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Cafeteria Plan Cafeteria Plan [Company Name] Cafeteria Plan Article I Introduction 1.1. Purpose of Plan. [company name] has adopted this Plan to attract, reward, and retain qualified employees and to recognize their contribution to its success by providing eligible employees with a choice of one or more health, dependent care, and other benefits offered through this Plan or through the Component Plans to this Plan. The Plan is also designed to permit eligible employees to choose certain benefits instead of receiving cash compensation. 1.2. Plan Status. This Plan is intended to be a cafeteria plan that meets the requirements of Section 125 of the Code, as amended, and to be maintained in compliance with applicable rules and regulations issued by the Internal Revenue Service and Department of Labor. The Plan is to be interpreted and administered in a manner consistent with those requirements. 1.3. Exclusive Benefit of Participants. This Plan has been established for the exclusive benefit of the Participants and their Beneficiaries. 1.4. Nondiscrimination Requirements. This Plan and the underlying benefits are intended not to discriminate with respect to contributions and benefits. In determining if any contribution or benefit hereunder is considered discriminatory, the rules in Code section 125 and the regulations thereunder will apply as well as any other applicable Code section or regulation. Article II Definitions 2.1. Cafeteria Plan and Underlying Plan Definitions. Capitalized terms used in this Plan that are not otherwise defined shall have the meanings given in Section 2.2.. These may not be the same terms as are used for the same concept in the governing documents for benefit plans underlying a Component Plan to this Plan, and such documents may have a different definition for the same term. 2.2. Certain Definitions. (a) Administrator means, as applicable, the Plan Sponsor or any delegate named by the Plan Sponsor in writing to undertake any administrative responsibilities for the Plan. The Administrator for purposes of the Plan may not be the same as the administrator of any Component Plan offered through the Plan. (b) Beneficiary means any person or persons duly designated by a Participant as a person entitled to receive coverage or any benefit payable under the Plan. (c) Change in Status means, with respect to a Participant, any of the events described below (and any other events identified for a Component Plan): (1) Change in Marital Status.A change in a Participant’s legal marital status, including marriage, death of the Participant’s spouse, divorce, and legal separation or annulment. (2) Change in Number of Dependents.Events that change the number of Dependents of a Participant or the participating spouse of a Participant, including birth, death, adoption, and placement for adoption. (3) Change in Employment Status.Any of the following events that change the employment status of a Participant or of his or her spouse or Dependents: (i) termination or commencement of employment; (ii) strike or lockout; (iii) commencement of, or return from, an unpaid leave of absence; (iv) change in worksite; and (v) any change in employment status of a Participant or the spouse or Dependent of a Participant that has the consequence that the individual becomes eligible or ceases to be eligible for a benefit offered under this Plan or another employee benefit plan offered to such individual. (4) Change in Dependent Eligibility Requirements.Any event that causes a Dependent to satisfy or cease to satisfy the Dependent eligibility requirements for a particular benefit, such as a specified age, student status, or any similar circumstance. (5) Change in Residence.A change in the place of residence of the Participant, the Participant’s spouse, or Dependents. (d) COBRA means the continuation coverage provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified in Code section 4980B and Sections 601 through 607 of ERISA, or any successor legislation, as amended from time to time. (e) Code means the Internal Revenue Code of 1986, as amended from time to time. (f) Compensation means wages within the meaning of Code section 3401(a) and all other payments of compensation that are actually paid or made available in gross income during the Plan Year to an Employee by the Employer for which the Employer is required to furnish the Employee a written statement (Form W-2) under Code sections 6041(d), 6051(a)(3), and 6052. Compensation is determined without regard to any rules under Code section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed. Compensation includes amounts not currently includible in gross income by reason of Code sections 125, 132(f)(4), 402(e)(3), 402(h), or 403(b). Compensation does not include a Participant’s Compensation earned prior to becoming a Participant in the Plan. (g) Component Plan means an employee benefit plan offered by the Employer that Eligible Employees may elect to participate in through this