Medical Leave Act (FMLA) If you take feave under the Family and Medical Leave Act, you may revoke or change your existing elections for health insurance and the Health Flexible S,pending Arrangement. lf your coverage in these benefds terminates, due to your revocation of the benefit while on leave or due to your non-payment of contributions, you will be permitted to reinstate coverage for the remaining part of the Plan Year upon your retum. For the Health Flexible Spending Arrangement, you may continue your coverage or you may revoke your coverage and resume it when you retum. You can resume your coverage at its original level and make payments for the time that you are on leave. For example, if you etect $1,200 for the year and are out on leave for 3 months, then retum and elect to resume your coverage at that level, your remaining payments will be increased to cover the difference - from $100 per month to $150 per month. Altematively your maximum amount will be reduced proportionately for the time that you were gone. For example, ff you elect $1,200 for the year and are out on leave for 3 months, your amount will be reduced to $900. The expenses you incur during the time you are not in the Heaith Flexible Spending Arrangement are not reimbursable. If you continue your coverage during your unpaid leave, you may pre-pay tor the coverage, you may pay for your coverage on an after-tax basis while you are on leave, or you and your Employer may arrange a schedule for you to "catch up" your payments when you retum. 4. Uniformed Services Employment and Reemployment Rights Act (USERRA) If you are going into or retuming from military service, you may have special rights to health care coverage under your Health Flexible Spending Arrangement under the Unifom�ed Services Employment and Reemployment Rights Act of 1994. These rights can include exterxJed health care coverage. If you may be affected by this law, ask your Adminisirator for fwther details. 5. What happens if i terminate employment? If you terminate employment during the Plan Year, your right ta benefits will be determined in the following manner: (a) You will remain covered by insurance, but only for the period for which premiums have been paid prior to your termination of employment. (b) You will still be able to request reimbursement for qualifying Day Care expenses for the remainder of the Plan Year from the balance remaining in your Day Care benefit at the time of termination of employment. Mowever, no further salary redirection 04/10 contributions will be made on your behalf after you terminate. You must submit claims within 90 days after the end of the Plan Year in which termination occurs. {c) You may elect to continue your participation in the Health Flexible Spending Arrangement for the remainder of the Plan Year. (d) If you elect to continue your participation in the Health Flexible Spending Arrangement, you must continue to make any required contributions to the Plan. (e) If you elect not to continue participation in the Health Flexible Spending Arrangement, participation will cease and no furthe► salary redirection contributions witl be contributed on your behatf. You will be able to submit c{aims for health care expenses. However, you wiU be able to submit claims for heatth care expenses that were incurred before the end of the period for which payments to the Heatth Flexible Spending Arrangement have already been made. You must submit claims within 90 days after the end of the Plan Year in which termination occurs. 6. Will my Social Security benefits be affected? Your Social Security benefits may be slightly reduced because when you receive . tax-free benefits under our Plan, it reduces the amount of contributions that you make to the Federal Social Security system as well as our contribution to Social Security on your behalf. �ll HIGHLY COMPENSATED AND KEY EMPLOYEES 1. Do iimitations apply to highly compensated employees? Under the tntemal Revenue Code, highy compensated employees and key employees generally are Participants who are officers, shareholders or highly paid. You will be notified by ihe Administrator each Plan Year whether you are a highly compensated emplayee or a key employee. If you are within these categories, the amount of contributions and benefits for you may be limited so that the Plan as a whole does not unfairiy favor those who are highly paid, their spouses or their dependents. Federal tax laws state that a plan will be considered to unfairly favor the key employees 'rf they as a group receive mo�e than 25% of all of the nontaxable benefits provided for under our Plan. Plan experience will dictate whether contribution limitations on highiy compensated employees or key employees will apply. You wilt be notified of these limitations if you are affected. VII PLAN ACCOUNTING 1. Periodic Statements The Administrator will provide you with a statement of your benefit periodically during the Pian Year that shows your benefit balance. It is important to read these statements carefully so you understand the balance remaining to pay for a benefit. Remember, you want to spend afl the money you have designated for a particular benefit by the end of the Ptan Year. 8 04/10 VIII GENERAL INFORMATION ABOUT OUR PLAN This Section contains certain general information which you may need to know about the Plan. 1. General Plan Information City of Federal Way Cafeteria Plan is the name of the Pian. Your Employer has assigned Plan Number 501 to your Plan. The provisions of your amended Plan become effective on January 1; 2010. Your Plan was originally effective on January 1, 1994. Your Plan's records are maintained on a twelve-month period of time. This is known as the Plan Year. The Plan Year begins on January 1 and ends on December 31. 2. Employer Information Your Emptoyer's name, address, and identification number are: City of Federal Way 33325 8th Ave S Federal Way, Washington 98003 91-1462550 3. Plan Administrator Information The name, address and business telephone number of your Ptan's Adminisirator are: City of Federal Way 33325 8th Ave S Federal Way, Washington 98003 (253) 835-2532 The Administrator keeps the records for the Plan and is responsible for the administration of the Plan. The Administrator will also answer any questions you may have about our Plan. You may contact the Administrator for any fu�ther inf.ormation about the Plan. 4. Service of Legal Process The name and address of the P1an's agent for service of legal process are: Gity of Federal Way 33325 8th Ave S Federal Way, Washington 98003 5. Type of Administration The type of Administration is Employer Administration. 