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HomeMy WebLinkAboutCC RES 2013-13RESOLUTION NO. 2013- 13 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, RESTATING THE CITY OF PALM DESERT IRS SECTION 125 FLEXIBLE BENEFITS PLAN; WHEREAS, Section 125 of the Internal Revenue Code allows employees to choose among two or more appropriate levels of health benefits for themselves and their families; and WHEREAS, the City of Palm Desert first adopted it's flexible benefits plan in 1999; and WHEREAS, the Flexible Benefits Plan is not considered discriminatory to collective bargaining units; and WHEREAS, over the years the plan has been amended to reflect changes in Federal law and the City's benefits structure; and WHEREAS, it is beneficial to restate the current plan in its entirety for ease of recordkeeping; NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Palm Desert, California, adopt the attached restated City of Palm Desert IRS Section 125 Cafeteria Plan; and PASSED, APPROVED AND ADOPTED at the regular meeting of the Palm Desert City Council, held on this 28th day of February, 2013, by the following vote, to wit: AYES: BENSON, SPIEGEL, TANNER, WEBER, and HARNIK NOES: NONE ABSENT: NONE ABSTAIN: NONE !AN C. HARNIK MAYOR ATTEST: RACI1ELLE D. KLASSEN, CITY CLERK City of Palm Desert, California [This page has intentionally been left blank.] aim sill OR RESOLUTION NO. 2013-13 CITY OF PALM DESERT SECTION 125 PLAN DOCUMENT Amended and Restated Effective February 28, 2013 I II 1 1111 I Ell II I I ■1111=1IIUII.I 1 11I II N_I1 I11 II 1111 I I I II 11111 1 11 L I I I IIII1I I I.■IL. I I III I II I I III RESOLUTION NO. 2013-13 STATEMENT OF PURPOSE This document describes the City of Palm Desert Section 125 Plan. The Plan was originally effective on July 1, 1999, and is hereby amended and restated effective July 1, 2008. The Plan is intended to qualify as a "cafeteria plan" under section 125 of the Internal Revenue Code of 1986, as amended, and is to be interpreted in a manner consistent with all relevant provisions of the Code. The purpose of the Plan is to give participants a choice between receiving cash or optional benefit coverages. The Plan enables participants who choose an optional benefit coverage to make their contributions for such coverage on a before -tax basis. 1 RESOLUTION NO. 2013-13 ARTICLE I DEFINITIONS Whenever used herein, the following terms shall have the following meaning, unless a different meaning is clearly required by the context: 1.1 Administrator. The Administrator shall be the entity designated as the Administrator in section 6.1 of the Plan. 1.2 Anniversary Date. The Anniversary Date shall mean the first day of any Plan Year. 1.3 Code. Code shall mean the Internal Revenue Code of 1986, as amended. 1.4 Compensation. Compensation shall mean the total remuneration of a Participant, including (but not limited to) wages, salary, overtime, bonuses, commissions, and any other payment which is not an advance, loan or expense reimbursement. Each Participant's Compensation shall be determined prior to taking into account the Participant's salary reduction contributions under the Plan. 1.5 Dependent. Dependent shall mean any individual who is a tax dependent of the Participant as defined in Code section 152(a); however, in the case of a health benefit, a Dependent shall be defined as set forth in Code section 105(b) and the regulations issued under Code section 106. For purposes of a dependent -care flexible spending arrangement (if offered under the Plan), a Dependent shall also be defined as in Code section 21(e)(5) (i.e. a dependent of the parent with custody for the greater portion of the calendar year). 1.6 Effective Date. Effective Date shall mean July 1, 2008. 1.7 Election Period. Election Period shall mean the period of time in which a Participant or Eligible Employee may enter, change, or terminate from the Plan. 1.8 Eligible Employee. Eligible Employee shall mean (a) any Employee who is regularly scheduled to work a minimum of 20 hours per week and (b) any city council member. Notwithstanding anything in the Plan to the contrary, the term "Eligible Employee" shall not include Employees who are classified by the Employer as temporary Employees, and Employees who are regularly scheduled to work Tess than 20 hours per week. 1.9 Employee. Employee shall mean (a) any individual who is classified by the Employer as an employee of the Employer and who is on the Employer's Form W-2 payroll, and (b) any elected official of the Employer; provided, that the person is not classified by the Employer as a leased employee or contract worker. 1.10 Employer. Employer shall mean City of Palm Desert. 