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HomeMy WebLinkAboutRes 61-85 12/17/1985 ~ /¡)r ~, .,;;..' . ... . c-" RESOLUTION NO. 61-85 A RESOLUTION AMENDING RESOLUTION NO. 39-85 APPROVING AND AUTHORIZING A FLEXIBLE COMPENSATION PLAN FOR EMPLOYEES OF THE VILLAGE OF MOUNT PROSPECT WHEREAS, pursuant to provísíons of the Internal Revenue Code there has been submítted to the Mayor and Board of Trustees of the Víllage of Mount Prospect a certaín plan entítled IIVíllage of Mount Prospect Flexíble Compensatíon Planll to províde for payment of premíums of Víllage employees for the Medícal Plan of the Village of Mount Prospect; and WHEREAS, the Mayor and Board of Trustees díd pass Resolution No. 39-85 adoptíng said IIVíllage of Mount Prospect Flexíble Compensation Planll; and WHEREAS, the Mayor and Board of Trustees of the Village of Mount Prospect have determíned that ít would be ín the best ínterest of the Village to amend the IIVillage of Mount Prospect Flexíble Compensation Planll, whích amendment would permit employees of the Víllage an opportuníty to have a choice ín theír benefit program to include medícal and life insurance coverages, and health care and dependent care reímbursement accounts. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: The IIVillage of Mount Prospect Flexíble Compensatíon Pl anll ís hereby amended to ínclude addítíonal choices of medícal and lífe ínsurance coverages, and health care and dependent care reímbursement. SECTION TWO: The Mayor and Clerk of the Village of Mount Prospect are hereby authorízed to execute the IIVillage of Mount Prospect Flexíble Compensatíon Planll as amended and attached hereto as Exhíbit IIAII, whích amendment being the subject of thís Resolutíon shall be effectíve February 1, 1986. SECTION THREE: That this Resolutíon shall be ín full force and effect Trom and after its passage and approval ín the manner províded by law. AYES: Arthur, Farley, Murauskis, Van Geem NAYS: None ABSENT: Floras, Wattenberg PASSED and APPROVED thís 17th day of December , 1985. ATTEST: L~~kclerk ~ JI J{~ rarolyn . Krause, Mayor -'- c.~ Initial Draft Prepared by A. S. Hansen, Inc. for Review by Legal Counsel VILLAGE OF MOUNT PROSPECT FLEXIBLE COMPENSATION PLAN As Amended and Restated Effective: February 1, 1986 REj,olu-b'o¡) £. (P/..9~ PREAMBLE ARTICLE I ARTICLE I I ARTICLE II I ARTICLE IV ARTICLE V n f1 I VILLAGE OF MOUNT PROSPECT FLEXIBLE COMPENSATION PLAN Table of Contents Purpose 1.1 - Purpose 1.2 - Legal Status 1.3 - Definitions 1.4 - Construction Eligibility for Participation Salary Conversion for Participants 3.1 - Flexible Dollars 3.2 - Salary Exchange Spending Flexible Dollars 4.1 - Benefit Areas Where Flexible Dollars Can Be Applied 4.2 - Medical Plan 4.3 - Additional Life Insurance 4.4 - Health Care Reimbursement 4.5 - Dependent Care Assistance Plan 4.6 - Accounts 4.7 - How Flexible Dollars Are Maintained Hereunder 4.8 - Internal Revenue Service Approval 4.9 - Termination of Participation Administration 5.1 - Plan Administrator 5.2 - Powers and Duties of the Plan Administrator 5.3 - Medical Plan 5.4 - Claims Procedure 5.5 - Availability of Plan Details 5.6 - Participant's Statements 5.7 - Rules and Decisions 5.8 - Plan Administrator Procedurer 5.9 - Indemnification of the Plan Administrator 5.10- Committee 5.11- Facility of Payment Page No. 1 1 2 2 3 4 4 6 6 6 6 7 7 8 8 8 10 10 11 12 13 13 13 13 14 14 14 ARTICLE VI ARTICLE VI I ARTICLE VIII n n VILLAGE OF MOUNT PROSPECT FLEXIBLE COMPENSATION PLAN Table of Contents (cont'd) Miscellaneous 6.1 - Nonguarantee of Employment 6.2 - Rights to Employer's Assets 6.3 - Nona1ienation of Benefits 6.4 - Divestment of Benefits Amendments and Action By Employer 7.1 - Amendments 7.2 - Action by Employer Plan Termination 8.1 - Right to Terminate 8.2 - Plan Termination Page No. 15 15 15 16 17 17 18 18 n Q, PREAMBLE The purpose of this document is to set forth the flexible compensation plan of the Village of Mount Prospect. The plan is designed to provide employees an opportunity to have a choice in their benefit programs. The choices established in this plan include medical and life insurance coverages, and health care and dependent care reimbursement accounts. The plan was initially implemented effective July 1, 1985. The plan is hereby amended and restated by the Village effective February 1, 1986, to expand its employees' choice-making opportunities. n A ARTICLE I Purpose and Definitions 1.1 Purpose: The purpose of this legal instrument is to set forth the amended and restated flexible compensation plan of the Village of Mount Prospect (I'Empl oyer") hereinafter call ed the uPl an". This Plan is effective on January 1, 1986, and is applicable to all the Employees, as defined herein, of the Employer. This Plan does not apply to any Employee who was terminated prior to February 1, 1986, unless such Employee becomes reemployed by the Employer on or after such date. Employees of the Employer who are eligible to participate in the Medical Plan and who are on the Employer's payroll as of February 1,1986, are eligible, as defined herein, for the benefits of this Plan. Employees hi red on or after February 1,1986, may become eligible for benefits under this Plan as described in Section 2.1. 