Medical Reimbursement Plan Document

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Centennial School District

MEDICAL REIMBURSEMENT PLAN

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TABLE OF CONTENTS

ARTICLE I - INTRODUCTION

1.1 / Adoption of the Plan
1.2 / Effective Dates
1.3 / Purpose
ARTICLE II - DEFINITIONS

ARTICLE III - PARTICIPATION

3.1 / Eligibility
3.2 / Limited Coverage under this Plan (Spouse covered under an HSA)
3.3 / Commencement of Participation
3.4 / Term of Participation
3.5 / Treatment of Rehired Employees
3.6 / Continuation Coverage
3.7 / Family Medical Leave Act
3.8 / Change in Participant Election
3.9 / Medical Child Support Orders

ARTICLE IV – CONTRIBUTIONS AND BENEFITS

4.1 / Funding
4.2 / Benefits
4.3 / Amounts Paid in Error
4.4 / Nondiscrimination
4.5 / Maximum Benefit
4.6 / Forfeiture (Use-it-or-lose-it-Rule)
4.7 / Grace Period for Qualified Expenses
4.8 / Military Cash Out Option

ARTICLE V - PLAN ADMINISTRATION

5.1 / Employer Duties
5.2 / Information to be Provided to the Employer
5.3 / Interpreting Plan Terms
5.4 / Misstatements
5.5 / Review Procedures
5.6 / Rules to Apply Uniformly
5.7 / The Privacy Rule
5.8 / The Federal Security Rule

ARTICLE VII - GENERAL PROVISIONS

6.1 / Amendment and Termination
6.2 / Nonassignability
6.3 / Not an Employment Contract
6.4 / Participant Litigation
6.5 / Addresses
6.6 / Required Information
6.7 / Severability
6.8 / Applicable Law

MEDICAL REIMBURSEMENT PLAN

ARTICLE I

INTRODUCTION

1.1 Adoption of the Plan. This Medical Reimbursement Plan has been adopted and executed by the Employer.

1.2 Effective Dates. The provisions of this Plan are effective on July 1, 2011. The Employer’s Medical Reimbursement Plan was originally effective July 1, 1999.

1.3 Purpose. The purpose of the Plan is to provide reimbursement for certain medical expenses of Participants not otherwise covered by insurance or by the Employer. The Employer intends that the Plan qualify as an accident and health plan under Section 105 and 106 of the Code, and that the nontaxable benefits provided under the Plan be eligible for exclusion from Participants' income under Section 105(b) of the Code.

ARTICLE II

DEFINITIONS

As used in this Plan document, the following terms will have the following meanings:

2.1 "Change in Status" A Change In Status is an event that allows a Participant to change their contribution election during the Plan Year, and outside of the scheduled open enrollment period. The Employer has elected to allow all of the Change in Status reasons published by the IRS for this type of Plan.

2.2 "Code" the Internal Revenue Code of 1986, as amended.

2.3 "Compensation" all the earned income, salary, wages and other earnings paid by the Employer to a Participant during a Plan Year, including any amounts contributed by the Employer pursuant to a salary reduction agreement which are not includable in gross income under Sections 125, 402(g)(3), 402(h), 403(b) or 457(b) of the Code.

2.4 "Dependent" means an individual who is a dependent of a Participant within the meaning of Section 152(a) as modified by Section 105(b).

2.5 "Eligible Employee" an Employee, as defined below, who is eligible to participate in the Employer's health care program, limited to employees who regularly work at least 40 hours per week, and not including Employees who are Non-Resident Aliens (within the meaning of Section 7701(b)(1)(B) of the Code deriving no earned income (within the meaning of Section 911(d)(2) of the Code) from the Employer which constitutes income from sources within the United States (within the meaning of Section 861(a)(3) of the Code.

