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2024-001 - Resolution
i I RESOLUTION NO. 2024-001 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, RANCHO CUCAMONGA,CALIFORNIA,APPROVING AN AMENDED AND RESTATED CAFETERIA PLAN AND EMPLOYEE PLAN SUMMARY FOR THE CITY OF RANCHO CUCAMONGA WHEREAS, Section 125 of the Internal Revenue Code ("IRS Code") and the regulations thereunder permit an eligible employer to implement a Section 125 Plan ("Cafeteria Plan") for the benefit of its eligible employees; and WHEREAS,the City of Rancho Cucamonga implemented a Cafeteria Plan on September 1, 2007, to provide its eligible employees with the opportunity to choose among qualified benefits available to them under the Cafeteria Plan; and WHEREAS, the City of Rancho Cucamonga desires to update and reconfirm the Cafeteria Plan and has prepared an Amended and Restatement Cafeteria Plan document, which it believes complies with the IRS Code; and WHEREAS, the City Council finds that adopting the Amended and Restated Cafeteria Plan is in the best interest and welfare of the City as it allows for pre-tax benefits choices; and NOW, THEREFORE, by the CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, RANCHO CUCAMONGA, CALIFORNIA as follows: SECTION 1. Adoption of the Amended and Restated Cafeteria Plan. The staff for the City of Rancho Cucamonga independently considered the Amended and Restated Cafeteria Plan Document and found that it adequately outlines the terms and conditions of the Cafeteria Plan. SECTION 2. Employee Plan Summary. The staff for the City of Rancho Cucamonga independently considered the Employee Summary Plan Summary and found that it adequately summarizes the terms and conditions of the Cafeteria Plan. SECTION 3. Implementation. The Plan Administrator of the Cafeteria Plan is hereby authorized and directed to take any and all action necessary to implement the purposes of this Resolution and the Amended and Restated Plan. SECTION 4. Effective Date. This resolution shall take effect immediately upon its passage, with the Amended and Restated Plan's effective date to be January 1, 2024. Resolution No. 2024-001 — Page 1 of 2 PASSED, APPROVED, and ADOPTED this 17th day of January, 2024. 0&� r� ennis Michael, Mayor/ ATTEST: IWQ' l � ice . Reynolds, ity Clerk STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) ss CITY OF RANCHO CUCAMONGA ) I, Janice C. Reynolds, City Clerk of the City of Rancho Cucamonga, do hereby certify that the foregoing Resolution was duly passed, approved, and adopted by the City Council of the City of Rancho Cucamonga, at a Regular Meeting of said Council held on the 17t1 day of January, 2024. AYES: Hutchison, Kennedy, Michael, Scott, Stickler NOES: None ABSENT: None ABSTAINED: None Executed this 18th day of January, 2024, at Rancho Cucamonga, California. anice (C Reynolds, City Cylerk Resolution No. 2024-001 — Page 2 of 2 CITY OF RANCHO CUCAMONGA CAFETERIA PLAN City.of Ranciio Cucamoriga ` 10500,Ci.vic Center Drive Raricho:Cucamonga' ,A 91730 h. ATTACHMENT 3 +?+I'�+� 'M°'...+�-t�•uR+.�ew I.rWYui+r arm .'« .�.✓+..w.�'�»ws`.w ;�+y.n +�.nwW�n.,..,.,a.e�pr w•w�°s�lwn!k'����'��A{�w'H'!w'�.a's.N...w,a..rv+ �r.u::4;q'+vwe,s�s.e v..w.erw.C. r TABLE OF CONTENTS ...................................................................................................................................................................................... SECTION 1 -ESTABLISHMENT AND PURPOSE......................................................................................................1 1.1 Establishment and Purpose...................................................................................................................................................1 1.2 Original Effective Date...........................................................................................................................................................1 1.3 Amendment and Restatement..............................................................................................................................................1 1.4 The Plan...................................................................................................................................................................................1 1.5 Definitions...............................................................................................................................................................................1 SECTION 2-ADMINISTRATION OF THE PLAN......................................................................................................4 2.1 In General................................................................................................................................................................................4 2.2 Plan Administrator Powers and Responsibilities..............................................................................................................4 2.3 Allocation of Duties and Responsibilities...........................................................................................................................4 2.4 Payment of Expenses..............................................................................................................................................................5 2.5 Insurance Control Clause......................................................................................................................................................5 2.6 Inability to Locate Payee........................................................................................................................................................5 2.7 Experience Gains....................................................................................................................................................................5 2.8 Priority of Contributions.......................................................................................................................................................5 SECTION 3 -ELIGIBILITY AND PARTICIPATION.....................................................................................................6 3.1 Employee Participation..........................................................................................................................................................6 3.2 HIPAA Special Enrollment...................................................................................................................................................6 3.3 Leave of Absence.....................................................................................................................................................................6 Family and Medical Leave Act("FMLA")..........................................................................................................................6 Uniformed Services Employment and Reemployment Rights Act of 1994("USERRA")..........................................6 ApplicableState or Municipal Law......................................................................................................................................6 3.4 Cessation of Participation.....................................................................................................................................................7 3.5 Reinstatement of Former Participants................................................................................................................................7 SECTION 4-BENEFIT ELECTIONS............................................................................................................................8 4.1 Elections...................................................................................................................................................................................8 4.2 Annual Enrollment Period....................................................................................................................................................8 4.3 Irrevocability of Elections......................................................................................................................................................8 4.4 Permissible Election Changes...............................................................................................................................................8 4.5 Submitting Notices,Designations,and Elections..............................................................................................................8 SECTION 5-PERMISSIBLE ELECTION CHANGES................................................................................................10 SECTION6-METHOD OF FUNDING.....................................................................................................................13 6.1 Source of Funding.................................................................................................................................................................13 6.2 Establishment of Accounts..................................................................................................................................................13 6.3 Salary Reduction Agreement..............................................................................................................................................13 SECTION 7-PREMIUM CONTRIBUTION BENEFITS............................................................................................14 7.1 Premium Contribution Benefits.........................................................................................................................................14 7.2 Cash in Lieu Benefits............................................................................................................................................................14 7.3 Benefit Costs..........................................................................................................................................................................14 7.4 Claims and Appeal Procedures...........................................................................................................................................14 SECTION 8-HEALTH FSA BENEFITS .....................................................................................................................15 8.1 Health FSA Benefits..............................................................................................................................................................15 8.2 Qualified Health Care Expenses......................................................................................................................................:..15 8.3 Health FSA Maximum Dollar Limit..................................................................................................................................15 8.4 Incurred Expenses................................................................................................................................................................15 8.5 Use-Or Lose Rule and Account Carryovers.....................................................................................................................15 8.6 Health FSA Reimbursements..............................................................................................................................................16 Amended and Restated January 1, 2024 8.7 Health Insurance Portability and Accountability Act("HIPAA") ...............................................................................16 8.8 Health FSA Continuation of Coverage Rights.................................................................................................................16 SECTION 9-DEPENDENT CARE FSA BENEFITS..................................................................................................17 9.1 Dependent Care FSA Benefits.............................................................................................................................................17 9.2 Qualified Dependent Care Expenses.................................................................................................................................17 