AMEMDMENT NO. 1 TO CITY OF CLEARWATERS PREMIUM PAYMENT PLAN DOCUMENT
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AMENDMENT NO.1 TO THE CITY OF CLEARWATER'S
PREMIUM PAYMENT PLAN DOCUMENT
MARCH 13, 1995
Article V, Section 5.4(b) is amended to read as follows:
(b) If the Premium Expense under a health insurance Benefit provided by an
independent, third-party provider under the Plan increases or decreases during a
Plan Year, then the Plan shall automatically increase or decrease, as the case may be,
the Salary Redirection of all affected Participants for such health insurance Benefit.
Alternatively, if the Premium Expense increases significantly, the Administrator
shall permit the affected Participants to either make corresponding changes in their
Premium payments or revoke their elections and, in lieu thereof, receive on a
prospective basis coverage under another health plan with similar coverage. In
addition, if the coverage under a health insurance Benefit provided by an independent
third-party provider is significantly curtailed or ceases during a Plan Year, or if
there is substantial change in the managed care network quality and/or access,
affected Participants may revoke their elections on such health insurance Benefit anc
in lieu thereof, elect to receive on a prospective basis coverage under another health
plan with similar coverage.
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In witness whereof, this Plan Document is hereby executed the ~ day of I .~.
1995.
CITY OF CLEARWATER
issioner
BettY~I~itY Manager
Approved as to form and countered signed: Attest:
(,
(}Y1 Jw
0, ~ ,2:. JJ~~ p._
Cy~ Geeea~ City Clerk
0-0 u... cieAM.....
Pamela Akin, City
3/95 125 Cafeteria Plan Amendment
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CITY OF CLEARWATER
Interdepartmental Correspondence Sheet
ill
All Employees and ~i:ees Covered Under the City's Medical Plan
. .f"G JJj
Susan G. Highsmit, uman Resources Manager/Employee Relations
FROM:
COPIES:
SUBJECT:
March 1995
DATE:
Section 125 Cafeteria Plan
Since 1991, the City of Clearwater has offered its employees the opportunity 0 f
deducting their medical premium on a pre-tax basis under a Section 125 Cafeteria
Plan. This pre-tax basis allows employees to pay less FICA and income taxes. In
return, the plan must follow the rules for a Cafeteria Plan written by the Internal
Revenue and the Department of Labor.
When you make your benefits decisions under the Cafeteria Plan, you cannot
them during the year unless you have met certain clearly defined events.
events are included each year in your enrollment information packets.
change
These
We have amended the rules for 1995. The actual amended Cafeteria Plan Document
language is included:
Article V, Section 5.4(b) IS amended to read as follows:
(b) If the Premium Expense under a health Insurance Benefit provided by an
independent, third-party provider under the Plan increases or decreases during a
Plan Year, then the Plan shall automatically increase or decrease, as the case may be,
the Salary Redirection of all affected Participants for ::iuch health insurance Benefit.
Alternatively, if the Premium Expense increases significantly, the Administrator
shall permit the affected Participants to .either make corresponding changes in their
Premium payments or revoke their elections and, in lieu thereof, receive on a
prospective basis coverage under another health plan with similar coverage. In
addition, if the coverage under a health insurance Benefit provided by an
independent, third-party provider is significantly curtailed or ceases during the
Plan Year, or if there is a substantial change in the managed care network qualify
and/or access, affected Participants may revoke their elections of such health
insurance Benefit and, in lieu thereof, elect to receive on a prospective basis
coverage under another health plan with similar coverage.
Here is what this really means:
- If the Pru Care Plus or the Pru Care HMO Network quality or access changes
substantially during any year and the City and the carrier agree, you will be allowed
to transfer from Pru Care Plus to Pru Care HMO once a year.