2 RESOLUTION NO. 2013-13 1.11 "Flex Dollars": Flex Dollars shall mean benefit credits or benefit dollars provided to a participant by the Employer, which may be applied towards the cost of Optional Benefit Coverages. 1.12 Highly Compensated Employee. Highly Compensated Employee shall mean any individual defined under Code section 125(e) as a "highly compensated individual" or "highly compensated employee." 1.13 Insurance Company. Insurance Company shall mean any insurance company, insurance carrier, or insurer that underwrites insurance and has a contract with the Employer for an Optional Benefit Coverage under this Plan. 1.14 Optional Benefit Coverage. Optional Benefit Coverage shall mean coverage available to Participants under the Plan. 1.15 Participant. Participant shall mean any Eligible Employee who elects to participate in the Plan in accordance with Article II. 1.16 Period of Coverage. Period of Coverage shall mean (i) a Plan Year, or (ii) the portion of the Plan Year remaining after the effective date of an Eligible Employee's election of an Optional Benefit Coverage under the Plan, or (iii) the portion of the Plan Year prior to a Participant's termination from the Plan, whichever is applicable. 1.17 Plan. Plan shall mean the City of Palm Desert Section 125 Plan, as set forth herein. 1.18 Plan Year. Plan Year shall mean the period beginning January 1 and ending December 31. 1.19 Salary Reduction Contributions. Salary Reductions Contributions shall mean the amount that each Participant has authorized the Employer to reduce his or her Compensation on a before -tax basis in order for such amount to be contributed to the Plan to provide the Optional Benefit Coverages selected by the Participant. The amount of Salary Reduction Contributions shall be designated on the salary reduction agreement specified by the Administrator. 1.20 Status Chanae. Status Change shall mean any of the events described in section 4.6(A) of the Plan. 3 RESOLUTION NO. 2013-13 ARTICLE II ELIGIBILITY AND PARTICIPATION 2.1 Eligibility. All Employees shall become eligible to participate in the Plan upon satisfying the definition of an Eligible Employee. 2.2 Entry Date. Eligible Employees begin participating in the Plan on the first day of the month following their first day of active service for the Employer. 2.3 Employee Election. All Employees who meet the eligibility requirements set forth in section 2.1 may elect, during the appropriate Election Period, to become a Participant by completing the salary reduction agreement specified by the Administrator, and submitting the completed agreement to the Administrator. The agreement designates whether the Employee desires to elect Optional Benefit Coverages under the Plan. 2.4 Election Periods. Eligible Employees shall be allowed to make elections under the Plan during the following Election Periods: (A) Initial Election Period. (B) All Eligible Employees have an Election Period of 30 days, beginning on their first date of active service for the Employer, during which they must complete and submit the necessary forms to the Administrator to elect the Optional Benefit Coverages that they desire under the Plan. This initial Election Period may be extended by the Administrator, at its sole discretion, upon written notice to Eligible Employees. Annual Election Periods. After an Eligible Employee's initial Election Period, the Eligible Employee may elect to change, modify, decrease, or increase his or her benefits during the annual Election Period, which shall be the 30 day period immediately preceding the Anniversary Date of the Plan or such other 30 day period as may be specified* by the Employer. Eligible Employees must. complete a new salary reduction agreement as described in section 2.3 in order to make changes in 4 RESOLUTION NO. 2013-13 1 r i their Plan elections. This annual Election Period may be extended by the Administrator, in its sole discretion, upon written notice to Eligible Employees. 2.5 Termination of Participation. A Participant shall remain a Participant in the Plan until the occurrence of one or more of the following: (A) Participant ceases to be eligible to participate in Plan; (B) Participant's employment is terminated; (C) Participant's death; (D) The termination of this Plan; (E) Participant elects not to participate under section 4.4(c). 