HomeMy WebLinkAboutC04-237 Mountain States Administration Co., Inc.eOd / X37 -yam
DEPENDENT CARE
FLEXIBLE SPENDING ACCOUNT
EAGLE COUNTY
EAGLE COUNTY GOVERNMENT
— January 1, 2004 —
IMPORTANT TELEPHONE NUMBERS
PLAN SPONSOR — Group # 371
Eagle County Government
500 Broadway
P.O. Box 850
Eagle, CO 81631
Telephone: (970) 328 -8790
Fax: (970) 328 -8799
www. eggle.,ounty. us
CLAIMS ADMINISTRATOR
Mountain States Administration Co., Inc. (MSA)
13901 East Exposition Ave.
Aurora, CO 80012
(303) 360 -9600
Denver Metro Area
(800) 828 -8847
Inside Colorado
(800) 828 -8012
Outside Colorado
(303) 360 -7100
Fax
www.msaclaims.com
TABLE OF CONTENTS
INTRODUCTION TO FLEXIBLE SPENDING ACCOUNTS ................ ..............................1
DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT PLAN ......... ............................... 2
GENERALINFORMATION ............................................................................... ............................... 2
ELIGIBILITY................................................................................................... ............................... 3
CHANGES AND TERMINATIONS ...................................................................... ............................... 3
SpecialEnrollment ................................................................................... ............................... 3
Termination.............................................................................................. ............................... 4
CONTRIBUTIONS............................................................................................ ............................... 4
REIMBURSEMENTS FROM THE DEPENDENT CARE FSA PLAN ........................ ............................... 5
DEPENDENT CARE ELIGIBLE EXPENSES ........................................................ ............................... 5
DEPENDENT CARE FSA EXCLUDED EXPENSES ............................................. ............................... C
CONTRIBUTION PLANNING TIPS .................................................................... ............................... 7
DISCRIMINATIONTESTS ................................................................................ ............................... 8
FSA EFFECT ON OTHER BENEFIT PLANS ....................................................... ............................... 8
DEPENDENT CARE ACCOUNT OR FEDERAL TAX CREDIT? ............................. ............................... 8
DEPENDENT CARE FSA CLAIMS PROCEDURE ............................................... ............................... 9
ClaimsFiling Deadline ............................................................................ ............................... 9
CONTINUATION OF COVERAGE DURING A LEAVE OF ABSENCE ................... ............................... 10
DEFINITIONS............................................................................................... .............................11
SUMMARY PLAN DESCRIPTION ......................:..................................... .............................13
ADOPTION.................................................................................................... .............................15
Eagle County Government i Table of Contents • 1/1/04
INTRODUCTION TO
FLEXIBLE SPENDING ACCOUNTS
Dependent Care Flexible Spending Accounts (FSAs) are possible due to a provision of the IRS Code
Section 125 tax law that allows "You" to deposit a portion of your before tax income into a non-
taxable account which is used to reimburse you for eligible childcare or eldercare expenses you
might have. You save federal, state, and FICA taxes on the money that you set aside to pay for these
types of expenses.
This description of the Dependent Care FSA is the written "Plan Document" and Summary Plan
Description of the Plan. It outlines all rules on Plan operations including participation,
reimbursement and operational procedures. When terms have unique definitions, those terms are
found in quotation marks (i.e. "Children ") and are defined in the Definitions section of this Plan.
Eagle County Government is the Plan Administrator and herein referred to as Eagle County,
Employer, or Plan Sponsor. If any interpretations or judgments of the Plan Document are necessary,
the Plan Administrator will make them.
Eagle County Government reserves the right to amend or terminate all Plans at its sole
discretion and to make administrative and interpretive decisions necessary to Plan operation.
Eagle County Government 1 Introduction to FSAs • 1/1/04
DEPENDENT CARE
FLEXIBLE SPENDING ACCOUNT PLAN
GENERAL INFORMATION
The Dependent Care Flexible Spending Account Plan (FSA) is a Benefit Plan that allows "You" to
be reimbursed for certain child or elder care expenses which you may have. The dependent care
must be necessary for you (or you and your "Spouse ") to be gainfully employed or in order for
your Spouse to attend school full -time.
For persons with these types of expenses totaling only $500 per year, it is not uncommon to save
$150 to $200 per year. The higher the expenses and the higher your tax bracket, the more the
savings.
The Dependent Care FSA is funded with employee contributions that are made via "Salary
Reduction." Similar to a pre -tax payroll deduction, you direct money into your Flexible Spending
Account instead of receiving it in the form of cash pay. In this way you avoid Federal, State and
social security taxes that are paid when cash compensation is received.
To gain these advantages there are several strict Internal Revenue Code rules for the Dependent Care
FSA to follow, such as:
Once you enroll you may not withdraw or change your rate of contribution for
the rest of the "Plan Year," except as described under Special Enrollment.
2. If you have any unused funds in your account at the end of the Plan Year,
Internal Revenue Service regulations prohibit the return of any excess amount
to you. This is called the "use- it -or- lose -it " rule. Forfeited funds will be used
by the Employer to offset administrative costs of the Plan.
3. To be eligible for reimbursement in a "Plan Year," expenses must be incurred
during the Plan Year and incurred while you were enrolled in the Plan.
4. You will be reimbursed only up to the amount of funds accumulated in your
account through "Salary Reductions."
You should plan carefully, and then use the Dependent Care FSA to help maximize after -tax take
home pay.
Eagle County Government 2 Dependent Care FSA Plan • 1/1/04
ELIGIBILITY
The Dependent Care FSA is elective and operates only if "You" enroll each "P1anYear." "Regular
Full- Time" and "Regular Part- Time" "Employees" may participate. You are first eligible to
participate on the first of the month following date of employment.
You must enroll either:
Within thirty (30) days from date of hire. Participation will normally be effective on the
first day of the month coincident with or next following enrollment. Your initial period
of participation runs from your enrollment date and ends on the last day of the P1anYear.
2. For succeeding PlanYears, you must re- enroll preceding that P1anYear. The enrollment
period will be designated annually by the Employer. Participation will be effective on
the first day of the Plan Year.
CHANGES AND TERMINATIONS
Special Enrollment
Once you have made your election for the "Plan Year," that election will stay in effect for the entire
Plan Year. Changes in Dependent Care FSA elections may only be made mid -year if the changes are
allowed under IRS Code and are on account of and consistent with a change in status as defined by
the IRS. You must enroll, or request the change in writing within thirty (30) days of the change in
status. A qualified change in status includes:
1. A change in marital status (marriage, death of "Spouse," legal separation, or annulment);
2. A change in the number of dependents (as the result of birth, death, adoption, or
placement for adoption);
3. A change in employment status ( commencement or termination of employment, strike or
lockout, commencement of or return from unpaid leave of absence, change in worksite, or
change in eligibility status for the plan);
4. Dependent ceasing to satisfy eligibility requirements;
5. Conforming to a judgment, decree, or order resulting from a divorce, legal separation,
annulment, or change in legal custody for a dependent child or foster child;
Eagle County Government 3 Dependent Care FSA Flan • 1 /1 /U4
6. Leave of absence under the Family and Medical Leave Act;
7. Any other change in status permitted under Treasury Regulations § 1.125 -4 and the
regulations thereunder.
CAUTION: Claims incurred during periods of time for which you do not make contributions are not
eligible for reimbursement.
Termination
Your contributions to the Dependent Care Flexible Spending Account will cease on the last day of
the pay period in which you cease to be an eligible "Employee" due to:
1. Termination of employment (voluntary or involuntary), retirement or death;
2. Your reduction in hours worked below the minimum required to participate; or
3. Failure to pay premium contributions due during a leave of absence (see Continuation
During a Leave of Absence).
Contributions will also stop at the end of each "Plan Year." You must re- enroll for subsequent Plan
Years.
Upon termination of employment, all claims for "Expenses Incurred" may only be submitted for
services provided prior to the date of termination and while you were a participant in the Plan.
