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CAFETERIA PLAN AGREEMENT

AN EMPLOYER HEALTH AND WELFARE BENEFIT PLAN

This Supporting Plan Document sets out the provisions of the Cafeteria Plan Arrangement, an Employee Health and Welfare Benefit Plan, installed for:

  • To be established as effective:

The purpose of this Cafeteria Plan Arrangement is to provide the Plan holder and eligible employees a method of choice between cash compensation or additional premium payments by the Plan holder for benefits under the Welfare Plan.

This Cafeteria Plan Arrangement is intended to qualify as a Cafeteria Plan under Internal Revenue Code Section 125, as amended, and is to be interpreted in accord with the requirements of that provision.

Neither the Administrator nor the Plan holder makes any guarantee that amounts paid for the benefit of any participating Employee are excludable from the participating Employee’s income for federal or state income tax purposes, or from wages for FICA purposes.

Upon adoption of this Supporting Plan Document for the Cafeteria Plan Arrangement, the Plan holder will promptly notify all employees of its existence and eligibility requirements, and of the terms of the Cafeteria Plan Arrangement.

The Plan holder specifically reserves the right and authority to amend the provisions of this Supporting Document for the Cafeteria Plan Arrangement to the extent and in the manner that the Plan holder deems advisable, by written amendment signed by an appropriate officer.

In addition, the Plan holder specifically reserves the right and authority to terminate this Cafeteria Plan Arrangement. Participating Employees must be given 30 days advance notice in the event of such termination.

 

DEFINITION OF TERMS

A. WELFARE PLAN: The ____________________ Employee Health and Welfare Benefit Plan.

B. CAFETERIA PLAN ARRANGEMENT: The section 125 Cafeteria Plan Arrangement established by this Supporting Plan Document.

C. PLAN HOLDER: ________________________, the employer establishing this Section 125 Cafeteria Plan Arrangement.

D. PLAN HOLDER’S ______________________________________

BUSINESS _________________________________________

ADDRESS: _________________________________________

E. PLAN YEAR: The date that the Cafeteria Plan Arrangement begins, up to the date of the next following year.

F. PLAN ANNIVERSARY: The date that the Cafeteria Plan. Arrangement begins in any calendar year.

G. DESCRIPTION OF WELFARE PLAN BENEFITS AND COVERAGE PERIODS: See attached policy(ies) and/or Welfare Plan Document(s).

H. 1. INSURED BENEFITS UNDERWRITTEN BY: ________________

2. SELF-FUNDED BENEFITS ADMINISTERED BY: _____________

I. ADMINISTRATOR: The Plan holder or any other person or committee that may be appointed by the Plan holder to supervise the administration of the Cafeteria Plan Arrangement.

J. PARTICIPATING EMPLOYEE ELIGIBILITY: All permanent employees regularly scheduled to work _____ hours or more per week.

 

EFFECTIVE DATE

A. The effective date of this Supporting Document for those employees eligible on that date; or

B. The date following eligibility, but coinciding with satisfaction of eligibility requirements under the Welfare Plan for those employees who become eligible subsequent to the effective date of this Supporting Document Cafeteria Plan Arrangement.

 

TERMINATION DATE

Termination of participation in the Cafeteria Plan Arrangement shall be the earlier of:

A. The date the Participating Employee (an employee participating in the Cafeteria Plan Arrangement) terminates employment; or

B. The date the Participating Employee no longer meets the eligibility requirements; or

C. The date the Participating Employee is placed on lay-off or an approved leave of absence; or

D. The date this Cafeteria Plan Arrangement is terminated.

 

ADMINISTRATION

The Administrator shall supervise the administration of the Cafeteria Plan Arrangement to see that it is carried out, in accordance with its terms, for the exclusive benefit of employees eligible to participate, without discrimination. The Administrator has the power and authority to administer the Cafeteria Plan Arrangement, subject to its terms and to the requirements of applicable laws. The powers of the Administrator include, but are not limited to, the following:

A. To establish and enforce such procedures and regulations necessary for the administration of the Cafeteria Plan Arrangement, or as may be required by law.

