CENTENNIAL SCHOOL DISTRICT
FLEXIBLE BENEFITS PLAN
TABLE OF CONTENTS
ARTICLE I - INTRODUCTION
1.1 Adoption of the Plan
1.2 Effective Dates
ARTICLE II - DEFINITIONS
ARTICLE III - PARTICIPATION
3.2 Commencement of Participation
3.3 Term of Participation
3.4 Treatment of Rehired Employees
3.5 HIPAA Portability
3.6 Medical Child Support Orders
3.7 Family Medical Leave Act
3.8 Change in Enrollment
ARTICLE IV - CONTRIBUTIONS AND BENEFITS
4.3 Increases or Decreases in Premiums
4.4 Maximum Contribution
ARTICLE V - PLAN ADMINISTRATION
5.1 Employer's Duties
5.2 Information to be Provided to the Employer
5.3 Interpreting Plan Terms
5.5 Review Procedures
5.6 Rules Apply Uniformly
ARTICLE VI - GENERAL PROVISIONS
6.1 Amendment and Termination
6.3 Not an Employment Contract
6.4 Participant Litigation
6.6 Required Information
6.8 Applicable Law
FLEXIBLE BENEFITS PLAN
1.1 Adoption of the Plan. This Flexible Benefits Plan has been adopted and executed by the
1.2 Effective Dates. The provisions of this Plan are effective on July 1, 2011. The Employer’s
Cafeteria Plan has been in effect since July 1, 1999.
1.3 Purpose. The purpose of this Plan is to allow Employees to select among cash,
Compensation, and certain nontaxable general welfare and fringe benefit plans sponsored by the
Employer. The Employer intends that this Plan qualify as a Cafeteria Plan under Section 125 of the Code,
and that the benefits provided under this Plan be eligible for exclusion from the Participants' income under
Section 125 of the Code.
As used in this Plan document, the terms listed in this Section will have the following meanings:
2.1 "Change in Status" A Change In Status is an event that allows a Participant to change their
contribution election during the Plan Year, and outside of the scheduled open enrollment period. The
Employer has elected to allow all of the Change in Status reasons published by the IRS for this type of
2.2 "Code" the Internal Revenue Code of 1986, as amended.
2.3 "Compensation" all the earned income, salary, wages and other earnings paid by the
Employer to a Participant during a Plan Year, including any amounts contributed by the Employer
pursuant to a salary reduction agreement which are not includable in gross income under Sections 125,
402(g)(3), 402(h), 403(b) or 457(b) of the Code.
2.4 "Dependent" means an individual who is a dependent of a Participant within the meaning of
Section 152(a) as modified by Section 105(b).
2.5 "Eligible Employee" an Employee, as defined below, who is eligible to participate in the
Employer's health care program, limited to employees who regularly work at least 40 hours per week, and
not including Employees who are Non-Resident Aliens (within the meaning of section 7701(b)(1)(B) of the
Code deriving no earned income (within the meaning of section 911(d)(2) of the Code) from the Employer
which constitutes income from sources within the United States (within the meaning of section 861(a)(3)
of the Code).
2.6 "Employee" a person who is currently or hereafter employed by the Employer, or by any
other employer aggregated under sections 414(b), (c), (m), (n) or (o) of the Code and the regulations
there under, including a Leased Employee subject to section 414(n) of the Code. Individuals who are not
contemporaneously classified as Employees of the Employer for purposes of the Employer's payroll
system (including, without limitation, individuals employed by temporary help firms, technical help firms,
staffing firms, employee leasing firms, professional employer organizations or other staffing firms whether
or not deemed to be "common law" Employees or "Leased Employees" within the meaning of section
414(n) (o) of the Code) are not considered to be Eligible Employees of the Employer and will not be
eligible to participate in the Plan. In the event any such individuals are reclassified as Employees for any
purpose, including without limitation, common law or statutory employees, by any action of any third
party, including, without limitation, any government agency, or as a result of any private lawsuit, action, or
administrative proceeding, such individuals will notwithstanding such reclassification, remain ineligible for
participation hereunder. Notwithstanding foregoing, the exclusive means for individuals who are not
contemporaneously classified as an Employee of the Employer on the Employer's payroll system to
become eligible to participate in this Plan is through an amendment to this Plan, duly executed by the
Employer, which specifically renders such individuals eligible for participation hereunder.
The Employer will have full and complete discretion to determine eligibility for participation,
including, without limitation, the determination of those individuals who are deemed Employees of the
Employer (or any controlled group member). This Plan is to be construed to exclude all individuals who
are not considered Employees for purposes of the Employer's payroll system, and the Employer is
authorized to do so, despite the fact that its decision may result in the loss of the Plan's tax qualification.
2.7 "Employer" Centennial School District or any of its affiliates, successors or assignors which
adopt the Plan.