9 04/10 6. Claims Submission Claims for expenses should be submitted to: Flex-Plan Services, inc PO Box 53250 Believue, WA 98015 IX ADDITIONAL PLAN INFORMATtON 1. Claims Process You should submit ail reimbursement claims during the Plan Year. for the Heakh Flexible Spending Arrangement, you must subrnit claims no later than 90 days after the end of the Plan Year. For the Day Care Flexible Spending Arrangement, you musi submit claims rw later than 90 days after the end of the Ptan Year. Any claims submitted after that time will not be considered. Claims that are insured or self-funded will be handled in accordance with procedures contained in the insurance policies or contracts. Atl other general requests should be directed to the Rdministrator of our Plan. If a Day Care or medical expense claim under the Ptan is denied in whole or in part, you or your beneficiary will receive written notification. The notification will include the reasons for the denial, with reference to the spec�c provisions of the Plan on which the deniat was based, a description of any additional information needed to process the daim and an explanation of the claims review procedure. Within 60 days after denial, you or your beneficiary may submit a written request for reconsideration of ihe denial to the Administrator. Any such request should be accompanied by documents or records in support of your appeal. You or your beneficiary may review pertinent documents and submit issues and comments in writing. The Administrator will review the claim and provide, within 60 days, a written response to the appeal. (This period may be extended an additionai 60 days under certain circumstances.) In this response, the Administrator will explain the reason for the decision, with specific reference to the provisions of the Plan on which the decision is based. The Administrator has the exclusive right to interpret the appropriate plan provisians. Decisions ot the Administrator are conclusive and binding. X SUMMARY The money you eam is important to you and your family. You need it to pay your bills, enjoy recreational activities and save for the future. Our flexible benefits plan will help you keep more of the money you earn by lowering the amount of taxes vou oav. The Plan is the result of our continuing efforts to find ways to help you get the mo� If you have any questions, please contact the Adrr iA7 APPENDIX t TO THE FLEXIBLE BENEFITS PLAN SUMMARY PLAN DESCRIPTION We understand that medical information about you and your health is personal. We are committed to protecting medicat information about you. This summary applies to all of the personal health information we maintain with regard to the Plan. Your doctor or health care provider wiil have different policies or notices regarding the doctor's use and disclosure of your medicai information created in the doctor's office or clinic. During the course of providing you with coverage unde� the Plan, the Plan wili have access to information about you tfiat is deemed to be "protected health information", or PHI, by the Health Insurance Portability and Accountability Act of 1996, or HIPAA. The following is a summary of procedures adopted by the Employer to ensure that both Empioyer and any third party service providers treat your PHI with the level of protection required by HiPAA. This summary wil! provide you with a general overview of the ways in which we may use and disclose medical information about you. We also describe your rights and ce�tain obligations we have regarding the use and disclosure of inedicat information. We are required by law to: • make sure that medical information that identifies you is kept private; • give you this notice of our legal duties and privacy practices with respect to medical information about you; and • follow the terms of the notice that is currently in effect. Your PHI will be disclosed to certain employees of Emp{oyer who assist in administration of #he Plan. These individuals may only use your PHI for Plan administration f�ctions including those described below, provided they do not violate the provisions set forth herein. Any employee of Employer who violates the rules for handling PNI established herein will be subject to adverse disciplinary action. Employer will establish a mechanism for resolving privacy issues and will take prompt corrective action to cure any violations. By adoption of ths SPD, Employer has certified that it will comply with the privacy procedures summarized herein and detailed in any separate privacy notice. Employer may not use or disclose your PHI other than as summarized herein or as required by law. Any agents or subcontractors who are provided your PHI must agree to be bound by the restrictions and conditions conceming your PHI found herein. Your PHI may not be used by Employer for any employment-related actions or decisions or in connection with any other benefit or employee benefit plan of Employer. Employer must report to the Plan any uses or disclosures of your PHI of which the Employer becomes aware that are inconsistent with the provisions set forth herein. HOW WE MAY USE AND DISCLOSE MEDICAL INFORMATION ABOUT YOU. The foliowing categories describe different ways that we use and disclose medical infomnation for purposes of Plan administration. For each category of uses or disclosures we will expfain what we mean and try to give some examples. Not every use or disclosure in a category will be listed. However, ali of the ways we are permitted to use and disclose information will fall within one of the categories. � sPO - Appendix 1 For Payment (as described in ap�licable repulationsl. We may use and disclose medical information about you to determine eligibility for Plan benefits, to facilitate payment for the treatment and services you receive from health care providers, to determine benefi/ responsibility under the Plan, or to coordinate Plan coverage. For Health Care Operations (as described in aaalicable requlations). We may use and disclose medical information about you for other Plan operations. These uses and disclosures are