- If this event even becomes necessary, you will be notified of your rights at t hat
time.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY 4
2.2 EFFECTIVE DATE OF PARTICIPATION 4
2.3 APPLICATION TO PARTICIPATE 4
2.4 TERMINATION OF PARTICIPATION 4
2.5 TERMINATION OF EMPLOYMENT 5
3.1
3.2
3.3
4.1
4.2
4.3
ARTICLE III
CONTRIBUTIONS TO THE PLAN
SALARY REDIRECTION
APPLICATION OF CONTRIBUTIONS
PERIODIC CONTRIBUTIONS
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ARTICLE IV
BENEFITS
BENEFIT OPTIONS
HEALTH INSURANCE BENEFIT
DENTAL INSURANCE BENEFIT
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7
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4 . 4
4.5
4 . 6
5.1
5.2
5.3
5.4
6.1
6.2
6.3
6.4
7.1
7.2
7.3
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CANCER INSURANCE BENEFIT
CASH BENEFIT
NONDISCRIMJNATION REQUIREMENTS
ARTICLE V
PARTICIPANT ELECTIONS
INITIAL ELECTIONS
SUBSEQUENT ANNUAL ELECTIONS
FAILURE TO ELECT
CHANGE OF ELECTIONS
ARTICLE VI
PLAN PROVISIONS
CLAIM FOR BENEFITS
NAMED FIDUCIARY
GENERAL FIDUCIARY RESPONSIBILITIES
NONASSIGNABILITY OF RIGHTS
ARTICLE VII
ADMINISTRATION
PLAN ADMINISTRATION
EXAMINATION OF RECORDS
PAYMENT OF EXPENSES
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7.4
7.5
8.1
8.2
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
9.11
9.12
9.13
9.14
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INSURANCE CONTROL CLAUSE
INDEMNIFICATION OF ADMINISTRATOR
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ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
AMENDMENT
TERMINATION
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ARTICLE IX
MISCELLANEOUS
PLAN INTERPRETATION
GENDER AND NUMBER
WRITTEN DOCUMENT
EXCLUSIVE BENEFIT
PARTICIPANT'S RIGHTS
ACTION BY THE EMPLOYER
EMPLOYER'S PROTECTIVE CLAUSES
NO GUARANTEE OF TAX CONSEQUENCES
INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS
FUNDING
OTHER SALARY-RELATED PLANS
GOVERNING LAW
SEVERABILITY
CAPTIONS
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9.15 CONTINUATION OF COVERAGE
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CITY OF CLEARWATER
PREMIUM PAYMENT PLAN
INTRODUCTION
The Employer has adopted this Plan effective January 1,
1991 to recognize the contribution made to the Employer by its
Employees. Its purpose is to reward them by providing benefits
for those Employees who shall qualify hereunder and their
dependents and beneficiaries. The concept of this plan is to
allow Employees to choose among different types of benefits based
on their own particular goals, desires and needs. The plan shall
be known as City of Clearwater Premium Payment Flan (the "Plan").
The intention of the Employer is that the Plan qualify
as a "Cafeteria Plan" within the meaning of Section 125 of the
Internal Revenue Code of 1986, as amended, and that the benefits
which an Employee elects to receive under the Plan be includable
or excludable from the Employee'S income under section 125(a) and
other applicable sections of the Internal Revenue Code of 1986,
as amended.
ARTICLE I
DEFINITIONS
1.1 "Administrator" means the individual(s) or corporation
appointed by the Employer to carry out the administration of the
Plan. In the event the Administrator has not been appointed, or
resigns from a prior appointment, the Employer shall be deemed to
be the Administrator.
1.2 "Affiliated Employer" means the Employer and any
corporation which is a member of a controlled group of
corporations (as defined in Code Section 414(b)) which includes
the Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)}
with the Employer; any organization (whether or not incorporated)
which is a member of an affiliated service group (as defined in
Code section 414(m)) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant to
Treasury regulations under Code Section 414(0).
1.3 "Benefit" means any of the optional benefit choices
available to a Participant as outlined in section 4.1.
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1.16 "Key Employee" means an employee defined in Code
section 416(i) (1) and the Treasury regulations thereunder.
1.17 "participant" means any Eligible Employee who elects
to become a Participant pursuant to Section 2.3 and has not for
any reason beGome ineligible to participate further in the Plan.
1.18 "Plan" means this instrument, including all amendffients
thereto.
1.19 "Plan Year" means the 12-month period beginning
January 1st and ending December 31st. The Plan Year shall be the
coverage period for the Benefits provided for under this Plan. In
the event a Participant commences participatlon during a Plan
Year, then the initial coverage period shall be that portion of
the Plan Year commencing on such participant's date of entry and
ending on the last day of such Plan Year.
1.20 "Premium Expenses" or "Premiums" mean the
Participant's cost for the insured Benefits described in Section
4.1.
1.21 "Salary Redirection" means the contributions made by
the Employer on behalf of Participants pursuant to Section 3.1.
