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HomeMy WebLinkAbout2005-013RESOLUTION NO. 2005-013 A RESOLUTION OF . THE BOARD OF COUNTY COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, ADOPTING AN AMENDMENT TO ITS CAFETERIA PLAN. WHEREAS, the County offers its employees a number of benefits in a format that is commonly called a "Cafeteria Plan;" and WHEREAS, from time to time the federal laws governing Cafeteria Plans change which requires amendment of the County's current Plan; and • WHEREAS, the ,Summary Material Modifications need to be distributed to all County employees; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COMMISSIONERS OF INDIAN RIVER COUNTY, FLORIDA, that: 1. The County's Cafeteria Plan is hereby amended to include the changes attached as Exhibit A. 2. The Director of Human Resources shall provide notice to all County employees of the changes to the Cafeteria Plan. The resolution was moved for adoption by Commissioner Wheel er and the motion was seconded by Commissioner Davis , and, upon being put to a vote, the vote was as follows: Chairman Thomas S. Lowther Aye Vice Chairman Arthur R. Neuberger Aye Commissioner Wesley S. Davis Aye Commissioner Gary C. Wheeler Ayes_ Commissioner Sandra L. Bowden Aye The Chairman thereupon declared the resolution duly passed and adopted this 8th day of February , 2005. F:Wttorney\Bill\Resolutions\Flex Co Cobra resolution.doc .,^ "Attest.---J--X, Barton, Clerk By RESOLUTION NO. 2005- 013 Deputy C • Approved for form and le • a suffi,i ycy: William K. DeBraal Assistant County Attorney 2 INDIAN RIVER COUNTY Board of County Commissioners By _ S. Thomas S. Lowther, Chairman BCC approval date: 02-08-2005 SUMMARY PLAN DESCRIPTION'. — SUMMARY MATERIAL MODIFICATIONS INTRODUCTION, Your Employer has amended your Cafeteria Plan. This is merely a summary of the most important changes to the Plan. These changes replace or modify the corresponding areas of your Summary Pian Description. If you have any questions, contact your Plan's Administrator. A copy of the Plan, including this amendment, is available for your inspection. If there is any discrepancy between the terms of the Plan or the amendment itself and this summary material modification, the provisions of the Plan, as amended, will control. 11 SUMMARY OF CHANGES The following Section has been added in its entirety to the Summary Plan Description: QUALIFIED MEDICAL CHILD SUPPORT ORDER A medical child support order is a judgment, decree or order (including approval of a property settlement) made under state law that provides for child support or health coverage for the child of a participant. The child becomes an "alternate recipient" and can receive benefits under the health plans of the Employer, if the order is determined to be "qualified." You may obtain, without charge, a copy of the procedures governing the determination of qualified medical child support orders from the Plan Administrator. CONTINUATION COVERAGE RIGHTS UNDER COBRA Under federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), certain employees and their families covered under health benefits under this Plan will be entitled to the opportunity to elect a temporary extension of health coverage (called "COBRA continuation coverage") where coverage under the Plan would otherwise end. This notice is intended to inform Plan Participants and beneficiaries, in summary fashion, of their rights and obligations under the continuation coverage provisions of COBRA, as amended and reflected in final and proposed regulations published by the Department of the Treasury. This notice is intended to reflect the law and does not grant or take away any rights under the law. The Plan Administrator or its designee is responsible for administering COBRA continuation coverage. Complete instructions on COBRA, as well as election forms and other information, will be provided by the Plan Administrator or its designee to Plan Participants who become Qualified Beneficiaries under COBRA. While the Plan itself is not a group health plan, it 1 does provide health benefits. Whenever "Plan" is used in this section, it means any of the health benefits under this Plan including the Health Care Reimbursement Plan. 1. What is COBRA Continuation Coverage? COBRA continuation coverage is the temporary extension of group health plan coverage that must be offered to certain Plan Participants and their eligible family members (called "Qualified Beneficiaries") at group rates. The right to COBRA continuation coverage is triggered by the occurrence of a life event that results in the loss of coverage under the terms of the Plan (the "Qualifying Event"). The coverage must be identical: to the coverage that the Qualified Beneficiary had immediately before the Qualifying Event, or if the coverage has been changed, the coverage must be identical to the coverage provided to similarly situated active employees who have not experienced a Qualifying Event (in other words, similarly situated non -COBRA beneficiaries). 