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HomeMy WebLinkAboutResolution No. 92-14 CITY OF THE COLONY, TEXAS RESOLUTION NO. ,¢~.Q_?z?/ A RESOLUTION AUTHORIZING THE ADOPTION OF A FLEXIBLE SPENDING PLAN IN COMPLIANCE WITH SECTION 125 OF THE INTERNAL REVENUE SERVICE CODE ACCORDING TO THE AWl'ACHED PLAN DOCUMENT WHEREAS, Section 125 of the Internal Revenue Service Code provides that employees may pay for certain group coverage expenses with pre-income tax dollars if a proper plan is established; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of The Colony, Texas: That the City Council of the City of The Colony does hereby authorize the City Manager to execute a flexible spending plan in accordance with the plan document outlined in Attachment "A". PASSED AND APPROVED thisc~Q/o~day of ~ , 1992. William W. Manning, ATTEST: Patti A. Hicks, CMC/AAE, City Secretary APPROVED AS TO FORM: SAMPLE PLAN DOCUMENT FLEXIBLE BENEFITS PROGRAM FOR THE EMPLOYEES OF ~E CITY OF THE COLONY TABLE OF CONTENTS ARTICLE 1: PURPOSE, APPLICABLE LAW AND DEFINrrONS Section 1.1 Purpose Section 1.2 Applicable Law Section 1.3 Def'mitions ARTICLE 2: ELIGIBILITY REQUIREMEN'IX3 Section 2A Eligibility ' Section 2.2 Participant Election Section 2.3 Irrevocability of Election ARTICI.F. 3: EFFE~ DATE ARTICLE 4: TERMINATION AND AMENDMENTS Section 4.1 Termination of Plan Section 4.2 Termination Affect on Rights Section 4.3 Amendments ARTICLE 5: BENEFTrS Section 5.1 Program Benefits Section 5.2 Premium Expenses Section 5.3 Contributions to the Plan Section 5.4 Limitations on Benefits ARTICLE 6: MISCELLANEOUS Section 6.1 Availability of Plan Details Section 6.2 Allocation of Responsibility for Administration Section 6.3 Administrator and Representive Compensation Section 6.4 Powers and Duties of the Administrator Section 6.5 Rules and Decisions Section 6.6 Authorization of Benefit Payments Section 6.7 Liability Limitation Section 6.8 Non-alienation of Benefits ARTICLE 7: SIGNATURE CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCUMENT PAGE 1 ARTICLE 1: PURPOSE, APPLICABLE LAW AND DEFINITIONS Section 1.1 Purpose The City of the Colony hereby establishes a plan called CITY OF THE COLONY FLEXIBLE BENEFITS PLAN which is to permit participants to choose among fringe benefits available to be purchased on their behalf by premium payments by the City of the Colony. The purpose of this document is to set forth the plan and its provisions. Section 1.2 Applicable Law The provisions of this plan shall be construed according to the laws of the State of Texas, except as superseded by federal law. It is the intent of the Employer that this plan qualify as a "cafeteria plan" as defined under Section 125 of the Internal Revenue Code. The plan will be "nondiscriminatory" as such term is used in Section 125 of the Internal Revenue Code. The plan shall also serve as an amendment to certain existing benefit plans presently in effect for the Employer. Section 1.3 Definitions The following words when appearing in the plan have the meaning set forth below unless the context clearly denotes otherwise: a. Employer: City of The Colony b. Plan: CITY OF THE COLONY FLEXIBLE BENEFITS PLAN c. Effective Date: October 1, 1992 d. Plan Year: Mean the twelve month period commencing October 1, 1992 and ending September 30, 1993 e. Employee: Any person employed by the Employer and, to the extent necessary, a retired or terminated Employee who is entitled to benefit payments under this plan. f. Employer Board: City Council of the City of The Colony. g. Employer Official: An Official of the City of The Colony. h. Administrator: An individual or committee designated in writing by the Employer Official. i. Participant: An Employee of the Employer who elects to participate in this plan. j. Dependents: An eligible Employee's spouse, children or other qualifying dependents of the Employee as defined in Section CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCUMENT PAGE 2 152/125 of the Internal Revenue Code currently in effect or as amended. k. Designated Representative: Any employee under the direction and guidance of the administrator who is directed to coordinate, communicate, implement or administer CITY OF THE COLONY FLEXIBLE BENEFITS PLAN. ARTICLE 2: ELIGIBILITY REQUIREMENTS Section 2.1 Eli§ibility All Employees of thc Employer shall be eligible to participate in the Plan. Section 2.2 Participant Election Any Eligible Employee who wishes to participate in the Plan shall be considered to have elected into the Plan upon receipt of a signed Plan enrollment form by the Administrator. Such election shall be made prior to the beginning of the Plan Year for existing participants. New eligible employees will have 30 days from the commencement date of their employment to enroll in the Plan. Section 2.3 Irrevocability of Election Once the Plan Year has commenced, thc Plan election shall become binding and irrevocable for the