Claims must be submitted within ninety (90) days from the date of termination. Claims received
after this deadline are not covered by the Plan and any undistributed amounts will be forfeited.
CONTRIBUTIONS
Prior to the start of the "Plan Year," "You" determine the amount that you wish to contribute to your
Dependent Care FSA account on a Plan Year basis. You may contribute up to $5,000 per Plan
Year, except for the following conditions:
If you or your "Spouse" earn less than $5,000, the most you can contribute is the lesser of
your or your Spouse's income;
2. If you are married but file separate returns, you may contribute a maximum of $2,500
each Plan Year;
3. If both you and your Spouse contribute to a Dependent Care FSA, the maximum you may
contribute 'ol int1X is a total of $5,000;
Eagle County Government 4 Dependent Care FSA Plan • 1/1/04
4. If your Spouse is a full -time student at least five (5) months a year or is disabled and
incapable of self -care, the IRS considers his or her income to be $3,000 per year if you
have one dependent or $6,000 per year if you have two or more dependents. Thus, the
maximum annual amount you could contribute to the Dependent Care FSA is $3,000 if
you have one dependent or $5,000 (the annual contribution maximum) if you have two
dependents; and,
5. If your effective date of participation in the Plan is any date other than January 1, you may
contribute up to the allowed Plan maximum. Contributions may not exceed your pay.
Your annual contribution amount will be deducted equally per each pay period (26 per year)
throughout the year and made by reducing your current pay via "Salary Reduction." This means that
Dependent Care FSA contribution amounts are deducted from your gross pay prior to calculation of
taxes.
REIMBURSEMENTS FROM THE DEPENDENT CARE FSA PLAN
Over the period of the "Plan Year," you will file claims for expenses eligible under the Dependent
Care FSA with the Plan's Claims Administrator. Dependent Care FSA reimbursements for eligible
expenses will normally be made within fifteen (15) days from the date the claim is properly
submitted. Reimbursements will be made only up to the amount of funds accumulated in your
Dependent Care account.
DEPENDENT CARE ELIGIBLE EXPENSES
Eligible Dependent Care expenses are those that enable "You" (or you and your "Spouse ") to be
gainfully employed or in order for your Spouse to attend school full -time. Gainful employment may
be full or part-time, inside or outside of the home. Volunteer work does not meet the definition of
gainful employment.
The following core criteria must be met for an expense to be eligible for reimbursement by the Plan:
The claim is an eligible expense;
2. The claim was incurred while "You" were a Dependent Care FSA participant;
3. The claim was incurred within the "Plan Year ";
4. The claim was submitted prior to any claim filing deadlines;
5. The claim is for an eligible "Dependent "; and
6. The claim is not excluded for any other reason as described under Dependent Care FSA
Excluded Expenses.
Eagle County Government 5 Dependent Care I bA N an • Ii11u4
EYANIPLES OF ELIGIBLE EXPENSES
A child care or adult care center that complies with state and local regulations;
2. A nursery school or summer day camp;
3. Dependent care duties performed by a housekeeper;
4. Someone to care for an elderly or incapacitated dependent;
5. A relative who cares for your dependents, as long as he or she is age 19 or older and is not
one of your dependents;
6. A babysitter (either inside or outside your home).
If the care is provided outside your home, your "Dependent" must spend at least eight (8) hours each
day in your home.
You will have to report the Social Security number of the caregiver when you file a claim. If you use
a child or adult care center, you will have to report the center's Taxpayer Identification Number
(TIN). The amount of your Dependent Care Account deposit will automatically be reported on your
W -2 form.
This is not a complete list of the types of expenses that are eligible for reimbursement. You may
want to refer to Internal Revenue Service Publication 503 as a guideline or consult your tax advisor
for further information on the types of dependent care expenses that qualify for reimbursement.
DEPENDENT CARE FSA EXCLUDED EXPENSES
The Plan will not reimburse:
1. Babysitting that is not work - related.
2. Overnight camp.
3. School costs for the first grade and higher.
4. Nursing home expenses for dependents who don't live with you.
5. Dependent care, if:
a. Care is provided by a Spouse;
b. Care is provided by a person for whom the employee claims a personal tax
deduction;
Eagle County Government 6 Dependent Care FSA Plan • 1/1/04
C. Care is provided by a child of the employee who is under age 19;
d. Any care that is deducted on your personal income tax filing;
e. The "Dependent" "Child" is age 13 or over.
6. Other expenses not allowed under Internal Revenue Code regulations or guidelines
including but not limited to Code Section 129.
7. Claims filed after any claim filing deadlines state herein.
CONTRIBUTION PLANNING TIPS
Undistributed account balances at the close of each "Plan Year" or at termination of participation
must, by law, be forfeited (returned to the Employer). Reasonable planning should virtually
eliminate this potential for you. Forfeited funds will be used by the Employer to offset
administrative costs of the Plan.
To help you estimate your eligible dependent care expenses, look at the following chart and fill in the
expenses you think you will have in the "Plan Year." Add the estimated costs — you can elect to
contribute any part of that amount into your Dependent Care FSA, up to the Plan maximum.
Dependent Care Flexible Spending Account Worksheet
(Only list care necessary for you and your "Spouse" to work or for your Spouseto attend school full -time)
Day care provider
(child or adult):
Nursery school:
Before - school /after- school care:
Summer day camp:
Babysitter while you are at work:
Housekeeper whose duties
include day care:
Other:
TOTAL:
Eagle County Government
Estimated Cost
$
$
7 Dependent Care FSA Plan • 1/1 /04
Be sure to submit bills for reimbursement before any filing deadlines, especially prior to the end of
the "Plan Year," the time that forfeitures may occur. Bills must be for services rendered within the
Plan Year and while you were a participant in the Dependent Care FSA.
All reimbursements will be made directly to the participating employee. The employee is
responsible for paying those persons who provided services or care.
DISCRIMINATION TESTS
Internal Revenue Code rules require that benefits under this plan be received by a broad cross section
of employees. Should actual plan operations result in violation of those rules, the Plan reserves the
right to reduce benefits to any individual to cause the Plan to be in compliance with applicable laws.
FSA EFFECT ON OTHER BENEFIT PLANS
FSA participation will reduce your cash pay in each Plan Year of participation. Any Social Security,
Workers' Compensation and Unemployment Insurance contributions and benefits will be based upon
the lower pay level and, could, over time, result in lower benefit payments.
For other Benefit Plans sponsored by the Employer such as Life Insurance or Retirement Plans that
may be income - based, benefits will continue to be based on your regular pay, prior to FSA
contributions.
DEPENDENT CARE ACCOUNT OR FEDERAL TAX CREDIT?
Eligible expenses for the Dependent Care FSA are generally the same expenses that would give you
a dependent care tax credit on your federal income tax return. You will need to decide if you want
the tax advantages of the Dependent Care account or if you want to take the federal dependent care
tax credit.
Briefly, here are the differences between the two:
Using the Dependent Care FSA reduces your taxable income.
2. The federal dependent care tax credit reduces your federal income tax by a percentage of
your qualifying dependent care expenses. That percentage will vary according to your
family income.
Expenses reimbursed through the Dependent Care Account are not eligible for the federal
dependent care tax credit. They reduce your maximum tax credit dollar for dollar.
Please seek advice from your tax professional if needed to choose which option is better for you.
Eagle County Government 8 Dependent Care FSA Plan • 1/1/04
DEPENDENT CARE FSA CLAIMS PROCEDURE
As "You" accumulate Dependent Care expenses, you should file claims for review and appropriate
reimbursement. A completed Claim Reimbursement Form must be submitted, along with receipts to
substantiate the claim(s). You may obtain a claim form from the Employer's Human Resources
Office or Claims Administrator.
The receipts must include:
1. Description of services provided and receipt showing the amount paid.
2. Name of person for whom services were provided and relationship to "You."
3. Complete name, address and Tax ID # or social security number of those providing
services.
