HomeMy WebLinkAbout7 Attachment 1 125 Plan Amendment Attachment 1
AMENDMENT TO THE 125 PLAN
Re: Limitation on Health FSA Salary Reduction Contributions and
Clarified Definition of Eligible Health Care Expenses
WHEREAS, Truckee Donner Public Utility District (the "Employer") sponsors the amended and
restated 125 Plan, which is a cafeteria plan under Section 125 of the Internal Revenue Code of
1986, as amended("Code"), that provides one or more of the following benefits: a premium-
only plan(the "POP")that allows employees to pay for insurance premiums on a pre-tax basis, a
health flexible spending account(the "Health FSA")under Section 125 of the Code, and/or a
limited use health flexible spending account (the "Limited Use Health FSA")under Section 125
of the Code;
WHEREAS, the 125 Plan is administered by Cooperative Benefit Administrators, Inc. ("CBA"),
a subsidiary of National Rural Electric Cooperative Association("NRECA");
WHEREAS, the Patient Protection and Affordable Care Act, as clarified by IRS Notice 2012-40,
provides that a participant in a Health FSA and/or Limited Use Health FSA may only contribute
up to $2,500, effective January 1, 2013;
WHEREAS, the Employer wishes to modify the definition of Eligible Health Care Expenses
contained in Section 4.17 to clarify that the costs of certain special foods and/or beverages and
the non-medical services of doulas and other childbirth service providers are not Eligible Health
Care Expenses; and
WHEREAS,NRECA has determined that the 125 Plan, as administered by CBA, should be
amended, effective as of January 1, 2013.
NOW, THEREFORE,pursuant to the authority reserved to the Employer by Section 19.10 of the
125 Plan, the 125 Plan is hereby amended, effective as of January 1, 2013, and clarified as
follows:
First Change
Section 4 of the 125 Plan shall be clarified by adding the following new sentences after the first
sentence of subsection 4.17 thereof:
Eligible Health Care Expenses shall not include the costs of special foods and/or
beverages regardless of a prescription, unless such special foods and/or beverages qualify
as medical care under IRS Revenue Ruling 55-261 and only to the extent that the costs of
such special foods and/or beverages exceed the costs of the commonly available version of
the same products. The costs of non-medical services of doulas and other childbirth service
providers are not Eligible Health Care Expenses.
Attachment 1
Second Change
Section 6 of the 125 Plan shall be amended by replacing subsection 6.01(b)(ii) thereto with the
following new subsection 6.01(b)(ii):
Maximum and Minimum Plan Contributions. The maximum Plan Contribution
during any Plan Year made by a Participant and/or Employer for benefits under
the Health Flexible Spending Account may not exceed the lesser of $5,000, or the
amount designated by the Employer, except to the extent that contributions are
required pursuant to Section 13. The maximum Participant contribution to the
Health Flexible Spending Account (and Limited Use Health Flexible Spending
Account combined, if applicable) may not exceed $2,500. Although there is no
minimum Plan Contribution to the Health Flexible Spending Account, the
Employee's participation in the Health Flexible Spending Account will terminate if
the Employee does not elect to contribute to it. The prior sentence will not apply to
a Participant who does not make a contribution, but who has a Health Flexible
Spending Account to which an Employer Contribution has been made.
Third Change
Section 6 of the 125 Plan shall be amended by replacing subsection 6.01(d)(ii) thereto with the
following new subsection 6.01(d)(ii):
Maximum and Minimum Plan Contributions. The maximum Plan Contribution
during any Plan Year made by a Participant and/or Employer for benefits under
the Limited Use Health Flexible Spending Account may not exceed the lesser of
$5,000, or the amount designated by the Employer, except to the extent that
contributions are required pursuant to Section 13. The maximum Participant
contribution to the Limited Use Health Flexible Spending Account (and Health
Flexible Spending Account combined, if applicable) may not exceed $2,500.
Although there is no minimum Plan Contribution to the Limited Use Health
Flexible Spending Account, the Employee's participation in the Limited Use Health
Flexible Spending Account will terminate if the Employee does not elect to
contribute to it. The prior sentence will not apply to a Participant who does not
make a contribution, but who has a Limited Use Health Flexible Spending Account
to which an Employer Contribution has been made.
IN WITNESS WHEREOF, the Employer has caused the 125 Plan to be amended by
approval of the Board of Directors, and signed by the duly authorized officer below:
Name: Date
Title:
2