2.6 Termination of Employment. If a Participant's employment is terminated, then all contributions to the Plan by the Participant shall cease upon the termination date. The Participant shall no longer be considered a Participant, effective on the date of termination of employment. However, a Participant may still be eligible for certain benefits in accordance with the terms of the Optional Benefit Coverages for which contributions have been paid on the Participant's behalf. The continuation of any benefit shall be govemed solely by the terms and provisions of the plans providing the Optional Benefit Coverages, and in accordance with applicable law. 5 RESOLUTION NO. 2013-13 ARTICLE III OPTIONAL BENEFIT COVERAGES 3.1 Coverage Options. Each Participant may choose under this Plan to receive his or her Compensation in cash, plus any flex dollars, or to have a portion of it applied by the Employer toward the cost of the Optional Benefit Coverages available to the Participant. Notwithstanding anything herein to the contrary, Optional Benefit Coverages shall be limited to coverages and benefits available under the plans identified in schedule A. 3.2 Description of Optional Benefit Coverages. While the election of one or more of the Optional Benefit Coverages may be made under this Plan, the coverages and benefits thereunder will be provided not by this Plan but by the plans identified in schedule A. The requirements for participating in such plans, and the other terms and conditions of coverage and benefits under such plans, are set forth from time to time in the plans identified in schedule A, and in any group insurance contracts and prepaid health plan contracts that constitute (or are incorporated by reference) in certain of those plans. The benefit descriptions in such plans, as in effect from time to time, are hereby incorporated by reference into this Plan. 3.3 Election of Optional Benefit Coverages in Lieu of Cash. A Participant may elect under this Plan to receive one or more of the Optional Benefit Coverages described in section 3.2, to the extent available to the Participant under the applicable plans identified on schedule A, in accordance with the procedures described in sections 4.1, 4.2 and 4.3. If a Participant elects coverage for a Period of Coverage under a plan identified on Schedule A, and if the Participant is required under such plan to pay a share of the cost of such coverage, such share shall be paid by the Participant. Payment shall first be from the Participant's Flex Dollars, as provided in Section 5.2, and second by means of a reduction in the Participant's regular compensation for the Period of Coverage for the balance of the cost of each coverage elected. 6 RESOLUTION NO. 2013-13 ARTICLE IV ELECTIONS 4.1 Election Procedure. Prior to the commencement of each Period of Coverage, the Administrator shall provide one or more written election forms and salary reduction agreements to each Participant and to each other individual who is expected to be an Eligible Employee at the beginning of the applicable Period of Coverage. The election forms and agreements shall be effective as of the first day of the Period of Coverage. Each Participant who desires to elect an Optional Benefit Coverage available for the Period of Coverage shall so specify on the appropriate election form or agreement, and shall agree to a reduction in his or her Compensation. (A) The amount of the reduction in the Participant's Compensation for the Period of Coverage for an Optional Benefit Coverage on schedule A shall equal the Participant's share of the cost of such coverage, reduced by the amounts paid by the Employer (if any). (B) The amount of contributions shall change according to the schedule of Employee contributions for the Employer's group benefits. A Participant's salary reduction agreement could automatically increase or decrease, depending upon the change in premiums of that particular benefit offered by the Employer, or increase or decrease depending upon the amount of the Participant's required contribution for benefits. Each election form must be completed and returned to the Administrator on or before such date as the Administrator shall specify, which date shall be no later than the beginning of the first pay period for which the participant's salary reduction agreement will apply. 4.2 Salary Reduction Aareements Each Participant shall complete a salary reduction agreement at the initial Election Period. In all following years, if a Participant desires to change the amount of the election, enroll in the Plan, or terminate from the Plan, a new salary reduction agreement must be completed within the annual Election Period. 