1.2 Legal Status: This Plan is a "cafeteria plan" under Section 125 of the Code. The Plan will be "nondiscriminatory" as such term is used in Section 125 of the Code and the Employer will take whatever steps are necessary to maintain the Plan as unondiscriminatory" under said Section 125. The steps the Employer will take may include, but are not limited to, a change in the method of determining the Participant's salary conversion created by the Plan and/or the method of all ocati ng the el ected benefits to i ndi vi dual Parti cipants. addition, this Plan shall operate in such a manner that the "statutory In nontaxable benefits" (as defined in Section 125(f) of the Code} provided hereunder to "key employees" (as defined in Section 416(i)(l) of the Code) shall not exceed 25 percent of the aggregate of such benefits provided to all Participants under the Plan. 0581L:12/85 1 £\ ,. , -' 1.3 Definitions: The following words when appearing in this Plan have the meanings set forth below unless the context clearly denotes otherwise: (a) Annual Base Salary: For any Plan Year, an Employee's annual rate of base compensation determined as of December 1 of the previous calendar year (or as of his date of hire if he was hired during December of the previous calendar year), prior to any conversion to Flexible Dollars, disregarding overtime pay, bonuses, and any other additional forms of compensation. (b) Board: Prospect. (c) Code: The Internal Revenue Code of 1954, as amended from time to time. The Village Board of the Village of Mount (d) Committee: The persons appointed to assist the Plan Administrator in the administration of the Plan. (e) Effective Date: February 1,1986. (f) Employee: Any person employed or compensated for services by the Employer on a regular, full-time basis. (g) Employer: The Village of Mount Prospect, a municipality organized and existing under the laws of the State of Illinois. (h) Flexible Dollars: The dollar credits made available to a Participant under this Plan by the Employer in exchange for certain compensation of a Participant, determined in accordance with Article III hereof. (i) Participant: An Employee of the Employer who is eligible to participate in this Plan in accordance with Article II hereof. (j) Plan: The Village of Mount Prospect Flexible Compensation Plan as it may be amended from time to time. (k) Plan Administrator: The person(s} appointed to administer the Plan in accordance with Article V. (l) Plan Year: The twelve (12) month period beginning on January 1st and ending December 31st; except that the first Plan Year for this amended and restated Plan shall be the period beginning on February 1, 1986 and ending December 31, 1986. 1.4 Construction: The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender; the singular may include the plural; and vice versa unless the context clearly indicates to the contrary. 0581L:12/85 2 f'.4 ARTICLE II Eligibility for Participation An individual who is an Employee of the Employer, who is on the Employer's payroll and who is eligible to participate in the Medical Plan of the Employer on the Effective Date will become a Participant on the Effective Date. An individual who is an Employee of the Employer who does not become a Participant on the Effective Date, or who becomes an Employee after the Effective Date will become a Participant on the date such Employee becomes eligible to participate in the Medical Plan of the Employer. If a Participant no longer meets the requirements for eligibility in the Medical Plan of the Employer for any reason but is still working for the Employer, then all salary conversion shall cease as of such date. 0581L:12/85 3 f\ ART! CLE II I Sources of Flexible Dollars for Participants 3.1 Flexible Dollars: For eligible Participants, there is one potential This article explains this source and how it is source of Flexible Dollars. allocated for the Participants' use. 3.2 Salary Exchange: Each Participant may elect Flexible Dollar credits prior to any Plan Year in lieu of a certain specified dollar amount of the Annual Base Salary otherwise available to such Participant for such Plan Year, equa 1 to: (a) the premium amounts, if any, required from the Participant for coverage under the Medical Plan of the Employer and for the additional life insurance coverage, if any, elected by the Participant; plus (b) the contribution amounts, if any, elected by the Participant for allocation to such Participant's Health Care Expense Account under the Health Care Reimbursement Plan and Dependent Care Expense Account under the Dependent Care Assistance Plan, provided, however, that the amount of Annual Base Salary so exchanged for contribution to such Participant's Health Care Expense Account shall not exceed $7,500 (or, if less, the Participant's Annual Base Salary), and further that the amount of salary so exchanged for contribution to such Participant's Dependent Care Expense Account shall not exceed $5,000 (or, if less, the Participant's Annual Base Salary). If a Participant elects to exchange Annual Base Salary for Flexible Dollars, such Participant shall be credited with Flexible Dollars equal to the amount of Annual Base Salary so exchanged. Any Participant who elects additional life insurance coverage must elect to exchange Annual Base Salary to pay premiums for such coverage. The procedures for making such election, including the timing and duration thereof, shall be determined by the Plan Administrator. Elections for a Plan Year shall be irrevocable for that Plan Year, except that an election to exchange Annual Base Salary for Flexible 0581 L: 1 2/85 4 r'\ " Dollar credits may be modified (or newly elected) on account of and consistent with a change in family status. A change in family status means, for example, the Participant1s marriage, divorce, death of the spouse or a child, birth or adoption of a child, and termination of employment of the spouse. 0581L:12/85 5 n¡ -" ARTICLE IV Spending Flexible Dollars 4.1 Benefit Areas Where Flexible Dollars Can Be Applied: In general, Flexible Dollars can be used to provide benefits in accordance with Sections 4.2 through 4.5 hereof. 4.2 Medical Plan: For any Plan Year, each Participant who has so elected may use Flexible Dollars created for such purpose to pay for all (or part) of the Participant's coverage premiums falling due on or after the Effective Date under the Medical Plan maintained by the Employer for its Employees. A Participant who elects medical coverage for a Plan Year shall be deemed to have elected the same coverage for the next subsequent Plan Year, unless such Participant specifically elects different coverage (or no coverage) before the start of such next subsequent Plan Year. 4.3 Additional Life Insurance: For any Plan Year, each Participant who has so elected may use Flexible Dollars created for such purpose to pay premiums for Additional Life Insurance coverage during such Plan Year, in $10,000 coverage increments up to an aggregate coverage amount, in conjunction with coverage provided directly by the Employer, equal to $50,000. 4.4 Health Care Reimbursement Plan: For any Plan Year, each Participant who has so elected may use Flexible Dollars created for such purpose to provide reimbursement for qualifying expenses for services incurred during such Plan Year through his or her Heatlh Care Expense Account under the Health Care Reimbursement Plan. 0581 L : 1 2/85 6 4.5 Dependent Care Assistance Plan: For any Plan Year, each Participant who has so elected may use Flexible Dollars created for such purpose to provide reimbursement for qualifying expenses for services incurred during such Plan Year through his or her Dependent Care Expense Account under the Dependent Care Assistance Plan. 4.6 Accounts: Flexible Dollars to be applied to provide benefits under the Heath Care Reimbursement Plan or the Dependent Care Assistance Plan (the "component plans") shall be provided (respectively) through the Health Care Expense Account and the Dependent Care Expense Account. A Participant who desires reimbursement for eligible expenses under such component plans shall designate a specific amount of Flexible Dollars to be allocated to his or her Health Care Expense Account or Dependent Care Expense Account (or to each such Account), not to~xceed the-maximum provided in Article III for each such Account. The Health Care Expense Account and Dependent Care Expense Account shall each be credited as of the first day of the Plan Year with an amount equal to the full amount of Flexible Dollar credits the Participant has created for each such Account for that Plan Year. Whenever a Participant requests a benefit payment under either of the component plans, the Employer shall make such payment to the extent that such Participant's Account has sufficient Flexible Dollar credits remaining to provide such benefit payment or payments. In order for a Participant to be reimbursed from any of his or her Accounts for an expense covered under the corresponding component plan, the Participant must submit a reimbursement claim to the Plan Administrator on forms furnished by the Plan Administrator for such purpose. All such claims shall be subject to the Plan Administrator's approval. If such Participant's appropriate Account contains a balance which is insufficient to provide all benefit payments requested, the 0581L:12/85 7 ~'---'-'---_. . n () _..' Plan Administrator may consult with the Participant in making such determination. All requests for benefit payments shall be in accordance with Section 5.3 hereof. Amounts allocated to a Participant's Health Care Expense Account or Dependent Care Expense Account may only be used to reimburse expenses under the component plan which corresponds to such Account. Amounts allocated to one account may. not be used to pay expenses under a component plan which corresponds to another Account. Each Participant who does not designate a specific dollar amount for an Account shall not be permitted to obtain reimbursement for expenses under the corresponding component plan. Amounts allocated to an Account by a Participant for a Plan Year may be used to reimburse such Participant only for claims for covered expenses incurred during that Plan Year. Amounts in an Account not used to pay claims during that Plan Year shall be forfeited. 