Health Reimbursement Arrangement Plan-hra

8/2/2019 Health Reimbursement Arrangement Plan-hra

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Copyright Envision SBS. 2007. All rights reserved. Protected by the copyright laws of the United States & Canada and by international treaties. IT IS ILLEGALAND STRICTLY PROHIBITED TO DISTRIBUTE, PUBLISH, OFFER FOR SALE, LICENSE OR SUBLICENSE, GIVE OR DISCLOSE TO ANY OTHER PARTY,THIS PRODUCT IN HARD COPY OR DIGITAL FORM. ALL OFFENDERS WILL BE SUED IN A COURT OF LAW.

HEALTH REIMBURSEMENT ARRANGEMENT (HRA) PLAN

While there is no requirement that you use a third party administrator, it is important that your Health ReimbursementArrangement complies with all IRS, DOL, and ERISA guidelines. For this reason, most tax professionals encouragetheir clients to use a company that specializes in this type of employee benefit plan.

This Health Reimbursement Arrangement (HRA) Plan (the Plan) is made and effective [DATE],

BETWEEN: [YOUR COMPANY NAME] (the "Company"), a corporation organized and existingunder the laws of the [State/Province] of [STATE/PROVINCE], with its head officelocated at:

[YOUR COMPLETE ADDRESS]

AND: [EMPLOYEE NAME] (the "Employee"), an individual having his/her main residence located at:

[COMPLETE ADDRESS]

RECITALS

WHEREAS, [YOUR COMPANY NAME] desires to provide medical care benefits relating to expenses notcovered under a medical policy;

RESOLVED, Health Reimbursement accounts shall be maintained for each full-time employee from whichcovered expenses (as defined in Section 213 of the Internal Revenue Code) for the employee or theirdependents shall be reimbursed. [YOUR COMPANY NAME]-funded reimbursements to an employee shallnot exceed [AMOUNT] during one calendar year. [YOUR COMPANY NAME]-funded reimbursements to anemployee with dependents shall not exceed [AMOUNT] during one calendar year.

RESOLVED, the submission of medical expenses must be in a form and in sufficient detail to meet therequirements of the [YOUR COMPANY NAME]. Expenses may be submitted until [DATE] for the previouscalendar year.

RESOLVED, the Plan shall be administered in a nondiscriminatory manner (as defined in Section 150(h) ofthe Internal Revenue Code) and shall remain in effect until modified or terminated by a later resolution.

RESOLVED, the plan shall reimburse former employees for medical care expenses up to an amount equalto the unused reimbursement amount remaining at retirement or other termination of employment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, theparties hereto, intending, to be legally bound, agree as follows:

1. PURPOSE

Effective as of [DATE PLAN GOES INTO EFFECT], [YOUR COMPANY NAME] establishes a HealthReimbursement Arrangement Plan effective [DATE] for the benefit of all full-time employees (working atleast [NUMBER] hours or more per week) and their dependents (employee's spouse and minor children)under Section 105(b), (e) of the Internal Revenue Code as from time to time amended.

The provisions of the Plan, as set forth herein, shall only apply to an eligible employee who is in the active

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employ of the Employer on or after [DATE OF ELIGIBILITY].

2. DEFINITIONS AND CONSTRUCTION

Definitions

Where the following words and phrases appear in this Plan, they shall have the respective meanings setforth in this Article, unless the context clearly indicates to the contrary.

Principal Entities

a) Plan: The HRA Plan for Employees working for [YOUR COMPANY NAME], the Plan set forthherein, as amended from time to time.

b) Employer: [YOUR COMPANY NAME], a [LEGAL STATUS (I.E., A CORPORATION)] organizedand existing under the laws of the State of [NAME OF STATE], or its successor or successors.

c) Committee: The person or persons appointed pursuant to Section 6 to assist the Employer withPlan Administration in accordance with said Section.

d) Employee: Any person who, on or after the Effective Date, is receiving remuneration for personalservices rendered to the Employer.

e) Participant: An Employee participating in the Plan in accordance with the provisions of Section 3.1.

f) Fiduciaries: The Employer and the Committee, but only with respect to the specific responsibilitiesof each for Plan administration, all as described in Section 6.1.