B. To interpret and determine questions concerning the Cafeteria Plan Arrangement, including the eligibility of any employee to participate.

C. To delegate responsibility under the Cafeteria Plan Arrangement and to designate such other persons as may be necessary to carry out these responsibilities, with any delegation or designation set out in writing.

D. To establish and maintain such records as are necessary to properly administer the Cafeteria Plan Arrangement and as may be necessary to meet the requirements of law.

E. To make available to each Participating Employee his or her records maintained under the Cafeteria Plan Arrangement, for examination at reasonable times during normal business hours.

F. The administrator shall at all times exercise and act under the power and authority granted by the Cafeteria Plan Arrangement in a manner that is nondiscriminatory.

 

FUNDING

A. Prior to the beginning of each Plan Year, the Plan holder shall determine that portion of the monthly Welfare Plan premium contribution to make on behalf of each employee participating in the Welfare Plan. Such contributions shall be considered non-elective contributions. Any such contribution made by the Plan holder is fixed in amount, irrespective of what election is made by a Participating Employee in item B. below.

B. The excess of the monthly Welfare Plan premium over the amount contributed on behalf of each employee by the Plan holder will be made by each employee participating in the plan. Participating Employees may elect, prior to ____________________ of each year to have their portion of the monthly Welfare Plan contribution:

1. Contributed to the Welfare Plan on a pre-tax basis, through the Cafeteria Plan Arrangement, from a corresponding reduction in salary (contributions made in this fashion are considered employer, non-elective contributions); or

2. Contributed to the Welfare Plan by payroll deduction on an after-tax basis. If this method of funding is elected by Participating Employees, an amount equal to the excess of the monthly Welfare Plan premium over the amount contributed by the Plan holder on behalf of each Participating Employee (as set out in A and B above) will be included in the employee’s taxable gross pay.

C. All contributions by the Plan holder (as set out in A.1 and B.1) will be available to Participating Employees solely to purchase benefits under the Welfare Plan. The contribution by the Plan holder will not exceed the cost of such benefits for any Participating Employees.

D. If a Participating Employee terminates as set out in section III above, the employee shall forfeit all unused contributions made up to the date of termination.

 

BENEFITS ELECTIONS

A. Participating Employees make benefit elections prior to the beginning of each Plan Year. These elections remain in effect until the end of that Plan Year. Employees may change elections prior to the beginning of each subsequent Plan Year.

B. Employees may change benefit election during the Plan Year only as a result of a change in the employee’s family status. Changes in family status include: birth, adoption, divorce, marriage, death or termination of spouse’s employment.

C. Elections under the Cafeteria Plan Arrangement are made on the form(s) provided by the Administrator for making said elections, and shall be distributed within 15 days prior to the beginning of each Plan Year to all current participants and the employees expected to be eligible to participate at the beginning of each Plan Year.

D. Said elections are to be made in the manner described on the form(s) so provided, that must be completed and returned to the Administrator prior to the beginning of each Plan Year.

E. Elections under the Cafeteria Plan Arrangement for employees who become eligible to participate during any Plan Year shall be made in the manner described on the form(s) provided for making said elections by the Administrator. They shall be made prior to the start of the first payroll period for which salary reduction elections are effective.

F. Elections made under this Cafeteria Plan Arrangement will terminate upon the date on which an employee ceases to be a Participating Employee or eligible to participate, even though coverage or benefits under the Welfare Plan may continue to the extent provided in the Welfare Benefit Plan and/or by law.

Participating Employees are required to provide to the Plan holder and/or the Administrator any information, and to sign such documents, as may reasonably be required for the proper administration of the Cafeteria Plan Arrangement.

This Cafeteria Plan Arrangement will be construed, administered and enforced according to the laws of ______________________.

IN WITNESS WHEREOF, the Plan holder has caused this Cafeteria Plan Arrangement to be executed in its name and behalf on this _______ day of ______________, _____, by its duly authorized officer.

Name ____________________________________________

Signature _________________________________________

Title ______________________________________________

 

Sample Enrollment Election Form

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