4.7 How Flexible Dollars Are Maintained Hereunder: No actual funds or assets shall be maintained under this Plan, the Health Care Expense Account, the Dependent Care Expense Account, or under any of the Plans reference herein where Flexible Dollars can be spent. A record of a Participant's Flexible Dollar credits and expenditures shall be maintained by the Plan Administrator. 4.8 Internal Revenue Service Approval: The use of an option, if any, under this Plan may, at the discretion of the Committee, be contingent upon approval of the Internal Revenue Service. 4.9 Termination of Participation: In the event a Participant no longer satisfies the eligibility requirements of this Plan for any reason (termination of service, death, disability, retirement, layoff, unpaid leave of absence, transfer to part-time status), any Flexible Dollar amounts which have been elected but have not yet accrued under this Plan for the current 0581L:12/85 8 ~ year will not be payable to (or on behalf of) such Participant or his beneficiary. The Participant's salary exchange hereunder shall terminate as of the date such Participant becomes ineligible to participate in this Plan. Any credit balances of amounts of Flexible Dollars actually accrued remaining to the Participant's credit in his or her Health Care Expense Account or Dependent Care Expense Account after deduction for all reimbursements of eligible claims shall remain therein for the remainder of the Plan Year and the Participant shall be permitted to submit claims against such balance(s}. Any amounts remaining in such Amounts after all claims for the Plan Year have been submitted shall be forfeited. If, upon termination of participation, reimbursements from the Participant's Accounts are greater than the Flexible Dollars accured in such Accounts, the net amount of such excess shall be recovered from the Participant (or his or her beneficiary) either in cash or as a setoff against any remaining wages, accrued vacation pay, or other monies due and owing to the Participant (or his or her beneficiary) by the Employer. Any attempt by the Participant to defraud the Plan will be considered an attempt to defraud the Employer. 0581L:12/85 9 ~ ARTICLE V Administration 5. 1 Plan Administrator: The Employer or such person(s} as the Employer designates shall be the Plan Administrator. The Plan Administrator shall have overall responsibility for the administration of this Plan and any decisions made in accordance herewith shall be final and conclusive on all Employees, spouses and their dependents. The Board may change or modify this responsibility in its sole discretion. All usual and reasonable expenses of the Plan Administrator may be paid in whole or in part by the Employer and any expenses not paid by the Employer shall not be the responsibility of the Plan Admi ni strator. The Plan Administrator or any other designated representativ~of ~- the Employer who is an Employee of the Employer shall not receive any compensation with respect to services hereunder except as such person may be entitled to benefits under this Plan. 5.2 Powers and Duties of the Plan Administrator: The Plan 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 questions 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 manner as the Plan Administrator determines to be appropriate, information explaining the Pl an; (d) to receive from the Employer and from Participants such information as shall be necessary for the proper administration of the Pl an; 0581L:12/85 10 ð n ./ (e) to furnish the Employer, upon request, such annual 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 necessary) reports of benefit payments by the Employer and reports of di sburse- ments for expenses; (g) to exercise such authority and responsibility as it deems appropriate in order to comply with the terms of the Plan relating to the records of the Participants and the balances which are payable under this Plan; and (h) to appoint individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal and actuarial counsel. In exercising these powers and duties, the Plan Administrator may rely upon any direction, information or action of another Employee of the Employer, and is not required under this Plan to inquire into the authority of any such di recti on, information or action. It is intended under this Plan that the Plan Administrator shall be responsible for the proper exercise of its own powers, duties, responsibilities and obligations under this Plan and shall not be responsible for any act or failure to act of another Employee of the Employer. Neither the Plan Administrator nor the Employer makes any guarantee to any Employee in any manner for any loss or other event because of the Employee's participation in this Plan. The Plan Administrator shall have no power to add to, subtract from or modify any of the terms of the Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under the Plan. 5.3 Medical Plan: Administration of, and payment of claims arising under the Medical Plan of the Employer shall be in accordance with the procedures set forth in such Medical Plan, and the provisions of this Plan shall not apply. 