Plan. Component Plans may be governed by separate plan documents and be subject to eligibility requirements, benefit restrictions or limitations, claim and other administrative procedures, and other terms in addition to the terms of this Plan. (h) Dependent means any of the following (unless otherwise defined for purposes of any Component Plan): (1) Section 152 Dependent.A Dependent includes a Participant’s dependent within the meaning of Code section 152; provided that, for any Component Plan that provides benefits that are excludable from an Employee’s income under Code section 105, such dependent status is determined without regard to Code sections 152(b)(1), (b)(2), and (d)(1)(B), but includes a Participant’s child for whom Code section 152(e) applies (and such child shall be treated as a Dependent of both divorced parents). (2) Michelle’s Law Dependent.For any Component Plan that is a group health plan under Code section 9832 (excluding excepted benefits pursuant to Code section 9831), a Dependent includes a child who otherwise qualifies as a Section 152 dependent (defined above) to the extent the Employer is required by Michelle’s Law to provide continuation coverage because the child is a full-time student who is on a medically necessary leave of absence from school. The child will continue to be a Dependent if the leave of absence commences while the child is suffering from a serious illness or injury, is medically necessary, and causes the child to lose student status for purposes of the group health plan’s benefit coverage; provided that the Administrator may condition continuation of such status on receiving written physician Page 2 certification that the child is suffering from a serious illness or injury and that the leave of absence is medically necessary. The child ceases Dependent status as of the earliest of (i) the date the medically necessary leave of absence ends, (ii) the one-year anniversary of the first day of the medically necessary leave of absence, or (iii) the date benefits would otherwise terminate under either the group health plan or this Plan. This section shall be construed consistently with the Michelle’s Law provisions of Code section 9813. (3) Adult Children.For any Component Plan that is a group health plan under Code section 9832 (excluding excepted benefits pursuant to Code section 9831) that provides benefits excluded from an Employee’s income under Code section 105, a Dependent includes a child of a Participant (including biological children, step children, adopted children, individuals legally placed for adoption, and eligible foster children placed by an authorized agency or judicially placed with the Participant) who, as of the end of the calendar year, has not attained age 27. (i) Dependent Care Reimbursement Plan means the Component Plan for reimbursing eligible dependent care expenses with pre-tax dollars whose specific terms are set forth in Article VIII of this Plan. (j) Effective Date means [date]. (k) Elective Contributions means amounts elected by Participants to have deducted from their Compensation as contributions under a Component Plan for a Plan Year in exchange for certain benefits. (l) Eligible Employee means any Employee described in Section 3.1. who is eligible to participate in one or more benefits under the terms of the Plan. (m) Employee means any individual who is employed (or was employed upon initial participation in the Plan) by the Employer; provided that the term excludes any individual who is a two-percent shareholder of an S corporation or self-employed (including sole proprietors and individuals treated as partners of a partnership), determined in accordance with Proposed Treasury Regulation section 1.125-1(g)(2). For the avoidance of doubt, no individual shall be treated as an Employee based upon performing services for the Employer solely as a director or an independent contractor. (n) Employer means the Plan Sponsor and any other entity that (i) is treated as a single employer with the Plan Sponsor under Code sections 414(b), (c), (m) or (o), and (ii) adopts the Plan with the consent of the Plan Sponsor. (o) Entry Date means, with respect to a Component Plan for a Plan Year, the date on which a Participant who elects to participate in the Component Plan commences participation for the Plan Year. The Entry Date is normally the first day of the Plan Year, except as otherwise provided under Section 4.2. or Article V. (p) Flex-Credit means nonelective employer contributions that may be made available to Participants for a Plan Year to apply toward benefits under a Component Plan in accordance with Section 6.3.. (q) Health Coverage and Premium Payment Plan means the Component Plan under which Participants may elect to enroll in an Employer health plan and pay the employee share for such coverage through Elective Contributions made through Compensation reduction on a pre-tax basis and whose specific terms are set forth in Article VII of this Plan.
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