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Flexible Spending Accounts Plan

The Flexible Spending Accounts Plan includes the Medical Expense Reimbursement Account and the Dependent Care Account.

This Summary Plan Description describes the Flexible Spending Accounts Plan available through the Franklin & Marshall College Group Insurance Plan and Flexible Spending Account (described herein as the "Flexible Spending Accounts Plan", the "Plan", or the "Section 125 Plan") effective as of September 1, 2013. It is required by the Employee Retirement Income Security Act of 1974 (ERISA), as amended. The purpose of this Summary Plan Description (SPD) is to acquaint employees with the provisions of the Section 125 Plan, the way in which it is administered, and participants' rights under the federal law which applies to employee benefit plans. This SPD describes the election process and the tax effect of participation in the Section 125 Plan. Every effort has been made to make this SPD as accurate as possible, however, in the event of a discrepancy between the SPD and the Plan Document, the Plan Document shall control. The Plan Document can be viewed by contacting Human Resources. The Section 125 Plan is intended to qualify as a cafeteria plan under the Internal Revenue Code. The Section 125 Plan is established for the exclusive benefit of participants, their covered dependents, and their beneficiaries, and is administered impartially for the benefit of all eligible employees.


Facts About the Plan

Plan Name:  Franklin & Marshall College Group Insurance Plan and Flexible Spending Account

Plan Number:  501 - Plan 501 also includes the Shared Services Group Health Plan, the Franklin & Marshall College Group Dental Plan, and the Franklin & Marshall College Group Life Insurance Plan which are each described in separate Summary Plan Descriptions.

Name, Address, and Telephone Number of Employer/Sponsor:  Franklin & Marshall College, Lancaster, PA 17604-3003, (717) 291-3995. Employer shall also include the Lancaster City Alliance.

Plan Sponsor's Employer Identification Number:  23-1352635

Plan Year:  January 1 to December 31

Type of Plan:  Section 125 cafeteria plan arrangement with premium conversion feature and medical and dependent care reimbursement accounts.

Name, Address and Telephone Number of Plan Administrator:  Franklin & Marshall College, Lancaster, PA 17604-3003, (717) 291-3995

Type of Administration:  Administration is provided through an independent third party administrator. The third party administrator is Significa Benefit Services, P.O. Box 7777, Lancaster, PA 17604-7777.  Significa Benefit Services’ telephone numbers are (717) 581-1300 and (800) 433-3746. Significa Benefit Services is appointed by the College to perform certain administrative services with respect to the Plan. Significa Benefit Services does not finance or insure the Plan. Under this type of administration, benefits are not guaranteed under a contract or policy of insurance. In its role as a third party administrator, Significa Benefit Services is not an "administrator" as defined in Section 3(16)(A) of ERISA. The College is the Plan "administrator" as defined in Section 3(16)(a) of ERISA.

Agent for Service of Legal Process:  The Plan sponsor at the above address.


Plan Benefits

The Flexible Spending Accounts Plan

The Flexible Spending Accounts Plan includes:

  1. the Insurance Premium Payment Plan, which allows eligible employees to pay their share of health and/or dental plan premiums on a pre-tax basis through salary reduction,
  2. the Medical Expense Reimbursement Account, which allows employees to set aside money on a pre-tax basis through salary reduction, and then use these funds to reimburse themselves for their eligible medical, prescription drug, vision, and dental expenses, and
  3. the Dependent Care Reimbursement Account, which allows employees to set aside money on a pre-tax basis through salary reduction, and then reimburse themselves for their eligible dependent care expenses.

Insurance Premium Payment Plan-- Eligible employees may pay for their portion of the cost of coverage under the Shared Services Group Health Plan (“Group Health & Prescription Drug Plan”) and/or the Franklin & Marshall College Group Dental Plan with "pre-tax" dollars. (Based on current IRS regulations, the portion of the premium paid to cover a same-sex domestic partner may not be paid on a pre-tax basis.) The benefits a participant elects through the Insurance Premium Payment Plan are non-taxable, so the participant does not pay Social Security or federal income taxes on his/her portion of the cost of coverage under the Shared Services Group Health Plan or Group Dental Plan.

Eligible, active full-time employees are automatically enrolled in the Insurance Premium Payment Plan upon electing group health and/or dental coverage through the College, which means each employee's share of premiums is paid on a pre-tax basis through payroll deduction. Employees may elect to pay premiums, through payroll deduction, on an after-tax basis. To do so, an employee must notify the Plan Administrator (via the Human Resources office), annually and in writing, of his/her desire to pay premiums on an after-tax basis. Such notice must be provided upon initial enrollment in the Shared Services Group Health Plan and/or the Group Dental Plan, and during each annual Open Enrollment period.

An employee's election through the Insurance Premium Payment Plan may vary from year to year depending upon the required rate of contribution for coverage under the Shared Services Group Health Plan and the Group Dental Plan. The Plan Administrator reserves the right to select the insurer(s) which will offer group medical coverage and group dental coverage, the policy terms under which benefits will be offered, and the amount of premium contribution required by participants. The Plan Administrator may alter, amend, or terminate the Shared Services Group Health Plan and/or the Group Dental  Plan in its sole discretion. If an employee does not choose any of the benefits offered under the Shared Services Group Health Plan and/or the Group Dental  Plan, the employee will be considered to have elected a "cash" benefit in the form of taxable salary equal to the amount of the applicable participant-paid insurance premiums.

The benefits provided under the Shared Services Group Health Plan and the Group Dental Plan are described in greater detail in a separate Shared Services Group Health Plan Summary Plan Description and the Group Dental Plan Summary Plan Description, available from Human Resources.

Medical Expense Reimbursement Account and Dependent Care Reimbursement Account-- The Flexible Spending Accounts Plan gives eligible employees the ability to participate in the Medical Expense Reimbursement Account and/or the Dependent Care Reimbursement Account.  An eligible employee may elect to have a portion of his/her salary deducted from each paycheck on a pre-tax basis and designated to a Medical Expense Reimbursement Account and/or a Dependent Care Reimbursement Account. After paying for eligible medical expenses which are not reimbursed through any insurance plan or eligible dependent care expenses, the employee may be reimbursed from the money in his/her Account(s).

Although a participating employee pays for his/her medical care expenses and/or dependent care expenses, the employee can reduce his/her federal income tax obligation by designating money to an Account(s) before federal income tax is calculated and withheld from pay.

 

Eligibility for Participation

Insurance Premium Payment Plan-- Full-time employees of Franklin & Marshall College, the Centennial Conference, and the Lancaster City Alliance are eligible to participate in the Insurance Premium Payment Plan as of the date they satisfy the eligibility requirements for the Shared Services Group Health Plan and the Group Dental  Plan.

Medical Expense Reimbursement Plan and Dependent Care Reimbursement Plan-- Employees who work or are expected to work for wages for the College at least 1,000 hours per Plan Year are eligible to participate in the Medical Expense Reimbursement Plan and/or Dependent Care Reimbursement Plan, including:

  • faculty and professional staff employees, including visiting, tenured, non-tenured, and tenure-track faculty; employees of the Centennial Conference who: (1) are regularly scheduled to work on the Franklin & Marshall College campus and (2) are paid through the College's payroll system, as long as otherwise eligible; and employees of the Lancaster City Alliance who are  paid through the College's  payroll system.
  • faculty on an approved joint appointment: one full-time position shared by two College faculty members each working at least 1,000 hours annually
  • full-time faculty working a reduced schedule under an approved Phased Retirement Agreement or Pre-retirement Leave of Absence Agreement
  • full-time faculty on an approved paid sabbatical or paid Junior Faculty Leave
  • faculty and professional staff employees on an approved paid or unpaid Family & Medical Leave as provided for in the Family & Medical Leave Act, or other approved paid leave of absence which provides for continued coverage
  • faculty and professional staff who hold positions designated as “part-time”, but who are authorized and budgeted by the College to work 1,000 or more hours per year

Part-time employees holding positions not budgeted to work at least 1,000 hours per year; independent contractors; contracted employees; adjunct faculty; individuals who volunteer their services without compensation; students; student employees; and former and retired College employees are not eligible to participate in this Section 125 Plan.



The Election Process

Initial Election-- College employees are eligible to make elections under the Section 125 Plan at the same time they are eligible to enroll in the Shared Services Group Health Plan and the Group Dental  Plan. Eligible College employees may enroll as of the first day of the calendar month coinciding with or following appointment to a full-time position. An eligible employee must submit a properly completed enrollment form within 31 calendar days of the first day of eligibility, in order to be enrolled in the Flexible Spending Accounts Plan. If the enrollment form is not submitted to the Plan Administrator (via Human Resources) within 31 calendar days of the first day of eligibility, coverage the Plan shall become effective no sooner than the next January 1, barring any special enrollment rights and assuming an enrollment form is completed and returned by January 1.

Full-time employees who elect benefits under the Shared Services Group Health Plan and/or the Group Dental  Plan will automatically be enrolled in the  Premium Payment Plan.

Employees who do not wish to participate in the Insurance Premium Payment Plan, and, therefore, elect to pay their portion of health insurance premiums and dental insurance premiums on an after-tax basis, must notify the Plan Administrator (via Human Resources), in writing, upon enrollment in the Shared Services Group Health Plan or Group Dental Plan.

College employees are eligible to enroll in the Medical Expense Reimbursement Plan and/or Dependent Care Reimbursement Plan as of the first of the calendar month coinciding with or following appointment to a position expected to work at least 1,000 hours per Plan Year. When a participant is eligible to enroll in the Plan, he/she will be asked to complete and submit an enrollment form. The proper enrollment form must be completed and submitted to Human Resources within 31 calendar days of the 1st day of eligibility.

Subsequent Elections-- During each Open Enrollment period, eligible employees will be asked to complete an election form to select the benefits to be provided on their behalf for the next Plan Year. If an eligible employee elects to participate in the Section 125 Plan, his/her compensation will be reduced by the amount of his/her elections.


Making Changes to Elections

Other than during the annual Open Enrollment period, an employee may only make a change to his/her elections if the employee experiences a qualified change in status, as described below. At that time, an employee may choose to begin or end participation, or increase or decrease the amount contributed to one or both plans. Employees must request a change, and submit the appropriate enrollment form to the Plan Administrator (via Human Resources), within 31 calendar days of the qualified change in status.

If an employee starts or ends participation in the Medical Expense Reimbursement Account Plan or Dependent Care Account Plan during the year due to a qualified change in status, participation in that Account starts or ends as of the effective date of the change in status. An employee may not be reimbursed for expenses that were incurred before his/her participation began or after it ended.


Key Restrictions / Important Information

While Reimbursement Accounts can reduce the amount of taxes a participant must pay, participants should be aware of these restrictions before enrolling in one or both plans:

  • Once enrolled in one or both plans, contributions cannot be changed or stopped unless the participant has a qualified change in status, such as marriage, divorce, or the birth or adoption of a child.
  • If a participant enrolls in both the Medical Expense Reimbursement Plan and the Dependent Care Reimbursement Plan, money may not be transferred between the two Accounts established for the participant under the plans.
  • If a participant does not incur enough eligible expenses during the year to use all the contributions he/she made to the Account(s), the IRS requires the participant to forfeit any remaining balance in his/her Account(s).
  • With the Medical Expense Reimbursement Account, eligible expenses must be incurred between January 1 of the current year and March 15 of the following calendar year.

  • With the Dependent Care Account, eligible expenses must be incurred between January 1 and the next December 31 (i.e., during the calendar year).

