DIALYSIS CORPORATION OF AMERICA SECTION 125 PLAN
AND ALL SUPPORTING FORMS HAVE BEEN PRODUCED FOR
CBIZ BENEFITS & INSURANCE SERVICES, INC.
Copyright 2002 SunGard Corbel
All Rights Reserved
DIALYSIS CORPORATION OF AMERICA SECTION 125 PLAN
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY 3
2.2 EFFECTIVE DATE OF PARTICIPATION 3
2.3 APPLICATION TO PARTICIPATION 3
2.4 TERMINATION OF PARTICIPATION 3
2.5 CHANGE OF EMPLOYMENT STATUS 4
2.6 TERMINATION OF EMPLOYMENT 4
ARIICLE III
CONTRIBUTIONS TO THE PLAN
3.1 EMPLOYER CONTRIBUTION 4
3.2 SALARY REDIRECTION 5
3.3 APPLICATION OF CONTRIBUTIONS 5
3.4 PERIODIC CONTRIBUTIONS 5
ARTICLE IV
BENEFITS
4.1 BENEFIT OPTIONS 5
4.2 HEALTH INSURANCE BENEFIT 6
4.3 DENTAL INSURANCE BENEFIT 6
4.4 DISABILITY INSURANCE BENEFIT 6
4.5 CASH BENEFIT 6
4.6 NONDISCRIMINATION REQUIREMENTS 7
ARTICLE V
PARTICIPANT ELECTIONS
5.1 INITIAL ELECTIONS 7
5.2 SUBSEQUENT ANNUAL ELECTIONS 8
5.3 FAILURE TO ELECT 8
5.4 CHANGE OF ELECTIONS 8
ARTICLE VI
ERISA PROVISIONS
6.1 CLAIM FOR BENEFITS 11
6.2 NAMED FIDUCIARY 12
6.3 GENERAL FIDUCIARY RESPONSIBILITIES 12
6.4 NONASSIGNABILITY OF RIGHTS 12
ARTICLE VII
ADMINISTRATION
7.1 PLAN ADMINISTRATION 13
7.2 EXAMINATION OF RECORDS 13
7.3 PAYMENT OF EXPENSES 14
7.4 INSURANCE CONTROL CLAUSE 14
7.5 INDEMNIFICATION OF ADMINISTRATOR 14
ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
8.1 AMENDMENT 14
8.2 TERMINATION 14
ARIICLE IX
MISCELLANEOUS
9.1 PLAN INTERPRETATTON 15
9.2 GENDER AND NUMBER 15
9.3 WRITTEN DOCUMENT 15
9.4 EXCLUSIVE BENEFIT 15
9.5 PARTICIPANTS RIGHTS 15
9.6 ACTION BY THE EMPLOYER 15
9.7 EMPLOYER'S PROTECTIVE CLAUSES 15
9.8 NO GUARANTEE OF TAX CONSEQUENCES 16
9.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS 16
9.10 FUNDING 17
9.11 GOVERNINGLAW 17
9.12 SEVERABILITY 17
9.13 CAPTIONS 17
9.14 CONTINUATION OF COVERAGE 17
9.15 FAMILY AND MEDICAL LEAVE ACT 17
9.16 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT 17
9.17 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS
ACT 18
DIALYSIS CORPORATION OF AMERICA SECTION 125 PLAN
INTRODUCTION
The Employer has adopted this Plan effective September 1, 2002, to
recognize the contribution made to the Employer by its Employees. Its purpose is
to reward them by providing benefits for those Employees who shall qualify
hereunder and their dependents and beneficiaries. The concept of this Plan is to
allow Employees to choose among different types of benefits based on their own
particular goals, desires and needs. The Plan shall be known as Dialysis
Corporation of America Section 125 Plan (the "Plan").
The intention of the Employer is that die Plan qualify as a "Cafeteria
Plan" within the meaning of Section 125 of the Internal Revenue Code of 1986, as
amended, and that the benefits which an Employee elects to receive under the
Plan be ineludible or excludable from the Employees income under Section 125(a)
and other applicable sections of the Internal Revenue Code of 1986, as amended.
ARTICLE I
DEFINITIONS
1.1 "Administrator" means the individual(s) or corporation appointed by
the Employer to carry out the administration of the Plan. In the event the
Administrator has not been appointed, or resigns from a prior appointment, the
Employer shall be deemed to be the Administrator.
1.2 "Affiliated Employer" means the Employer and any corporation which
is a member of a controlled group of corporations (as defined in Code Section
414(b)) which includes the Employer; any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section 414(c))
with the Employer; any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code Section 414(m)) which
includes the Employer; and ally other entity required to be aggregated with the
Employer pursuant to Treasury regulations under Code Section 414(o).
1.3 "Benefit'' means any of the optional benefit choices available to a
Participant as outlined in Section 4.1.
1.4 "Code" means the Internal Revenue Code of 1986, as amended or
replaced fain time to time.