4.3 Initial Elections. Upon commencing employment as an Eligible Employee, an Eligible Employee who is not already a Participant in the Plan shall have 30 days to elect one or more Optional Benefit Coverage under the Plan for the remainder of the Plan Year. Such election shall be made by completing the salary reduction agreement and other necessary -7- RESOLUTION NO. 2013-13 forms as specified by the Administrator. The Administrator may choose to extend this initial Election Period, at its sole discretion, in order to assist Employees in determining whether to participate in the Plan. 4.4 Failure to Return Election Forms. (A) A new Participant's failure to retum a completed election form under section 4.1, 4.2, or 4.3 to the Administrator on or before the specified due date for the Period of Coverage in which he or she becomes a Participant with respect to the benefits available for that Period of Coverage shall constitute (1) an election to participate in any default coverage as the Administrator may, in its discretion, designate from time to time; and (2) an agreement to a reduction in the Participant's Compensation for the Period of Coverage equal to the cost of the Participant's share of such coverages for the Period of Coverage, reduced by the amounts paid by the Employer (if any). (B) An existing Participant's failure to return a completed election form to the Administrator relating to coverage under a plan identified as an Optional Benefit Coverage on Schedule A on or before the specified due date for any subsequent Period of Coverage shall be deemed to constitute (1) a reelection to participate in any of the same Optional Benefit Coverages, if any, under such plans as were in effect just prior to the end of the preceding Period of Coverage (to the extent such coverage remains available as an Optional Benefit Coverage under the Plan), and (2) an agreement to a reduction in the Participant's Compensation for the subsequent Period of Coverage equal to the Participant share of each such coverage for the Period of Coverage, reduced by the amounts paid by the employee's flex dollars (if any) under Section 5.2. (C) Participants may voluntarily terminate their participation in the Plan, but only during an annual Election Period. If a Participant elects not to participate for the Plan Year applicable for the annual Election Period, then that Participant cannot elect to reenter the Plan until the next annual Election Period, unless a Status Change occurs. 4.5 Irrevocable Nature of Salary Reduction Selected. (A) A Participant's election of the amount of the Salary Reduction Contributions shall be irrevocable during the Period of Coverage. (B) Participants can change, modify, decrease or increase their Salary Reduction Contributions only if a Status Change has occurred, a change has occurred in the Employer's group benefits offered to its Employees, or a change has occurred in the amount of contributions for the Plan as required by the Employer during the Plan Year. If such a change has occurred, then the Participant must submit to the Administrator a completed new salary reduction agreement in order to have the change be effective at the beginning of the following payroll period for the remaining Period of Coverage. -8- RESOLUTION NO. 2013-13 (C) The Employer and/or the Administrator cannot change any amount of the Salary Reduction Contributions selected by each Participant during the Plan Year, unless a termination has occurred as defined under section 2.5 or 2.6 of this Plan, or a Status Change has occurred, or a change has occurred in the Employers group benefits offered to its Employees, or a change has occurred in the amount of contribution for the plan's benefits as required by the Employer. 4.6 Status Chanaes. A Participant's election made under the Plan (including an election made through inaction under section 4.4) shall be irrevocable by the Participant during the Period of Coverage, except as otherwise provided in sections (A) through (F) below. A Participant may revoke an election in writing for the balance of the Period of Coverage and, if desired, file a new election in writing if, under the facts and circumstances, a Status Change occurs, and the requested revocation and new election satisfy the applicable consistency requirements in section 4.7 hereof. Application for a Status Change must be submitted to the Administrator within 30-days of the actual event. (A) For this purpose, a Status Change includes the following events: atio me ORO 1. Leaal Marital Status. Events that change a Participant's legal marital status, including marriage, death of spouse, divorce, legal separation, so or annulment. 2. Number of Dependents. Events that change the Participant's number of Dependents, including birth, adoption, placement for adoption (as defined in regulations under Code section 9801), or death of a Dependent. 