2. Who Can Become a Qualified Beneficiary? In general, a Qualified Beneficiary can be: (a) Any individual who, on the day before a Qualifying Event, is covered under a Plan by virtue of being on that day either a covered Employee, the Spouse of a covered Employee, or a Dependent child of a covered Employee. If, however, an individual is denied or not offered coverage under the Plan under circumstances in which the denial or failure to offer constitutes a violation of applicable law, then the individual will be considered to have had the coverage and will be considered a Qualified Beneficiary if that individual experiences a Qualifying Event. (b) Any child who is born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage, and any individual who is covered by the Plan as an alternate recipient under a qualified medical support order. If, however, an individual is denied or not offered coverage under the Plan under circumstances in which the denial or failure to offer constitutes a violation of applicable law, then the individual will be considered to have had the coverage and will be considered a Qualified Beneficiary if that individual experiences a Qualifying Event. The term "covered Employee" includes any individual who is provided coverage under the Plan due to his or her performance of services for the employer sponsoring the Plan. An individual is not a Qualified Beneficiary if the individual's status as a covered Employee is attributable to a period in which the individual was a nonresident alien who received from the individual's Employer no earned income that constituted income from sources within the United States. If, on account of the preceding reason, an individual is not a Qualified Beneficiary, then a Spouse or Dependent child of the individual will also not be considered a Qualified Beneficiary by virtue of the relationship to the individual. Each Qualified Beneficiary (including a child who is born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage) must be offered the opportunity to make an independent election to receive COBRA continuation coverage. 2 3. What is a Qualifying Event? A Qualifying Event is any of the following if the Plan provided that the Plan participant would lose coverage (i.e., cease to be covered under the same terms and conditions as in effect immediately before the Qualifying Event) in the absence of COBRA continuation coverage: (a) The death of a covered Employee. (b) The termination (other than by reason of the Employee's gross misconduct), or reduction of hours, of a covered Employee's employment. (c) The divorce or legal separation of a covered Employee from the Employee's Spouse. (d) A covered Employee's enrollment in any part of the Medicare program. (e) A Dependent child's ceasing to satisfy the Plan's requirements for a Dependent child (for example, attainment of the maximum age for dependency under the Plan). If the Qualifying Event causes the covered Employee, or the covered Spouse or a Dependent child of the covered Employee, to cease to be covered under the Plan under the same terms and conditions as in effect immediately before the Qualifying Event (or in the case of the bankruptcy of the Employer, any substantial elimination of coverage under the Plan occurring within 12 months before or after the date the bankruptcy proceeding commences), the persons losing such coverage become Qualified Beneficiaries under COBRA if all the other conditions of the COBRA are also met. For example, any increase in contribution that must be paid by a covered Employee, or the Spouse, or a Dependent child of the covered Employee, for coverage under the Plan that results from the occurrence of one of the events listed above is a loss of coverage. The taking of leave under the Family and Medical Leave Act of 1993 ("FMLA") does not constitute a Qualifying Event. A Qualifying Event will occur, however, if an Employee does not return to employment at the end of the FMLA leave and all other COBRA continuation coverage conditions are present. If a Qualifying Event occurs, it occurs on the last day of FMLA leave and the applicable maximum coverage period is measured from this date (unless coverage is lost at a later date and the Plan provides for the extension of the required periods, in which case the maximum coverage date is measured from the date when the coverage is lost.) Note that the covered Employee and family members will be entitled to COBRA continuation coverage even if they failed to pay the employee portion of premiums for coverage under the Plan during the FMLA leave. 