9.3 Dependent Care FSA Maximum Dollar Limit.................................................................................................................17 9.4 Use-Or-Lose Rule.................................................................................................................................................................17 9.5 Incurred Expenses.................................................................................................................................................................17 9.6 Dependent Care FSA Reimbursements.............................................................................................................................17 9.7 Tax Report to Dependent Care FSA Participants............................................................................................................18 SECTION 10-THE USE AND DISCLOSURE OF PHI.............................................................................................19 10.1 Health Plans...........................................................................................................................................................................19 10.2 Business Associates...............................................................................................................................................................19 10.3 Third Parties with Authorization.......................................................................................................................................19 10.4 Plan Sponsor..........................................................................................................................................................................19 10.5 Conditions and Limitations on Use and Disclosure by Plan Sponsor.........................................................................19 10.6 Organized Health Care Arrangement...............................................................................................................................20 10.7 Access to PHI.........................................................................................................................................................................20 10.8 Limitations of PHI Access and Disclosure.......................................................................................................................20 10.9 Noncompliance Issues.........................................................................................................................................................20 10.10 Security Rules........................................................................................................................................................................20 10.11 Breach Notification Rules....................................................................................................................................................21 10.12 HITECH Rules...................................................................................:..................................................................................21 SECTION 11 -GENERAL PROVISIONS...................................................................................................................22 11.1 Plan Interpretation and Severability..................................................................................................................................22 11.2 Separate Plans........................................................................................................................................................................22 11.3 Return or Recharacterization of Contributions...............................................................................................................22 11.4 Effect of Mistake....................................................................................................................................................................22 11.5 Nonassignability....................................................................................................................................................................22 11.6 Employment Noncontractual.............................................................................................................................................22 11.7 No Guarantee of Tax Consequences..................................................................................................................................22 11.8 Indemnification of The City by Participants....................................................................................................................23 11.9 Governing Law......................................................................................................................................................................23 11.10 Headings and Captions........................................................................................................................................................23 11.11 Gender and Number.............................................................................................................................................................23 11.12 Entire Plan..............................................................................................................................................................................23 SECTION 12-AMENDMENT AND TERMINATION..............................................................................................24 12.1 Amendment...........................................................................................................................................................................24 12.2 Termination...........................................................................................................................................................................24 APPENDIXA...............................................................................................................................................................25 Participation and Eligibility Requirements...................................................................................................................................25 APPENDIXB................................................................................................................................................................26 Summary of Benefits and Contribution Requirements...............................................................................................................26 APPENDIXC...............................................................................................................................................................28 AffiliatedEmployers.........................................................................................................................................................................28 1 ii City of Rancho Cucamonga Cafeteria Plano Plan Document SECTION 1 - ESTABLISHMENT AND PURPOSE ...................................................................................................................................................................................... 1.1 Establishment and Purpose City of Rancho Cucamonga("The City")has established the City of Rancho Cucamonga Cafeteria Plan("Plan")to provide its (and its Affiliated Employers) eligible Employees of The City the opportunity to reduce their taxable salary ("Compensation") to cover the cost of certain Elective Benefits on a pre-tax basis. The Plan is intended to qualify as a"Cafeteria Plan"within the meaning of Code Section 125 and the regulations issued thereunder and shall be interpreted in a manner consistent with the requirements thereof. Each eligible Employee shall have the opportunity to elect any of the following Elective Benefits: ■ The Plan's Premium Contribution Benefits and cash-in-lieu benefits set forth in Section 7. ■ The health care flexible spending account("Health FSA") set forth in Section 8,which is intended to qualify as an"accident or health plan"and a"self-funded medical reimbursement plan"under Code Sections 105 and 106. ■ The dependent care flexible spending account("Dependent Care FSA")set forth in Section 9,which is intended to qualify as a"dependent care assistance program"under Code Section 129. 1.2 Original Effective Date This plan originally took effect on January 1,2008. 1.3 Amendment and Restatement This restatement reflects all changes made to the Plan, including all changes required to achieve compliance with applicable Internal Revenue Services("IRS")regulations as of January 1,2024. 1.4 The Plan This Plan,in conjunction with any separate written document which may be required by law,is intended to satisfy the written plan requirement of Code Section 125 and the regulations thereunder. 1.5 Definitions As used herein,the following words and phrases shall have the following respective meanings when capitalized: ACA.ACA means the Patient Protection and Affordable Care Act of 2010,as amended from time to time. Account.Any of the accounts established by The City pursuant to Section 6.2 to which a Participant's Contributions are credited. Affiliated Employer. The City and any "Affiliated Employer" listed on Appendix C which is a member of a controlled group(as defined in Code Section 414(b))which includes The City,any trade or business(whether or not incorporated)which is under common control(as defined in Code Section 414(c))with The City,or any other entity required to be aggregated with The City pursuant to Treasury regulations under Code Section 414(o). Annual Enrollment Period.The period of time(as determined by The City)during which eligible Employees make benefit elections for the subsequent Plan Year. COBRA.The Consolidated Omnibus Budget Reconciliation Act of 1985,as amended from time to time. Code.The Internal Revenue Code of 1986,as amended from time to time. Compensation. With respect to any pay period, the total cash remuneration received, or which would have been received, by the Participant from The City during the Coverage Period prior to any Employee contributions authorized under the Plan. Amended and Restated m January 1, 2024 1 Contributions.Any amount withheld from an eligible Employee's Compensation pursuant to an actual or deemed Salary Reduction Agreement that allows the eligible Employee to elect one or more Elective Benefits that are qualified benefits pursuant to Code Section 125(f)and other applicable laws. Coverage Period.The Plan Year,with the following exceptions: ■ For Employees who first become eligible to participate,it shall mean the portion of the Plan Year following the date on which participation commences;and, ■ For Employees who terminate participation,it shall mean the portion of the Plan Year prior to the date on which participation terminates. Dependent Child.Except for purposes of the Dependent Care FSA,a Dependent Child includes: ■ Any individual who qualifies as a dependent under the applicable Premium Contribution Benefit plan; ■ An individual as defined in Code Section 105(b); ■ Any child as defined in Code Section 152(f)(1))of the Participant; ■ Any child of the Employee to whom IRS Revenue Procedure 2008-48 applies (regarding certain children of divorced or separated parents who receive more than half of their support for the calendar year from one or both parents and are in the custody of one or both parents for more than half of the calendar year). Dependent (Dependent Care FSA). For purposes of the Dependent Care FSA, a Dependent is a "qualifying individual,"as defined in Code Section 21(b).Under this definition,a"child"includes a biological child,stepchild, eligible foster child,legally adopted child,or child placed with the Participant for legal adoption by the Participant. Dependent Care Expenses. Any dependent care expenses incurred by a Participant for dependent care services which qualify for the federal tax credit under Code Section 21,and which have been incurred by or on behalf of a Participant,or