entire Plan Year; however, a benefit election may be revoked by a participant after the period of coverage has commenced and the participant may make a new election if the revocation and new election are on account of and consistent with a change in family status. A list of examples of family status changes is shown below. (This list is not intended to be exclusive, and election changes related to similar events may also be allowed.) a. Marriage or divorce of the participant. b. Death of the participant's spouse or dependent. c. Birth or adoption of a child. d. Change in custody of dependents. e. Termination or commencement of employment of the participant's spouse. f. A switch from part-time to full-time status (or vice versa) by the participant or the spouse. g. Unpaid leave of absence taken by the participant or the participant's spouse. h. A significant change in the health coverage of the participant or spouse attributable to the spouse's employment. CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCI.YMENT PAGE 3 Also, if the cost of any Premium Expenses described in Section 5.2 increases or decreases during the Plan Year, corresponding changes consistent with such increase or decrease will automatically be made in the Plan Contributions for such Premium Expenses scheduled to be made by affected Participants. If any such cost increase raises a Participant's Plan Contribution for such Premium Expense by more than 25%, or if any health coverage under any policy described in Section 5.2 is significantly curtailed or ceases during the Plan Year, the affected Participants may elect to cease participation under such health plan. ARTICLE 3: EFFECTIVE DATE The effective date of the Plan shall be October 1, 1992. Each year will constitute a new plan year and will cover the time period October 1, to September 30. Each plan year will require a new election to participate by the eligible participants which will be made prior to the beginning of the plan year. The Plan will remain in existence indefinitely until termination occurs. ARTICLE 4: TERMINATION AND AMENDMENTS Section 4.1 Termination of Plan The Employer may terminate the Plan at any time. Section 4.2 Termination Affect on Rights Upon termination of the Plan the rights of all participants affected thereby shall become payable as the Administrator may direct. Section 4.3 Amendments The Employer Official, with the approval of the Employer Board, reserves the right to make from time to time any amendment or amendments to the Plan, provided, however, that the Employer may make any amendment it determines necessary or desirable, with or without retroactive effect, to comply with the law. CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCUMENT PAGE 4 ARTICLE 5: BENEFITS Section 5.1 Program Benefits The Plan is designed to enable the Employer to pay each Employee's premium expenses, in lieu of an equal amount of his compensation, for the Employee's participation in the Employer's group medical and dental plans, as provided under Internal Revenue Code 105, and group life insurance plans as provided under Internal Revenue Code 79; and long-term and/or short-term disability insurance. Section 5.2 Expenses The premium expenses which shall be paid by the Employer or reimbursed by the Employer shall be the Employee's portion of the premiums for coverage or reimbursement incurred during the Plan Year, under the following Premium Plans, as such portion is defined in the relevant plans and contracts of the Employer: a. City of The Colony Group Health and Dental Plans; b. City of The Colony Group Life Insurance Plan, provided that if the Employee's total insurance coverage under such plan is in excess of $50,000, the premiums attributable to such excess coverage shall not be considered Premium Expenses under the Plan; c. City of The Colony Accidental Death and Dismemberment Plan. d. City of The Colony Long Term Disability Plan. e. City of The Colony Short Term Disability Plan. Section 5.3 Contributions to the Plan Contribution to the Plan for the payment of benefits provided under the plans shall come from the reduction or conversion of a participant's compensation. The compensation reduction or conversion will be agreed to by the employee upon completion of the Plan Enrollment Form. The Employer may also make non-elective contributions to the Plan on behalf of the participants. Section 5.4 Limitations on Benefits Coverage and limitations for a participants Premium Plan benefits shall be as set forth on the participants Premium Plan. CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCUMENT PAGE 5 ARTICLE 6: MISCELLANEOUS Section 6.1 Availability of Plan Details The Employer will make available descriptive materials to participants concerning how the Plan operates including the process by which benefits are payable. If participants have questions concerning the operation of the Plan or the participant's eligibility for the payment of benefits under the Plan, the Employer's designated representative is to be contacted either in person or in writing. In the event the Employer's designated representative is unavailable, then the participant should contact the Administrator. Section 6.2 Allocation of Responsibility of Administration The designated representative of the Employer shall have only those specific powers, duties, responsibilities and obligations as are specifically given them under the Plan. The Employer Official shall have the sole authority to amend or terminate, in whole or in part, the Plan at any time with the approval of the Employer Board. The Administrator shall have the sole responsibility for the administration of the Plan; which responsibility is specifically described in the Plan. The Administrator warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan. Furthermore, the Administrator may rely upon any such direction, information or action of another Employee of the Employer as being proper under the Plan, and is not required under the Plan to inquire into the propriety of any such direction, information or action. It is intended under the Plan that the Administrator shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under the Plan and shall not be responsible for any act or failure to act for another Employee of the Employer. Neither the Administrator nor the Employer makes any guarantee to any participant in any manner for any loss or other event because of the participant's participation in the Plan. Section 6.3 Administrator and Designated Representative Compensation The Administrator and designated representative shall not receive any compensation with respect to services hereunder except as such person may be entitled to contracts and/or benefits agreed to under the Plan. CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCUMENT PAGE 6 Section 6.4 Powers and Duties of the Administrator The Administrator shall have such duties and powers as may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following: a. to construe and interpret the Plan, decide all question of eligibility and determine the amount, manner and time of payment of any benefits hereunder; b. to prescribe procedures to be followed by participants filing applications for benefits; c. to prepare and distribute, in such a manner as the Administrator determines to be appropriate, information explaining the Plan; d. to receive any information from the Employer Board, other Employer departments and from participants necessary for the proper administration of the Plan. e. to furnish the Employer, upon request, such reports with respect to the administration of the Plan as are reasonable and appropriate; f. to receive, review and keep on file (as it deems convenient and proper) reports of benefit payments by the Employer and reports of disbursements for expenses directed by the Administrator; and g. to appoint individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal and actuarial counsel. h. to furnish to participants any information necessary as required by the various Internal Revenue Code sections for the benefits in the Plan. The Administrator shall have no power to add to, subtract from or modify any of the terms of the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under the Plan. Section 6.5 Rules and Decisions The Administrator may adopt such rules as he deems necessary, desirable or appropriate. All rules and decisions of the Administrator shall be uniformly and consistently applied to all participants in similar circumstances. When making a determination or calculation, the Administrator shall be entitled to rely upon information furnished by a participant, other Employer personnel or the legal and professional counsel of the Employer. CITY OF THE COLONY FLEXIBLE BENEFITS PLAN DOCUMENT PAGE 7 Section 6.6 Authorization of Benefit Payments The Administrator shall issue directions to the appropriate Employer departments concerning all benefits which are to be paid from the Employer's funds pursuant to the provisions of the Plan. Section 6.7 Liability. Limitation In administering the Plan, neither the Employer, the Administrator, nor any person to whom is delegated any duty or power in connection with administering such plan, shall be liable for any action of failure to act, except for its or his own gross negligence or willful misconduct, nor for the payment of any benefit or other amount under any plan. Section 6.8 Non-alienation of Benefits Benefits payable under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a spouse or former spouse, or for any other relative of the Employee. ARTICLE 7: SIGNATURE IN WITNESS WHEREOF, the Employer Official has caused the Plan to be executed and its City of The Colony seal attached hereto by its duly authorized officers on the 21st day of September, 1992, but effective as of October 1, 1992. CITY OF THE COLONY