4. Date or period for which services were provided.
Please submit all Dependent Care FSA claims to the Plan's Claims Administrator. Refer to the
Important Telephone Numbers section for contact information details.
Note: The date that a claim is considered 'filed" is the date that it is
stamped "received" by the Claims Administrator.
"You" will be reimbursed only up to the amount of money accumulated in your account through
"Salary Reductions." You should, however, still claim the full amount of the expenses you paid.
The balance of unpaid claims will be carried forward to future months within the "Plan Year" and
processed in the sequential order in which they were submitted.
Dependent Care FSA reimbursements will normally be made within fifteen (15) days from the date
the claim is properly submitted.
Claims Filing Deadline
End of Plan Year
All claims for "Expenses Incurred" in a "P1anYear" must be submitted no later than three months
following the end of that Plan Year. Claims received after this deadline are not covered by the Plan
and any undistributed amounts will be forfeited.
Termination of Employment
Eagle County Government 9 Dependent Care FSA Plan • 1/1/04
Upon termination of employment, all claims for "Expenses Incurred" may only be submitted for
services provided prior to the date of termination and while you were a participant in the Plan.
Claims must be submitted within ninety (90) days from the date of termination. Claims received
after this deadline are not covered by the Plan and any undistributed amounts will be forfeited.
CONTINUATION OF COVERAGE DURING A LEAVE OF ABSENCE
A participating "Employee" on either a Family Medical Leave (as defined in the Family Medical
Leave Act of 1993, as amended) or any other Leave of Absence approved by Eagle County
Government may maintain coverage in the Dependent Care FSA. There are two (2) options for
continuing contributions during a Leave of Absence:
For a paid leave, contributions will continue on a pre -tax "Salary Reduction" basis.
2. For an unpaid leave, contributions must be made by direct payment to the Plan Sponsor.
Such contributions will be on a post -tax basis. Coverage and claims payment will not be
disrupted as long as monthly contributions are received by the Plan by the first day of each
month. Reimbursements from the Dependent Care FSA will be discontinued if the
contribution is not received by the first day of any month.
A participating Employee who terminates coverage while on an approved Leave of Absence may
reinstate coverage immediately upon return to work. Such reinstatement must be made within thirty
(30) days of returning to work. Claims are not eligible for reimbursement for expenses incurred
while coverage was terminated. Coverage for the remainder of the Plan Year will be equal to the
participating Employee's election for the Plan Year, prorated for the period during the Leave for
which no contributions were paid, and reduced by prior reimbursements.
NOTE: Claims incurred during periods of time for which you do not make contributions or when
coverage has been terminated are not eligible for reimbursement.
A participating Employee on an approved Leave of Absence has the right to revoke or change
elections (for example, because of a change in status as described in sub - section Special Enrollment)
under the same terms and conditions that apply to employees participating in the Plan who are not on
a Leave of Absence.
Eagle County Government 10 Dependent Care FSA Plan • 1/1/04
DEFINITIONS
As used in this Plan, the following words shall have the meaning indicated in this section:
" Child(ren)" shall mean the employee's:
1. Natural children;
2. Lawfully adopted children, or children in the process of being legally adopted from the
time of placement in the employee's home;
3. Stepchildren;
4. Children for whom the employee has been appointed legal guardian, legal ward, a ward by
court decree.
Such Children must be:
Unmarried;
2. Under the age of 13;
Reside with the Employee in a parent -child relationship.
In the case of divorced parents, the Child shall be treated as a qualifying individual of the custodial
parent and shall not be treated as a qualifying individual with respect to the non - custodial parent,
regardless of which parent claims a tax exemption for the Child.
"Dependent" shall mean:
The Employee's Spouse who is physically and /or mentally unable to care for himself or
herself;
2. An Employee's or Spouse's elderly parent whom the Employee cares for and claims as a
dependent on their federal income tax filing;
3. The Employee's Child(ren);
4. The Employee's Children) of any age who are physically and /or mentally unable to care
for himself or herself.
To be physically and /or mentally unable to care for oneself shall mean that the person cannot dress,
clean, or feed themselves because of physical and/or mental problems. Also, a person who must
have constant attention to prevent them from injuring themselves or others are considered to be
unable to care for themselves.
Eagle County Government 11 uetmitions • -u w4
The Dependent must also regularly spend at least eight (8) hours each day in the Employee's
household.
"Employee" shall mean a person employed by Eagle County Government on regular basis who is
included in a class or group of employees to which this Plan extends.
"Expenses Incurred" shall mean, for the purposes of this Plan, that an expense shall be considered
to be incurred at the time the service for which such expense incurred is rendered or at the time the
supply for which such expense incurred is furnished.
"Plan" shall mean the plan of benefits detailed in the Plan Document.
"Plan Document" shall mean the document detailing the plan of benefits.
"Plan Year" shall mean the annual accounting period of the Plan, which shall begin and end on the
dates as specified in the Summary Plan Description.
Regular Full- Time" shall mean an employee regularly scheduled to work an average of thirty-eight
(38) hours per week.
"Regular Part - Time" shall mean an employee who is employed in a position which normally
requires more than 30 hours, but less than 38 hours per week, and such person is not classified by
Eagle County Government as temporary, occasional or seasonal or Regular Full Time.
"Salary Reduction" shall mean an employer- sponsored arrangement in which employees may elect
to have some portion of their salaries be contributed to a tax - qualified plan on their behalf.
"Spouse" shall mean an Employee's lawful spouse or common -law spouse, provided a notarized
affidavit of common -law marriage is submitted to Eagle County Government's Human Resources.
"You" and "Your" shall mean an Eagle County Government Employee actively participating in this
Plan.
Eagle County Government 12 Definitions • 1/1/04
SUMMARY PLAN DESCRIPTION
1. Names of the Plan and Plan Number:
Eagle County Government Dependent Care Flexible Spending Account - Plan Number 506
The Plan is for the benefit of employees of Eagle County Government.
2. Employer Identification Number
3. Name and Address of Employer whose Employees are Covered by the Plan:
EAGLE COUNTY GOVERNMENT
500 Broadway
P.O. Box 850
Eagle, CO 81631
4. Plan Year:
The Plan Year begins on January 1 and ends on December 31.
5. Plan Administrator:
HUMAN RESOURCES DIRECTOR
EAGLE COUNTY GOVERNMENT
500 Broadway
P.O. Box 850
Eagle, CO 81631
6. Agent for Service of Legal Process:
Plan Administrator
7. Funding:
The Dependent Care Flexible Spending Account Plan is self - funded by voluntary employee
salary reductions and is managed by the Plan Administrator.
Eagle County Government 13 Summary Plan Description • 1/1/04
8. Your Rights to Information About the Plan
Eagle County Government feels strongly about all Plan participants having access to
complete information about the Plan. You are entitled to:
A. Examine, without charge, at the Plan Administrator's office and at other specified
locations, such as work sites, all "Plan Documents."
B. Obtain copies of all "Plan Documents" and other Plan information upon written
request to the Plan Administrator. The Administrator may make a reasonable charge
for the copies.
C. Receive a summary of the Plan's annual financial report.
In addition, the people who operate your plan, called fiduciaries of the Plan, have a duty to
do so prudently and in your interest as well as that of other Plan participants and
beneficiaries.
If your claim for a welfare benefit is denied in whole or in part, you will receive a written
explanation of the reason for the denial. You have the right to have the Plan Administrator
review and reconsider your claim.
Eagle County Government 14 Summary Plan Description • 1/1/04
ADOPTION
Sponsor: Eagle County Government
Plan Document: Dependent Care Flexible Spending Account
Summary Plan Description: Dependent Care Flexible Spending Account
Replacement: This Plan replaces Eagle County Government Dependent Care
Flexible Spending Account Plan dated January 1, 2000 which is
hereby terminated.
Legal Compliance: The Plan is intended to comply with all applicable federal or state
laws and findings of their regulatory authorities and by this
provision is automatically amended to be in minimal compliance
as necessary.