1.5 "Compensation" means the base compensation received by the
Participant from the Employer during a Plan Year. Compensation shall not include
overtime, commissions and bonuses.
1.6 "Dependent" means any individual who qualifies as a dependent under
an Insurance Contractor under Code Section 152 (as modified by Code Section
105(b)).
1.7 "Effective Date" means September 1, 2002.
1.8 "Election Period" means the period immediately preceding the beginning
of each Plan Year established by the Administrator, such period to be applied or
a uniform and nondiscriminatory basis for all Employees and Participants.
However, an Employee's initial Election Period shall be determined pursuant to
Section 5.1.
1.9 "Eligible Employee" means any Employee who has satisfied the
provisions of Section 2.1.
However, any Employee who is a "part-time" Employee shall not be eligible
to participate in this Plan. A "part-time" Employee is any Employee who works,
or is expected to work on a regular basis, less than 35 hours a week and is
designated as a part-time Employee on the Employer's personnel records.
1.10 "Employee" means any person who is employed by the Employer, but
excludes any person who is employed as an independent contractor. The tern
Employee shall include leased employees within the meaning of Code Section
414(n)(2).
1.11 "Employer" means Dialysis Corporation of America and any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan.
1.12 "Employer Contribution" means the contributions made by the
Employer pursuant to Section 3.1 to enable a Participant to purchase Benefits.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
1.14 "Insurance Contract" means any contract issued by an Insurer
underwriting a Benefit.
1.15 "Insurer" means any insurance company that underwrites a Benefit
under this Plan.
1.16 "Key Employee" means an Employee described in Code Section
416(i)(1) and the Treasury regulations thereunder.
1.17 "Participant" means any Eligible Employee who elects to become a
Participant pursuant to Section 2.3 and has not for any reason become ineligible
to participate further in the Plan.
1.18 "Plan'' means this instrument, including all amendments thereto.
1.19 "Plan Year" means the 12-month period beginning January 1st and
ending December 31st, except that the first Plan Year shall be a short Plan Year
beginning September 1st. The Plan Year shall be the coverage period for the
Benefits provided for under this Plan. In the event a Participant commences
participation during a Plan Year, then the initial coverage period shall be hat
portion of the Plan Year commencing on such Participant's date of entry and
ending on the last day of such Plan Year.
1.20 "Premium Expenses" or "Premiums" means the Participant's cost for the
Benefits described in Section 4.1.
1.21 "Salary Redirection" means the contributions made by the Employer
on behalf of Participants pursuant to Section 3.2.
1.22 "Salary Redirection Agreement" means an agreement between the
Participant and the Employer under which lie Participant agrees to reduce his
Compensation or to forego all or part of the increases In such Compensation and
to have such amounts contributed by the Employer to the Plan on the
Participant's behalf The Salary Redirection Agreement shall apply only to
Compensation that has not been actually or constructively received by the
Participant as of the date of the agreement (after taking this Plan and Code
Section 125 into account) and, subsequently does not become currently available
to die Participant.
1.23 "Spouse" means the legally married husband or wife of a
Participant, unless legally separated by court decree.
ARTICLE II
PARTICIPATION
2.1 ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder 90 days
after his initial date of employment with the Employer.
2.2 EFFECTIVE DATE OP PAIVIICIPATION
An Eligible Employee shall become a Participant effective as of the first
day of the month coinciding with or next following the date on which he met the
eligibility requirements of Section 2.1.
2.3 APPLICAIION TO PARTICIPATE
An Employee who is eligible to participate in this Plan shall, during the
applicable Election Period, complete an application to participate and election
of benefits form which the Administrator shall furnish to the Employee. The
election made on such form shall be 'revocable until the end of the applicable
Plan Year unless the Participant is entitled to change his Benefit elections
pursuant to Section 5.4 hereof
An Eligible Employee shall also be required to execute a Salary Redirection
Agreement during the Election Period for the Plan Year during which he wishes to
participate in this Plan. Any such Salary Redirection Agreement shall be
effective for the first pay period beginning on or after the Employee's
effective date of participation pursuant to Section 2.2.
2.4 TERMINATMN OP PARTICIPATION
A Participant shall no longer participate in this Plan upon the occurrence
of any of the following events:
(a) His termination of employment, subject to the provisions of Section
2.6;
(b) The end of the Plan Year during which he became a limited Participant
because of a change in employment status pursuant to Section 2.5;
(c) His death; or
(d) The termination of this Plan, subject to the provisions of Section
8.2.
2.5 CHANGE OF EMPLOYMENT STATUS
If a Participant ceases to be eligible to participate because of a change
in employment status or classification (other than through termination of
employment), the Participant shall become a limited Participant in this Plan for
the remainder of the Plan Year in which such change of employment status occurs.