necessary to run the Plan. As Required By Law. We wiR disclose medical information about you when required to do so by federal, state, or local law. To Avert a Serious Threat to Health or Safety. We may use and disclose rriedical inforrr►ation about you when necessary to prevent a serious threat to your heatth and safery or the health and safety of the public or another person. Any disclosure, however, would only be to someone able to help prevent the threat. SPECIAL SITUATIONS Disclosure to Health Plan Sr>onsor. Inforrnation may be disclosed to another health plan maintained by Employer for purposes of facilitating claims payments under that plan. In addition, medical information may be disclosed to Employer personnel solely for purposes of administering benefits under the Plan. Organ and Tissue Donation. If you are an organ donor, we may release medical information to organizations that tiandle organ procurement or organ, eye, or tissue transplantation or to an organ donation bank, as necessary to facilitate organ or tissue donation and transplantation. Military and Veterans.. If you are a member of the armed forces, we may release medical inforrnation about you as required by military command authorities. Workers' Comoensation. We may release medical information about you for workers' compensation or similar programs. Public Heafth Risks. We may disdose medical information about you for public health adivities (e.g., to prevent or control disease, injury, or disability). Health Oversipht Activities. We may disclose medical information to a health oversight agency for activities authorized by law. Lawsuits and Disautes. If you are involved in a lawsuit or a dispute, we may disclose medicat information about you in response to a court or administrative order. We may also disclose medical information about you in response to a subpoena, discovery request, or other IawFul process by someone else involved in the dispute, but only if efforts have been made to tell you about the request or ta obtain an order protecting the information requested. Law Enforcement. We may release medical information if asked to do so by a law enforcement o�cial for law er�forcement purposes. Appendix 1 SPD — _ . __ ._.._--- .._.� Coroners. Medical Examiners and Funeral Directors. We may release medical information to a coroner or medical examiner. We may also release medical information about patients of the hospital to funeral directors as necessary to carry out their duties. National Security and Inteltipence Activities. We may retease medical information about you to authorized federal officials for intelligence, counterintelligence, and other national security activities authorized by law. Inmates. If you are an inmate of a correctional institution or under the custody of a law enforcement o�cial, we may release medical information about you to the correctional :institution or 1aw enforcement officiaL � YOUR RIGHTS REGARDING MEDICAL INFORMATlON ABOUT YOU. You have the following rights regarding medical information we maintain about you: Right to insnect and Copy. You fiave the right to inspect and copy medical information tha# may be used to make decisions about your Plan benefits. To inspect and copy medicat information that may be used to make decisions about you, you must submit your request in writing to Personnel/Benefits Office, except as otherwise set forth in any separate Privacy Notice provided to you by Empfoyer. If you request a copy of the information, we may charge a fee for the costs of copying, mailing or other supplies associated with your request. We may deny your request to inspect and copy in certain very limited circumstances. HIPAA provides several important exceptions to your right to access your PHI. For example. you will not be permitted to access psychotherapy notes or information compiled in anticipation of, or for use in, a civil, criminal, or administrative action or proceeding. Employer will not allow you to access your PHl if these or any of the exceptions permitted under NIPAA apply. If you are denied access ta medical information, you may request that the denial be review�ed. Riuht to Amend. If you feel that medical information w�e have about you is incorrect or incomplete, you may ask us to amend the information. You have the right to request an amendment for as long as the information is kept by or for the Plan. To request an amendment, your request must be made in writing and submitted to your human resources department. In addition, you must provide a reason that supports your request. We may deny your request for an amendment if it is not in writing or does not include a reason to support the request. 1n addition, we may deny your request if you ask us to amend information that: • Is not part of the medical information kept by or for the Plan; • Was not created by us, unless the person or entity that created the infom�ation is no longer available to make the amendment; • ls not part of the information which you w�ould be permitted to ir�spect and copy; or • Is accurate and complete. 3 �— n�end� i � Employer must act on your request for an amendment of your PHI no later than 60 days after receipt of your request. Employer may extend the time for making a decision for no more than 30 days, but it must provide you with a written explanation for the delay. If Employer denies your request, it must provide you a written explanation for the denial and an explanation of your right to submit a written statement disagreeing with the denial. Rictht to an Accounting of Disclosures. You have the right to request an "accounting of disclosures" (other than disclosures you authorized in writing) where such disclosure was made for any purpose other than treatment, payment, or health care operations. You will be notified of where you can obtain an accounting of disclosure in the separate Privacy Notice. Your request must state a time period that may not be longer than six years and may not include dates before April 2003. Your request should indicate in what farm you want the list (for example, on paper or etectronically). The first list you request within a 12-month period will be free. For additional lists, we may charge you for the costs of providing the list. We will notify you of the cost involved and you may choose to withdraw or modify your request at that time before any costs