  • A participant cannot receive a refund, carry balances over to pay for the next year's expenses, or transfer money from one Account to another. Forfeited money is used to help offset the cost of administering the Plan.
  • A participant cannot claim an expense on his/her federal income tax return if the participant has been reimbursed for that expense through the Medical Expense Reimbursement Plan or the Dependent Care Reimbursement Plan.
  • Participants have until March 31 of the next year to submit claims for reimbursement for expenses incurred during the previous year. Any money left in a participant's Account(s) after that date must be forfeited.
  • If a Medical Expense Reimbursement Account participant also participates in the College's PPO Health Plan $1,000 with Health Reimbursement Account, reimbursement to the employee for medical expenses deemed "eligible" through the Health Reimbursement Account will be provided first from any balance in the employee's Health Reimbursement Account (HRA).  Currently, such eligible expenses are the deductible, health and prescription drug coinsurance and co-payments incurred through the PPO Health Plan $1,000.  If the participant does not have enough funds in the HRA to provide full reimbursement for his/her eligible medical expenses, the remaining amount which cannot be reimbursed from the participant's HRA balance may then be submitted for reimbursement by the participant through his/her Medical Expense Reimbursement Account. An employee may not be reimbursed for the same incurred medical expense from both the Health Reimbursement Account and the Medical Expense Reimbursement Account. However, if the balance in an employee's HRA is not sufficient to provide full reimbursement for an eligible medical expense, the employee may then request reimbursement of the remaining eligible expense through his/her Medical Expense Reimbursement Account, if a balance remains in this Account and if the expense is an "eligible" expense under the Medical Expense Reimbursement Account.
  • Medical Expense Reimbursement Account participants who also participate in the College's PPO Health Plan $1,000 with Health Reimbursement Account should plan carefully when determining their annual salary reduction election to the Medical Expense Reimbursement Account. Such participants are advised to take into account that they will be reimbursed first for eligible medical expenses from their Health Reimbursement Account balance to the extent a balance is available.

Changes in Status / Special Enrollment Periods / “Mid-year” Election Changes

After an employee has selected benefits under this Plan, the employee may not change his/her elections until the next Open Enrollment period, with changes effective the next January 1. The only exception to this rule is if there is a relevant change in status. If a Plan participant experiences a relevant change in status, he/she may be permitted to change benefit elections for the balance of the Plan Year after the change, provided the change in elections is on account of and consistent with a change in status that affects eligibility under the terms of a plan.

Changes to Group Health & Prescription Drug Plan, Group Dental Plan, and/or Medical Expense Reimbursement Plan elections may be made after the start of the Plan Year (January 1) if:

  • an employee experiences a "Change in Status", as defined by the Internal Revenue Service, that affects eligibility for coverage (see below)
  • an employee, his/her spouse, or dependent(s) becomes qualified for, or loses, coverage under Medicare or Medicaid
  • an employee/retiree or dependent qualifies for special enrollment rights under the Health Insurance Portability and Accountability Act (HIPAA): an individual who is otherwise eligible for health insurance coverage through the College's Plan, but declined coverage because he/she had other health insurance coverage, is permitted to enroll in the College's Plan upon loss of eligibility for other coverage or upon termination of "COBRA" coverage under another employer's plan; an eligible individual may enroll in the College's Health Insurance & Prescription Drug Plan if his/her employer's contributions toward other coverage cease; and an employee/retire may enroll him/herself and eligible dependents following marriage, birth of a child, adoption, or placement for adoption

Loss of eligibility for coverage may occur (1) when an individual meets the lifetime maximum benefit level under another employer's health plan, or (2) when the other employer no longer offers any benefits to a class of similarly-situated individuals.

  • an employee takes an unpaid leave of absence per the Family & Medical Leave Act
  • the Plan receives a court order, such as a Qualified Domestic Relations Order or Qualified Medical Child Support Order, requiring the College's Health Insurance & Prescription Drug Plan to provide coverage for a dependent(s) (Plan Participants and beneficiaries may obtain, without charge, a copy of the procedures governing QMCSO determinations from the Plan Administrator.)

Each of the following qualifies as a "Change in Status" based on current Internal Revenue Service regulations:

  • a change in legal marital status due to marriage, death of a spouse, divorce, legal separation, or annulment
  • a change in number of dependents due to birth, death, adoption, or placement for adoption
  • a change in employment status due to commencement or termination of employment, commencement of or return from an unpaid leave of absence, a change in work site by the employee or dependent, or other change in employment that leads to a loss or gain of eligibility of the employee, spouse, or dependent under a plan
  • a change in a dependent's ability to satisfy the requirements for coverage due to attainment of age or full-time student status
  • a change in the place of residence or work of the employee/retiree, spouse, or dependent that affects eligibility for coverage

A corresponding, prospective change to Shared Services Group Health Plan and Group Dental Plan elections and elections through the Insurance Premium Payment Plan (but not Medical Expense Reimbursement Plan elections) are also permitted if:

  • an employee's spouse or dependent child makes permissible election changes under his/her employer's health or dental plan or Section 125 cafeteria plan, such as during an Open Enrollment period
  • a benefit option is significantly curtailed: When the Plan Administrator determines that the coverage for an employee, spouse or dependent child has been "significantly curtailed" with or without a loss of coverage, the employee can revoke the current election and must elect coverage under a similar benefit option except as follows. If the employee, spouse or dependent experiences a loss of coverage as a result of the curtailment, the participant has the option of not electing replacement coverage under the Plan. Whether there has been a loss of coverage or a significant curtailment in coverage will be determined in the sole discretion of the Plan Administrator, and applied on a consistent basis. A loss of coverage may occur when there is a substantial decrease in the providers who participate in a benefit option or if there is a reduction in benefits for a specific medical condition for which the employee, spouse or dependent is currently under treatment. Coverage is considered to be "significantly curtailed" only if there is an overall reduction in coverage.
  • a benefit option is added or significantly improved: When the Plan adds a new benefit option or significantly improves an existing option, the Plan Administrator may permit participants to make an election change to participate in the new or significantly improved option, on a prospective basis, and to revoke their elections under any similar benefit option. The Plan Administrator, in its sole discretion and applied on a consistent basis, will determine whether there has been an addition of or significant improvement in a benefit option.
  • an employee, spouse, or dependent or a benefit option under the Plan experiences a relevant significant change in cost: If the Plan Administrator determines that the cost charged to an employee for a specific benefit option has significantly increased, the employee can revoke his/her election for that coverage and elect coverage under another benefit option. If the Plan Administrator determines that the cost charged to an employee for a specific benefit option has significantly decreased, an employee may revoke any existing elections and elect coverage under the option with the cost decrease. The Plan Administrator, in its sole discretion and on a uniform and consistent basis, will determine whether a cost increase or decrease is significant based on IRS guidance.

Changes to Dependent Care Reimbursement Plan elections may only be made after the start of the Plan Year (January 1) if:

  • an employee experiences a "Change in Status" as described above
  • a dependent care provider is replaced by another provider, resulting in a change in the cost of care
  • an employee experiences a decrease in dependent care costs due to a coverage change, such as a reduced need for care
  • an employee experiences a significant increase in dependent care costs, as long as the dependent care provider is not a relative of the employee

All mid-year election changes must be on account of and consistent with the status change experienced by the employee.

If a change in status affecting an employee or his/her spouse or dependent(s) occurs, the employee must notify the Plan Administrator (via Human Resources) and submit a new Flexible Spending Accounts Plan enrollment form within 31 calendar days of the event (along with a new Shared Services Group Health Plan enrollment form and/or a Group Dental Plan enrollment form, as applicable). If the form(s) is not properly submitted within 31 calendar days of the status change or other event, changes to benefit elections may not be made until the following January 1. The Plan Administrator will determine whether a requested change is permissible and on account of and consistent with a change in status.


Additional Information Regarding Mid-year Election Changes:

  • Except in limited circumstances, benefit election changes must be applied prospectively.
  • Other than in the case of birth, adoption, or placement for adoption, changes to benefit plan elections made on account of a status change will be effective the first of the calendar month following the status change.
  • Employees' pre-tax health insurance premiums and pre-tax dental insurance premiums will automatically be adjusted, through the Insurance Premium Payment Plan, if there is an increase or decrease in the cost of coverage through the College's Shared Services Group Health Plan and/or Group Dental Plan. Such adjustments will be made prospectively.
  • If an employee terminates employment and is then rehired by the College within 30 calendar days, he/she will not be permitted to change previous Group Health & Prescription Drug Plan, Group Dental Plan, or Flexible Spending Accounts Plan elections, unless the employee has experienced another "Change in Status" or relevant event as described above.
  • Health insurance coverage and dental insurance coverage may not be cancelled by a participant if he/she experiences a "significant curtailment" or change in coverage that does not constitute a loss of coverage. For example, if an employee moves out of the area, he/she may enroll in the College's Indemnity (out-of-area) Plan, but may not cancel coverage or change his/her Medical Expense Reimbursement Plan election.
  • Health insurance premiums and dental insurance premiums for retroactive coverage may only be paid on an after-tax basis, except in the case of birth, adoption, or placement for adoption.

Tax Advantages of the Plan

As a participant in the Insurance Premium Payment Plan, the amount contributed toward Shared Services Group Health Plan premiums and Group Dental Plan premiums will be deducted from pay before federal taxes are calculated. Since participants do not pay federal taxes on the money used to pay their portion of health and dental insurance premiums, their take-home pay will be higher. By paying their share of health and/or dental insurance premiums on a pre-tax basis, participants lower their taxable income.

Through the Medical Expense Reimbursement Plan and the Dependent Care Reimbursement Plan, participants can reduce the amount of their income subject to taxes and save money by paying for certain eligible medical and dependent care expenses on a pre-tax basis. When an employee participates in the Medical Expense Reimbursement Plan and/or Dependent Care Reimbursement Plan, the College sets up an Account on the employee's behalf. The Account is funded solely by the employee's contributions, and is used to reimburse the employee for eligible expenses using pre-tax dollars.

When an employee elects to participate in one or both of these plans, he/she contributes money to an Account in his/her name each pay period before taxes are withheld from the employee's pay. The funds which accumulate in the Accounts are then used to reimburse the employee for eligible medical or dependent care expenses that are incurred by the employee. Although the participant must pay for medical expenses and/or dependent care expenses, the participant saves money because contributions to these Accounts are exempt from federal and Social Security taxes.

For state income tax purposes, the Commonwealth of Pennsylvania does not exclude contributions under Section 125 Plans except for those pertaining to medical expenses. Please note, participants will not pay Social Security taxes on their share of contributions to the Section 125 Plan. As a result, the earnings used to calculate Social Security benefits at retirement will not include these payments. This could result in a small reduction in the Social Security benefit the participant receives at retirement. However, savings on current taxes will normally be greater than any eventual reduction in Social Security benefits.


Medical Expense Reimbursement Account and Dependent Care Reimbursement Account

Participation in either of the Reimbursement Accounts is optional. Employees who anticipate incurring medical and/or dental care expenses that their insurance plan(s) will not cover, or will cover only in part, may want to participate in the Medical Expense Reimbursement Plan. An employee who pays for child or elder care so that he/she (and his/her spouse, if married) can work or attend school may want to participate in the Dependent Care Reimbursement Plan.

When an employee enrolls in one or both plans, he/she elects to participate for the full calendar year (or the remainder of the calendar year, if eligible to enroll during the year). The amount an employee chooses to contribute to the Medical Expense Reimbursement Plan and/or Dependent Care Reimbursement Plan will be deducted from paychecks in equal installments throughout the year and credited to an Account(s) in the employee's name. If an employee enrolls mid-year, he/she may still contribute the annual maximum to the Account(s) for that year. In this case, the amount an employee elects to contribute will be divided by the number of pay periods remaining in the year. As a participant incurs eligible medical or dependent care expenses, he/she pays for these services and then requests reimbursement from his/her Medical Expense Reimbursement Account and/or Dependent Care Reimbursement Account, as described below. Reimbursement Accounts do not earn interest during the year. Each type of plan has specific guidelines regarding which expenses are eligible for reimbursement. Please note that not all expenses are eligible for reimbursement.

Internal Revenue Service (IRS) rules require that an employee elects to participate in one or both plans before the start of each calendar year. A previous election will not automatically carry over into the next calendar year, even if a participant wishes to keep his/ her contribution the same.

To participate in the Medical Expense Reimbursement Account and/or Dependent Care Account during a calendar year, an enrollment form must be completed and submitted during the Open Enrollment period that begins prior to January 1.