As a limited Participant, no further Salary Redirection maybe made on behalf of
the Participant, and, except as otherwise provided herein, all further Benefit
elections shall cease, subject to the limited Participant's fight to continue
coverage under any Insurance Contracts. Subject to the provisions of Section
2.6, if the limited Participant later becomes an Eligible Employee, then the
limited Participant may again become a full Participant in this Plan, provided
he otherwise satisfies the participation requirements set forth in this Article
II as if he were a new Employee and made an election in accordance with Section
5.1.
2.6 TERMINATION OP EMPLOYMENT
If a Participant's employment with the Employer is terminated for any
reason other titan death, his participation in the Plan shall he governed in
accordance with the following:
(a) With regard to Benefits which are insured, the Participants
participation in the Plan shall cease, subject to the Participant's light to
continue coverage under any Insurance Contract for which premiums have already
been paid.
(b) This Section shall be applied and administered consistent with such
further rights a Participant and his Dependents may be entitled to pursuant to
Code Section 4980B and Section 9.14 of the Plan.
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 EMPLOYER CONTRIBUTION
The Employer shall make available to each Participant an Employer
Contribution in an amount to be determined by the Employer prior to the
beginning of each Plan Year. Each Participant's Employer Contribution shall be
available to purchase Benefits pursuant to Article IV. If no Benefits are
selected, there shall be no Employer Contribution.
The Employer's Contribution shall be made available at the beginning of the
Plan Year.
3.2 SALARY REDIRECTION
If a Participant's Employer Contribution is not sufficient to cover the
cost of Benefits he elects pursuant to Article IV, his Compensation will be
reduced in an amount equal to the difference between the cost of Benefits he
elected and the amount of Employer Contribution available to him. Such reduction
shall be his Salary Redirection, which die Employer will use on his behalf,
together with his Employer Contribution, to pay for the Benefits he elected. The
amount of such Salary Redirection shall be specified in the Salary Redirection
Agreement and shall he applicable for a Plan Year. Notwithstanding the above,
for new Participants, the Salary Redirection Agreement shall only be applicable
from the first day of the pay period following the Employee's entry date up to
and including the last day of the Plan Year.
Any Salary Redirection shall be determined prior to the beginning of a Plan
Year (subject to initial elections pursuant to Section 5.1) and prior to the end
of the Election Period and shall be irrevocable for such Plan Year. However, a
Participant may revoke a Benefit election or a Salary Redirection Agreement
after the Plan Year has commenced and make a new election with respect to the
remainder of the Plait Year, if both the revocation and the new election are on
account of and consistent with a change in status and such other permitted
events as determined under Article V of the Plan and consistent with the rules
and regulations of the Department of the Treasury. Salary Redirection amounts
shall be contributed on a pro rata basis for each pay period during die Plan
Year. All individual Salary Redirection Agreements are deemed to the part of
this Plan and incorporated by reference hereunder.
3.3 APPLICATION OF CONTRIBUTIONS
As soon as reasonably practical after each payroll period, the Employer
shall apply the Employer Contribution and Salary Redirection to provide the
Benefits elected by the affected Participants.
3.4 PERIODIC CONTRIBUTIONS
Notwithstanding the requirement provided above and in other Articles of
this Plan that Salary Redirections be contributed to the Plan by the Employer on
behalf of an Employee on a level and pro rata basis for each payroll period, the
Employer and Administrator may implement a procedure in which Salary
Redirections are contributed throughout the Plan Year on a periodic basis that
is not pro rata for each payroll period.
ARTICLE IV
BENEFITS
4.1 BENEFIT OPTIONS
Each Participant may elect to have the amount of his Employer Contributions
and Salary Redirections applied to any one or more of the following optional
Benefits:
(1) Health Insurance Benefit
(2) Dental Insurance Benefit
(3) Disability Insurance Benefit
4.2 HEALTH INSURANCE BENEFIT
(a) Each Participant may elect to be covered under a health and
hospitalization Insurance Contract for the Participant, his or her spouse, and
his or her Dependents.
(b) The Employer may select suitable health and hospitalization
Insurance Contracts for use in providing this health insurance benefit, which
policies will provide uniform benefits for all Participants electing this
Benefit.
(c) The rights and conditions with respect to the benefits payable flow
such health and hospitalization Insurance Contract shall be determined
therefrom, and such Insurance Contract shall he incorporated herein by
reference.
4.3 DENTAL INSURANCE BENEFIT
(a) Each Participant may elect to he covered under the Employer's
dental Insurance Contract. In addition, the Participant may elect either
individual or family coverage under such Insurance Contract.
(b) The Employer may select suitable dental Insurance Contracts for use
in providing this dental insurance benefit, which policies will provide uniform
benefits for all Participants electing this Benefit
(c) The rights and conditions with respect to the benefits payable from
such dental Insurance Contract shall be determined therefrom, and such dental
Insurance Contract shall be incorporated herein by reference.
4.4 DISABILITY INSURANCE BENEFIT
(a) Each Participant may elect to be covered under the Employer's
disability Insurance Contract. The amount of coverage thereunder shall be
sufficient to provide a basic benefit of 60% of the Participants Compensation.
