FLEXIBLE BENEFITS PLANS
MEDICAL SPENDING ACCOUNT
DEPENDENT CARE ACCOUNT
SUMMARY PLAN DESCRIPTION
July 2010
Oak Ridge Associated Universities
Third Party Administrator: BenefitsAssist, inc.
P. O. Box 31823
Knoxville, TN 37930-1823
(865) 769-2800
Company Name: Oak Ridge Associated Universities
Company Address: P.O. Box 117
Oak Ridge, TN 37831-0117
Company Telephone No.: 865-576-3167
Plan Administrator: Director
Compensation, Benefits and HRIS
P. O. Box 117
Oak Ridge, TN 37831-0117
Employer Identification Number: 62-0476816
Plan Number: 832
ORAU sponsors the 125 Flexible Benefits Plan (the Plan) and is also the Administrator and the Agent for Legal Process. ORAU uses its own and/or employee funds to pay benefits provided under this Plan.
Neither this plan nor any action taken with respect to it shall confer upon any person the right to continue employment with ORAU.
This plan will use protected health information (PHI) to the extent of and in accordance with the uses and disclosures permitted by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
The plan’s designated agent for service of legal process is the General Counsel of the corporation. Any legal papers should be delivered to the address listed above. However, service may also be made upon the Plan Administrator or a Trustee.
The Plan year begins on July 1 and ends on June 30.
DEFINITIONS AND ACRONYMS
Account – The balance of a hypothetical account established for each participant. Account(s) shall include to the extent provided in the adoption agreement, a premium payment account, a medical spending account, a dependent care spending account and such other account(s) as the Plan Administrator, in its discretion, deems appropriate.
Basic Pay Rate (Salary) – The stated rate of pay per hour based on a full-time work schedule, excluding any premium payments such as shift differential, benefits, emergency on-call or call-in allowance, or overtime.
Employee Retirement Income Security Act of 1974 (ERISA) – A federal law that protects participants in most private retirement plans by setting minimum vesting and participation requirements and requiring prudent selection of investment choices. Also ERISA imposes reporting requirements on plan sponsors.
EOB – Explanation of Benefits
FMLA – Family and Medical Leave Act
FTR – An employee who works in an established position within the standard classification plan and salary schedule for an indefinite period of time and is regularly scheduled to work 40 hours each workweek.
FTT – An Employee who works in an established position within the standard classification plan and salary schedule for a definite period of time of up to one year or more and is scheduled to work 40 hours each workweek.
HIPAA - Health Insurance Portability and Accountability Act of 1996
HR – Human Resources
IRS – Internal Revenue Service
PHI – Protected Health Information
Plan Year – The 12-consecutive month period (July 1 through June 30) described in the Adoption Agreement.
PTR – An employee who works in an established position within the standard classification plan and salary schedule for an indefinite period of time and who works an average of at least 20 hours, but normally less than 40 hours each workweek. Compensation will be paid in proportion to time worked.
Salary Reduction – Annuity contributions that are withheld from salary under the terms of a salary reduction agreement and that are not subject to current federal income taxes.
SPD – Summary Plan Description
TEMP – Temporary employees are in established positions within the standard classification plan and salary schedule who work part-time for a definite period of time, or who work full-time for a definite period of time of less than one year.