2.3 Determination of Contribution and Other Definitions

a) Participation: The period or periods during which an Employee participates in this Plan asdetermined in accordance with Section 3.1.

b) Compensation: The total of all amounts paid to a Participant for a given Year by the Employer forpersonal services and reported as wages for purposes of income tax, or substitute, less (1)amounts paid while covered by a collective bargaining agreement which does not provide forinclusion hereunder, (2) the cost of providing group term life insurance in excess of the statutoryamount, (3) reimbursed moving expenses, (4) any other amount required to be reported which isnot direct compensation for services performed and (5) amounts in excess of [AMOUNT].

c) Effective Date: [THE EFFECTIVE DATE], the date on which the provisions of this Plan becameeffective.

d) Year: The 12-month period commencing on January 1 and ending on December 31.

e) Code: The Internal Revenue Code and any other Codes relating to issues contained in this Plan, as

amended from time to time.

2.4 ConstructionThe masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender,unless the context clearly indicates to the contrary. The words "hereof," "herein," "hereunder" and othersimilar compounds of the word "here" shall mean and refer to the entire Plan and not to any particularprovision, Section or Article. Article and Section headings are for convenience of reference and not intendedto add to or subtract from the terms of this Plan.

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3. PARTICIPATION AND NOTIFICATIONS

ParticipationExcept for an Employee who, for the entire Year was covered by a collective bargaining agreement whichdoes not provide for his inclusion hereunder, an Employee shall participate in the Plan for any Year in which

he meets the following requirements:

a) He/she has performed services for the Employer at some time during the Year

b) His/her Compensation for the Year is [AMOUNT] or greater, and

c) the given Year is preceded by a [NUMBER]-year period that includes at least three Years in each ofwhich he/she has performed services for the Employer at some time during the Year

Notifications[YOUR COMPANY NAME] shall notify an Employee in writing when he first becomes a Participant. Suchnotification shall include information required to be furnished by [GOVERNMENT AGENCY]. Suchnotification shall also advise the Participant that he should establish a Health Reimbursement Arrangement

and the date by which the establishment should be accomplished. If the Participant fails to notify theCommittee of the establishment of a HRA as of the prescribed date, the Committee shall choose a HealthReimbursement Arrangement Plan for such Participant and execute such forms and documents as may benecessary to establish a Health Reimbursement Arrangement Plan for and on behalf of such Participant.

4. CONTRIBUTIONS

NOTE: The following Section 4.1 incorporates the requirements of [CODE] regarding the permitted disparityin plan contributions. The contribution percentage for compensation above a certain level cannot exceedthe contribution percentage on compensation below a certain level by more than the lesser of:

a) the contribution percentage on compensation below a certain level, or

b) the greater of:

i) [%], or

ii) the percentage equal to the portion of the rate under Internal Revenue Code

Employer Contributions On and After [DATE]Each Year the Employer shall determine whether or not a contribution will be made under the Plan for thatYear. If the Employer determines that a contribution will be made for a Year, then, subject to the provisionsof Section 4.4, the contribution made on behalf of each Employee who is a Participant for that Year shall beequal to:

a) a percentage of Compensation, as determined by the Employer, payable to all Participants;

b) to the extent any contribution has not been allocated under (a) above, an additional allocation shallbe made to all Participants considering only their compensation in excess of the social securitywage base for the Year. The percentage for any additional allocation under this Section 4.1(b) shallnot exceed the lesser of:

i) the percentage used under Section 4.1(a) above, or

ii) the greater of:


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a) [%], or

b) the percentage equal to the portion of the rate under Internal Revenue Code (ineffect as of the beginning of the Year).

c) to the extent any contribution remains after the allocations under Sections 4.1(a)and (b) above, the remainder shall be allocated to all Participants based on theirCompensation for the Year.