(b) The Employer may select suitable disability Insurance Contracts for
use in providing this disability Benefit. The disability Insurance Contracts may
provide for long-term or short-term coverage.
(c) The rights and conditions with respect to the Benefits payable from
such disability Insurance Contract shall be determined therefrom, and such
disability Insurance Contract shall be incorporated herein by reference.
4.5 CASH BENEFIT
If a Participant does not elect any Salary Redirections, such Participant
shall be deemed to have chosen the Cash Benefit as his sole Benefit Option.
However, if a Participant fails to make any election of Benefit Option, then the
Employer Contribution will be deemed to be waived.
4.6 NONDISCRIMINATION REQUIREMENTS
(a) It is the intent of this Plan to provide benefits to a
classification of employees which the Secretary of the Treasury finds not
to be discriminatory in favor of the group in whose favor discrimination
may not occur under Code Section 125.
(b) It is the intent of this Plan not to provide qualified benefits as
defined under Code Section 125 to Key Employees in amounts that exceed 25%
of the aggregate of such Benefits provided for all Eligible Employees under
the Plan. For purposes of the preceding sentence, qualified benefits shall
not include benefits which (without regard to this paragraph) are
includible in gross income.
(c) If the Administrator deems it necessary to avoid discrimination or
possible taxation to Key Employees or a group of employees in whose favor
discrimination may not occur in violation of Code Section 125, it may, but
shall not be required to reject any election or reduce contributions or
non-taxable Benefits in order to assure compliance with this Section, Any
act taken by the Administrator under this Section shall be carried out in a
uniform and nondiscriminatory manner. If the Administrator decides to
reject any election or reduce contributions or non-taxable Benefits, it
shall he done in the following manner. First, the non-taxable Benefits of
the affected Participant (either an employee who is highly compensated or a
Key Employee, whichever is applicable) who has the highest amount of
non-taxable Benefits for the Plan Year shall have his non-taxable benefits
reduced until the discrimination tests sot forth In this Section are
satisfied or until the amount of his non-taxable Benefits equals the
nor-taxable Benefits of the affected Participant who has the second highest
amount of non-taxable Benefits. This process shall continue until the
nondiscrimination tests set forth in this Section are satisfied. With
respect to any affected Participant who has had Benefits reduced pursuant
to this Section, the reduction shall be made proportionately among insured
Benefits. Contributions which are not utilized to provide Benefits to any
Participant by virtue of any administrative act under this paragraph shall
be forfeited and deposited into the benefit plan surplus.
ARTICLE V
PARTICIPANT ELECTIONS
5.1 INITIAL ELECTIONS
An Employee who meets the eligibility requirements of Section 2.1 on the
first day of, or during, a Plan Year may elect to participate in this Plan for
all or the remainder of such Plan Year, provided he elects to do so before his
effective date of participation pursuant to Section 2.2. However, if such
Employee does not complete an application to participate and benefit election
form and deliver it to the Administrator before such date, his Election Period
shall extend 30 calendar days after such date, or for such further period as the
Administrator shall determine and apply on a uniform and nondiscriminatory
basis. However, any election during the extended 30-day election period pursuant
to this Section 5.1 shall not be effective until the first pay period following
the later of such Participant's effective date of participation pursuant to
Section 2.2 or the date of the receipt of the election form by the
Administrator, and
shall be limited to the Benefit expenses incurred for the balance of the Plan
Year for which the election is made.
5.2 SUBSEQUENT ANNUAL ELECTIONS
During the Election Period prior to each subsequent Plan Year, each
Participant shall be given the opportunity to elect, on an election of benefits
form to be provided by the Administrator, which Benefit options he wishes to
select und purchase with his Employer Contributions and Salary Redirections. Any
such election shall be effective for any Benefit expenses incurred during the
Plan Year which follows the end of the Election Period. With regard to
subsequent annual elections, the following options shall apply:
(a) A Participant or Employee who railed to initially elect to
participate may elect different or new Benefits under the Plan during the
Election Period;
(h) A Participant may terminate his participation in the Plan by
notifying the Administrator in writing during the Election Period that he
does not want to participate in the Plan for the next Plan Year;
(c) .An Employee who elects not to participate for the Plan Year
following the Election Period will have to wait until the next Election
Period before again electing to participate in the Plan.
5.3 FAILURE TO ELECT
Any Participant failing to complete an election of benefits form pursuant
to Section 5.2 by the end of the applicable Ejection Period shall be deemed to
have made the same Benefit option elections as are then in effect for the
current Plan Year. The Participant shall also be deemed to have elected Salary
Redirection in an amount necessary, when added to available Employer
Contributions, to purchase such Benefit options.
5.4 CHANGE OF ELECTIONS
(a) Any Participant may change a Benefit election after the Plan Year
(to which such election relates) has commenced and make new elections with
respect to the remainder of such Plan Year if, under the facts and
circumstances, the changes are necessitated by and are consistent with a
change in status which is acceptable under rules and regulations adopted by
the Department of the Treasury, the provisions of which art incorporated by
reference. Notwithstanding anything herein to the contrary, if the rules
and regulations conflict, then such rules and regulations shall control.
