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R-03-02 01/14/02RESOLUTION R RESOLUTION AMENDING THE VILLAGE OF LEMONT CAFETERIA PLAN WHEREAS, lie VILLAGE OF LEMONT (the Village) hereby certifies that Resolution 310, entitled Resolution Adopting the Village of Lemont Cafeteria Plan was duly adopted by the Village Board of Trustees on April 11, 1994, and that the Resolution has not been modified or rescinded as of the date hereof; and WHEREAS, the Village desires to amend the Cafeteria Plan duly adopted on April 11, 1994. NOW, THEREFORE BE IT RESOLVED by the President and Board of Trustees as follows/ 1. That the Village of Lemont amended Cafeteria Plan and Summary Plan Description attached hereto as Exhibits A and B are hereby approved and adopted. 2. That the proper officers of the Village are hereby authorized and directed to execute and deliver to the Administrator of the Plan one or more counterparts of the Plan. 3. That the Administrator shall be instructed to take such actions that are deemed necessary and proper in order to implement the amended Plan, and to set up adequate accounting and administrative procedures to provide benefits under the amended Plan. 4. That the proper officers of the Village shall act as soon as possible to notify the employees of the Village of the adoption of the amended Cafeteria Plan by delivering to each employee a copy of the summary description of the amended Plan in the form of the Summary Plan Description attached hereto as Exhibit B. PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF LEMONT, COUNTIES OF COOK, WILL AND DUPAGE, ILLINOIS, on this 14th day of January , 2002. John Benik Debby Blatzer Peter Coules Connie Markiewicz Steven Rosendahl Jeanette Virgilio Attest: AYES NAYS PASSED ABSENT v v JO ' N F. P AZZA, Village Presid CHARLENE SMOLLEN, Village Clerk Approve as to form: Villag Forney VILLAGE OF LEMONT PREMIUM ONLY PLAN ARTICLE I - Introduction 1.1. Purpose of Plan. The purpose of this Plan is to provide employees of Village of Lemont a choice between cash and benefits under the Cafeteria Plan maintained by Village of Lemont. 1.2. Cafeteria plan status. This Plan is intended to qualify as a "cafeteria plan" under Section 125 of the Internal Revenue Code of 1986, as amended, and is to be interpreted in a manner consistent with the requirements of Section 125. This Plan is maintained for the exclusive benefit of the employees of the Village. ARTICLE II - Definitions 2.1. "Administrator" means the Village or such other person or committee as may be appointed from time to time by the Village to supervise the administration of the Plan. 2.2. "COBRA health care continuation rules" means the provisions under the Consolidated Omnibus Budget Reconciliation Act of 1985, Internal Revenue Code Section 4980B, or its predecessor, Internal Revenue Code Section 162(k), relating to the continuation coverage requirements of group health plans. 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. 2.4. "Village" means Village of Lemont, a Village organized under the laws of Illinois. Premium Only Plan Prepared for VILLAGE OF LEMONT by Dugan & Lopatka. CPAs, PC. -2- 2.5. "Covered Premium" shall mean the employee paid portion of any insurance premiums or other payments made under the Village's group health insurance plan in effect from time to time. 2.6. "Effective Date" means April 23, 1994. Amended "Effective Date" means January 1, 2002. 2.7. "Election Period" means the 30-day period immediately preceding the Effective Date of the Plan, in the case of the first Plan Year, or the 30-day period immediately preceding the first day of any subsequent Plan Year. 2.8. "Employee" means any individual employed by the Village. 2.9. "ERISA" means the Employee Retirement Income Security Act of 1974. 2.10. "Key Employee" means any person who is a key employee as defined in Section 416(i)(1) of the Code. 2.11. "Participant" means each Employee who participates in the Plan in accordance with Article III. 2.12. "Plan" means the Village of Lemont Cafeteria Plan as set forth herein, together with any and all amendments and supplements hereto. 2.13. "Plan Year" means the period beginning on the Effective Date and ending on December 31, and the 12 -month period ending on each December 31 thereafter. 2.14. "Pre -Tax Insurance Option" means the option of taking cash or paying covered premium with pre -tax dollars. 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. Eligibility and commencement of participation. All Employees eligible for insurance Premium Only Plan Prepared for VILLAGE OF LEMOM by Dugan & Lopatka, CPAs, PC. 3 coverage are eligible to participate in the Plan. An Employee will become a Participant on the later of (a) the Effective Date or (b) the first day of eligibility under the Village's group health insurance plan. 3.2. Cessation of participation. Except as provided for in Article 3.3, a Participant will cease to be a Participant as of the earliest of (a) the date on which the Plan terminates or (b) the date on which he ceases to be an Employee. 