Dependent,during a Coverage Period.If the Participant takes a paid or unpaid leave of absence lasting longer than 14 consecutive calendar days, Dependent Care Expenses shall not include expenses incurred after the fourteenth day of the leave and through the end of the leave. Dependent Care Service Provider.A person who provides care or other dependent care services,which qualify for the federal tax credit under Code Section 21 but shall not include: (a) a dependent care center (as defined in Code Section 21(b)(2)(D))unless the requirements of Code Section 21(b)(2)(C)are satisfied;or(b)a related individual as described in Code Section 129(c). Elective Benefits. Cash and any of the various qualified benefits under Code Section 125(f) and corresponding regulations listed on Appendix B made available by The City to the eligible Employees who elect to participate in the Plan. Employee.An individual whose relationship with The City or one of its Affiliated Employers is,under common law, that of an employee and who is on The City's payroll. Employer. The City, any predecessor or successor entity, and any other Affiliated Employer that has adopted the Plan with the consent of The City. FMLA.The Family and Medical Leave Act of 1993,as amended from time to time. Health Care Expenses. For purposes of the Health FSA, expenses incurred by a Participant for medical care-, as defined in Section 213(d).A Participant may receive reimbursement for Health Care Expenses incurred during the period of coverage for which an election is in force, or for which Health FSA benefits are otherwise available as a result of a carryover as provided in Section 9.5. Highly Compensated Individual. An individual within the meaning of Code Section 125(e)(2) and the Treasury regulations thereunder. HIPAA.The Health Insurance Portability and Accountability Act of 1996,as amended. 2 City of Rancho Cucamonga Cafeteria Plano Plan Document Key Employee. An individual within the meaning of Code Section 416(i)(1) and the Treasury regulations thereunder. Participant. An eligible Employee or former eligible Employee who participates in the Plan after meeting the eligibility and participation requirements set forth by The City. Permissible Election Change.Any of the allowable mid-year election changes described in Section 5 due to one of the "Qualifying Life Events" included in Code Section 125 and the regulations issued thereunder that the Plan Administrator, in its sole discretion and on a uniform and consistent basis, determines are permitted mid-year election changes. Plan.The City Cafeteria Plan as set forth herein,including all attachments hereto,as amended from time to time. Plan Administrator. The City and the person or persons designated by The City as being responsible for the operations and administration of the Plan,or the authorized delegate(s)of such person or persons. Plan Sponsor.The Plan Sponsor is City of Rancho Cucamonga. Plan Year. The 12-consecutive month period beginning on January 1 and ending on December 31 of the same calendar year. Premium Contribution Benefit.Any of the Elective Benefits sponsored by The City for which Participants can pay their share of premium costs on a pre-tax basis. Salary Reduction Agreement.The actual or deemed agreement(election form)made by an eligible Employee under which the Employee agrees to pay for Elective Benefits through payroll deductions. Spouse. A spouse shall mean the individual defined in the applicable Benefits Documents. If not defined in the Benefits Documents,a spouse shall mean the individual who is legally married to an Employee as determined under the laws of the state or sovereign country where the place of ceremony occurred and who is treated as a spouse for federal income tax purposes pursuant to Revenue Ruling 2013-17. USERRA.The Uniformed Services Employment and Reemployment Rights Act of 1994,as amended from time to time. Amended and Restated a January 1, 2024 3 SECTION 2 - ADMINISTRATION OF THE PLAN ...................................................................................................................................................................................... 2.1 In General The City shall be the Plan Administrator, unless The City elects otherwise. The City may appoint any person, including,but not limited to selected Employees of The City,to perform the duties of the Plan Administrator.Any person so appointed shall signify acceptance in writing(or such other form as acceptable to both parties)with The City.The Plan Administrator shall be charged with the full power and the responsibility for administering the Plan in all its details. If no Plan Administrator has been appointed by The City, or if the person designated as Plan Administrator by The City is not available to serve as such for any reason,The City shall be deemed to be the Plan Administrator of the Plan. A Plan Administrator may resign by delivering a resignation in writing (or such other form as acceptable to both parties) to The City or be removed by The City by delivery of notice of removal (in writing or such other form as acceptable to both parties),to take effect at a date specified therein,or upon delivery to the Plan Administrator if no date is specified. The City shall be empowered to appoint and remove the Plan Administrator from time to time as it deems necessary for the proper administration of the Plan to ensure that the Plan is being operated for the exclusive benefit of the Participants in the Plan in accordance with the terms of the Plan and all applicable laws. 2.2 Plan Administrator Powers and Responsibilities Administration of the Plan. The Plan Administrator shall have all powers necessary to administer this Plan, including the power to construe and interpret the Plan documents;to decide all questions relating to an Employee's eligibility to participate in the Plan; to determine the amount, manner, and timing of any payment of benefits or change in accordance with the Plan; and to appoint or employ advisors, including legal counsel, to render advice with respect to any of the Plan Administrator's responsibilities under the Plan.Any construction,interpretation,or application of the Plan by the Plan Administrator shall be final, conclusive, and binding. All actions by the Plan Administrator shall be taken pursuant to uniform standards applied to all persons similarly situated. Records and Reports.The Plan Administrator shall be responsible for maintaining sufficient records to reflect the Compensation of each Participant for purposes of determining the amount of Compensation received by a Participant under the Plan. The Plan Administrator shall be responsible for submitting all required reports and notifications relating to the Plan to Participants or their beneficiaries, the Internal Revenue Service, and the Department of Labor.The City shall keep or cause'to be kept all books of account,records and other data as may be necessary or advisable in its judgment for the administration of the Plan. Rules and Decisions.The Plan Administrator may adopt such rules as it deems necessary,desirable,or appropriate in the administration of the Plan.All rules and decisions of the Plan Administrator shall be applied uniformly and consistently to all Employees and Participants in similar circumstances. When making a determination or calculation, the Plan Administrator may rely upon all such information so furnished, including the Participant's, former Participant's, or beneficiary's current mailing address. The Plan Administrator will also be entitled, to the extent permitted by law, to rely conclusively on all tables, valuations, certificates, opinions, and reports that are furnished by accountants,attorneys,or other experts employed or engaged by the Plan Administrator. 2.3 Allocation of Duties and Responsibilities The Plan Administrator may designate persons other than the Plan Administrator to carry out any of its duties and responsibilities under the Plan. A Plan fiduciary shall have only those specific powers, duties,responsibilities and obligations as are explicitly given him under the Plan.It is intended that each fiduciary shall not be responsible for any act or failure to act of another fiduciary.A.fiduciary may serve in more than one fiduciary capacity with respect to the Plan. To the extent permitted by law, The City agrees to indemnify any Employee, person or entity serving as the Plan Administrator, except for any third-party administrator in its capacity as the Health FSA claims administrator, against all claims,liabilities,losses,damages,costs and expenses(including reasonable attorneys'fees and expenses, paid in settlement of any claims approved by The City)occasioned by any act or failure to act in connection with the 4 City of Rancho Cucamonga Cafeteria Plan Plan Document Plan,except where such act, or failure to act,is the result of willful neglect or gross negligence on the part of such Employee,person or entity. 2.4 Payment of Expenses The City shall pay all expenses authorized and incurred by the Plan Administrator in the administration of the Plan, unless,by agreement,law,or common practice,the Plan Administrator absorbs such expenses. 2.5 Insurance Control Clause In the event of a conflict between the terms of this Plan and the terms of an insurance contract and any attachments, the terms of the insurance contract and attachments shall control as to those Participants receiving coverage under such insurance contract. For this purpose,the insurance contract, shall control in defining the persons eligible for insurance,the dates of their eligibility,the conditions which must be satisfied to become insured,if any,the benefits Participants are entitled to,and the circumstances under which insurance terminates. 2.6 Inability to Locate Payee If a payment is due under the Plan, and if notice of such payment due is mailed to the last known address of such person,as shown on the Plan records,and within six(6)months after such mailing such person has not made written claim therefore,the Plan Administrator shall,unless otherwise provided in the Benefit Documents,direct that such payment and all remaining contributions otherwise due to such person be canceled,and upon such cancellation,the Plan shall have no further liability therefore. 2.7 Experience Gains If the Health FSA has an experience gain with respect to a Plan Year, such experience gain may be used to pay expenses of the Health Care FSA, or for such other uses that are determined by the Plan Administrator to be consistent with applicable laws and regulations.If the Dependent Care FSA has an experience gain with respect to a Plan Year,such experience gain may be used to pay expenses of the Dependent Care FSA,or for other uses that are determined by the Plan Administrator to be consistent with applicable laws and regulations. In no event shall experience gains be allocated among Participants based,directly or indirectly,on the level of their Health FSA or Dependent Care FSA reimbursement amounts. 2.8 Priority of Contributions Contributions shall be deemed to come first from amounts contributed by eligible Employees and then from amounts contributed by The City. Amended and Restated ® January 1, 2024 5 SECTION 3 - ELIGIBILITY AND PARTICIPATION ...................................................................................................................................................................................... 3.1 Employee Participation An eligible Employee will become a Participant after he or she has satisfied the applicable eligibility requirements set forth in Appendix A, provided that such Employee makes a timely coverage election and makes all required contributions at the time and in the manner specified by The City. However, any eligible Employee who was a Participant in the Plan on the effective date of this amendment shall continue to be eligible to participate in the Plan. 3.2 HIPAA Special Enrollment Notwithstanding any other provisions in this Section, any Employee who becomes eligible under the Health Portability and Accountability Act of 1996 ("HIPAA") special enrollment rules for coverage by group health plan offered under the Plan shall be allowed to participate in the Plan, so long as such Employee complies with the provisions set out in HIPAA. 