In general, a change in election is not consistent if the change in
status is the Participant's divorce, annulment or legal separation from a
spouse, the death of a spouse or dependent, or a dependent ceasing to
satisfy the eligibility requirements for coverage, and the Participant's
election under the Plan is to cancel accident or health insurance coverage
for any individual other than the one involved in such event. In addition,
if the Participant, spouse or dependent gains
or loses eligibility for coverage, then a Participant's election under the
Plan to cease or decrease coverage for that individual under the Plan
corresponds with that change in status only if coverage for that individual
becomes applicable or is increased under the family member plan.
Regardless of the consistency requirement, if the individual, the
individual's spouse, or dependent becomes eligible for continuation
coverage under the Employer's group health plan as provided in Code Section
4980B or any similar state law, then the individual may elect to increase
payments under this Plan in order to pay for the continuation coverage.
However, this does not apply for COBRA eligibility due to divorce,
annulment or legal separation.
Any new election shall be effective at such time as the Administrator
shall prescribe, but not earlier than the first pay period beginning after
the election form is completed and returned to the Administrator. For the
purposes of this subsection, a change in status shall only include the
following events or other events permitted by Treasury regulations:
(1) Legal Marital Status: events that change a Participant's legal
marital status, including marriage, divorce, death of a spouse, legal
separation or annulment;
(2) Number of Dependents: Events that change a Participants number of
dependents, including birth, adoption, placement for adoption, or
death of a dependent;
(3) Employment Status: Any of the following events that change the
employment status of the Participant, spouse, or dependent:
termination or commencement of employment, a strike or lockout,
commencement or return from an unpaid leave of absence, or a change in
worksite. In addition, if the eligibility conditions of this Plan or
other employee benefit plan of the Employer of the Participant,
spouse, or dependent depend on the employment status of that
individual and there is a change in that individual's employment
status with the consequence that the individual becomes (or ceases to
be) eligible under the plan, then that change constitutes a change in
employment under this subsection;
(4) Dependent satisfies or ceases to satisfy the eligibility
requirements: An event that causes the Participant's dependent to
satisfy or cease to satisfy the requirements for coverage due to
attainment of age, student status, or any similar circumstance; and
(5) Residency: A change in lie place of residence of the Participant,
spouse or dependent.
(b) Notwithstanding subsection (a), the Participants may change an
election for accident or health coverage during a Plan Year and make a new
election that corresponds with the special enrollment rights provided in
Code Section 9801(f). Such change shall take place on a prospective basis.
(c) Notwithstanding subsection (a), in the event of a judgment,
decree, or order ("order") resulting from a divorce, legal separation,
annulment, or change in legal custody (including a qualified medical child
support order defined in ERISA Section 609) which requires accident or
health coverage for a Participant's child (including a foster child who is
a dependent of the Participant):
(1) The Plan may change an election to provide coverage for the
child if the order requires coverage under the Participant's plan; or
(2) The Participant shall be permitted to change an election to
cancel coverage for the child if the order requires the former spouse
to provide coverage or such child, under that individuals plan and
such coverage is actually provided.
(d) Notwithstanding subsection (a), a Participant may change
elections to cancel accident or health coverage for the Participant or
the Participant's spouse or dependent if the Participant or the
Participants spouse or dependent is enrolled in the accident or health
coverage of the Employer and becomes entitled to coverage (i.e.,
enrolled) under Part A or Part B of the Title XVIII of the Social
Security Act (Medicare) or Title XIX of the Social Security Act
(Medicaid), other than coverage consisting solely of benefits under
Section 1928 of the Social Security Act (the program for distribution
of pediatric vaccines). If the Participant or the Participants spouse
or dependent who has been entitled to Medicaid or Medicare coverage
loses eligibility, that individual may prospectively elect coverage
under the Plan if a benefit package option under the Plan provides
similar coverage.
(e) If the cost of a Benefit provided under the Plan increases or
decreases during a Plan Year, then the Plan shall automatically
increase or decrease, as the case may be, the Salary Redirections of
all affected Participants for such Benefit. Alternatively, if the cost
of a benefit package option increases significantly, the Administrator
shall permit the affected Participants to either make corresponding
changes in their payments or revoke their elections and, in lieu
thereof, receive on a prospective basis coverage under another benefit
package option with similar coverage, or drop coverage prospectively
if there is no benefit package option with similar coverage.
A cost increase or decrease refers to an increase or decrease in
the amount of elective contributions under the Plan, whether resulting
from an action taken by the Participants or an action taken by the
Employer.
If the coverage under a Benefit is significantly curtailed or
ceases during a Plan Year, affected Participants may revoke their
elections of such Benefit and, in lieu thereof, elect to receive on a
prospective basis coverage under another plan with similar coverage,
or drop coverage prospectively if no similar coverage is offered.