Amount that May Be Contributed to the Accounts

Each participant decides the amount he/she wants to contribute to the Medical Expense Reimbursement Plan and/or Dependent Care Reimbursement Plan by estimating out-of-pocket health care and/or dependent care expenses during the upcoming calendar year. There are maximum amounts that may be contributed each Plan Year (calendar year), as follows:

  • Maximum Medical Expense Reimbursement Plan Election: $2,500 per Plan Year

This amount will be determined prior to the start of each Plan Year by the Plan Administrator. If an employee's spouse is also a full-time College employee, each employee may contribute up to $2,500 per year to the Medical Expense Reimbursement Plan, however, two individuals may not both be reimbursement from their Medical Expense Reimbursement Account for the same expense.

  • Dependent Care Reimbursement Account: $5,000 per Plan Year, or up to $2,500 if married and filing separate tax returns

Additional Limitations on Contributions

The amount which may be contributed to the Dependent Care Reimbursement Plan cannot exceed the participant's compensation for the year. If a participant is married and his/her spouse's compensation is less than the participant's compensation, the participant's contribution amount cannot exceed the spouse's income. For example, if an employee's income is $40,000 per year and her spouse's income is $4,000 per year, the maximum the employee may contribute to the Dependent Care Reimbursement Plan is limited to $4,000 for that year. If an employee's spouse is a full-time student or is incapable of self-care, his/her income is assumed to be:

  • $250 per month, if there is one person for whom eligible dependent care expenses are incurred, or
  • $500 per month, if there are two or more persons for whom eligible dependent care expenses are incurred.

An employee's and spouse's combined maximum contribution to a Dependent Care Reimbursement Plan cannot exceed $5,000 per year (if the spouse also participates in a dependent care reimbursement plan through his/her employer and a joint federal tax return is filed). If an employee's spouse or other dependent participates in a Medical Expense Reimbursement Plan through his/her employer, both may not claim reimbursement for the same medical expenses.


Medical Expense Reimbursement Account

Participants may use a Medical Expense Reimbursement Account to pay for eligible health care expenses that their health insurance plan(s) do not cover or cover only in part, such as deductibles, co-payments, eligible dental expenses, and vision care.  Expenses must be incurred by the participating employee or his/her eligible dependents.

Eligible Dependents— For purposes of the Medical Expense Reimbursement Account, the following are eligible dependents:

  • The legally-recognized spouse of the enrolled employee.
  • An enrolled employee’s child, if the child is age 25 or younger (under age 26). 
  • An employee’s child, grandchild, sibling or step-sibling, parent, grandparent, aunt, uncle, niece, or nephew who is physically or mentally incapable of caring for him/herself and depends on the employee for at least half of his/her financial support.  
  • An individual who is physically or mentally incapable of caring for him/herself; depends on the employee for at least half of his/her support; and is a member of the employee's household for the entire tax year. 

The term "child" is defined as an individual who is the son, daughter, stepson, or stepdaughter of the employee; includes both a legally-adopted child of the employee and a child who is lawfully placed with the employee for legal adoption; and includes an “eligible foster child”, defined as an individual who is placed with the employee by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.


Eligible Health Care Expenses

A Medical Expense Reimbursement Account may be used to provide reimbursement for a wide variety of eligible medical care expenses, if such expenses are not covered or are covered only in part under the participant's health insurance plan(s).

To be considered eligible, an expense must be incurred while the employee is a participant in the Medical Expense Reimbursement Plan.  Additionally, medical expenses must be incurred from January 1 of the calendar year in which the employee is participating in the Plan through March 15 of the following calendar year.  Expenses are treated as having been incurred when the participant or eligible dependent is provided with the medical care that gives rise to the medical expenses, not when the participant is formally billed for, or pays for, the medical care. An employee may not be reimbursed during the current Plan Year for expenses incurred during a different Plan Year.

Eligible expenses recognized by the IRS include but are not limited to:

  • acupuncture
  • ambulance transportation
  • audio display television for the deaf
  • birth control pills
  • Braille books and magazines, limited to the difference between the cost of the Braille items and the cost for regular items
  • breast pumps and supplies for a nursing mother
  • cancer insurance premiums
  • chiropractic expenses in excess of health plan limits
  • contact lenses and solutions
  • costs for keeping a mentally disabled person in a halfway house or special home (not the home of a relative), when recommended by a psychiatrist to help the person adjust from life in a psychiatric hospital to community living
  • costs for medical services provided by physicians, surgeons, specialists, or other medical practitioners
  • costs for services by Christian Science practitioners
  • crutches
  • deductible, co-pay, and coinsurance amounts (excludes insurance premiums)
  • dental examinations and services
  • expenses for medical care in a nursing home
  • eyeglasses, including lenses, frames, and exams
  • hearing expenses, including examinations, hearing aids, and batteries required to operate a hearing aid
  • hospitalization charges in excess of the usual and customary fees, including private room coverage
  • insulin purchased with or without a prescription
  • laboratory fees
  • medical expenses for therapy received as medical treatment, such as speech, occupational, physical, or cardiac therapy
  • medical expenses paid to a special school if the main reason for using the school is relieving a medical or physical disability medicine prescribed by a doctor
  • medical supplies such as crutches and blood sugar test kits
  • medicines and drugs purchased with a prescription, including co-payments for such medicines  (effective January 1, 2011, expenses for over-the-counter medicines purchased without a prescription may not be reimbursed, with the exception of insulin)
  • nursing services when provided by a registered nurse or licensed practical nurse for medical care
  • orthodontia / braces
  • oxygen or oxygen equipment to relieve breathing problems caused by a medical condition
  • psychiatrist/psychologist fees
  • purchase of a guide dog for a blind or deaf individual
  • purchase or rental of special medical equipment, if the primary purpose is medical care
  • tuition fees for a special school for a learning disabled child who has severe learning disabilities caused by mental or physical impairments, including nervous system disorders, when recommended by a doctor; tutoring fees for a teacher specially trained and qualified to work with children with severe learning disabilities are also eligible when recommended by a doctor
  • services by an optometrist
  • smoking cessation programs and medicines
  • special car controls for the handicapped
  • special telephone for the deaf
  • sterilization fees
  • surgery (legal operations), including experimental procedures
  • vaccinations
  • vision correction surgery, including laser eye surgery
  • weight loss programs, if the patient is participating in the program as treatment for a specific disease, including obesity, diagnosed by a physician

Ineligible Health Care Expenses

In general, health care expenses that do not qualify as medical deductions for federal income tax purposes are not eligible for reimbursement.

Examples of ineligible expenses include but are not limited to:

  • any expenses incurred in connection with an illegal operation or treatment
  • automobile insurance premiums, including any portion of the premium providing medical coverage for persons injured through an accident in or with the covered individual's vehicle
  • bottled water
  • cosmetics, such as toiletries and toothpaste
  • cosmetic surgery, except to correct congenital abnormality, bodily injury, or disfiguring disease
  • costs for sending a child with behavioral or disciplinary problems to a special school for benefits the child may receive from the course of study and disciplinary methods
  • custodial care in an institution
  • dancing or swimming lessons, even when recommended by a qualified physician for health improvement
  • diet / weight loss foods or drinks, even if recommended by a physician
  • expenditures for the general health of an individual, including expenses related to exercise, fitness, nutrition, recreation, vacation, or membership in a spa or health club
  • expenses that are filed on a federal tax return for a tax credit or for which a deduction is taken
  • funeral and burial expenses
  • hair removal (electrolysis)
  • hair transplants
  • health club dues, YMCA dues, steam bath, etc., even if recommended by a physician
  • health insurance premiums, including premiums for employer-provided medical and dental coverage and for contact lens insurance
  • household and domestic help, even if recommended by a qualified physician due to an individual's inability to perform physical housework
  • life insurance premiums or premiums for policies taken to provide repayment for loss of earnings or accidental loss of life, limb, sight, etc.
  • long-term care insurance premiums and expenses
  • marriage counseling fees
  • maternity clothes, diaper service, etc.
  • over-the-counter drugs or medicines purchased without a prescription, even if recommended by a physician, with the exception of insulin 
  • transportation expenses to and from work, even if a physical condition requires a special means of transportation
  • vacation or travel, even when taken for general health purposes, improvement of morale, or to relieve physical or mental discomfort
  • vitamins and dietary supplements, even if recommended by a physician
  • weight loss programs, except when the patient is being treated for a specific disease, including obesity, diagnosed by a physician

Dependent Care Reimbursement Account

A Dependent Care Reimbursement Account may be used to reimburse a Plan participant for the cost of care for eligible dependent(s), as described below. Expenses must be incurred during the calendar year in which the employee participates in the Plan.

Eligible Dependents-- For purposes of the Dependent Care Account, the following are eligible dependents if the enrolled employee claims them as dependents on his/her federal tax return:

  • The enrolled employee's child or stepchild, if the child is age 12 or younger (under age 13); if the child does not provide over half of his/her own support during the calendar year; and if the child shares the employee’s principal residence for more than six months of the calendar year.
  • The legally-recognized spouse of the enrolled employee who is physically or mentally incapable of caring for him/herself; lives in the employee’s household for more than one-half of the taxable year; and spends at least 8 hours per day in the employee’s home.
  • An employee’s child, grandchild, sibling, parent, grandparent, aunt, uncle, niece, or nephew who is physically or mentally incapable of caring for him/herself and depends on the employee for at least half of his/her financial support; lives in the employee’s household for more than one-half of the taxable year; and spends at least 8 hours per day in the employee’s home.
  • An individual who is physically or mentally incapable of caring for him/herself; depends on the employee for at least half of his/her support; lives in the employee’s household for more than one-half of the taxable year; and spends at least 8 hours per day in the employee’s home.

Expenses eligible for reimbursement are those incurred to care for an eligible dependent and to enable the enrolled employee to remain gainfully employed. 

The term "child" is defined as an individual who is the son, daughter, stepson, or stepdaughter of the employee; includes both a legally-adopted child of the employee and a child who is lawfully placed with the employee for legal adoption; and includes an “eligible foster child”, defined as an individual who is placed with the employee by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

If an employee is a divorced or separated parent, he/she may be eligible to use the Dependent Care Reimbursement Account if the employee must have day care services in order to work, even if the child does not reside with the employee-parent. In the situation where a child received over one-half of his/her support during the year from his/her parents who are separated, divorced, or have lived apart for the last six months of the year, and was in the custody of one or both parents during more than one-half of the year, the child will be eligible under the Dependent Care Reimbursement Account even if the child did not live with the employee-parent for more than one-half of the year, if there is a written agreement that allows this or if the custodial parent agrees that he/she will not claim the child as a dependent. Employees are encouraged to consult a qualified tax advisor if this situation applies.

For purposes of the Dependent Care Reimbursement Account, an individual shall be considered physically or mentally incapable of self-care if, as a result of a physical or mental impairment, the individual is incapable of caring for his/her hygiene or nutritional needs, or requires the full-time attention of another person for his/her own safety or the safety of others.

Acceptable verification of dependent status must be provided to the Plan Administrator before claims will be reimbursed for a dependent.


Eligible Dependent Care Expenses

Eligible dependent care expenses include, but are not limited to:

  • amounts paid to a dependent care center, baby-sitter, or nurse in order to allow the participant and his/her spouse to work
  • amounts paid to a housekeeper or cook if part of the services are provided to a person who qualifies for dependent care
  • amounts paid for services performed outside the home for the care of the participant's dependent or spouse
  • amounts paid to a relative who provides dependent care services, provided the relative is not the employee's or his/her spouse's: (1) dependent for whom a personal exemption deduction is allowed for federal income tax purposes, or (2) child or stepchild who is under age 19 at the end of the calendar year
  • expenses for after-school programs
  • expenses for a summer day camp
  • the full amount paid to a nursery school, even when the school provides lunch and educational services

Ineligible Dependent Care Expenses

Certain expenses are not eligible for reimbursement through a Dependent Care Reimbursement Account.