1.22 "Salary Redirection Agreement" means an agreement
between the Participant and the Employer under which the
Participant agrees to reduce his Compensation or to forego all or
part of the increases in such Compensation and to have such
amounts contributed by the Employer to the Plan on the
participant's behalf. The Salary Redirection Agreement shall
apply only to Compensation that has not been actually or
constructively received by the Participant as of the date of the
agreement (after taking this Plan and Code Section 125 into
account) and, subsequently does not become currently available to
the Participant.
1.23 "Spouse" means the legally married husband or wife of
a Participant, unless legally separated by court decree.
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ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY
Any 'Employee shall be eligible to participate
hereunder as of his date of employment (or the Effective Date of
the Plan, if later). If a former Participant is rehired during
the same period of coverage in which termination'of employment,
occurs, and such former Participant had revoked existing Benefit
elections and terminated the receipt of Benefits at the time of
termination of employment, then such rehired former Participant
shall be prohibited from making new Benefit elections for the
remaining portion of the period of coverage.
2.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant
effective as of the date on which he satisfies the requirements
of Section 2.1.
2.3 APPLICATION TO PARTICIPATE
An Employee who is eligible to participate in this Plan
shall, during the applicable Election Period, complete an
application to participate and election of benefits form which
the Administrator shall furnish to the Employee. The election
made on such form shall be irrevocable until the end of the
applicable Plan Year unless the Participant is entitled to change
his Benefit elections pursuant to Section 5.4 hereof.
An Eligible Employee shal). also be required to execute
a Salary Redirection Agreement during the Election Period for the
Plan Year during which he wishes to p&rticipate in this Plan. Any
such Salary Redirection Agreement shall be effective for the
first pay period beginning on or after the Employee's effective
date of participation pursuant to Section 2.2.
2.4 TERMINATION OF PARTICIPATION
A Participant shall no longer participate in this Plan
upon the occurrence of any of the following events:
(a) His termination of employment, subject to the
provisions of section 2.5;
(b) His death; or
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(c) The termination of this Plan, subject to the
provisions of section 8.2.
2.5 TERMINATION OF EMPLOYMENT
If a Partic~pant terminates employment with the
Employer for any reas ~ other than death, his participation in
the Plan shall be governed in accordance with the following:
(a) with regard to Benefits which are insured, the
Participant's participation in the Plan shall cease, subject
to the Participant's right to continue coverage under any
Insurance Contract for which premiums have already been paid.
(b) This Section shall be applied and administered
consistent with such further rights a Participant and his
Dependents may acquire pursuant to Code Section 4980B and
Section 9.15 of the Plan.
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 SALARY REDIRECTION
Benefits under the Plan shall be financed by Salary
Redirections sufficient to support Benefits that a Participant
has elected hereunder and to pay the Participant's Premium
Expenses. The salary administration program of the Employer shall
be revised to allow each Participant to agree to reduce his pay
during a Plan Year by an amount determined necessary to purchase
the elected Benefit. The amount of such Salary Redirection shall
be specified in the Salary Redirection Agreement and shall be
applicable for a Plan Year. Notwithstanding the above, for new
Participants, the Salary Redirection Agreement shall only be
applicable from the first day of the pay period following the
Employee's entry date up to ;-.' Id including the last day of the
Plan Year. However, in no ev-.;nt shall a participant's Salary
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Redirection exceed $1,000 per pay period.
Any Salary Redirection shall be determined prior to the
beginning of a Plan Year (subject to initial elections pursuant
to Section 5.1) and prior to the end of the Election Period and
shall be irrevocable for such Plan Year. However, a Participant
may revoke a Benefit election or a Salary Redirection Agreement
after the Plan Year has commenced and make a new election and/or
Salary Redirection Agreement with respect to the remainder of the
Plan Year, if both the revocation and the new election are on
account of and consistent with a change in family status and such
other permitted events as determined under Article V of the Plan
and consistent with the rules and regulations of the Department
of the Treasury. Salary Redirection amounts shall be contributed
on a pro rata basis for each pay period during the Plan Year. All
individual Salary Redirection Agreements are deemed to be part of
this Plan and incorporated by reference hereunder. .
3.2 APPLICATION OF CONTRIBUTIONS
As soon as reasonably practical after each payroll
period, the Employer shall apply the Salary Redirection to
provide the Benefits elected by the affected Participants.