2.8 "Participant" an Eligible Employee who has met the eligibility requirements of this Plan and
has elected to participate in the Plan.
2.9 "Plan Year" means the 12-consecutive month period, July 1st through June 30th.
2.10 “Qualified Benefit Plans” group welfare benefit plans and fringe benefit plans that are
considered “qualified” by the IRS Code Section 125, a designation that allows these plans to be offered
on a pre-tax basis. The Qualified benefits that will be included under this Plan are listed in the Summary
Plan Description. These benefits are subject to change at the discretion of the Employer.
2.11 "Salary Reduction Agreement" the agreement authorizing the Employer to reduce the
Employee's Compensation while a Participant for purposes of making contributions toward Benefits under
2.12 "Spouse" an individual who is legally married to a Participant but will not include an
individual separated from a Participant or under a decree of legal separation.
3.1 Eligibility. Each Eligible Employee is eligible to participate in the Plan on their date of hire, or
the date on which the Employee otherwise becomes eligible to participate as defined in this Plan
Document or by applicable law, so long as the Employee is employed by the Employer on the day they
are enrolled. The Employee’s election must be delivered to the Employer within 30 days of the date of
3.2 Commencement of Participation. Upon becoming eligible to Participate in this Plan, an
Employee that is enrolled in a Qualified Benefit Plan will be deemed to have executed a Salary Reduction
Agreement that authorizes the Employer to reduce the Participant's Compensation in the amount
necessary to fund the Employee’s share of the cost of the Qualified Benefits Plans. For any Plan Year, an
Employee has the right to decline coverage and refuse salary reduction by submitting a written request to
the Benefits Coordinator.
For any following Plan Year, the Qualified Benefits Plans under which the Participant is enrolled
will be in effect for the new Plan Year. The Participant will be deemed to have executed a valid Salary
Reduction Agreement for the amount necessary to fund the Employee’s share of the cost of the Qualified
3.3 Term of Participation. Each Participant will be enrolled in the Plan for the entire Plan Year
or the portion of the Plan Year remaining after enrollment, or until the earlier of when:
(a) the Participant dies, resigns or terminates employment or ends a severance period
with the Employer;
(b) the Participant fails to make required contributions under the Plan;
(c) the Participant ceases to be an eligible Employee;
(d) the Plan terminates; or,
(e) the Participant revokes their election under a Change In Status.
3.4 Treatment of Rehired Employees. A Participant whose employment terminates and is
subsequently re-employed within 30 days of their separation of service and within the same Plan Year will
immediately rejoin the Plan with the same Benefit elections.
Should the Participant return within 30 days of their separation of service during the following
Plan Year, the Participant will be allowed to change elections through the Open Enrollment process.
A Participant whose employment terminates and who is subsequently re-employed with more
than 30 days separation of service will need to re-satisfy Plan eligibility requirements to rejoin the Plan.
Any unused reimbursement Benefits Account balance prior to the initial separation of service date will be
3.5 HIPAA Portability. Any Employee who becomes eligible under the Health Insurance
Portability and Accountability Act of 1996("HIPAA") for coverage under an Accident or Health benefit
offered by the Employer will be allowed to make a consistent election, or election change under this Plan.
3.6 Medical Child Support Orders. The Employer will adhere to the terms of any judgment,
decree, or court order (including a court's approval of a domestic relations settlement agreement) which
complies with federal or applicable state law. The Employer will comply with the administrative
requirements described under 29 USC Sec. 1169 relating to Qualified Medical Child Support Orders
(QMCSO), including any federal regulations or state laws relating to the same. On the date coverage is
provided as directed by a QMCSO the Employee-parent will become eligible to participate in this Plan in
order to pay their share of the cost of the coverage on a pre-tax basis.
3.7 Family Medical Leave Act. FMLA leave will not be available to Employees for Plan Years in
which the Employer has 50 or fewer Employees. For Plan Years in which the Employer has more than 50
Employees, the Employer is required to make FMLA leave available to eligible employees under
circumstances that are prescribed by applicable federal law, including the Family and Medical Leave Act
of 1993 (29 U.S.C. 2611) as amended.
Payment Option(s) for coverage while on unpaid Family Medical Leave Act leave for group plans:
(a) Pre-pay before commencement of leave through pre-tax or after-tax Salary Reduction
Agreement from any taxable Compensation, including cashing out of unused sick or vacation
days, provided all other plan requirements are met.
(b) Pay-as-you-go. Employees may pay their share of premium payments on the same
schedule as payments would be made if the employee were not on leave, or under another
schedule permitted under Department of Labor regulations.
The Employer will not be required to continue the health coverage of an Employee who
fails to make required premium payments while on FMLA leave. However, if the Employer
chooses to continue the health coverage of an Employee who fails to make required premium
payment while on FMLA leave, the Employer is entitled to recoup those payments after the
Employee returns from FMLA leave.
