1 Plan Document and Summary Plan Description Health Care Flexible Spending Account A Component of the Mayo Flexible Spending Account Plan January 2015 benefits TO BUILD ON
2 Health Care Flexible Spending Account (A Component of the Mayo Flexible Spending Account Plan) January2015
3 HOW TO USE THIS DOCUMENT HOW TO USE THIS DOCUMENT The Table of Contents beginning on page 6 provides an overview of the detailed information in the Plan. You will find a glossary of terms used in this document beginning on page 47. To quickly search for a specific word or phrase, simply press the Ctrl and F keys simultaneously to open the search function. 521.MC rev Page 3 of 51
4 INTRODUCTION INTRODUCTION Mayo Clinic sponsors the Mayo Health Care Flexible Spending Account Plan to reimburse eligible employees of Mayo Clinic and other participating employers for health care expenses on a pre-tax basis. Effective January 1, 2015, this document sets forth the benefits under the Health Care Flexible Spending Account ( Plan ) which is a component of the Mayo Flexible Spending Account Plan. There are separate summaries for the Dependent Care Flexible Spending Account, Pre-Tax Health Savings Account Plan which are the other components of the Mayo Flexible Spending Account Plan. This document replaces all previous Plan statements and descriptions. Because this document is intended to give employees an easily understood explanation of the Plan, it also serves as the summary plan description. Privacy rules required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) are part of this Plan and are stated in a separate document that is available from the Plan Administrator. Many of the provisions in the Plan are interrelated. Therefore, please review this entire document so that you understand fully what your benefits and responsibilities are under this Plan. The right of Mayo Clinic to amend or terminate this Plan is explained in the administrative section of this document. The pre-tax payments under this Plan are permitted under Section 125 of the Internal Revenue Code, subject to certain rules and limitations, including the requirement of a written plan document. This document includes the written Pre-Tax Premium Payment Rules for this Plan ( Pre-Tax Premium Rules ). The Plan will be administered in accordance with these rules and limitations and with any subsequent amendment to or clarification of the rules and limitations. The Pre-Tax Premium Rules are not subject to ERISA. The plan year for the Premium Payment Rules is the calendar year. You should also consider the fact that an adult dependent child who may be eligible for coverage under the Mayo Medical Plan is not an eligible eligible family member under this Plan unless that adult child is your tax dependent for Federal income tax purposes. If you have any questions about whether your child is a tax dependent, please consult your tax advisor. 521.MC rev Page 4 of 51
5 CONTACT INFORMATION CONTACT INFORMATION Mayo Clinic Health Soultions is the claim administrator for the Health Care Flexible Spending Account and processes claims and answers claim questions for the Plan. Mayo Clinic Health Solutions customer service representatives are available to answer any questions or concerns regarding Plan. Phone lines are open from 7 a.m. to 7 p.m. (Central Time) Monday through Friday (excluding holidays). For enrollment or eligibility questions, please contact Mayo Clinic s Employee Service Center. The Employee Service Center is your contact for this Plan. Phone lines are open from 7 a.m. to 6 p.m. (Central Time) Monday through Friday (excluding holidays). QUESTIONS ABOUT PLAN Mayo Clinic Health Solutions Street NW Rochester, MN (local) (toll free) TDD at (toll free) QUESTIONS ABOUT ENROLLMENT/ELIGIBILITY Mayo Clinic Employee Service Center 200 First Street SW Rochester, MN (local) (toll free) COBRA ADMINISTRATION Discovery Benefits, Inc. PO Box 2079 Omaha, NE M-F, 7 a.m. 7 p.m. CST The Employee Service Center and Mayo Clinic Health Solutions Customer Service have access to translation services to meet the needs of many non-english speaking persons. El presente Resumen del Plan de Descripción, que también sirve como documento del plan, está redactado en inglés y ofrece detalles sobre sus derechos y beneficios bajo el Plan Médico de Mayo. Si tiene alguna dificultad para entender cualquier parte de este documento, por favor comuníquese con el Centro para Servicios al Empleado o con el Servicio de Atención al Cliente de Mayo Clinic Health Solutions, a los números que constan abajo. 521.MC rev Page 5 of 51