2.6 "Employee" a person who is currently or hereafter employed by the Employer, or by any other employer aggregated under sections 414(b), (c), (m), (n) or (o) of the Code and the regulations there under, including a Leased Employee subject to section 414(n) of the Code. Individuals who are not contemporaneously classified as Employees of the Employer for purposes of the Employer's payroll system (including, without limitation, individuals employed by temporary help firms, technical help firms, staffing firms, employee leasing firms, professional employer organizations or other staffing firms whether or not deemed to be "common law" Employees or "Leased Employees" within the meaning of Section 414(n) (o) of the Code) are not considered to be Eligible Employees of the Employer and will not be eligible to participate in the Plan. In the event any such individuals are reclassified as Employees for any purpose, including without limitation, common law or statutory employees, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action, or administrative proceeding, such individuals will notwithstanding such reclassification, remain ineligible for participation hereunder. Notwithstanding foregoing, the exclusive means for individuals who are not contemporaneously classified as an Employee of the Employer on the Employer's payroll system to become eligible to participate in this Plan is through an amendment to this Plan, duly executed by the Employer, which specifically renders such individuals eligible for participation hereunder.

2.7 "Employer" Centennial School District or any of its affiliates, successors or assignors which adopt the Plan.

2.8 "Participant" any Employee who has met the eligibility requirements of this Plan and has elected to participate in the Plan.

2.9 ""Plan Year" means the 12-consecutive month period, July 1st through June 30th.

2.10 "Qualified Expenses" medical expenses incurred during a Plan Year, or applicable Grace Period if any, by a Participant, the Participant's Spouse or the Participant's Dependents while the Participant is covered under this Plan. Medical expenses are only reimbursable to the extent allowed under the tax code. For purposes of the Plan, an expense is incurred on the date when the underlying services giving rise to the medical expenses are performed and not on the date that the services are billed by the service-provider or paid by the Participant.

2.11 "Salary Reduction Agreement" the agreement authorizing the Employer to reduce the Employee's Compensation while a Participant for purposes of obtaining Medical Reimbursement Benefits under this Plan.

2.12 "Spouse" an individual who is legally married to a Participant but will not include an individual separated from a Participant under a decree of legal separation.

ARTICLE III

PARTICIPATION

3.1 Eligibility. Each Eligible Employee is eligible to participate in the Plan on their date of hire, or the date on which the Employee otherwise becomes eligible to participate as defined in this Plan Document or by applicable law, so long as the Employee is employed by the Employer on the day they are enrolled. The Employee’s election must be delivered to the Employer within 30 days of the date of hire.

3.2 Limited Coverage under this Plan (Spouse covered under an HSA). Section 1201 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, added Section 223 to the Internal Revenue Code to permit eligible individuals to establish Health Savings Accounts (HSAs) for taxable years beginning December 31, 2003. In order to allow an Employee’s Spouse to contribute to an HSA Account, an Employee is required to submit a written request to the Benefits Coordinator requesting “single” or “Parent and Child(ren)” enrollment in this Medical Reimbursement Plan. Qualified Expenses will be limited to covered services or supplies provided to the Employee and dependents that are not covered under the Spouse’s HSA. No claims for family members covered under the HSA can be submitted under this Plan.

3.3 Commencement of Participation. An Eligible Employee is required to execute a Salary Reduction Agreement setting forth the amount of pretax funds to be made available to the Eligible Employee for the immediately following Plan Year or remaining portion of the Plan Year. The Participant must, before the end of the first Plan Year of participation and, before the end of each subsequent Plan Year, provide the Employer with a newly executed Salary Reduction Agreement. Each new agreement will specify the amount to be made available to the Participant for the immediately following Plan Year. Should a Participant fail to execute a valid Salary Reduction Agreement for any Plan Year before the start of the Plan Year, the Participant will be ineligible to participate in the Plan for that Plan Year.

3.4 Term of Participation. Each Participant will be enrolled in the Plan for the entire Plan Year or the portion of the Plan Year remaining after enrollment, or until the earlier of:

(a) the Participant dies, resigns or terminates employment with the Employer;

(b) the Participant fails to make required contributions under the Plan;

(d) the Plan terminates; or,

(e) the Participant revokes their election under a Change In Status.

3.5 Treatment of Rehired Employees. A Participant whose employment terminates and is subsequently re-employed within 30 days of their separation of service and within the same Plan Year will immediately rejoin the Plan with the same Benefit elections.

Should the Participant return within 30 days of their separation of service during the following Plan Year, the Participant will be allowed to change elections through the Open Enrollment process.

A Participant whose employment terminates and who is subsequently re-employed with more than 30 days separation of service will need to re-satisfy Plan eligibility requirements to rejoin the Plan. Any unused reimbursement Benefits Accounts balance prior to the initial separation of service date will be forfeited.