If a Participant’s coverage under the Plan ceased while on FMLA leave, the Participant will be
entitled to resume coverage upon return from leave on the same participation basis in effect prior to the
leave, or as otherwise required under the FMLA. The Participant will be entitled to elect reinstatement in
the Plan at the coverage level that was in effect before the FMLA leave. Or, the Participant can continue
with the amount withheld from the Participant’s compensation on payroll-by-payroll basis equal to the
amount withheld before the FMLA leave.
3.8 Change in Enrollment. No Participant in the Plan will be allowed to alter or discontinue the
Participant's benefits elections during a Plan Year except when due to and consistent with a Change in
Status. Change In Status enrollment requests must be made within 30 days of the Change In Status
Event and be consistent with the actual Change In Status. An Employee can make a prospective change
to a Health Savings Account election under this Plan during the Plan Year without having a Change In
Upon the occurrence of a Change in Status, the Participant will file a Salary Reduction
Agreement, which will serve to revoke the Participant's previous elections. The new Salary Reduction
Agreement, if determined by the Employer to be timely submitted and consistent with the Status Change,
will be effective prospectively and apply only to those Benefits accruing to the Participant, the
Participant's Spouse or the Participant's Dependents after the effective date of the new Salary Reduction
Agreement. With respect to an election change under the special enrollment period provisions of HIPAA,
"timely submitted" will mean submitted no later than the last day of such special enrollment period. The
Employer will determine if the new Salary Reduction Agreement has been timely submitted consistent
with the nature of the Change in Status.
CONTRIBUTIONS AND BENEFITS
4.1 Funding. The Employer will contribute amounts necessary to meet its obligations under the
Plan out of its general assets. Contributions to the Plan for any Plan Year will be limited to the amounts
necessary to pay for the Qualified Benefits Plans elected by the Participant. Contributions to the Plan will
be made to and held in such accounts or funds as the Employer deems appropriate.
The Employer may provide additional Employer contributions in the way of cash or spending
credits that can be used for any Qualified Benefit Plan, or used in a limited manner as defined by the
Employer. The Employer may make defined contributions to specific Qualified Benefit Plans. The
enrollment materials used each Plan Year include the amount of any Employer contributions, the rules
defining how the Employer contributions can be used by the Participants, and any limitations on the use
of Employer contributions. The enrollment materials are attached to and hereby incorporated by reference
to this Plan Document. Employer contributions will continue to be provided while on approved FMLA
leave to the same extent provided to an Employee actively at work.
4.2 Benefits. This Plan will pay the premium or required contribution on behalf of the Participant
for the Qualified Benefit Plans elected by the Participant.
4.3 Increases or Decreases in Premiums. If the premiums or required contribution for any
benefit plan being offered by the Employer during the Plan Year increase or decrease, a Participant’s
contributions will increase or decrease automatically in an amount sufficient to pay for such increase or
decrease. However, in the case of an increase in premium, if there is a similar benefit offered under the
Plan at the time of said increase, the Participant may select such similar benefit rather than pay the
The Employer reserves the right to reduce the Participants' share of any Premiums and increase
the Employer's share by a like amount. The duration of this "Premium Holiday" is at the Employer's
discretion. The Employer will notify the Participants prior to ceasing the "Premium Holiday." The Employer
reserves the right to increase the Participants' share of any Premiums and decrease the Employer's share
by a like amount. The duration of this is at the Employer's discretion. The Employer will notify Participants
prior to raising the Participants' obligations. As this is considered to be temporary, Participants will not be
considered to have incurred a Change in Status should the Employer invoke this option.
4.4 Maximum Contribution. The Maximum Contribution any individual can make under this Plan
is an amount equal to the sum of the costs for each of the highest cost premium or required contributions
for Employer Sponsored Qualified Benefit Plans.
4.5 Nondiscrimination. The Plan is not intended to discriminate in favor of highly compensated
individuals as to eligibility to participate or contributions and benefits as required by the Code. The
Employer may exclude or limit certain highly compensated individuals from participation in the Plan, in the
Employer's judgment, such actions serve to assure that the Plan does not violate applicable
4.6 Forfeiture. A Participant forfeits the amount of their annual election that is in excess of the
amount of premium reimbursed for Qualified Benefits during any Plan Year.
Upon such forfeiture, the Participant's accrual will be reduced to zero. Forfeited funds can be
retained by the Employer, or at the discretion of the Employer, forfeitures of benefits under the Plan can
be reallocated to Participants in any reasonable manner that has no relation to prior claims history.
Forfeitures of benefits may also be applied towards the cost of administering the Plan. Forfeitures of
benefits will become the sole property of the Employer.