are incurred. Note that HIPAA provides several important exceptions to your rigM to an accounting of the disclosures of your PHI. For example, Employer does not have to account for disclosures of your PH! (i) to carry out treatment, payment or healthcare operations, (ii) to correctional institutions or law enforcement officials, or (iii) for national securiry or intelligence purposes. Employer will not include in your accounting any of the disclosures for which there is an exception under HIPAA. Employer must act on your request for an accounting of #he disclosures of your'PHI no tater than 60 days after receipt of ihe request. Employer may extend the time for providing you an accounting by no more than 30 days, but it must {xovide you a written explanation for the delay. You may request one accounting in any 12-month period free of cF►arge. Employer will impose a fee for each subsequent request within the 12-month period. Right to Reauest Confidential Communications. You have the right to request that we communicate with you about medical matters in a certain way or at a certain location. For example, you can ask that we only contact you at work or by mait. To request confidentia! communicafions, you must make your request in writing to your human resources department. We will not ask you the reason for your request. We will accommodate all requests we deem reasonable. Your request must specify how or where you wish to be contacted. When Employer no longer needs PHI disclosed to it by the Plan, for the purposes for which the PHI was disclosed, Employer must, if feasible, return or destrvy the PHI that is no longer needed. If it is not feasibfe to return or destroy the PHI, Emptoyer must limit further uses and disclosures of the PHI to those purposes that make the return or destruction of the PHI infeasibte. CHANGES TO THIS SUMMARY AND THE SEPARATE PRIVACY NOTICE We reserve the right to charx�e this summary and the separate Privacy Notice that may be provided to you. We reserve the right to make the revised or changed notice effective for medical information we already have abouf you as well as any information we receive in the future. The notice will contain the effective date on the front page.. 4 SPD — Appendix I COMPLAINTS if you believe your privacy rights have been violated, you may file a complaint with the Plan or with the Secretary of the Department of Heafth and Human Services. To file a complaint with the Plan, contact your human resources department except as othervvise provided in any separate Privacy Notice. All complaints must be submitted in writing. You will not be penalized for filing a complaint. OTHER USES �F MEDICAL INFORMATION. Other uses and disclosures of inedical information not covered by this notice or the laws that apply to us will be made only with your written permission. If you provide us permission to use or disclose medical information about you, you may revoke that permission, in writing, at any #ime. It you revoke your permission, we will no longer use or disclose medical information about you for the reasons covered by your written authorization. We are unable to take back any disclosures we have afready made with your permission and that we are required to retain our records of the care that we provided to you. 5 SPO - Appendix I AC O® CERTIFICATE OF LIABILITY INSURANCE AG) 12 -6( DATE (MMIDDIYYYY) 04/20/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Bordelon, McCluskey & Sefton, Inc 3801 150th Avenue, SE, Suite 300 Bellevue, WA 98006 License #: 142376 INSURED NAVIA BENEFIT SOLUTIONS, INC. PO Box 53250 Bellevue, WA 98015 CONTACT NAME: Paul Bordelon PHONE (A(C. No. ExU: (425)455-2227 E -MAIL ADDRESS: FAX . No): (425)6534030 paul@bordeloninsurance.com INSURER(S) AFFORDING COVERAGE NAIC # INSURER A: Liberty Surplus Insurance Corporation INSURER B: INSURER C : INSURER D : INSURER E : INSURER F : COVERAGES CERTIFICATE NUMBER: 00000000 - 1496422 REVISION NUMBER: 24 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL SUBR INSD WVD POLICY NUMBER POLICY EFF POLICY EXP (MM/DD/YYYY) IMM/DDIYYYYI LIMITS COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ CLAIMS -MADE OCCUR AMAGE TO RENTED PREM PREMISES (Ea occurrence) $ MED EXP (Any one person) $ GE PERSONAL & ADV INJURY $ GENERAL AGGREGATE $ 'L AGGREGATE LIMIT APPLIES PER: POLICY L_ _1 jE& L_ _ j LOC OTHER: PRODUCTS - COMP/OP AGG $ $ AUTOMOBILE LIABILITY ANY AUTO OWNED AUTOS ONLY HIRED AUTOS ONLY SCHEDULED AUTOS NON -OWNED AUTOS ONLY COMBINED SINGLE LIMIT (Ea accident) $ BODILY INJURY (Per person) $ BODILY INJURY (Per accident) $ PROPERTY DAMAGE (Per accident) $ $ UMBRELLA LIAB EXCESS LIAB _ OCCUR CLAIMS -MADE EACH OCCURRENCE $ AGGREGATE $ $ DED RETENTION $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY YIN ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? r� (Mandatory In NH) If yes, describe under DESCRIPTION OF OPERATIONS below N / A I PER I I OTH- STATUTE Eft E.L. EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE $ E.L. DISEASE - POLICY LIMIT $ A A Cyber /Communications Professional Liab DPS5NBARV3002 DPS5NBARV3002 04/22/2017 04/22/2017 04/22/2018 04/22/2018 Cyber Liability Each Occurance 3,000,000 1,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Ev'dence of Insurance CERTIFICATE HOLDER CANCELLATION City of Federal Way Attention: Human Resources 33325 8th Avenue South Federal Way, WA 98003 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHO DREPREESENTATIVE a (PDB) ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Printed by PDB on April 20, 2017 at 10:56AM AC RO O® CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) 04/20/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Bordelon, McCluskey & Sefton, Inc 3801 150th Avenue, SE, Suite 300 Bellevue, WA 98006 License #: 142376 INSURED NAVIA BENEFIT SOLUTIONS, INC. PO Box 53250 Bellevue, WA 98015 CONTACT NAME: Paul Bordelon PHONE fNG. No. ExU: (425)455-2227 (NBC, No): (425)653 -3030 E -MAIL ADDRESS: paul@bordeloninsurance.com INSURER(S) AFFORDING COVERAGE NAIC 0 INSURER A: Markel Insurance company INSURER B : INSURER C : INSURER D : INSURER E : INSURER F : COVERAGES CERTIFICATE NUMBER: 00000000 - 1530128 REVISION NUMBER: 23 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL INSO SUBR WVD POLICY NUMBER POLICY EFF (MM/DD/YYYY) POLICY EXP (MM/DD/YYYY) LIMITS COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ DAMAGE TO PREMISES (Ea RENTED $ CLAIMS -MADE OCCUR MED EXP (Any one person) $ PERSONAL 8 ADV INJURY $ GENERAL AGGREGATE $ GEN'L _ AGGREGATE LIMIT APPLIES POLICY JE T OTHER: PER: LOC PRODUCTS - COMP /OP AGG $ $ AUTOMOBILE LIABILITY ANY AUTO OWNED AUTOS ONLY HIRED AUTOS ONLY SCHEDULED AUTOS NON -OWNED AUTOS ONLY COMBINED SINGLE LIMIT (Ea accident) $ BODILY INJURY (Per person) $ BODILY INJURY (Per accident) $ PROPERTY DAMAGE (Per accident) $ $ UMBRELLA LIAB EXCESS LIAB _ OCCUR CLAIMS -MADE EACH OCCURRENCE $ AGGREGATE $ $ DED RETENTION $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N ANY PROPRIETOR/PARTNER /EXECUTIVE OFFICER/MEMBER EXCLUDED? f (Mandatory in NH) If yes, describe under DESCRIPTION OF OPERATIONS below N /A PER OTH- STATUTE ER E.L. EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYEE $ E.L. DISEASE - POLICY LIMIT $ A Crime 5221 PR02177001 04/22/2017 04/22/2018 Employee Thef 5,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Crime policy is a third party policy and the certificate holder is a third party beneficiary. CERTIFICATE HOLDER CANCELLATION City of Federal Way Attention: Human Resources 33325 8th Avenue South Federal Way, WA 98003 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTH5 REPRESENTATIVEe (5 (PDB) ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Printed by PDB on April 20, 2017 at 10:53AM ACOREY CERTIFICATE OF LIABILITY INSURANCE DATE (MM /DD/YYYY) 04/20/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER INSURED Bordelon, McCluskey & Sefton, Inc 3801 150th Avenue, SE, Suite 300 Bellevue, WA 98006 License #: 142376 NAVIA BENEFIT SOLUTIONS, INC. PO Box 53250 Bellevue, WA 98015 CONTACT NAME: Paul Bordelon PHONE (425)455-2227 E-MAIL ADDRESS: paul@bordeloninsurance.com F FAX Ha); (425)653 -3030 INSURER(S) AFFORDING COVERAGE NAM* INSURER A : Ohio Casualty INSURER B: 24074 INSURER C: INSURER D INSURER E : INSURER F : COVERAGES CERTIFICATE NUMBER: 00000000 - 1479533 REVISION NUMBER: 27 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS INSR LTR TYPE OF INSURANCE ADDLISUBR INSD MID POLICY NUMBER POLICY EFF (MM/DDIYYYY) POLICY EXP (MMIDD/YYYY) LIMITS A X COMMERCIAL GENERAL LIABILITY I Y BK057744499 04/22/2017 04/22/2018 EACH OCCURRENCE $ 1,000,000 DAMAGE TO RENTED PREMISES Ea occurrence) $ 1,000,000 CLAIMS -MADE XI OCCUR MED EXP (Any one person) $ 15,000 PERSONAL & ADV INJURY $ 1,000,000 GENERAL AGGREGATE $ 2,000,000 GEN'L AGGREGATE POLICY OTHER: X LIMIT APPLIES PER: JECOT F J LOC PRODUCTS- COMP /OPAGG $ 2,000,000 $ A AUTOMOBILE X LIABILITY ANY AUTO OWNED AUTOS ONLY HIRED AUTOS ONLY X SCHEDULED AUTOS NON -OWNED AUTOS ONLY Y BK057744499 04/22/2017 04/22/2018 D SINGLE LIMIT $ 1,000,000 $ BODILY INJURY (Per person) BODILY INJURY (Per accident) $ PROPERTY DAMAGE (Per accident) $ $ A X UMBRELLA LIAB EXCESS LIAB X OCCUR CLAIMS -MADE Y US057744499 04/22/2017 04/22/2018 EACH OCCURRENCE $ 4,000,000 AGGREGATE $ 4,000,000 $ DED X RETENT ON $ 10000 A AND EMPLOYERS' LIABII ITY Y / N ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? I , (Mandatory In NH) DESCRIPTION OF OPERATIONS below N/A BK057744499 04/22/2017 04/22/2018 X '' STATUTE ERA Stop Gap E.L. EACH ACCIDENT $ 1,000,000 E.L. DISEASE -EA EMPLOYEE $ 1,000,000 E.L. DISEASE - POLICY LIMIT $ 1,000,000 DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached If more space is required) The General Liability policy includes a blanket automatic additional insured endorsement that provides Primary and Non - Contributory Additional Insured status to the certificate holder and a blanket waiver of rights, only when there is a written contract between the named insured and the certificate holder that requires such status. CERTIFICATE HOLDER CANCELLATION City of Federal Way Attention: Human Resources 33325 8th Avenue South Federal Way, WA 98003 I SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHO �DIR�E�PRREESENTATIVE / ,��� (J`^ s e r��Y� (1/ / (PDB) ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Printed by PDB on April 20, 2017 at 10:57AM COMMERCIAL GENERAL LIABILITY CG 88 10 04 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. COMMERCIAL GENERAL LIABILITY EXTENSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART INDEX SUBJECT PAGE NON -OWNED AIRCRAFT 2 NON -OWNED WATERCRAFT 2 PROPERTY DAMAGE LIABILITY - ELEVATORS 2 EXTENDED DAMAGE TO PROPERTY RENTED TO YOU (Tenant's Property Damage) 2 MEDICAL PAYMENTS EXTENSION 3 EXTENSION OF SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 3 ADDITIONAL INSUREDS - BY CONTRACT, AGREEMENT OR PERMIT 3 PRIMARY AND NON - CONTRIBUTORY- ADDITIONAL INSURED EXTENSION 5 ADDITIONAL INSUREDS - EXTENDED PROTECTION OF YOUR "LIMITS OF INSURANCE" 6 WHO IS AN INSURED - INCIDENTAL MEDICAL ERRORS /MALPRACTICE AND WHO IS AN INSURED - FELLOW EMPLOYEE EXTENSION - MANAGEMENT EMPLOYEES 6 NEWLY FORMED OR ADDITIONALLY ACQUIRED ENTITIES 7 FAILURE TO DISCLOSE HAZARDS AND PRIOR OCCURRENCES 7 KNOWLEDGE OF OCCURRENCE, OFFENSE, CLAIM OR SUIT 7 LIBERALIZATION CLAUSE 7 BODILY INJURY REDEFINED 7 EXTENDED PROPERTY DAMAGE 8 WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US - 8 WHEN REQUIRED IN A CONTRACT OR AGREEMENT WITH YOU CG 88 10 04 13 ® 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 8 With respect to coverage afforded by this endorsement, the provisions of the policy apply unless modified by the endorsement. A. NON -OWNED AIRCRAFT Under Paragraph 2. Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability, exclusion g. Aircraft, Auto Or Watercraft does not apply to an aircraft provided: 1. It is not owned by any insured; 2. It is hired, chartered or loaned with a trained paid crew; 3. The pilot in command holds a currently effective certificate, issued by the duly constituted authority of the United States of America or Canada, designating her or him a commercial or airline pilot; and 4. It is not being used to carry persons or property for a charge. However, the insurance afforded by this provision does not apply if there is available to the insured other valid and collectible insurance, whether primary, excess (other than insurance written to apply specifically in excess of this policy), contingent or on any other basis, that would also apply to the loss covered under this provision. B NON -OWNED WATERCRAFT Under Paragraph 2. Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liability, Subparagraph (2) of exclusion g. Aircraft, Auto Or Watercraft is replaced by the following: This exclusion does not apply to: (2) A watercraft you do not own that is: (a) Less than 52 feet long; and (b) Not being used to carry persons or property for a charge. C. PROPERTY DAMAGE LIABILITY - ELEVATORS 1. Under Paragraph 2. Exclusions of Section I - Coverage A - Bodily Injury And Property Damage Liabil- ity, Subparagraphs (3), (4) and (6) of exclusion j. Damage To Property do not apply if such "property damage" results from the use of elevators. For the purpose of this provision, elevators do not include vehicle lifts. Vehicle lifts are lifts or hoists used in automobile service or repair operations. 2. The following is added to Section IV - Commercial General Liability Conditions, Condition 4. Other Insurance, Paragraph b. Excess Insurance: The insurance afforded by this provision of this endorsement is excess over any property insurance, whether primary, excess, contingent or on any other basis. D. EXTENDED DAMAGE TO PROPERTY RENTED TO YOU (Tenant's Property Damage) If Damage To Premises Rented To You is not otherwise excluded from this Coverage Part: 1. Under Paragraph 2. Exclusions of Section I - Coverage A - Bodily Injury and Property Damage Liability: a. The fourth from the last paragraph of exclusion j. Damage To Property is replaced by the follow- ing: Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" (other than damage by fire, lightning, explosion, smoke, or leakage from an automatic fire protection system) to: (i) Premises rented to you for a period of 7 or fewer consecutive days; or (ii) Contents that you rent or lease as part of a premises rental or lease agreement for a period of more than 7 days. Paragraphs (1), (3) and (4) of this exclusion do not apply to "property damage" to contents of premises rented to you for a period of 7 or fewer consecutive days. A separate limit of insurance applies to this coverage as described in Section III - Limits of Insurance. CG 88 10 04 13 © 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 2 of 8 b. The last paragraph of subsection 2. Exclusions is replaced by the following: Exclusions c. through n. do not apply to damage by fire, lightning, explosion, smoke or leakage from automatic fire protection systems to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III - Limits Of Insurance. 2. Paragraph 6. under Section III - Limits Of Insurance is replaced by the following: 6. Subject to Paragraph 5. above, the Damage To Premises Rented To You Limit is the most we will pay under Coverage A for damages because of "property damage" to: a. Any one premise: (1) While rented to you; or (2) While rented to you or temporarily occupied by you with permission of the owner for damage by fire, lightning, explosion, smoke or leakage from automatic protection sys- tems; or b. Contents that you rent or lease as part of a premises rental or lease agreement. 3. As regards coverage provided by this provision D. EXTENDED DAMAGE TO PROPERTY RENTED TO YOU (Tenant's Property Damage) - Paragraph 9.a. of Definitions is replaced with the following: 9.a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies any person or organization for damage by fire, lightning, explosion, smoke, or leakage from automatic fire protection systems to premises while rented to you or temporarily occupied by you with the permission of the owner, or for damage to contents of such premises that are included in your premises rental or lease agreement, is not an "insured contract ". E. MEDICAL PAYMENTS EXTENSION If Coverage C Medical Payments is not otherwise excluded, the Medical Payments provided by this policy are amended as follows: Under Paragraph 1. Insuring Agreement of Section I - Coverage C - Medical Payments, Subparagraph (b) of Paragraph a. is replaced by the following: (b) The expenses are incurred and reported within three years of the date of the accident; and F. EXTENSION OF SUPPLEMENTARY PAYMENTS - COVERAGES A AND B 1. Under Supplementary Payments - Coverages A and B, Paragraph 1.b. is replaced by the following: b. Up to $3,000 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds. 2. Paragraph 1.d. is replaced by the following: d. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the claim or "suit ", including actual loss of earnings up to $500 a day because of time off from work. G. ADDITIONAL INSUREDS - BY CONTRACT, AGREEMENT OR PERMIT 1. Paragraph 2. under Section II - Who Is An Insured is amended to include as an insured any person or organization whom you have agreed to add as an additional insured in a written contract, written agreement or permit. Such person or organization is an additional insured but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused in whole or in part by: a. Your acts or omissions, or the acts or omissions of those acting on your behalf, in the performance of your on going operations for the additional insured that are the subject of the written contract or written agreement provided that the "bodily injury" or "property damage" occurs, or the "per- sonal and advertising injury" is committed, subsequent to the signing of such written contract or written agreement; or CG 88 10 04 13 @ 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 3 of 8 S b. Premises or facilities rented by you or used by you; or c. The maintenance, operation or use by you of equipment rented or leased to you by such person or organization; or d. Operations performed by you or on your behalf for which the state or political subdivision has issued a permit subject to the following additional provisions: (1) This insurance does not apply to "bodily injury", "property damage ", or "personal and ad- vertising injury" arising out of the operations performed for the state or political subdivision; (2) This insurance does not apply to "bodily injury" or "property damage" included within the "completed operations hazard ". Insurance applies to premises you own, rent, or control but only with respect to the following hazards: (3) (a) The existence, maintenance, repair, construction, erection, or removal of advertising signs, awnings, canopies, cellar entrances, coal holes, driveways, manholes, marquees, hoist away openings, sidewalk vaults, street banners, or decorations and similar expo- sures; or (b) The construction, erection, or removal of elevators; or (c) The ownership, maintenance, or use of any