If, during the period of coverage, a new benefit package option
or other coverage option is added, an existing benefit package option
is significantly improved, or an existing benefit package option or
other coverage option is
eliminated, then the affected Participants may elect the newly-added
option, or elect another option if an option has been eliminated
prospectively and make corresponding election changes with respect to
other benefit package options providing similar coverage. In addition,
those Eligible Employees who are not participating in the Plan may opt
to become Participants and elect the new or newly improved benefit
package option.
A Participant may make a prospective election change to add group
health coverage for the Participant, the Participants spouse or
dependent if such individual loses group health coverage sponsored by
a governmental or educational institution, including a state
children's health insurance program under the Social Security Act, the
Indian Health Service or a health program offered by an Indian tribal
government, a state health benefits risk pool, or a foreign government
group health plan.
A Participant may make a prospective election change that is on
account of and corresponds with a change made under the plan of a
spouse's, former spouses or dependent's employer if (1) the cafeteria
plan or other benefits plan of the spouse's, former spouse's or
dependent's employer permits its participants to make a change; or (2)
the cafeteria plan permits participants to make an election for a
period of coverage that is different from the period of coverage under
the cafeteria plan of a spouse's, former spouse's or dependents
employer.
ARTICLE VI
ERISA PROVISIONS
6.1 CLAIM FOR BENEFITS
(a) Any claim for Benefits underwritten by an Insurance Contract
shall be made to the Insurer. If the Insurer denies any claim, the
Participant or beneficiary shall follow the Insurer's claims review
procedure. Any other claim for Benefits shall be made to the
Administrator. If the Administrator denies a claim, the Administrator
may provide notice to the Participant or beneficiary, in writing,
within 90 days after the claim is filed unless special circumstances
require an extension of time for processing the claim. If the
Administrator does not notify the Participant of the denial of the
claim within the 90 day period specified above, then the claim shall
be deemed denied. The notice of a denial of a claim shall be written
in a manner calculated to be understood by the claimant and shall set
forth:
(1) specific references to the pertinent Plan provisions on which
the denial is based;
(2) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation as
to why such information is necessary; and
(3) an explanation of the Plan's claim procedure.
(b) Within 60 days after receipt of the above material, the
claimant shall have a reasonable opportunity to appeal the claim
denial to the
Administrator for a full and fair review, the claimant or his duly
authorized representative may:
(1) request a review upon written notice to the Administrator;
(2) review pertinent documents; and
(3) submit issues and comments in writing.
(c) A decision on the review by the Administrator will be made
not later than 60 days after receipt of a request for review, unless
special circumstances require an extension of time for processing
(such as the need to hold a hearing), in which event a decision should
be rendered as soon as possible, but in no event later than 120 days
after such receipt. The decision of the Administrator shall be written
and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, with specific
references to the pertinent Plan provisions on which the decision is
based.
6.2 NAMED FIDUCIARY
The Administrator shall be the named fiduciary pursuant to ERISA Section
402 and shall be responsible for the management and control of the operation and
administration of the Plan.
6.3 GENERAL FIDUCIARY RESPONSIBILITIES
The Administrator and any other fiduciary under ERISA shall discharge their
duties with respect to this Plan solely in the interest of the Participants and
their beneficiaries and
(a) for the exclusive purpose of providing Benefits to
Participants and their beneficiaries and defraying reasonable expenses
of administering the Plan;
(b) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; and
(c) in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are consistent with
ERISA.
6.4 NONASSIGNABILJTY OF RIGHTS
The right of any Participant to receive any reimbursement under
the Plan shall not be alienable by the Participant by assignment or
any other method, and shall not be subject to the rights or creditors,
and any attempt to cause such right to be so subjected shall not be
recognized, except to such extent as may be required by law.
ARTICLE VII
ADMINISTRATION
7.1 PLAN ADMINISTRATION
The operation of the Plan shall be under the supervision of the
Administrator. It shall be a principal duty of the Administrator to see that the
Plan is carried out in accordance with its terms, and for the exclusive benefit
of employees entitled to participate into Plan. The Administrator shall have
full power to administer the Plan in all of its details, subject, however, to
the pertinent provisions of the Code. The Administrator's powers shall include,
but shall not be limited to the following authority, in addition to all other
powers provided by this Plan:
(a) To make and enforce such rules and regulations as the
Administrator deems necessary or proper for the efficient
administration of the Plan;
(b) To interpret the Plan, the Administrator's interpretations
thereof in good faith to be final and conclusive on all persons
claiming benefits by operation of the Plan;
(c) To decide all questions concerning the Plan and the
eligibility of any person to participate in the Plan and to receive
benefits provided by operation of the Plan;
(d) To reject elections or to limit contributions or Benefits for
certain highly compensated participants if it deems such to be
desirable in order to avoid discrimination under the Plan in violation
of applicable provisions of the Code;
(e) To provide Employees with a reasonable notification of their
benefits available by operation of the Plan;
(f) To appoint such agents, counsel, accountants, consultants,
and actuaries as may be required to assist in administering the Plan.