3. Employment Status. Any of the following events that change the employment status of the Employee, Employee's spouse, or the Employee's Dependent: a termination or commencement of employment; a strike or lockout; a commencement of or return from an unpaid leave of absence; and a change in worksite. In addition, if the eligibility conditions of the cafeteria plan or other employee benefit plan of the employer of the Employee, spouse, or Dependent depend on the employment status of that individual and there is a change in that individual's employment status with the consequence that the individual becomes (or ceases to be) eligible under the plan, then that change constitutes a change of employment under this paragraph. 4. Requirements For Unmarried Dependents. An event that causes a Participant's Dependent to satisfy or cease to satisfy the requirements for coverage due to attainment of age, student status, -9- RESOLUTION NO. 2013-13 or any similar circumstance as provided in any accident or health plan identified in schedule A under which the Participant received coverage. 5. Residence or Worksite. A change in the place of residence or work of the Participant or the Participant's spouse or Dependent. 6. Enrollment in Health Coverage. A significant change in the cost or health coverage of the Participant or the Participant's spouse attributable to the spouse's employment, and such other events that the Administrator determines will permit the revocation of an election (and, if applicable, the filing of a new election) during a Period of Coverage under regulations and rulings of the Internal Revenue Service. (B) In order to revoke an election or file a new election under this subsection, a Participant must submit to the Administrator a written application within 30 days of the Status Change. (C) In the case of coverage under a welfare plan identified in Schedule A, a Participant may revoke an election in writing for the balance of the Period of Coverage and file a new election in writing that corresponds with the special enrollment rights provided in Code section 9801(f), whether or not the change in election is permitted under section 4.6 above. (D) In the case of a judgment, decree or order resulting from a divorce, legal separation, annulment, or change in legal custody (including a qualified medical child support order) that requires accident or health coverage for a Participant's child, a Participant may change his or her election (1) to provide coverage for the child under a health plan identified in schedule A if the order so requires, or (2) to cancel coverage under a health plan identified in schedule A for the Participant's child if such order requires the Participant's former spouse to provide coverage. (E) In the case of coverage under a health plan identified in schedule A, a Participant may revoke an election in writing for the balance of the Period of Coverage and file a new election in writing to cancel such health plan coverage for the Participant and/or the Participant's spouse or Dependent to the extent that such individual become entitled to coverage under Part A or Part B of Title XVIII of the Social Security Act (Medicare) or Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under section 1928 of the Social Security Act (the program for distribution of pediatric vaccines). In addition, if an Employee, spouse or Dependent who has been entitled to such coverage under Medicare or Medicaid loses eligibility for such coverage, the Plan may permit the Employee to make a prospective election to commence or increase coverage of that Employee, spouse, or Dependent under the accident or health plan. A Participant may not revoke his or her election if he or she - 10 - RESOLUTION NO. 2013-13 becomes eligible for state children's health insurance program coverage during the year. (F) In the case of coverage under a health plan identified in schedule A which is provided by an independent third -party provider, if: 1. The Participant's share of the cost of such coverage significantly increases as a result of a significant cost increase by the independent third -party provider, or 2. Such coverage ceases or is significantly curtailed, the Administrator may permit all Participants electing such coverage for the Period of Coverage to revoke their elections for the balance of the Period of Coverage, provided that similar coverage is elected under a health plan identified in schedule A for the balance of the Period of Coverage. (G) Any revocation and new election under this section 4.6 shall be effective at such time as the Administrator shall prescribe, but not earlier than the first pay period beginning after the revocation and submission of a new election to the Administrator, unless otherwise required by law. 4.7 Consistency Rules. A Participant's requested written revocation and new election will be consistent with a Status Change described in section 4.6 if, and only if, (1) the Status Change results in the Participant, or the Participant's spouse or Dependent, gaining or losing eligibility for accident or health coverage under either the Plan or a plan of the spouse's or Dependent's employer, and (2) the election change corresponds with that gain or Toss of coverage. Notwithstanding anything in this section 4.7 to the contrary, if the Participant, or the Participant's spouse or Dependent, become eligible for continuation coverage under a health plan identified in schedule A as provided in Code section 4980E or any similar state law, the Participant may elect to reduce his or her Compensation under the Plan in order to pay for the continuation coverage. 