3.3. Compliance with COBRA health care continuation rules. Notwithstanding the provisions of Article 3.2, a Participant in the Cafeteria Plan may elect to continue participation in such plan as provided for under the COBRA health care continuation rules. A Participant that separates from service may continue participation in the Cafeteria Plan throughout the COBRA continuation period, provided that the Participant continues to make any required premium payments. The Participant will cease to be a Participant in the Cafeteria Plan and the period of coverage will terminate under such plan if the Employee ceases to make any required premium payments. 3.4. Reinstatement of former Participant. A former Participant will become a Participant again if and when he meets the eligibility requirements of Article 3.1. ARTICLE IV - Optional 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 cost of the following optional benefit: (a) the amount of his Covered Premium on a pre -tax basis. 4.2. Election of optional benefits in lieu of cash. A Participant may elect under this Plan to receive the optional benefits described in Article 4.1 in accordance with the procedure described in Article 4.3. If a Participant elects the optional benefit described in Article 4.1(a), Premium Only Plan Prepared for VILLAGE OF LEMONY by Dugan & Lopatka, CPAs, PC. -4- the Participant's cash compensation will be reduced, and an amount equal to the reduction will be credited by the Village to the amount of his Covered Premium in accordance with the Village's group health insurance plan. 4.3. Election procedure. During the Election Period, the Administrator shall provide a written election form and compensation reduction agreement to each Participant and to each other Employee who is expected to become a Participant at the beginning of the Plan Year. The election form shall be effective as of the first day of the Plan Year. Each Participant who desires the optional benefit coverage described in Article 4.1 for the Plan Year shall so specify on the appropriate election form or forms and shall agree to a reduction in his cash compensation. The amount of the reduction in the Participant's cash compensation for the Plan Year for the optional benefit described in Article 4.1(a), shall be the amount elected by the Participant. An Employee who is a Participant and who fails to complete, sign and file the election forms as required by this Article 4.3 shall be deemed to have elected to continue the same benefit coverage and reduction in cash compensation then in effect for such Participant. 4.4. New Participants. As soon as practicable before an Employee becomes a Participant under Article 3.1 or 3.4, the Administrator shall provide the written election form and compensation reduction agreement described in Article 4.3 to the Employee. If the Employee desires the optional benefit coverage described in Article 4.1 for the balance of the Plan Year, he shall so specify on the election form and shall agree to a reduction in his cash compensation as provided in Article 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 cash compensation reduction agreements will apply. 4.5. 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 Premium Only Plan Prepared for VILLAGE OF LEMONT by Dugan & Lopatka, CPAs. PC. -5- 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. 4.6. Modification of elections due to premium change. The Administrator may automatically increase or decrease the amount of a participant's salary reduction during the Plan Year in response to an appropriate change in the Covered Premium charged by an insurer for any of the insured benefits elected hereunder, commensurate with the time that the insurer has made such premium change effective. The adjusted salary reduction amount shall be in effect until the end of the Plan Year coverage period, or earlier change in Covered Premiums required by the insurer, or by another insurer providing substituted coverage during the Plan Year. 4.7. Revocation or change of election by the Participant during the Plan Year. Any election made under the Plan (including an election made through inaction under Article 4.3) shall be irrevocable by the Participant during the Plan Year except as otherwise provided in (a) through (g) below. (a) A Participant may revoke an election in writing for the balance of the Plan Year and, if desired, file a new election in writing if, under the facts and circumstances, 1) a change in status occurs, and 2) the requested revocation and new election satisfy the consistency requirements in Article 4.8 below. Application for such change must be made no later than 30 days after the date of the actual event. For this purpose, a change in status includes the following events: 1. Legal martial status. An event that changes a Participant's legal martial status, including marriage, death of spouse, divorce, legal separation or annulment. Premium Only Plan Prepared for VILLAGE OF LEMON' by Dugan & Lopatka, CPAs, PC. -6- 2. Number of dependents. An event that changes a Participant's number of dependents (as defined in Code Section 152), including birth, death, adoption or placement for adoption. 