Examples of ineligible expenses include but are not limited to:

  • child care expenses when such expenses are incurred to allow an employee to participate in non-work activities
  • child care expenses incurred while not actively working, such as when on leave of absence
  • care in a convalescent nursing home
  • cost of food, clothing, and educational expenses
  • custodial care for a dependent who resides outside the participant's home
  • dependent care that allows the participant or his/her spouse to do volunteer work
  • expenses for which a dependent care tax credit is taken or that are reimbursed under a health care reimbursement account
  • services provided by one dependent to care for another
  • the cost of transportation between the employee's home and the place where dependent care services are provided
  • tuition for kindergarten and schooling for first grade or higher

Submitting a Claim for Reimbursement

When a Plan participant (College employee) has incurred eligible health care expenses not covered or paid through any plan, the participant may either pay for such expenses using the Plan debit card, or may pay with a personal credit card, check, or cash and then submit a Claim Form to request reimbursement from his/her Account.  When a participant has incurred eligible dependent care expenses, the participant must complete and submit a Claim Form as described below to receive reimbursement from his/her Dependent Care Account. 

Debit Card--  A Plan participant may pay for eligible health care expenses with a Plan debit card, in lieu of submitting a Claim Form to request reimbursement.  The eligible expense will then be deducted from the participant’s Medical Expense Reimbursement Account balance.  After paying with the debit card, the Plan participant may be required to provide substantiation of the health care expense (such as an itemized receipt from the health care provider and an Explanation of Benefits from the health plan administrator).   The Plan Administrator will notify the participant if substantiation is required.  Use of the debit card is optional; a Plan participant may choose instead to pay the expense with a personal credit card, by check, or with cash and then submit a Claim Form to request reimbursement.

The debit card cannot be used to pay dependent care expenses, and a Claim Form must be submitted as described below.

The Flexible Spending Accounts Plan Claim Form is available in the Human Resources office, via eDisk (Human Resources public folder), and from Significa Benefit Services. If not paying for eligible health care expenses with the debit card, and for all dependent care expenses, a properly completed Claim Form must be submitted to the Claims Administrator (Significa Benefit Services) along with other documentation as follows:

  • For health / medical care expenses, the completed Claim Form must be submitted along with an itemized bill and "Explanation of Benefits" (EOB) indicating the name and address of the health care provider, the name of the individual receiving services, date of services, type of services, and the amount charged for services.
  • For prescription drug expenses, the Claim Form must be submitted along with an itemized bill including the pharmacy name and address, the patient's name, date of service, description of item, prescribing physician's name, and the amount charged for the prescription medicine. The name of the prescription drug may be "blacked out" by the participant if the bill clearly shows that the requested reimbursement is limited to the co-payment amount.
  • For dependent care expenses, the completed Claim Form must be submitted along with a receipt from the dependent care provider showing the name of the provider, the Federal Tax ID Number or Social Security Number of the dependent care provider, the name of the dependent(s) to whom care was provided, and the amount charged for care.

Cancelled checks presented without other required documentation are not an acceptable form of claims substantiation.

The Claim Form and additional information listed above must be submitted directly to Significa Benefit Services, P.O. Box 7777, Lancaster, PA 17604-7777, fax (717) 581-8379.

Reimbursement to the participant from the participant's Account will generally be made within 14 days of when a proper claim is received by the third party administrator. The participant must have a minimum of $25.00 in receipts to request reimbursement. The participant may request reimbursement for an amount less than $25.00 only when he/she makes the final reimbursement request for the year. Acceptable verification of dependent status must be provided to the Plan Administrator and/or third party administrator before claims will be reimbursed for a dependent. The Plan Administrator, or the third party administrator on its behalf, reserves the right to require evidence that an individual for whom a participant is claiming expenses is a dependent as defined by the Internal Revenue Code.

Medical Expense Reimbursement Account-- Eligible medical expenses must be incurred between January 1 of the calendar year in which an employee is a participant in the Medical Expense Reimbursement Account, and March 15 of the following calendar year. If an employee participates in the Medical Expense Reimbursement Account, any claims submitted for expenses incurred between January 1 and March 15 will automatically be applied first to any remaining Account balance from the previous calendar year. If there is no remaining balance from the previous calendar year or if the employee did not participate during the previous calendar year, claims will be applied against his/her current year balance.

Dependent Care Account—Eligible dependent care expenses must be incurred during the calendar year (January 1 through December 31) for which the employee is requesting reimbursement.

Expenses are treated as having been incurred when the employee or eligible dependent is provided with the service that gives rise to the expense, not when the participant is formally billed for, or pays for, the service.

In addition, the following guidelines apply to reimbursement requests:

Medical Expense Reimbursement-- A participant may request reimbursement for an amount that is greater than his/her Account balance if the participant's contributions for the remainder of the year will cover the amount being reimbursed. Eligible health care expenses are only reimbursed if they are incurred while an employee is a participant in the Medical Expense Reimbursement Account Plan.

Dependent Care Reimbursement-- A participant may only be reimbursed up to the current balance in his/her Dependent Care Reimbursement Account. If a participant submits a request that exceeds his/her current Account balance, the participant will be reimbursed when the funds become available in the Account. Eligible dependent care expenses are only reimbursed if they are incurred in the same calendar year as contributions are withheld from pay.

Participants have until March 31 of the following calendar year to request reimbursement from their Accounts for expenses incurred during the calendar year for the Dependent Care Account, or through March 15 for the Medical Expense Reimbursement Account.

To receive reimbursement for eligible expenses, a properly completed Claim Form plus substantiating document(s) as outlined above must be hand-delivered, submitted by fax, or mailed and postmarked to the Plan's third party administrator (Significa Benefit Services) no later than by March 31.  Please note: Any amounts remaining in a participant's Account(s) after March 31 must be forfeited by the participant.

Coordination between the Health Reimbursement Account and the Medical Expense Reimbursement Account-- As noted above, if a Medical Expense Reimbursement Account participant also participates in the College's PPO Health Plan $1,000 with Health Reimbursement Account, reimbursement to the employee for his/her eligible medical expenses will be provided first from any balance in the employee's Health Reimbursement Account (HRA). If the participant does not have enough funds in the HRA to provide full reimbursement for his/her eligible medical expenses, the remaining amount which cannot be reimbursed from the participant's HRA balance may then be submitted for reimbursement by the participant through his/her Medical Expense Reimbursement Account. An employee may not be reimbursed for the same incurred medical expense from both the Health Reimbursement Account and the Medical Expense Reimbursement Account. However, if the balance in an employee's HRA is not sufficient to provide full reimbursement for an eligible medical expense, the employee may then request reimbursement of the remaining eligible expense through his/her Medical Expense Reimbursement Account, if a balance remains in this Account and if the expense is an "eligible" expense under the Medical Expense Reimbursement Account.


Important Information About Taxes

In some cases, an employee may be able to deduct certain medical care expenses from income, and receive a tax credit for certain dependent care expenses when filing the federal tax return, as described below. The College acts only as the Plan Administrator and sponsor for the Medical Expense and Dependent Care Reimbursement Plans and bears no responsibility for any employee's tax obligations. Employees remain fully accountable to the IRS to prove the eligibility of any expense that was submitted for reimbursement. Employees are encouraged to consult their tax or financial advisor to determine what is best for their personal financial situation.

Medical Care Expenses-- If an employee decides to reimburse him/herself for eligible medical care expenses through his/her Medical Expense Reimbursement Account, the participant cannot claim those same expenses as deductions on his/her income tax return. In most cases, a medical care reimbursement account is more advantageous than the tax deduction. Current IRS regulations require that out-of-pocket expenses exceed 7.5% of adjusted gross income in order to be eligible for deduction on the federal tax return. In addition, regulations only allow individuals to deduct those expenses that exceed 7.5% of adjusted gross income. By using pre-tax dollars to pay for eligible expenses, through the Medical Expense Reimbursement Account, the tax advantage begins immediately.

Dependent Care Expenses-- Current IRS regulations allow individuals to take a dependent care tax credit when they file their taxes. A taxpayer may claim credit on qualified expenses up to $3,000 for one dependent and up to $6,000 for two or more dependents. If an employee chooses to reimburse him/herself on a pre-tax basis through his/her Dependent Care Reimbursement Account, those reimbursed expenses will reduce the amount of federal tax credits available. For each dollar reimbursed from the Dependent Care Reimbursement Account, one less dollar of expenses may be claimed for a federal tax credit. Employees may wish to consult a tax advisor to determine whether their tax advantages will be greater by participating in the Dependent Care Reimbursement Plan or claiming a dependent care tax credit.


Coordination of Benefits

Termination of Coverage / When Plan Participation Ends

Insurance Premium Payment Plan-- Participation in the Insurance Premium Payment Plan will continue in effect from year to year, until a participant elects, in writing, to cease participation in the Insurance Premium Payment Plan. Premiums required for participation in the Shared Services Group Health Plan and the Group Dental Plan may vary from year to year. The contributions of participants through the Insurance Premium Payment Plan will automatically be adjusted by the Plan Administrator as participant-paid health insurance premiums and dental premiums are adjusted.

Medical Expense Reimbursement Account and Dependent Care Reimbursement Account-- Any salary reduction elections relating to coverage under the Medical Expense Reimbursement Account and Dependent Care Reimbursement Account shall cease at the end of the Plan Year, unless a participant elects to participate again in one or both accounts before the start of the next calendar year, during the Open Enrollment period. Elections under the Medical Expense Reimbursement Plan and Dependent Care Reimbursement Plan do not automatically carry over into the next Plan Year (calendar year), even if a participant wishes to keep his/her contribution amount(s) the same. A new enrollment form must be submitted each year, during the Open Enrollment period, to continue elections for the Medical Expense Reimbursement Plan and dependent Care Reimbursement Plan.

Participation in the Medical Expense Reimbursement Account and/or Dependent Care Account, and pre-tax contributions, will also cease:

  • at the end of the calendar month in which employment termination or retirement  occurs;
  • during an unpaid leave of absence;
  • at the end of the month following the date an employee is no longer eligible to participate in the Plan; or
  • at the end of the month following the date the Plan is terminated. 

When Plan participation terminates, pre-tax contributions (salary reductions) to a participant’s Account(s) will also cease.

An individual may continue to request reimbursement for medical care expenses incurred prior to or on his/her termination date. Eligible medical care expenses will be reimbursed to the full extent of the individual's unused annualized contribution.

Eligible dependent care expenses will be reimbursed to the full extent of the individual's unused Account balance as of his/her termination date for qualified dependent care expenses incurred during the remainder of the calendar year in which termination occurs.

The balance in an individual's Reimbursement Account(s) will be maintained until March 31 of the following year, so that the individual can submit claims for any unreimbursed expenses.

Please see the “COBRA” section below for important information about optional, temporary continuation of coverage through the Plan following a “Qualifying Event” that leads to loss of coverage.


Circumstances Which May Affect Benefits

The College believes the Section 125 Plan is fully qualified as a "cafeteria plan" under the Internal Revenue Code and that the benefits it provides are therefore tax-free. However, there can be no assurance that the intended tax benefits will be available. Participants will be liable for any tax plus interest that would be imposed in the unlikely event that benefits are ruled unqualified by the Internal Revenue Service. Federal law makes it necessary to sometimes limit or restrict contributions or elections under the Section 125 Plan which discriminate in favor of officers and highly compensated employees of the College. A participant will be notified in the event any such limit may apply.

Nothing in the Section 125 Plan gives an employee a right to continued employment and the College retains the right to discharge an employee at any time, except for the purpose of denying the employee any benefits for which he/she would otherwise be entitled.


Funding

All benefits under the Section 125 Plan are paid directly from the general assets of the College. Unless required by federal law, no assets will be set-aside in a separate trust to provide benefits.


Benefit Denials and Claims Procedures

Benefit Denials-- If a College employee or his/her dependent claims benefits under the Shared Services Group Health Plan and/or Group Dental Plan offered through this Section 125 Plan, and the claim for benefits is denied, an appeal process will be provided under the terms of the Shared Services Group Health Plan and the Group Dental Plan. This Section shall apply only to the extent that a claim for benefits is not governed by a provision of a benefit plan available under this Plan. Any claim governed by a provision of a benefit plan available under this Plan shall be subject to review under such benefit plan and not under this Plan.