4. What is the Procedure for Obtaining COBRA Continuation Coverage? The Plan has conditioned the availability of COBRA continuation coverage upon the timely election of such coverage. An election is timely if it is made during the election period. In the case of an individual who is not a Qualified Beneficiary and who is receiving coverage under the Plan solely because of the individual's relationship to a Qualified Beneficiary, if the Plan's obligation to make COBRA continuation coverage available to the Qualified Beneficiary ceases, the Plan is not obligated to make coverage available to the individual who is not a Qualified Beneficiary. 3 If Timely Payment is made to the Plan in an amount that is not significantly less than the amount the Plan requires to be paid for a period of coverage, then the amount paid will be deemed to satisfy the Plan's requirement for the amount to be paid, unless the Plan notifies the Qualified Beneficiary of the amount of the deficiency and grants a reasonable period of time for payment of the deficiency to be made. A "reasonable period of time" is 30 days after the notice is provided. A shortfall in a Timely Payment is not significant if it is no greater than the lesser of $50 or 10% of the required amount. 5. What is the Election Period and How Long Must It Last? The election period is the time period within which the Qualified Beneficiary can elect COBRA continuation coverage under the Plan. The election period must begin not later than the date the Qualified Beneficiary would lose coverage on account of the Qualifying Event and must not end before the date that is 60 days after the later of the date the Qualified Beneficiary would lose coverage on account of the Qualifying Event or the date notice is provided to the Qualified Beneficiary of her or his right to elect COBRA continuation coverage. Note: If a covered employee who has been terminated or experienced a reduction of hours qualifies for a trade readjustment allowance or alternative trade adjustment assistance under a federal law called the Trade Act of 2002, and the employee and his or her covered dependents have not elected COBRA coverage within the normal election period, a second opportunity to elect COBRA coverage will be made available for themselves and certain family members, but only within a limited period of 60 days or less and only during the six months immediately after their group health plan coverage ended. Any person who qualifies or thinks that he or she and/or his or her family members may qualify for assistance under this special provision should contact the Plan, Administrator or its designee for further information. 6. Is a Covered Employee or Qualified Beneficiary Responsible for Informing the Pian Administrator of the Occurrence of a Qualifying Event? • The Plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrator or its designee has been timely notified that a Qualifying Event has occurred. The employer (if the employer is not the Plan Administrator) will notify the Plan Administrator or its designee of the Qualifying Event within 30 days following the date coverage ends when the Qualifying Event is: (a) the end of employment or reduction of hours of employment, (b) death of the employee, (c) commencement of a proceeding in bankruptcy with respect to the employer, or (d) enrollment of the employee in any part of Medicare, IMPORTANT: For the other Qualifying Events (divorce or legal separation of the employee and spouse or a dependent child's losing eligibility for coverage as a dependent child), you or someone on your behalf must notify the Plan Administrator or its designee in writing within 60 days after the Qualifying Event occurs, using the procedures specified below. If 4 these procedures are not followed or if the notice is not provided in writingto the Plan; Administrator or its designee during the 60 -day notice period, any spouse or dependent child who loses coverage will not be offered the option to elect continuation coverage. You must send this notice to the Plan Administrator. NOTICE PROCEDURES: Any notice that you provide must be in writing. Oral notice, including notice by telephone, is not acceptable. You must mail, fax or hand -deliver your notice to the Plan Administrator or other designee as defined by the Employer. If mailed, your notice must be postmarked no later than the last day of the required notice period. Any notice you provide must state: • the name of the plan or plans under which you lost or are losing coverage, • the name and address of the employee covered under the plan, • the name(s) and address(es) of the Qualified Beneficiary(ies), and • the Qualifying Event and the date it happened. If the Qualifying Event is a divorce or legal separation, your notice must include a copy of the divorce decree or the legal separation agreement. Be aware that there are other notice requirements