3.3 Leave of Absence Subject to the leave policies and procedures adopted by The City and to the extent prescribed by law, a covered Employee maybe eligible to continue certain Plan benefits for a period of time during an approved leave of absence. Note that Dependent.Care FSA Participants are not eligible to participate in the Dependent Care FSA while on leave of absence. Unpaid Leave of Absence.In general,if a covered Employee goes on an unpaid FMLA,USERRA,or other approved unpaid leave of absence that does not affect eligibility for a specific Benefit option, he or she may, at the covered Employee's option, continue certain benefits under the Plan for a limited period of time, so long as he or she continues to make any required contribution payments: ■ By prepayment before taking leave with a pre-leave salary reduction contribution; ■ By after-tax contributions while on leave;or, ■ With catchup salary reduction contributions after the leave ends. If a Participant goes on an approved unpaid leave of absence that affects eligibility for a specific Benefit option,the COBRA provisions shall apply and the applicable Permissible Election Change rules in Section 4.4 may apply upon his or her return to work. Paid Leave of Absence.During a paid leave of absence that does not affect eligibility for a specific Benefit option,a covered Employee generally will continue coverage under the Plan on the same terms and conditions as required by the Plan Administrator prior to the leave of absence.so long as the Employee had benefit elections in place prior to the commencement of the leave of absence.The covered Employee's regular Contribution amounts,including pre- . tax Contributions,shall continue to be deducted from his or her Compensation while on leave. Family and Medical Leave Act("FMLA") Notwithstanding any provision to the contrary in this Plan,if a covered Employee goes on an approved unpaid leave under FMLA,The City will,to the extent required by FMLA,continue to maintain the Employee's group health plan benefits on the same terms and conditions as if he or she had not taken the leave. Uniformed Services Employment and Reemployment Rights Act of 1994("USERRA") Notwithstanding any provision herein to the contrary in this Plan,if a Covered Employee goes on a qualifying,leave of absence under USERRA, then, to the extent required by USERRA, The City will continue to maintain the Employee's group health plan benefits on the same terms and conditions as if he or she had not gone on the qualifying leave. Applicable State or Municipal Law The City shall permit a participant to continue participation in the Plan as required under any applicable state or municipal law to the extent that such law is not pre-empted by federallaw. 6 City of Rancho Cucamonga Cafeteria Plan Plan Document 3.4 Cessation of Participation Unless otherwise stated in the applicable Benefit Documents,a Participant's coverage will cease upon the earliest of the following: ■ The date or end of the month in which the Participant ceases to satisfy the eligibility requirements. This may result from the Participant's death,reduction in hours,or termination of active employment; ■ The end of the period for which the Participant paid the required contribution if the contribution for the next period is not paid when due; ■ The date the Participant reports for active military service,unless coverage is continued through USERRA;or, ■ The date that the Participant's coverage is terminated by amendment of the Plan,by whole or partial termination of the Plan,termination of the insurance contract or agreement,or by discontinuance of contributions by The City. 3.5 Reinstatement of Former Participants A former Participant whose participation in the Plan ceases due to termination of employment, and who is subsequently rehired by The City must meet the Plan's then current entry guidelines to participate in the Plan. Amended and Restated - January 1, 2024 7 SECTION 4 - BENEFIT ELECTIONS ...................................................................................................................................................................................... The Plan Administrator, or its delegate, shall establish procedures and deadlines for filing Salary Reduction Agreements/Election Forms. In no event may an eligible Employee make elections on or after the date on which the cash that he or she would otherwise receive through payroll is made available. 4.1 Elections Each newly eligible Employee who chooses to participate in the Plan shall timely file a Salary Reduction Agreement/Election Form with The City after satisfying the eligibility requirements set forth in Section 3.1. The election shall provide that the Participant's Compensation in each payroll period shall be reduced by a specific amount not to exceed the lesser of the limits set forth in such Employee's elected Elective Benefits,or the Participant's Compensation for that payroll period.An Employee who does not elect benefits when first eligible may not enroll in the Plan until the next Annual Enrollment Period unless a Qualifying Life Event occurs pursuant to Section 4.4 below. Default Coverage.Consistent with Proposed Treasury Regulation Section 1.125-2(b),the Plan Administrator,at its discretion,may automatically enroll newly eligible Employees in certain benefits for the remainder of the Plan Year ("Default Coverage").In the event The City adopts Default Coverage procedures,it shall give eligible Employees the opportunity to change their Default Coverage election or to waive participation in the Plan. 4.2 Annual Enrollment Period Before making their annual benefit elections, all eligible Employees and Participants shall be notified of the administrative procedures involved in the benefit election process. Unless provided otherwise by The City,if a Participant does not make a new election with respect to the Plan during an Annual Enrollment Period, the Participant's coverage under the Plan will cease to apply during the next Plan Year.The Participant's Compensation for each subsequent Plan Year without coverage shall be adjusted accordingly. 4.3 Irrevocability of Elections Except as described in Section 4.4,a Participant may not change any elections for the duration of the Coverage Period with regard to participation in the Plan,salary reduction amounts,and elections of particular Elective Benefits. 4.4 Permissible Election Changes Elections made or deemed to be made under the Plan for any Plan Year may not be changed or revoked after the first payroll period to which they apply,except on account of and consistent with a Qualifying Life Event described in Section 5 of this Plan document.The Participant generally must notify The City within 30 days of the event giving rise to a change in order to revoke his or her elections and make a new election (60 days in the case of a HIPAA Special Enrollment right due to the loss of eligibility for Medicaid or CHIP).Generally,election and salary reduction changes shall be effective on a prospective basis only(i.e.,election changes will become effective no earlier than the first day of the next calendar month following the date that the election change request was filed). However, an election change on account of a HIPAA Special Enrollment Right,attributable to the birth,adoption,or placement for adoption of a new dependent child may,subject to the provisions of the underlying group health plan,be effective retroactively back to the date of the qualifying event. 4.5 Submitting Notices, Designations,and Elections All notices,designations and elections of Participants shall be submitted to the Plan Administrator electronically or on paper forms as specified by the Plan Administrator.In accordance with IRS regulations regarding the electronic submission of documents,each Participant shall be effectively able to access the electronic system used to make an election. In addition, the electronic system shall be reasonably designed to preclude any other individual from making-the election (authentication); provide the Participant with a reasonable opportunity to review, confirm, modify,or rescind the terms of the election before the election is effective(review);and provide the Participant with 8 City of Rancho Cucamonga Cafeteria Plan Plan Document a confirmation of the effect of the election, either through a written paper document or through an electronic medium,within a reasonable time after the election is made(confirmation). Amended and Restated © January 1, 2024 1 9 SECTION 5 - PERMISSIBLE ELECTION CHANGES ...................................................................................................................................................................................... Participants generally cannot change benefit elections under the Plan or vary the salary reduction amounts that they have selected during the Plan Year. However, a Participant may revoke certain benefit elections after the Plan Year has commenced and make new elections with respect to the remainder of the Plan Year if both the revocation and new elections are on account of and consistent with a Qualifying Life Event. The Plan Administrator reserves the right to determine whether an Employee has experienced a Qualifying Life Event and whether the Employee's requested election is consistent with such event. Election and salary reduction changes shall be effective on a prospective basis only (i.e., election changes will become effective no earlier than the first day of the next calendar month following the date that the election change request was filed),except that an election change on account of a HIPAA Special Enrollment Right,attributable to the birth,adoption, or placement for adoption of a new dependent child may,subject to the provisions of the underlying group health plan,be effective retroactively back to the date of the qualifying event. If a Participant undergoes a Qualifying Life Event, he or she must inform the Plan Administrator and complete a new Election Form within 30 days after the occurrence of the qualifying event (or within 60 days in the case of a Special Enrollment Right due to loss of eligibility for Medicaid or Children's Health Insurance Program("CHIP")coverage). Change of Status Qualifying Life Events include a change of status due to one of the following events permitted under the rules and regulations adopted by the Department of the Treasury, but only if the Qualifying Life Event changes the individual's eligibility for the applicable benefit.These change in status rules apply to elections for all qualified benefits,including Health FSAs and Dependent Care FSAs(except that election changes are generally not permitted for FSA benefits if the Qualifying Life Event is a change in residence): ■ Legal Marital Status.Events that change an employee's legal marital status, including marriage, death of employee's spouse,divorce,legal separation,and annulment. ■ Number of Dependents.Events that change the number of employee's dependents,including following birth,death, adoption,placement for adoption. ■ Employment status.Any of the following events that change the employment status of the employee,the employee's spouse, or the employee's dependent: termination or commencement of employment; strike or lockout; commencement of or return from an unpaid leave of absence; or a change in worksite. In addition, if the eligibility conditions of this Plan or other employer-sponsored plan of the employee, spouse, or dependent depend on the employment status of that individual and there is a change in that individual's employment status with the consequence that the individual becomes (or ceases to be) eligible under the plan, then that change constitutes a change in employment under this subsection. ■ Dependent Satisfies or Ceases to Satisfy Eligibility Requirements. Events that cause an employee's dependent to satisfy or cease to satisfy eligibility requirements for coverage on account of