The Plan Administrator is responsible for establishing and maintaining reasonable procedures for: 1) filing claims, 2) providing notification of benefit decisions, and 3) appealing negative benefit decisions (collectively referred to as "claims procedures"). The Plan Administrator is also responsible for making certain that the procedures comply with ERISA and that claims are considered consistently for participants in similar situations.

The College assigned responsibility for processing claims under this Plan to Significa Benefit Services, an independent third party administrator. Participants are to contact Significa Benefit Services with questions about requesting benefits and filing claims. By filing a written request with Significa Benefit Services, a participant may designate a representative to act on his/her behalf in pursuing a benefit claim or appealing a negative benefit decision. The request must identify who and to what extent a person is authorized to act on the participant's behalf. The Plan will then recognize the level of authority granted to the representative by the participant. Significa Benefit Services’ mailing address is P.O. Box 7777, Lancaster, PA 17604-7777. Significa Benefit Services’ telephone numbers are (717) 581-1300 and (800) 433-3746.

Significa Benefit Services’ authority is limited to processing claims according to the claims procedures established and maintained by the Plan Administrator. Significa Benefit Services may not make independent decisions involving claims that are different from the rules established by the Plan Administrator.

Incorrectly and incompletely filed claims cannot be paid or reimbursed. A claim is incorrectly filed if a participant or participant's representative does not follow the Plan Administrator's claims procedures. A claim is incompletely filed if a participant or participant's representative submits a claim that omits any information considered necessary by the Plan Administrator.

The time for making an initial claims decision begins to run when a claim is filed according to the Plan Administrator's claims procedures, regardless of whether the Plan has all of the information necessary to decide the claim at the time of the filing. The Plan will be deemed to have received a claim for benefits under this Plan if a participant or a participant's representative makes a written communication reasonably calculated to bring a request for a claim to the attention of Significa Benefit Services.

If Significa Benefit Services denies any claim for benefits under this Plan, Significa Benefit Services promptly and in writing will notify the participant of such denial. The notification of a denial of a claim for benefits will be made not later than 30 days after receipt of the claim by Significa Benefit Services. However, if a written extension notice is provided to the participant or the participant's representative before the end of that 30-day period, the time to consider a claim may be extended for an additional 15 days, as long as the circumstances necessitating the extension are beyond the control of the Plan. The extension notice will include the reason for the extension, as well as the date by which a decision by Significa Benefit Services can be expected. Significa Benefit Services may secure independent medical or other advice and require such other evidence as deemed necessary to decide a claim for benefits.

Written notice of a negative benefit decision will include: 1) the specific reason(s) for the denial of benefits, 2) the specific Plan provision(s) on which the denial is based, 3) a description of any additional material or information necessary for the participant or participant's representative to perfect a claim and an explanation of why such information is necessary, and 4) an explanation of the right of appeal and the process to appeal the negative benefit decision, including an explanation of the participant's or his/her representative's right to review relevant documents and information, and the participant's right to file suit under ERISA with respect to any negative benefit decision after appeals of a claim have been exhausted.

If a claim is denied in whole or in part, the participant or his/her representative may appeal to Significa Benefit Services for review of the claim. The appeal must be made within 180 days of Significa Benefit Services’ notice of the negative benefit decision. If the appeal is not made within 180 days, the participant will lose his/her right to appeal and bring a civil action under section 502(a) of ERISA. The participant's or representative's written appeal should state the reasons that he/she believes the claim should not have been denied. It should include any relevant facts and/or documents to support the claim. The participant or participant's representative may ask additional questions of Significa Benefit Services, make written comments, and may review (on request and at no charge) documents and other information relevant to the appeal. Neither the participant nor the participant's representative will be provided access to or copies of files of other participants.

Significa Benefit Services will review and decide the participant's or representative's appeal within a reasonable time and, within 30 days after receiving the written appeal, shall render, in writing, a decision. The individual who reviews and decides the appeal will not be the same individual who originally denied the claim for benefits, or that individual's subordinate. Significa Benefit Services may require additional relevant information to decide the claim. If the decision on appeal affirms the initial denial of the participant's claim for benefits under the Plan, the participant or his/her representative will be furnished with a notice of negative benefit decision on review, which includes the following:

1) the specific reason(s) for the denial,

2) the specific Plan provision(s) on which the denial is based,

3) a statement of the participant's or representative's right to review (on request and at no charge) relevant documents and other information,

4) a description of any internal rule, guideline, or protocol, if applicable, used to make the benefit decision and a statement that such rule, guideline, or protocol will be provided to the participant or his/her representative upon request at no charge, and

5) a statement of the participant's right to bring suit under ERISA.

If the initial appeal of a participant's benefit claim is denied, the participant or representative may then appeal to the Plan Administrator for review of the denial. The second appeal must be made within 60 days of the date of receipt of Significa Benefit Services’ notice of a denial of the first appeal. If the second appeal is not made within 60 days, the participant will lose his/her right to appeal and bring a civil action under section 502(a) of ERISA.

The participant's or representative's second written appeal may include comments, documents, records, and any other information relating to the participant's claim. During the period that the claim is being reconsidered, upon request and free of charge, the participant or participant's representative will also have access to, and the right to obtain copies of all documents, records, and information relevant to the participant's claim. Neither the participant nor the participant's representative will be provided access to or copies of files of other participants.

The Plan Administrator will review the full record of the claim within a reasonable time and, within 30 days after receiving the written appeal, shall render, in writing, an independent decision about the participant's or representative's second appeal. The notice will include the same information that was included in the notice of negative benefit decision at the first level of appeal. Neither the reviewer of the first appeal nor a subordinate of that individual will be involved in the decision about the second appeal. The Plan Administrator will not give deference to the first level appeal decision.

The Plan Administrator may require additional relevant information to decide the second appeal. All medical information supplied to the Plan Administrator is to be kept confidential and protected from unauthorized use. However, a second appeal involving certain claims for benefits may require the use of a special, written authorization form. If Significa Benefit Services sends a participant or participant's representative one of these forms, it must be signed and returned to Significa Benefit Services as soon as possible so there is no delay in the Plan Administrator considering the second appeal.

If the Plan Administrator denies the claim on second appeal, the decision will be final and binding on all parties.


Amendment and Termination of The Section 125 Plan

While it is intended that the Section 125 Plan will be continued indefinitely, the College reserves the right , in its sole discretion, to amend or terminate the Section 125 Plan at any time and for any reason.  If the Section 125 Plan is amended or terminated, the College will notify employees. No consent of any participant or beneficiary is required to terminate, modify, amend, or change the Plan.


Required Notices

“COBRA” - Temporary Continuation of Coverage

The information below is intended to provide an explanation of "COBRA" continuation coverage; describe when it becomes available to an employee or retired College employee and/or eligible dependents; and describe what an employee or retiree and his/her covered dependents must do to protect the right to elect continued coverage through COBRA, if coverage is lost. This section describes COBRA continuation rights if coverage through the Shared Services Group Health Plan and/or Group Dental Plan is lost, and continuation rights if coverage through the Medical Expense Reimbursement Account is lost.

Employees and retirees of Franklin & Marshall College, and their dependents, who are covered under the College's Shared Services Group Health Plan and/or Group Dental Plan have the right to temporary continuation of their health insurance or dental insurance coverage if coverage is lost due to a "Qualifying Event", as required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA). COBRA guarantees an opportunity to elect temporary continuation of health and dental insurance coverage at group rates. No evidence of insurability is required to choose continuation coverage. Coverage is the same as that for active employees or retired employees, and continued health coverage includes prescription drug coverage.

Participants who lose coverage through the Medical Expense Reimbursement Account may elect to temporarily continue their coverage, through the remainder of the Plan Year, via COBRA.

Qualifying Events-- An employee of Franklin & Marshall College enrolled in the Group Health & Prescription Drug Plan, Group Dental Plan, and/or Medical Expense Reimbursement Account has the right to choose continuation coverage for him/herself, his/her covered spouse, and any covered dependent children as applicable, if the employee, spouse, or dependent children lose coverage under the Plan(s) due to:

  • a reduction in the employee's hours of work that leads to loss of eligibility for coverage through the Shared Services Group Health Plan and Group Dental Plan (such as during a personal leave of absence or a change from full-time to part-time status), or
  • termination of the employee's employment (except for termination due to gross misconduct).

An employee who loses coverage under this Plan, due to a Qualifying Event outlined above, becomes a "Qualified Beneficiary" and is entitled to elect temporary continuation of coverage through COBRA.

The covered spouse of a College employee or retiree has the right to choose continuation coverage for him/herself and his/her covered dependent children, if the spouse or his/her covered dependent children lose coverage through the College's Shared Services Group Health Plan or Group Dental Plan for any of the following reasons:

  • the death of the College employee or retiree,
  • the reduction of the employee's hours of work,
  • the termination of the employee's employment (except for termination due to gross misconduct),
  • the employee or retiree becomes entitled to Medicare benefits (Medicare Part A, Part B or both), or
  • the employee or retiree and his/her spouse divorce or legally separate.

A spouse who loses coverage under this Plan, due to a Qualifying Event as outlined above, becomes a "Qualified Beneficiary" entitled to elect temporary continuation of coverage through COBRA.

The covered dependent child of a College employee or retiree has the right to elect COBRA continuation coverage, if coverage through the College's Shared Services Group Health Plan and Group Dental Plan is lost for any of the following reasons:

  • the death of the parent (employee or retiree),
  • a reduction in the parent's (employee's) work hours,
  • termination of the parent's (employee's) employment (except for termination due to gross misconduct),
  • the parent (employee or retiree) becomes entitled to Medicare benefits (Medicare Part A, Part B or both),
  • the parents' divorce or legal separation, or
  • the child ceases to be a dependent child eligible for coverage under the terms of the College's Plan(s) (child reaching his/her age limitation, or any other change in status which effects eligibility for coverage).

A dependent child who loses coverage under this Plan, due to a Qualifying Event as outlined above, becomes a "Qualified Beneficiary" entitled to elect temporary continuation of coverage through COBRA.

If a proceeding under Title 11 (bankruptcy) is filed with respect to Franklin & Marshall College, and that bankruptcy results in the loss of coverage of any retired employee covered under the Group Health & Prescription Drug Plan, the retired employee will become a Qualified Beneficiary with respect to the bankruptcy. The retired employee's spouse, surviving spouse, and dependent children will also become Qualified Beneficiaries if bankruptcy results in the loss of their coverage under the Plan. In this case, the Qualified Beneficiary(ies) may elect continued coverage via COBRA.

Notification Requirements-- Continuation of coverage through COBRA will be offered upon timely and proper notice that a Qualifying Event has occurred or will occur. The covered employee/former employee or College retiree, spouse, and/or dependent child has the responsibility to inform the Plan Administrator (via Franklin & Marshall College's Human Resources department) of a Qualifying Event that results in loss of coverage under the College's Group Health & Prescription Drug Plan, Group Dental Plan, and/or Medical Expense Reimbursement Account. Written notice to the Plan Administrator (via Human Resources) must be made within 60 calendar days of the later of: (1) the date of the Qualifying Event, (2) the date that coverage is lost due to a Qualifying Event, or (3) the date the Qualified Beneficiary is informed, through the Summary Plan Description or initial COBRA notice, of the relevant Plan's procedures for providing notice of loss of coverage due to a Qualifying Event.