elevators covered by this insurance. However: 1. The insurance afforded to such additional insured only applies to the extent permitted by law; and 2. If coverage provided to the additional insured is required by a contract or agreement, the insur- ance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured. With respect to Paragraph 1.a. above, a person's or organization's status as an additional insured under this endorsement ends when: (1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or (2) That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. With respect to Paragraph 1.b. above, a person's or organization's status as an additional insured under this endorsement ends when their written contract or written agreement with you for such premises or facilities ends. With respects to Paragraph 1.c. above, this insurance does not apply to any "occurrence" which takes place after the equipment rental or lease agreement has expired or you have returned such equipment to the lessor. The insurance provided by this endorsement applies only if the written contract or written agreement is signed prior to the "bodily injury" or "property damage ". We have no duty to defend an additional insured under this endorsement until we receive written notice of a "suit" by the additional insured as required in Paragraph b. of Condition 2. Duties In the Event Of Occurrence, Offense, Claim Or Suit under Section IV - Commercial General Liability Condi- tions. CG 88 10 04 13 © 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 4 of 8 2. With respect to the insurance provided by this endorsement, the following are added to Paragraph 2. Exclusions under Section I - Coverage A - Bodily Injury And Property Damage Liability: This insurance does not apply to: a. "Bodily injury" or "property damage" arising from the sole negligence of the additional insured. b. "Bodily injury" or "property damage" that occurs prior to you commencing operations at the location where such "bodily injury" or "property damage" occurs. c. "Bodily injury", "property damage" or "personal and advertising injury" arising out of the render- ing of, or the failure to render, any professional architectural, engineering or surveying services, including: (1) The preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders or drawings and specifications; or (2) Supervisory, inspection, architectural or engineering activities. This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occur- rence" which caused the "bodily injury" or "property damage ", or the offense which caused the "personal and advertising injury", involved the rendering of, or the failure to render, any professional architectural, engineering or surveying services. d. "Bodily injury" or "property damage" occurring after: (1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or (2) That portion of "your work" out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. e. Any person or organization specifically designated as an additional insured for ongoing operations by a separate ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS endorsement is- sued by us and made a part of this policy. 3. With respect to the insurance afforded to these additional insureds, the following is added to Section III - Limits Of Insurance: If coverage provided to the additional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance: a. Required by the contract or agreement; or b. Available under the applicable Limits of Insurance shown in the Declarations; whichever is less. This endorsement shall not increase the applicable Limits of Insurance shown in the Declaratio ns. H. PRIMARY AND NON - CONTRIBUTORY ADDITIONAL INSURED EXTENSION This provision applies to any person or organization who qualifies as an additional insured under any form or endorsement under this policy. Condition 4. Other Insurance of SECTION IV - COMMERCIAL GENERAL LIABILITY CONDITIONS is amend- ed as follows: a. The following is added to Paragraph a. Primary Insurance: If an additional insured's policy has an Other Insurance provision making its policy excess, and you have agreed in a written contract or written agreement to provide the additional insured coverage on a primary and noncontributory basis, this policy shall be primary and we will not seek contribution from the additional insured's policy for damages we cover. CG 88 10 04 13 © 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 5 of 8 b. The following is added to Paragraph b. Excess Insurance: When a written contract or written agreement, other than a premises lease, facilities rental contract or agreement, an equipment rental or lease contract or agreement, or permit issued by a state or political subdivision between you and an additional insured does not require this insurance to be primary or primary and non - contributory, this insurance is excess over any other insurance for which the addi- tional insured is designated as a Named Insured. Regardless of the written agreement between you and an additional insured, this insurance is excess over any other insurance whether primary, excess, contingent or on any other basis for which the additional insured has been added as an additional insured on other policies. I ADDITIONAL INSUREDS - EXTENDED PROTECTION OF YOUR "LIMITS OF INSURANCE" This provision applies to any person or organization who qualifies as an additional insured under any form or endorsement under this policy. 1. The following is added to Condition 2. Duties In The Event Of Occurrence, Offense, Claim or Suit: An additional insured under this endorsement will as soon as practicable: a. Give written notice of an "occurrence" or an offense that may result in a claim or "suit" under this insurance to us; b. Tender the defense and indemnity of any claim or "suit" to all insurers whom also have insurance available to the additional insured; and c. Agree to make available any other insurance which the additional insured has for a loss we cover under this Coverage Part. d. We have no duty to defend or indemnify an additional insured under this endorsement until we receive written notice of a "suit" by the additional insured. 