3.3 PERIODIC CONTRIBUTIONS
Notwithstanding the requirement provided above and in
other Articles of this Plan that Salary Redirections be
contributed to the Plan by the Employer on behalf of an Employee
on a level and pro rata basis for each payroll period, the
Employer and Administrator may implement a procedure in which
Salary Redirections are contributed throughout the Plan Year on a
periodic basis that is not pro rata for each payroll period.
ARTICLE IV
BENEFITS
4.1 BENEFIT OPTIONS
Each Participant may elect to have the amount of his
Salary Redirections applied to anyone or more of the following
optional Benefits:
(1) Health Insurance Benefit
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(2) Dental Insurance Benefit
(3) Cancer Insurance Benefit
(4) Cash Benefit
4.2 HEALTH INSURANCE BENEFIT
(a) Each Participant may elect to be covered under a
health and hospitalization Insurance Contract for the
Participant, his or her spouse, and his or her Dependents.
(b) The Emp~oyer may select suitable health and
hospitalization Insurance Contracts for use in providing this
health insurance benefit, which policies will provide uniform
benefits for all Participants electing this Benefit.
(c) The rights and conditions with respect to the
benefits payable from such health and hospitalization
Insurance Contract shall be determined therefrom, and such
Insurance Contract shall be incorporated herein by reference.
4.3 DENTAL INSURANCE BENEFIT
(a) Each Participant may elect to be covered under the
Employer's dental Insurance Contract. In addition, the
Participant may elect either individual or family coverage
under such Insurance Contract.
(b) The rights and conditions with respect to the
benefits payable from such dental Insurance Contract shall be
determined therefrom, and such dental Insurance Contract
shall be incorporated herein by reference.
4.4 CANCER INSURANCE BENEFIT
(a) Each Participant may elect to be covered under the
Employer's Cancer Insurance Contract. In addition, the
Participant may elect either individual or family coverage.
(b) The rights and conditions with respect to the
benefits payable from such Cancer Insurance Contract shall be
determined therefrom, and such Cancer Insurance Contract
shall be incorporated herein by reference.
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4.5 CASH BENEFIT
If a Participant fails to make any election of Benefit
options or does not elect any Salary Redirections, such
Participant shall be deemed to have chosen the Cash Benefit as
his sole Benefit option.
4.6 NONDISCRIMINATION REQUIREMENTS
(a) It is the intent of this Cafeteria Plan to provide
benefits to a classification of employees which the Secretary
of the Treasury finds not to be discriminatory in favor of
the group in whose favor discrimination may not occur under
Section 125.
(b) It is the intent of this Cafeteria Plan not to
provide qualified benefits as defined under Code section
125(e) to Key Employees in amounts that exceed 25% of the
aggregate of such Benefits provided for all Eligible
Employees under the Plan. For purposes of the preceding
sentence, qualified benefits shall not include benefits which
~without regard to this paragraph) are includable in gross
lncome.
(c) If the Administrator deems it necessary to avoid
discrimination or possible taxation to Key Employees or a
group of employees in whose favor discrimination may not
occur in violation of Code Section 125, it may, but shall not
be required to, reject any election or reduce contributions
or non-taxable Benefits in order to assure compliance with
this Section. Any act taken by the Administrator under this
Section shall be carried out in a uniform and
nondiscriminatory manner. If the Administrator decides to
reject any election or reduce contributions or non-taxable
benefits, it shall be done in the following manner. First,
the non-taxable Benefits of the affected Participant (either
an employee who is highly compensated or a Key Employee,
whichever is applicable) who has elected the highest amount
of non-taxable Benefits for the Plan Year shall have his
non-taxable benefits reduced until the discrimination tests
set forth in this Section are satisfied or until the amount
of his non-taxable Benefits equals the non-taxable Benefits
of the affected Participant who has elected the second
highest amount of non-taxable Benefits. This process shall
continue until the nondiscrimination tests set forth in this
Section are satisfied. With respect to any affected
Participant who has had Benefits reduced pursuant to this
Section, the reduction shall be made proportionately among
insured Benefits.
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ARTICLE V
PARTICIPANT ELECTIONS
5.1 INITIAL ELECTIONS
An Employee who meets the eligibility requirements of
Section 2.1 on the first day of, or during, a Plan Year may elect
to participate in this plan for all or the remainder of such Plan
Year, provided he elects to do so before his effective date of
partiCipation pursuant to Section 2.2 and prior to the end of the
Election Period (as defined under Section 1.8) ~For the initial
enrollment period, i.e., the plan Year beginning January 1, 1991,
all Eligible Employees must complete their election form and return
the election form to the Administrator prior to December 31, 1990.