in other contexts, for example, in order to qualify for a disability extension. Once the Plan Administrator or its designee receives timely notice that a Qualifying Event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries. Each Qualified Beneficiary will have an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage for their spouses, and parents may elect COBRA continuation coverage on behalf of their children. For each Qualified Beneficiary who elects COBRA continuation coverage, COBRA continuation coverage will begin on the date that plan coverage would otherwise have been lost. If you or your spouse or dependent children do not elect continuation coverage within the 60 -day election period described above, the right to elect continuation coverage will be lost. 7. Is a Waiver Before the End of the Election Period Effective to End a Qualified Beneficiary's Election Rights? If, during the election period, a Qualified Beneficiary waives COBRA continuation coverage, the waiver can be revoked at any time before the end of the election period. Revocation of the waiver is an election of COBRA continuation coverage. However, if a waiver is later revoked, coverage need not be provided retroactively (that is, from the date of the loss of coverage until the waiver is revoked). Waivers and revocations of waivers are considered made on the date they are sent to the Plan Administrator or its designee, as applicable. 5 8. When . May a Qualified Beneficiary's COBRA Continuation Coverage be Terminated? During the election period, a Qualified Beneficiary may waive COBRA continuation coverage. Except for an interruption of coverage in connection with a waiver, COBRA continuation coverage that has been elected for a Qualified Beneficiary must extend for at least. the period beginning on the date of the Qualifying Event and ending, not before the earliest of the following dates: (a) The last day of the applicable maximum coverage period. (b) The first day for which Timely Payment is not made to the Plan with respect to the Qualified Beneficiary. (c) The date upon which the Employer ceases to provide any group health plan (including a successor plan) to any employee. (d) The date, after the date of the election, that the Qualified Beneficiary first becomes covered under any other Plan that does not contain any exclusion or limitation with respect to any pre-existing condition, other than such an exclusion or limitation that does not apply to, or is satisfied by, the Qualified Beneficiary. (e) The date, after the date of the election, that the Qualified Beneficiary first enrolls in the Medicare program (either part A or part B, whichever occurs earlier). (f) In the case of a Qualified Beneficiary entitled to a disability extension, the later of: (1) (i) 29 months after the date of the Qualifying Event, or (ii) the first day of the month that is more than 30 days after the date of a final determination under Title II or XVI of the Social Security Act that the disabled Qualified Beneficiary whose disability resulted in the Qualified Beneficiary's entitlement to the disability extension is no longer disabled, whichever is -earlier; or (2) the end of the maximum coverage period that applies to the Qualified Beneficiary without regard to the disability extension. The Plan can terminate for cause the coverage of a Qualified Beneficiary on the same basis that the Plan terminates for cause the coverage of similarly situated non -COBRA beneficiaries, for example, for the submission of a fraudulent claim. In the case of an individual who is not a Qualified Beneficiary and who is receiving. coverage under the Plan solely because of the individual's relationship to a Qualified Beneficiary, if the Plan's obligation to make COBRA continuation coverage available to the Qualified Beneficiary ceases, the Plan is not obligated to make coverage available to the individual who is not a Qualified Beneficiary. 9. What Are the Maximum Coverage Periods for COBRA Continuation Coverage? The maximum coverage periods are based on the type of the Qualifying Event and the status of the Qualified Beneficiary, as shown below. 6 (a) In the case of a Qualifying Event that is a termination of employment or reduction of hours of employment, the maximum coverage period ends 18 months after the Qualifying Event if there is not a disability extension and 29 months after the Qualifying Event if there is a disability extension. (b) In the case of a covered Employee's enrollment in the Medicare program before experiencing a Qualifying Event that is a termination of employment or reduction of hours of employment, the maximum coverage period for Qualified Beneficiaries other than the covered Employee ends on the later of: (1) 36 months after the date the covered Employee becomes enrolled in the Medicare program; or (2) 18 months (or 29 months, if there is a disability extension) after the date of the covered Employee's termination of employment or reduction of hours of employment. (c) In the case of a Qualified Beneficiary who is a child born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage, the maximum coverage period is the maximum coverage period applicable to the Qualifying Event giving rise to the period of COBRA continuation coverage during which the child was born or placed for adoption. (d) In the case of any other Qualifying Event than that described above, the maximum coverage period ends 36 months after the Qualifying Event. 