3. Employment status. An event that changes the employment status of the Participant or the Participant's spouse or dependent, including termination or commencement of employment, a strike or lockout, a commencement or return from an unpaid leave of absence, and a change in worksite, as well as any other change in the individual's employment status that results in the individual becoming (or ceasing to be) eligible under a benefit plan of his employer. 4. Requirements for unmarried dependents. An event that causes a dependent to satisfy or cease to satisfy the requirements for coverage on account of attainment of age, student status, or any similar circumstance. 5. Residence. A change in the place of residence of the Participant or his spouse or dependent. 6. Other. Such other events that the Administrator determine will permit the revocation of an election (and, if applicable, the filing of a new election) during a Plan Year under regulations and rulings of the Internal Revenue Service. (b) A Participant may revoke an election in writing for the balance of the Plan Year and file a new election in writing that corresponds with the special enrollment rights provided in Code Section 9801(0, whether or not the change in election is permitted under Article 4.7(a) above. (c) In the case of a judgment, decree or order resulting from a divorce, legal separation, annulment, or change in legal custody (including a qualified medical child support order) that requires accident or health coverage for a Participant's child or for a foster child who is a dependent of the Participant, a Participant may change his election 1) in order to provide Premium Only Plan Prepared for VILLAGE OF LEMONY by Dugan & Lopatka, CPAs. PC. -7- health coverage for the child if the order so requires, or 2) in order to cancel health coverage for the Participant's child if such order requires the Participant's spouse or former spouse or another individual to provide coverage for the child. (d) A Participant may revoke an election in writing for the balance of the Plan Year and file a new election in writing in order to cancel or reduce the Covered Premium for the Participant and /or for one or more coverage dependents of the Participant to the extent that such individual becomes entitled to coverage under Part A or Part B of Title XVIII of the Social Security Act (Medicare) or Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under Section 1928 of the Social Security Act (the program for distribution of pediatric vaccines). In addition, if the Participant or any eligible dependent who has been entitled to Medicare or Medicaid loses eligibility for such coverage, the Participant may file a new election in writing for the balance of the Plan Year to commence or increase his Covered Premium. (e) The Administrator may permit all Participants electing an Optional Benefit for the Plan Year to revoke their elections for the balance of the Plan Year, if: 1. such coverage ceases or is significantly curtailed, or 2. the Participants' share of the Covered Premium significantly increases, and 3. if the Village offers another Optional Benefit with similar coverage, the Participant elects the Optional Benefit. (f) If a new Optional Benefit becomes available, or an existing Optional Benefit is eliminated, during the Plan Year, or if a similar change occurs under a plan of another employer, affected Participants may elect the new coverage (or may elect another option if a coverage has been eliminated), and make corresponding election changes regarding similar coverage, for the balance of the Plan Year. Premium Only Plan Prepared for VILLAGE OF LEMONf by Dugan & Lopatka. CPAs, PC. - 8 - (g) In the event that a Participant's spouse or dependent makes an election change under a plan maintained by his or her employer, the Administrator may permit the Participant to revoke an election under this Plan and make a new election for the balance of the Plan Year that is on account of and corresponds with the election change made by the Participant's spouse or dependent, if: 1. the election change made by the Participant's spouse or dependent under his employer's plan satisfies the regulations and rulings under Code section 125; or 2. the period of coverage under the plan maintained by the employer of the Participant's spouse or dependent does not correspond with the Plan Year of this Plan. (h) Any revocation and new election under this Article 4.7 shall be effective at such time as the Administrator shall prescribe, unless otherwise required by law. 4 8 Consistency rules. A Participant's requested revocation and new election will be consistent with a change in status if the election change is on account of and corresponds with a change in status that affects eligibility for coverage under a plan of the Employer or under a plan maintained by the employer of the Participant's spouse or dependent. 