However, if such Employee does not complete an application to
participate and benefit election for~ and deliver it to the
Administrator before such date, his Election Period shall extend
30 calendar ~ays after such date, or tor such further period as
the Administrator shall determine and apply on a uniform and
nondiscriminatory basis. However, any election during the extended
30-day election period pursuant to this Section 5.1 shall not be
effective until the first pay period following the later of such
participant's effective date of participation pursuant to
section 2.2 or the date of the receipt of the election form by the
Administrator, and shall b~ limited to the Benefit expenses
incurred for the balance of the Plan Year for which the election
is made.
5.2 SUBSEQUENT ANNUAL ELECTIONS
During the Election Period prior to 'each subsequent
Plan Year, each Participant shall be given the opportunity to
elect, on an election of benefits form to be provided by the
Administrator, which Benefit options he wishes to select and
purchase with his Salary Redirections. Any such election shall be
effective for any Benefit expenses incurred during the Plan Year
which follows the end of the Election Period. with regard to
subsequent annual elections, the following options shall apply:
(a) A Participant or Employee who failed to initially
elect to participate may elect different or new Benefits
under the plan during the Election Period;
(b)
the Plan
Election
Plan for
A Participant may terminate his participation in
by notifying the A~~inistrator in writing during the
Period that he does not want to participate in the
the next Plan Year;
(c) ~~ Employee who elects not to participate for the
plan Year following the Election Period will have to wait
until the next Election Period before again electing to
participate in the plan.
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5.3 FAILURE TO ELECT
Any Participant failing to complete an election of
benefits form pursuant to Section 5.2 by the end of the
applicable Election Period shall be deemed to have made the same
Benefit option elections as are then in effect for the current
Plan Year. The Participant shall also be deemed to have elected
Salary Redirection in an amount necessary to purchase such
Benefit options.
5.4 CHANGE OF ELECTIONS
(a) Any Participant may change a Benefit election after the
Plan Year (to which such election relates) has commenced and make
new elections with respect to the remainder of such Plan Year if
the changes are necessitated by and are consistent with a change
in family status which is acceptable under rules and regulations
adopted by the Department of the Treasury. Benefit election
changes are consistent with family status changes only if the
election changes are necessary or appropriate as a result of the
family status change. Any new election under this Section 5.4
shall be effective at such time as the Administrator shall
prescribe, but not earlier than the first pay period beginning
after the election form is completed and returned to the
Administrator. For the purposes of this paragraph, the following
events shall be considered examples of a change in family status:
(1) the marriage or divorce of the Participant;
(2) the birth or adoption of a child by the
Participant;
(3) the death of the Participant/s spouse or a
Dependent
(4) the termination or commencement of employment of
the Participant's spouse;
(5) the switching from part-time to full-time
employment status (or from full-time to part-time
status) by the Participant or the Participant's spouse;
(6) the t~king of an unpaid leave of absence by the
Participant or the Participant's spouse; or
(7) a significant change in health coverage
attributable to the spouse/s employment.
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(b) If the Premium Expense under a health insurance
Benefit provided by an independent, third-party provider
under the Plan increases or decreases during a Plan Year,
then the Plan shall automatically increase or decrease, as
the case may be, the Salary Redirections of all affected
Participants for such health insurance Benefit.
Alternatively, if the ~remium Expense increases
significantly, the Administrator shall permi~ the affected
Participants to either make corresponding changes in their
Premium payments or revoke their elections and, in lieu
thereof, receive on a prospective basis coverage under
another health plan with similar coverage. In addition, if
the coverage under a health insurance Benefit provided by an
independent, third-party provider is significantly curtailed
or ceases during a Plan Year, affected Participants may
revoke their elections of such health insurance Benefit and,
in lieu thereof, elect to receive on a prospective basis
coverage under another health plan with similar coverage.