0581L:12/85 11 n 5.4 Claims Procedure: As indicated in Section 4.7 hereof, the Plan Administrator shall establish procedures to be followed in connection witha Participant's claims for reimbursement from his or her Health Care Expense 'I , Account or Dependent Expense Account maintained hereunder. In the event a Participant has a claim for any benefits under this Plan, then such Participants shall file a claim with the Plan Administrator on a form or forms provided for such purpose. Claims submitted to be paid out of a Participant's Account(s) totalling at least twenty-five dollars ($25.00) may be submitted at any time during the Plan Year; provided, however, that a Participant may submit claims totalling less than twenty-five dollars ($25.00) at any time after December 1 of each Plan Year. Payment of claims shall be made directly to the Participant, subject to the provisions of Section 5.11 hereof if applicable, and shall not be made directly to the provider of any of the services provided for hereunder or under any of the component plans. If the Participant fails to file a claim for benefits, then the Plan Administrator may take whatever steps are necessary and proper to dispose of unpaid benefits under this Plan. Prior to making any payment of benefits hereunder, the Plan Administrator may require the Participant to provide such information and the completion of appropriate documents or forms necessary for the proper administration of this Plan. The Plan Administrator may rely upon all such information furnished it, including the Participant's current mailing address. Further, the Plan Administrator may also request that the Participant file all appropriate claims and requests for payment from any other plan or plans maintained by the Employer prior to making of any payments under this Plan. The Plan Administrator may also include the requirement that the Participant file all appropriate claims and requests for payment with any insurance carrier which has the responsibility for making any benefits payments under any plans maintained by the Employer. 0581L:12/85 12 0 --.../' The Plan Administator shall make all determinations as to the right of any person to a benefit under this Plan. Any denial by the Plan Administrator of the claim for benefits under the Plan by a Participant shall be stated in writing by the Plan Administrator and delivered or mailed to thè Participant; and such notice shall set forth the specific reasons for the denial, written to the best of the Plan Administrator's ability in a manner that may be understood without legal counsel. In additon, the Plan Administrator shall afford a reasonable opportunity to any Participant whose claim for benefits has been denied for a review of the decision denying the claim. 5.5 Availability of Plan Details: The Plan Administrator has made and shall conti nue to make avail able descripti ve material s to' Parti cipants concerning how the Plan operates including the process by which benefits are payable. 5.6 Participant's Statements: At least once each year, the Plan Administrator shall provide to each Participant a statement of his participation under the Plan for the prior Plan Year. Such statement will be in writing, in a form to be prescribed by the Plan Administrator, and shall show the amounts paid or expenses incurred by the Employer under the Plan on behalf of the Participant during the prior Plan Year. 5.7 Rules and Decisions: The Plan Administrator may adopt such rules and procedures as it deems necessary, desirable or appropriate. All rul es and decisions of the Plan Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information furnished by a Participant, the Employer or the legal counsel of the Employer. 5.8 Plan Administrator Procedure: The Plan Administrator may act at a The Plan Administrator may adopt such meeting or in writing without a meeting. bylaws and regulations as it deems desirable for the conduct of its affairs. 0581L:12/85 13 n 5.9 Indemnification of the Plan Administrator: The Plan Administrator shall be indemnified by the Employer against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto. 5.10 Committee: The Plan Administrator shall be assisted in its administration of the Plan by the Committee. The Committee shall be responsible for such assistance, and shall have such powers and duties as are delegated to it by the Plan Administrator. 