Claims Filing Deadline: If due to provider error or administrative delay, claims are not
filed by the Plan's claim filing deadline, the Plan Administrator
may, at its sole discretion and without setting any precedent,
accept and process such claims as covered by the Plan provided
such claims are submitted no later than twelve (12) months after
the end of the Plan Year in which services are provided.
Effective Date: January 1, 2004
Adopted: Date: " t Y �2 00
tnt
Signature: Kt
Title:
1 \�
Eagle County Government �' 15 Adoption • 1/1/04
HEALTHCARE
FLEXIBLE SPENDING ACCOUNT
EAGLE COUNTY
EAGLE COUNTY GOVERNMENT
— January 1, 2004 —
IMPORTANT TELEPHONE NUMBERS
PLAN SPONSOR — Group # 371
Eagle County Government
500 Broadway
P.O. Box 850
Eagle, CO 81631
Telephone: (970) 328 -8790
Fax: (970) 328 -8799
www. eaglecounty its
CLAIMS ADMINISTRATOR
Mountain States Administration Co., Inc. (MSA)
13901 East Exposition Ave.
Aurora, CO 80012
(303) 360 -9600
Denver Metro Area
(800) 828 -8847
Inside Colorado
(800) 828 -8012
Outside Colorado
(303) 360 -7100
Fax
www.msaclaims.com
TABLE OF CONTENTS
INTRODUCTION TO FLEXIBLE SPENDING ACCOUNTS ................ ............................... l
HEALTHCARE FLEXIBLE SPENDING ACCOUNT PLAN ................. ............................... 2
GENERAL INFORMATION ............................................................................... ............................... 2
ELIGIBILITY................................................................................................... ...............................
3
CHANGES AND TERMINATIONS ...................................................................... ...............................
3
SpecialEnrollment ................................................................................... ...............................
3
Termination.............................................................................................. ...............................
4
CONTRIBUTIONS............................................................................................ ...............................
5
REIMBURSEMENTS FROM THE HEALTHCARE FSA PLAN ................................ ...............................
5
HEALTHCARE FSA ELIGIBLE EXPENSES ........................................................ ...............................
5
HEALTHCARE FSA EXCLUDED EXPENSES ..................................................... ...............................
6
CONTRIBUTION PLANNING TIPS .................................................................... ...............................
7
DISCRIMINATION TESTS ................................................................................ ...............................
8
FSA EFFECT ON OTHER BENEFIT PLANS ....................................................... ...............................
8
HEALTHCARE FSA CLAIMS PROCEDURE ....................................................... ...............................
8
ClaimsDecision Timeline ........................................................................ ...............................
9
TimelyFiling of Claims ......................................................................... ...............................
10
Claims Appeal Procedures ..................................................................... ...............................
10
Your Rights When Requesting an Appeal of a Claims Denial .............. ...............................
10
CONTINUATION OF COVERAGE OPTIONS ........................................ .............................12
HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996
(HIPAA) ........................................................................................................ ............................... 15
DEFINITIONS............................................................................................... .............................18
SUMMARY PLAN DESCRIPTION .......................................................... ............................... 22
ADOPTION.................................................................................................. ............................... 24
Eagle County Government i Table of Contents • 1/1/04
INTRODUCTION TO
FLEXIBLE SPENDING ACCOUNTS
Healthcare Flexible Spending Accounts (FSAs) are possible due to a provision of the Internal
Revenue Code Section 125 tax law that allows "You" to contribute a portion of your before tax
income into a non - taxable account which is used to reimburse you for eligible unreimbursed medical,
dental, vision and other eligible healthcare expenses. You save federal, state, and FICA taxes on the
money that you set aside to pay for these types of expenses.
This description of the Healthcare FSA is the "Plan Document" and Summary Plan Description of
the Plan. It outlines all rules on Plan operations including participation, reimbursement and
operational procedures. When terms have unique definitions, those terms are found in quotation
marks (i.e. "Children ") and are defined in the Definitions section of this Plan.
Eagle County Government is the Plan Administrator and herein referred to as Eagle County,
Employer, or Plan Sponsor. If any interpretations or judgments of the Plan Document are necessary,
the Plan Administrator will make them.
Eagle County Government reserves the right to amend or terminate all Plans at its sole
discretion and to make administrative and interpretive decisions necessary to Plan operation.
Eagle County Government 1 Introduction to FSAs • 111104
HEALTHCARE
FLEXIBLE SPENDING ACCOUNT PLAN
GENERAL INFORMATION
The Healthcare Flexible Spending Account Plan (FSA) is a Benefit Plan that allows "You" to be
reimbursed for eligible healthcare expenses incurred by you and /or your "Dependents" that are not
covered by other benefit plans or insurance.
For persons with these types of eligible expenses totaling only $500 per year, it is not uncommon to
save $150 to $200 per year due to tax savings. The higher the expenses and the higher your tax
bracket, the more the savings.
The Healthcare FSA is funded with employee contributions that are made via "Salary Reduction."
Similar to a pre -tax payroll deduction, you direct money into your Flexible Spending Account
instead of receiving it in the form of cash pay. In this way, you avoid Federal, State and social
security taxes that are paid when cash compensation is received.
To gain these tax advantages there are several strict Internal Revenue Code rules for the FSA to
follow, such as:
1. Once you enroll you may not withdraw or change your rate of contribution for
the rest of the "P1anYear," except as described under Special Enrollment.
2. If you have any unused funds in your account at the end of the P1anYear,
Internal Revenue Service regulations prohibit the return of any excess amount
to you. This is sometimes called the use- it -or- lose -it rule. Forfeited funds will
be used by the Employer to offset administrative costs of the Plan.
To be eligible for reimbursement in a "P1anYear," expenses must be incurred
during the PlanYear and incurred while you are enrolled in the Plan.
4. You can be reimbursed up to the total amount of your annual deposit — even
before that amount has accumulated in your account.
You should plan carefully, and then use the Healthcare FSA to help maximize after -tax take home
pay.
Eagle County Government 2 Health Care FSA Plan • 1/1/04
ELIGIBILITY
The Healthcare FSA is elective and operates only if "You" enroll each "PlanYear." "Regular Full -
Time" and "Regular Part- Time" "Employees" may participate. You are first eligible to participate
on the first of the month following date of employment.
You must enroll either:
1. Within thirty (30) days from date of hire. Participation will normally be effective on the
first day of the month coincident with or next following enrollment. Your initial period
of participation runs from your enrollment date and ends on the last day of the PlanYear.
2. For succeeding P1anYears, you must re- enroll preceding that PlanYear. The enrollment
period will be designated annually by the Employer. Participation will be effective on
the first day of the Plan Year.
You may participate in the Healthcare FSA even though you may not enroll in the Employer's
Medical Plan.
Eligible healthcare expenses for "Dependents" are also eligible for reimbursement under this Plan.
CHANGES AND TERMINATIONS
Special Enrollment
Once "You" have made your election for the "PlanYear," that election will stay in effect for the entire
PlanYear. Changes in Healthcare FSA elections may only be made mid - PlanYear if the changes are
allowed under IRS Code and are on account of and consistent with a change in status as defined
therein. You must enroll, or request the change in writing within thirty (30) days of the change in
status. A qualified change in status includes:
A change in marital status (marriage, death of spouse, legal separation, or annulment);
2. A change in the number of dependents (as the result of birth, death, adoption, or
placement for adoption);
A change in employment status (commencement or termination of employment, strike or
lockout, commencement of or return from unpaid leave of absence, change in worksite, or
change in eligibility status for the plan);
4. Dependent ceasing to satisfy eligibility requirements;
Eagle County Government 3 Health Care FSA Plan • 1/1/04
5. Conforming to a judgment, decree, or order resulting from a divorce, legal separation,
annulment, or change in legal custody for a dependent child or foster child;
6. Entitlement of the participant or the participant's spouse or dependent child to coverage
under Medicaid or Medicare, or loss of such coverage;
7. Leave of absence under the Family and Medical Leave Act;
S. Any other change in status permitted under Treasury Regulations §1.125-4 and the
regulations thereunder.
In the event you have a qualified change in status mid -Plan -Year "You" will not be permitted to
reduce your contribution level below an amount sufficient to cover claims incurred prior to your
change in status.
For example: "You" elect to contribute $100 per month ($1,200 /year) in the FSA. March
15th you are reimbursed $800 in eligible expenses. Then you experience a qualified
change in status on June 1St and request that your contribution be reduced to $0 per
month. However, as of June 1St you had only contributed $500 (Jan — May). Therefore,
you will not be permitted to reduce your contribution to $0, until such time your
contributions equal the amount you have already been reimbursed.
CAUTION: Claims incurred during periods of time for which you do not make contributions are not
eligible for reimbursement.
Termination
Your contributions to the Healthcare Flexible Spending Account will cease on the last day of the pay
period in which you cease to be an eligible "Employee" due to:
Termination of employment (voluntary or involuntary), retirement or death;
2. Your reduction in hours worked below the minimum required to participate; or
3. Failure to pay premium contributions due during a leave of absence (see Continuation of
Coverage, subsection, During a Leave of Absence).
Contributions will also stop at the end of each "Plan Year." You must re- enroll for subsequent Plan
Years.
Upon termination of employment, all claims for "Expenses Incurred" may only be submitted for
services provided prior to the date of termination and while you were a participant in the Plan.
Claims must be submitted within ninety (90) days from the date of termination. Claims received
after this deadline are not covered by the Plan and any undistributed amounts will be forfeited.
Eagle County Government 4 Health Care FSA Plan • 1/1/04
Under certain circumstances, you may elect to continue participation in the Healthcare FSA through
the end of the Plan Year by continuing to make contributions via COBRA continuation coverage.
Please refer tothe subsection entitled COBRA, under the Continuation of Coverage Options section.
CONTRIBUTIONS
Prior to the start of the "P1anYear," "You" determine the amount that you wish to contribute to your
Healthcare FSA account. Maximum contributions cannot exceed $2,400 per Plan Year. Your
annual contribution will be prorated per each pay period (26 per year) and made by reducing your
current pay via "Salary Reduction." This means that Healthcare FSA contribution amounts are
deducted from your gross pay prior to calculation of taxes.
If your effective date of participation in the Plan is any date other than the first day of the P1anYear,
the annual maximum contribution amount will be prorated based on the number of payroll periods
remaining in the Plan Year.
REIMBURSEMENTS FROM THE HEALTHCARE FSA PLAN
Over the period of the "PlanYear," "You" will file claims for expenses eligible under the Healthcare
FSA with the Plan's Claims Administrator. Healthcare FSA reimbursements for eligible expenses will
normally be made within fifteen (15) days from the date the claim is properly submitted.
Reimbursements will be made for eligible Healthcare expenses up to your annual election amount
minus any prior Plan Year reimbursements.
HEALTHCARE FSA ELIGIBLE EXPENSES
The following core criteria must be met for an expense to be eligible for reimbursement by the Plan:
1. The claim is an eligible expense;
2. The expense was incurred while you were a Healthcare FSA participant;
3. The claim was incurred within the "Plan Year;"
4. The expense has not been, nor will it be, reimbursed by any other health or benefit plan;
5. The claim was submitted prior to any claim filing deadlines; and
6. The claim is not listed as an exclusion under Healthcare FSA Excluded Expenses.
7. The expenses are incurred for the treatment of an illness and /or accident.
Eagle County Government 5 Health Care FSA Plan • 1/1/04
You may want to refer to IRS Publication 502 or consult with the Claims Administrator or your tax
advisor for further information on the types of medical expenses that may qualify.
Keep in mind that IRS Publication 502 is intended for individual taxpayers. Some very important
differences exist between healthcare expense reimbursements made through the Healthcare FSA
Plan, and allowable deductions of healthcare expenses as an individual taxpayer, for example:
1. Expenses must be incurred during the "Plan Year" for the Healthcare FSA, and
2. Premium payments for any health insurance plans are not a reimbursable expense through
the Healthcare FSA.
You may not claim healthcare expenses reimbursed through the Healthcare Flexible Spending
Account on your individual income tax return.
HEALTHCARE FSA EXCLUDED EXPENSES
The Plan will not reimburse:
Services and supplies that are not "Medically Necessary."
2. Expenses for services provided by non - licensed or non - recognized professional providers
of the given specialty. (Providers must be licensed if so required by State law, certified by
trade groups if such certification is available and certificated by appropriate educational
institutions.)
3. That part of any expense paid by other insurance or a reimbursement plan.
4. Expenses not allowed under Internal Revenue Service regulations or guidelines, including
but not limited to Code Sections 213 and 105.
5. Expenses for care that is cosmetic in nature, unless due to an accidental injury, disease
process or congenital deformity.
6. Expenses for health insurance premiums, whether the plan is sponsored by the Employer
or not.
7. Expenses for any other types of insurance premiums.
8. Claims filed after any claims filing deadlines stated herein.
Eagle County Government 6 Health Care FSA Plan • 1/1/04
CONTRIBUTION PLANNING TIPS
Undistributed account balances at the close of each "P1anYear" or at termination of participation
must, by law, be forfeited (returned to the Plan Sponsor). Reasonable planning should virtually
eliminate this potential for you. Forfeited funds will be used by the Plan Sponsor to offset
administrative costs of the Plan.
To help you estimate your eligible healthcare expenses look at the following chart and fill in the
expenses you think you will have during the P1anYear. Add the estimated costs — you can elect to
contribute any part of that amount into your Healthcare FSA, up to the Plan maximum.
Healthcare Flexible Spending Account Worksheet
Only expenses NOT paid by other benefit or insurance plans may be claimed as reimbursable expenses.
Expense Type
Estimated Cost
Medical deductibles:
$
Dental deductibles:
$-
Medical co- payments:
$
Dental co- payments:
$
Annual physical exam:
$
Prescription copays:
$
Over- the - Counter drugs *:
$
Vision correction surgery:
$
Eyeglasses, contact lenses:
$
Orthodontic expenses:
$
Other:
$
$
$
TOTAL
* Vitamins and/or supplements are not reimbursable unless they meet the following criteria:
1. Prescribed by an FDA approved Physician qualified to write prescriptions; and
2. The claim for which includes a Physician's written letter /note attesting the vitamin and/or supplement is
"Medically Necessary" to treat a specific condition. Refer to the Claims Procedure section for further details.
Multi- vitamins and /or supplements for general well-being or good health are not reimbursable.
Eagle County Government 7 Health Care FSA Plan • 1/1/04
Be sure to submit bills for reimbursement before any filing deadlines, especially prior to the end of
the "P1anYear," the time that forfeitures may occur. Bills must be for services rendered within the
PlanYear and while you were a participant in the Healthcare FSA.
All reimbursements will be made directly to the participating employee. The employee is responsible
for paying those persons who provided services or care.
DISCRIMINATION TESTS
Internal Revenue Code rules require that benefits under this plan be received by a broad cross section
of employees. Should actual plan operations result in violation of those rules, the Plan reserves the
right to reduce benefits to any individual to cause the Plan to be in compliance with applicable laws.
FSA EFFECT ON OTHER BENEFIT PLANS
Flexible Spending Account participation will reduce your cash pay in each Plan Year of
participation. Any Social Security, Workers' Compensation and Unemployment Insurance
contributions and benefits will be based upon the lower pay level and, could, over time, result in
lower benefits.
For other Benefit Plans sponsored by the Employer such as Life Insurance, Disability or Retirement
Plans that may be income - based, benefits will continue to be based on your regular pay, prior to FSA
contributions.
HEALTHCARE FSA CLAIMS PROCEDURE
As "You" and /or your "Dependents" accumulate expenses, you should file claims for review and
appropriate reimbursement. A completed Claim Reimbursement Form must be submitted, along with
invoices, statements, receipts or an Explanation of Benefits (EOB) to substantiate the claim(s). You
may obtain a claim form from the Employer's Human Resources Office or Claims Administrator:
1. Description of services provided and amount paid.
2. Name of person for whom services were provided.
Complete name, address and Tax ID # or social security number of those providing
services.
4. Date or period for which services were provided.
Eagle County Government 8 Health Care FSA Plan • 1/1/04
5. For medical services partly covered by our Medical Plan, the Explanation of Benefits
(EOB) received from our Claims Administrator.
For medical services partly covered by a benefit plan or an insurance company, the Explanation of
Benefits (EOB) received from the claims administrator or the insurance company should be
submitted as long as the date of service and charges are shown.
For eligible expenses for which no prescription is required, "You" must indicate the items for which
you are filing a claim for reimbursement on the receipt and name what the expense is if the
description on the receipt is in any way unclear. For doctor recommended vitamins to treat a specific
health condition, a note or letter from your doctor attesting to such must be included.
Please submit all Healthcare FSA claims to the Plan's Claims Administrator. Refer to the Important
Telephone Numbers section for contact information details.
Note: The date that a claim is considered 'filed" is the date that it is
stamped "received" by the Claims Administrator.
Claims Decision Timeline
The Claims Administrator will evaluate your claim for benefits promptly after receiving it. Within
thirty (30) days after receipt of your claim, the Claims Administrator will send you: (a) a written
decision of your claim; or (b) a notice that the period to decide your claim has been extended for an
additional 15 days. If the extension is due to your failure to provide information necessary to decide
the claim, the extended time period for deciding your claim will not begin until you provide the
information or otherwise respond.
Should an extension be necessary, you will be notified of the following: (a) the reasons for the
extension; (b) when your claim is expected to be decided; and (c) any additional information needed
to decide the claim.
If additional information is needed, you will have 45 days to provide the information. If you do not
provide the information within 45 days, the Claims Administrator may decide your claim based on
the information received.
If your claim is denied in whole or in part, you will receive a written notice of denial containing:
1. The specific reason(s) for the denial, referencing the plan provision(s) which the decision
is based, as well as references to any internal rule(s) or guideline(s) relied upon in making
the decision.
2. Information concerning your right to receive an explanation of the scientific or clinical
judgment relied upon to exclude healthcare expenses for services or supplies that are
experimental or investigational or are not necessary or accepted according to generally
accepted standards of the healthcare practice.
Eagle County Government 9 Health Care FSA Plan • 1/1104
3. Request and describe any additional information necessary to support your claim.
4. Information concerning your right to appeal the claims decision with applicable time
frames you must follow.
Timely Filin- of Claims
End of Plan Year
All claims for "Expenses Incurred" in a "P1anYear" must be submitted no later than three months
following the end of that Plan Year. Claims received after this deadline are not covered by the Plan
and any undistributed amounts will be forfeited.
Termination of Employment
Upon termination of employment, all claims for "Expenses Incurred" may only be submitted for
services provided prior to the date of termination and while you were a participant in the Plan.
Claims must be submitted within ninety (90) days from the date of termination. Claims received
after this deadline are not covered by the Plan and any undistributed amounts will be forfeited.
Claims Appeal Procedures
If all or part of a claim for benefits is denied, you may request an appeal of the claims denial. You
must request an appeal in writing within 180 days after receiving notice of the denial. When
appealing a claim decision, you should:
State the reason you feel the claim is valid;
2. Submit any written comments, documents, or other information you wish to be considered
to support your claim;
3. Include the name of the Employee, his or her Social Security number, the name of the
patient and the Group Identification Number, if any.
4. Mail or submit written appeals to the Plan's Claims Administrator. Refer to the
Important Telephone Numbers section for contact information details.
Note: The date that an appeal is considered 'filed" is the date that it is
stamped "received" by the Plan's Claims Administrator.
Your Rights When Requesting an Appeal of Claims Denial
You may review all "Relevant Information" to the claim and copies shall be provided free
of charge, upon request.
Eagle County Government 10 Health Care FSA Plan • 1/1/04
2. You may review all of the Plan's internal rules, guidelines, and scientific or statistical
research relevant to the claim, upon request
3. You may review the Plan's schedule of usual and customary fees for those claims
involving a reduction in physician fees, upon request.
4. The Plan must disclose the name of any medical professionals who were consulted during
the claim review process, upon request.
5. No prior approval is needed to appeal denied claims and no fees may be charged.
6. An authorized representative may advocate or act on your behalf in pursuing or appealing
a claim. A written authorization, signed by the Plan participant, must be completed on a
form provided by the Plan that serves to designate the authorized representative of the
Plan participant. You may request an Authorized Representative form from the Claims
Administrator.
The person(s) conducting the appeal will collectively be the Named Plan Fiduciary (NPF) and not the
same individual(s) who denied the claim originally. The NPF will not give deference to the initial
denial decision. If the denial was based on the judgment of a physician, the NPF will consult with
another physician. This physician will be someone other than the physician who made the original
judgment and will not be subordinate to that person. All written comments or other items you
submit will be taken into consideration to support your claim.
Upon receipt of the requested appeal, the claim shall be decided upon within a reasonable period but
not later than sixty (60) calendar days, with no extensions allowed. A written determination of your
claim will be sent to you.
Eagle County Government 11 Health Care FSA Plan • 1/1/04
CONTINUATION OF COVERAGE OPTIONS
During a Leave of Absence
A participating Employee on either a Family Medical Leave (as defined in the Family Medical Leave
Act of 1993, as amended) or any other Leave of Absence approved by the Employer, is entitled to
maintain coverage in the Healthcare FSA. There are two (2) options for continuing contributions
during a Leave of Absence:
For a paid leave, contributions will continue on a pre -tax "Salary Reduction" basis.
2. For an unpaid leave, contributions must be made monthly by direct payment to the Plan
on a post -tax basis. Coverage and claims payment will not be disrupted as long as
monthly contributions are received by the Plan by the first day of each month.
Reimbursements from the Healthcare FSA will be discontinued if the contribution is not
received by the first day of any month.
If coverage is not continued during a Leave of Absence and unless Special Enrollment provisions
apply, the employee's original Plan election will resume immediately upon return to work. Claims
incurred during periods of time for which contributions are not made are not eligible for
reimbursement.
COBRA
Continuation of coverage may be available as mandated by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and subsequent related regulations and amendments
(COBRA). As mandated by Federal law, the Plan offers optional continuation coverage to "Qualified
Beneficiaries" if coverage would otherwise end due to one of the following Qualifying Events:
Termination of employment for any reason except "Gross Misconduct." Coverage may
continue for Qualified Beneficiaries.
2. A reduction in hours worked which results in loss of Plan eligibility. Coverage may
continue for Qualified Beneficiaries.
3. The Employee's death. Coverage may continue for eligible "Dependents."
4. Divorce or legal separation from a spouse. Coverage may continue for that spouse and
eligible Dependents.
5. Loss of eligibility of a covered Dependent Child due to Plan eligibility requirements.
Coverage may continue for that Dependent Child.
Eagle County Government 12 Continuation of Coverage • 1/1/04
Continuation coverage is available only if, on the date of the qualifying event, remaining
benefits for the current Plan year are greater than remaining contribution payments for the
Plan Year.
NOTIFICATION REQUIREMENT
The "Qualified Beneficiary" has the responsibility to inform Eagle County Government of a divorce,
legal separation, or a child losing dependent status under the Plan within sixty (60) days of the
qualifying event. Failure to provide this notification within sixty (60) days will result in the loss of
continuation coverage rights.
The Plan will notify the Qualified Beneficiary of continuation coverage rights. The Qualified Benefi-
ciary will then have sixty (60) days from the later of the date of the qualifying event or the mailing date
of the Notice to elect continuation coverage. Failure to elect continuation coverage within sixty (60)
days after election period will result in permanent loss of continuation coverage rights.
MAXIMUM PERIOD OF CONTINUATION COVERAGE
The maximum period of continuation coverage is to the end of the "Plan Year" in which the
qualifying event occurs but may terminate sooner if premium contributions are not paid within thirty
(30) days of the due date.
COST OF CONTINUATION COVERAGE
The cost of continuation coverage will be equal to the cost of providing coverage for the period to
similarly situated "Covered Persons" plus a 2% administration fee. The administration fee will not be
credited to the participant's account but shall be treated as an administrative charge.
The Qualified Beneficiary must make the initial payment within forty -five (45) days of notifying the
Plan of election of continuation coverage. Future payments must be made in monthly installments
within thirty (30) days of the due date.
The cost of continuation coverage is computed from the date coverage would normally end due to
the qualifying event.
Failure to make the initial payment within forty -five (45) days of notifying the Plan of election of
continuation coverage will result in cancellation of continuation coverage retroactively to the date of
the qualifying event.
Failure to make any subsequent payment within thirty (30) days of the established due date will
result in the permanent cancellation of continuation coverage.
If premiums are not paid by the first day of the period of coverage, the Plan has the option to cancel
coverage until payment is received and then reinstate the coverage retroactively to the beginning of
the period of coverage.
Eagle County Government 13 Continuation of Coverage • 1/1/04
WHEN COBRA CONTINUATION COVERAGE ENDS
Continuation of coverage ends on the earliest of:
The date the maximum continuation period expires; or
2. The last period for which payment was made when coverage is canceled due to non-
payment of the required cost.
Eagle County Government 14 Continuation of Coverage • 1/1/04
HEALTH INSURANCE PORTABILITY AND
ACCOUNTABILITY ACT OF 1996 (HIPAA)
Protected Health Information — HIPAA Privacy - Title II
NOTE: Title II provisions become effective as of April 14, 2004
Notwithstanding any other Plan provision, effective as of the effective date of the regulations, to the
extent the Plan is a group health plan subject to the privacy regulations, the Plan will operate in
accordance with the requirements of the Health Insurance Portability and Accountability Act of 1996
and its medical privacy regulations at 45 C.F.R., Parts 160 -164, with respect to "Protected Health
Information" (PHI), as defined therein. The Plan Administrator, or its delegate, retains full discretion
in interpreting these rules and applying them to specific situations. All such decisions shall be given
full deference unless the decision is determined to be arbitrary and capricious
HIPAA Privacy sets forth rules which govern and limit the use and disclosure of PHI. The objectives
of the rules are to:
1. Give patients the right to access their medical records;
2. Restricts most disclosure of PHI to the minimum necessary for the intended purpose; and
3. Establish safeguards and restrictions regarding disclosure of records for certain public
responsibilities, such as public health, research and law enforcement.
PERMITTED USES AND DISCLOSURES FROM THE PLAN TO THE PLAN SPONSOR:
The Plan is permitted to use and disclose PHI for the following purposes, to the extent they are not
inconsistent with HIPAA:
1. For Plan administrative functions related to treatment, payment, or health care operations
without participant authorization;
2. Pursuant to a valid authorization signed by the individual (or authorized representative) to
whom the PHI pertains;
3. Directly to the individual to whom the PHI pertains;
4. For judicial and administrative proceedings, in response to lawfully executed process,
such as a court order or subpoena;
5. For public health and health oversight activities, and other governmental activities
accompanied by lawfully executed process;
6. To obtain premium bids; to amend, modify, or terminate the Plan; and to obtain
enrollment and waiver information, claims processing, auditing, and monitoring the Plan;
or
Eagle County Government 15 "irm • '/ ""l+
7. As otherwise may be required or permitted by law.
PLAN SPONSOR CERTIFICATION TO GROUP HEALTH PLAN
The Plan Sponsor has certified to the Plan that it shall fully comply with the laws and regulations set
forth under HIPAA. The Plan will disclose PHI to the Plan Sponsor only for purposes of general Plan
administration, including but not limited to, enrollment and eligibility functions, reporting functions,
auditing functions, financial and billing functions, to assist in the administration of a Participant
dispute or inquiry, to obtain and maintain stop -loss coverage related to benefit claims under the Plan,
and any other authorized insurance or benefit function. The Plan may disclose PHI to the Plan
Sponsor only after the Plan Sponsor hereby:
1. Amends the Eagle County Government Healthcare FSA Plan as required;
2. Authorizes the Privacy Official and HIPAA Privacy Compliance Team to be given access
to PHI (no other persons shall have access to PHI). These specified employees shall
receive proper training and only have access to and use PHI to the extent necessary to
perform plan administrative functions that the Plan Sponsor performs for the Plan. In the
event an authorized employee fails to comply with the provisions within this Section,
he /she maybe subject to disciplinary action, including termination of employment. The
Plan Administrator, or its delegate, also shall document the facts of the violation, actions
that have been taken to discipline the offending party and the steps taken to prevent future
violations.
Further, Plan Sponsor will take the following actions by the required compliance date stated herein:
SECURITY STANDARDS
The Plan Sponsor shall implement policies and procedures to protect PHI, such as administrative
safeguards, physical safeguards, technical and transmission security measures. The Plan Sponsor will
ensure that policies providing adequate separation of records and employees are established and
maintained between the Plan and Plan Sponsor
PRIVACY RULE
The Plan Sponsor agrees that with respect to any PHI disclosed to it by the Plan, Plan Sponsor shall:
Not use or further disclose PHI other than as permitted or required by the Plan or by law;
2. Ensure that any agent, including a subcontractor, to whom it provides PHI received from
the Plan agrees to the same restrictions and conditions that apply to the Plan Sponsor with
respect to PHI;
3. Not use or disclose the PHI for employment- related actions and decisions or in connection
with any other benefit or employee benefit plan of the Plan Sponsor;
Eagle County Government 16 HIPAA • 1/1/04
4. Report to the Plan any use or disclosure of the information that is inconsistent with the
uses or disclosures provided for, of which it becomes aware;
5. Ensure that the adequate separation between Plan and Plan Sponsor required in
accordance with HIPAA.
6. Make available the information required to provide an accounting of disclosures in
accordance with HIPAA;
7. Make PHI available to Plan Participants for the purposes of the rights of access and
inspection in accordance with HIPAA;
8. Make PHI for amendment, and incorporate any amendments to PHI in accordance with
HIPAA;
9. Make internal practices, books, and records relating to the use and disclosure of PHI
available to the Secretary of the U.S. Department of Health and Human Services (HHS)
upon request and
10. If feasible, return or destroy all PHI received from the Plan that the Plan Sponsor still
maintains in any form and will retain no copies of such information when no longer
needed for the purpose for which disclosure was made, except that, if such return or
destruction is not feasible, limit further uses and disclosures to those purposes that make
the return or destruction of the information infeasible.
Eagle County Government 17 HIPAA • 1/1/04
DEFINITIONS
As used in this Plan, the following words shall have the meaning indicated in this section:
"Children" shall mean the employee's:
1. Natural children;
2. Lawfully adopted children, or children in the process of being legally adopted from the
time of placement in the employee's home;
3. Stepchildren;
4. Children for whom the employee has been appointed legal guardian, legal ward, a ward
by court decree.
Such children must be unmarried and depend upon the employee for at least fifty percent of their
support and maintenance and reside with the employee in a parent -child relationship.
The above referenced residency requirement shall not apply:
1. Where children are not residing with the employee because of the employee's decree of
divorce or separation;
2. Where the children are students; nor
3. Where the children reside in an institution.
"Dependent(s)" shall mean:
1. The employee's lawful spouse or common -law spouse, provided a notarized affidavit of
common -law marriage is submitted to Eagle County Government's Human Resources
office.
2. The employee's "Children" from birth to the end of the calendar year during which age
19 is reached.
3. The employee's unmarried dependent Children to the end of the calendar year during
which age 24 is reached if they attend an accredited or licensed educational institution as
a full -time student (as defined by the institution) and depends upon the covered person
for support and maintenance. Proof of full -time student status must be provided to the
Claims Administrator as requested. Coverage for students age 19 or over is subject to the
following:
Eagle County Government 18 Definitions • 1/1104
a. Vacation breaks scheduled by the school do not jeopardize a dependent child's full -
time student status. However, if a dependent child is not attending as a full -time
student during the semester following the break, that dependent child will no longer
be considered a dependent under the Plan. Coverage will terminate at the end of the
Calendar Year in which the dependent attended an accredited or licensed educational
institution as a full -time student.
b. A previously ineligible dependent child who becomes an attending full -time student
at an educational institution at a later date may be enrolled under the Plan as a new
dependent within thirty (3 0) days of the date the semester begins. Proof of attendance
as a full -time student from the registrar of the educational institution must be
provided to the Plan within the thirty (30) day period for coverage to become
effective on the first day of the month in which classes start.
Parents and other relatives or children of your Dependents are not eligible for dependent coverage
even though they may be supported by you.
Any person who is covered as an employee shall not be considered a dependent, and no person shall
be considered as a dependent of more than one employee.
"Employee" shall mean a person employed by Eagle County Government on regular basis who is
included in a class or group of employees to which this Plan extends.
"Expenses Incurred" shall mean, for the purposes of this Plan, that an expense shall be considered
to be incurred at the time the service for which such expense incurred is rendered or at the time the
supply for which such expense incurred is furnished.
"Gross Misconduct" shall mean conduct characterized by:
Willful or wanton disregard of Eagle County Government's interests;
2. Deliberate violations or disregard of standards of behavior that Eagle County Government
has the right to expect of an employee;
Carelessness or negligence of such degree or recurrence as to indicate evil design or
wrongful intent on the part of the Employee.
"Medically Necessary" means services or supplies which are:
1. Generally accepted by the national medical professional community as being safe and
effective in treating a covered illness or injury;
2. Consistent with the symptoms or diagnosis;
3. Furnished at the most appropriate medical level; and
4. Not primarily for the convenience of the patient, a healthcare provider or anyone else.
Eagle County Government 19 Definitions • 111104
Notwithstanding the above, benefits for any hospital length of stay in connection with childbirth for
the mother or the newborn child to less than 48 hours following a normal vaginal delivery, or less
than 96 hours following a cesarean section will be deemed "Medically Necessary."
"Physician" shall mean a person acting within the scope of his license and holding the degree of
Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), Doctor of Dental Surgery (D.D.S.), Doctor
of Podiatry (D.P.M.), Doctor of Optometry (D.O.), Doctor of Chiropractic (D.C.), or a Psychologist
(Ph.D.).
"Plan" shall mean the plan of benefits detailed in the Plan Document.
"Plan Document" shall mean the document detailing the plan of benefits.
"Plan Year" shall mean the annual accounting period of the Plan, which shall begin and end on the
dates as specified in the Summary Plan Description.
"Protected Health Information" (PHI) shall mean individually identifiable health information as
defined by the Health Insurance Portability and Accountability Act of 1996 and its Privacy
regulations at 45 C.F.R § 160.103.
"Qualified Beneficiary" shall mean an employee (or former employee), an employee's spouse, or
dependents who are covered under the Plan on the day before a qualifying event.
"Regular Full- Time" shall mean an employee regularly scheduled to work an average of thirty -eight
(3 8) hours per week.
"Regular Part - Time" shall mean an employee who is employed in a position which normally
requires more than 30 hours, but less than 38 hours per week, and such person is not classified by
Eagle County Government as temporary, occasional or seasonal or "Regular Full Time."
"Relevant Information" shall mean any information if it:
1. Was relied upon in making the benefit determination;
2. Was submitted, considered or generated in the course of making the benefit
determination, without regard to whether such document, record or other information was
relied upon in the making of the benefit determination;
3. Demonstrates compliance with the plan's administrative processes and consistency
safeguards required in making the benefit determination; or
4. Constitutes a statement of policy or guidance with respect to the Plan concerning the
denied treatment option or benefit for the Plan participant or beneficiary's diagnosis,
without regard to whether such advice or statements were relied upon in making the
benefit determination.
tagie county Government 20 Definitions • 1/1/04
"Salary Reduction" shall mean an employer- sponsored arrangement in which employees may elect
to have some portion of their salaries be contributed to a tax- qualified plan on their behalf.
"You" and "Your" shall mean an Eagle County Government Employee actively participating in this
Plan.
Eagle County Government 21 Definitions • 1/1/04
SUMMARY PLAN DESCRIPTION
I. Names of the Plan and Plan Number:
Eagle County Government Healthcare Flexible Spending Account - Plan Number 505
The Plan is for the benefit of employees of Eagle County Government.
2. Employer Identification Number
3. Name and Address of Employer whose Employees are Covered by the Plan:
4. Plan Year:
5.
6.
EAGLE COUNTY GOVERNMENT
500 Broadway
P.O. Box 850
Eagle, CO 81631
The Plan Year begins on January 1 and ends on December 31.
Plan Administrator *:
HUMAN RESOURCES DIRECTOR
EAGLE COUNTY GOVERNMENT
500 Broadway
P.O. Box 850
Eagle, CO 81631
*Also serves as the Named Plan Fiduciary for all Claims Appeals.
Privacy Official:
HUMAN RESOURCES DIRECTOR
EAGLE COUNTY GOVERNMENT
500 Broadway
P.O. Box 850
Eagle, CO 81631
Eagle County Government 22 Summary Plan Description • 1/1/04
2
E:M
9.
Agent for Service of Legal Process:
Plan Administrator
Funding:
The Healthcare Flexible Spending Account Plan is self - funded by voluntary employee pay
reductions and is managed by the Plan Administrator.
Your Rights to Information About the Plan
Eagle County Government feels strongly about all Plan participants having access to
complete information about the Plan. You are entitled to:
A. Examine, without charge, at the Plan Administrator's office and at other specified
locations, such as work sites, all "Plan Documents."
B. Obtain copies of all "Plan Documents" and other Plan information upon written
request to the Plan Administrator. The Administrator may make a reasonable charge
for the copies.
C. Receive a summary of the Plan's annual financial report.
In addition, the people who operate your plan, called fiduciaries of the Plan, have a duty to
do so prudently and in your interest as well as that of other Plan participants and
beneficiaries.
If your claim for a welfare benefit is denied in whole or in part, you will receive a written
explanation of the reason for the denial. You have the right to have the Plan Administrator
review and reconsider your claim.
Eagle County Government
23 Summary Plan Description • 1/1/04
ADOPTION
Sponsor.- Eagle County Government
Plan Document: Healthcare Flexible Spending Account
Summary Plan Description: Healthcare Flexible Spending Account
Replacement: This Plan replaces Eagle County Government Healthcare Flexible
Spending Account Plan dated January 1, 2000 which is hereby
terminated.
Legal Compliance: The Plan is intended to comply with all applicable federal or state
laws and findings of their regulatory authorities and by this
provision is automatically amended to be in minimal compliance
as necessary.
Claims Filing Deadline: If due to provider error or administrative delay, claims are not
filed by the Plan's claim filing deadline, the Plan Administrator
may, at its sole discretion and without setting any precedent,
accept and process such claims as covered by the Plan provided
such claims are submitted no later than twelve (12) months after
the end of the Plan Year in which services are provided.
Effective Date: January 1, 2004
Adopted:
NOTE: Title II of the section entitled Health Insurance
Portability and Accountability Act of 1996 (HIPAA), shall be
effective as of 4/14/04. All other changes become effective upon
this Plan's Effective date as stated above
Date: =�I v Ly )7
Signature: _q�k
Title:
Eagle County Government 24 Adoption • 111104
VA' 5 T R.11 1� I I T i *0 IN
Orig;viptls ' to:
1. Ccnt-,ict Book
r.