Written notice must be provided to the Plan Administrator by the employee/former employee or retiree who has lost or will lose coverage through the Plans, the spouse or dependent child who is losing coverage through the College's Plans, or a representative acting on behalf of the employee, retiree, spouse, or dependent child. Such notice must be sent via fax, mail, or hand-delivered to Human Resources, Franklin & Marshall College, P.O. Box 3003, Lancaster, PA 17604-3003, fax: (717) 291-3969. The written notice must include:

  1. the full name of the College employee, former employee, or retired employee and his/her social security number and mailing address,
  2. the name and mailing address of all dependents who have lost or will lose coverage through the College's Shared Services Group Health Plan and/or Group Dental Plan due to a Qualifying Event,
  3. a brief description of the Qualifying Event that has resulted, or will result, in loss of coverage through the College's plans (i.e., divorce, legal separation, child's loss of dependent status, etc.) and, as required, verification of the Qualifying Event,
  4. the date the Qualifying Event occurred/will occur,
  5. other relevant information necessary for the Plan Administrator to verify that a Qualifying Event that will lead to loss of coverage through the College's plans has occurred or will occur, and the date of the Qualifying Event.

When notice of a Qualifying Event is properly submitted to the Plan Administrator (via Human Resources), the Plan Administrator, or the third party administrator designated by the Plan Administrator, will notify the individual within 14 days of receiving the notice, if the individual is not eligible for continuation coverage through COBRA. The notice of ineligibility will include the reason(s) that continuation coverage is not available.

Employer Responsibility-- When the Qualifying Event is the termination of employment or reduction of hours of employment, death of the employee, commencement of a proceeding in bankruptcy with respect to Franklin & Marshall College, or the employee's becoming entitled to Medicare benefits (under Part A, Part B, or both), the employer is responsible for notifying the Plan Administrator of the Qualifying Event.

Birth or Adoption-- If a child is born, adopted, or placed for adoption with a formerly covered employee or retired employee during the COBRA period, the employee/retiree must notify the Plan Administrator within 31 calendar days of the birth or adoption in order to elect health insurance and prescription drug coverage and/or dental insurance coverage through COBRA for the child.

Notice of Disability-- If the Qualifying Event that resulted in the COBRA election is termination of employment or reduction in work hours, the temporary COBRA health insurance and prescription drug and dental insurance continuation period may be extended due to the disability of any Qualified Beneficiary. In the case of disability, written notice of disability must be provided by the Qualified Beneficiary to the Plan Administrator within 60 calendar days of the latest of: (a) the date of the Social Security Administration's disability determination; (b) the date of the Qualifying Event: the employee's termination of employment or reduction of hours; (c) the date on which the Qualified Beneficiary loses (or would lose) coverage under the terms of the plans as a result of the employee's termination of employment or reduction of work hours; or (d) the date on which the individual is informed of the obligation to provide the disability notice, and the procedures for providing such notice, through the Plan's Summary Plan Description or the initial COBRA notice.

If disability status changes, the Plan Administrator must be notified within 30 days after the later of the date of the final determination by the Social Security Administration, or the date the Qualified Beneficiary is informed of the Plan's procedures for providing such notice.

Failure to Provide Timely and Proper Notice of a Qualifying Event-- If proper, timely written notice is not made to the Plan Administrator, all rights to continue coverage through COBRA will terminate. If proper notice of a Qualifying Event is not provided, if continuation coverage through COBRA is not elected in a timely manner, or if COBRA premiums are not paid in a timely manner by the employee/former employee, retired employee, or Qualified Beneficiary(ies), all coverage will terminate effective when the employment termination or other Qualifying Event occurred, in accordance with the provisions outlined in the Plan Documents.

Electing COBRA Continuation Coverage-- Following a Qualifying Event, and when proper and timely written notification of a Qualifying Event that leads to loss of coverage through the College's Health Insurance & Prescription Drug Plan, Group Dental Plan, and/or Medical Expense Reimbursement Account is provided to the Plan Administrator as required, the Qualified Beneficiary will receive a detailed notice of his/her COBRA rights, and instructions for electing COBRA coverage and paying premiums. Such notice will be sent by the College's third party COBRA administrator. To elect continuation coverage, a Qualified Beneficiary must complete an election form and furnish it within 60 calendar days according to instructions on the form. Each Qualified Beneficiary has a separate right to elect continuation coverage as applicable.

A failure to elect COBRA coverage may affect future rights under federal law, including the right to avoid having pre-existing condition exclusions applied by other group health plans. The guaranteed right to purchase an individual health insurance policy that does not impose pre-existing condition exclusions will also be forfeited.

An employee/former employee, retired employee, spouse, or covered dependent who can obtain other group health insurance coverage may request special enrollment rights within 30 days of loss of coverage through the College's Group Health Insurance & Prescription Drug Plan through the other plan.

Coverage Periods-- Group health insurance and prescription drug continuation coverage and/or dental insurance coverage through COBRA may be elected for a maximum period as follows:

  • If the person affected by loss of coverage through the College's Health Insurance & Prescription Drug Plan and/or Dental Plan is the employee, and loss of coverage is due to a reduction in the employee's work hours or employment termination for reasons other than gross misconduct, the period of continuation coverage is a maximum of 18 months.
  • If the person affected by loss of coverage through the College's Shared Services Group Health Plan and/or Group Dental Plan is an employee's or retiree's spouse, and the reason for loss of coverage is the employee's/retiree's death, divorce or legal separation, or entitlement to Medicare benefits, the period of continuation coverage is a maximum of 36 months. If an employee's hours are reduced or employment ends for reasons other than gross misconduct, the period of continuation coverage is 18 months.
  • If the person affected by loss of coverage is an employee's or retiree's dependent child, and the reason for loss of coverage is the employee's/retiree's death, divorce or legal separation, entitlement to Medicare benefits, or the dependent child ceases to be a dependent eligible for coverage through the Plan, the period of continuation coverage is a maximum of 36 months. If an employee's hours are reduced or employment is terminated for reasons other than gross misconduct, the period of continuation coverage is 18 months.

The period of continuation coverage described above may be shorter than expected if: (a) the College ceases to provide any group health plan and/or group dental plan for its employees and/or retirees, (b) the premium for continuation coverage is not paid on time by the covered individual, (c) the individual becomes covered under another group health plan and/or group dental plan after the date COBRA is elected, unless the other coverage has certain exclusions or limitations with respect to a pre-existing condition of the individual, or (d) the individual becomes entitled to Medicare benefits (under Part A, Part B, or both) after the date COBRA is elected.

Continuation coverage may also be terminated for any reason the Plan would terminate coverage of a participant or beneficiary not receiving continuation coverage, such as due to fraud.

When the Qualifying Event is the end of employment or reduction of the employee's hours of employment, and the employee became entitled to Medicare benefits less than 18 months before the Qualifying Event, COBRA continuation coverage for Qualified Beneficiaries other than the employee lasts until 36 months after the date of Medicare entitlement. For example, if a covered employee becomes entitled to Medicare 8 months before the date on which his/her employment terminates, COBRA continuation coverage for the spouse and dependent children can last up to 36 months after the date of Medicare entitlement, which is equal to 28 months after the date of the Qualifying Event. Otherwise, when the Qualifying Event is the end of employment or reduction of the employee's hours of employment, COBRA continuation coverage generally lasts for only up to a total of 18 months.

Extension of COBRA Period Due to Disability-- If an employee loses coverage through the College's Shared Services Group Health Plan and/or Group Dental Plan due to termination of employment or reduction in work hours, he/she may qualify to extend the COBRA continuation period from 18 months to a maximum of 29 months if disabled. This extension applies if all of the following conditions are met: (1) the Qualifying Event was the covered employee's termination of employment or reduction of hours; (2) a Qualified Beneficiary (who may be the covered employee, his/her spouse, or his/her dependent child) has been issued a determination by the Social Security Administration, establishing that he/she was disabled at any time during the first 60 days of COBRA coverage; (3) a Qualified Beneficiary notifies the Plan Administrator, via the Human Resources office, of the Social Security Administration's determination within the 18 month period that begins on the date of the Qualifying Event; and (4) a Qualified Beneficiary notifies the Plan Administrator of the Social Security Administration's determination within 60 days after the latest of: (a) the date of the Social Security Administration's disability determination; (b) the date of the Qualifying Event: the employee's termination of employment or reduction of hours; (c) the date on which the Qualified Beneficiary loses (or would lose) coverage under the terms of the Plan as a result of the employee's termination of employment or reduction of work hours; or (d) the date on which the individual is informed of the obligation to provide the disability notice, and the procedures for providing such notice, through the Plan's Summary Plan Description or the initial COBRA notice.

Each Qualified Beneficiary who has elected COBRA continuation coverage will be entitled to the 11 month extension if one of them qualifies.

Extension of COBRA Period Due to Second Qualifying Event-- If a spouse or dependent child experiences a second Qualifying Event while receiving health and/or dental coverage through COBRA, he/she may be eligible to extend the COBRA period, up to a maximum of 36 months, but only if the event would have caused the spouse or dependent child to lose coverage under the Plan had the first Qualifying Event not occurred. This extension is available to the spouse and eligible dependent children if the College employee/former employee, or retired employee dies, becomes entitled to Medicare benefits (Part A, Part B, or both), gets divorced or legally separated, or if the dependent child stops being eligible under the Plan as a dependent child, but only if the event would have caused the spouse or dependent child to lose coverage under the Plan had the first Qualifying Event not occurred. Proper written notice of a second Qualifying Event must be made to the Plan Administrator, as outlined above under "Notification Requirements", within 60 calendar days of the second Qualifying Event.

Medical Expense Reimbursement Account-- A Medical Expense Reimbursement Account participant who terminates his/her employment with the College, or becomes ineligible for coverage through the Flexible Spending Accounts Plan, may submit claims for reimbursement for eligible medical expenses incurred through his/her termination date or date he/she becomes ineligible for participation. A participant may elect to continue to participate in the Medical Expense Reimbursement Account, via COBRA, through the remainder of the Plan Year, but may not change his/her previous salary reduction election. If COBRA continuation coverage is elected, monthly contributions to the Medical Expense Reimbursement Account are made by the participant on an after-tax basis following employment termination or the Qualifying Event which resulted in loss of coverage. Claims for reimbursement of eligible medical expenses incurred during the Plan Year in which the employment termination or other Qualifying Event occurs may be submitted.

COBRA Premiums-- COBRA participants pay 100% of the health insurance and dental insurance group rate premium for continuation coverage, plus a 2% administrative fee. Current monthly premiums can be found in the Summary Plan Description for the Shared Services Group Health Plan and the Summary Plan Description for the Group Dental Plan, available from the Plan Administrator (via the Human Resources office).

If the COBRA health insurance and/or dental insurance continuation period is extended for up to 29 months due to disability, 150% of the group rate is charged during the 11 month extension.

Making COBRA Payments-- When an employee/former employee, spouse, and/or dependent child elects COBRA coverage, he/she, or a third party representing the COBRA recipient, must make the first payment for such coverage not later than 45 calendar days after the date of his/her election of continued coverage. If the first payment is not made in full in a timely manner, rights to continued coverage will be lost.

Subsequent payments, after the first payment, are subject to a 30 day grace period; continuation coverage will be provided for each coverage period as long as payment is made before the end of the grace period. However, if payment is made later than the first day of the coverage period, but before the end of the grace period, COBRA coverage will be suspended as of the first day of the coverage period and then reinstated, retroactively, when proper payment is received. If a COBRA participant fails to make a periodic payment before the end of the grace period, he/she will lose all rights to COBRA continuation coverage.

The law requires that, at the end of the 18 month, 29 month, or 36 month health insurance continuation coverage period, participants be allowed to enroll in an individual conversion health plan if one is available under the terms of the College's Group Health & Prescription Drug Plan. In addition, under the Health Insurance Portability & Accountability Act, in certain circumstances, such as when COBRA coverage terminates, an individual may have the right to buy individual health coverage with no pre-existing condition exclusion, and without providing evidence of good health. The College's health insurance carrier must be contacted directly to request conversion to an individual policy.

Questions about COBRA may be directed to Human Resources, (717) 291-3995, Ceridian Benefits Services, the College's 3rd party COBRA administrator, (800) 877-7994, or the U.S. Department of Labor's Employee Benefits Security Administration, www.dol.gov/ebsa.

Coverage During Family & Medical Leave

If a covered employee takes a qualifying leave under the Family & Medical Leave Act of 1993, as amended (FMLA), then to the extent required by the FMLA, the College will continue to maintain the employee's group health insurance coverage on the same terms and conditions as if the employee were still an active employee. During a paid leave under the FMLA, participation in the Group Health & Prescription Drug Plan, the Group Dental Plan, and the Flexible Spending Accounts Plan will continue for an employee who otherwise remains eligible, and who was covered through the plans immediately prior to commencement of leave. Health insurance premiums and dental premiums, at active employee rates, will be deducted from the employee's salary on a pre-tax / salary reduction basis, unless the employee previously elected to have premiums for group insurance deducted on an after-tax basis. An employee's contributions to the Medical Expense Reimbursement Account and/or Dependent Care Account will be deducted from the employee's salary on a pre-tax / salary reduction basis

During an unpaid leave under the FMLA, an employee may elect to continue or may discontinue coverage under the Group Health & Prescription Drug Plan, the Group Dental Plan, and Insurance Premium Payment Plan, and/or the Medical Expense Reimbursement Account.

An employee who is entitled to and takes an unpaid leave of absence under the FMLA and elects to continue coverage under the plans while on FMLA leave must pay his/her share of the premiums and contributions for such coverage. Payments are to be made by the employee in one of the following ways:

Pre-payment Option-- an election by the employee to pre-pay all or a portion of the premiums / contributions due during the FMLA leave period on a pre-tax basis through salary reduction of not yet available pre-leave compensation, to the extent that such pre-tax payments will not be used to fund coverage during the next Plan Year. If an employee elects this pre-payment option, he/she must notify the Plan Administrator, via the Franklin & Marshall Human Resources office, at least one month in advance of commencement of leave. Pre-payment cannot be required as a condition of remaining in the Plan, nor can it be the only method offered for paying premiums for coverage during an FMLA leave.

Pay-As-You-Go Option-- an arrangement under which the employee pays his/her share of premiums / contributions on an after-tax basis. Premiums for group health insurance coverage and/or dental insurance coverage, at active employee rates, must be sent to the Plan Administrator, via the Franklin & Marshall Human Resources office, by the last work day of each month for which coverage is provided. Medical Expense Reimbursement Account contributions must be submitted by the employee on a monthly basis, in the manner described by the Plan Administrator at commencement of leave. If premium payments are more than 30 calendar days late, College health insurance and dental insurance coverage and participation in the Medical Expense Reimbursement Account will be terminated during the remainder of the leave.

If an employee elects to continue his/her coverage while on unpaid leave, the College will continue to pay its share of any premiums. If an employee's coverage ceases while on FMLA leave, upon return from such leave, he/she may elect to be reinstated in the plans on the same terms that applied prior to the employee's FMLA leave, or as otherwise required by the FMLA.


Health Insurance Portability and Accountability Act of 1996

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) limits the circumstances under which coverage may be excluded for medical conditions present before a participant enrolls in a group health insurance plan ("pre-existing conditions"). In addition, HIPAA prevents discrimination against individuals based on their health status, and allows for special enrollment periods under certain circumstances. HIPAA also regulates the use and disclosure of "Protected Health Information".

Pre-existing Condition Exclusions-- Under the law, a pre-existing condition exclusion generally may not be imposed for more than 12 months (18 months for a late enrollee). The 12 month exclusion period is reduced by an individual's prior health coverage. If, at the time an employee enrolls in a new employer's health plan, he/she already has had 12 months of continuous health coverage, without a break in coverage of 63 days or more, the employee will not have to start over with a new 12 month exclusion for any pre-existing medical conditions. If an individual was previously covered, he/she is entitled to a certificate of prior coverage from the third party administrator. A "Certificate of Creditable Coverage" must be provided to the individual by the plan when coverage is lost. Under HIPAA, pre-existing condition exclusions may not be applied to pregnancy. In addition, pre-existing condition exclusions may not be applied to a newborn, an adopted child, or a child placed for adoption who is under age 18 as long as the child becomes covered under the health plan within 31 calendar days of birth, adoption, or placement for adoption, and provided the child does not incur a subsequent 63 day or more break in coverage. The Plan includes no pre-existing condition exclusions.

Health Status Discrimination-- HIPAA prohibits group health plans from establishing eligibility rules based on health status-related factors (such as medical condition, claims experience, medical history, genetic information, or disability). Plans may not require individuals to pay a greater premium based on a health status-related factor. However, plans may establish limits or restrictions on benefits or coverage for similarly situated individuals.

Special Enrollment Provisions-- HIPAA provides for special enrollment periods under certain circumstances. If an employee or retiree declines coverage under the Plan for him/herself and/or eligible dependents because of other coverage, the individual may be able to enroll him/herself and/or eligible dependents in the Plan, providing the appropriate enrollment form is completed and submitted within 31 calendar days after other coverage, including "COBRA", terminates due to loss of eligibility for such coverage. Under HIPAA, special enrollment rights are also granted when an employer's contributions toward an individual's other health insurance coverage ceases. In addition, if an employee or retiree acquires a new eligible dependent(s) through marriage, birth, adoption, or placement for adoption, such dependent may be enrolled in the Plan within 31 days of the birth, adoption, or placement for adoption, or in the case of marriage, within 31 days of the 1st of the calendar month after the date of marriage. Under these circumstances, it is not necessary to wait until the annual Open Enrollment period to enroll in the Plan. The maximum pre-existing condition exclusion period for special enrollees is 12 months, reduced by the special enrollee's creditable coverage. No pre-existing condition exclusions may apply to a child if enrolled within 31 days of birth, adoption, or placement for adoption.


HIPAA Notice of Privacy Practices

THIS NOTICE OF PRIVACY PRACTICES DESCRIBES HOW MEDICAL INFORMATION ABOUT YOU MAY BE USED AND DISCLOSED AND HOW YOU CAN GET ACCESS TO THIS INFORMATION. PLEASE REVIEW IT CAREFULLY.

This Notice of Privacy Practices (the “Notice”) describes the legal obligations of the Franklin & Marshall College group health plan (the “Plan”) and your legal rights regarding your protected health information held by the Plan under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).  Among other things, this Notice describes how your protected health information may be used or disclosed to carry out treatment, payment, or health care operations, or for any other purposes that are permitted or required by law.

This Notice applies to the following employee benefit plans (the “Plan”) that are sponsored by Franklin & Marshall College (the “Employer”): the Franklin & Marshall Shared Services Health Plan; the Dental Plan; the Employee Assistance Program; the Flexible Spending Accounts Plan; the Health Reimbursement Arrangement; and the Emeriti Retirement Health Plan .

We are required to provide this Notice of Privacy Practices to you pursuant to HIPAA.

The HIPAA Privacy Rule protects only certain medical information known as “protected health information” or “PHI”.  Generally, protected health information is individually identifiable health information, including demographic information, collected from you or created or received by a health care provider, a health care clearinghouse, a health plan, or your employer on behalf of a group health plan that relates to:

(1) your past, present or future physical or mental health or condition;

(2) the provision of health care to you; or

(3) the past, present or future payment for the provision of health care to you.

If you have any questions about this Notice or about our privacy practices, please contact the designated Privacy Official:

Director, Human Resources, Privacy Official

Franklin & Marshall College

PO Box 3003

Lancaster, PA 17604-3003

717-291-4353

Effective Date

This Notice is effective September 23, 2013

Our Responsibilities

We are required by law to:

  • maintain the privacy of your protected health information;
  • provide you with certain rights with respect to your protected health information;
  • provide you with a copy of this Notice of our legal duties and privacy practices with respect to your protected health information; and
  • follow the terms of the Notice that is currently in effect.

We reserve the right to change the terms of this Notice and to make new provisions regarding your protected health information that we maintain, as allowed or required by law.  If we make any material change to this Notice, we will provide you with a copy of our revised Notice of Privacy Practices via any reasonable method or by mailing a revised notice to your last-known address on file.

How We May Use and Disclose Your Protected Health Information

Under the law, we may use or disclose your protected health information under certain circumstances without your permission. The following categories describe the different ways that we may use and disclose your protected health information. For each category of uses or disclosures we will explain what we mean and present some examples. Not every use or disclosure in a category will be listed. However, all of the ways we are permitted to use and disclose information will fall within one of the categories.

For Payment. We may use or disclose your protected health information to determine your eligibility for Plan benefits, to facilitate payment for the treatment and services you receive from health care providers, to determine benefit responsibility under the Plan, or to coordinate Plan coverage. For example, we may tell your health care provider about your medical history to determine whether a particular treatment is experimental, investigational, or medically necessary, or to determine whether the Plan will cover the treatment. We may also share your protected health information with a utilization review or precertification service provider. Likewise, we may share your protected health information with another entity to assist with the adjudication or subrogation of health claims or to another health plan to coordinate benefit payments.

For Health Care Operations. We may use and disclose your protected health information for other Plan operations. These uses and disclosures are necessary to run the Plan. For example, we may use medical information in connection with conducting quality assessment and improvement activities; underwriting, premium rating, and other activities relating to Plan coverage; submitting claims for stop-loss (or excess-loss) coverage; conducting or arranging for medical review, legal services, audit services, and fraud & abuse detection programs; business planning and development such as cost management; and business management and general Plan administrative activities.

To Business Associates. We may contract with individuals or entities known as Business Associates to perform various functions on our behalf or to provide certain types of services. In order to perform these functions or to provide these services, Business Associates will receive, create, maintain, use and/or disclose your protected health information, but only after they agree in writing with us to implement appropriate safeguards regarding your protected health information. For example, we may disclose your protected health information to a Business Associate to administer claims or to provide support services, such as utilization management, pharmacy benefit management, claims management, nurse navigation, or subrogation, but only after the Business Associate enters into a Business Associate contract with us.

As Required by Law. We will disclose your protected health information when required to do so by federal, state or local law. For example, we may disclose your protected health information when required by national security laws or public health disclosure laws.

To Avert a Serious Threat to Health or Safety. We may use and disclose your protected health information when necessary to prevent a serious threat to your health and safety, or the health and safety of the public or another person. Any disclosure, however, would only be to someone able to help prevent the threat. For example, we may disclose your protected health information in a proceeding regarding the licensure of a physician.

To Plan Sponsors. For the purpose of administering the plan, we may disclose to certain employees of the Employer protected health information. However, those employees will only use or disclose that information as necessary to perform plan administration functions or as otherwise required by HIPAA, unless you have authorized further disclosures. Your protected health information cannot be used for employment purposes without your specific authorization.

Special Situations

In addition to the above, the following categories describe other possible ways that we may use and disclose your protected health information. For each category of uses or disclosures, we will explain what we mean and present some examples. Not every use or disclosure in a category will be listed. However, all of the ways we are permitted to use and disclose information will fall within one of the categories.

Military and Veterans. If you are a member of the armed forces, we may release your protected health information as required by military command authorities. We may also release protected health information about foreign military personnel to the appropriate foreign military authority.

Workers' Compensation. We may release your protected health information for workers' compensation or similar programs. These programs provide benefits for work-related injuries or illness.

Public Health Risks. We may disclose your protected health information for public health actions. These actions generally include the following:

  • to prevent or control disease, injury, or disability;
  • to report births and deaths;
  • to report child abuse or neglect;
  • to report reactions to medications or problems with products;
  • to notify people of recalls of products they may be using;
  • to notify a person who may have been exposed to a disease or may be at risk for contracting or spreading a disease or condition;
  • to notify the appropriate government authority if we believe that a patient has been the victim of abuse, neglect, or domestic violence. We will only make this disclosure if you agree, or when required or authorized by law.

Health Oversight Activities. We may disclose your protected health information to a health oversight agency for activities authorized by law. These oversight activities include, for example, audits, investigations, inspections, and licensure. These activities are necessary for the government to monitor the health care system, government programs, and compliance with civil rights laws.

Lawsuits and Disputes. If you are involved in a lawsuit or a dispute, we may disclose your protected health information in response to a court or administrative order. We may also disclose your protected health information in response to a subpoena, discovery request, or other lawful process by someone else involved in the dispute, but only if efforts have been made to tell you about the request or to obtain an order protecting the information requested.