5.1 Employer’s Duties. In addition to any rights, duties or powers specified throughout the Plan,
the Employer will have the following rights, duties and powers:
(a) to interpret the Plan, to determine the amount, manner and time for payment of any
benefits under the Plan, and to construe or remedy any ambiguities, inconsistencies or omissions
under the Plan;
(b) to adopt and apply any rules or procedures to insure the orderly and efficient
administration of the Plan;
(c) to determine the rights of any Participant, Spouse, Dependent or beneficiary to
benefits under the Plan;
(d) to develop appellate and review procedures for any Participant, Spouse, Dependent
or designated beneficiary denied benefits under the Plan;
(e) to maintain records it may require in connection with the proper administration of the
(f) to employ any agents, attorneys, accountants or other parties (who may also be
employed by the Employer) and to allocate or delegate to them such powers or duties as is
necessary to assist in the proper and efficient administration of the Plan, provided that such
allocation or delegation and the acceptance thereof is in writing.
5.2 Information to be Provided to the Employer. The Employer, or any of its agents, will
collect employment records of any employee eligible to participate under the Plan. These records will
include, but will not be limited to, any information regarding period of employment, leaves of absence,
salary history, termination of employment, or any other information the Employer may need for the proper
administration of the Plan. Any Participant or Dependent or any other person entitled to participate in this
Plan will furnish to the Employer his correct post office address, his date of birth, the names, correct
addresses and dates of birth of any designated beneficiaries, with proper proof thereof, or any other data
the Employer might reasonably request to insure the proper and efficient administration of the Plan.
5.3 Interpreting Plan Terms. Any interpretation of any provision of this Plan made in good faith
by the Employer as to the terms of this Plan is final and will be binding upon the parties.
5.4 Misstatements. Any misstatement or other mistake of fact will be corrected as soon as
reasonably possible upon notification to the Employer and any adjustment or correction attributable to
such misstatement or mistake of fact will be made by the Employer as he considers equitable and
5.5 Review Procedures. In cases where the Employer, Service Provider or a Third Party
Administrator denies participation under this Plan for any reason, the Employer or Third Party
Administrator will provide written documentation of the reasons for their action. The written denial will be
provided to the Employee within 30 days of the date of the decision. The written denial will refer to any
Plan or section of the Code relied upon in making the decision.
The Employer or Third Party Administrator may request additional information needed to properly
make their decision. They will provide a written request that explains why the information is necessary,
and explain these review procedures.
The Participant can request a review of this decision by contacting the Employer within 180 days
from the day the Participant receives the decision to deny participation or 180 days from the date the
premium or required contribution was not made.
In any case where the Employer determines special circumstances apply, the Employer may
extend the amount of time any Participant, Spouse, Dependent or designated beneficiary may need to
appeal a decision to deny participation, upon proper application to the Employer.
5.6 Rules Apply Uniformly. The Employer will perform assigned duties in a reasonable manner
and on a nondiscriminatory basis and will apply uniform rules to all Participants similarly situated under
6.1 Amendment and Termination. The Employer may amend or terminate this Plan at any time
by legal action of the authorized agents of the Employer. The Employer may make amendments apply
retroactively to the extent necessary so that the Plan remains in compliance with Section 125 of the Code
or any other provision of the Code applicable to the Plan.
6.2 Nonassignability. Benefits under this Plan are nonassignable. Benefits are for the exclusive
benefit of Participants, Spouses, Dependents and beneficiaries. No benefit will be voluntarily or
involuntarily assigned, sold or transferred.
6.3 Not an Employment Contract. This Plan is not an employment contract, the Employer in no
way guarantees employment for any employee or Participant. Participation in this Plan will in no way
assure continued employment with the Employer.
6.4 Participant Litigation. In any action or proceeding against the Plan, or the administration
thereof, employees or former employees of the Employer or any other person having or claiming to have
an interest under the Plan will not be necessary parties to such action or proceeding. The Employer or
their registered representatives will be the sole source for service of process against the Plan. Any final
judgment which is not appealed or appealable will be binding on the Employer and any interested party to
6.5 Addresses. Each Participant will provide the Employer with his or her current post office
address. Any communication or statement mailed or sent to the Participant’s last known post office
address will be considered adequate notice under this Plan.
6.6 Required Information. Each Participant, Spouse or Dependent will furnish the Employer
documents, evidence or information that the Employer considers necessary to ensure the efficient
operation and administration of the Plan.
6.7 Severability. If any provision of this Plan is found to be illegal or invalid, that finding will only
apply to that part of the Plan being addressed by the finding and will not apply to any other provision of
this Plan. The Plan will be construed as if the illegal or invalid term never existed.
6.8 Applicable Law. The Plan will be governed by the Internal Revenue Service Code, and the
regulations promulgated by the Internal Revenue Service.
Executed this _________ day of _____________, ______.
Employer: Centennial School District
Polly Moore, Esq., Director of Human Resources