Resolution 03-2024 - Flexible Spending Plan Amendment

Exactly as extracted, unformatted — for checking against the original. The readable version is easier to read.

TOWN COUNCIL OF CENTREVILLE
RESOLUTION 03-2024
A RESOLUTION OF THE TOWN COUNCIL OF CENTREVILLE TO AMEND THE
FLEXIBLE SPENDING AGREEMENT PLAN
WHEREAS, on April 1,2072, the Town adopted a Flexible Spending Agreement Plan (FSA)
to provide benefits for qualified employees and their dependents and beneficiaries. The plan allows
employees to elect between cash compensation or certain nontaxable benefit options as they desire.
WHEREAS, the Town Council of Centreville wishes to amend the current Flexible Spending
Agreement Plan by increasing the maximum annual election for Health Care FSA to $3,200 and by
increasing the allowable carryover of unused contributions for Health Care FSA to $640.
NOW THEREFORE BE IT RESOLVED by the Town Council of Centreville, acting pursuant
to the authorities noted above:
Section 1. The recitals set forth above are incorporated herein by reference and made apartof this
Resolution;
Section 2. The amended Town of Centreville FSA Plan Document and Summary Plan Description
attached to this Resolution as Exhibit "A" is hereby approved;
Section 3. The Town Manager is hereby authorized to execute and deliver to the Administrator of the
Plan one or more counterparts of the Plan and to take whatever additional actions are reasonably
necessary to effectuate the terms of this Resolution;
Section 4. The Administrator of the Plan is hereby instructed to take such actions as the Administrator
deems necessary to implement the Flexible Spending Agreement Plan including setting up adequate
accounting and administrative procedures for the provision of benefits under the Plan;
Section 5. The Town Manager shall cause the Summary of Plan Description which is attached hereto
and approved to be delivered to each employee of the Town; and
Section 6. The Flexible Spending Agreement Plan shall be effective July l, 2024.
BY ORDER: We hereby certifu that Resolution Number 03-2024 is true and correct and duly adopted
by the Town Council of Centreville, Maryland.
ATTEST: THE TOWN COUNCIL OF CENTREVILLE
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l/abr-)
Betty 6an Hall Ashley H. , Esq., President
Acting Town Clerk
B. Johnson, Jr., Vice President

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Daniel B. Worth, Member
Jim A. Beauchamp, Member
.I , Member

EXHIBIT A
INNUVAIIVE
HEALTH SERVICES
Town of Centreville
Town of Centreville
101 Lawyers Row
Centrevllle, MD 21617
Town of Centreville FSA Plan
Plan Document
Amended and Restated )uly OL,2022
Draft Amendment Formatted: Centered
Resolution 03-2024

VI. ARTICLE - HEALTH FLEXIBLE SPENDING ACCOUNT
01. ESTABLISHMENT OF BENEFIT
Thls Health Flexlble Spendlng Account is lntended to qualify as a medical relmbursement plan
under Code Section 105 and shall be interpreted ln a manner conslstent wlth such Code Section
and the Treasury regulatlons thereunder. Participants who elect to partlcipate ln thls Health
Flexlble Spending Account may submit claims for the relmbursement of allowable Medlcal
Expenses. All amounts reimbursed shall be perlodlcally pald from amounts allocated to the
Partlcipant's Health Flexlble Spendlng Account. Periodic payments reimbursing Participants from
the Health Flexlble Spendlng Account shall in no event occur less frequently than monthly.
02. DEFINITIONS
For the purposes of thls Artlcle and the Plan, the terms below have the followlng meanlngs:
a. "Health Flaxlbl€ soendlno Account" means the account established fora Particlpant
pursuant to thls Plan to whlch part of his or her Cafeterla Plan Beneflt Dollars may be
allocated and from whlch all allowable Medical Expenses lncurred by the Participant, his or
her Spouse and hls or her oependents may be relmbursed.
b. "Hlohlv Comoensated Partlcloant" means, for the purposes of thls Artlcle and
determining discrimlnatlon under Code Sectlon 105(h), a participant who is:
1. one of the 5 hlghest pald offlcers;
2, ashareholderwhoowns(orlsconslderedtoown,applyingtherulesofCodeSectlon
318) more than 10 percent ln value of the stock of the Employel or
3. amongthehighestpald25percentofall Employees(otherthanexclusionspermlttedby
Code Section 105(hX3XB) for those lndlviduals who are not Participants).
c. 'Medlcai ExoensGs" means any expense for medical care within the meaning of the term
'medlcal care" as deflned in Code Section 213(d) and the rulings and Treasury regulatlons
thereunder, and not otherwise used by the Partlclpant as a deductlon ln determinlng his or
her tax liability under the Code. "Medlcal Expenses" can be lncurred by the Participant, his or
her Spouse and his or her Dependents. 'lncurred" means, with regard to Medical Expenses,
when the Partlclpant ls provided with th€ medical care that glves rlse to the Medical Expense
and not when the Partlcipant ls formally bllled or charged for, or pays for, the medical care,
A Particlpant may not be relmbursed for the cost of other health coverage such as premiums
pald under plans malntalned by the employer of the Partlclpant's Spouse or indlvldual
policies malntalned by the Participant or his or her Spouse or Dependent.
d. A Participant may not be relmbursed for'qualified long-term care services'as defined ln
Code Secuon 77o28(cl.
e. The definitlons of the Artlcle tltled: 'Plan Definitions" are hereby lncorporated by reference to
the extent necessary to lnterpret and apply the provlslons of thls Health Flexlble Spending
Account,
I o:.FoRFErruREs $640
A Participant in the Health Care Flexlble Spending Account may roll over up to tS5eftof unused
funds at the end of one Plan Year to the next Plan Year. The maxlmum limit may increase from
year-to-year as provided under IRS Notice 2020-33 and Sectlon 125(i) of the lnternal Revenue
Code. These funds can be used during the followlng Plan Year for expenses incurred in that Plan
Year. Amounts carried over do not affect the maximum amount of salary redirections otherwise
permitted for said next Plan Year. Unused amounts are those remalnlng after all eligible expenses
for the Plan Year have been reimbursed, These amounts may not be cashed out or converted to
any other taxable or nontaxable beneflt. Unused amounts ln excess of maximum limlt wlll be
forfeited.
I oq. LrMrrarroN oN aLLocATroNs $3.200.00
Notwithstanding any provislon contalned ln thls Health Flexible Spending Account to the contrary,
the maximum amount of salary redirections that may be allocated to the Health Flexlble Spendlng
Account by a Participant in any Plan Year ls $?F50r0fr The maxlmum limit may lncrease from
year-to-year pursuant to Secdon 125(lX2) of the lnternal Revenue Code. The minimum amount
that may be allocated to the Health Flexlble Spending Account by a Partlclpant ln or on account of
any Plan Year ls i130.00.
carrvoven A Particlpant in the Health Care Flexible Spending Account may roll over up to

