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
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�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
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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
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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
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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
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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
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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
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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
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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;
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(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
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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
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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,
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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.
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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
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