10. Under What Circumstances Can the Maximum Coverage Period Be Expanded? If a Qualifying Event that gives rise to an 18 -month or 29 -month maximum coverage period is followed, within that 18- or 29 -month period, by a second Qualifying Event that gives rise to a 36 -months maximum coverage period, the original period is expanded to 36 months, but only for individuals who are Qualified Beneficiaries at the time of both Qualifying Events. In no circumstance can the COBRA maximum coverage period be expanded to more than 36 months after the date of the first Qualifying Event. The Plan Administrator must be notified of the second qualifying event within 60 days of the second qualifying event. This notice must be sent to the Plan Administrator or its designee. 11. How Does a Qualified Beneficiary Become Entitled to a Disability Extension? A disability extension will be granted if an individual (whether or not the covered Employee) who is a Qualified Beneficiary in connection with the Qualifying Event that is a termination or reduction of hours of a covered Employee's employment, is determined under Title II or XVI of the Social Security Act to have been disabled at any time during the first 60 days of COBRA continuation coverage. To qualify for the disability extension, the Qualified Beneficiary must also provide the Plan Administrator with notice of the disability determination on a date that is both within 60 days after the date of the determination and before the end of the original 18 -month maximum coverage. This notice must be sent in writing to the Plan Administrator or its designee. 7 12. Does the Plan Require Payment for. COBRA Continuation Coverage? For any periodof COBRA continuation coverage under the Plan, qualified: beneficiaries who elect COBRA continuation coverage may be required to pay up to 102% of the applicable premium and up to 150% of the applicable premium for any expanded period of COBRA continuation coverage covering a disabled Qualified Beneficiary due to a disability extension. Your Plan Administrator will inform you of the cost. The Plan will terminate a Qualified Beneficiary's COBRA continuation coverage as of the first day of any period for which timely payment is not made. 13. Must the Plan. Allow Payment for COBRA Continuation Coverage to be Made in Monthly Installments? Yes. The Plan is also permitted to allow for payment at other intervals. 14. What is Timely Payment for payment for COBRA Continuation Coverage? Timely Payment means a payment made no later than 30 days after the first day of the coverage period. Payment that is made to the Plan by a later date is also considered Timely Payment if either under the terms of the Plan, covered employees or Qualified Beneficiaries are allowed until that later date to pay for their coverage for the period or under the terms of an arrangement between the Employer and the entity that provides Plan benefits on the Employer's behalf, the Employer is allowed until that later date to pay for coverage of similarly situated non -COBRA beneficiaries for the period. Notwithstanding the above paragraph, the Plan does not require payment for any period of COBRA continuation coverage for a Qualified Beneficiary earlier than 45 days after the date on which the election of COBRA continuation coverage is made for that Qualified Beneficiary. Payment is considered made on the date on which it is postmarked to the Plan. If Timely Payment is made to the Plan in an amount that is not significantly less than the amount the Plan requires to be paid for a period of coverage, then the amount paid will be deemed to satisfy the Plan's requirement for the amount to be paid, unless the Plan notifies the Qualified Beneficiary of the amount of the deficiency and grants a reasonable period of time for payment of the deficiency to be made. A "reasonable period of time" is 30 days after the notice is provided. A shortfall in a Timely Payment is not significant if it is no greater than the lesser of $50 or 10% of the required amount. 