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I+ i r f, L, Participant, a Participant's Spouse, or a Participant's dependent who has been entitled to Medicare or Medicaid loses eligibility for such coverage, then the Participant may prospectively elect to commence or increase the health or accident coverage provided under this Plan (including the Health Care Expense Reimbursement Plan and Limited Scope Health Care Expense Reimbursement Plan) of the person losing entitlement to Medicare or Medicaid. (e) Change in Cost. (1) Automatic Increase or Decrease for Insignificant Cost Changes. If the cost of an Optional Benefit (other than Health Care Expense Reimbursement Plan and Limited Scope Health Care Expense Reimbursement Plan) increases or decreases during a Plan Year by an insignificant amount, then the pre-tax contributions or after-tax contributions (as applicable) under each affected Participant Election shall be prospectively increased or decreased to reflect such change. The Plan Administrator, on a reasonable and consistent basis, will automatically effectuate this prospective increase or decrease in Participant contributions in accordance with such cost changes. The Plan Administrator (in its sole discretion) will decide, in accordance with prevailing IRS guidance, whether increases or decreases in costs are "insignificant" based upon all the surrounding facts and circumstances (including, but not limited to, the dollar amount or percentage of the cost change). (2) Significant Cost Increases. If the Plan Administrator determines that the cost of an Optional Benefit (other than Health Care Expense Reimbursement Plan and Limited Scope Health Care Expense Reimbursement Plan) significantly increases during a Plan Year, the Participant may, on a prospective basis, either: (i) make a corresponding increase in his or her Election; (ii) enroll in another benefit package option providing similar coverage and make a corresponding Election change; or (iii) revoke his or her Election if no other benefit package option providing similar coverage is available. The Plan Administrator (in its sole discretion) will decide, in accordance with prevailing IRS guidance, whether a cost increase is significant and what constitutes"similar coverage"based upon all the surrounding facts and circumstances. (3) Significant Cost Decrease. If the Plan Administrator determines that the cost of an Optional Benefit (other than Health Care Expense Reimbursement Plan and Limited Scope Health Care Expense Reimbursement Plan) significantly decreases during a Plan Year: (i) an Eligible Employee or Participant may commence participation in such Optional Benefit; and (ii) the Plan Administrator shall automatically effectuate a prospective decrease in a Participant's Election with respect to such Optional Benefit in accordance with the cost decrease. i l k ©2012 Hitesman&Wold,P.A. 12 City of Elk River Flexible Benefits Plan