Law Enforcement. We may disclose your protected health information if asked to do so by a law enforcement official—

  • in response to a court order, subpoena, warrant, summons or similar process;
  • to identify or locate a suspect, fugitive, material witness, or missing person;
  • about the victim of a crime if, under certain limited circumstances, we are unable to obtain the victim's agreement;
  • about a death that we believe may be the result of criminal conduct; and
  • about criminal conduct.

Coroners, Medical Examiners and Funeral Directors. We may release protected health information to a coroner or medical examiner. This may be necessary, for example, to identify a deceased person or determine the cause of death. We may also release medical information about patients to funeral directors, as necessary to carry out their duties.

National Security and Intelligence Activities. We may release your protected health information to authorized federal officials for intelligence, counterintelligence, and other national security activities authorized by law.

Inmates. If you are an inmate of a correctional institution or are in the custody of a law enforcement official, we may disclose your protected health information to the correctional institution or law enforcement official if necessary (1) for the institution to provide you with health care; (2) to protect your health and safety or the health and safety of others; or (3) for the safety and security of the correctional institution.

Research. We may disclose your protected health information to researchers when:

(1) the individual identifiers have been removed; or

(2) when an institutional review board or privacy board has reviewed the research proposal and established protocols to ensure the privacy of the requested information, and approves the research.

Required Disclosures

The following is a description of disclosures of your protected health information we are required to make.

Government Audits. We are required to disclose your protected health information to the Secretary of the United States Department of Health and Human Services when the Secretary is investigating or determining our compliance with the HIPAA privacy rule.

Disclosures to You. When you request, we are required to disclose to you the portion of your protected health information that contains medical records, billing records, and any other records used to make decisions regarding your health care benefits. We are also required, when requested, to provide you with an accounting of most disclosures of your protected health information if the disclosure was for reasons other than for payment, treatment, or health care operations, and if the protected health information was not disclosed pursuant to your individual authorization.

Other Disclosures

Personal Representatives. We will disclose your protected health information to individuals authorized by you, or to an individual designated as your personal representative, attorney-in-fact, etc., so long as you provide us with a written notice/authorization and any supporting documents (i.e., power of attorney). Note: Under the HIPAA privacy rule, we do not have to disclose information to a personal representative if we have a reasonable belief that:

(1) you have been, or may be, subjected to domestic violence, abuse or neglect by such person; or

(2) treating such person as your personal representative could endanger you; and

(3) in the exercise of professional judgment, it is not in your best interest to treat the person as your personal representative.

Spouses and Other Family Members. With only limited exceptions, we will send all mail to the employee. This includes mail relating to the employee's spouse and other family members who are covered under the Plan, and includes mail with information on the use of Plan benefits by the employee's spouse and other family members and information on the denial of any Plan benefits to the employee's spouse and other family members. If a person covered under the Plan has requested Restrictions or Confidential Communications (see below under “Your Rights”), and if we have agreed to the request, we will send mail as provided by the request for Restrictions or Confidential Communications.

Authorizations. Other uses or disclosures of your protected health information not described above will only be made with your written authorization. Examples include, but are not limited to, psychotherapy notes, uses and disclosures for marketing purposes and any sale of PHI.  You may revoke written authorization at any time, so long as the revocation is in writing. Once we receive your written revocation, it will only be effective for future uses and disclosures. It will not be effective for any information that may have been used or disclosed in reliance upon the written authorization and prior to receiving your written revocation.

Underwriting. If the group health plan uses PHI for underwriting purposes, the plan will not use or disclose genetic information for underwriting purposes.

Your Rights

You have the following rights with respect to your protected health information:

Right to Inspect and Copy. You have the right to inspect and copy certain protected health information that may be used to make decisions about your health care benefits. To inspect and copy your protected health information, you must submit your request in writing to the Privacy Official. If you request a copy of the information, we may charge a reasonable fee for the costs of copying, mailing, or other supplies associated with your request.

We may deny your request to inspect and copy in certain very limited circumstances. If you are denied access to your medical information, you may request that the denial be reviewed by submitting a written request.

Right to Amend. If you feel that the protected health information we have about you is incorrect or incomplete, you may ask us to amend the information. You have the right to request an amendment for as long as the information is kept by or for the Plan.

To request an amendment, your request must be made in writing and submitted to the Privacy Official. In addition, you must provide a reason that supports your request.

We may deny your request for an amendment if it is not in writing or does not include a reason to support the request. In addition, we may deny your request if you ask us to amend information that:

  • is not part of the medical information kept by or for the Plan;
  • was not created by us, unless the person or entity that created the information is no longer available to make the amendment;
  • is not part of the information that you would be permitted to inspect and copy; or
  • is already accurate and complete.

If we deny your request, you have the right to file a statement of disagreement with us and any future disclosures of the disputed information will include your statement.

Right to an Accounting of Disclosures. You have the right to request an “accounting” of certain disclosures of your protected health information. The accounting will not include (1) disclosures for purposes of treatment, payment, or health care operations; (2) disclosures made to you; (3) disclosures made pursuant to your authorization; (4) disclosures made to friends or family in your presence or because of an emergency; (5) disclosures to business associates; (6) disclosures for national security purposes; and (7) disclosures incidental to otherwise permissible disclosures.

To request this list or accounting of disclosures, you must submit your request in writing to the Privacy Official. Your request must state a time period of not longer than the past six years. Your request should indicate in what form you want the list (for example, paper or electronic). The first list you request within a 12-month period will be provided free of charge. For additional lists, we may charge you for the costs of providing the list. We will notify you of the cost involved and you may choose to withdraw or modify your request at that time before any costs are incurred.

Right to Request Restrictions. You have the right to request a restriction or limitation on your protected health information that we use or disclose for treatment, payment, or health care operations. You also have the right to request a limit on your protected health information that we disclose to someone who is involved in your care or the payment for your care, such as a family member or friend. For example, you could ask that we not use or disclose information about a surgery that you had.

Except as provided in the next paragraph, we are not required to agree to your request. However, if we do agree to the request, we will honor the restriction until you revoke it or we notify you.

Effective February 17, 2010 (or such other date specified as the effective date under applicable law), we will comply with any restriction request if (1) except as otherwise required by law, the disclosure is to the health plan for purposes of carrying out payment or health care operations (and is not for purposes of carrying out treatment); and (2) the protected health information pertains solely to a health care item or service for which the health care provider involved has been paid out-of-pocket in full.

To request restrictions, you must make your request in writing to the Privacy Official. In your request, you must tell us (1) what information you want to limit; (2) whether you want to limit our use, disclosure, or both; and (3) to whom you want the limits to apply—for example, disclosures to your spouse.

Right to Request Confidential Communications. You have the right to request that we communicate with you about medical matters in a certain way or at a certain location. For example, you can ask that we only contact you at work or by mail.

To request confidential communications, you must make your request in writing to the Privacy Official. We will not ask you the reason for your request. Your request must specify how or where you wish to be contacted. We will accommodate all reasonable requests if you clearly provide information that the disclosure of all or part of your protected information could endanger you.

Right to Be Notified of a Breach. You have the right to be notified in the event that we (or a Business Associate) discover a breach of unsecured protected health information.

Right to a Paper Copy of This Notice. You have the right to a paper copy of this notice. You may ask us to give you a copy of this notice at any time. Even if you have agreed to receive this notice electronically, you are still entitled to a paper copy of this notice.

To obtain a paper copy of this notice contact the Privacy Official identified on the first page of this Notice.

Complaints

If you believe that your privacy rights have been violated, you may file a complaint with the Plan or with the Office for Civil Rights of the United States Department of Health and Human Services. To file a complaint with the Plan, contact the Privacy Official. All complaints must be submitted in writing.

You will not be penalized, or in any other way retaliated against, for filing a complaint with the Office for Civil Rights or with us.
 

Security of Protected Health Information-- With respect to Electronic Protected Health Information (ePHI), the Plan Sponsor will:

  • Implement administrative, physical, and technical standards that reasonably and appropriately protect the confidentiality, integrity, and availability of electronic PHI;
  • Ensure that the firewall required by the HIPAA privacy rule is supported by reasonable and appropriate security measures;
  • Ensure that any agent or subcontractor to whom the Plan Sponsor provides electronic PHI agrees to implement reasonable and appropriate security measures; and
  • Report to the Plan any security incident of which the Plan Sponsor becomes aware.

Electronic PHI is health information about a Plan participant that is in an electronic format. Health information includes information about the individual's past, present, or future physical or mental condition, the provision of health care to the individual, or the past, present, or future payment for the provision of health care to the individual.

Complaints-- If you feel that your privacy rights as described in this Notice have been violated, you may complain to the Plans by contacting the individual named below.

You may also file a complaint with the Secretary of the Department of Health and Human Services, Hubert H. Humphrey Building, 200 Independence Ave. SW., Washington, DC  20201.

The Plans will not retaliate or discriminate against you for filing a complaint.

Contact Information-- If you have any questions about this Notice or would like to file a complaint, you may contact:

The Director, Human Resources

Franklin & Marshall College

P.O. Box 3003

Lancaster, PA 17604-3003

(717) 291-3995


Statement of ERISA Rights

Participants in the Plan are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA provides that all Plan participants are entitled to the following rights:

Receive Information about the Plan and benefits-- Examine, without charge, at the Plan Administrator's office and at other specified locations, all documents governing the Plan (including, if applicable, insurance contracts and collective bargaining agreements), and a copy of the latest annual report (Form 5500 Series) filed by the Plan, if the Plan is required to do so, with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, (including, if applicable, insurance contracts and collective bargaining agreements), and copies of the latest annual report (Form 5500 Series), if the Plan is required to file such form, and updated Summary Plan Description. The Plan Administrator may make a reasonable charge for the copies.

Receive a summary of the Plan's annual financial report, if the Plan is required to prepare such a report-- The Plan Administrator is required by law to furnish each participant with a copy of any summary annual report.

Continue Group Health Plan and Group Dental Plan coverage-- Continue health insurance and dental insurance coverage for self, and dependent spouse or dependent children if applicable, if there is a loss of coverage under the Plan as a result of a Qualifying Event. A participant and his/her dependents will be required to pay for such coverage. This Summary Plan Description includes rules governing COBRA continuation coverage rights.

Reduction or elimination of exclusionary periods of coverage for pre-existing conditions under the Group Health Plan and Group Dental Plan, if you have Creditable Coverage for another plan-- You should be provided a Certificate of Creditable Coverage, free of charge, from your group health plan or health insurance issuer and group dental plan or insurance carrier when you lose coverage under a health or Dental Plan, when you become entitled to elect COBRA continuation coverage, when your COBRA continuation coverage ceases, if you request it before losing coverage, or if you request it up to 24 months after losing coverage. Without evidence of Creditable Coverage, an individual may be subject to a preexisting condition exclusion for 12 months (up to 18 months for late enrollees) after enrolling in a health insurance plan.

Prudent Action by Plan Fiduciaries-- In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of an employee benefit plan. The people who operate this Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may terminate your employment or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.

Enforce Your Rights-- If a claim for a welfare benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps participants can take to enforce the above rights. For instance, if you request a copy of the Plan documents or the latest annual report (if applicable) from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the Plan's decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court. If it should happen that Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or You may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance with Questions

If you have any questions about your Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.In no case will a Plan participant, or anyone acting on a participant's behalf, be entitled to challenge a decision of the Plan Administrator in court or in any other administrative proceeding unless and until the claim and appeal procedures described in this Summary Plan Description have been complied with and exhausted.

For information about using your Debit Card in conjunction with your Medical Expense Reimbursement Account, please click here: Flexible Spending Accounts and HRA Debit Card.

To access Significa Benefit Services' website and manage your Flexible Spending Account online, click here: www.significabenefits.com.  You can find instructions for creating an account here: Account Instructions. (To create an account on the Significa website, an F&M participant will need to enter group number 03820.)