United Group Programs Agmt
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UNITED GROUP PROGRAMS, INC.
Congress Corporate Plaza
902 Clint Moore Road, Suite 100
Boca Raton, FL 33487
Telephone: (561) 997-9892
Fax: (561) 997-9927
AGREEMENT FOR SERVICES
AGREEMENT made this 29th day of August, 2002 between the City of Miami Beach, Florida, a municipal
corporation having it's address at 1700 Convention Center Drive, Miami Beach, FL 33139, thereinafter
referred to as "Employer", and United Group Programs, Inc., a Florida Corporation, having it's principal
place of business at 902 Clint Moore Road, Suite 100, Boca Raton, FL 33487, hereinafter referred to as
"Administrators. "
WHEREAS, the Administrators are making available a Cafeteria Compensation Plan, to be established by
the Employer; and
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND AGREEMENTS
HEREIN CONTAINED, THE RECEIPT AND SUFFICIENCY OF WHICH IS HEREBY
ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
1. Administrators agree to make available the Cafeteria Compensation Plan to be used as the
Employer's Plan.
2. Employer designates and appoints Administrators to be the Plan Administrator of Employer's
Cafeteria Compensation Plan and authorizes the Administrators to perform the functions and
duties necessary to prepare, implement, and operate the Cafeteria Compensation Plan.
3. Administrators shall have the right to retain outside services at its cost, wherever necessary,
including administrative marketing services.
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4. Employer agrees to provide data to make necessary payroll deductions and assist Administrators
in implementing and operating the Cafeteria Compensation Plan.
5. Administrators agree to perform all the functions and duties essential to the continuing operation
of the Employer's Cafeteria Compensation Plan.
6. Administrators agree to perform all of the duties and functions essential to the continuing
operation of the Employer's Cafeteria Compensation Plan after its implementation, which will
include annual program reviews.
7. Employer agrees to restrict the use of the Cafeteria Compensation Plan for its own Employer's
Cafeteria Compensation Plan only, and agrees not to disclose details of the Plan to other parties
unless Administrators give permission to do so.
8. Administrators shall be entitled to a monthly fee for services based on the following schedule.
The fee is payable at the beginning of the month and is considered late and cause for suspension or
termination when due more than 31 days.
Schedule 1:
A $4.95 per Flexible particioant based on a twelve (12) month year to be paid by the
City of Miami Beach.
There is an initial set-up fee of $2.500.
Each subsequent year there is an annual set-up fee of$I.500.
The Fee of$4.95 is guaranteed for !"year, after which, it may be adjusted upon giving ninety (90) days
1
'ly
written notice.
9. Checks will be processed and mailed on the 30th of every month, as long as funding is available.
10. Administrators will provide the following services at the request of the employer:
. Letters to FSA participants to prevent forfeiture
. 9 hour workday. 9:00 a.m. to 6:00 p.m. EST
. Bilingual Specialists
. Online Reporting
. 8 Free Reports
. 5500 Forms Prep
. Email communication
. Up to (3) enrollment meetings, and up to 12 meetings for the first year, and (12) meetings for
subsequent years.
. (800) Toll Free Number
. Mailings to the Employees Address of Record
. Plan Booklet to Employer
. Certificate to Employees
. Discrimination Testing
11. Employer may terminate this Agreement, after one (1) year from the effective date of the Plan (or
9/30/02), without case and for convenience, upon thirty days written notice to Administrators.
Administrators may terminate this Agreement, after one (1) year from the effective date of the
Plan, without case and/or convenience, upon ninety (90) days prior written notice to Employer.
12. Notwithstanding Paragraph 11 above, Employer may terminate this Agreement at anytime, for
any of the following:
a) In the event Administrators should become bankrupt or insolvent, or if
Administrators are suspended or restricted from performance by Federal or State
Regulatory authority.
b)Termination shall occur in the event Administrators are unable to perform as Plan
Agent as set forth in the contract;
c) All or any portion ofthe Plan (or type or plan adopted) is ruled illegal by statute,
regulation or opinion of any governmental body, or use the of any element of the plan is
restricted;
d) Employer or any of its employees receive an inquiry from the IRS indicating the
possibility that some or the entire plan is not legally or validly implemented.
13. Administrators warrant that the Plan and its method of implementation satisfy current
interpretation of IRS regulations and state and federal law .
14. Administrators shall promptly inform Employer of all enactments or changes in statutes,
amendments, or regulations applicable to this plan.
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15. Plan Administrators hereby agrees to maintain, during the term of this Agreement, $1,000,000.00 in
General Liability Insurance, $2,000,000.00 in Professional Liability Insurance, and Workers Compensation
Insurance, as evidenced by certificates delivered to the City of Miami Beach.
16. This Agreement shall be binding upon the parties, its successors, and assignees.
17. This Agreement shall be interpreted under the laws of the State of Florida. Venue or any action filed
pursuant to this Agreement shall be in Miami-Dade County, Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
appropriate officials, as of this 29th day of August, 2002
FOR CITY OF MIAMI BEACH, FL
ATTEST:
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FOR UNITED GROUP PROGRAMS, INC.
ATTEST:
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SEC TARY
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CHIEF FINANCIAL OFFICER
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DATE
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'Print Name
Address of Record:
CITY OF MIAMI BEACH
1700 CONVENTION CENTER DRIVE, THIRD FLOOR
MIAMI BEACH, FLORIDA 33139
A TTN: Human Resources Department
Address of Record:
UNITED GROUP PROGRAMS, INC.
902 Clint Moore Road, Suite 100
Boca Raton, Florida 33487
A TTN: Allen Stem
APPROwmAlTO
FORM a LANGUAGE
aFORIXICUTION
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Date
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UNITED GROUP PROGRAMS, INC.
Congress Corporate Plaza
902 Clint Moore Road, Suite 100
Boca Raton, Florida 33487
Telephone: (561) 997-9892
Fax: (561) 997-9927
www.ugpinc.com
ADOPTION AGREEMENT/ PLAN DOCUMENT
FOR
CITY OF MIAMI BEACH
Name: CITY OF MIAMI BEACH, FL: FED ID #
Address: 1700 CONVENTION CENTER DRIVE, THIRD FLOOR
MIAMI BEACH, FLORIDA 33139
Phone:
Third Party Administrator appointed by Plan Sponsor:
Name:
Address:
City:
Phone:
UNITED GROUP PROGRAMS, INC.
902 Clint Moore Rd, Suite 100
Boca Raton, Florida 33487
561-997-9892
This Adoption Agreement; Cafeteria Compensation Plan and Supplemental Benefit Plans shall constitute the Em-
ployer's Plan when completed and signed.
WITNESSETH:
WHEREAS, the Employer desires the Section 125 Cafeteria Compensation Plan and hereinafter called the "Plan" for
the benefit of the Employer's eligible Employees, the Effective Date of which shall be 10/01/02; and
NOW, THEREFORE, the parties hereto, agree as follows:
For the benefit of its employees, the undersigned employer(s) adopts the Section 125 Cafeteria Compensation Plan,
which includes these separate supplemental benefit plans (place an "X" in the appropriate boxes):
(X) A. Child and Dependent Care Reimbursement Supplemental
Benefit Plan
(X) B. Health Expense Reimbursement Payment Supplemental
Benefit Plan
The Employer by adopting these Supplemental Benefit Plans incorporates them by reference to become one docu-
ment with the Plan.
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,
In connection herewith, the Employer makes the following statements and selections for each plan:
Item 1
Check either A or B:
(X) A.
() B.
The effective date of this plan shall be: 10/01/02.
If this is an amendment to an existing plan:
The effective date of this plan shall be:
The original effective date of this plan was:
Item 2
Check either A, B or C:
() A. The plan year shall begin on the effective date of this plan and shall end
N/A. Each subsequent plan year shall begin on N/A. and end on
N/A.
(Utilize this if a short plan year is wanted, Le., October to December.)
( X ) B. The plan year shall begin on 10/0 1/02 and the same day of each subsequent year; and end on
09/30/03, _and on the same day of each subsequent year.