2. The limits of insurance applicable to the additional insured are those specified in a written contract or written agreement or the limits of insurance as stated in the Declarations of this policy and defined in Section III - Limits of Insurance of this policy, whichever are less. These limits are inclusive of and not in addition to the limits of insurance available under this policy. J. WHO IS AN INSURED - INCIDENTAL MEDICAL ERRORS / MALPRACTICE WHO IS AN INSURED - FELLOW EMPLOYEE EXTENSION - MANAGEMENT EMPLOYEES Paragraph 2.a.(1) of Section II - Who Is An Insured is replaced with the following: (1) "Bodily injury" or "personal and advertising injury": (a) To you, to your partners or members (if you are a partnership or joint venture), to your members (if you are a limited liability company), to a co- "employee" while in the course of his or her employ- ment or performing duties related to the conduct of your business, or to your other "volunteer workers" while performing duties related to the conduct of your business; (b) To the spouse, child, parent, brother or sister of that co- "employee" or "volunteer worker" as a consequence of Paragraph (1) (a) above; (c) For which there is any obligation to share damages with or repay someone else who must pay damages because of the injury described in Paragraphs (1) (a) or (b) above; or (d) Arising out of his or her providing or failing to provide professional health care services. However, if you are not in the business of providing professional health care services or providing profes- sional health care personnel to others, or if coverage for providing professional health care ser- vices is not otherwise excluded by separate endorsement, this provision (Paragraph (d)) does not apply. Paragraphs (a) and (b) above do not apply to "bodily injury" or "personal and advertising injury" caused by an "employee" who is acting in a supervisory capacity for you. Supervisory capacity as used herein means the "employee's" job responsibilities assigned by you, includes the direct supervision of other "employ- ees" of yours. However, none of these "employees" are insureds for "bodily injury" or "personal and CG 88 10 04 13 © 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 6 of 8 advertising injury" arising out of their willful conduct, which is defined as the purposeful or willful intent to cause "bodily injury" or "personal and advertising injury", or caused in whole or in part by their intoxica- tion by liquor or controlled substances. The coverage provided by provision J. is excess over any other valid and collectable insurance available to your "employee ". K. NEWLY FORMED OR ADDITIONALLY ACQUIRED ENTITIES Paragraph 3. of Section II - Who Is An Insured is replaced by the following: 3. Any organization you newly acquire or form and over which you maintain ownership or majority interest, will qualify as a Named Insured if there is no other similar insurance available to that organization. However: a. Coverage under this provision is afforded only until the expiration of the policy period in which the entity was acquired or formed by you; b. Coverage A does not apply to "bodily injury" or "property damage" that occurred before you acquired or formed the organization; and c. Coverage B does not apply to "personal and advertising injury" arising out of an offense committed before you acquired or formed the organization. d. Records and descriptions of operations must be maintained by the first Named Insured. No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations or qualifies as an insured under this provision. L. FAILURE TO DISCLOSE HAZARDS AND PRIOR OCCURRENCES Under Section IV - Commercial General Liability Conditions, the following is added to Condition 6. Repre- sentations: Your failure to disclose all hazards or prior "occurrences" existing as of the inception date of the policy shall not prejudice the coverage afforded by this policy provided such failure to disclose all hazards or prior "occurrences" is not intentional. M. KNOWLEDGE OF OCCURRENCE, OFFENSE, CLAIM OR SUIT Under Section IV - Commercial General Liability Conditions, the following is added to Condition 2. Duties In The Event of Occurrence, Offense, Claim Or Suit: Knowledge of an "occurrence ", offense, claim or "suit" by an agent, servant or "employee" of any insured shall not in itself constitute knowledge of the insured unless an insured listed under Paragraph 1. of Section II - Who Is An Insured or a person who has been designated by them to receive reports of "occurrences ", offenses, claims or "suits" shall have received such notice from the agent, servant or "employee ". N. LIBERALIZATION CLAUSE If we revise this Commercial General Liability Extension Endorsement to provide more coverage without additional premium charge, your policy will automatically provide the coverage as of the day the revision is effective in your state. O. BODILY INJURY REDEFINED Under Section V - Definitions, Definition 3. is replaced by the following: 3. "Bodily Injury" means physical injury, sickness or disease sustained by a person. This includes mental anguish, mental injury, shock, fright or death that results from such physical injury, sick- ness or disease. CG 88 10 04 13 ® 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 7 of 8 P. EXTENDED PROPERTY DAMAGE Exclusion a. of COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY is replaced by the following: a. Expected Or Intended Injury "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" or "property damage" resulting from the use of reasonable force to protect persons or property. Q. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US - WHEN REQUIRED IN A CONTRACT OR AGREEMENT WITH YOU Under Section IV - Commercial General Liability Conditions, the following is added to Condition 8. Trans- fer Of Rights Of Recovery Against Others To Us: We waive any right of recovery we may have against a person or organization because of payments we make for injury or damage arising out of your ongoing operations or your work" done under a contract with that person or organization and included in the "products- completed operations hazard" provided: 1. You and that person or organization have agreed in writing in a contract or agreement that you waive such rights against that person or organization; and 2. The injury or damage occurs subsequent to the execution of the written contract or written agree- ment. CG 88 10 04 13 @ 2013 Liberty Mutual Insurance Includes copyrighted material of Insurance Services Office, Inc.. with its permission. Page 8 of 8