$640
f55&€sof unused funds at the end of one Plan Year to the next Plan Year. The maximum limlt
may increase from year-to-year as provided under IRS Notice 2020-33 and Section 125(il of the
lntemal Revenue Code. These funds can be used during the following Plan Year for expenses
incurred in that Plan Year. Amounts carried over do not affect the maximum amount of salary
redirections otherwise permitted for said next Plan Year, Unused amounts are those rema:ning
after all eligible expenses for the Plan Year have been reimbursed. These amounts may not be
cashed out or converted to any other taxable or nontaxable beneflt. Unused amounts in excess of
maximum limit will be forfeited.
05.w
a, lntent to b€ nondlscrimlnatory. lt ls the lntent of thls Health Flexible Spendlng Account
not to discriminate ln vlolatlon of the Code and the Treasury regulatlons thereunder.
b, AdJustment to avold t€st fallure. lf the Administrator deems lt necessary to avoid
disirimlnation under thls Health Flexlble Spending Account, lt may, but shall not be requlred
to, rerect any elections or reduce contributlons or Eenefits ln order to assure compliance with
this Section. Any act taken by the Admlnlstrator under this Section shall be carrled out in a
uniform and nondiscriminatory manner. lf the Adminlstrator decldes to reject any elections or
reduce contributions or Benefits, it shall be done ln the following manner. First, the Benefits
designated for the Health Flexlble spending Account by the member of the group in whose
favor discrlmlnation may not occur pursuant to Code Sectlon 105 that elected to contribute
the highest amount to the fund for the Plan Year shall be reduced until the nondiscrimination
tests set forth in this Section and/or the Code are satisfied, or until the amount designated for
the fund equals the amount designated for the fund by the member of the group ln whose
favor discrimination may not occur pursuant to Code Section 105 who has elected the second
highest contributlon to the Health Flexible Spending Account for the Plan Year. This process
shall contlnue untll the nondiscriminatlon tests set forth in this Section or the Code are
satisfted, Contributlons whlch are not utllized to provide Benefits to any Partlclpant by virtue
of any administrative act under this paragraph shall be forfelted and credited to the benefit
plan surplus.
06. COORD]NATION WITH CAFETERIA PLAN
All Participants under the Plan are eligible to recelve Beneflts under this Health Flexible Spending
Account. Enrollment under the Cafeteria Plan shall constitute enrollment under this Health Flexible
Spending Account. ln addltion, other matters concernlng contrlbutlons, elections and the like shall
be governed by the general provlslons of the Cafeteria Plan,
07, HEALTH FLEXIBLE SPENDING ACCOUNT CLAIMS
a. Expenses must be lncurred durlng Plan Year. All ellglble Medical Expenses lncurred by a
Participant, his or her Spouse and his or her Oependents durlng the Plan Year shall be
reimbursed, subiect to the Section titled: "Termlnatlon of Employment", even though the
submission of such a clalm occurs after his or her partlclpation hereunder ceases; but
provided that the Medlcal Expenses were incurred during the applicable Plan Year, Medical
Expenses are treated as having been incurred when the Participant is provided wlth the
medical care that gives rlse to the medlcal expenses, not when the Particlpant ls formally
billed or charged for, or pays for the medical care.
b. Relmbursement avallabla throughout Plan Year. The Admlnlstrator shall direct the
reimbursement to each eligible Partlcipant for all allowable Medical Expenses, up to a
maximum of the amount deslgnated by the Participant for the Health Flexlble Spending
Account for the Plan Year. Reimbursements shall be made avallable to the Participant
throughout the year without regard to the level of Cafeteria Plan Benefit Dollars which have
been allocated to the fund at any glven polnt ln time. Furthermore, a Pardcipant shall be
entitled to reimbursements only for amounts in excess of any payments or other
relmbursements under any health care plan covering the Partlcipant and/or his or her Spouse
or Dependents.
c. Payments. Relmbursement payments under this Plan shall be made directly to the
Partlcipant. However, ln the Admlnistrator's discretion, payments may be made directly to
the service provlder. The appllcation for payment or relmbursement shall be made to the
Adminlstrator on an acceptable form wlthln a reasonable time after incurring the debt or
paylnq for the servlce. The application shall include a written statement from an lndependent
thlrd party stating that the Medical Expense has been lncurred and the amount of such
expense. Furthermore, the Partlcipant shall provide a written statement that the Medical
Expense has not been reimbursed or is not relmbursable under any other health plan
coverage and, lf relmbursed from the Health Flexlble Spending Account, such amount will not
be claimed as a tax deduction. The Administrator shall retain a flle of all such applications.
d. clalms for relmbursament. clalms for the reimbursement of Medical Expenses lncurred ln
any Plan Year shall be pald as soon after a clalm has been flled as ls admlnlstratively
practicable; provided however, that lf a Partlclpant fails to submlt a clalm withln 60 days after