6 ELIGIBILITY AND PARTICIPATION Table of Contents HOW TO USE THIS DOCUMENT...3 INTRODUCTION...4 CONTACT INFORMATION...5 ELIGIBILITY AND PARTICIPATION...8 Who is eligible for coverage?...8 When You Can Enroll...9 How do I pay for the cost of coverage I elect?...9 Can I change or cancel my enrollment during the year?...10 What if I have questions about enrolling or changing my election after a change in status?...12 When does my coverage become effective?...12 What happens to my Plan coverage at retirement?...12 If I die, what happens to coverage for my dependents at my death?...13 WHEN DOES COVERAGE END?...14 Employee Coverage Ends...14 Effect of Termination of Coverage...14 Effect of Return to Employment...15 Dependent Coverage Ends...15 Additional Termination of Coverage Rules...15 CONTINUATION OF HEALTH CARE COVERAGE UNDER COBRA...16 COBRA Eligibility...16 Notification of COBRA Continuation Coverage Election...17 You Must Give Notice of Certain Qualifiying Events...17 How is COBRA Coverage Provided?...18 What is the Length of COBRA Continuation Coverage...18 Election of COBRA Continuation Coverage...18 Procedures to Elect COBRA Continuation Coverage...18 Cost of COBRA Continuation Coverage...18 Payment for COBRA Continuation Coverage...19 Termination of COBRA Continuation Coverage Before the End of the Maximum Coverage Period...19 Keep Your Plan Informed of Address Changes...19 HEALTH CARE FLEXIBLE SPENDING ACCOUNT...20 Annual Contributions...20 Employee Contributions...20 Reimbursement Information...21 Tax Benefits...21 Definition of Dependent...21 Information Regarding Your Account...21 ELIGIBLE EXPENSES...23 INELIGIBLE EXPENSES...27 CLAIM PAYMENT AND APPEAL PROCEDURES...30 STANDARD CLAIM PROCEDURE...31 Filing an Initial Claim...31 Time for Filing a Claim...31 Filing a Claim...31 Special Rules for Filing Orthodontia Claims...32 Claim Decision...33 Claim Payment MC rev Page 6 of 51
7 ELIGIBILITY AND PARTICIPATION APPEAL PROCEDURE FOR STANDARD CLAIMS...34 Filing First Level Appeal (Standard Claim Process)...34 Time for Filing First Level Appeal...34 Filing of First Level Appeal...34 Appeal Decision...34 Filing Second Level Appeal (Standard Claim Process)...34 Time for Filing Second Level Appeal...34 Filing of Second Level Appeal...34 Appeal Decision...34 Special Rule for Claims Related to a Course of Treatment...35 GENERAL RULES APPLICABLE TO ALL CLAIM PROCEDURES...36 Authority...36 Time Limits for Commencing Legal Action...36 Exhaustion of Administrative Remedies...36 CLAIM ADMINISTRATION AND COMMITTEE CONTACTS FOR APPEAL PROCESS...37 GENERAL PROVISIONS...38 Applicable Law...38 Conformity with Governing Law...38 Construction of Terms...38 HIPAA Privacy Rules...38 Assignment Prohibited...38 No Guarantee of Employment...38 Non-Discrimination Policy...38 Plan Provisions Binding...39 Section Titles...39 PLAN ADMINISTRATION...40 Powers and Duties of the Plan Administrator...40 Records...40 Release of Medical Information...40 Assignment of Benefits...40 Amendment and Termination of Plan...41 ERISA STATEMENT OF RIGHTS...42 Receive Information About Your Plan and Benefits...42 Continue Group Health Plan Coverage...42 Prudent Actions by Plan Fiduciaries...42 Enforce Your Rights...43 Assistance with Your Questions...43 PLAN ADMINISTRATIVE INFORMATION...44 GLOSSARY MC rev Page 7 of 51
8 ELIGIBILITY AND PARTICIPATION ELIGIBILITY AND PARTICIPATION Who is eligible for coverage? If you are classified by a participating employer for payroll and personnel purposes as an employee who is regularly scheduled to work at least half-time [forty (40) hours or more per pay period] for the employer, you are considered an eligible employee and eligible to enroll in the Plan on the first day of employment and during the annual open enrollment. Regularly scheduled means your schedule on file with your employer is.5 FTE or more. A.4 FTE working extra hours does not qualify as regularly scheduled to work.5 FTE. An employer s classification is conclusive and binding for purposes of determining benefit eligibility under the Plan. No reclassification of an employee s or non-employee s status for any reason by a third party, whether by a court, governmental agency, or otherwise, and without regard to whether or not the employer agrees to the reclassification, shall make the employee retroactively or prospectively eligible for benefits. Any uncertainty regarding an employee s classification will be resolved by excluding that person from eligibility. Impact of Mayo Basic Coverage. Because Mayo Basic is a High Deductible Health Plan which allows you to make contributions toward a Health Savings Account (HSA), you and your family members are not eligible for the Health Care Flexible Spending Account Waiting Period. There is no waiting period. An eligible employee is eligible for coverage on the first day of employment or change to eligible status with the employer. FMLA Covered Persons. Family Medical Leave Act leaves of absence will be administered according to applicable law and policies established by the employer. Copies of FMLA policies are available from the employer. Military Leave Covered Persons. Military leaves of absence will be administered according to applicable law and policies established by the employer. Copies of military leave policies are available from the employer. Leave of Absence. Employees who would normally be working as a regular employee for the employer for at least the required number of hours per pay period to qualify as an eligible employee, but who are on an employer approved leave of absence, including approved personal, disability, parental, and/or military leave, remain eligible employees for the duration of the approved leave. Any contributions, however, that are made during unpaid or third-party paid leaves have to be made with after-tax dollars. 521.MC rev Page 8 of 51