3.6 Continuation Coverage. The Employer shall adopt rules relating to continuation coverage, as provided under the Public Health Services Act or applicable state law, as may be required from time to time, and shall advise affected individuals of the terms and conditions of such continuation coverage.

3.7 Family Medical Leave Act. FMLA leave will not be available to Employees for Plan Years in which the Employer has 50 or fewer Employees. For Plan Years in which the Employer has more than 50 Employees, the Employer is required to make FMLA leave available to eligible employees under circumstances that are prescribed by applicable federal law, including the Family and Medical Leave Act of 1993 (29 U.S.C. 2611) as amended.

Payment Option(s) for coverage while on unpaid Family Medical Leave Act leave for group plans:

(a) Pre-pay before commencement of leave through pre-tax or after-tax Salary Reduction Agreement from any taxable Compensation, including cashing out of unused sick or vacation days, provided all other plan requirements are met.

(b) Pay-as-you-go. Employees may pay their share of premium payments on the same schedule as payments would be made if the employee were not on leave, or under another schedule permitted under Department of Labor regulations.

The Employer will not be required to continue this Plan for an Employee who fails to make required premium payments while on FMLA leave. However, if the Employer chooses to continue the health coverage of an Employee who fails to make required premium payment while on FMLA leave, the Employer is entitled to recoup those payments after the Employee returns from FMLA leave.

If a Participant’s coverage under the Plan ceased while on FMLA leave, the Participant will be entitled to resume coverage upon return from leave on the same participation basis in effect prior to the leave, or as otherwise required under the FMLA. The Participant will be entitled to elect reinstatement in the Plan at the coverage level that was in effect before the FMLA leave, with increased contributions if necessary to reach their annual election. Or, the Participant can continue with the amount withheld from the Participant’s compensation on payroll-by-payroll basis equal to the amount withheld before the FMLA leave.

3.8 Change in Participant Election. No Participant will be allowed to alter or discontinue their annual election during a Plan Year except when due to and consistent with a Change in Status. Change In Status requests must be made within 30 days of the Change In Status event and must be consistent with the actual Change In Status event. A Participant will not be allowed to reduce their contributions below the amount they have already been reimbursed during the current Plan Year.

Upon the occurrence of a Change in Status, the Participant will file a new Salary Reduction Agreement, which will serve to revoke the Participant's previous Salary Reduction Agreement. The new Salary Reduction Agreement, if determined by the Employer to be timely submitted and consistent with the Status Change, will be effective prospectively and apply only to those Benefits accruing to the Participant after the effective date of the new Salary Reduction Agreement. The Employer will determine if the new Salary Reduction Agreement has been timely submitted consistent with the nature of the Change in Status.

3.9 Medical Child Support Orders. The Employer will adhere to the terms of any judgment, decree, or court order (including a court's approval of a domestic relations settlement agreement) which complies with federal or applicable state law. The Employer will comply with the administrative requirements described under 29 USC Sec. 1169 relating to Qualified Medical Child Support Orders (QMCSO), including any federal regulations or state laws relating to the same. When coverage is provided as directed by a QMCSO the Employee will become eligible to participate in this Plan in order to pay their share of the cost of the coverage on a pre-tax basis.

ARTICLE IV

CONTRIBUTIONS AND BENEFITS

4.1 Funding. Contributions to the Plan are made and limited in accordance with the Participant’s annual election as stated on the Participant’s Salary Reduction Agreement. Contributions to the Plan will be accounted for as the Employer deems appropriate.

4.2 Benefits. Benefits will only be provided for the reimbursement of Qualified Expenses incurred by a Participant, a Participant's Spouse or a Participant's Dependents during the Plan Year and during the period in which the Employee is a Participant. Benefits are provided from the Employer’s general assets. The amount of the Participant’s annual election is available throughout the Plan Year.

A claim under this Medical Reimbursement Account can only be reimbursed if the Participant provides a written statement from an independent third party stating that the medical expense has been incurred, the amount of the expense, and a written statement that the medical expense has not been reimbursed or is not reimbursable under any other health plan coverage. If claims are submitted electronically, the Participant will sign a certification upon enrollment or acceptance of an electronic card that claims submitted under the card have not been reimbursed by any other insurance or self insured plan, and that the Participant is not seeking reimbursement under any other insured or self insured plan.