TABLE OF CONTENTS
DEFINITIONS AND ACRONYMS ii
INTRODUCTION 1
ELIGIBILITY FOR PARTICIPATION 1
Eligible Employee 1
Participation 1
Plan Year 1
ELECTIONS 2
In General 2
Election Procedures 2
Modification of Elections 2
BENEFITS 2
Medical Spending Account 3
Dependent Care Flexible Spending Account 3
FORFEITURES 4
Plan Year/Termination 4
CLAIMS 4
Deadlines 4
Debit/Credit Cards 5
Documentation of Claims 5
Method and Timing of Payment 5
Where to Submit Claims 5
Refunds/Indemnification 5
Beneficiary 5
Claim Procedures for Health Benefits 6
Application for Benefits 6
Timing of Notice of Denied Claim 6
Content of Notice of Denied Claim 6
Appeal of Denied Claim 7
Denial of Appeal 7
CLAIM PROCEDURES FOR NON-HEALTH BENEFITS 8
Application for Benefits 8
Timing of Notice of Denied Claim 8
Content of Notice of Denied Claim 8
Appeal of Denied Claim 8
Denial of Appeal 9
YOUR RIGHTS UNDER ERISA 9
CONTINUED GROUP MEDICAL INSURANCE PLAN 9
PRUDENT ACTION BY PLAN FIDUCIARIES 9
ASSISTANCE WITH YOUR QUESTIONS 10
MISCELLANEOUS 10
Qualified Medical Child Support Orders 10
Loss of Benefit 10
Amendment and Termination 11
Fees 11
Administrator Discretion 11
Taxation 11
Address/Dependent Changes 11
FREQUENTLY ASKED QUESTIONS 11
Participation 11-12
Medical Reimbursement Benefits 12-13
Dependent Care Assistance Benefits 14
Claims 15
iv
INTRODUCTION
Oak Ridge Associated Universities (the Company) established the Flexible Benefits Plan (the Plan) effective February 1, 1991. This Summary Plan Description describes main provisions of the Plan as amended and restated effective July 1, 2007. Please read it carefully. It is important to understand the plan requirements and the benefits it can provide.
This revised Summary Plan Description (SPD) supersedes all previous SPDs. Although the purpose of this document is to summarize the more significant provisions of the Plan, the SPD cannot modify the terms of the Plan document. If there are inconsistencies between the SPD and the Plan document, the Plan document will control.
While ORAU fully expects that this Plan will continue indefinitely, ORAU has the right to amend or terminate the Plan at any time without prior notice. Nothing is intended to be or shall be construed to entitle any participant to vested or non-terminable benefits. Neither this plan nor any action taken with respect to it shall confer upon any employee the right to continue employment.
If you have any questions after reading the SPD, please contact a Human Resources (HR) Benefits staff member.
Eligibility for Participation
Eligible Employee
You are an eligible employee if you are a Full-time Regular (FTR), Part-time Regular (PTR) or Full-time Temporary (FTT) employee at Oak Ridge Associated Universities or any affiliate who has adopted the plan.
Participation
Employees are eligible to participate in the plans on the date employed in an eligible classification or when changed to an eligible classification. There is no waiting period.
You will stop being a participant eligible to receive benefits from the Plan on the date you are no longer an eligible employee or the date you separate your employment with ORAU.
Your election form will be binding for the Plan Year, July 1 through June 30. If you begin participating in the Plan after the beginning of the plan year, your election form will be binding for the remainder of the plan year.
Plan Year
The Plan Year will begin each July 1 and will continue for a 12-month period ending on each subsequent June 30.
Elections
In General
When you first become eligible to participate in the Plan, you must complete an enrollment form within 30 days of eligibility. By completing the election form, you agree to reduce your taxable compensation for each payroll period. All contributions will be credited to an account established in your behalf. Your contributions to the Plan are not subject to federal income tax or social security taxes.
Please note that while you may enjoy certain tax benefits, there may be some drawbacks to participation in the Plan. For instance, participation in the Plan may lower your social security benefits. You should consult with your professional tax/financial advisor to determine the consequences of your participation in this Plan.
Election Procedures
When you are first eligible to participate in the Plan, you must return a completed election form to Human Resources on or before the date specified. During an open enrollment period, your enrollment form must be returned by the date determined by the Plan Administrator. Late applications will not be accepted.
You will generally only be able to change your elections as of the beginning of each Plan Year. Prior to the start of each Plan Year, HR will provide an election form to you. In order to participate in the Plan for the next Plan Year, you must return the completed election form to HR at MS-32 on or before the date specified by the Plan Administrator. See "Modification of Elections" below for situations where you may modify elections at a time other than the beginning of a Plan Year.
If as of the start of a Plan Year you have not returned an election form by its due date, you will be deemed to have elected not to participate in the Plan for that Plan Year.