attainment of age,change in student status, or any similar circumstance. ■ Residency Change. A change in the place of residence of the employee, spouse,or dependent that results in a loss of eligibility for coverage(e.g.relocates outside the current plan's service area). ■ Qualifying Dependent. For the Dependent Care Assistance Plan only, a dependent becoming or ceasing to be a "Qualifying Dependent"as defined under Code Section 21(b)shall also qualify as a Qualifying Life Event. HIPAA Special Enrollment Rights An employee may change an election for group health coverage during a Plan Year and make a new election that corresponds with HIPAA Special Enrollment Rights, including those authorized under the provisions of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIP), as long as the employee meets the notice requirements. Special Enrollment Rights can occur when: 10 City of Rancho Cucamonga Cafeteria Plan ® Plan Document ■ He or she loses eligibility for coverage under a group health plan or other health insurance coverage (such as if the employee and their dependents lose coverage under the employee's spouse's plan). ■ He or she gains a new dependent through marriage,birth,adoption,or being placed for adoption. ■ The employee or their dependents lose coverage under a CHIP or Medicaid or become eligible to receive premium assistance under those programs for group health plan coverage. ACA Marketplace/Exchange Enrollment Qualifying Life Events include the opportunity to enroll in the ACA Marketplace/Exchange or other plans that offer minimum essential coverage under the ACA.These Qualifying Life Events apply to elections for group health plan coverage that is not Health FSA benefit coverage and that provides minimum essential coverage under the ACA: ■ ACA Marketplace/Exchange Election. An employee may elect to cancel contributions for and payment of their portion of the group health plan premiums if(1) he or she is eligible for a special enrollment period to enroll in a "qualified health plan" through an ACA Marketplace or (2) he or she is seeking to enroll in a qualified health plan through a Marketplace during the Marketplace's annual open enrollment period. In addition,effective January 1,2023,a Participant may prospectively drop some or all covered family members from the group health plan consistent with their enrollment or intended enrollment in an ACA Marketplace/Exchange. ■ ACA Reduction in Hours. An employee may elect to cancel contribution for and payment of the employee-paid portion of group health plan premiums if(1)he or she had been reasonably expected to average at least 30 hours of service per week and subsequently move to a position in which the employee is reasonably expected to average less than 30 hours of service per week,even if they continue to be eligible under the employer-sponsored group health plan; and(2)the revocation of the election of coverage under the group health plan corresponds to the employee's(and any dependents') intended enrollment in another plan that provides ACA minimum essential coverage with the new coverage effective no later than the first day of the second month following the month in which the original coverage is revoked. Change in Cost or Coverage A change in cost or coverage,as follows,may allow an election change.The following Qualifying Life Events do not apply to the election of Health FSA benefits: ■ Change in Coverage under Another Employer's Plan.An employee may make a new election if there is a change in coverage (for the employee, his or her spouse or dependent(s)) under a plan provided by another employer. The employee's new election must be on account of the change in the other employer's plan and correspond with that change. ■ Significant Coverage Decrease with or without Loss of Coverage. If an employee's coverage under a benefit is significantly curtailed or ceases during a Plan Year,he or she may revoke their election of such benefit and,in its place, elect to receive on a prospective basis coverage under another plan with similar coverage, or drop coverage prospectively if no similar coverage is offered. ■ Significant Improvement or Addition of a New Benefit.If,during the period of an employee's coverage,a new benefit package option or other coverage option is added,an existing benefit package option is significantly improved,or an existing benefit package option or other coverage option is eliminated,then the employee may elect the newly added option,or elect another option if an option has been eliminated prospectively and make corresponding election changes with respect to other benefit package options providing similar coverage.In addition,if an employee is not participating in the Plan when these options are added or changed,he or she may opt to become a participant and elect the new or newly improved benefit package option. ■ Significant Cost Increase.If the cost of one of the benefit options increases significantly,an employee may either make corresponding changes in his or her payments or revoke their elections and,in lieu thereof, receive on a prospective basis coverage under another benefit option with similar coverage,or drop coverage prospectively if there is no benefit package option with similar coverage. ■ Significant Cost Decrease. If the cost of an employee's benefit option decreases significantly, he or she may make corresponding changes in their payments. In addition, if an employee is not enrolled in the Plan and the cost of an option decreases significantly,he or she may elect coverage under the corresponding benefit package. Amended and Restated ® January 1, 2024 11 ■ In addition,if the expenses for a component plan increase or decrease during a Plan Year,the Plan may automatically increase or decrease accordingly each affected employee's required periodic contribution for such health insurance benefits. Other Situations Other situations that may permit an election change: ■ Court Order. A judgment, decree,or other order resulting from a divorce,legal separation,annulment,or change in legal custody(including a Qualified Medical Child Support Order) that requires accident or health coverage for an employee's child or for a foster child who is a dependent of the employee.The employee may change his or her election to provide coverage for the child if the order requires coverage for the child under the Plan and may cancel coverage under the Plan for the child if the order requires the employee's spouse,former spouse,or other individual to provide coverage for the child,and that coverage is,in fact,provided. ■ Entitlement to Medicare or Medicaid. If an employee or an employee's spouse or dependent who is enrolled in an employer-sponsored accident or health plan becomes enrolled under Part A or Part B of Medicare or under Medicaid (other than coverage consisting solely of benefits under the program for distribution of pediatric vaccines), the employee may make an election change to cancel or reduce coverage of that employee,spouse,or dependent under the accident or health component plan. In addition, if an employee or an employee's spouse or dependent who has been enrolled in such coverage under Medicare or Medicaid loses eligibility for such coverage,the employee may make an election to commence or increase his or her coverage or the coverage of his or her spouse or dependent,as applicable, under The City's accident or health plan. ■ Loss of Coverage under Health Plan of a Governmental or Educational Institution.If an employee or an employee's spouse or dependent is enrolled in a group health coverage sponsored by a governmental or educational institution and loses such coverage,the employee may make an election change to add coverage under a corresponding The City plan. Group health coverage sponsored by a governmental or educational institution includes (but is not limited to) coverage under: a state children's health insurance program (SCHIP); a medical care program of an Indian Tribal government, the Indian Health Service, or a tribal organization; a state health benefits risk pool; and a foreign government group health plan. ■ FMLA Leaves of Absence. A participant may revoke coverage or,if coverage is required,continue coverage but delay payment of his or her share of the cost for group health plan coverage during the period of a leave of absence under FMLA. An employee who revokes coverage shall be entitled to reinstate coverage upon returning from a leave of absence under FMLA. ■ COBRA Premiums.If the employee or the employee's spouse or dependent becomes eligible for continuation coverage under an employer's group health plan as provided in Code section 4980B or any similar state law,the employee may elect to increase contributions under the Plan in order to pay for the continuation coverage. ■ Correcting Discrimination Issues under the Code.If The City determines before or during a Plan Year that the Plan or one of its component plans will fail to satisfy any nondiscrimination requirement imposed by the Code or any limitation on benefits provided to highly compensated or key employees,The City may decrease or revoke the elections of affected highly compensated or key employees to ensure compliance with such nondiscrimination requirements or benefit limitation. 12 City of Rancho Cucamonga Cafeteria Plano Plan Document SECTION 6 - METHOD OF FUNDING ...................................................................................................................................................................................... 6.1 Source of Funding Benefits under the Plan may be funded by the general assets of The City,by Participant contributions, or by some combination of these. Contributions are established by The City. The City reserves the right to modify the cost sharing of contributions between itself and Participants,in such amounts as The City in its absolute discretion shall determine from time to time. Nothing herein will be construed to require The City or the Plan Administrator to maintain any fund or to segregate any amount for the benefit of any Participant,and no Participant or other person shall have any claim against, right to, or security or other interest in any fund, account, or asset of The City from which any payment under this Plan may be made.There is no trust or other fund from which Benefits are paid. 6.2 Establishment of Accounts The City shall make all contributions required by the Elective Benefits out of its general assets.The City will retain title to,and beneficial ownership of,assets which are earmarked for payment of benefits under this Plan.In no event shall benefits under the Plan be provided in the form of deferred compensation. For bookkeeping purposes only, the Plan Administrator, or its delegate, will maintain an Account for each Participant. This Account will be divided into sub-accounts which will be credited with the amount of salary reduction specified by such Participant for each Elective Benefit. 6.3 Salary Reduction Agreement By executing and submitting the Salary Reduction Agreement/Election Form as prescribed by the Plan Administrator,the Employee authorizes The City to reduce his or her Compensation per pay period in the amount specified on the Salary Reduction Agreement/Election Form.Each individual Salary Reduction Agreement shall be deemed a legally binding agreement and shall be incorporated by reference hereunder. Benefits under an Elective Benefit shall be payable,or provided,for a Coverage Period only if such benefits relate to, and such costs were incurred during, periods in which the individual has properly elected to participate in that Elective Benefit. Salary reductions generally shall be contributed to each Account on a pro rata basis for each pay period during the Plan Year. Changes to a Salary Reduction Agreement. Any Salary Reduction Contribution shall be determined prior to the beginning of a Plan Year and prior to the end of the Annual Enrollment Period and shall be irrevocable for such Plan Year. However,a Participant may revoke a Salary Reduction Agreement after the Plan Year has commenced and make a new election with respect to the remainder of the Plan Year,if both the revocation and the new election are on account of and consistent with a Qualifying Life Event as described in Section 4.4. Termination of a Salary Reduction Agreement. A Participant's Salary Reduction Agreement shall automatically terminate if the Participant terminates his or her employment with The City or transfers to an Affiliated Employer which has not adopted the Plan. If such Participant(or former Participant)subsequently returns to the employment of The City,the Participant shall,. subject to the eligibility and participation requirements,be permitted to execute a new Salary Reduction Agreement and resume having salary reductions made on his or her behalf. Amended and Restated January 1, 2024 13 SECTION 7 - PREMIUM CONTRIBUTION BENEFITS . ........................................................................................................................................................ 