5.11 Facility of Payment: Whenever, in the opinion of the Plan Administrator, a person entitled to receive any payment of a benefit or installment thereof hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage the person's financial affairs, the Plan Administrator may direct the Employer to make payments to such person or to the 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 Employer to apply the payment for the benefit of such person in such manner as the Plan Administrator considers advisable. Any payment of a benefit or installment thereof in accordance with the provisions of this Section shall be a complete discharge of any liability for the making of such payment under the provisions of the Plan. 0581 L : 12/85 14 ARTICLE VI Miscellaneous 6.1 Nonguarantee of Employment: Nothing contained in this Plan shall be construed as a contract of employment between the Employer and any Employee, or as a right of any Employee to be continued in the employment of the Employer, or as a limitation of the right of the Employer to discharge any of its Employees, with or without cause. 6.2 Rights to Employer's Assets: No Employee or beneficiary shall have any right to, or interest in, any assets of the Employer upon termination of employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable 'under the Plan to such----- Employee or beneficiary. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Employer and the Plan Administrator shall not be liable therefor in any manner. 6.3 Nonalienation of Benefits: Benefits payable under this 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, prior to actually being received by the person entitled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable hereunder, shall be void. The Employer shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder. 0581 L: 12/85 15 r'\ 'I) 6.4 Divestment of Benefits: Subject only to the specific provisions of this Plan, nothing shall be deemed to divest a Participant of a right to the benefit to which the Participant becomes entitled in accordance with the provisions of this Plan. -,-,- ---,. .",-...- '-', ,- 0581L:12/85 16 ~-- ~- r\ ~ ARTICLE VI I Amendments and Action By Employer 7.1 Amendments: The Employer reserves the right to make from time to time any amendment or amendments to this Plan, including, but not by way of limitation, any amendment it determines necessary or desirable, with or without retroactive effect, to comply with Federal. State or local law. 7.2 Action by Employer: Any action by the Employer under this Plan may be by resolution of its Board, or by any person or persons duly authorized by resolution of said Board to take such action. 0581L:12/85 17 '. ; ~ n j ARTICLE VII I Plan Termination 8.1 Right to Terminate: In accordance with the procedures set forth in this Section, the Employer by action of the Board may terminate the Plan at any time. In the event of the dissolution, merger, consolidation or reorganization of the Employer, the Plan shall terminate unless the Plan is continued by a successor to the Employer in accordance with a resolution of its governing board. 8.2 Plan Termination: Upon the termination of the Plan, the rights of all Participants affected thereby shall become payable as the Plan Admi ni strator may di recto Such direction may include a distribution of the balance remaining to the Participant's credit, after payment of any expenses properly chargeabl e thereto. 0581L:12/85 18 :~\ IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing instrument comprising the Village of Mount Prospect Flexible Compensation Plan, VILLAGE OF MOUNT PROSPECT has caused its corporate seal to be affixed hereto and these presents to be duly executed in its name and behal f by its proper officers thereunto authorized thi s 1M dày of 7J ¡¿C!.-/?!1 8 Et:. , 1985. VILLAGE OF MOUNT PROSPECT ATTEST: e~'1~ Jl t:~ President ~JY~ Vi11 age Cl erk (VILLAGE SEAL) 0581L:12/85 23 ~ VILLAGE OF MOUNT PROSPECT HEALTH CARE REIMBURSEMENT PLAN EFFECTIVE FEBRUARY 1, 1986 Purpose: This document is for the purpose of creating a medical reimbursement plan of the Village of Mount Prospect (hereinafter referred to as the "Employer"). The written plan, which shall be known as the Village of Mount Prospect Health Care Reimbursement Plan (hereinafter called the "Planll), is for the exclusive benefit of the eligible Employees of the Employer or their spouses or dependents and will provide such persons with specific benefits consisting of personal medical services as defined herein. Such Plan is established in connection with, and to form a part of, the Village of Mount Prospect Flexible Compensation Plan (hereinafter called the "Flexible Compensation Plan"). Whenever the masculine is used herein it shall also be construed to include the feminine. This Plan is intended to meet the requirements of Section 105(h) of the Internal Revenue Code of 1954 as amended from time to time. Effective Date: This Plan is effective on February 1,1986, or at the discretion of the Employer, upon approval of this Plan by the Internal Revenue Service. This Plan shall terminate on the date specified by the Employer by a resolution duly adopted. Plan Year: The twelve-month period commencing on January 1 and ending on December 31; except that the first Plan Year for this Plan shall be the period beginning on February 1, 1986 and ending December 31, 1986. \ 0862L:12/2/85 1 " ~ El i gi bil i ty: Each Employee of the Employer who is covered by the Flexible Compensation Plan is eligible for benefits hereunder. Health Care Expense Account: During enrollment in the Flexible Compensation Plan for each Plan Year, each Participant who desires reimbursement for health-related expenses must designate a specific dollar amount to be allocated to such Participant's Health Care Expense Account under the Flexible Compensation Plan. The maximum amount which a Participant may allocate to his Health Care Expense Account for a Plan Year shall be the dollar amount for such Plan Year set forth in Section 3.2 of the Flexible Compensation Plan. Each Participant who does not designate a specific dollar amount to his Health Care Expense Account during enrollment shall not be permitted to obtain reimbursement for health-related expenses during the Plan Year. Amounts allocated to a Participant's Health Care Expense Account fora- Plan Year may be used to reimburse such Participant only for claims based on health-related expenses incurred during that Plan Year. Amounts in such Participant's Health Care Expense Account not used to pay claims during that Plan Year will be forfeited. Covered Expenses Reimbursable: Any health-related expenditures incurred on or after the Effective Date hereof which meet the criteria for deduction as a medical expense under Section 213 of the Internal Revenue Code of 1954, as amended from time to time (without regard to any percentage limitation contained therein) will be eligible for reimbursement to the extent the Employee has Flexible Dollar credits available in his medical reimbursement account under the Flexible Compensation Plan. Reimbursement will be available for vision and hearing care, medical and dental expenses over the current medical plan and dental plan coverage, and prescription drug reimbursement. Expenses paid by the Employer's medical plan or dental plan, an HMO, or any other group or insured medical/dental program are not reimbursable under this Plan. 0862L:12/2/85 2 General: For the purposes of this Plan, where the term IIdependent" is used, the term has the same meaning as provided by Section 152 of the Internal Revenue Code. Any payments of benefits from the Plan shall be made solely from the general assets of the Employer. This Plan shall not be funded in any way. The Employer or such person(s) as the Employer designates shall be the Plan Administrator. The Plan Administrator shall have overall responsibility for the administration of this Plan and any decisions made in accordance herewith shall be final and conclusive on all Employees, spouses and their dependents. The Plan Administrator shall be indemnified by the Employer against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurred in the defense of any claim relating thereto. 0862L: 1 2/2/85 3 IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing instrument comprising the Village of Mount Prospect Health Care Reimbursement Plan, VILLAGE OF MOUNT PROSPECT has caused its corporate seal to be affixed hereto and these presents to be duly executed in its name and behalf by its proper officers thereunto authorized as of the day and year first above written. VILLAGE OF MOUNT PROSPECT ATTEST: ~~c/ Vd.v /l. Ä c+ Ii 1~ President Vi 11 age Cl erk - , 0862L:12/2/85 4 VILLAGE OF MOUNT PROSPECT DEPENDENT CARE ASSISTANCE PLAN EFFECTIVE FEBRUARY 1, 1986 Purpose: This document is for the purpose of creating a dependent child care assistance plan of. the Village of Mount Prospect (hereinaft~r referred to . . as the II Emp1 oyer"). The written plan, which shall be known as the Village of Mount Prospect Dependent Care Assistance Plan (hereinafter called the "Plan"), is for the exclusive benefit of the eligible Employees of the Employer or their spouses or dependents and wnl provide such persons with specific benefits consisting of dependent care assistance as defined herein. Such Plan is established in connection with, and to form a part of, the Village of Mount Prospect Flexible Compensation Plan (hereinafter called the "Flexible ---- .._.. - Compensation Plan"). Wherever the masculine is used herein it shall also be construed to include the feminine. This Plan is intended to meet the requirements of Section 129 of the Internal Revenue Code of 1954 as amended from time to time. Effective Date: This Plan is effective on February 1 ~ 1986~ or~ at the discretion of the Employer~ upon the approval of this Plan by the Internal Revenue Service. This Plan shall terminate on the date specified by the Employer by a resolution duly adopted. Plan Year: The twelve-month period commencing on January 1 and ending on December 31; except that the first Plan Year for this Plan shall be the period beginning on February 1,1986 and ending December 31,1986. 0862L:12/2/85 1 n ,A 1 Nondiscrimination: Neither the contributions to nor the benefits provided under this Plan by the Employer shall in any way discriminate in favor of Employees who are officers, shareholders, or highly compensated. Further, not more than twenty-five percent (25%) of the amounts contributed to this Plan during any Plan Year may be provided for the class of individuals who are shareholders or owners (or their spouses or dependents) each of whom (on any dqy of such Plan Year) owns more than five percent (5%) of the stock or of the capital or profits interest of the Employer. Definition of Terms: A capitalized term shall have the same meaning as herein defined and as defined in the Employer's Flexible Compensation Plan. El i gi bi 1 i ty: Each Employee of the Employer who is covered by the v Flexible Compensation Plan is eligible for benefits hereunder. Dependent Care Expense Account:' During enrollment in the Flexible Compensation Plan for each Plan Year, each Participant who desires reimbursement for dependent care expenses must designate a specific dollar amount to be allocated to his Dependent Care Expense Account under the Flexible Compensation Plan. The maximum amount which a Participant may . ~ allocate to his Dependent Care Expense Account for a Plan Year shall be the dollar amount for such Plan Year set forth in Section 3.2 of the Flexible Compensation Plan. Each Participant who does not designate a specific dollar amount to his Dependent Care Expense Account during enrollment shall not be permitted to obtain reimbursement for dependent care assistance expenses during the Plan Year. Amounts allocated to a Participant's Dependent Care Expense Account for a Plan Year may be used to reimburse the Participant only for claims incurred during that Plan Year. Amounts in the Participant's Dependent Care Expense Account not used to pay claims incurred during that Plan Year will be forfeited. 0862L:12/2/85 2 n Covered Expenses Reimbursable: The Employee will be reimbursed for dependent care expenses which are "employment related expenses," incurred on or after the Effective Date hereof to the extent the Employee has Flexible Dollar credits available in his Dependent Care Expense Account under the Flexible Compensation Plan. For this purpose "employment related expenses" are amounts paid by an Employee or his spouse, in order to be employed, if such expenses are (i) for household services, or {ii} for the care of a dependent of the Employee who is either under the age of 15, or physically or mentally incapable of caring for himself. If such expenses are incurred for services outside the Employee's home, the expense must be for a dependent who is under age fifteen (15), or if for a dependent who is physically or mentally incapable of caring for himself, such --------. dependent must regularly_spend at least eight (8) hours per day in the Employee I S home. If a dependent care center is the recipient of the employment re1 ated expenses, then these payments will be reimbursable only if the dependent care center, complies with all state and local laws. Further, the dependent care center must be a facility which provides care for more than six (6) people and which receives fees, payment or grants for such people. Reimbursements made to a married Employee cannot exceed the earned income of such Employee's spouse for the year (unless such spouse is a full-time student or is a dependent with respect to which "emp10yment related expenses" are incurred). No Employee is entitled to reimbursement for an expense hereunder if such Employee, or his spouse, has claimed such expense as an income tax deduction (or tax credit) on such Employee's or spouse's federal income tax return: 0862L:12/2/85 3 n A If expenses are incurred due to a payment to a dependent of the employee or spouse of the employee (as defined in Section l51(e) of the Code) or to a child of the employee (as defined in Section 151(e}(3) of the Code) who is under age 19, such expenses shall not be reimbursable under this Plan. Genera 1 : For the purposes of thi s Pl an, where the term IIdependent" is used, the term has the same meaning as provided by Section 152 of the Internal Revenue Code of 1954. Any payments of benefits from the Plan shall be made solely from the general assets of the Employer. This Plan shall not be funded in any way. The Employer or such person(s) as the Employer designates shall be the Plan Administrator. The P1 an Admini strator shall have overall responsi.bil ity for the admi ni strati on of thi s Pl an and any deci sions made in accordance herewith shall be final and conclusive on all Employees, spouses and their dependents. The Plan Administrator shall be indemnified by the Employer against anY and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan, including expenses reasonably incurr~d in the defense of any claim relating thereto. 0862L: 1 2/2/85 4 -- '--------- ! ~" " n IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing instrument comprising the Village of Mount Prospect Dependent Care Assistance Plan, VILLAGE OF MOUNT PROSPECT has caused its corporate seal to be affixed hereto and these presents to be duly executed in its name and behalf by its proper officers thereunto authorized as of the day and year first above written. VILLAGE OF MOUNT PROSPECT ATTEST: d~c-I ~b ~~vlf"= ß j{~ President' n_- -- .--.-------- --- _-n --.. Vi 11 age Clerk 0862L: 1 2/2/85 5