4.8 Changes by Administrator. If the Administrator determines, before or during any year, that the Plan may fail to satisfy for such year any nondiscrimination or other requirement imposed by the Code, or any limitation on benefits provided to the Highly Compensated Employees, the Administrator shall take such action as the Administrator deems appropriate, under rules uniformly applicable to similarly situated Participants, to assure compliance with such requirement or limitation. Such action may include, without limitation, a modification of elections by Highly Compensated Employees (as defined by the Code - 11 - RESOLUTION NO. 2013-13 for purposes of the nondiscrimination requirement in question) without the consent of such Employees. 4.9 Adiustment of Compensation Reductions. If the cost of Optional Benefit Coverages provided by an independent third -party provider under a medical, dental or vision plan identified in Schedule A increases or decrease during a Period of Coverage, a corresponding change shall be made in the Salary Reduction Contributions of all Participants receiving such coverage in an amount to be determined by the Administrator. 4.10 Maximum Elective Contributions. The maximum amount of elective contributions under the Plan for any Participant shall be the total cost to the Participant for the Period of Coverage of the most expensive Optional Benefit Coverages that any Participant could elect. 4.11 Cessation of Required Contributions. Nothing in this Plan shall prevent the cessation of coverage or benefits under any plan identified on schedule A, in accordance with the terms of such plan, on account of a Participant's failure to pay the Participant's share of the cost of such coverage or benefits, through Compensation reduction or otherwise. 4.12 Coordination with Family and Medical Leave Act. Notwithstanding any other provision of this Plan, the Administrator may (a) permit a Participant to revoke and (subsequently reinstate) his or her election of one or more Optional Benefit Coverages under the Plan, and (b) adjust a Participant's Compensation reduction as a result of a revocation or reinstatement to the extent the Administrator deems necessary or appropriate to assure the Plan's compliance with the provisions of the Family and Medical Leave Act of 1993 and any regulations pertaining thereto. - 12 - RESOLUTION NO. 2013-13 ARTICLE V FLEX DOLLARS AND ADDITIONAL CASH BENEFITS 5.1 Flex Dollars. A Participant will be eligible to receive Flex Dollars if, and to the extent that, the Employer has elected to provide Flex Dollars under the Plan. Prior to the commencement of each Period of Coverage the Employer shall determine the amount of Flex Dollars available to each such Participant in accordance with the rules and procedures adopted by the Employer and by the Plan Administrator, which shall not discriminate in favor of Highly Compensated Employees. The Administrator shall notify such Participant in writing of the amount of Flex Dollars available to him or her for the Period of Coverage (or for the balance of the Period of Coverage). 5.2 Allocation of Flex Dollars. Any Flex Dollars available to a Participant under this Article V shall be applied proportionately each pay period toward the cost of the Optional Benefit Coverages elected by the Participant. If for any Period of Coverage the cost of the Optional Benefit Coverages elected by the participant exceeds the Participant's Flex Dollars, then the Participant's compensation shall be reduced proportionately each pay period on a pre-tax basis in the amount of the excess, and an amount equal to the compensation reduction shall be contributed by the Employer to cover the remaining cost of the optional Benefit Coverages elected by the Participant. However, if for any Period of Coverage the cost of the Optional Benefit Coverages elected by the Participant is Tess than the Participant's Flex Dollars, then the Participant shall receive the value of any Flex Dollars not allocated to Optional Benefit Coverage and divert them to the plans described on Schedule B or receive the Flex Dollars as taxable income. 