Any procedure, discretionary act, interpretation or construction taken by
the Administrator shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to comply with the terms of Code Section 125 and the
Treasury regulations thereunder.
7.2 EXAMINATION OF RECORDS
The Administrator shall make available to each Participant, Eligible
Employee mid any other Employee of the Employer such records as pertain to their
interest under the Plan for examination at reasonable times during nominal
business hours.
7.3 PAYMENT OF EXPENSES
Any reasonable administrative expenses shall be paid by the Employer unless
the Employer determines that administrative costs shall be borne by the
Participants under the Plan or by any Trust Fund which may he established
hereunder. The Administrator may impose reasonable conditions for payments,
provided that such conditions shall not discriminate in favor of highly
compensated employees.
7.4 INSURANCE CONTROL CLAUSE
In the event of a conflict between the terms of this Plan and the terms of
an Insurance Contract of an independent third party Insurer whose product is
then being used in conjunction with this Plan, the terms of the Insurance
Contract shall control as to those Participants receiving coverage under such
Insurance Contract. For this purpose, the Insurance Contract shall control in
defining the persons eligible for insurance, the dates of their eligibility, the
conditions which 'mist be satisfied to become insured, if any, the benefits
Participants are entitled to and the circumstances under which insurance
terminates.
7.5 INDEMNIFICATION OF ADMINISTRATOR
The Employer agrees to indemnify and to depend to the fullest extent
permitted by law any Employee serving as the Administrator or as a member of a
committee designated as Administrator (including any Employee or former Employee
who previously served as Administrator or as a member of such committee) against
all liabilities, damages, costs and expenses (including attorney's fees and
amounts paid in settlement of any claims approved by the Employer) occasioned by
any act or omission to act in connection with the Plan, if such act or omission
is in good faith.
ARTICLE VIII
AMENDMENT OR TERMINATION OF PLAN
8.1 AMENDMENT
The Employer, at any time or from time to time, may amend any or all of the
provisions of the Plan without the consent of any Employee or Participant. No
amendment shall have the effect of modifying any benefit election of any
Participant in effect at the time of such amendment, unless such amendment is
made to comply with Federal, state or local laws, statutes or regulations.
8.2 TERMINATION
The Employer is establishing this Plan with the intent hat it will be
maintained for an indefinite period of time. Notwithstanding the foregoing, the
Employer reserves the right to terminate this Plan, in whole or in part, at any
time. In the event the Plan is terminated, no further contributions shall be
made. Benefits under any Insurance Contract shall be paid in accordance with the
terms of the Contract.
ARTICLE IX
MISCELLANEOUS
9.1 PLAN INTERPRETATION
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner. This Plan shall be read in its entirety and not
severed except as provided in Section 9.12.
9.2 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all eases where they would so apply.
9.3 WRITTEN DOCUMENT
This Plan, in conjunction with any separate written document which may be
required by law, is intended to satisfy the written Plan requirement of Code
Section 125 and any Treasury regulations thereunder relating to cafeteria plans.
9.4 EXCLUSIVE BENEFIT
This Plan shall be maintained for the exclusive benefit of the Employees
who participate in the Plan.
9.5 PARTICIPANT'S RIGHTS
This Plan shall net be deemed to constitute an employment contract between
the Employer and any Participant or to be a consideration or an inducement for
the employment of any Participant or Employee. Nothing contained in this Plan
shall be deemed to give any Participant or Employee the right to be retained in
the service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
9.6 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.7 EMPLOYERS PROTECTIVE CLAUSES
(a) Upon the failure of either the Participant or the Employer to
obtain the insurance contemplated by this Plan (whether as a result of
negligence, gross neglect or otherwise), the Participant's Benefits shall
be limited to the insurance premium(s), if any, that remained unpaid for the
period in question and the actual insurance proceeds, if any, received by the
Employer or the Participant as a result of the Participant's claim.
(b) The Employer's liability to the Participant shall only extend to
and shall be limited to any payment actually received by the Employer from
the Insurer. In the event that the full insurance Benefit contemplated is
not promptly received by the Employer within a reasonable time after
submission of a claim, then the Employer shall notify the Participant of
such facts and the Employer shall no longer have any legal obligation
whatsoever (except to execute any document called for by a settlement
reached by the Participant). The Participant shall be free to settle,
compromise or refuse to pursue the claim as the Participant, in his sole
discretion, shall see fit.
(c) The Employer shall not be responsible for the validity of any
Insurance Contract issued hereunder or for the Failure on the part of the
Insurer to make payments provided for under any Insurance Contract. Once
insurance is applied for or obtained, the Employer shall not be liable for
any loss which may result from the failure to pay Premiums to the extent
Premium notices are not received by the Employer.