ARTICLE VI
PLAN PROVISIONS
6.1 CLAIM FOR BENEFITS
(a) Any claim for Benefits underwritten by an Insurance
Contract shall be made to the Insurer. If the Insurer denies
any claim, the Participant or beneficiary shall follow the
Insurer's claims review procedure. Any other claim for
Benefits shall be made to the Administrator. If the
J..dministrator denies a claim, the Administrator may provide
notice to the Participant or beneficiary, in writing, within
90 days after the claim is filed unless special circumstances
require an extension of time for processing the claim. If the
Administrator does not notify the Participant of the denial
of the claim within the 90 day period specified above, then
the claim shall be deemed denied. The notice of a denial of a
claim shall be written in a manner calculated to be
understood by the claimant and shall set forth
(1) specific references to the pertinent Plan\ \
provisions on which the denial is based; '\
(2) a description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation as to why such information is
necessary; and
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(3) an explanation of the Plan's claim procedure.
(b) Within 60 days after receipt of the above material,
the claimant shall have a reasonable opportunity to appeal
the claim denial to the Administrator for a full and fair
review. The claimant or his duly authorized representative
may
(1) request a review upon written notice to the
Administrator;
(2) review pertinent documents; and
(3) submit issues and comments in writing.
(c) A decision on the review by the Administrator will
be made not later than 60 days after receipt of a request for
review, unless special circumstances require an extension of
time for processing (such as the need to hold a hearing), in
which event a decision should be rendered as soon as
possible, but in no event later than 120 days after such
receipt. The decision of the Administrator shall be written
and shall include specific reasons for the decision, written
in a manner calculated to be understood by the claimant, with
specific references to the pertinent Plan provisions on which
the decision is based.
6.2 NAMED FIDUCIARY
The Administrator shall be the named fiduciary and shall
be responsible for the management and control of the operation
and administration of the Plan.
6.3 GENERAL FIDUCIARY RESPONSIBILITIES
The Administrator and any other fiduciary shall
discharge their duties with respect to this Plan solely in the
interest of the Participants and their beneficiaries and
(a) for the exclusive purpose of providing Benefits to
Participants and their beneficiaries and defraying reasonable
expenses of administering the Plan;
(b) with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting
in like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with
like aims; and
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(c) in accordaflce with the documents and instruments
governing the Plan.
6.4 NONASSIGNABILITY OF RIGHTS
The right of any Participant to receive any
reimbursement under the Plan shall not be alienable by the
Participant by assignment or any other method, and shall not be
subject to the rights of creditors, and any attempt to cause such
right to be so subjected shall not be recognized, except to such
extent as may be required by law.
ARTICLE VII
ADMINISTRATION
7.1 PLAN ADMINISTRATION
The operation of the Plan shall be under the
supervision of the Administrator. It shall be a principal duty of
the Administrator to see that the Plan is carried out in
accordance with its terms, and for the exclusive benefit of
Employees entitled to participate in the Plan. The Administrator
shall have full power to administer the Plan in all of its
details, subject, however, to the pertinent provisions of the
Code. The Administrator's powers shall include, but shall not be
limited to the following authority, in addition to all other
powers provided by this Plan:
(a) To make and enforce such rules and regulations as
the Administrator deems necessary or proper for the efficient
administration of the Plan;
(b) To interpret the Plan, the Administrator's
interpretations thereof in good faith to be final and
c0nclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan and to
receive benefits provided under the Plan;
(d) To reject elections or to limit contributions or
Benefits for certain highly compensated participants if it
deems such to be desirable in order to avoid discrimination
under the Plan in violation of applicable provisions of the
Code;
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(e) To provide; Employees with a reasonable notification
of their benefits available under the Plan;
(f) To appoint such agents, counsel, accountants,
consultants, and actuaries as may be required to assist in
administering the Plan.
Any procedure, discretionary act, interpretation or
construction taken by the Administrator shall be done in a
nondiscriminatory manner based upon uniform principles
consistently applied and shall be consistent with the intent that
the Plan shall continue to comply with the terms of Code section
125 and the Treasury regulations thereunder.
7.2 EXAMINATION OF RECORDS
The Administrator shall make available to each
Participant, Eligible Employee and any other Employee of the
Employer such records as pertain to their interest under the Plan
for examination at reasonable times during normal business hours.
7.3 PAYMENT OF EXPENSES
Any reasonable administrative expenses shall be paid by
the Employer unless the Employer determines that administrative
costs shall be borne by the Participants under the Plan or by any
Trust Fund which may be established hereunder. The Administrator
may impose reasonable conditions for payments, provided that such
conditions shall not discriminate in favor of highly compensated
employees.
