4.13 SR 05-06-2024 - Laserfiche WebLink

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© 2012 Hitesman & Wold, P.A. City of Elk River Flexible Benefits Plan 9 ARTICLE IV. CONTRIBUTIONS 4.1 Salary Reduction Contributions. To the extent the cost of Benefits exceeds the Employer Contribution, a Participant may elect in accordance with the Election procedures described in Article V to receive his or her full Compensation in cash, or to have a portion of such Compensation applied by the Employer toward the Participant’s share of the cost of Benefits. If so elected, the Participant’s Compensation will be reduced, and an amount equal to the reduction shall be allocated by the Employer to the Benefits designated by the Participant. A Participant’s Compensation shall be reduced by pro-rata amounts of the Participant’s total salary reduction Election. Salary reduction is done on a pre-tax basis before any withholdings have been made. The frequency of salary reduction contributions shall be two (2) payrolls per month. Notwithstanding the foregoing, if participation in a Benefit extends to the last day of the month in which a Participant’s employment terminates, if necessary, additional salary reduction contributions shall be taken from the Participant’s final pay check to pay for the coverage provided during the period of time following the date on which the Participant’s employment terminates. 4.2 Imputation of Income. To the extent a Participant participates in an Optional Benefit that covers a Dependent who is not the Participant’s Spouse or Tax Dependent, the entire cost of coverage for Optional Benefits for which the Participant is responsible shall be paid pre-tax through this Plan and the fair market value of the coverage for that Dependent shall be imputed as income to the Participant as the coverage is provided (pursuant to Cafeteria Plan Regulations). This provision applies regardless of whether the cost of coverage is paid by salary reduction or allocation of available Employer Contributions, if any. 4.3 Salary Deduction Contributions. The Employer may require that amounts for which the Participant is responsible, but which cannot be paid with pre-tax dollars through salary reduction described above, be funded with after-tax dollars pursuant to a salary deduction agreement. Such salary deductions shall be made on a periodic basis and relate to a Participant’s Compensation after taxes and withholdings have been made. 4.4 Employer Contribution. The Employer makes a fixed dollar contribution per month per Participant based upon such Participant’s coverage level (or lack of coverage) under the Group Medical Benefits. The Employer Contribution must be first allocated to pay the costs of Core Benefits. The amount of the Employer Contribution shall be communicated to the Participants prior to the start of each Plan Year so that they may consider it in making their Elections. The amount of the Employer Contribution may change from year to year as announced by the Employer prior to the Plan Year start. Participants who work less than forty (40) hours per week receive a prorated Employer Contribution based upon hours worked. No Employer Contribution shall be credited to any Employee during a period of leave of absence, whether authorized or unauthorized, unless required by the Family Medical Leave Act (“FMLA”). 4.5 Maximum Under the Plan. Under no circumstances may a Participant’s total salary reduction exceed the sum of (a) the cost of insurance or insurance-type Benefits, plus (b) the maximum Election amounts permitted under the reimbursement-type Optional Benefits, plus (c) the maximum Election amount permitted under the HSA Contribution Feature, minus (d) the Employer Contribution, if any. 4.6 No Trust. Nothing in this Plan is intended to require the establishment of a trust. The portion of benefits paid under this Plan attributable to Employer Contributions, if any, is paid from the Employer’s general assets. The portion of benefits paid under this Plan attributable to Participant contributions including, but not limited to, salary reduction amounts is paid from the Employer’s general assets. Page 102 of 254