7.1 Premium Contribution Benefits The purpose of the Premium Contribution Benefits is to enable Participants to pay for their share of the cost of certain benefits under the group health and welfare plan on a pre-tax basis.Detailed descriptions of the underlying benefit plans are contained in each Premium Contribution Benefit's benefit booklets and certificates, provider contracts, policies, and descriptions ("Benefit Documents"), which are incorporated by reference herein. Plan benefits will be provided and paid solely by the Plan pursuant to the terms of the applicable insurance policy,service agreement,or applicable self-insured plan document.The City neither guarantees nor has any responsibility for the quality of the health care or services provided or the level of benefits paid under any insurance policy or service agreement. 7.2 Cash in Lieu Benefits If an eligible Employee declines to enroll in the Plan's medical coverage, they may be eligible to receive taxable compensation in lieu of the Plan's medical benefits ("Cash-in-Lieu Benefits").See Appendix B for the Plan's Cash- in-Lieu schedule. Other Group Coverage Required.An eligible Employee who elects to participate in the Plan's Cash-in-Lieu Benefits must attest annually through the completion of an Insurance Waiver Credit Program Form that he or she has Minimum Essential Coverage("MEC")from a source other than an individual or family plan. 7.3 Benefit Costs The cost to Participants of Premium Contribution Benefits shall be determined by The City,regardless of the method of funding the Plan.The total annual salary reduction to be credited to a Participant's elected Premium Contribution Benefits shall not exceed the total of all Premium Contribution Benefits in which the Participant is enrolled. Each year, The City shall review the costs of the benefits provided under the Plan. The City may make changes to these costs at its discretion.Before making annual benefit elections,all eligible Employees and Participants shall be notified as to the currently effective contribution requirements for participation in the benefits for the Plan Year. 7.4 Claims and Appeal Procedures Claims for Premium Contribution Benefits(e.g.,the right to pay insurance premiums on a pre-tax basis or the right to make an election change due to a Qualifying Life Event)must be filed with The City or the Plan Administrator in a timely manner.The City or the Plan Administrator may prescribe a form or forms for filing such claims,and,if it does so,a claim will not be deemed properly filed unless such form is used. To file a claim or appeal for an underlying coverage(e.g.medical,dental,or vision benefits),a claimant must follow the procedures set forth in the Benefit Documents for the applicable component plan. 14 City of Rancho Cucamonga Cafeteria Plan ® Plan Document SECTION 8 - HEALTH FSA BENEFITS ...................................................................................................................................................................................... 8.1 Health FSA Benefits The purpose of the Health FSA is to enable eligible Employees to contribute to the Health FSA on a pre-tax or after- tax basis and receive reimbursement for Qualified Health Care Expenses that are not otherwise payable by any other health plan. 8.2 Qualified Health Care Expenses Qualified Health Care Expenses incurred by Participant shall be for medical care and services as defined in Code Section 213(d) and as allowed under Code Sections 105 and 106(f) and the rulings, and Treasury regulations, thereunder. Effective January 1, 2020, an amount paid for a non-prescribed drugs or menstrual care products is a Qualifying Health Care Expense. The Participant must have a legal obligation to pay the Qualified Health Care Expense,and the expense must not be eligible for reimbursement through insurance or otherwise. 8.3 Health FSA Maximum Dollar Limit Notwithstanding any provision contained in this Plan to the contrary,the maximum amount of salary reductions that may be allocated to the Health FSA by a Participant in or on account of a Plan Year is set annually by the IRS as detailed on Appendix B of this Plan document. The maximum dollar amount elected by the Participant for reimbursement of Health Care Expenses incurred during a Coverage Period (reduced by prior reimbursements during the Coverage Period) shall be available at all times during the Coverage Period, regardless of the actual amounts credited to the Participant's Health FSA Account. Notwithstanding the foregoing, no reimbursements will be available for Health Care Expenses incurred after coverage under this Plan has terminated,unless the Participant has elected COBRA coverage as provided in Section 9.8. 8.4 Incurred Expenses A Health Care Expense is incurred by a Participant at the time the medical care or service giving rise to the expense is furnished and not when the Participant is formally billed for,is charged for,or pays for the medical care or service. A Participant's Health FSA for a Plan Year or other Coverage Period will be debited for any approved reimbursement of Health Care Expenses incurred on or after the first day of the Plan Year but no later than the end of the same Plan Year. 8.5 Use-Or Lose Rule and Account Carryovers If any balance remains in the Participant's Health FSA after the end of any Plan Year after all reimbursement requests have been processed,then such ending balance in excess of the carryover permissible amount shall be forfeited. In such event, the Participant shall have no further claim to the forfeited funds for any reason and the Plan Administrator shall use such funds as described in Section 2.7. The Plan Administrator shall"carryover"any unused balance of up to permissible carryover amount remaining in a Participant's Health FSA at the end of a Plan Year and will apply it to Participant's Health FSA balance for the subsequent Plan Year,subject to the following limitations: ■ Prior to the beginning of a new Plan Year,Participants may waive the carryover in accordance with procedures established by the Plan Administrator; ■ Cash-out or conversation of the carryover funds to other taxable or nontaxable benefits is not permitted; ■ The carryover balance will not count toward the maximum dollar limit on annual salary reduction contributions under Code Section 125(i);and, ■ Qualified Health Care Expenses incurred in the current Plan Year will be reimbursed first from a Participant's unused amounts credited for that Plan Year and then from amounts carried over from the prior Plan Year. Amended and Restated January T, 2024 15 8.6 Health FSA Reimbursements Reimbursements under the Health FSA must be submitted pursuant to procedures established by the Plan Administrator. In general, a Health FSA Participant may apply for reimbursement by submitting a request to the Plan Administrator in such form as the Plan Administrator may prescribe,by no later than 90 days following the close of the Plan Year in which the Health Care Expense was incurred(or 90 days after the date eligibility ceases).At minimum,the request for reimbursement must include: ■ The name of the person or persons who incurred the Health Care Expenses; ■ The nature and date of the expenses so incurred; ■ The amount of the requested reimbursement; ■ A statement that such expenses have not otherwise been reimbursed and that the Claimant will not seek reimbursement through any other source;and, ■ Other such details about the expenses that may be requested by the Plan Administrator in the reimbursement request form or otherwise (e.g., a statement from a medical practitioner that the expense is to treat a specific medical condition,documentation that a medicine or drug was prescribed,or a more detailed certification from the Claimant). The reimbursement request must be accompanied by bills,invoices,or other statements from an independent third party showing that the Health Care Expenses have been incurred and the amounts of such expenses,along with any additional documentation that the Plan Administrator may request. Debit Cards. Subject to IRS guidance regarding electronic payment card programs, the Plan Administrator may provide for the use of debit or stored value cards for Health FSA reimbursements of Qualified Health Care Expenses, provided that Participants comply with the card substantiation procedures established by the Plan Administrator. 8.7 Health Insurance Portability and Accountability Act("HIPAA") This Plan is a "hybrid entity" within the meaning of HIPAA. This Plan elects to provide the privacy and security protections required by HIPAA only to the Health FSA. 8.8 Health FSA Continuation of Coverage Rights Notwithstanding anything in the Plan to the contrary, to the extent required by Code Section 4980B and the Proposed Treasury Regulations thereunder("COBRA"), a Participant who would lose Health FSA coverage under the Plan upon the occurrence of a qualifying event (as defined in Code Section 4980B(f)(3)) shall be permitted to continue such coverage by electing to make the required contributions in accordance with procedures established by the Plan Administrator that are consistent with COBRA. COBRA coverage may be paid on a pre-tax basis for current Employees receiving taxable compensation (as may be permitted by the Plan Administrator on a uniform and consistent basis). 16 City of Rancho Cucamonga Cafeteria Plan Plan Document SECTION 9 - DEPENDENT CARE FSA BENEFITS ...................................................................................................................................................................................... 9.1 Dependent Care FSA Benefits The purpose of the Dependent Care FSA is to enable Participants to pay for Qualified Dependent Care Expenses on a pre-tax basis. 9.2 Qualified Dependent Care Expenses Qualified Dependent Care Expenses incurred by Participant shall be for expenses related to the payment for, or provision of,dependent care services that are considered employment-related expenses under Code Section 21(b)(2) and its regulations. Expenses reimbursed through insurance or any other plan are not qualified Dependent Care Expenses. 9.3 Dependent Care FSA Maximum Dollar Limit The maximum amount which the Participant may receive in any Plan Year in the form of reimbursements or payments for Dependent Care Expenses under the Dependent Care FSA shall be the least of- ■ $5,000, reduced by any amounts contributed by the Participant's Spouse to a plan that pays or reimburses Dependent Care Expenses($2,500 in the case of a married individual filing a separate tax return); ■ The Participant's actual or deemed earned income for the Plan Year as defined in Code Section 32(c)(2) (after reductions in Compensation under Code Section 125, including the reduction related to participation in the Dependent Care FSA);or, ■ The actual or deemed earned income of the Participant's Spouse,if applicable,for the Plan Year. In the case of a Spouse who is a full-time student at an educational institution or is physically or mentally incapable of caring for himself or herself,such Spouse shall be deemed to have earned income of not less than$250 per month if the Participant has one Dependent and$500 per month if the Participant has two or more Dependents The amount available for reimbursement of Dependent Care Expenses may not exceed the year-to-date amount credited to the Participant's Dependent Care FSA, less any prior reimbursements for Dependent Care Expenses incurred during the Plan Year.A Participant's Dependent Care FSA Account may not have a negative balance. 