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HomeMy WebLinkAboutC09-052 Healthcare_Flexible Spending AccountHEALTHCARE FLEXIBLE SPENDING ACCOUNT EAGLE COUNTY GOVERNMENT - January 1, 2009 - ~~GL~ COUNTY TABLE QF CONTENTS IMPORTANT CONTACT INFORMATION ....................................................................................................1 PLAN ADMINISTRATION .............................................................................................................................2 HEALTHCARE FLEXIBLE SPENDING ACCOUNT PLAN ..........................................................................3 GENERAL INFORMATION ................................................................................................. ..............................3 ELIGIBILITY AND WAITING PERIOD .................................................................................... .............................4 "General Purpose FSA" or "Limited Purpose FSA" .................................................... ..............................4 "Dependents" Enrolled in Separate Qualified High Deductible Health Plan ........... ..............................5 CONTRIBUTIONS ............................................................................................................. ............................. 5 CONTRIBUTION PLANNING TIPS ....................................................................................... ............................. 5 ELIGIBLE EXPENSES ....................................................................................................... .............................7 EXCLUDED EXPENSES .................................................................................................... ............................. 8 CLAIMS FILING PROCEDURE ............................................................................................ .............................8 Filing a Paper Claim ................................................................................................ ............................. 8 Auto-Rollover ........................................................................................................... ............................. 9 Claims Decision Timeline ........................................................................................ ...........................10 Claim Filing Deadline ............................................................................................... ...........................11 Claims Appeal Procedures ...................................................................................... ...........................11 Your Rights When Requesting an Appeal of a Claims Denial ................................. ...........................11 CHANGES AND TERMINATIONS ......................................................................................... ........................... 12 Special Enrollment ................................................................................................... ...........................12 Termination .............................................................................................................. ...........................13 DISCRIMINATION TESTS .................................................................................................. ........................... 14 FSA EFFECT ON OTHER BENEFIT PLANS ......................................................................... ........................... 14 CONTINUATION OF COVERAGE OPTIONS ............................................................................................15 DURING A LEAVE OF ABSENCE .................................................................................................................... 15 COBRA ...................................................................................................................................................15 Qualifying Events ................................................................................................................................16 Notification Requirements ..................................................................................................................17 Election Procedures ............................................................................................................................18 Cost of Continuation Coverage ...........................................................................................................18 Maximum Period of Continuation Coverage .......................................................................................19 When COBRA Continuation Coverage Ends .....................................................................................19 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 (HIPAA) .......................20 Permitted Uses and Disclosures From the Plan To the Plan Sponsor :.............................................20 Plan Sponsor Certification to Group Health Plan ................................................................................21 Privacy Rule ........................................................................................................................................22 DEFINITIONS ..............................................................................................................................................23 SUMMARY PLAN DESCRIPTION ..............................................................................................................28 ADOPTION .................................................................................................................................................. 