9 ELIGIBILITY AND PARTICIPATION When You Can Enroll The following paragraphs describe enrollment. Initial Enrollment Eligible employees: An eligible employee 31 days from the date he/she first satisfies the definition of eligible employee to enroll for coverage in the Plan. This is called the initial enrollment period. Enrollment materials are available from the designated person of the employer. Enrollment materials must be completed and returned to the Plan Administrator or its designee within the 31 day period. If enrollment does not occur within this initial period, the eligible employee may enroll in the Plan only if a special enrollment situation occurs or during the annual open enrollment. 1. Open Enrollment Prior to the start of a coverage year, the Plan has an open enrollment period. If you wish to participate, you must enroll each year. At the time of open enrollment, you may elect to enroll, increase, decrease your contributions, or drop coverage. The terms of the open enrollment period, including duration of the election period, shall be determined by the Plan Administrator and communicated prior to the start of the open enrollment period. Once your elections are effective, you may not change them until the next annual enrollment period unless you experience a special enrollment. The open enrollment effective date of coverage is January Special Enrollment Due to a Change in Status Event Under certain circumstances, an eligible employee who did not enroll during the initial enrollment period may enroll in the Plan during the Plan year. These circumstances warrant "special enrollment." Special enrollment shall be permitted as identified in the Change in Status Events chart below. Time Period for Special Enrollment Period. The eligible employee must request special enrollment in the Plan within 31 days of the event. If the Plan Administrator or its designee does not receive the eligible employee s completed Change/Cancel Form within this deadline, the eligible employee loses special enrollment rights for that event. How do I pay for the cost of coverage I elect? Eligible employees electing coverage under the Plan pay their share of the cost of coverage through pretax salary reductions. This reduces taxable income reported by Mayo on your W-2. Therefore if you elect coverage under the Plan, you will pay your share through pre-tax salary reductions each payroll. Your taxable compensation from Mayo will be correspondingly reduced by your share of the cost of the coverage you elect. Because you pay your share of the cost of coverage pre-tax, however, federal law limits the circumstances under which you can make changes to your pre-tax election during the plan year. Unless you have a special enrollment or change in status event (as discussed in the next sub-section entitled Can I change or cancel my enrollment during the year? ) you will not be able to make changes until the next open enrollment period. 521.MC rev Page 9 of 51
10 ELIGIBILITY AND PARTICIPATION Can I change or cancel my enrollment during the year? Because you contribute to the Plan on a pre-tax basis, federal law limits your ability to change your benefit elections during the year. This means that once you make your enrollment, you cannot change or cancel unless you experience a change in status event. Your change must be both on account of and consistent with the change in status event. Change in status events and consistency requirements that apply to the Plan are described in the chart below. You may be asked to provide proof of your Change in Status Event and the date the event occurred. Failure to do so may result in denial of your change request. Change in Status Events Permitted Election Changes Marriage Enroll or increase coverage because of new dependent(s). Cancel or decrease coverage if you and/or any dependent(s) will be covered by spouse s Health Care Flexible Spending Account. Divorce or Annulment Enroll or increase coverage if you or any dependent(s) lost coverage under spouse s Health Care Flexible Spending Account. Decrease coverage in anticipation of reduced expenses because of spouse s loss of coverage. Death of Spouse Enroll or increase coverage if you and/or any dependent lost coverage under spouse s plan. Decrease coverage in anticipation of reduced expenses because of spouse s death. Change in Number of Dependents (birth, adoption, death, etc.) Dependent Loses Eligibility Dependent Gains Eligibility Enroll or increase coverage for new dependent. Decrease coverage in the event of the death of a dependent. Decrease coverage but only relating to anticipated expenses of dependent losing eligibility. Add or increase coverage but only relating to anticipated expenses of dependent gaining eligibility. 521.MC rev Page 10 of 51
11 ELIGIBILITY AND PARTICIPATION Change in Status Events Employment Status Changes of Spouse You or dependents gain or lose eligibility under another flexible benefit plan Permitted Election Changes Enroll or increase coverage because of loss of other coverage (e.g., if you were covered under your spouse s health care flexible spending account plan and your spouse loses coverage, you, your spouse, and any other dependents covered on your spouse s plan can make or increase an election in Mayo s Health Care Flexible Spending Account plan). Cancel or decrease coverage if you and/or any dependent(s) will be covered by spouse s or dependent s health care flexible spending account because of gaining eligibility for coverage. Your Employment Status Changes You gain or lose Eligibility under the Mayo Clinic Flexible Spending Account Residence Change Certain Changes under Spouse s Employer s Plan. If they are due to and correspond with a permitted change made under your spouse s employer s plan (for example, if your spouse s employer adds a new health option mid-year and your spouse can elect and elects coverage under the new option) or during the annual enrollment period of your spouse s employer s plan, if it (and the plan year) is different from Mayo s annual enrollment and Plan year. Medicare or Medicaid Eligibility Change Qualified Medical Child Support Order (QMCSO) Enroll coverage if you have gained eligibility. If you have lost eligibility in an employment related change, such as termination or moving from a benefit eligible to benefit ineligible job classification, your coverage will be automatically canceled, as well as your pre-tax election. You can continue to submit any expenses you incurred before your coverage was canceled until March 31 of the following year. No change permitted Enroll or increase coverage if you are dropping coverage under spouse s health care flexible spending account. Cancel or decrease coverage if you and/or any dependent(s) will be covered by spouse s health care flexible spending account. No change permitted Enroll or increase coverage if QMCSO requires that you provide coverage and if you provide more than half the financial support for the child. 521.MC rev Page 11 of 51
12 ELIGIBILITY AND PARTICIPATION Change in Status Events Change to Cost or Coverage Needs Permitted Election Changes No change permitted How do I cancel coverage or reduce my coverage level? Some changes to your health coverage will happen automatically. For example, if you terminate or are no longer eligible for coverage under the Plan, your coverage will automatically be terminated. If you return to work to a benefit eligible position within 30 days of your termination, your benefits are automatically reinstated at the previous election level. If you are rehired or otherwise become benefit eligible after 30 days, you are treated as a new hire. If you are an eligible employee and are required by a Qualified Medical Child Support Order to provide Health Care Flexible Spending Account coverage for health expenses of a child, you will be enrolled in the Plan, if necessary, or your contribution will be increased as specified in the Order, and the entire cost to you for such coverage will be deducted from your pay automatically on a pre-tax basis. If you experience one of the change in status events listed above and want to change or cancel your enrollment in the Plan, contact the Employee Service Center within 31 days of the occurrence of the event. What if I have questions about enrolling or changing my election after a change in status? Mayo Clinic administers the Plan according to the rules and retains the discretion to determine whether you can make the desired cancellation or reduction of coverage. If you have further questions, contact the Employee Service Center. When does my coverage become effective? The date on which coverage becomes effective depends on when enrollment occurs. a. Enrollment Within Initial Enrollment Period. The effective date of coverage for eligible employees who enroll during the initial enrollment period is the first day of employment or change to eligible status with the employer. Open Enrollment Period If an eligible employee does not enroll within the initial enrollment period, he or she must wait until the next open enrollment period unless a special enrollment situation occurs. The effective date of coverage would be the first day of the coverage year for which the open enrollment period was held. Additional information is available on page 8. b. Special Enrollment. When enrollment occurs as the result of a special enrollment described above, your new elections will be effective the first payroll period following the date your completed election change is approved. What happens to my Plan coverage at retirement? At the time of retirement, you are able to continue the Plan for a limited period under COBRA coverage. Please refer to the section titled Continuation of Health care Coverage Under COBRA for more details 521.MC rev Page 12 of 51
13 ELIGIBILITY AND PARTICIPATION If I die, what happens to coverage for my dependents at my death? In the event of your death, the person entitled to receive payment under applicable law can submit claims for expenses incurred prior to your death to the extent those claims would have been eligible for reimbursement to you. You will only be reimbursed for eligible health care expenses you incurred while you are making contributions during the Plan Year. No expenses incurred after your participation ends will be reimbursed. Your dependents may be able to continue coverage for a limited period after your death. Please see the COBRA continuation coverage section on page 15 for more details. 521.MC rev Page 13 of 51
14 WHEN DOES COVERAGE END WHEN DOES COVERAGE END? Employee Coverage Ends Coverage ends at midnight of the earliest of the following dates: 1. The date the Plan is terminated. 2. The date in which you terminate employment with the employer. 3. The date your employment position or status changes such that you are no longer an eligible employee. 4. The date ending the period for which the last contribution is made if you fail to make any required contributions when due. 5. The date the employer terminates the Plan or its participation in the Plan. 6. The date of your death. 7. If the Plan is amended so that you lose coverage, the effective date of the amendment. 8. The last day of the Plan year for which you have a benefit election in effect. 9. The last day of the pay period following the date you request your benefit election be terminated as a result of, and consistent with, a change in status event or leave of absence rule. Effect of Termination of Coverage On the date your participation ends, no further reductions in pay will be contributed to your accounts. All claims must be submitted for reimbursement by March 31 following the year in which your participation terminated. Any amount remaining in your account after eligible expenses have been reimbursed will be forfeited unless you return to employment within 30 days or you elect COBRA continuation coverage, if available. In the event of your death, the person entitled to receive payment under applicable law can submit claims for expenses incurred prior to your death to the extent those claims would have been eligible for reimbursement to you. In addition, you will be reimbursed only for eligible health care expenses you incurred while you are making contributions during the Plan year. No expenses incurred after your participation ends will be reimbursed. 521.MC rev Page 14 of 51
15 WHEN DOES COVERAGE END Effect of Return to Employment The following special rules apply when you return to work for the employer: Thirty (30) Days or Less If you return to work within 30 days of the date you terminated employment, your prior elections will be reinstated automatically for the remainder of the Plan Year. After 30 Days If you return to work more than 30 days from the date you terminated employment, you will be treated as a newly hired employee and the initial enrollment rules will apply. Refer to the Initial Enrollment section on page 8 for more information. Dependent Coverage Ends You can submit expenses of eligible dependents for reimbursement that are incurred while you are covered under the Plan. Eligible dependents include your spouse, your domestic partner (if your 152 tax dependent) and children who are your 152 tax dependents. See Definition of Dependent at page 21 for more information about eligible dependents. Additional Termination of Coverage Rules Your participation under the Plan will terminate immediately upon termination of the Plan or will terminate at midnight upon the occurrence of the earliest of: 1. The date you do not cooperate with (1) the Plan Administrator, as that term is defined in Section 3(16)(A) of ERISA, with respect to the administration of the Plan and/or (2) the employer. Such determination shall be made at the discretion of the Plan Administrator provided such determination is consistent with and in fulfillment of the Plan Administrator s fiduciary duties as described in Section 404 of ERISA. 2. The date you provide fraudulent information to obtain Plan benefits or coverage, including falsifying information on your applications for coverage and/or submitting fraudulent, altered, or duplicate billings for personal gain. If any claims are mistakenly paid for expenses incurred due to such fraudulent information, the employee will be required to reimburse the Plan for any claims mistakenly paid. 3. The date you do not reimburse the Plan for any claims mistakenly paid. 521.MC rev Page 15 of 51
16 CONTINUATION OF HEALTH CARE COVERAGE UNDER COBRA CONTINUATION OF HEALTH CARE COVERAGE UNDER COBRA This section contains detailed information about your right to COBRA continuation coverage, which is a temporary extension of coverage under the Plan after you or your eligible dependents lose coverage in certain circumstances. The right to COBRA continuation coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA continuation coverage can become available to you and your dependents who are covered under the Plan when you or your dependents would otherwise lose health coverage under the Plan. This notice generally explains COBRA continuation coverage, when it may become available to you and your dependents, and what you need to do to protect the right to receive it. COBRA Eligibility COBRA continuation coverage is a continuation of Plan coverage when coverage would otherwise end because of a life event known as a qualifying event. After a qualifying event (and any required notice of that event has been properly provided), COBRA continuation coverage must be offered to each person who is a qualified beneficiary. You, your spouse or domestic partner, and your dependent children could become qualified beneficiaries if coverage under the Plan is lost because of a qualifying event. Under the Plan, qualified beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation coverage. If you are an employee, you will become a qualified beneficiary if you lose coverage under the Plan because either one of the following qualifying events occurs: Your hours of employment are reduced. Your employment ends for any reason other than your gross misconduct. If you are the spouse or domestic partner of an employee, you will become a qualified beneficiary if your expenses can no longer be reimbursed under the Plan because any of the following qualifying events occur: Your spouse or domestic partner dies. Your spouse s or domestic partner s hours of employment are reduced. Your spouse s or domestic partner s employment ends for any reason other than his or her gross misconduct. You become divorced from your spouse or, you officially terminate your domestic partnership relationship. (Also, if an employee eliminates coverage for his or her spouse in anticipation of a divorce, and a divorce later occurs, the ex-spouse may still be entitled to COBRA continuation coverage even though he or she lost coverage before the divorce. It is therefore important for the ex-spouse to notify the COBRA Administrator of the divorce even if coverage had been eliminated earlier. The ex-spouse will need to follow the procedures outlined below for providing such notice.) Note that under federal law, a domestic partner must be the employee s 152 tax dependent to be a qualified beneficiary. 521.MC rev Page 16 of 51
17 CONTINUATION OF HEALTH CARE COVERAGE UNDER COBRA Your dependent children (including your domestic partner s children, if your 152 tax dependent, and children participating under a qualified medical child support order (QMSCO)) will become qualified beneficiaries if their expenses can no longer be reimbursed under the Plan because any of the following qualifying events occur: Parent/employee dies. Parent/employee s hours of employment are reduced. Parent/employee s employment ends for any reason other than his or her gross misconduct. Parents become divorced or legally separated, or officially terminate their domestic partnership. Child stops being eligible for coverage under the Plan. Notification of COBRA Continuation Coverage Election The Plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrator has been timely notified that a qualifying event has occurred. When the qualifying event is the end of employment or reduction of hours of employment, death of the employee, or commencement of a proceeding in bankruptcy with respect to the employer, the employer must notify the COBRA Administrator of the qualifying event You Must Give Notice of Certain Qualifiying Events For the other qualifying events (divorce or legal separation, termination of a domestic partnership or a dependent child s losing eligibility), you or your dependents must notify Human Resources. Verbal notice, including notice by telephone, is not sufficient. You may deliver your written notice by mail, facsimile, or by hand. You must submit written notice within 60 days after the later of (1) the date of the qualifying event, or (2) the date on which you lose, or would lose, coverage under the terms of the Plan as a result of the qualifying event, that states the type of qualifying event permitting you to elect COBRA continuation coverage. You do not need to complete a specific form, but you need to provide certain information. Your written notice must include (i) the name of this Plan, (ii) the type of qualifying event (e.g., divorce), (iii) the date of the event, and (iv) your name and the names of the other qualified beneficiaries. You must provide notice in a timely manner. If mailed, your notice must be postmarked no later than the last day of the 60-day election period described above. Otherwise it must be received no later than that day. If you or your dependent fails to provide notice to the Plan Administrator during this 60-day notice period, any spouse or dependent child who loses coverage will not be offered the option to elect continuation coverage. 521.MC rev Page 17 of 51
18 CONTINUATION OF HEALTH CARE COVERAGE UNDER COBRA How is COBRA Coverage Provided? Once the Plan Administrator receives notice that a qualifying event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries. Each qualified beneficiary will have an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children. As long as the employee is a qualified beneficiary, however, there can only be one Health Care Flexible Spending Account election for the entire family. In case of divorce, there can only be one Health Care Flexible Spending Account election for the former spouse and any dependent children who have lost coverage as a result of the divorce. A qualified beneficiary must elect coverage within 60 days of being provided a COBRA election notice. Failure to do so will result in loss of the right to elect COBRA continuation coverage under the Plan. A qualified beneficiary may change a prior rejection of COBRA continuation coverage any time until the end of the 60-day election period. What is the Length of COBRA Continuation Coverage COBRA continuation coverage is a temporary continuation of coverage. The maximum COBRA period for a Plan ends on the last day of the Plan year in which the qualifying event occurred. Election of COBRA Continuation Coverage To elect COBRA continuation coverage, you must complete an election form and furnish it according to the directions on the form. Each qualified beneficiary has a separate right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children. As long as the employee is a qualified beneficiary, however, there can only be one Health Care Flexible Spending Account election for the entire family. In case of divorce, there can be only one Health Care Flexible Spending Account election for the former spouse and any dependent children who have lost coverage as a result of the divorce. A qualified beneficiary must elect coverage within 60 days of being provided a COBRA election notice. Failure to do so will result in loss of the right to elect COBRA continuation coverage under the Plan. A qualified beneficiary may change a prior rejection of COBRA continuation coverage any time until the end of the 60-day election period Procedures to Elect COBRA Continuation Coverage The following are the Plan s procedures to elect COBRA continuation coverage. To elect COBRA continuation coverage, you must provide written notice to Mayo Clinic Health Solutions at the address listed in the Contact Information section on page 5. Verbal notice, including notice by telephone, is not sufficient. You may deliver your written notice by mail, facsimile, or by hand. As part of the notice to elect COBRA continuation coverage, you must submit a completed election form. If you do not have a copy of the election form, you may obtain it by contacting Human Resources as indicated in the Contact Information section on page 5. You must provide election notice in a timely manner. If mailed, your election form must be postmarked no later than the last day of the 60-day election period described above. Otherwise it must be received no later than that day. Cost of COBRA Continuation Coverage Generally each qualified beneficiary may be required to pay 102 percent of the entire cost of COBRA continuation coverage on an after-tax basis. 521.MC rev Page 18 of 51
19 CONTINUATION OF HEALTH CARE COVERAGE UNDER COBRA Payment for COBRA Continuation Coverage First payment for COBRA continuation coverage If you elect COBRA continuation coverage, you do not have to send payment with the COBRA Continuation Coverage Election Form. However, you must make your first payment for COBRA continuation coverage not later than 45 days after the date of your election. (This is the date the election form is postmarked, if mailed.) If you do not make your first payment for COBRA continuation coverage in full not later than 45 days after the date of your election, you will lose all COBRA continuation coverage rights under the Plan. You are responsible for making sure that the amount of your first payment is correct. You may contact Mayo Clinic Health Solutions to confirm the correct amount of your first payment. Your first payment for COBRA continuation coverage should be sent to Mayo Clinic Health Solutions at the address listed in the Contact Information section. Periodic payments for COBRA continuation coverage After you make your first payment for COBRA continuation coverage, you will be required to make payments for each subsequent month of coverage. Under the Plan, these periodic payments for COBRA continuation coverage are due on the first of each month. If you make a periodic payment on or before the first day of the month to which it applies, your coverage under the Plan will continue for that month without any break. The Plan will not send periodic notices of payments due each month. Periodic payments for COBRA continuation coverage should be sent to the same address as the first payment. Grace period for periodic payments Although periodic payments are due on the first of each month, you will be given a grace period of 30 days to make each periodic payment. Your COBRA continuation coverage will be provided for each month as long as payment for that month is made before the end of the grace period for that payment. If you fail to make a periodic payment before the end of the grace period for that month, you will lose all rights to COBRA continuation coverage under the Plan. If COBRA continuation coverage is cancelled for nonpayment, coverage will not be reinstated and you will have no further rights to COBRA continuation coverage. Termination of COBRA Continuation Coverage Before the End of the Maximum Coverage Period COBRA continuation coverage will be terminated before the end of the maximum period if (i) any required premium is not paid on time, (ii) after electing COBRA continuation coverage a qualified beneficiary becomes covered under another group health plan that does not impose any pre-existing condition exclusion for a pre-existing condition of the qualified beneficiary, (iii) after electing COBRA continuation coverage, a qualified beneficiary enrolls in Medicare, or, (iv) the employer ceases to provide any group health plan for its employees. COBRA continuation coverage may also be terminated for any reason the Plan would terminate coverage of a participant or beneficiary not receiving COBRA continuation coverage (such as fraud). Keep Your Plan Informed of Address Changes In order to protect your and your family s rights, you should keep the Plan Administrator informed of any changes in your address and the addresses of family members. You should also keep a copy for your records of any notices you send to or receive from the Plan Administrator. 521.MC rev Page 19 of 51
20 HEALTH CARE FLEXIBIBLE SPENDING ACCOUNT HEALTH CARE FLEXIBLE SPENDING ACCOUNT The Health Care Flexible Spending Account section details the eligible expenses under the Plan. Annual Contributions Effective January 1, 2013, due to limits set under the Patient Protection and Affordable Care Act, you are allowed to contribute up to $2,500 pre-tax to a Health Care Flexible Spending Account to pay for eligible out-of-pocket health care expenses such as deductibles, copayments and coinsurance, and other such expenses which are not covered by any other source. Your pre-tax contribution is made through the Pre- Tax Premium Rules. You or your Dependents do not need to be covered by the employer s health programs in order for you to contribute money to your account. Please note that any individual who is an eligible dependent or eligible family member under the Mayo Medical Plan may not be an eligible Dependent under this Plan. Dependents under this Plan must be tax dependents under section 152 of the Internal Revenue Code. Employee Contributions You must carefully plan the amount you wish to contribute because the Plan is governed by federal regulations and restrictions. Important points to remember are: No Tax Deduction. You cannot take a tax deduction on your federal income tax return for expenses reimbursed from your Health Care Flexible Spending Account. No Change to Election. During the year you cannot change your contribution election except under certain conditions, see Change in Status Events for details. Use It or Lose It. If your contributions during the year exceed the eligible expenses you incur during that year, you will forfeit the excess money in your accounts at the end of the year. Filing Deadline. Even if you incur eligible expenses for the year, if you do not file a claim for reimbursement of those expenses before the filing deadine, you will forfeit the amount remaining in your accounts. The filing deadline for the year is March 31 of the following year. The minimum employee contribution is $5 per payroll, and the maximum employee contribution is $2,500 annually. 521.MC rev Page 20 of 51
2015 Health and Insurance Benefits Guide With updates as of February 2015 (indicated by dark blue text) With updates as of June 2015 (indicated by dark red text) Original version: October 2014 Health and
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