7.4 INSURANCE CONTROL CLAUSE
In the event of a conflict between the terms of this
Plan and the terms of an Insurance Contract of a particular
Insurer whose produc~ is then being used in conjunction with this
Plan, the terms of the Insurance Contract shall control as to
those Participants receiving coverage under such Insurance
Contract. For this purpose, the Insurance Contract shall control
in defining the persons eligible for insurance, the dates of
their eligibility, the conditions which must be satisfied to
become insured, if anYi the benefits Participants are entitled to
and the circumstances under which insurance terminates.
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7.5 INDEMNIFICATION OF;ADMINISTRATOR
The Employer agrees to indemnify and to defend to the
fullest extent permitted by law any Employee serving as the
Administrator or as a member of a committee designated as
Administrator (including any Employee or former Employee who
previously served as Administrator or as a member of such
committee) against all liabilities, damages, costs and expenses
(including attorney's fees and amounts paid in settlement of any
claims approved by the Employer) occasioned by any act or
omission to act in connection with the Plan, if such act or
omission is in good faith.
A.RTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
8.1 AMENDMENT
The Employer, at any time or from time to time, may
amend any or all of the provisions of the Plan without the
consent of any Employee or Participant. No amendment shall have
the effect of modifying any benefit election of any Participant
in effect at the time of such amendment, unless such amendment is
made to comply with Federal, state or local laws, statutes or
regulations.
8.2 TERMINATION
The Employer is establishing this Plan with the intent
that it will be maintained for an indefinite period of time.
Notwithstanding the foregoing, the Employer reserves the right to
terminate the Plan, in whole or in part, at any time. In the
event the Plan is terminated, no further contributions shall be
made. Benefits under any Insurance Contract shall be paid in
accordance with the terms of the Contract.
ARTICLE IX
MISCELLANEOUS
9.1
PLAN INTERPRETATION
All provisions of this Plan shall be interpreted and
in a uniform, nondiscriminatory manner. This Plan shall
in its entirety and not severed except as provided in
9.13.
applied
be read
Section
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9.2 GENDER AND NUMBER'
Wherever any words are used herein in the masculine, .
feminine or neuter gender, they shall be construed as though they
were also used in another gender in all cases where they would so
apply, and whenever any words are used herein in the singular or
plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.3 WRITTEN DOCUMENT
This plan, in conjunction with any separate written
document which may be required by law, is intended to satisfy the
written Plan requirement of Code Section 125 and any Regulations
thereunder relating to cafeteria plans.
9.4 EXCLUSIVE BENEFIT
This Plan shall be maintained for the exclusive benefit
of the Employees who participate in the Plan.
9.5 . PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute an
employment contract between the Employer and any Participant or
to be a consideration or an inducement for the employment of any
Participant or Employee. Nothing contained in this Plan shall be
deemed to give any Participant or Employee the right to be
retained in the service of the Employer or to interfere with the
right of the Employer to discharge any Participant or Employee at
any time regardless of the effect which such discharge shall have
upon him as a Participant of this Plan.
9.6 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is
permitted or required to do or perform any act or matter or
thing, it shall be done and performed by a person duly authorized
by its legally constituted authority.
9.7 EMPLOYER'S PROTECTIVE CLAUSES
(a) Upon the failure of either the Participant or the
Employer to obtain the insurance contemplated by this Plan
(whether as a result of negligence, gross neglect or
otherwise), the Participant's Benefits shall be limited to
the insurance premium, if any, that remained unpaid for the
period in question and the actual insurance proceeds, if any,
received by the Employer or the Participant as a result of
the Participanc's claim.
(b) The Employer's liability to the Participant shall
only extend to and shall be limited to any paym~nt actually
received by the Employer from the Insurer. In the event that
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the full insurance Benefit contemplated is not promptly
received by the Employer within a reasonable time after
submission of a claim, then the Employer shall notify the
Participant of such facts and the Employer shall no longer
have any legal obligation whatsoever (except to execute any
document 9alled for by a settlement reached by the
Participant). The Participant shall be free to settle,
compromise or refuse to pursue the claim as the Participant,
in his sole discretion, shall see fit.
(c) The Employer shall not be responsible for the
validity of any Insurance Contract issued hereunder or for
the failure on the part of the Insurer to make payments
provided for under any Insurance Contract, or for the action
of any person which may delay or render null and void or
unenforceable, in whole or in part, an Insurance Contract.
With regard to this paragraph, the following shall apply:
(1) Once insurance is applied for or obtained, the
Employer shall not be liable for any loss which may
result from the failure to pay Premiums to the extent
Premium notices are not received by the Employer.