4.9. Automatic termination of election. Elections made under this Plan shall automatically terminate on the date on which the Participant ceases to be a Participant in the Plan. In the event such a former Participant again becomes a Participant before the end of the same Plan Year, the elections previously in effect for the Participant under the plans shall be automatically reinstated for the balance of the Plan Year, except as otherwise elected by the Participant in accordance with Article 4.7. 4.10. Maximum employer contributions. The maximum amount of employer contributions under the Plan for any Participant shall be equal to the amount of the Participant's Covered Premium Only Plan Prepared for VILLAGE OF LEMONT by Dugan & Lopatka. CPAs, PC. -9- Premium under the Village's group health insurance plan. 4.11 Coordination with FMLA. Notwithstanding any other provision of this Plan, the Administrator may a) permit a Participant to revoke (and subsequently reinstate) his or her election to receive reimbursement of Qualifying Health Care Expenses during the Plan Year, and b) adjust a Participant's Coverage Amount and Required Premium as a result of a revocation or reinstatement to the extent the Administrator deems necessary or appropriate to assure the Plan's compliance with the provisions of the Family and Medical Leave Act of 1993 and any regulations pertaining thereto. ARTICLE V - Payment of Covered Premiums 5.1. Each Participant shall automatically have his Covered Premium paid directly by the Village each payroll period out of his salary reduction. 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 Premium Only Plan Prepared for VILLAGE OF LEMOIVT by Dugan & Lopatka, CPAs, PC. -10- 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; (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. Notwithstanding the foregoing, any claim which arises under any other plan shall not be subject to review under this Plan, and the Administrator's authority under this Article 6.1 shall not extend to any matter as to which an administrator under any such other plan is empowered to make determinations under such plan. 6.2. Examination of records. The Administrator will make available to each Participant such of its 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 or in accordance with the instructions of, the administrators of the Cafeteria Plan, or by accountants, counsel or other experts empioyea 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 Premium Only Plan Prepared for VILLAGE OF LEMONr "by Dugan & Lopatka, CPAs, PC. - 11 - 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 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. n',Iu'I 1 111 I• II 7.1. Amendment of Plan. The Village reserves the power at any time or times to amend the provisions of the Plan to any extent and in any manner that it may deem advisable, by a written instrument signed by the President of the Village. 7.2. Termination of Plan. The Village has established the Plan with the bona fide intention and expectation that it will be continued indefinitely, but the Village will have no obligation whatsoever to maintain the Plan for any given length of time and may discontinue or terminate the Plan at any time without liability. Upon termination or discontinuance of the Plan, all elections and reductions in compensation relating to the Plan shall terminate. ARTICLE VIII - Notice 8.1. In accordance with the provisions of Internal Revenue Code Section 89 and the Regulations thereunder or such other comparable successor provision of federal law, the employees of the Village are provided notification of the benefits available under the Plan through memorandums and other correspondence and documents provided to all employees. 8.2. The employees of the Village shall be provided notification of the operating, procedural and administrative rules of the Plan through the Summary Plan Description which shall be provided to all employees. The operating rules contained in the Summary Plan Premium Only Plan Prepared for VILLAGE OF LEMONT by Dugan & Lopatka, CPAs, PC. - 12 - Description are hereby made a part of this Plan by reference to this Article 8.2. ARTICLE IX - Miscellaneous Provisions 9.1. 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. 9.2. Limitation of rights. The employee's rights under this Plan are legally enforceable; however, this Plan shall not be deemed to constitute a contract between the Village and any Participant or to be a consideration or an inducement for the employment of any Participant or Employee. Nothing contained in this Plan shall be deemed to give any Participant or Employee the right to be retained in the service of the Village or to interfere with the right of the Village to discharge any Participant or Employee at any time for any reason regardless of the effect which such discharge shall have upon him or her as a Participant of this Plan. 9.3. Governing law. This Plan shall be construed, administered and enforced according to the laws of Illinois. IN WITNESS WHEREOF, the Village has caused this Amended Plan to be executed in its name and on its behalf by its officers thereunto duly authorized this I `tom ?5,„„:01, 20_ Village of Lemont B day of Premium Only Plan Prepared for VILLAGE OF LEMONT by Dugan & Lopatka, CPAs, PC.