However, the contribution made on behalf of any Participant for any Year may not exceed [AMOUNT](*minus any Employer contribution made on the Employee's behalf pursuant to Section 4.2). Except to theextent provided in this Section 4.1, contributions to any one Participant shall bear a uniform relationship tothe Compensation of each Participant receiving a contribution under this Plan.

The [AMOUNT] limitation referred to above shall be increased in accordance with the increases made to thelimit defined under [CODE].

The contributions of the Employer made on behalf of each Participant shall be paid directly to, and

deposited in, the Bank Account of each such Participant and shall be paid no later than [NUMBER] monthsafter the close of the Year.

Contributions by ParticipantsParticipants are permitted to make contributions under this Plan but are subject to the [AMOUNT] limitationdefined under the Internal Revenue Code.

5. ADMINISTRATION

Fiduciary ResponsibilityThe Fiduciaries shall have only those specific powers, duties, responsibilities and obligations as arespecifically given them under this Plan. The Employer shall have the sole responsibility for making thecontributions provided for under Section 4.1 and Section 4.2, and shall have the sole authority to appointand remove members of the Committee, to choose the Health Reimbursement Arrangement Plan that willbe utilized for Participants who either fail to choose their own or choose a Health Reimbursement

Arrangement Plan that will not accept certain contributions made hereunder, and to amend or terminate thisPlan. The Committee shall have the sole responsibility for the administration of this Plan, whichresponsibility is specifically described in this Plan.

Appointment of CommitteeThe Plan shall be administered by a Committee consisting of at least one person who shall be appointed byand serve at the pleasure of the Board of Directors of the Employer. All usual and reasonable expenses ofthe Committee shall be paid by the Employer. Any members of the Committee who are Employees shall notreceive compensation with respect to their services for the Committee.

Claims Procedure

The Committee shall make all determinations as to the eligibility of any Employee for Plan Participation oran Employer contribution. Any denial by the Committee of the claim for benefits under the Plan by anEmployee shall be stated in writing by the Committee and delivered or mailed to the Employee; and suchnotice shall set forth the specific reasons for the denial, written to the best of the Committee's ability in amanner that may be understood without legal or actuarial counsel. In addition, the Committee shall afford areasonable opportunity to any Employee whose claim for benefits has been denied for a review of thedecision denying the claim.

Records and Reports



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The Committee shall exercise such authority and responsibility as it deems appropriate in order to complywith governmental regulations relating to records of Employer contributions made hereunder, notifications toParticipants, and reports, if any, to the [GOVERNMENT AGENCY] or to the [LABOR DEPARTMENT].

Other Committee Powers and DutiesThe Committee shall have such duties and powers as may be necessary to discharge its duties hereunder,

including, but not by way of limitation, the following:

a) to construe and interpret the Plan and decide all questions of eligibility;

b) to prepare and distribute, in such manner as the Committee determines to be appropriate,information explaining the Plan;

c) to receive from the Employer and from Participants such information as shall be necessary forthe proper administration of the Plan;

d) to furnish the Employer, upon request, such annual reports with respect to the administration ofthe Plan as are reasonable and appropriate;

e) to appoint or employ individuals to assist in the administration of the Plan and any other agentsit deems advisable, including legal counsel;

f) to follow the Employer's choice of Health Reimbursement Arrangement Plan when it is theresponsibility of the Committee hereunder to establish a Health Reimbursement Arrangement Planfor a Participant.

The Committee shall have no power to add to, subtract from or modify any of the terms of the Plan, or tochange or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibilityunder the Plan.

Rules and DecisionsThe Committee may adopt such rules as it deems necessary, desirable or appropriate. All rules anddecisions of the Committee shall be uniformly and consistently applied to all Participants in similarcircumstances. When making a determination or calculation, the Committee shall be entitled to rely uponinformation furnished by a Participant, the Employer or the legal counsel of the Employer.