9.4 Use-Or-Lose Rule If any balance remains in the Participant's Dependent Care FSA at the end of any Plan Year after all reimbursement requests have been processed,then such ending balance shall be forfeited.In such event,the Participant shall have no further claim to the forfeited funds for any reason and the Plan Administrator shall use such funds as described in Section 2.7. 9.5 Incurred Expenses Dependent Care Expenses shall be deemed to be incurred at the time the services to which the expenses relate are rendered. A Participant's Dependent Care FSA for a Plan Year or other Coverage Period will be debited for any approved reimbursement of Dependent Care Expenses incurred on or after the first day of the Plan Year but no later than the end of the same Plan Year 9.6 Dependent Care FSA Reimbursements Reimbursements under the Dependent Care FSA must be submitted pursuant to procedures established by the Plan Administrator.In general,a Dependent Care FSA Participant may apply for reimbursement by submitting a request to the Plan Administrator in such form as the Plan Administrator may prescribe,by no later than 90 days following the close of the Plan Year in which the Dependent Care Expense was incurred (or 90 days after the date eligibility ceases).At minimum,the request for reimbursement must include: ■ The name of the person or persons on whose behalf the Dependent Care Expenses have been incurred; Amended and Restated January 1, 2024 17 ■ The nature and date of the expenses so incurred; ■ The amount of the requested reimbursement; ■ The name of the person, organization, or entity to whom the expense was or is to be paid, and taxpayer identification number(Social Security number,if the recipient is a person); ■ A statement that such expenses have not otherwise been reimbursed and that the Claimant will not seek reimbursement through any other source; ■ The Participant's certification that he or she has no reason to believe that the reimbursement requested,added to his or her other reimbursements to date for Dependent Care Expenses incurred during the same calendar year,will exceed the applicable statutory limit for the Participant;and, ■ Other such details about the expenses that may be requested by the Plan Administrator in the reimbursement request form or otherwise(e.g.,a more detailed certification from the Participant). The reimbursement request must be accompanied by bills,invoices,or other statements from an independent third party showing that the Dependent Care Expenses have been incurred and the amounts of such expenses,along with any additional documentation that the Plan Administrator may request. Debit Cards. Subject to IRS guidance regarding electronic payment card programs, the Plan Administrator may provide for the use of debit or stored value cards for Dependent Care FSA reimbursements of Qualified Dependent Care Expenses,provided that Participants comply with the card substantiation procedures established by the Plan Administrator. 9.7 Tax Report to Dependent Care FSA Participants On or before January 31 of each year, the Plan Administrator shall furnish to each Participant who has received reimbursement for Dependent Care Expenses during the prior calendar year a written statement showing the Dependent Care Expenses paid during such year with respect to the Participant or showing the Salary Reductions for the year for the Dependent Care FSA,as the Plan Administrator deems appropriate. This statement shall be set forth on the Participant's Form W-2. 18 City of Rancho Cucamonga Cafeteria Plano Plan Document SECTION 10 - THE USE AND DISCLOSURE OF PHI ...................................................................................................................................................................................... To the extent that the Health FSA is a group health plan that uses, creates,or has access to protected health information ("PHI")as defined by HIPAA,the following provisions apply. 10.1 Health Plans As permitted by HIPAA,the terms of this Section shall not apply to health information that is: ■ Summary health information provided to The City for the purposes of obtaining premium bids or modifying the group health plan; ■ Information provided to The City regarding whether an individual is participating or has enrolled or disenrolled from the plan;or, ■ Information provided to The City pursuant to an authorization which meets the requirements of the HIPAA Privacy Rules described at 45 C.F.R.Section 164.508. 10.2 Business Associates The Plan may disclose PHI to its Business Associates (as such term is defined under HIPAA) who have agreed in writing to comply with all applicable HIPAA regulations for purposes related to the administration of the Plan. 10.3 Third Parties with Authorization With the exception of uses and disclosures of PHI for health care treatment,payment for health care and health care operations,the Plan will disclose PHI to third parties as permitted by HIPAA and only upon authorization by the participant,and the information may be used only as described in the authorization.The Plan will not require any participant to complete an authorization as a condition of payment,enrollment,or eligibility for benefits. 10.4 Plan Sponsor The Plan will disclose PHI to The City as plan sponsor of the Plan ("Plan Sponsor") only upon receipt of a certification from the Plan Sponsor that this Plan document contains the limitations and conditions required by HIPAA and contained in this Section. The Plan Sponsor may use and disclose PHI for the purposes of administration functions that The City performs for or on behalf of a group health plan component plan to the extent and in accordance with the uses and disclosures permitted by HIPAA and contained in this Section. 10.5 Conditions and Limitations on Use and Disclosure by Plan Sponsor The Plan Sponsor shall: ■ Not use or further disclose PHI other than as permitted or required by the Plan document or as required by law; ■ Ensure that any agents,including a subcontractor,to whom the Plan Sponsor provides PHI received from the Plan agree in writing to the same restrictions and conditions that apply to the Plan Sponsor with respect to such PHI; ■ Not use or disclose PHI for employment related actions and decisions unless authorized by an individual; ■ Not use or disclose PHI in connection with any other benefit or employee benefit plan of the Plan Sponsor unless authorized by an individual; ■ Not use or disclose PHI that is genetic information for underwriting purposes; ■ Report to the Plan any PHI use or disclosure that is inconsistent with the uses or disclosures provided for of which it becomes aware; ■ Make PHI available to an individual in accordance with HIPAA's access requirements; Amended and Restated o January 1, 2024 19 ■ Make PHI available for amendment and incorporate any amendments to PHI in accordance with HIPAA; ■ Make available the information required to provide an accounting of disclosures in accordance with HIPAA; ■ Make internal practices, books and records relating to the use and disclosures of PHI received from the Plan available to the HHS Secretary for the purposes of determining the Plan's compliance with HIPAA; ■ Report breaches of unsecured PHI as described in Section 10.11; ■ If feasible,return or destroy all PHI received from the Plan that the Plan Sponsor still maintains in any form, and retain no copies of such PHI when no longer needed for the purpose for which the disclosure was made(or if return or destruction is not feasible,limit further uses and disclosures to those purposes that make the return or destruction infeasible);and ■ Ensure adequate separation between the Plan and The City as required by 45 C.F.R. Section 164.504(f)(2)(iii) and described in this Plan. 10.6 Organized Health Care Arrangement The Plan Administrator may intend the Plan to form part of an Organized Health Care Arrangement along with any other benefit under a covered health plan(under 45 C.F.R.Section 160.103)provided by The City: 10.7 Access to PHI In accordance with HIPAA, only the following employees or classes of employees may be given access to PHI, including electronic PHI: ■ the Privacy Officer; ■ the Security Officer(electronic PHI);and, ■ staff designated by the Privacy Officer or Security Officer. The Plan shall ensure that any member of The City's workforce who may have access to PHI pursuant to this Section 10.7 is,in a timely manner,properly and routinely trained on The City's policies and procedures with respect to PHI, as necessary and appropriate under HIPAA. 10.8 Limitations of PHI Access and Disclosure The persons described in Section 10.7 may only have access to and use and disclose PHI for Plan.administration or operation functions that the Plan Sponsor performs for the Plan. Procedures shall be implemented to ensure that only these designated employees have access to PHI, and even then, that they have access only to the minimum necessary amount of PHI to perform their duties. 10.9 Noncompliance Issues If the persons described in Section 10.7 do not comply with any of the provisions of this Section, then such individuals shall be disciplined in accordance with the policies adopted by The City established for purposes of privacy compliance,up to and including dismissal from employment.The City shall arrange to maintain records of each compliance violation incident,including information regarding the persons involved as well as the disciplinary and corrective measures taken. 10.10Security Rules The City further agrees that if it creates, receives, maintains, or transmits any electronic PHI (other than enrollment/disenrollment information, de-identified information or summary health information, which are not subject to these restrictions)on behalf of the Plan,it will: ■ Implement administrative, physical, and technical safeguards and security measures that reasonably and appropriately protect the confidentiality,integrity,and availability of the electronic PHI; ■ Ensure that the adequate separation required by 45 CFR§ § 164.504(f)(2)(iii) is supported by reasonable and appropriate security measures; 20 City of Rancho Cucamonga Cafeteria Plan Plan Document ■ Ensure that any agent(including subcontractors)to whom it provides such electronic PHI shall agree in writing to implement reasonable and appropriate security measures to protect the PHI;and ■ Report to the Plan any security incident of which it becomes aware. 10.11 Breach Notification Rules In the event of a breach of unsecured PHI by the Plan,the Plan will notify affected individuals,the Department of Health and Human Services,and/or the media in the form and method described under HIPAA. 10.12 H ITECH Rules To the extent that The City transmits health information electronically in connection with a Covered Transaction as defined by the HIPAA Privacy Rules,it shall do so in a manner which meets the criteria established by the Health Information Technology for Economic and Clinical Health Act of 2009 ("HITECH")and its regulations. Amended and Restated a January 1, 2024 21 SECTION 11 - GENERAL PROVISIONS ................................................................................................................................................. 11.1 Plan Interpretation and Severability All provisions of this Plan shall be interpreted and applied in a uniform,nondiscriminatory manner.This Plan shall be read in its entirety and not severed except as provided in this Section.If any provision of the Plan is held invalid, unenforceable, or inconsistent with any law, regulation or requirement, its invalidity, unenforceability, or inconsistency shall not affect any other provision of the Plan,and the Plan shall be construed and enforced as if such provision had not been included herein. 