(2) To the extent Premium notices are received by the
Employer, the Employer's liability for the payment of
such Premiums shall be limited to the amount of such
Premiums and shall not include liability for any other
loss which may result from failure to pay such Premiums.
(3) The Employer shall not be liable for the payment of
any insurance Premium or any loss which may result from
the failure to pay an insurance Premium if the 3enefits
available under this Plan are insufficient to provide
for the amount of such Premium cost at the time it is
due. In such circumstances the Participant shall be
responsible for and see to the payment of such Premiums.
The Employer shall undertake to notify a Participant if
available Benefits under this Plan are' insufficient to
provide for an insurance Premium but shall not be liabl~
for any failure to make such notification.
9.8 NO GUARANTEE OF TAX CONSEQUENCES
Neither the Administrator nor the Employer makes any
commitment or guarantee that any amounts paid to or for the
benefit of a Participant under the Plan will be excludable from
the Participant's gross income for federal or state income tax
purposes, or that any other federal or state tax treatment will
apply to or be available to any Participant. It shall be the
obligation of each Participant to determine whether each payment
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under the Plan is excludable from the Participant's gross income
for federal and state income tax purposes, and to notify the
Employer if the Participant has reason to believe that any such
payment is not so excludable. Notwithstanding the foregoing, the
rights of Participants under this Plan shall be legally
enforceable.
9.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS
If any Participant receives one or more payments or
reimbursements under the Plan that are not for a permitted
Benefit, such Participant shall indemnify and reimburse the
Employer for any liability it may incur for failure to withhold
federal or state income tax or Social Security tax from such
payments or reimbursements. However, such indemnification and
reimbursement shall not exceed the amount of additional federal
and state income tax (plus any penalties) that the Participant
would have owed if the payments or reimbursements had been made
to the Participant as regular cash compensation, plus the
Participant's share of any Social Security tax that would have
been paid on such compensation, less any such additional income
and Social Security tax actually paid by the Participant.
9.10 FUNDING
Unless otherwise required by law, contributions to the
Plan need not be placed in trust or dedicated to a specific
Benefit, but shall instead be considered general assets of the
Employer until the Premium Expense required under the Plan has
been paid. Furthermore, and unless otherwise required bylaw,
nothing herein shall be construed to require the Employer or the
Administrator to maintain any fund or segregate any amount for
the benefit of any Participant, and no Participant or other
person shall have any claim against, ~ight to, or security or
other interest in, any fund, account or asset of the Employer
from which any payment under the Plan may be made.
9.11 OTHER SALARY-RELATED PLANS
It is intended that any other salary-related employee
benefit plans that are maintained or sponsored by the Employer
shall not be affected by this Plan. Any contributions or benefits
under such other plans with respect to a Participant shall, to
the extent permitted by law and not otherwise provided for in
such other plan, be based on his or her total compensation from
the Employer, including any amounts by which his or her salary or
wages may be reduced pursuant to the provisions of Section 3.1.
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9.12 GOVERNING LAW
This Plan is governed by the Code and the Treasury
regulations issued thereunder (as they might be amended from time
to time). In no event shall the Employer guarantee the favorable
tax treatment sought by this Plan. To the extent not preempted by
Federal law, the provisions of this Plan shall be construed,
enforced and ~dministered according to the laws of the State of
Florida.
9.13 SEVERABILITY
If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not
affect any other provisions of the Plan, and the Plan shall be
construed and enforced as if such provision had not been included
herein.
9.14 CAPTIONS
The captions contained herein are inserted only as a
matter of convenience and for reference, and in no way define,
limit, enlarge or describe the scope or intent of the Plan, nor
in any way shall affect the Plan or the construction of any
provision thereof.
9.15, CONTINUATION OF COVERAGE
Notwithstanding anything in the Plan to the contrary,
in the event any benefit under this Plan subject to the
continuation coverage requirement of Code section 4980B becomes
unavailable, each Participant will be entitled to continuation
coverage as prescribed in Code section 498GB.
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IN WITNESS WHEREOF, this Plan document 1S hereby executed this ~IS+
day of Qi , 19f~
CITY OF CLEARWATER, FLORIDA
By:
-flc 7? -t2t~
Ron H. Rabun
City Manager
Approved as
and correct
Attest:
~
.~
Goudeau
M. A. Galbraith,
City Attorney
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