15. Must a Qualified Beneficiary be Given the Right to Enroll in a Conversion Health Plan at the End of the Maximum Coverage Period for COBRA Continuation Coverage? If a Qualified Beneficiary's COBRA continuation coverage under a group health plan ends as a result of the expiration of the applicable maximum coverage period, the Plan will, during the 180 -day period that ends on that expiration date, provide the Qualified Beneficiary with the option of enrolling under a conversion health plan if such an option is otherwise generally available to similarly situated non -COBRA beneficiaries under the Plan. If such a conversion option is not otherwise generally available, it need not be made available to Qualified Beneficiaries. 8 16. How is My Participation in the Medical Expense Reimbursement Plan Affected? You can elect to continue your participation in the Medical Expense Reimbursement Plan for the remainder of the Plan Year, subject to the following conditions. You may only continue to participate in the Medical Expense Reimbursement Plan if you have contributed more money than you have taken out in claims. For example, if you elected to contribute an annual amount of $500 and, at the time you terminate employment, you have contributed $300 but only claimed $150, you may elect to continue coverage under the Medical Expense Reimbursement Plan. If you elect to continue coverage, then you would be able to continue to receive your health care reimbursements up to the $500. However, you must continue to pay for the coverage, just as the money has been taken out of your paycheck, but on an after-tax basis. The Plan can also charge youan extra amount (as explained above for other health benefits) to provide this benefit. IF YOU HAVE QUESTIONS If you have questions about your COBRA continuation coverage, you should contact the Plan Administrator or its designee or you may contact the nearest Regional or District Office of the U.S. Department of Labor's Employee Benefits Security Administration (EBSA). Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA's website at www.dol.gov/ebsa. KEEP YOUR PLAN ADMINISTRATOR INFORMED OF ADDRESS CHANGES In order to protect your family's rights, you must keep the Plan Administrator informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Plan Administrator or its designee. 9 PLAN DOCUMENT — SUMMARY MATERIAL MODIFICATIONS The Cafeteria Plan (hereinafter referred to as the "P.Ian") is hereby amended as follows: The Section in Article I entitled "DEFINITIONS" is replaced in its entirety as follows: "Dependent" means any individual who qualifies as a dependent under an Insurance Contract or under Code Section 152 (as modified by Code Section 105(b)) or as amended by any regulation or ruling of the Internal Revenue Service. Any child of a Plan Participant who is determined to be an alternate recipient under a qualified medical child support order under ERISA Sec. 609 shall also be considered a Dependent under this Plan. The Section entitled "PARTICIPANT ELECTIONS", subsection (b) under "CHANGE OF ELECTIONS", is replaced in its entirety as follows: (b) notwithstanding subsection (a), the Participants may change an election for accident or health coverage during a Plan Year and make a new election that corresponds with the special enrollment rights provided in Code Section 9801(f). Such change shall take place on a prospective basis, unless otherwise required by Code Section 9801(f) to be retroactive. The Section entitled "DEPENDENT DAY CARE REIMBURSEMENT PLAN", subsection (e) under "DEFINITIONS", is replaced in its entirety as follows: (e) "Qualifying Dependent" means, for Dependent Day Care Reimbursement Plan purposes, (1) a Participant's Dependent (as defined in Code Section 152(a)(1)) who has not attained age 13; (2) a Dependent or the Spouse of a Participant who is physically or mentally incapable of caring for himself or herself and has the same principal place of abode as the Participant for more than one-half of such taxable year; or (3) a child that is deemed to be a Qualifying Dependent described in paragraph (1) or (2) above, whichever is appropriate, pursuant to Code Section 21(e)(5). The Section entitled "ADMINISTRATION", subsection titled "PLAN ADMINISTRATION", is replaced in its entirety as follows: 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 conclusive on all persons claiming benefits by operation of 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 by operation of 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; (e) To provide Employees with a reasonable notification of their benefits available by operation of the Plan; (f) To approve reimbursement requests and to authorize the payment of benefits; and (g) To establish and communicate procedures to determine whether a medical child support order is qualified under ERISA Section 609. (h) 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. IN WITNESS WHEREOF, this Amendment has been executed this day of Signed by: Employer 2