11.2 Separate Plans. To the extent required to satisfy applicable law,including,but not limited to,the nondiscrimination provisions of the Code,and any privacy and security laws,each coverage level,each group of employees covered by the Plan,and each class of benefits provided under the Plan,will constitute a separate"plan." 11.3 Return or Recharacterization of Contributions Notwithstanding any provision in this Plan to the contrary,in the event the Plan Administrator determines that the Plan may be discriminatory under the Code,a Participant's Salary Reduction Agreement may be: (a)disregarded to the extent necessary to prevent such discrimination and,as a result,the amount of Salary Reduction Contributions which would otherwise have been made pursuant to such Salary Reduction Agreement may instead be paid directly to the Participant as additional compensation;or(b)recharacterized as after-tax Employee Contributions,which are voluntary nondeductible Employee contributions. 11.4 Effect of Mistake In the event of a mistake as to the eligibility or participation of an Employee,the allocations made to the Account of any Participant, the amount of distributions made or to be made to a Participant or other person, the Plan Administrator shall,to the extent it deems possible,cause to be allocated or cause to be withheld or accelerated,or otherwise make adjustment of, such amount as will in its judgment accord to such Participant or other person the credits to the Account or distributions to which he is properly entitled under the Plan. Such action by the Plan Administrator may include withholding of any amounts due the Plan or The City from Compensation paid by The City. 11.5 Nonassignability It is a condition of the Plan,and all rights of each person eligible to receive benefits under the Plan shall be subject thereto,that no right or interest of any such person in the Plan shall be assignable or transferable in whole or in part, either directly or by operation of law or otherwise, including, but not by way of limitation, execution, levy, garnishment, attachment,pledge, or bankruptcy,but excluding devolution by death or mental incompetence, and no right or interest of any such person in the Plan shall be liable from, or subject to,any obligation or liability of such person,including claims for alimony or the support of any Spouse. 11.6 Employment Noncontractual The Plan confers no right upon any Employee to continue in employment or affect or modify the terms of an Employee's employment in any way. 11.7 No Guarantee of Tax Consequences The City makes no commitment or guarantee that any amounts paid to or for the benefit of a Participant under the Plan will be excludable from the Participant's gross income for federal or state tax nor that any other favorable tax treatment will apply to or be available to any Participant with respect to such amounts. It shall be the obligation of each Participant to determine whether each payment under this Plan is excludable from the Participant's gross income for federal and state tax purposes,and to notify the Plan Administrator if the Participant has reason to believe that any such payment is not so excludable. 22 City of Rancho Cucamonga Cafeteria Plan Plan Document 11.8 Indemnification of The City by Participants If any Participant receives one or more payments or reimbursements under the Plan that are not for an allowable expense,such Participant shall indemnify and reimburse The City for any liability it may incur for failure to withhold federal or state income tax or Social Security tax from such payments or reimbursement. However, such indemnification and reimbursement shall not exceed the amount of additional federal and state income tax that the Participant would have owed if the payments or reimbursements that had been made to the Participant as regular cash compensation,including the Participant's share of any Social Security tax that would have been paid on such compensation,less any additional income and Social Security tax actually paid by the Participant. 11.9 Governing Law This Plan shall be construed and enforced in accordance with the Code to the extent it is not preempted by federal law and with the laws of the State of California. Any legal action relating to, arising out of, or involving, the Plan shall be-litigated in in the state or federal court of proper jurisdiction in the State of California. 11.10 Headings and Captions The headings and captions herein are provided for reference and convenience only and shall not be considered part of the Plan nor be employed in the construction of the Plan. 11.11 Gender and Number Whenever used in the Plan, words in the masculine gender shall include all gender distinctions, and unless the context otherwise requires,words in the singular shall include the plural, and words in the plural shall include the singular. 11.12 Entire Plan The Plan document,and the documents incorporated by reference herein,shall constitute the governing documents for the Plan.No oral statement or other communication will void or reduce coverage under the Plan, or amend or modify the terms of the Plan,or be used in defense to a claim,unless in writing and signed by the Plan Administrator. Amended and Restated ® January 1, 2024 23 SECTION 12 - AMENDMENT AND TERMINATION ................................................................................................................................................................. 12.1 Amendment The City,shall have the right at any time by written instrument, duly executed and acknowledged,to modify,alter or amend this Plan or any Elective Benefit in whole or in part without the consent of any Employee,Participant,or Affiliated Employer.However,no such amendment shall diminish or eliminate any claim for any benefit to which a Participant shall have become entitled prior to such amendment. Notwithstanding the foregoing, the Plan Administrator shall have the right to amend the Plan at any time,retroactively or otherwise,in such respects and to such extent as may be necessary to fully qualify it as a cafeteria plan under existing and applicable laws and regulations,including Code Section 125,and if and to the extent necessary to accomplish such purpose,may by such amendment decrease or otherwise affect benefits to which Participants may have already become entitled. 12.2 Termination The Plan herein provided for has been established by The City with the intention that it shall be continued in operation indefinitely. Notwithstanding any other provision of this Plan,The City or its authorized delegate.may terminate or partially terminate the Plan or reduce or discontinue employer contributions at any time consistent with federal, state or local laws, statutes, and regulations without the consent of any Employee, Participant or Affiliated Employer. IN WITNESS WHEREOF,the undersigned authorized representative has executed this amended and restated Plan document effective as of January 1,2024,on behalf of City of Rancho Cucamonga to evidence the adoption of this amended and restated Plan as set forth herein. For City of Rancho Cucamonga: Signature: Name: Title: Date: 24 City of Rancho Cucamonga Cafeteria Plana Plan Document APPENDIX A ...................................................................................................................................................................................... CITY OF RANCHO CUCAMONGA CAFETERIA PLAN Participation and Eligibility Requirements Employee Eligibility An Employee who is determined to be benefit-eligible as of his or her start date shall be offered coverage as of the Effective Date of Eligibility specified below. Effective Date of Working Hours Employee Class Benefit Option Eligibility Requirement Full-Time City Employees All Elective Benefits listed First day of the month 40 hours per week on Appendix B following date of hire Full-Time Fire District All Elective Benefits listed First day of the month 40 hours per week or 122 Employees on Appendix B following date of hire hours over 2 weeks of shift Certain employees who are hired into positions that are not initially benefit-eligible may become participants in the Plan by achieving Full-Time Status ("ACA-FT") under special eligibility rules for variable hour, part-time, and seasonal employees.In the event City of Rancho Cucamonga adopts such rules,it intends to administer them in a manner consistent with the final regulations issued by the Department of Treasury related to the "Shared Responsibility" provisions of the ACA. Amended and Restated January 1, 2024 25 APPENDIX B ...................................................................................................................................................................................... CITY OF RANCHO CUCAMONGA CAFETERIA PLAN Summary of Benefits and Contribution Requirements Effective as of January 1, 2024 benefits and Employee contribution requirements of the City of Rancho Cucamonga Cafeteria Plan are as follows: Elective Benefits The following Elective Benefits are available under the Plan: ■ Premium Contribution Benefits: ■ Group Medical ■ Voluntary Worksite Benefits ■ General-Purpose Health FSA ■ Dependent Care FSA The above Elective Benefits are described in the applicable Benefits Documents provided by each carrier, contract administrator,which are incorporated herein by reference. Premium Contribution Requirements Prior to the beginning of a Plan Year,City of Rancho Cucamonga,at its discretion,may make changes to the benefits and contribution requirements. The cost sharing requirements for Premium Contribution Benefits are detailed in the Annual Open Enrollment materials provided to eligible Employees, which are incorporated herein by reference. Copies of enrollment materials are available upon request by contacting: City of Rancho Cucamonga Attn:Human Resources Director 10500 Civic Center Drive Rancho Cucamonga,CA 91730 909-477-2700 Cash-in-Lieu, Health FSA and Dependent Care FSA Limits and Deadlines Participants may make contributions to these accounts,subject to the account maximums specified below,in the manner determined by the Plan Administrator and may not exceed the full amount elected in any one Plan Year. Benefits Beneft0etails City Employees: $300 Fire District Employees: $200 to$500 depending on dependent status and bargaining group. DetailsHealth FSA Account Maximum Contribution Amount per Plan Year: Up to the statutory maximum limit per Plan Year in accordance with Code Section 125(i)(2) (cost of living adjustment). Health FSA Carryover Maximum: If funds remain in your Health FSA at the end of the Plan Year, up to 20%of the current Plan Year's Maximum Contribution 1 26 City of Rancho Cucamonga Cafeteria Plan Plan Document Amount will be carried over for your use in the subsequent Plan Year. Run-Out Period for sending in Reimbursement 90 days after the end of the Plan Year in which the expense was Requests: incurred. j.Dependent Care FSA Account Maximum Contribution Amount per Plan Year: ■ Single or married filing jointly Up to$5,000 per plan year ■ Married filing jointly and spouse's earned Up to spouse's earned income per plan year income is less than$5,000 per year ■ Married filing separately Up to$2,500 per plan year(spouse may also contribution $2,500 to a separate Dependent Care Assistance Program Run-Out Period for sending in Reimbursement 90 days after the end of the Plan Year in which the expense was Requests: incurred. Amended and Restated m January 1, 2024 i 27 APPENDIX C ...................................................................................................................................................................................... CITY OF RANCHO CUCAMONGA CAFETERIA PLAN Affiliated Employers For purposes of the Plan,the following entities are Affiliated Employers of City of Rancho Cucamonga that have adopted the Plan with the consent of City of Rancho Cucamonga. Entity Name FEIN Rancho Cucamonga Fire Protection District(Fire District) 93-1004532 I 28 City of Rancho Cucamonga Cafeteria Plano Plan Document