5.3 Waiver of Coverage Cash Option. A Participant who has elected to waive coverage under a medical, dental and/or vision Optional Benefit Coverage identified in Schedule A may elect the Waiver of Coverage Cash Option. Under this Option, the Employer will increase such Participant's cash compensation by the waiver amount applicable to the Participant for each pay period during which the Participant does not have in effect any medical, dental and or vision Optional Benefit Coverage. Determination of the waiver amount available to Participants, and the manner in which it is paid, shall be made in accordance with the rules and procedures adopted by the Employer and by the Administrator, which shall not discriminate in favor of Highly Compensated Employees. The Administrator shall notify such Participant in writing of the waiver amount available to him or her for the Period of Coverage (or for the balance of the Period of Coverage) under this Coverage Cash Option. A Participant may elect the Waiver of Coverage Cash Option in writing in such form and manner as the Administrator shall prescribe, at the same time or times that the Participant is permitted to elect Optional Benefit Coverages under Article IV. Such election shall be irrevocable during each Period of Coverage to the same extent as an election of Optional Benefit Coverages identified in Schedule A. -13- RESOLUTION NO. 2013-13 ARTICLE VI NON-DISCRIMINATION 6.1 Intent. It is the intent of this Plan not to discriminate between any classes of Employees or create such an action in part or whole of this Plan document that is in violation of Code section 125 and applicable regulations. The Administrator shall avoid all discretionary acts, which could be deemed to be discriminatory under any applicable Code section or law. 6.2 Reduction of Benefits and/or Contributions. The Administrator may reduce, modify, change or reject the benefits or amounts of contribution of any Participant of the Plan, if the Administrator deems it necessary to make certain this Plan does not discriminate in favor of Highly Compensated Employees within the meaning of Code section 125 and any other applicable Code section or law. 6.3 Treatment of Contribution Reductions. Contribution reductions due to the Administrator's actions in accordance with sections 4.1 and/or 4.2 of the Plan shall be returned to the Participant in the form of a taxable refund of contributions. -14- RESOLUTION NO. 2013-13 ARTICLE VII ADMINISTRATION 7.1 Appointment of Administrator. The Employer is hereby designated as the Administrator. 7.2 Duties of the Administrator. The Administrator shall be responsible for the complete management of the Plan, and shall undertake any action necessary to preserve the benefits of the Participants. The Administrator shall have all necessary discretionary power to carry out the full administration and management of the Plan. The Administrator's powers shall include, but are not limited to, the following: (A) To interpret the provisions of the Plan; (B) To enforce all provisions of the Plan; (C) To decide all questions of eligibility; (D) To decide all questions of benefits; (E) To decide the proper management of benefit claims; (F) To obtain from every Employee the necessary forms and documents that allow participation in the Plan; (G) To obtain from every Participant the necessary forms and documents that allow continued participation or termination of participation in the Plan; (H) To contract with any and all insurance companies or other suppliers to provide benefits under the Plan; (I) To notify each Participant in writing of any amendment of the Plan, of any proposed amendment of the Plan, of the termination of any benefit of the Plan, and of the termination of the Plan; (J) To provide guidance for Employees and Participants as to questions of participation, benefits, or and other matters in connection with the Plan; (K) To appoint agents, consultants and professionals to assist in administering the Plan, and to complete necessary documentation and reports; (L) To avoid discrimination under the Plan; (M) To pay for any administrative costs of the Plan; (N) To do any other acts as deemed necessary to administer and manage the plan for the benefit of its Participants. 