( ) C. The plan year is amended to begin on , and the same day of each
subsequent year; and end on, and on the same day of each subsequent year.
Item 3
Check either A, B, or C:
(X) A. Employees are eligible to participate on the 91 st day of hire for probationary full time classified
employees not covered by any union and the ISI day of hire for full time unclassified employees. All other employ-
ees are not eligible.
() B. Employees who are nonresident aliens and receive no earned income from the employer, which
constitutes income from sources within the United States, are not eligible to participate.
() C. Employees who have not completed one year of service. Service is dermed as the 12 months or
prior service up to the beginning of the plan year. The term "Employee" shall include present and former employees
of the employer. The Plan may also provide benefits to spouses and other beneficiaries ofthe employee but spouses
and beneficiaries may not be participants in the Plan. Self-employed individuals, described in IRC
Section 401 (c), shall not be allowed to participate in the Plan, employees employed by an employer meeting IRC
Section 414(b) (c) or (m) shall be treated as being employed by a single employer.
The eligible employee shall have 1 days from the day he or she meets the eligibility requirement under Item Three to
elect benefits evidenced by the Salary Reduction Agreement.
For subsequent plan years the participant shall have 1 days from the last day of the Plan Year to complete a new Sal-
ary Reduction Agreement to remain a participant in the Plan.
Each employee shall be eligible to participate in this plan in accordance with Article II of the Plan Document, except
the following: 2
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Item 4
Employees begin plan participation on the entry date indicated below:
Check either A or B:
(X) A. The fIrst day of the month following the completion of eligibility.
( ) B. Other: (When a date other than the frrst is the plan year starting date).
Item 5
Choice of Law Forum
The laws of the state in which Employer has signed this adoption agreement, subject to the provisions of this con-
tract, shall govern in all matters arising from or relating to this contract. Any matters regarding the breach of contract
between United Group Programs and the Employer shall be subjected to the laws of Florida.
It is understood that:
Full responsibility is assumed by the organization establishing the plan, which organization acknowledges having
counseled with its legal and tax advisors with respect to the adoption of the Plan and the selection of options.
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CAFETERIA COMPENSATION PLAN
FOR
CITY OF MIAMI BEACH
ARTICLE I
Introduction
1.1 Purpose of the Plan. This document constitutes the Plan for the Employer named in the Adoption
Agreement and shall consist ofthe IRC Section 125 Cafeteria Plan, as defined. IRC Section 125 (c)(I)(A)(B);
(e)(I)(2). Further said Plan, shall consist ofthe Supplemental Plans as defined under Article 1.4 of this document.
The Employer intends that the Plan terms, including those relating to coverage and benefits are legally enforceable
and that the Plan is maintained for the exclusive benefit of the Employees.
The Employer reserves the sole right to modify or terminate the coverage or benefits under the Plan. The Employer
during the first twelve months of the operation of the Plan, as defmed under the Adoption Agreement, Item 2, shall
not modify or terminate any coverage or benefits offered under the Plan.
1.2 Effective Date. The Plan is effective as of the date shown in Item 1 of the Adoption Agreement.
1.3 Plan Administration, Plan Year. The Plan is administered by the Employer, or other parties appointed
by the Employer, on the basis of a Plan Year (the "Plan Year") as identified in Item 2 of the Adoption Agreement.
1.4 Supplemental Benefit Plans. As of the effective date of the Plan, various Supplemental Benefit Plans
have been incorporated by reference to become part of the Plan. These Suoplemental Benefit Plans are:
A. Child and Dependent Care Reimbursement Supplemental Benefit Plan.
B. Health Expense Reimbursement Payment Supplemental Benefit Plan.
The Employer from time to time may offer additional Suoolemental Plans by amendment, to be attached and form a
part of the Plan to offer additional benefit programs to the Employees. By resolution of the Employer, benefits under
this Plan may be made available under other Employee Welfare Benefit plans established from time to time by the
Employer, which Employee Welfare Benefit plans shall, to the extent permitted by law, supplement, and form a part
of this Plan. Notwithstanding the foregoing, benefits under deferred compensation arrangements shall not be offered
under the Plan unless such arrangements include a qualified cash or deferred arrangement as defmed in Section
40I(k)(2) of the Internal Revenue Code.
ARTICLE II
Participation
2.1 Eligibility. Each employee of the Employer who has met the eligibility requirements established in
Item 3 of the Adoption Agreement will be eligible to participate in the Plan on the first entry date as set out in Item 4
of the Adoption Agreement after he has filed with the Plan Administrator any written agreement electing to partici-
pate in the Plan as is required by the Plan Administrator, on a form satisfactory to the Plan Administrator.
2.2 Period of Coverage, Termination of Participation. A participant's period of Plan coverage with re-
spect to any benefit under the Plan shall be the Plan Year (or the remaining portion of the Plan Year in which the
participant first becomes eligible to participate in the Plan). The benefits for any participant and/or covered depend-
ent where applicable will terminate on the first to occur of the following dates:
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(a) The day the participant ceases to qualify as a participant as a result of termination of
. .
employment or failure to make the required contributions, if any;
(b) The day the participant terminates membership in a group or class of employees
eligible for benefits;
(c) With respect to a covered dependent, the date such dependent ceases to be a dependent;
(d) The date a specific coverage or benefit is discontinued; or
(e) The date the Plan is terminated.
2.3 COBRA Election. Subsections (a) and (b) of Section 2.2 is modified to include election by the employee
and/or hislher dependents of "continuation coverage" under Public Law 99-892 Title X as it applies to City of Miami
Beach Group Health Plan.
2.4 Notice of Eligibility. The Plan Administrator shall notify employees of the Employer of their eligibility to
participate in the Plan and of the terms of the Plan. Each employee will be furnished with a copy of a
Summary Plan Description.
ARTICLE III
Contributions
3.1 Employer Contributions. The Employer is to pay all administrative expenses of the Plan, including
compensation of the Trustee, consultants, administrators and counsel, where applicable.
3.2 PARTICIPANT CONTRIBUTIONS & BENEFITS CHOSEN. Participants shall make contributions
they have elected to make through the Salary Reduction Agreement they have signed, required of them under the
Plan. A participant may elect, in writing on a Salary Reduction form prepared by, and filed with, the Plan Adminis-
trator on or before the date he/she first becomes eligible, to participate in the Plan, and on or before the first day of
any Plan Year thereafter, to reduce hislher compensation for such Plan Year and to contribute the amount of such
salary reduction to the Plan as hislher elected deferral under the Plan, as defmed in the adoption Agreement Item (3).
The employee is required to complete and sign a new Salary Reduction Agreement at the beginning of each new Plan
Year according to the procedure established under the Adoption Agreement Item Three. The Salary Reduction
Agreement is effective only for a current Plan Year, not to exceed a twelve-calendar-month period.
Compensation is defmed as amounts received by an Employee from an Employer in the form of wages, tips, salaries,
bonuses, and as defmed under IRC Section 61.
The maximum amount of compensation that a participant may elect to defer in their Salary Reduction Agreement
shall be 50%.
Pursuant to such written election form, the participant shall also apportion his salary reduction contributions among
the benefits provided for in the Plan for which the participant or his covered dependents qualify. In no event shall
the sum of the amounts apportioned by the participant to each benefit exceed the total amount of his salary reduction
contribution. Salary reduction contributions will be made through payments made periodically corresponding to
payroll withholding payments beginning with the first regularly scheduled pay day for the Plan Year for which the
participant's written election is made (or the first regularly scheduled pay day which is on or after the date the par-
ticipant first becomes eligible to participate in the Plan if a salary reduction agreement has previously been properly
executed). The Plan Administrator will establish rules and regulations with respect to salary reduction agreements
hereunder in accordance with applicable law and regulations issued by the Department of the Treasury under Section
125 of the Internal Revenue Code.
The Participant may have the right to choose between cash and qualified benefits through a Salary Reduction
Agreement form provided by the Plan Administrator.
