6.5. ERMUSR 01-15-2008 - Laserfiche WebLink

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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 the Medical Expense Reimbursement Plan) significantly increases during a Plan Year, the Participant may either (a) make a corresponding prospective increase in his or her contributions, or (b) simply revoke his or her Election, and in lieu thereof, receive coverage under another Plan option which provides similar coverage. If no similar coverage is available, the Participant may revoke his or her Election. 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. (f) Change in Coverage. (1) Significant Curtailment. If the Plan Administrator determines that an Optional Benefit (other than the Medical Expense Reimbursement Plan) under this Plan is significantly curtailed or ceases during a Plan Year, the Participant may revoke his or her Election under the Plan. To the extent there is similar coverage, the Participant may prospectively elect such coverage. If no similar coverage is available, the Participant may simply revoke his or her Election. Coverage under an accident or health plan is deemed "significantly curtailed" only if there is an overall reduction in coverage provided to Participants under the Plan so as to constitute reduced coverage to Participants in general. The Plan Administrator (in its sole discretion) will decide, in accordance with prevailing IRS guidance, whether a curtailment is "significant", and whether a substitute Optional Benefit constitutes "similar coverage" based upon all the surrounding facts and circumstances. (2) Addition or Elimination of a Benefit Providing Similar Coverage. If during a Plan Year, the Plan adds or eliminates an Optional Benefit (other than the Medical Expense Reimbursement Plan), an affected Participant may elect a newly-added option or elect another Optional Benefit (where a Plan option has been eliminated), and may do so prospectively on a pre-tax basis by making corresponding Election changes with respect to coverage under another Optional Benefit that provides similar coverage. The Plan Administrator (in its sole discretion) will decide, in accordance with prevailing IRS guidance, whether a substitute Optional Benefit constitutes "similar coverage" based upon all the surrounding facts and circumstances. (3) Change in Coverage of Spouse or Dependent Under Their Employer's Plan. A Participant may make a prospective Election change (other than under the Medical Expense Reimbursement Plan) that is on account of and corresponds with a change made under the plan of the Spouse's, former Spouse's, or Dependent's employer, so long as (a) the cafeteria plan or qualified benefits plan of the Spouse's, former Spouse's, or Dependent's employer permits its participants to make an Election change that would be permitted under the proposed or final IRS regulations; or (b) the Plan permits Participants to make an Election for a Plan Year period of coverage which is different from the elan vear UZ007 Hitesman & Associates, P.A. 11 Elk River Municipal Utilities 122707 Flexible Benefits Plan