7.3 Reports and Records. MIR ma old The Administrator shall keep books, reports and records of all activities under the oup Plan. The records of the Plan shall be open for inspection during normal business hours, provided that a Participant may only inspect that Participant's individual mil participation records. The Administrator shall prepare and submit to the Employer an - 15 - RESOLUTION NO. 2013-13 annual report containing material which the Administrator deems necessary under Code section 125 or any other section of the Code. 7.4 Administrator Limitations. The Administrator is not responsible for administration of any group insurance plan supplied by an insurance Company. - 16 - RESOLUTION NO. 2013-13 ARTICLE VIII AMENDMENT AND TERMINATION OF THE PLAN 8.1 Amendment. The Employer may amend the Plan at any time, and from time to time, either retroactively or prospectively, except as may be limited by applicable law. 8.2 Termination. The Employer expects that this Plan will be maintained indefinitely. However, continuance is not guaranteed. The Employer reserves the right to terminate the Plan at any time with advance notice to Participants. -17- RESOLUTION NO. 2013-13 ARTICLE IX MISCELLANEOUS 9.1 Indemnification by Employer. To the fullest extent permitted by law, the Employer shall indemnify and hold harmless the Administrator and Employees who perform duties under the Plan, against all claims, losses, damages, expenses, and liabilities resulting from any action or omission of any such person in connection with administering the Plan, as long as such action or omission was at the time in good faith and carried forth with proper diligence and care, and provided that the Employer determines in its discretion that the Administrator or Employee did not commit gross negligence or willful misconduct. The Employer shall not be responsible for any action taken by any Insurance Company, nor shall it be responsible to make payments to any Participant if the Insurance Company fails to do so. 9.2 Funding. All contributions to the Plan shall be considered general assets of the Employer. 9.3 Not an Employment Agreement. The establishment of the Plan shall not be construed to constitute a contract between the Employer and any Participant, or to be a consideration or inducement for the employment of any Participant or Employee, or to confer upon any Employee or Participant any legal right to be retained in the employ of the Employer. All Employees will remain subject to discharge to the same extent as if the Plan had never been adopted, and may be treated without regard to the effect such treatment might have upon them under the Plan. Nothing in the Plan shall be deemed to be an agreement, consideration, inducement, or condition of employment. 9.4 Titles and Headings. 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. 9.5 Gender and Number. Wherever used in this document, the singular shall mean the plural, the plural shall mean the singular, the masculine shall mean the feminine, and the feminine shall •--. mean the masculine, except where the context requires otherwise. - 18 - RESOLUTION NO. 2013-13 9.6 Amendments in Writing. Any and all amendments to this Plan need to be in writing, and signed by a duly authorized representative of the Employer, in order to be valid. 9.7 Severabilitv. If any provision of the Plan is held invalid or unenforceable, its invalidity or its inability to be enforced will not affect other provisions of the Plan, and the Plan will be construed and enforced as if such provision had not been included therein. 9.8 Administrator Information. Name and address of the Administrator: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Telephone number of the Administrator: 760-346-0611 Employer identification number of the Administrator: 95-2859459 9.9 Goveminq Law. The Plan shall be construed in accordance with the laws of the state of Califomia to the extent not preempted by federal law. -19- RESOLUTION NO. 2013-13 SCHEDULE A OPTIONAL BENEFIT COVERAGES Optional Benefit Coverages shall consist of coverages under the following plans maintained by the Employer: • City of Palm Desert Medical Plan • City of Palm Desert Dental Plan • City of Palm Desert Vision Plan • City of Palm Desert Health Care Spending Account Plan • City of Palm Desert Dependent Care Spending Account Plan The plan documents for the above -referenced plans are hereby incorporated into this Plan by reference. - 20 - RESOLUTION NO. 2013-13 SCHEDULE B Flex Dollar Allowance Schedule With Health Insurance Coverage Employee Only Employee + 1 Employee + 2 or more Without Health Insurance Coverage Employee Only Employee + 1 Employee + 2 or more Premium Coverage Actual Premium up to PersChoice Rate Actual Premium up to PersChoice Rate Actual Premium up to PersChoice Rate Cash in Lieu of Premium $150.00 $150.00 $ 150.00 Dental & Vision Flex Dollars Employee Only Actual Premium $ 50.00 Actual Premium Employee + 1 Incl. dependants $ 50.00 Employee + 2 or Actual Premium more Incl. dependants $ 50.00 -21 - RESOLUTION NO. 2013-13 SIGNATURE PAGE IN WITNESS WHEREOF, the Employer has caused this Plan to be signed by its duly authorized representative on the day of , 200_. City of Palm Desert By: - 22 -