"Qualified Benefits" are those benefits that do not defer the receipt of compensation and the benefit is not included 5
in an employee's gross income by reason ofan express provision of Chapter I of the Internal Revenue Code. Such
benefits can include Accident or Health Plan (IRC Section 105 and 106); Group Term Insurance (IRC Section 79)
and Dependent Care Assistance Programs (IRC Section 129), healthcare and dependent care reimbursed accounts
and premium conversions. The Employer under the Adoption Agreement has chosen certain supplemental benefits
plans, as defined under Article 1.4 of the Plan, that meet the requirements established by IRC Section 125 and Pro-
posed Regulations 1.125-2, Q-4.
3.3 Change or Discontinuance of Participant Contributions.
A participant may not revise the rate of his salary reduction contributions or discontinue making salary reduction
contributions except as follows:
(a) The participant's contributions will automatically terminate as of the date his Plan participation terminates in
accordance with Section 2.2. If the Employee returns to employment prior to the end of the current Plan Year, then
the Employee will not be eligible for a new election and must utilize their previous election until the new Plan Year.
(b) The participant may file a written election with the Plan Administrator to revoke any prior election and to
make a new election with respect to the remaining portion of a Plan Year on account of, and consistent with, a
change in family status, including marriage, divorce, the death of the participant's spouse or child, the birth or adop-
tion of a child, the termination or change in spouse's employment, which revocation and new election will be effec-
tive as of the date it is approved by the Plan Administrator.
Notwithstanding any provision to the contrary in this Plan, if a participant goes on a qualifying unpaid leave under
the Family and Medical Leave Act of 1993 (FMLA), to the extent required by the FMLA, the Employer will con-
tinue to maintain the Participant's Medical Reimbursement Plan Benefits on the same terms and conditions as though
he were still an active employee (i.e., the Employer will continue to provide benefits to the extent the Employee opts
to continue his coverage). Ifthe Employee opts to continue his coverage, the Employee may pay his share of the
premium with after-tax dollars while on leave, or pre-tax dollars to the extent he receives compensation during the
leave, or the Employee may be given the option to pre-pay all or a portion of his share of the premium for the ex-
pected duration of the leave on a pre-tax salary reduction basis out of his pre-leave Compensation by making a spe-
cial election to that effect prior to the date such Compensation would normally be made available to him (provided,
however, that pre-tax dollars may not be utilized to fund coverage during the next plan year), or via other arrange-
ments agreed upon between the Employee and the Administrator (e.g., the Administrator may fund coverage during
the leave and withhold "catch-up" amounts upon the Employee's return). Upon return from such leave, the Em-
ployee will be permitted to reenter the Plan on the same basis the Employee was participating in the Plan prior to his
leave, or as otherwise required by the FMLA.
(c) If the participant ceases to make required premiums payments under a benefit offered under the Plan, then
the election choosing that benefit shall be revoked. The Employee cannot during the current Plan Year re-institute
the benefit election if this option is chosen.
For the purposes of this Section, any election by a Plan participant to change the apportionment of his salary
reduction contributions among the various benefits provided for in the Plan will be considered a revision of the rate
of his contributions.
3.4 Permitted Election Changes
While employees may change their elections during each annual election period, Section 125 regulations do not al-
low employees to change their elections during a plan year except under certain limited circumstances. This section
discusses changes permitted by law.
Status Chanees
Employers may permit employees to revoke existing elections in the event of a qualified change in family or em-
ployment status and to make new elections consistent with the status change. The rules for status changes may be
different for the premium conversion option and reimbursement accounts.
In general, qualified changes in family and employment status are changes in:
6
. Legal marital status - events that change an employee's legal marital status, including marriage, death of
spouse, divorce, legal separation, or annulment.
. Number of dependents - events that change an employee's number of dependents, including birth, adoption,
placement for adoption, or death of a dependent.
. Employment status - a termination or commencement of employment by the employee, spouse, or depend-
ent; or a strike or lockout; and the beginning of or return from an unpaid leave of absence. In addition,
qualified changes include a change in eligibility conditions for the employee, spouse or dependent if the in-
dividual because (or ceases to become) eligible under the plan (for example, a switch between part time and
full time).
. Dependent eligibility status - a dependent satisfies (or ceases to satisfy) the requirements for eligibility, for
example, attainment of a particular age such as age 19, loss of student status, or any similar circumstance
under the plan that qualifies (or disqualifies) a dependent for coverage.
Consistency Rule
To be eligible to make a change in the cafeteria plan election mid-year, the employee (or employee's spouse or de-
pendent) must experience a qualified change in family or employment status. IRS rules also require that the em-
ployee's new election be consistent with the type of status change that occurred. Further, the regulations identify
specific changes that are considered to be consistent based on the type of event.
For example, an employee getting married is a change in legal marital status. One type of change that would be con-
sistent with this event is the addition of his spouse to his health plan coverage. It would also be consistent for the
employee to cancel his health plan coverage and emoll for coverage under his spouse's health plan. The employee
dropping his ~ealth coverage entirely and not emolling under his spouse's health coverage would not be considered
consistent with the change in status.
Similarly, if an employee gets a divorce, he/she has experienced a change in legal marital status. In this circum-
stance, he/she may drop health coverage for hislher spouse. If he/she was covered under hislher spouse's plan,
he/she may emoll in hislher own plan since he/she will lose coverage under the spouse's plan when the divorce oc-
curs. It would not be consistent for him/her to drop hislher health coverage entirely.
An exception to this consistency rule applies when the employee elects to change a life or disability insurance elec-
tion because of a change in marital or employment status. IRS rules permit the employee to either increase or de-
crease coverage under these circumstances.
If any of the above events occur, the employee must notify the plan administrator within 30 days after the date of the
change in employment or family status. The individual may be permitted to change hislher existing benefit for the
remaining portion of the period of coverage (plan year). The new election must be consistent with the status change.
It is important to remember that even if the employee is permitted under IRe Section 125 to make a change due to a
status or coverage change, the employee is still subject to the rules of the insurance policies or other contracts gov-
erning the plan. For example, if a disability insurer prohibits mid-year changes regardless of the reason, the em-
ployee who experienced a qualified status change would not be able to change the disability coverage election.
Employee Election Chanee Procedures
If an employee satisfies one of the above rules for election changes, the employee should complete a new emollment
form. These forms should be kept on file and will replace any previous election(s) made by the employee. The pay-
roll company or department should be notified as necessary. A copy of the new emollment form may also need to be
submitted to your reimbursement account claims administrator for any medical or dependent care expense reim-
bursement account changes.
The following rules describe how medical care expense reimbursement accounts will be administered when the em-
ployee makes a permissible election change during the plan year. The rules below apply to all status changes, except 7
return from a Family Medical Leave (FMLA) if the employee suspended participation during the leave.
..
When an employee has a change in status and makes a permissible election change, the initial election will be avail-
able from the beginning of the plan year to the date of change. The new election will be available from the date of
change through the end of the plan year. Claims incurred prior to the change date will only be eligible up to the
amount of the original election.
Examole:
An employee has elected a $1,200 medical care expense reimbursement account election for a calendar year plan
year. On July 1, he/she experiences an eligible change in status and increases his election to $2,400. Based on this
example:
Deductions will be:
Jan. 1 - June 30$100 per month; total $600
Julv 1 - Dec. 31 $300 per month: total $1.800
Jan. 1 - Dec. 31 Total deductions of$2,400
Eligible expenses will base on the following:
Incurred date of Jan. 1 - June 30$1,200 available for reimbursement
Incurred date of July 1 - Dec. 31 $2,400 available for reimbursement
(less any reimbursements made prior to July 1)
Other Imoortant Election Chanee Rules
Special Enrollment Riehts under the Health Insurance and Portability Act (HIPAA)
An employee may change his/her election for coverage under a group health plan (e.g., medical, drug, dental, vision)
if the employee qualifies for the special enrollment rights required by HIP AA. In addition, the employee may in-
crease (or decrease) his/her salary reduction amount in connection with the coverage change. The change must be on
a prospective basis except in the case of a birth or adoption. In the case of birth or adoption, HIP AA requires an
election retroactive to the date of birth or adoption. (This provision does not permit a retroactive change to the
medical care expense reimbursement account).