Modification of Elections
Generally speaking, you may only revise your elections during the open enrollment period at the start of a Plan Year. However, in certain situations you may modify your elections upon a "change in status". A brief listing of events that constitute a change in status follows. Please note that there are several conditions and/or limitations that apply to the events listed below. Please contact HR if you have any questions or believe that you may qualify for an election change. A change in status includes:
· Change in your marital status.
· Change in the number of your dependents.
· Change in employment status.
· A dependent satisfies or ceases to satisfy eligibility requirements.
· Change in your place of residence.
· Commencement or termination of an adoption proceeding.
· Court judgment, decree, or order.
· Entitlement to Medicare or Medicaid.
· Significant cost or other coverage changes.
· You take unpaid leave under the Family Medical Leave Act (FMLA)
If you have a change in status, you may modify an election in your Medical Flexible Spending Account but your new annual contribution amount may not be less than the amount previously reimbursed at the time of the election change.
BENEFITS
Medical Spending Account
When you become eligible to enroll and participate in the Plan, a Medical Flexible Spending account will be established in your name. This account will be credited with your contributions and will be reduced by any payments made on your behalf. You will be entitled to receive reimbursement from this account for eligible expenses incurred by you, your spouse and dependents, if any. A dependent is generally someone who you may claim as a dependent on your federal income tax return. You may receive reimbursement for eligible expenses incurred at a time when you are actively participating on the Plan.
The entire annual amount you elect to contribute for the Plan Year for the Medical Flexible Spending Account less any reimbursements already disbursed will be available for reimbursement. The maximum amount you may contribute each year is $5,000.
Eligible expenses generally include all medical expenses that you may deduct on your federal income tax return, but you may also seek reimbursement for certain over-the-counter drugs and other medically related items. You will not be reimbursed for any expenses that are:
· not incurred in the Plan Year,
· incurred before or after you are eligible to participate in the Plan,
· attributable to a tax deduction you take in a prior taxable year, or
· covered, paid or reimbursed from any other source.
Dependent Care Flexible Spending Account
Dependent care expenses are the expenses you incur for the care of a dependent so that you or your spouse can be employed. The plan allows you to reduce your taxable income and use that amount to pay all or part of your dependent care expenses. When you become eligible to enroll and participate in the Plan, a Dependent Care Flexible Spending Account will be established in your name. This Account will be credited with your contributions and will be reduced by any payments made on your behalf. You will be entitled to receive reimbursement from this account for dependent care expenses. Dependent care expenses are defined as expenses you incur for the care of a qualifying individual. A qualifying individual is a dependent under age 13 or a spouse or dependent who lives with you and is physically or mentally incapable of caring for himself/herself. However, these expenses qualify only if they allow you to be gainfully employed.
Not all expenses qualify as dependent care assistance. Only expenses that are excludable from income under federal tax may qualify as dependent care assistance. Some examples of expenses that qualify are:
· Before and after school programs
· Care in your home or someone else's home (as long as the care giver is not your spouse or dependent and is age 19 or older)
· Licensed child care center
· Nursery school or pre-school
· Summer day care (not overnight)
Dependent care may not be provided by:
· A dependent of the participant
· The participant’s spouse
· A child of the participant who is under age 19
Please contact BenefitsAssist, inc. before enrolling in the Plan to confirm that the expenses for which you will seek reimbursement will qualify as dependent care assistance.
You will not be reimbursed for any expenses that are:
· not incurred in the Plan Year,
· incurred before or after you are eligible to participate in the Plan,
· attributable to a tax credit you take for the same expenses, or
· covered, paid or reimbursed from any other source.
The maximum amount of expense that may be contributed/reimbursed in any Plan year is $5,000 ($2,500 if you are married and filing a separate return). Special rules apply in the case of a spouse who is a student or incapable of caring for himself/herself.
You cannot receive reimbursement for dependent care expenses under this plan and receive a tax credit for federal taxes for the same expenses. Also, the reimbursement of dependent care expenses under this plan reduces the amount of dependent care expense eligible for the tax credit. Please consult a tax advisor to determine which option would be best for you.