Notifications and FormsThe Committee may require a Participant to complete and file with the Committee any and all formsapproved by the Committee, and to furnish all pertinent information requested by the Committee. TheCommittee may rely upon all such information so furnished it, including the Participant's current mailingaddress.

Indemnification of the CommitteeThe Committee and the individual members thereof shall be indemnified by the Employer against any andall liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of thePlan, including expenses reasonably incurred in the defense of any claim relating thereto.



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6. EMPLOYER RIGHTS

Non-guarantee of EmploymentNothing contained in this Plan shall be construed as a contract of employment between the Employer andany Employee, or as a right of any Employee to be continued in the employment of the Employer, or as alimitation of the right of the Employer to discharge any of its Employees, with or without cause.

Action by EmployerAny action by the Employer under this Plan may be by any person or persons duly authorized to take suchaction.

AmendmentsThe Employer reserves the right to make from time to time any amendment or amendments to this Planwhich do not cause any part of Employer contributions hereunder to be used for, or diverted to, any purposeother than the exclusive benefit of Participants, provided however, that the Employer may make anyamendment it determines necessary or desirable, with or without retroactive effect, to comply with the Codeor any other federal law and regulations issued pursuant thereto.

Successor Employer

In the event of the dissolution, merger, consolidation or reorganization of the Employer, provision may bemade by which the Plan will be continued by the successor; and, in that event, such successor shall besubstituted for the Employer under the Plan. The substitution of the successor shall constitute anassumption of Plan liabilities by the successor and the successor shall have all of the powers, duties andresponsibilities of the Employer under the Plan.

Right to TerminateThe Plan is intended to be permanent but the Employer reserves the right to terminate the Plan at any time.In the event of the dissolution, merger, consolidation, or reorganization of the Employer, the Plan shallterminate unless it is continued by a successor to the Employer in accordance with Section 6.4.

IN WITNESS WHEREOF, the parties have executed this Agreement at [DESIGNATE PLACE OFEXECUTION], with full knowledge of its content and significance and intending to be legally bound by theterms hereof the day and year first above written.

COMPANY EMPLOYEE

Authorized Signature Authorized Signature

Print Name and Title Print Name and Title



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ENROLLMENT FORM(Please Print All Information)

Participant Name: Social Security Number:

Address: Date of Birth:

Phone Number: Email Address:

Pay Period Weekly Bi-Weekly Semi-Monthly Monthly

New Hire (Hire date: / / ) Key Employee (Officer or Owner) Open Enrollment

Change in Status Explanation:

PREMIUM CONTRIBUTIONS

I elect to participate in the HRA Plan Yes No

The amount of salary reduction needed to pay premiums under the insured portions of the Plan will bedetermined by my employer. This amount will be changed as necessary, if premium charged by theinsurance company changes.

Check all that apply: Health Insurance Group Life Insurance Disability Insurance Dental Insurance Other(s)

MEDICAL REIMUBURSEMENT ACCOUNT

I elect to participate in the HRA Plan Yes No (not to exceed Employer Limit $ )

$ per pay x (# of pays) = $ Annually

DEPENDENT CARE ACCOUNT

I elect to participate in the HRA Plan Yes No (not to exceed [$], [$] if married filing separately)

$ per pay x (# of pays) = $ Annually

I request that my periodic paychecks for the plan year [YEAR] be reduced on a pro rata pro-tax basis by thesum of my medical reimbursement, dependent care and premium contributions to the plan, such amount tobe allocated among the benefits I selected above. I understand this election form cannot be revoked or

changed during the plan year unless there is a change in my status (e.g. marriage, divorce, death of spouseor child, birth or adoption of child, and change of employment of spouse) which justifies the revocation orchange. I understand I can be reimbursed only for qualified expenses incurred during the plan year and thatunused amounts may not be carried over into future plan years. I understand any unused dollars remainingin my account(s) at the end of the plan year will be forfeited. I have examined this agreement and to thebest of my knowledge, it is true, correct and complete.

Employee Signature: Date:


Health Reimbursement Arrangement Plan-hra

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