Judement. Decree or Court Order
If a court judgment, decree or order requires the employee to provide coverage for a dependent child (including a
stepchild or foster child), he/she may change his/her election to comply with the judgment, decree or court order.
Examples of court orders include divorce settlements and qualified medical child support orders.
Under these circumstances the cafeteria plan may permit the employee to:
. Add the dependent child when coverage is required under the order; or
. Drop coverage for the dependent child if coverage under another health plan (such as a former spouse's
coverage) is required by the order. The dependent child maybe removed only if the child is actually cov-
ered under the other plan (e.g., former spouse's plan.)
Rehired Emolovees
If an employee terminates and resumes employment with 30 days, the employee's prior election should be reinstated.
If the employee terminates and resume employment more than 30 days after his termination date, he will be required
to make a new election for the remainder of the year.
8
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Cost or Coveral!e Chanl!es (Premium Conversion and Dependent Care Expense Reimbursement Account
On Iv)
Certain election changes are permitted under the premium conversion option and/or dependent care expense reim-
bursement account when there is a cost or coverage change. These changes are not permitted for elections under a
medical care expense reimbursement account. The type of election change will depend upon the type of plan and the
extent to which the coverage or cost is changed.
. Automatic changes. If the cost of a qualified benefit under a premium conversion option increases or de-
creases during a period of coverage, the change in cost may be passed on to the employees.
. Significant cost increases. If the cost of a benefit package option (e.g., a medical plan option) increases
significantly during a period of coverage, the cafeteria plan may permit affected employees to:
Make a prospective increase in their premium contributions, or
Revoke the current election and make a new election under another benefit plan option providing
similar coverage.
While this rule also applies to dependent care expense reimbursement account plans, it is not applicable in
situations where the dependent care provider is a relative of the employee as defmed in Section I 52(a)(1) of
the Internal Revenue Code.
· Coverage Changes.
Significant curtailment. If coverage under a benefit plan option is significantly curtailed or elimi-
nated, the cafeteria plan may permit affected employees to revoke their election and make a new
election for coverage under a benefit option providing similar coverage. The change must be on a
prospective basis. Election changes are only permitted if the significant curtailment applies gener-
ally to participants in the plan rather than just a few, isolated individuals. For example, a single
medical practice group withdrawing from a managed care plan would not qualify as a "significant"
coverage curtailment. However, multiple hospitals or physician groups leaving a managed care
plan could be considered a general curtailment of plan coverage.
Change in coverage of spouse or dependent under another employer's plan. A cafeteria plan may
permit an employee to make an election change that is due to, and consistent with, a change made
under a plan of the spouse's or dependent's employer if:
o The spouse's or dependent's employer cafeteria or qualified benefit plan also permits the
change requested by the participant, and
o The change is because the other plan has a different annual election period than this plan.
Under this rule, a married couple whose employers sponsor cafeteria plans with differing
plan years (and therefore different annual election periods) could make changes mid-year
to correspond with the change under one of the spouses' annual election periods.
ARTICLE IV
Participant's Accounts, Payment of Benefits
4.1 Participant's Benefit Accounts. For the purpose of providing participants with the choice of which one or
more of the benefits under the Plan are to be provided to the participant, the Plan Administrator shall establish with
respect to each participant a bookkeeping account to reflect each benefit elected by the participant (all such accounts
are sometimes collectively referred to herein as the "benefits accounts" and individually as a "benefits account").
For purposes of adjusting participants' benefits accounts to reflect participants' salary reduction contributions and
distributions of Plan benefits, benefits accounts shall be described as "premium payment benefits accounts" (if the
applicable benefit is a premium payment benefit) or "reimbursement benefits accounts" (if the applicable benefit is a
reimbursement benefit or direct payment benefit). Immediately following the payroll processing date, the Plan Ad-
ministrator will credit the appropriate reimbursement benefits accounts of participants electing reimbursement bene-
fits under the Plan with the total amount apportioned by the participant on his salary reduction agreement to provide 9
such reimbursement benefit to the participant or, if applicable, his covered dependents for such Plan Year.
. ,
As of each regularly scheduled pay day, or the date the Administrator confirms placement of the employee's salary
reduction contribution within the employee's trust account, but no later than 90 days from the scheduled pay day.
The maximum amount of reimbursement is available at all times during the current Plan Year. The reimbursement
benefit or premium payment account shall be charged when a participant is reimbursed on a monthly basis. The
claim must be filed with the Plan Administrator and verified by a signed voucher or third party verified receipt. Re-
imbursement of benefits shall only be recognized within the current Plan Year not to exceed twelve calendar months.
The participant's premium payment benefit account or reimbursement benefit account shall be charged by the Plan
Administrator when the amounts allocated to such accounts are applied to provide benefits. In no event shall benefit
payments charged to any benefits account exceed the balance of such account.
No interest will be credited on the Participant's account balances.
4.2 Payment of Benefits. Benefits payable under the Plan for, or on behalf of, a participant or covered de-
pendent shall be paid as soon as practicable in such amounts, at such times and to such persons as shall be deter-
mined in accordance with the Plan. The form and manner of payment shall comply with the terms and conditions of
the Plan. Benefits will be paid directly from the trust, and charged against the reimbursement benefit account by the
Plan Administrator, established by the Employer or under the contract issued by a modified or fully self-funded pro-
gram, insurance company, health maintenance organization, or other organization or institution. All or a portion of
the benefits provided under the Plan may be paid directly to the person or institution on whose charges a claim is
based.
4.3 Designation of Beneficiaries. Each participant or covered dependent from time to time may name any
person(s) (who may be named concurrently, contingently, or successively) to whom the participant's or covered de-
pendent's benefits under the Plan are to be paid if the participant or covered dependent dies before he receives all
such benefits.
Each such beneficiary designation will revoke all prior designations by the participant or covered dependent; shall
not require the consent of any previously named beneficiary; shall be in a form prescribed by the Plan Administrator
during the participant's or covered dependent's lifetime.
If a participant or covered dependent fails to designate a beneficiary before his death, as provided above, or if the
designated beneficiary dies before the date ofthe participant's or covered dependent's benefits, the Plan Administra-
tor, in its discretion, may pay such benefits to either (a) one or more of the participant's or covered dependent's rela-
tives by blood, adoption, or marriage and in such proportions as the Plan Administrator determines, or (b) the legal
representative or representatives of the estate of the last to die of the participant or the covered dependent and his
designated beneficiary.
4.4 Facility of Payment. When a person entitled to benefits under the Plan is under a legal disability or, in
the Plan Administrator's opinion, is in any way incapacitated so as to be unable to manage his affairs, the Plan Ad-
ministrator may direct the payment of benefits to such person's legal representative, or to a relative or friend of such
person for such person's benefit; or the Plan Administrator may direct the application of such benefits for the benefit
of such person in such manner as the Plan Administrator considers advisable. Any payment made in accordance with
the preceding sentence shall be a full and complete discharge of any liability for such payment under the Plan.
ARTICLE V
Administration
5.1 The Plan Administrator. The person(s) named in the introduction to the Adoption Agreement is respon-
sible for the administration of the Plan (the "Plan Administrator").
5.2 Plan Administrator's Duties. Except as otherwise specifically provided and in addition to the powers,
rights, and duties specifically given to the PI~ Administrator elsewhere in the Plan, the Plan Administrator shall 10
have the following powers, rights, and duties:
",
(a) To construe and interpret the Plan, to decide all questions of eligibility and to determine the amount, manner,
and time of payment of any benefits hereunder and to remedy ambiguities, inconsistencies, or omissions.
(b) To adopt such rules of procedure as may be necessary for the efficient administration of the Plan and as are
consistent with its terms and such rules.
(c) Notwithstanding any other provision in the Plan to the contrary, and to the full extent permitted by the Inter-
nal Revenue Code, the Plan Administrator shall have the authority to construe any uncertain or disputed term or
provision in the Plan. The Plan Administrator's exercise of this discretionary authority to construe the terms of the
Plan shall be binding upon all interested parties, including, but not limited to, the Participant, the Participant's estate,
any beneficiary of the Participant and the Company. Ifthe Plan Administrator's discretionary authority under this
Plan must be exercised with respect to himself as an employee or retiree, then such discretionary authority shall be
exercised solely and exclusively by the Company. If the Plan Administrator is a committee, the Plan Administrator's
discretionary authority under this Plan must be exercised solely and exclusively by the other members of the
committee.
(d) To furnish the Employer with such information as it may require for tax or other purposes in connection with
the Plan.
(e) To enroll participants in the Plan; distribute and receive Plan administration forms and comply with all appli-
cable governmental reporting and disclosure requirements; and to prepare and distribute, in such manner as the Plan
Administrator determines to be appropriate, information explaining the Plan.
(t) To employ any agents, attorneys, accountants, or other persons (who also may be employed by the Employer)
and to allocate or delegate to them such powers, rights, and duties as the Plan Administrator considers necessary or
advisable to properly carry out the administration of the Plan, provided that any such allocation or delegation, and
the acceptance thereof, shall be in writing.
(g) To report after the end of each Plan Year to the Employer or to such person or persons as the Employer des-
ignates, regarding the administration of the Plan, any significant problems which have developed in connection with
the new administration of the Plan, and any recommendations which the Plan Administrator may have as to the
amendment of the Plan or the modification of Plan administration.
The Plan Administrator, in its capacity as Plan Administrator, shall have no power to add to, subtract from, or mod-
ify any of the terms of the Plan; nor to change or add to any benefits provided by the Plan; nor to waive or fail to ap-
ply any requirement of eligibility for the receipt of benefits under the Plan. Notwithstanding the preceding sentence,
the Plan Administrator shall have the power to take such actions as it shall consider necessary or appropriate to sat-
isfy the nondiscrimination requirements of Section 125 of the Internal Revenue Code and any regulations in interpre-
tation thereunder.
5.3 Information Required for Plan Administration. The records of the Employer as to an employee's or
participant's period or periods of employment, termination of employment and reason therefor, leaves of absence, re-
employment, and compensation will be conclusive on all persons. Participants and other persons entitled to benefits
under the Plan also shall furnish the Plan Administrator with such evidence, data, or information, as the Plan Admin-
istrator considers necessary or desirable to perform its duties.
5.4 Decision of Plan Administrator Final. Subject to applicable law and the provisions of Section 5.5, any
interpretation of the provisions of the Plan, and any decision on any matter within the discretion of the Plan Adminis-
trator, made by the Plan Administrator in good faith, shall be binding on all persons. A misstatement or other mis-
take of facts shall be corrected when it becomes known and the Plan Administrator shall make such adjustment on
account thereof as it considers equitable and practicable.
5.5 Review of Benefit Determinations. If a claim for benefits made by a participant or his beneficiary is
denied, the Plan Administrator shall, within 90 days (or 180 days if special circumstances require an extension of
time) after the claim is made, furnish the person making the claim with a written notice specifying the reasons for the
denial. Such notice shall also refer to the pertinent Plan provisions on which the denial is based, describe any addi- 11
tional material or information necessary for properly completing the claim and explain why such material or informa-
..
tion is necessary, and explain the Plan's claim review procedures. Ifrequested in writing, the Plan Administrator
shall afford each claimant whose claim has been denied a full and fair review of the Plan Administrator's decision
and, within 60 days (120 if special circumstances require additional time) of the request for reconsideration of the
denied claim, the Plan Administrator shall notify the claimant in writing of its final decision.
5.6 Uniform Rules. The Plan Administrator shall perform its duties on a reasonable and nondiscriminatory
basis and shall apply uniform rules to all participants similarly situated.
5.7 Indemnity. To the extent permitted by applicable law, and to the extent that they are not indemnified or
saved harmless under any liability coverage contract, any present or former officers, directors, or employees of the
Employer shall be indemnified and saved harmless by the Employer from and against any and all liabilities or allega-
tions of liability to which they may be subj ected by reason of any act done or omitted to be done in good faith in the
administration of the Plan, including all expenses reasonably incurred in their defense in the event that the Employer
fails to provide such defense after having been requested in writing to do so.
ARTICLE VI
Funding, Amendment, and Termination of the Plan
6.1 Funding. The Plan shall be maintained on an unfunded basis and benefits shall be paid solely as re-
quired out of the Benefit Accounts established herein of the Employer or under any contract issued by a modified or
fully self-funded program, insurance company, health maintenance organization, or other organization or institution,
as well as from Participants Salary Reduction Agreements.
6.2 Amendment. The Employer shall have the right at any time, and from time to time, to amend, in whole
or in part, any or all of the provisions of this Plan, provided that no such amendment shall change the terms and con-
ditions of payment of any benefits to which participants and covered dependents otherwise have become entitled un-
der the provisions of the Plan, unless such amendment is made to comply with federal or local laws or regulations.
The Employer also shall have the right to make any amendment retroactively, which is necessary to bring the Plan
into conformity with the Internal Revenue Code and resolutions thereunder. In addition, the Employer may amend
any provisions of any supplements to the Plan and may merge or combine supplements, and additional supplements
to the Plan, or separate existing supplements into an additional number of supplements.
6.3 Termination. The Employer shall have the right at any time to terminate this Plan except as is provided
under Article 1.1 of the Plan provided that such termination shall not eliminate any obligations of the Employer,
which therefore have arisen under the Plan.
ARTICLE VII
General Provisions
7.1 Non assignability. Benefits under the Plan are not in any way subject to the debts or other obligations
of the persons entitled thereto and may not voluntarily or involuntarily be sold, transferred, or assigned. Any partici-
pant or covered dependent may, however, with the Plan Administrator's consent, authorize the Plan Administrator to
pay benefits under the Plan directly to the person or institution on whose charges a claim is based. The Employer
shall be discharged from all liability to the extent of any payment made in accordance with such authorization. No
person shall have any right, title, or interest in, or to, any amount provided under this Plan prior to the payment
thereof to such person or in any property of the Employer.
7.2 No Employment Guarantee. Neither the establishment of the Plan nor any modification thereof, nor
the creation of any fund or account, nor the payment of any benefits shall be construed as giving to any participant or
other person any legal or equitable right against the Employer except as herein provided. No language contained
within the Plan creates a vested right to the benefits offered herein or create a Guarantee of Employment. 12
..,
7.3 Gender and Number. Words denoting the masculine gender shall include the feminine and neutral
genders and the singular shall include the plural and plural shall include the singular wherever required by the con-
text.
7.4 Limitation on Liability. It is expressly understood and agreed by each participant that, except for its or
their willful misconduct or gross neglect, the Employer shall not in any way be subject to any legal liability to any
participant for any cause of reason or thing whatsoever in connection with this Plan, and each participant hereby re-
leases the Employer and its agents from any and all liability or obligation, except as in this section provided and ex-
cept as provided by applicable federal law.
7.5 Participant Litigation. In any action or proceeding involving the Plan, or the administration thereof,
employees or former employees of the Employer or any other person individually having or claiming to have an in-
terest in the Plan shall not be necessary parties to such action or proceeding and shall not be entitled to any notice or
process thereof except as required by applicable law. Any final judgment, which is not appealed or appealable, that
may be entered in any such action or proceeding, shall be binding and conclusive upon the parties hereto and upon
all persons having or claiming to have any interest in the Plan.
To the extent permitted by law, if a legal action is begun against the Employer, or a modified or fully self-funded
program, insurance company, health maintenance organization, or other organization or institution providing benefits
under the Plan, by or on behalf of any person, and such action results adversely to such person or entity; or, if a legal
action arises because of conflicting benefit claims, the costs to the Employer, or such modified or fully-funded pro-
gram, insurance company, health maintenance organization or other organization or institution, of defending the ac-
tion, will be charged to the sums, if any, which were involved in the action or were payable to the participant, cov-
ered dependent or person concerned. To the extent permitted by applicable law, election to become a participant
under the Plan shall constitute a release of the Employer and its agent from any and all liability and obligation that
does not involve willful misconduct or gross neglect.
7.6 Addresses, Notice, Waiver of Notice. Each participant must file with the Plan Administrator, in writing
his/her address of record. Any communication, statement, or notice addressed to such a person at his/her last address
of record, as filed with the Plan Administrator, will be binding upon such person for all purposes of the Plan, and the
Employer shall not be obliged to search for or ascertain the whereabouts of any such person. Any notice required
under the Plan may be waived by the person entitled to notice.
7.7 Data. Each participant or covered dependent must furnish the Employer such documents, evidence, or
information, as the Employer considers necessary or desirable for the purpose of administering the Plan or to protect
the Employer or any modified or fully self-funded program, insurance company, health maintenance organization or
institution providing benefits under the Plan. Evidence required of anyone under the Plan shall be signed, made or
presented by the proper party or parties, and may be by certificate, affidavit, document or other information, which
the person acting thereon considers pertinent and reliable.
7.8 Mistake of Fact. Any mistake of fact or misstatement of fact shall be corrected when it becomes known
and proper adjustment made by reason thereof.
7.9 Withholding for Taxes. Notwithstanding any other provision of the Plan, the Employer or any modified
or fully self-funded program, insurance company, health maintenance organization, or other organization or institu-
tion providing benefits under the Plan, may withhold from any payment to be made under the Plan such amount or
amounts as may be required for purposes of complying with the tax withholding provisions of the Internal Revenue
Code, any state's income tax act or any applicable similar laws.
7.10 Severability. In case any provisions of the Plan shall be held illegal or invalid for any reason, such ille-
gality or invalidity shall not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced
as if such illegal and invalid provisions had never been set forth in the Plan.
7.11 "Spendthrift" Provisions. No benefit under the Plan shall be subject in any manner to anticipation,
pledge, encumbrance, alienation, or assignment, not to seizure, attachment or other legal process for the debts of any
Employee or beneficiary.
13
..;
7.12 Applicable Law. The Plan shall be construed according to the Internal Revenue Code of 1986, Em-
ployee Retirement Security Act of 1974 (ERISA) as amended from time to time and as construed, interpreted and
modified by regulations and rulings promulgated thereunder. The Plan is intended to constitute a Cafeteria Plan
meeting the requirements of Section 125 of the Code. To the extent not inconsistent therewith, the Plan shall be con-
strued according to the laws of the state indicated in Item 5 of the Adoption Agreement.
Supplement A
Child and Dependent Care Reimbursement
Supplemental Benefits Plan
1. Purpose. The purpose of this Supplement is to provide for the reimbursement of certain child and depend-
ent care expenses to participants. This supplement constitutes the child and dependent expense reimbursement plan
ofthe Employer. The benefit provided under this supplement is a "reimbursement benefit".
2. Amount of Benefit. Subject to the conditions and limitations of the Plan, each year each participant may
elect, in writing on a form filed with the Plan Administrator on or before the date he first becomes eligible to partici-
pate in the Plan, and on or before the first day of any plan year thereafter, to be reimbursed from the Employer for
child and dependent care costs (as defined in paragraph 3) incurred during that year by him to the extent that such
costs do not exceed an amount equal to the lesser of:
(a) The total child and dependent care cost paid by the participant and attributable to child and dependent care
services rendered during that plan year, regardless of whether such costs are paid by the participant during such plan
year, or:
(b) The total amount of exclusion cannot exceed twenty six hundred dollars ($2,600) for healthcare, and
for dependent care. Each Participant prior to making this benefit election will be provided a form illus-
trating the choice of salary reductions versus the dependent care credit. The amount of the exclusion shall not ex-
ceed in any taxable year as follows: For a participant who is not married at the close of the taxable year the earned
income of the Participant. For a participant who is married at the close of the taxable year the lesser of the earned
income of such participant or earned income of the spouse for the taxable year.
The Plan Administrator has the duty to explain to the participant the option of utilizing the credit for child and de-
pendent expenses IRC Section 21 versus elections of this Supplemental Benefit Plan option.
3. Costs. The term "child and dependent care costs", as used in the Plan, means amounts paid by the par-
ticipant for child and dependent care for in-house or on-site day care or for at-home day care provided by third par-
ties, which where applicable, meet state law requirements and the qualifications set forth in the Internal Revenue
Code and any rules, regulations, amendments and acts thereof. It is the duty of the participant claiming the exclusion
to report on their tax return the name, address, and taxpayer identification number of the third party provider of de-
pendent care services. If the provider is an IRC 501(c)(3) exempt organization only the provider's name and address
is required to be reported. If these procedures are not followed, the participant may be denied the exclusion from in-
come taxation.
4. Manner of Making Payments. As of the last day of each month, or sooner if elected by the Employer,
the Employer shall reimburse each participant for the portion of the child and dependent care costs that is payable to
him under paragraph 2, provided that the Plan Administrator receives evidence acceptable to it that such child and
dependent care costs have been paid by the participant. At the option of the Employer, the amount reimbursed can
be paid from the trust account established herein or from the Employer's general assets. The claim for payment filed
by the participant shall be in the manner and form provided by the Plan Administrator. For the claim to be reim-
bursed, the participant must provide written substantiation either by a) a third party provider stating the dependent
care expense has incurred and the amount of the expenses, or b) the participant providing a written statement that the
dependent care expense has not been reimbursed and is not reimbursable under any other plan coverage.
5. Period of Coverage. The period of coverage shall be based upon twelve months or if this is the first Plan
Year, the entire short Plan Year.
14
.
6. Nonduplication of Benefits. A participant shall not be reimbursed for child and dependent care cost un-
der this Plan to the extent that such costs are paid to, or for the benefit of, the participant, or to, or for the benefit of,
any individual included in his family unit, under the provisions of any other Plan.
Supplement B
Health Expense Reimbursement
Payment Benefits Under Cafeteria Plan
1. Purpose. The purpose of this supplement is to provide for reimbursement of certain health expenses to
participants. This supplement constitutes the health expense reimbursement plan of the Employer. The benefit pro-
vided under this supplement is a "reimbursement benefit".
2. Amount of Benefit. Subject to the conditions and limitations of the Plan, each year each participant may
elect, in writing on a form filed with the Plan Administrator on or before the date he first becomes eligible to partici-
pate in the Plan, and on or before the first day of any plan year thereafter, to be reimbursed from the Employer for
health care cost (as defined in paragraph 3) incurred during that year with respect to him and to his family unit (as
defined in paragraph 4) to the extent that such cost does not exceed an amount equal to the lesser of:
(a) The total health care cost paid by the participant and attributable to health services rendered during the plan
year and regardless of whether such costs are paid by the participant during such plan year; or
(b) The amount allocated by the participant to this benefit.
The maximum amount of the reimbursement will be available at all times during the period of coverage. Further, the
payment schedule for the benefit shall not be based on the rate or amount of covered claims incurred during the cov-
erage period.
3. Health Care Costs. The term "health care cost", as used in the Plan, means amounts paid by a participant
because of deductible amounts, coinsurance provision of the Employer's health care plan herein incorporated by ref-
erence to the extent that such amount, if paid or reimbursed under such plans, would be excluded from the partici-
pant's taxable income.
In no event shall health care costs include any item which is not included within the meaning of "medical care" as
defmed in Section 213( d) of the Code of the participant and his family unit.
4. Family Unit. The term "family unit," as applied to any participant, means the participant, his spouse, and his
children who are dependents within the meaning of the Employer's health care plan.
5. Manner of Making Payments. As of the last day of each month, the Employer shall reimburse each partici-
pant for the portion of his family unit's health care costs that is payable to him under paragraph 2, provided that the
Plan Administrator receives third party substantiated evidence acceptable to it, which shows that such health care
costs have been paid by the participant or any other member of the family unit and the Plan Administrator receives a
signed statement from the participant that he has not, and will not in the future, deduct such costs as expenses on his
individual federal or state income tax returns.
6. Period of Coverage. The period of coverage shall be based upon twelve months or if this is the first Plan
Year, the entire short Plan Year.
7. Nonduplication of Benefits. A participant shall not be reimbursed for health care costs under this Plan to the
extent that such costs are paid to, or for the benefit of, the participant, or to, or for the benefit of, any individual in-
cluded in his family unit, under the provisions of any other plan.
15
.
Supplement C
Health Insurance Premium Conversion Payment
Supplemental Benefits Plan
I. Purpose. The purpose of this supplement is to provide for premium conversion of group health insurance
premium paid by participants. This supplement constitutes the health premium conversion plan of the Employer.
The benefit provided under this supplement is a "premium payment benefit".
2. Amount of Benefit. Subject to the conditions and limitations of the Plan, each year each participant may
elect, in writing on a form filed with the Plan Administrator on or before the date he first becomes eligible to partici-
pate in the Plan, and on or before the first day of any plan year thereafter, to convert group health insurance premi-
ums paid by the participant on a pre-tax basis for health care cost to the extent that such cost(s) do not exceed an
amount equal to the lesser of:
(a) The total health care premium paid by the participant and attributable to health services rendered during the
plan year; or
(b) The amount allocated by the participant to this benefit subject to the following conditions:
The maximum amount of the reimbursement will be available at all times during the period of coverage. Further, the
payment schedule for the benefit shall not be based on the rate or amount of covered claims incurred during the cov-
erage period.
3. Healtb Care Costs. The term "health care cost", as used in the Plan, means amounts paid by a participant
to obtain coverage under the Employer's health care plan to the extent that said amount, if paid under such plans,
would be excluded from the participant's taxable income. In no event shall health care premium include any cover-
age which is not included within the meaning of "medical care" as defmed in Section 213( d) of the Code of the par-
ticipant and his family unit. The claim for payment filed by the participant shall be in a manner and form provided
by the Plan Administrator. For the claim to be reimbursed, the participant must provide written substantiation either
by a) a third party provider stating the expense has incurred and the amount of the expense or b) the participant pro-
viding a written statement that the expense has not been reimbursed and is not reimbursable under any other cover-
age.
4. Family Unit. The term "family unit", as applied to any participant, means the participant, his spouse, and
his children that are dependents within the meaning of the Employer's health care plan.
5. Manner of Making Payments. As of the last day of each month, the Employer shall convert each partici-
pant premium paid for the family unit's health care coverage. The premium paid to the group carrier can, at the op-
tion of the Employer, be paid directly to the carrier outside of the trust established herein. Only expenses defmed
under IRC Section 213 may be reimbursed under this Supplemental Benefit Plan. Further, only the participants
benefits, costs, as recognized by a Salary Reduction Agreement, may be reimbursed.
6. Period of Coverage. The period of coverage shall be based upon twelve months or if this is the first Plan
Year, the entire short Plan Year.
7. Nonduplication of Benefits. A participant shall reconvert premium for health care costs under this Plan to
the extent that such costs are paid to, or for the benefit of, the participant, or to, or for the benefit of, any individual
included in his family unit, under the provisions of any other plan.
16
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Plan Administrators hereby agrees to maintain, during the term of this Agreement, $1,000,000.00 in General
Liability Insurance, $2,000,000.00 in Professional Liability Insurance, and Workers Compensation Insurance, as
evidenced by certificates delivered to the City of Miami Beach.
8.2 This Agreement shall be binding upon the parties, its successors, and assignees.
8.3 This Agreement shall be interpreted under the laws of the State of Florida. Venue or any action filed pursuant to
this Agreement shall be in Miami-Dade County, Florida.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their appropriate
officials, as of this 29th day of August, 2002
FOR CITY OF MIAMI BEACH, FL
ATTEST:
~4Y
~ faJw-
FOR UNITED GROUP PROGRAMS, INC.
ATTEST:
By:
ri an ~"6lP
ECRE A Y
dJ/!J;6
r~;
CHIEF FINANCIAL OFFICER
DATE
~(b.<5
Address of Record:
CITY OF MIAMI BEACH
1700 CONVENTION CENTER DRIVE, THIRD FLOOR
MIAMI BEACH, FLORIDA 33139
A TfN: Human Resources Department
Address of Record:
UNITED GROUP PROGRAMS, INC.
902 Clint Moore Road, Suite 100
Boca Raton, Florida 33487
A TfN: Allen Stem
.,IICM!DAl1O
fORM aLANGUAGI
aFORIXECU8OII
t)-G-t?V'
... .
17
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
Welcome to United Group Programs, Inc. (UGP), an integrated, global consulting, advisory and administration
organization. With a client base of over 4,300 Worldwide, UGP is a professionally oriented company with over
34 years of experience in employee benefits. UGP is debt-free, bonded and insured and completely dedicated to
the service we provide our clients.
United Group Programs, Inc. is a TP A that brings service to its proper dimension. Between the hours of 9 a.m. and 6
p.m.(EST), all phones are answered by a live voice and within three (3) rings. When someone is unavailable to answer an
incoming call, the call is returned within minutes. Voice mail is available after 6 p.m. in the evening until 9 a.m. the
following day.
Currently, claims are processed within twenty-four hours and have been for approximately two (2) years. Clean claims
are guaranteed to be processed within three (3) business days.
We offer an extensive list of reports to government entities so that they may analyze all aspects of their health care
program, allowing them to make decisions and have insight offered nowhere else. UGP prides itself in keeping it's clients
informed and ready to act.
Online enrollment is available in both English and Spanish. Questions and answers may be handled either by a toll-free
phone call or online by one of our bilingual specialists. Our staff includes people who are experienced in verifying and
explaining benefits and in doing on-site enrollment. In most cases, UGP can use current enrollment material in order to
facilitate the entire enrollment process.
While we pay claims expeditiously, we take great care to avoid the possibility of fraud. Out-of-network claims are
immediately negotiated in an attempt to secure discounts available to networks with which the provider has a relationship.
Normally, when a claim comes in to an insurance company, or TPA, that is just a statement or "balance due" or in some
other way incomplete, the insurance company, or TPA, returns the bill to the employee with instructions for them to
contact the provider of service to get an itemized bill. The employee is often confused and brings this problem to their
supervisor, who then involves the Human Resources Department.
At UGP, we contact the provider and request a fax of the itemized bill in order to process the claim immediately. The
examiner pro actively intercedes to insure prompt servicing of the claim. The employee is not bothered or confused and
no one at work is taken away from the jobs they are paid to perform. This eliminates dunning notices, phone calls to the
employee by the provider and helps insure that the plan runs smoothly for all involved, particularly your Human
Resources Department.
United Group Programs offers pharmaceutical management as well as preferred provider medical and dental programs
throughout the United States. Benefits may be designed in whatever way the client desires and may be stratified by class,
location and length of service. Special arrangements may be made for unique situations involving the most valued
employees.
-
Value is in theform of performance, not salesmanship
United Group Programs, Inc.
902 CUnt Moore Road Suite 100
Boca Raton, FIoridll JJ4B7
(561) 997-9892 . Fax (561) 997-9927
E-mail jone@ ugpinc.com . www.ugpinc.com
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
In addition to our TPA services, we administer the Section 125 Cafeteria Program for over sixty employer groups
encompassing over 13,000 lives. We take a unique approach to our cafeteria administration in that we perform the
discrimination tests monthly, even though IRS rules require that they be run only once per year. We do the tests monthly
so that if any of our clients fail the test, we can move immediately to bring the account into compliance before the annual
testing date.
United Group Programs offers other optional benefits at the worksite in conjunction with the Cafeteria Program when
desired. The products include optional group life insurance, disability, vision, cancer and critical care. Long Term Care
is also available. Professional onsite consultants are available as needed.
United Group Programs, Inc. (UGP) is a privately held Corporation established on January 8, 1968 with no third party
debt. As a result of its privately held nature and absence of debt, UGP has had no requirement to obtain audited financial
statements or provide information to outside agencies to obtain a credit rating. UGP's position since its inception has
been to focus on operations whenever possible and to avoid the additional costs and time involved with making
information about the company public. Our company has been in operation in Georgia for over 20 years. Our stability is
well documented by our banking and customer relationships which we invite any potential customers to investigate.
Client references are provided herein and our long term banking relationship is with Northern Trust Bank of Florida.
Successful Cafeteria Plans
The key to any successful cafeteria plan is the education of all employees on the benefits and general provisions of a
cafeteria plan. An informed employee will understand and see the benefits and will participate in the plan.
United Group Programs has been administering Cafeteria plans since Section 125 of the Internal Revenue Service Code
was established.
United Group Programs Software
Our plans are completely computerized and administered through software developed specifically for Cafeteria plans.
Key reports, separate employee accounts, check registers, required IRS testing as well as other key components of the
administration are handled through this software which is backed up on a daily basis.
Customer Service
An 800# is provided for all employees to call. Experienced bilingual staff are available to answer all questions and
problems immediately. Initial enrollment meetings are recommended and are held at the beginning of the plan to educate
employees on the excellent benefits afforded to cafeteria plan participants.
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Value is in tlleform of performance, not salesmansllip
Ulfited Group Progromr, lnc.
902 Clint Moore RtHIII Srdte 100
Boca Raton, Florida 33487
(561) 997-9892 . Fox (561) 997-9927
E-mail jone@ugpinc.com . www.ugpinc.com
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
Frequently Asked Questions:
How often are claims summaries provided to the employer?
Included with each reimbursement check is a summary of the employee's current standing.
Provide samples of reports that can be regularly provided
How often are these reports provided?
1. Billing statements
2. administrative reports
3. reimbursement reports are provided monthly
4. balance letters are sent to each participant three months prior to the plan year.
13. Please provide a detailed list of your customer service procedures.
Upon receipt of any correspondence via telephone, mail, email or any other form of communication,
one of our customer service representatives takes immediate action to comply with whatever request
has been received. All of our staff are trained to closely scrutinize all matters and bring anything to the
attention of a supervisor should such involvement be necessary.
Our Section 125 staff is trained to diligently scrutinize all reimbursement claims and brings any
questionable submission immediately to the attention of a supervisor. Our staff closely examines all
claims in order to check for duplicate claims and to insure that all claims are eligible under the IRS
Section 125 code. In the event that any claims are ineligible our staff contacts the employee directly
and offers whatever guidance they may require in order to modify or resubmit the claim in such a way
that it is eligible for reimbursement. We also perform discrimination tests monthly despite the IRS
requirements that they be done annually. This is so that we can identify any client who does not meet
the requirements and can offer assistance and consultation as to what they can do to get back into
compliance.
Will UGP accept questions via email.
Yes, (24) twenty four hours a day.
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Value is in theform of performance, not salesmanship
United Group Programs, l"c.
902 ailll Moore Road Suite 1(}()
Boca Rato", Ftorldll JJ4B7
(561) 997-9B92 . Fax (561) 997-9927
E-mail jone@ugpinc.com.WWIII.ugpinc.com
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
Cost Proposal
United Group Programs has proposed (3) three Cafeteria Plans
1) UGP's Business Choice One Cafeteria Program
2) UGP's Miami Beach Premium Cafeteria Program
3) A Premium Only Plan
United Group Pro2rams Business Choice One Cafeteria Pro2ram
Cost Per Participant Per Month: 54.95.
United Group Programs administers this program for all of it's cafeteria administration clients. These clients, located
across the world, find no problem with contacting United Group Programs during normal business hours of 9:00 a.m. to
6:00 p.m. Eastern Standard Time. When the City of Miami Beach's employees contact UGP, unlike other Cafeteria
Administrators, a live person will answer the phone and assist them. Call times can take less than a minute. Employees
can easily handle any Cafeteria related question during their lunch break due to the fast and efficient service ofUGP, and
UGP's live customer assistance. We recommend this choice to Miami Beach, because this plan offers the most value,
while not including the frills in the requested plan, such as late hours, Braille documents when the city has no blind
employees, etc., which would most likely never be utilized, but which would cost the city and/or the employees
additional. I
9 hour workday. 9:00 a.m. to 6:00 p.m. EST
Bilingual Specialists
Online Reporting
8 Free Reports
5500 Forms Prep
Email communication
I Meeting Per Month for Enrollment
1 Other Cafeteria Meetings.
(800) Toll Free Number
Mailings to the Employees Residence
Plan Booklet to Employer
Certificate to Employees
Discrimination Testing
Letters to FSA participants to prevent forfeiture.
Setup: $3,500
Subsequent Years: $3,500 per year
Cost Per Participant Per Month: $4.95.
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Value is in tlleform of performance, not salesmanship
United Group ProgranIs, Inc.
902 CUnt Moore Rood Suite 100
Boca Raton, Florida 33487
(561) 997-9892 . Fax (561) 997-9927
E-mail jone@ugpinc.com . www.ugpinc.com
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
Any services not listed would not be included within the cost of the Choice One Program, unless United Group Programs
could furnish the service for no charge, except for a Bank Account for the Cafeteria Program.
United Group Proerams Premium Full Flex Plan
United Group Programs will conform to all the requirements of the City of Miami Beach's plan.
Cost:
Setup $3,500
Subsequent Years Setup: $3,500 per year.
Cost Per Participant Per Month: $19.00.
United Group Proerams Premium Onlv Plan
This plan can be selected separately as a stand alone service.
No meetings.
Cost Per Participant Per Month: $0.55
Setup Fee: $500
Subsequent Years Setup: $500 per year.
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Value is in tlleform of performance, not salesmanship
United Group Progranu, Inc.
902 CUnt Moore Rood Suite 100
Boca Raton, Florida 33487
(561) 997-9892 . Fax (561) 997-9927
E-mail jone@ugpinc.com . www.ugpinc.com
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
REFERENCES
American Welding Society
550 NW Lejune Rd.
Miami, FL 33126
800-443 -93 53
Luisa Hernandez
HELP, Inc.
2300 Corporate Blvd.
Suite 232
Boca Raton, FL 33431
Laura Flannery
561-997-2325
Continental Farms
1800 NW 89th Place
Miami, FL 33172
1-800-877-4065
Marciel Cros
Oconee County Board of Commissioners
Post Office Box 145
Watkinsville, GA 30677
(706) 769-3938/ Mallinda Smith
Madison County
Post Office Box 147
Danielsville, GA 30633
(706) 795-5664/ Morris Fortson
Pennsbury School District
134 Yardley Avenue
Fallington, PA 19058
(215) 428-4140 / Linda Jones
Atlantic Container Line
194 Wood Ave. S. Ste. 500
Iselin, NJ 08830-4120
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Value is in tJreform of performance, not salesmanship
United Group Programs, Inc.
901 CIinI Moore ROIUl Suite 100
Boca Raton, Rorlda 33487
(561) 997-9891 . Fax (561) 997-9917
E-mail jone@ugpine.eom . www.ugpinc.eom
Employees Health Insurance Benefits
City of Miami Beach
Section 125 Cafeteria Plan
732-452-5451
Anne Marie Beyer
David Plummer & Associates
1750 Ponce De Leon Blvd.
Coral Gables, FL 33134
Rosemarie Rodriguez
305-447-0900
Magnum Communications
280 Interstate North Pkwy
Suite #520
Atlanta, GA 30339
Scherer! Bio Systems
120 Interstate North Pkwy
Suite #305
Atlanta, GA 30339
Debra Poston
770-933-1800
Pro Band International
1900 West Oak Circle
Marietta, Ga 30062
Mueshe Pandya
770-423-7072
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Value is in tlleform of performance, not salesmansllip
Unita Group Progroms, lnc.
902 Clint Moore Road Suite 100
Boca Raton, Floridll33487
(561) 997-9892 . Fax (561) 997-9927
E-maitjone@ugpinc.com . www.ugpinc.com