30 Eagle County Government i Table of Contents • 1/1109 IMPORTANT CONTACT INFORMATION PLAN SPONSOR Eagle County Government 500 Broadway P.O. Box 850 Eagle, CO 81631 Telephone: (970) 328-8790 Fax: (970) 328-8799 www.eaglecounty. us CLAIMS ADMINISTRATOR CNIC Health Solutions (CNIC) PO Box 3559 Englewood, CO 80155 (303) 770-5710 (303) 770-0380 fax Toll Free: 1-800-426-7453 www.cnichs.com Eagle County Government 1 Important Contact Information • 1/1/09 PLAN ADMINISTRATION 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 the Employer or Plan Sponsor. If any interpretations orjudgments 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 2 Introduction to FSAs • 1/1/09 HEALTHCARE FLEXIBLE SPENDING ACCOUNT PLAN GENERAL INFORMATION Healthcare Flexible Spending Accounts (FBAs) 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 anon-taxable account which is used to reimburse you for eligible unreimbursed medical, dental, vision and other eligible healthcare expenses. For persons with these types of eligible expenses totaling as little as $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." Through apre-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: Once you enroll you may not withdraw or change your rate of contribution for the rest of the "PlanYear," 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 sometimes 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 while you are a participant 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 3 Healthcare FSA Plan • 1/1/09 ELIGIBILITY AND WAITING PERIOD The Healthcare FSA is elective and operates only if "You" enroll each "Plan Year." "Regular Full-Time" and "Regular Part-Time" "Employees" may participate. Regular Full-Time Employees are first eligible to participate on the first of the month coincident with or next following date of employment. Regular Part-Time Employees are eligible the first of the month coincident with or next following ninety (90) days of employment. You must enroll within thirty (30) days of the date you are first eligible. Your participation will begin the later of: Within thirty (30) days from the date you satisfied the required waiting period. Participation will normally be effective on the first day of the payroll period following enrollment. Your initial period of participation runs from your enrollment date and ends on the last day of the PlanYear. 2. For succeeding "Plan Years," 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 County's Medical Plan. Eligible healthcare expenses for "Dependents" of a participating Employee are also eligible for reimbursement under this Plan, unless as described below. "General Purpose FSA" or "Limited Purpose FSA" As defined in the Definitions section, there are two (2) types of Healthcare FSA's depending on which Employer-sponsored medical plan "You" enroll in. They are a "General Purpose FSA" or "Limited Purpose FSA." IRS rules allow an individual enrolled in a "High Deductible Health Plan" (HDHP) as defined by IRS Code section 223 to have both a "Health Savings Account" (HSA) and a Healthcare FSA, but only under certain circumstances. Enrolling in a General Purpose FSA will make an individual enrolled in a HDHP ineligible to contribute to an HSA. Therefore, Employees enrolled in the Plan Sponsor's qualified HDHP who enroll in this FSA Plan are automatically enrolled in the Limited Purpose FSA. Covered expenses are restricted to eligible dental, vision, and/or qualified preventive care expenses stated herein. In addition, You cannot contribute to an HSA if your spouse's FSA or Health Reimbursement Account (HRA) can pay for any of your medical expenses before the HDHP deductible is met. Should "You" change which medical plan You and/or your "Dependent's" are enrolled due to a qualified change in status event mid-year, you will not be permitted to change which type of Healthcare FSA plan you are enrolled in. This restriction may affect your ability to contribute to an HSA account, i.e. changing FROM anon-HDHP medical plan and enrolled Eagle County Government 4 Healthcare FSA Plan • 1/1/09 in the "General Purpose FSA" TO a qualified HDHP medical plan mid-year will disqualify you from being able to contribute to an HSA for the remainder of the FSA Plan Year. For more information on the limitations and restrictions to contributing to an HSA and being enrolled in a "General Purpose FSA," refer to IRS Rulings 2004-2 and 2004-45 entitled Interaction with Other Health Arrangements. "Dependents" Enrolled in Separate Qualified High Deductible Health Plan For any period of time in which the "Employee's" "Dependent(s)" are enrolled in a separate qualified High Deductible Health Plan (HDHP) and thereby eligible to contribute to a Health Savings Account (HSA), the Employee's Dependent's eligibility under this Plan shall automatically be deemed to be "Limited Purpose FSA" eligible only and the Employee agrees not to file Medical claims under this plan for his/her Dependents, except as permitted under IRS Ruling 2004-45. If non-permitted claims for his/her Dependents are submitted, it may disqualify the Dependents from contributing to their HSA and such expenses may be subject to income and penalty taxes. You're encouraged to consult your tax advisor or HSA Custodian for further information. CONTRIBUTIONS Prior to the start of the "Plan Year," "You" determine the amount that you wish to contribute to your Healthcare FSA account. The minimum contribution is $10 per pay period. The maximum contribution cannot exceed $5,000 per calendar year. You may incur eligible expenses during the Plan Year. Your contributions to the Plan will be prorated per each pay period (26 per calendar year) during the Plan Year and made by reducing your current pay via "Salary Reduction." This means that the Healthcare FSA contribution amounts are deducted from your gross pay prior to the calculation of taxes. If your effective date of participation in the Plan is any date other than the first day of the PlanYear, the annual maximum contribution amount will be prorated based on the number of payroll periods remaining in the "Plan Year." 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 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. Eagle County Government 5 Healthcare FSA Plan • 1/1/09 To help you estimate your eligible healthcare expenses fill in the following chart with the expenses you think you will have during the PlanYear. 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 list expenses NOT paid by other benefit or insurance plans that may be claimed as reimbursable expenses. Remember, Limited Purpose FSA participants should estimate dental and vision expenses ONLY) Expense Tylpe 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 $ * Be sure to submit bills for reimbursement before the claim filing deadline, as forfeitures may occur at that time. Bills must be for "Incurred Expenses" during the Plan Year and while you were an active participant in the Healthcare FSA. ** 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 6 Healthcare FSA Plan • 1/1/09 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 under IRS rules; 2. The claim was incurred while you were an active Healthcare FSA participant; 3. The claim was incurred within the "Plan Year;" 4. The claim 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; 6. The claim is not listed as an exclusion under the Healthcare FSA Excluded Expenses section; and 7. The claims are incurred for the treatment of an illness, wellcare, and/or injury. 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 allowable deductions of healthcare expenses as an individual taxpayer and allowable healthcare expenses for reimbursement through the Healthcare FSA Plan, for example: 1. Expenses must be incurred during the "Plan Year" for the Healthcare FSA; 2. Premium payments for any health insurance plans are not a reimbursable expense through the Healthcare FSA; and 3. Eligible Over the Counter (OTC) Drugs are only reimbursable through the Healthcare FSA. Eligible healthcare expenses for "Dependents" of a participating Employee are also eligible for reimbursement under this Plan whether or not enrolled in the Employer's medical plan, unless as described in section "Dependents" Enrolled in Separate Qualified High Deductible Health Plan." You may not claim healthcare expenses reimbursed through the Healthcare Flexible Spending Account on your individual income tax return. Eagle County Government 7 Healthcare FSA Plan • 1/1/09 EXCLUDED EXPENSES The Plan will not reimburse: Services and supplies that are not "Medically Necessary." 2. Expenses for services provided bynon-licensed ornon-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. Expenses for prescription drugs that have been imported and not approved by the FDA. Prescriptions must be legally procured. 4. That part of any expense paid by other insurance, Health Savings Account and/or a reimbursement plan. 5. Expenses not allowed under Internal Revenue Service regulations or guidelines, including but not limited to Code Sections 213 and 105. 6. Expenses for care that is cosmetic in nature, unless due to an accidental injury, disease process or congenital deformity. 7. Expenses for health insurance premiums, whether the plan is sponsored by the Employer or not. 8. Expenses for any other types of insurance premiums. 9. Claims not incurred during the "Plan Year," during periods of time for which contributions ceased, or filed after any claims filing deadlines stated herein. 10. Expenses forAcupuncture unless performed by a "Physician." You must submit Physician's Attestation of Medical Necessity with your claim. CLAIMS FILING PROCEDURE As "You" and/or your "Dependents" accumulate expenses, you should file claims for review and appropriate reimbursement with the Claims Administrator. All reimbursements will be made directly to the participating employee and the employee is responsible for paying those persons who provided services or care. Filin_g a Paper Claim 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 Eagle County Government 8 Healthcare FSA Plan • 1/1/09 may obtain a claim form from the Employer's Human Resources Office or Claims Administrator. The invoice, statement or receipt must be from the provider and must include: Description of services provided or item purchased; 2. Amount paid; 3. Name of person for whom services were provided; 4. Complete name, address and Tax ID # or social security number of those providing services; 5. Date or period for which services were provided. 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 or upon the Claims Administrator's request related to any other OTC claim. Please submit all Healthcare FSA claim forms to the Claims Administrator (refer to Important Contact Information section for details). Auto-Rollover "You" have the option to have your deductible, copays, and out-of-pocket expenses that are not reimbursed under your County sponsored Medical (except retail and mail order prescription drugs), Dental and/or Vision Plan to be automatically submitted to the Claims Administrator for reimbursement from your Healthcare FSA. This will eliminate the need for you to file a separate claim under the Healthcare FSA for the expenses processed by the Claims Administrator. In order for the auto-rollover to occur, you must have a sufficient account balance for the year to cover the expense(s). If you account balance is not sufficient, or has already been exhausted, you will not receive reimbursement. To activate this feature, you must complete the appropriate form upon enrollment and/or during the annual open enrollment period designated by the County. Once the auto- rolloveractivation has been made for the plan year, it cannot be changed until the following open enrollment period. Please contact Human Resources or the Claims Administrator (see Important Contact Information section) for the appropriate form(s). Eagle County Government 9 Healthcare FSA Plan • 1/1/09 Note: The auto rollover option is not available to Employees covered by both the County sponsored Plan and any other outside Plan(s). This option is only available to those Employees who are only enrolled in the County sponsored Plan. Please see Human Resources with questions. 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: 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. 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. Eagle County Government 10 Healthcare FSA Plan ~ 1/1/09 Claim Filin_g Deadline End of Plan Year All claims for "Expenses Incurred" in a "PlanYear" must be submitted no later ninety (90) days 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 and the name of the patient. 4. Mail or submit written appeals to the Claims Administrator (refer to Important Contact Information section for details). Your Rights When Reguestin_g an Appeal of a Claims Denial You may review all "Relevant Information" to the claim and copies shall be provided free of charge, upon request. 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, Reasonable and Customary fees for those claims involving a reduction in physician fees, upon request. Eagle County Government 11 Healthcare FSA Plan • 1/1109 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 Human Resources department. 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. 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. Changes will be effective on the first day of the payroll period following the date your written request is received by the Human Resources Department. 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, approved leave of absence, strike or lockout, change in worksite, or change in eligibility status for the plan); Eagle County Government 12 Healthcare FSA Plan • 1/1/09 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; 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. 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 exam~le: "You" elect to contribute $100 per month ($1,200/year) in the FSA. March 15 t' you are reimbursed $800 ineligible 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 1 S 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. Revocation of your election to participate when such a change is permitted under the terms of this Plan; or 4. Failure to pay premium contributions due during a leave of absence (refer to section Continuation of Coverage Options). Contributions will also stop at the end of the "Plan Year." You must re-enroll for subsequent Plan Years during the Plan's open enrollment period. 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. Eagle County Government 13 Healthcare FSA Plan • 1/1/09 Claims received after this deadline, are not covered by the Plan and any undistributed amounts will be forfeited. 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 see the sub-section entitled COBRA, under section Continuation of Coverage Options. 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 of 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 PlanYear 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 (for example: Life Insurance, Long Term Disability, 401(k), 457, etc) that may be income-based, benefits will continue to be based on your regular pay, prior to FSA contributions. Eagle County Government 14 Healthcare FSA Plan • 1/1/09 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 This section contains important information about your rights to continuation of coverage, which may become available to "Qualified Beneficiaries" (QBs) as mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended, and subsequent related regulations and amendments. As mandated by Federal law, the Plan offers optional continuation coverage to QB's when you or they would otherwise lose coverage under this Plan (the result of which is known as a qualifying event). This section explains when COBRA may become available to QBs and what you need to do to protect your right to receive it. NOTE: 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. Eagle County Government 15 Continuation of Coverage • 111/09 Plan's COBRA Notification Contact (PCNC) The Plan Sponsor has assigned the Plan's COBRA Notification Contact (PCNC). All written notices** and other communications regarding COBRA must be directed to the following individual who is acting on behalf of the Plan Administrator: Human Resources Director Eagle County Government 500 Broadway PO Box 850 Eagle, CO 81631 **COBRA administration may be administered by other parties in the PCNC's behalf. In that event, subsequent correspondence and notices are to be sent to that party. In this description, PCNC is defined to include such other party. The PCNC for the Plan may change from time to time. It is your responsibility to consult the most recent Plan Document or call the Plan Sponsor to obtain the most current information. Qualifyin_g Events COBRA must be offered to each person who is a "Qualified Beneficiary" (QB). A QB is someone who will lose coverage under the Plan as a result of a qualifying event (QE). Depending on the type of QE, employees, spouses of employees, and dependent children of employees enrolled in the Plan may be QBs. The Plan coverage offered under COBRA must be the same as that offered to other active (non-COBRA) participants under the Plan who are not receiving COBRA coverage. Furthermore, each QB who elects COBRA will have the same rights under the Plan as active participants. Continuation Coverage may be available to QBs if one of the following events occur: Your ("Employee") 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 16 Continuation of Coverage • 1/1/09 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. Notice of Unavailability If the Plan's COBRA Notification Contact (PCNC) determines that a QB who experiences and/or furnishes the Plan with a notice of QE is not entitled to COBRA continuation coverage, they will receive a Notice of Unavailability, which notifies them that they are not entitled to COBRA coverage. This Notice will be provided within 14 days of receiving the QE information. Notification Requirements Qualified Beneficiary Notice Obligations The QB has the responsibility to notify the PCNC of a divorce, legal separation, or a child losing dependent status under the Plan, in writing, within sixty (60) days after the later of the QE or the date on which the QB loses (or would lose) coverage under the terms of the Plan as a result of the QE. Failure to provide this notification within sixty (60) days will result in the loss of continuation coverage rights. All written notices QBs are required to submit to the PCNC must contain the following information: The name of the Plan for which you are (were) enrolled; 2. The name and address of the employee or former employee who is or was covered under the Plan; 3. The name(s) and address(es) of all qualified beneficiary(ies) who lost coverage due to the qualifying event/disability/second qualifying event; 4. The signature of the individual sending the notice. Incomplete or Untimely Notices to the PCNC If the written notice you, your spouse or dependent child(ren) provide to the PCNC does not contain all of the information and documentation required as stated above, such notice will nevertheless be considered complete and timely if all of the following conditions are met: The notice is mailed or hand-delivered to the PCNC; 2. The notice is provided by the deadline described herein; 3. From the written notice provided, the PCNC is able to a. determine that the notice relates to the Plan, Eagle County Government 17 Continuation of Coverage • 1/1/09 b. identify the covered employee and Qualified Beneficiary(ies) and any additional information as stated above; 4. The notice is submitted in writing with the additional information and documentation necessary to meet the Plan's requirements within 15 business days after a written or oral request is made by the PCNC for more information. If any of these conditions are not met, the incomplete and/or untimely notice will be rejected and COBRA will not be extended. The Plan's Obligations The PCNC will also notify you of the right to elect continuation coverage after it becomes aware of or receives written notice of a loss of coverage due to one of the following qualifying events: the employee's termination of employment (other than for gross misconduct), reduction in hours, death or becoming entitled to Medicare. Election Procedures When the PCNC receives written notice that a QE has occurred, COBRA may be offered. QBs must submit their completed COBRA election form within sixty (60) days from the later of the date that coverage terminated or the date the QB receives notice. Failure to elect within the 60-day period will result in no coverage and no further rights to elect COBRA. The following will not be accepted as electing COBRA and will not preserve your COBRA rights: 1) oral communications regarding COBRA coverage (including in-person or telephone statements about an individual's COBRA coverage) and 2) electronic communications, including emails and faxed communications. NOTE: If you decline COBRA before the due date to elect, you may change your mind as long as you furnish a completed Election form to the PCNC before the expiration of the sixty (60) day period. Cost of Continuation Coverage The Cost of continuation coverage will be equal to one-twelfth (1/12) of your annual contribution election 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 QB 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 by the first of the month, but not later than within thirty (30) days of such due date. The initial payment for 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 and loss of COBRA continuation rights. No claims Eagle County Government 18 Continuation of Coverage • 1/1/09 will be reimbursed for services incurred while a QB is ineligible for coverage either because of a loss of Plan eligibility due to a QE and/or non-payment of premium. NOTE: The Plan will not bill you for monthly contribution payments. It is the COBRA participant's responsibility to send in the monthly contributions by the due date Maximum Period of Continuation Coverage The maximum period of continuation coverage is to the end of the "Plan Year" in which the QE occurs but may terminate sooner if: 1. Contributions are not paid within thirty (30) days of the due date 2. The Employer no longer offers the Healthcare FSA Plan to any of its employees, or 3. Any other occurrence (e.g. submission of fraudulent benefit claims) that permits termination of coverage for cause with respect to covered employees or their spouses or dependent children who have coverage under the Plan for a reason other than the COBRA coverage requirements of federal law A Notice of Termination will be provided to you at your last known address within fourteen (14) days of becoming informed of events #1-3 listed above. Notification of Address Changes, Marital Status Changes, Dependent Status Changes and Disability Status Changes If you or your spouse's address changes, you must promptly notify the PCNC in writing (the PCNC needs up-to-date addresses in order to mail important COBRA notices and other information to you). Also, if your marital status changes or if a dependent ceases to be a dependent eligible for coverage under the Plan terms, you or your spouse or dependent must promptly notify the PCNC in writing. You should also always keep a copy, for your records, of any notices you send to the PCNC. 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. NOTE: If any claims are mistakenly paid for expenses incurred after the date coverage should have ended, then you, your spouse and/or dependent children will be required to reimburse the Plan for such claims mistakenly paid. Eagle County Government 19 Continuation of Coverage • 1/1/09 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT C}F 199fi (HIPAA) Protected Health Information - HIPAA Privacy -Title II 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: 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: 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 represen- tative) 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; Eagle County Government 20 HIPAA • 1/1/09 5. For public health and health oversight activities, and other governmental activities accompanied by lawfully executed process; or 6. 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 Plan Sponsor's 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 may be 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. Additionally, where "Electronic Protected Health Information" (EPHI) will be created, received, maintained or transmitted to or by the Plan Sponsor on behalf of the Plan, the Plan Sponsor shall reasonably safeguard the EPHI as follows: 1. Implement, administrative, physical and technical safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of the EPHI that Plan Sponsor creates, receives, maintains, or transmits on behalf of the Plan; Eagle County Government 21 HIPAA • 1/1/09 2. Ensure that adequate separation as required by the Privacy Rule is supported by reasonable and appropriate security measures; 3. Ensure that any agent, including a subcontractor, to whom it provides EPHI agrees to implement reasonable and appropriate security measures to protect such information; and 4. Report to the Plan any "Security Incident" of which the Plan Sponsor becomes aware. Privacy Rule The Plan Sponsor agrees that with respect to any PHI disclosed to it by the Plan, Plan Sponsor shall: 1. 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; 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 22 HIPAA • 1/1/09 DEFINITIONS As used in this Plan, the following words shall have the meaning indicated in this section: "Children" shall mean the employee's unmarried: Natural children; 2. Lawfully adopted children, children placed with a covered Employee in anticipation of adoption; a. The phrase children placed with a covered Employee orsame sex Domestic Partner in anticipation of adoption refers to a child whom the covered Employee orsame sex Domestic Partner intends to adopt, whether or not the adoption has become final, who has not attained the age of 18 as of the date of such placement for adoption. The term "placed" means the assumption and retention by such covered Employee or same sex Domestic Partner of a legal obligation for total or partial support of the child in anticipation of adoption of the child. The child must be available for adoption and the legal process must have commenced. 3. Stepchildren who reside in the covered Employee's household may also be included as long as a natural parent remains married to the covered Employee and also resides in the covered Employee's household; 4. Children for whom the employee has been appointed legal guardian, legal ward, a ward by court decree, or a dependent by affidavit of dependency. 5. Children of the employee's verified Domestic Partner where the employee's Domestic Partner meets the standards for domestic partnership set forth by Eagle County Government and has properly executed and filed an Affidavit of Domestic partnership with the County, and has concurred with and adhered to the terms and conditions thereon and in all applicable addenda to such affidavit. "Covered Person" shall mean an employee or a dependent who has met the eligibility requirements and to whom benefits are payable under this Plan. "Dependent" shall mean: 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 same sex domestic partner, provided a notarized affidavit of common-law marriage is submitted to Eagle County Government's Human Eagle County Government 23 Definitions • 1/1109 Resources office and as may be permitted by the IRS. Consult your tax advisor for any potential tax implications. 3. The employee's "Children" from birth to the end of the calendar year during which age 19 is reached. 4. 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: 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 (30) 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. "Electronic Protected Health Information (EPHI)" shall mean protected health information that is transmitted by, or maintained in, electronic media and is set forth in 45 C.F.R. section 160.103 as amended from time to time. Electronic media includes storage media such as hard drives, magnetic tape or disks and digital memory cards, and it includes transmission media such as the Internet, extranets, leased lines, dial-up lines, private networks and the physical movement of electronic storage media. "Employee" shall mean a person employed by the Employer on a regular basis and who is included in a class or group of employees to which the 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. Eagle County Government 24 Definitions • 1/1/09 "General Purpose FSA" shall mean the Healthcare FSA Plan stated herein that reimburses all Code Section 213(d) medical expenses except those listed in section Excluded Expenses. "Gross Misconduct" shall mean conduct characterized by: Willful or wanton disregard of the Employer's interests; 2. Deliberate violations or disregard of standards of behavior that the Employer has the right to expect of an employee; 3. Carelessness or negligence of such degree or recurrence as to indicate evil design or wrongful intent on the part of the Employee. "Health Savings Account" (HSA) shall mean atax-favored trust or custodial account as defined in IRS Code § 223 established exclusively for the purpose of paying qualified medical expenses of the account owner (and his/her eligible dependents if any) who, for the months for which contributions are made to an HSA, is covered under a qualified High- Deductible Health Plan (HDHP) and no other health plan that is not an HDHP. Refer to IRS Notice 2004-2, and other subsequent notices and regulatory guidance issued thereafter. For more details, visit www.treas.gov/offices/public-affairs/hsa. "High Deductible Health Plan" (HDHP) shall mean a qualified medical plan which meets the terms and guidelines as set forth in IRS Notice 2004-2 and other subsequent notices and regulatory guidance issued thereafter. For more details, visit www.treas.gov/offices/public-affairs/hsa. "Limited Purpose FSA" shall mean the Healthcare FSA Plan stated herein except that it reimburses ONLY eligible dental, vision, andlor qualified preventive care (as defined in IRS Ruling 2004-23) expenses stated herein. All Plan limitations and Excluded Expenses apply. "Medically Necessary" means services or supplies which are: Generally accepted by the national medical professional community as being safe and effective in treating a covered i{{ness 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. 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. Eagle County Government 25 Definitions • 1/1/09 "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 (O.D.), Doctor of Chiropractic (D.C.), or a Psychologist (Ph.D.) as well as other licensed health care professionals who are under the direct supervision of a Physician. In addition, Physician shall include licensed behavioral health therapists who practice within the scope of their license, as allowed by law, and as such are permitted to provide services without the direct supervision of a Doctor of Medicine (M.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 twelve (12) month period as described in section Summary Plan Description, Item #4. "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-six (36) hours per week. Duly elected County officials are eligible without regard to scheduled hours. "Regular Part-Time" shall mean an employee who is employed in a position which normally requires more than 30 hours, but less than 36 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 Eagle County Government 26 Definitions • 1/1/09 diagnosis, without regard to whether such advice or statements were relied upon in making the benefit determination. ' "Salary Reduction" shall mean an employer-sponsored arrangement in which employees may elect to have some portion of their salaries be contributed to atax-qualified plan on their behalf. "Security Incident" shall mean the attempted or successful unauthorized access, use, disclosure, modification, or destruction of information or interference with systems operations in an information system as set forth in 45 C.F.R. section 164.304, as amended from time to time. "You" and "Your" shall mean the Plan Sponsor's Employee actively participating in this Plan. Eagle County Government 27 Definitions • 1/1/09 SUMMARY PLAN QESCRtPTtON 1. Names of the Plan and Plan Number: Eagle County Government Healthcare Flexible Spending Account. The Plan is for the benefit of employees of Eagle County Government. 2. Employer Identification Number 84-9804908 3. Name and Address of Employer whose Employees are Covered by the Plan: Eagle County Government 500 Broadway PO Box 850 Eagle, CO 81631 4. Plan Year: The Plan Year is the twelve (12) month period beginning January 1 and ending on December 31. 5. Plan Administrator*: Human Resources Director Eagle County Government 500 Broadway PO Box 850 Eagle, CO 81631 *Also serves as the Named Plan Fiduciary for all C/airrls Appeals 6. Privacy and Security Official: Human Resources Director Eagle County Government 500 Broadway PO Box 850 Eagle, CO 81631 7. Agent for Service of Legal Process: Plan Administrator Eagle County Government 28 Summary Plan Description • 1/1/09 8 9 Funding: The Healthcare Flexible Spending Account is self-funded by voluntary employee salary reductions. 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 review and reconsider your claim. Eagle County Government 29 Summary Plan Description • 1/1/09 AaoPT~oN Sponsor.' Eagle County Government Plan Document: Healthcare Flexible Spending Account Summary Plan Description: Healthcare Flexible Spending Account Replacement: This Plan replaces the Eagle County Government Healthcare Flexible Spending Account Plan dated January 1, 2008 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 PlanYear in which services are provided. Effective Date: January 1, 2009 Adopted: Date: ~ ~ !~ ~ D ~ Signature: Title: C hay RM'~u/I Eagle County Government 30 Adoption • 1/1/09