9.8 NO GUARANTEE OF TAX CONSEQUENCFS
Neither the Administrator nor the Employer makes any commitment or
guarantee that any amounts paid to or for the benefit of a Participant under the
Plan will be excludable from the Participant's gross income for federal or state
income tax purposes, or that any other federal or state tax treatment will apply
to or be available to any Participant. It shall be the obligation of each
Participant to determine whether each payment under the Plan is excludable from
the Participant's gross income for federal and state income tax purposes, and to
notify the Employer if the Participant has reason to believe that any such
payment is not so excludable. Notwithstanding the Foregoing, the rights of
Participants under this Plan shall be legally enforceable.
9.9 INDEMNIFICATION OF EMPLOYER BY PARTICIPANTS
If any Participant receives one or more payments or reimbursements under
the Plan that arc not for a permitted Benefit, such Participant shall indemnify
and reimburse the Employer for any liability it may incur for failure to
withhold federal or state income tax or Social Security tax from such payments
or reimbursements. However, such indemnification and reimbursement shall not
exceed the amount of additional Federal and state income tax plus any penalties)
that the Participant would have owed if the payments or reimbursements had been
made to the Participant as regular cash compensation, plus the Participant's
share of any Social Security tax that would have been paid on such compensation,
less any such additional income and Social Security tax actually paid by the
Participant.
9.10 FUNDING
Unless otherwise required by law, contributions to the Plan need not be
placed in trust or dedicated to a specific Benefit, but may instead be
considered general assets of the Employer until the Premium Expense required
under the Plan has been paid. Furthermore, and unless otherwise required by law,
nothing herein shall be construed to require the Employer or the Administrator
to maintain any fund or segregate any amount for the benefit of any Participant,
and no Participant or other person shall have any claim against, right to, or
security or other interest in, any fund, account or asset of the Employer from
which any payment under the Plan may be made.
9.11 GOVERNING LAW
This Plan is governed by the Code and the Treasury regulations issued
thereunder (as they might be amended from time to time). In no event shall the
Employer guarantee the favorable tax treatment sought by this P1st To the extent
not preempted by Federal law, the provisions of this Plan shall be construed,
enforced and administered according to the laws of the State of Maryland.
9.12 SEVERABILITY
If any provision of the Plan is held invalid or unenforceable, its
invalidity or unenforceability shall sot affect any other provisions of the
Plan, and the Plan shall be construed and enforced as if such provision had not
been included herein.
9.13 CAPTIONS
The captions contained herein are inserted only as a matter of convenience
and for reference, and in no way define, limit, enlarge or describe the scope or
intent of the Plan, nor in any way shall affect the Plan or the construction of
any provision thereof
9.14 CONTINUATION OF COVERAGE
Notwithstanding anything in the Plan to the contrary, in the event any
benefit under this Plan subject to the continuation coverage requirement of Code
Section 4980B becomes unavailable, each Participant will be entitled to
continuation coverage as prescribed in Code Section 4980B.
9.15 FAMILY AND MEDICAL LEAVE ACT
Notwithstanding anything in the Plan to the contrary, in the event any
benefit under this Plan becomes subject to the requirements of the Family and
Medical Leave Act and regulations thereunder, this Plan shall be operated in
accordance with Regulation 1 125-3.
9.16 HEALTH INSURANCE PORTABILITY AND ACCOTJNTABILITV ACT
Notwithstanding anything in this Plan to the contrary, this Plan shall be
operated in accordance with HIPPA and regulations thereunder.
9.17 UNIFORM SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service shall be
provided in accordance with USERRA and the regulations thereunder.
IN WITNESS WHEREOF, this Plan document is hereby executed this
__________day of________________________________.
Dialysis Corporation of America
By ______________________
EMPLOYER
CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of Dialysis Corporation of America (the
Corporation) hereby certifies that the following resolutions were duly adopted
by the board of directors of the Corporation on __________________________ and
that such resolutions have not been modified or rescinded as of the date hereof
RESOLVED, that the form of Cafeteria Plan effective September 1,2002,
presented to this meeting is hereby approved and adopted and that the proper
officers of the Corporation are hereby authorized and directed to execute and
deliver to the Administrator of the Plan one or more counterparts of the Plan.
RESOLVED, that the Administrator shall be instructed to take such actions
that are deemed necessary and proper in order to implement the Plan, and to set
up adequate accounting and administrative procedures to provide benefits under
the Plan.
RESOLVED, that the proper officers of the Corporation shall act as soon as
possible to notify the employees of the Corporation of the adoption of the
Cafeteria Plan by delivering to each employee a copy of the summary description
of the Plan in the form of the Summary Plan Description presented to this
meeting, which form is hereby approved.
The undersigned further certifies that attached hereto as Exhibits A and B,
respectively, are true copies of Dialysis Corporation of America Section 125
Plan and the Summary Plan Description approved and adopted in the foregoing
resolutions.
________________________________
Secretary
________________________________
Date: