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R-92-03I \\ 1 RESOLUTION NO. R -92 -03 RESOLUTION APPROVING CAFETERIA PLAN WHEREAS, the Village of Deerfield is a Home Rule Municipality exercising its Home Rule powers pursuant to the Illinois Constitution of 1970; and WHEREAS, the Corporate Authorities of the Village of Deerfield have deemed it in the best interest of the Village to provide its employees with alternative medical benefit programs; and WHEREAS, the Corporate Authorities have reviewed a proposed Village of Deerfield Cafeteria Plan.for its employees in the form of Exhibit A attached hereto and made a part hereof; NOW THEREFORE BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF DEERFIELD, LAKE AND COOK COUNTY, ILLINOIS, AS FOLLOWS: SECTION That the Village of Deerfield Cafeteria Plan for the ONE employees of the Village of Deerfield, attached hereto as Exhibit A, be and is hereby approved and adopted as the Cafeteria Plan for the Village of Deerfield to be effective as of May 1, 1992. SECTION That the Finance Director of the Village of TWO Deerfield be appointed to take any and all such steps as may be required for the implementation of said Cafeteria Plan. SECTION That this Resolution shall be in full force and THREE effect from and after its adoption and passage in a manner provided by law. AYES: Ehlers, Marovitz, Rosenthal, Seidman; Swanson, Swartz (6) NAYS: None (0) ABSENT: None (0) PASSED this 20th day of April , A.D., 1992. APPROVED this 20th day of April, A.D., 1992. VILLAGE CLERK 4 - W�w ' rjrA -�/ �EN t, �.`VILLAGE PRESIDT The Village of Deerfield CAFETERIA PLAN Effective May 1, 1992 The Village of Deerfield CAFETERIA PLAN TABLE OF CONTENTS ARTICLE Page I Introduction . . . . . . . . . . . . . . . . . . . . . 1 1.1 Purpose of Plan . . . . . . . . . . . . . . . . 1 1.2 Cafeteria Plan Status . . . . . . . . . . . . . 1 II Definitions . . . . . . . . . . . . . . . . 1 2.1 "Administrator" . . . . . . . . . . . . . . . . 1 2.2 "Code" . . . . . . . . . . . . . . . . . 1 2.3 "Effective Date . . . . . . . . . . . . . . . . 2 2.5 "Key Employee" . . . . . . . . . . . . . . . . 2 2.6 "Participant" . . . . . . . . . . . . . . . . . 2 2.7 "Plan" . . . . . . . . . . . . . . . . . . 2 2.8 "Plan Year" . . . . . . • . . . . . . . . . 2 2.9 "Qualifying Premium Expense" . . . . . . . . . 2 2.10 "Village" . . . . . . . . . . . . . . . . . . . 3 III Participation . . . . . . . . . . . . . . . . . . . . . 3 3.1 Commencement of Participation . . . . . . . . . 3 3.2 Cessation of Participation . . . . . . . . . . 3 3.3 Reinstatement of Former Participant . . . . . . 4 IV Benefits . . . . . . . . . . . . . . . . . . . . . 4 4.1 Benefit Options . . . . . . . . . . 4 4.2 Election of Optional Benefits in Lieu of* Cash . . . . . . . . . . . . . . . . . . . 4 4.3 Election Procedure . . . . . . . . . . . . . . 5 4.4 New Participants . . . . . . . . . . . . . . . 5 4.5 Failure to Elect . . . . . . . . . . . . . . . 6 4.6 Changes by Administrator . . . . . . . . . . . 6 4.7 Irrevocability of Election by the Participant During the Plan Year . . . . . . . 7 V Payment of Premium Expense . . . . . . . . . . . . . . 8 5.1 Method of Payment . . . . . . . . . . . . . 8 5.2 Payment of Expenses. . . . . . . . . . . . 8 - i - F a The Village of Deerfield CAFETERIA PLAN TABLE OF CONTENTS ARTICLE Page VI Administration of Plan . . . . . . . . . . . . . . . 9 6.1 Plan Administrator . . . . . . . . . . . . . . 9 6.2 Examination of Records . . . . . . . . . . . . 10 6.3 Reliance on Tables, etc . . . . . 6.4 Nondiscriminatory Exercise of Authority . . . . 10 6.5 Indemnification of Administrator . . . . . . . 10 6.6 Named Fiduciary . . . . . . . . . . . . . . . 11 6.7 Claims and Review Procedures . . . . . . . . . 11 VII Amendment and Termination of Plan . . . . . . . . . . . 13 VIII Miscellaneous Provisions . . . . . . . . . . . . . 13 8.1 Information to be Furnished . . . . . . . . . 13 8.2 Limitation of Rights . . . . . . . . . . . . 13 8.3 Governing Law . . . . . . . . . . . . . . . . . 14 - ii - BAJ07147A3041792 ARTICLE I Introduction 1.1 Purpose of Plan. The purpose of this Plan is to provide Employees of the Village of Deerfield a choice between cash and the payment of Employee premiums under the Village of Deerfield Medical Plan ( "Medical Plan "), any successor health plan maintained by the Village or under any health maintenance organization offered to Employees by the Village that are excludable from the participant's gross income under Section 105(b) of the Code. 1.2 Cafeteria Plan Status. This Plan is intended to qualify as a "cafeteria plan" under Section 125 of the Internal Revenue Code of 1954, as amended, and is to be interpreted in a manner consistent with the requirements of Section 125. ARTICLE II Definitions 2.1 "Administrator" means the Village acting through its Corporate Authority (as defined in the Illinois municipal code) or such other person or committee as may be appointed from time to time by the Corporate Authority of the Village to supervise the administration of the Plan. 2.2 "Code" means the Internal Revenue Code of 1986, as amended from time to time. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation which amends, supplements or replaces such section or subsection. 2.3 "Effective Date" means May 1, 1992. 2.4 "Employee" means any individual employed by the Village. The term Employee shall also include any "leased employee" as defined in Section 414(n)(2) of the Code. 2.5 "Key Employee" means any person who is a key employee as defined in section 416(1)(1) of the Code. 2.6 "Participant" means any individual who participates in the Plan in accordance with Article III. 2.7 "Plan" means the Village of Deerfield Cafeteria Plan as set forth herein, together with any and all amendments and supplements hereto. 2.8 "Plan Year" means the period beginning on the Effective Date and ending on April 30, 1993, and the 12 -month period ending on each April 30, thereafter. 2.9 "Qualifying Premium Expense" means the premium expense charged by the Village to an Employee as the Employee's monthly share of the annual cost of maintaining medical coverage for the Employee under the Medical Plan, under any health maintenance organization offered by the Village to its Employees, or any successor or additional health coverage which the Village may offer in the future. Qualifying Premium Expense also covers the Employee's monthly expense of maintaining medical care for an - 2 - Employee's eligible dependents (as defined in the Medical Plan). Qualifying Premium Expense does not include any Employee health expenses not paid by the Medical Plan or any applicable health maintenance organization offered by the Village, nor does it cover premium expenses of any other individual or group health coverage not offered by the Village. 2.10 "Village" means the Village of Deerfield, an Illinois municipal corporation. The Village reserves the right to determine the percentage of health coverage expense to charge to the Employees as Qualifying Premium Expense.. A pronoun or adjective in the masculine gender includes the feminine gender, and the singular includes the plural, unless the context clearly indicates otherwise. ARTICLE III Participation 3.1 Commencement of Participation. Each full -time Employee whose customary employment with the Village is at least 30 hours per week excluding overtime work will be eligible to participate in the Plan. An Employee will become a Participant on the'later of (a) the Effective Date or (b) the day immediately following the completion of 30 days of employment by the Village. 3.2 Cessation of Participation. A Participant will cease to be a Participant as of the earlier of: (a) the date on which - 3 - the Plan terminates; (b) the date on which he elects to revoke an election after he separates from service with the Village; (c) the date he fails to make any required deferral under an irrevocable election; (d) the date he revokes any election as permitted in this Plan; or (e) the date he ceases to be an Employee eligible to participate under Section 3.1. 3.3 Reinstatement of Former Participant. A former Participant will become a Participant again if and when he meets the eligibility requirements of Section 3.1. ARTICLE IV Benefits 4.1 Benefit Options. A Participant may choose under this Plan.to receive his full compensation for any Plan Year in cash or to have a portion of it applied by the Village toward the payment or reimbursement of his Qualifying Premium Expense. 4.2 Election of Optional Benefits in Lieu of Cash. A Participant may elect to receive payments or reimbursements of his Qualifying Premium Expense under this Plan by filing an election and compensation reduction agreement in accordance with the procedures established in Section 4.3 below. An election to receive payments or reimbursements of Qualifying Premium Expense shall be irrevocable during the Plan Year, subject to a change in family status or such other event, as provided in the Cafeteria Plan. However, if the rate of Qualifying Premium Expense for - 4 - W group health insurance or changed coverage, as elected by the Village, shall change, the Participants' salary reductions shall automatically change in the same amount as the change in the Employee paid portion of any such health insurance premium. 4.3 Election Procedure. Prior to the commencement of each Plan Year, the'Administrator shall provide an election form and compensation reduction agreement to each Participant and to each other Employee who is expected to be a Participant at the beginning of the Plan Year. The election forms shall be effective as of the first day of the Plan Year. Each Participant who desires Qualifying Premium Reimbursement for the Plan Year shall so specify on the appropriate election form or forms and shall agree to a reduction in his compensation. The amount of the reduction in the Participant's compensation for the Plan Year shall be the amount elected by the Participant, subject to the limitations set forth herein. Each election form must be completed and returned to the Administrator on or before such date as the Administrator shall specify, which date shall be no later than the beginning of the first pay period for which the Participant's compensation reduction agreement will apply. 4.4 New Participants. As soon as practicable before an Employee becomes a Participant under Section 3.1 or 3.3 the Administrator shall provide the written election form and compensation reduction agreement described in Section 4.3 to the Employee. If the Employee desires Qualifying Premium - 5 - Reimbursement for the balance of the Plan Year, he shall so specify on the election form and shall agree to a reduction in his compensation as provided in Section 4.3. The election form must be completed and returned to the Administrator on or before such date as the Administrator shall specify, which date shall be no later than the beginning of the first pay period for which the Participant's compensation reduction agreement will apply. 4.5 Failure to Elect. A Participant failing to return a completed election form to the Administrator on or before the specified due date for the initial Plan Year of the Plan, or for the Plan Year in which he became a Participant, shall be deemed to have elected to receive his full compensation in cash, regardless of the election in effect during the preceding Plan Year. 4.6 Changes by Administrator. If the Administrator determines, before'or during any Plan Year, that the Plan may fail to satisfy for such Plan Year any nondiscrimination requirement imposed by the Code or any limitation on benefits provided to Key Employees, the Administrator shall take such action as the Administrator deems appropriate under rules uniformly applicable to similarly situated participants, to assure compliance with such requirement or limitation. Such action may include, without limitation, a modification of elections by highly compensated Employees or Key Employees with or without the consent of such Employees. 4.7 Irrevocability of Election by the Participant During the Plan Year. Elections made under the Plan (or deemed to be made under Section 4.5) shall be irrevocable by the Participant during the Plan Year, subject to a change in family status. A Participant may revoke a benefit election for the balance of a Plan Year and file a new election only if both the revocation and the new election are on account of and consistent with a change in family status. A change in family status for this purpose includes marriage, divorce, death of a spouse or child, birth or adoption of a child, termination of employment of a spouse, loss of medical coverage from a spouse's employer, switching from full -time to part -time status of a Participant or his spouse or significant changes in health care coverage attributable to the spouse's employment. In addition, a Participant shall be entitled to revoke an election and make a new election if health care under a plan maintained by the Village ceases or is significantly curtailed for all covered Employees, or new health care plans are offered on a prospective basis during the election period. The Administrator may permit the revocation of an election based on such other events that the Administrator determines will permit a change or revocation of an election during a Plan Year under regulations and rulings of the Treasury Department and the Internal Revenue Service. Any new election under this Section 4.7 shall be effective at such time as the Administrator shall prescribe, but not earlier than the first pay - 7 - period beginning after the election form is completed and returned to the Administrator. ARTICLE V Payment of Premium Expense 5.1 Method of Payment. A participant who elects payment of Qualifying Premium Expense for a Plan Year shall have salary reductions automatically applied toward the payment of Qualifying Premium Expense incurred by the Participant during the Plan Year. 5.2 Payment of Expenses. The Village shall at its option, use any salary reductions to pay Qualifying Premium Expense directly to any applicable health provider, or if the Village has advanced such expenses, the salary reductions may be paid directly to the Village in reimbursement of such advance. The full value of the Participant's salary reduction shall be available during the Plan Year to pay Qualifying Premium Expenses. ARTICLE VI Administration of Plan 6.1 Plan Administrator. The administration of the Plan shall be under the supervision of the Administrator. It shall be a principal duty of the Administrator to see that the Plan is carried out in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan without discrimination among them. The Administrator will have full power to administer the Plan in all of its details, subject to applicable requirements of law. For this purpose, the Administrator's powers will include, but will not be limited to, the following authority, in addition to all other powers provided by this Plan: (a) To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan, including the establishment. of any claims procedures that may be required by applicable provisions of law; (b) To interpret the Plan, its interpretation thereof in good faith to be final and conclusive on all persons claiming benefits under the Plan; (c) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan; �t (d) To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan; and (e) To allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, any such allocation, delegation or designation to be in writing. 6.2 Examination of Records. The Administrator will make available to each Participant such of his records under the Plan as pertain to him, for examination at reasonable times during normal business hours. 6.3 Reliance on Tables, etc. In administering the Plan, the Administrator will be entitled to the extent permitted by law to rely conclusively on all tables, valuations, certificates, opinions and reports which are furnished by accountants, counsel or other experts employed or engaged by the Administrator. 6.4 Nondiscriminatory Exercise of Authority. Whenever, in the administration of the Plan, any discretionary action by the Administrator is required, the Administrator shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment. 6.5 Indemnification of Administrator. The Village agrees to indemnify and to defend to the fullest extent permitted by law any Employee serving as the Administrator or as a member of a committee designated as Administrator (including any Employee or - 10 - i former Employee who formerly served as Administrator or as a member of such committee) against all liabilities, damages, costs and expenses (including attorneys' fees and amounts paid in settlement of any claims approved by the Village) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith. 6.6 Named Fiduciary. The Administrator will be a "named fiduciary" for purposes of Section 402(a)(1) of ERISA with authority to control and manage the operation and administration of the Plan, and will be responsible for complying with all of the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA. 6.7 Claims and Review Procedures. (a) Claims Procedure. If any person believes he is being denied any rights or benefits under the Plan, such person may file a claim in writing with the Administrator. If any such claim is wholly or partially denied, the Administrator will notify such person of its decision in writing. Such notification will'be written in a manner calculated to be understood by such person and will contain (i) specific reasons for the denial, (ii) specific reference to pertinent Plan provisions, (iii) a description of any additional material or information necessary for such person to perfect such claim and an explanation of why such material or information is necessary and (iv) information as - 11 - to the steps to be taken if the person wishes to submit a request for review. Such notification will be given within 90 days after the claim is received by the Administrator (or within 180 days, if special circumstances require an extension of time for processing the claim, and if written notice of such extension and circumstances is given to such person within the initial 90 day period). If such notification is not given within such period, the claim will be considered denied as of the last day of such period and such person may request a review of his claim. (b) Review Procedure. Within 60 days after the date on which a person receives a written notice of a denied claim (or, if applicable, within 60 days after the date on which such denial is considered to have occurred) such person (or his duly authorized representative) may (i) file a written request with the Administrator for a review of his denied claim and of pertinent documents and (ii) submit written issues and comments to the Administrator. The Administrator will notify such person of its decision in writing. Such notification will be written in a manner calculated to be understood by such person and will contain specific reasons for the decision as well as specific references to pertinent Plan provisions. The decision on review will be made within 60 days after the request for review is received by the Administrator (or within 120 days, - 12 - if special circumstance require an extension of time for processing the request, such as an election by the Administrator to hold a hearing, and if written notice of such extension and circumstances is given such person within the initial 60 day period). If the decision on review is not made within such period, the claim will be considered denied. ARTICLE VII Amendment and Termination of Plan The Plan may at any time be amended or terminated by a written instrument signed by the president of the Village. ARTICLE VIII Miscellaneous Provisions 8.1 Information to be Furnished. Participants shall provide the Village and Administrator with such information and evidence, and shall sign such documents as may reasonably be requested from time to time for the purpose of administration of the Plan. 8.2 Limitation of Rights. Neither the establishment of the Plan nor any amendment thereof, nor the payment of any benefits, will be construed as giving to any Participant or other person any legal or equitable right against the Village or Administrator, except as provided herein. - 13 - 8.3 Governing Law. This Plan shall be construed, administered and enforced according to the laws of Illinois. IN WITNESS WHEREOF, the Village has caused this Plan to be executed in its name and behalf this jj2e day of )14Aie /L , 1992, by its officer thereunto duly authorized. Village of Deerfield IM14- wtsn A it i!J...�M7s�7 � i- - 14 - a