EXHIBIT 10.13
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LANDAIR CORPORATION
SECTION 125 PLAN
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Effective January 1, 2001
LANDAIR CORPORATION
SECTION 125 PLAN
TABLE OF CONTENTS
PAGE
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FORWARD AND PURPOSE............................................................1
Article I DEFINITIONS..................................................1
Administrator.........................................................1
Benefit Description...................................................1
Change in Status......................................................1
Code..................................................................2
Dependent.............................................................2
Effective Date........................................................2
Election Change.......................................................2
Eligible Employee.....................................................3
Employee..............................................................3
Employer..............................................................3
ERISA.................................................................3
Flexible Pay..........................................................3
FMLA Leave............................................................3
Health Benefits.......................................................3
Health Plan...........................................................4
Participant...........................................................4
Participating Employer................................................4
Participation Year....................................................4
Plan..................................................................4
Plan Year.............................................................4
Premiums..............................................................4
Pre-Tax Benefits......................................................4
Article II ELIGIBILITY, PARTICIPATION, AND BENEFITS.....................4
2.1 General......................................................4
2.2 Incorporation by Reference...................................5
2.3 Premiums.....................................................5
Article III PARTICIPATION AND ENROLLMENT.................................5
3.1 Participation................................................5
3.2 Enrollment...................................................6
3.3 Termination of Enrollment....................................6
3.4 Enrollment Periods...........................................6
3.5 Limitation on Enrollment Changes............................12
3.6 COBRA Coordination..........................................12
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Article IV CONTRIBUTIONS...............................................12
4.1 Contributions Withheld......................................12
4.2 Xxxxxxxxx Prohibited........................................13
4.3 Enrollment..................................................13
4.4 Premium Rebates and Policy Dividends........................13
4.5 Effect of Change in Dependent Status........................13
4.6 Cash Benefit................................................13
4.7 Cost Changes................................................14
4.8 Coverage Changes............................................14
Article V ADMINISTRATION..............................................15
5.1 Allocation of Responsibility................................15
5.2 Administration..............................................16
5.3 Expenses....................................................16
5.4 Denial of Claims............................................16
5.5 Claims Review Procedure.....................................16
5.6 Other Administrative Powers and Duties......................18
5.7 Rules and Decisions.........................................18
5.8 Forms and Requests for Information..........................18
Article VI AMENDMENT OF THE PLAN.......................................19
Article VII TERMINATION OF THE PLAN.....................................19
Article VIII MISCELLANEOUS...............................................19
8.1 Employment Rights...........................................19
8.2 Spendthrift Clause..........................................19
8.3 No Guarantee of Nontaxability...............................20
8.4 Cafeteria Plan Nondiscrimination............................20
8.5 Health Care Nondiscrimination...............................21
8.6 Delegation of Authority.....................................21
8.7 Headings and Construction...................................21
8.8 Entire Plan Stated..........................................21
8.9 Applicable Law..............................................21
8.10 Exclusive Benefit Rule......................................21
8.11 Communication to Employees..................................21
8.12 Adoption by Other Employers.................................22
ARTICLE IX SIGNATURE...................................................22
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FORWARD AND PURPOSE
This Plan is made and adopted by Landair Corporation ("Landair").
W I T N E S S E T H:
WHEREAS, Landair desires to establish the Landair Corporation Section
125 Plan (the "Plan"); and
WHEREAS, it is intended that the Plan qualify as a cafeteria plan, an
accident and health plan, and a group life insurance plan under Code Sections
79, 105, 106, and 125 and shall be interpreted in a manner consistent with the
requirements of Code Sections 79, 105, 106, and 125.
NOW THEREFORE, Landair hereby establishes the Plan effective as of
January 1, 2001, to provide as follows:
ARTICLE I
DEFINITIONS
The following words and phrases have meanings set forth below, unless a
different meaning is plainly required by the context:
"ADMINISTRATOR" means Landair Corporation or its successor or
successors, which shall have the authority to administer the Plan as
provided in Article V.
"BENEFIT DESCRIPTION" means the certificate of coverage,
insurance policy, membership handbook, or summary plan description, as
applicable, for each benefit or any successor certificate of coverage,
insurance policy, membership handbook, or summary plan description
listed in Appendix A and such successor documents as the Administrator
may designate.
"CHANGE IN STATUS" means a change in status event as defined in
Treasury Regulations promulgated under Code Section 125, and to the
extent consistent therewith, means the following:
(1) LEGAL MARITAL STATUS. Events that change an Eligible
Employee's legal marital status, including marriage, death of
spouse, divorce, legal separation, and annulment;
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(2) NUMBER OF DEPENDENTS. Events that change an Eligible
Employee's number of Dependents, including birth, death,
adoption, and placement for adoption;
(3) EMPLOYMENT STATUS. Any of the following events that
change the employment status of the Eligible Employee, the
Eligible Employee's spouse, or the Eligible Employee's
Dependent: a termination or commencement of employment; a
commencement of or return from an unpaid leave of absence; and a
change in worksite. In addition, if the eligibility conditions
of the Plan or other employee benefit plans of the Employer of
the Eligible Employee or the employer of the 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, then that change constitutes a change in employment
status;
(4) DEPENDENT SATISFIES OR CEASES TO SATISFY THE
REQUIREMENTS. Events that cause an Eligible Employee's Dependent
to satisfy or cease to satisfy the eligibility requirements for
coverage on account of attainment of age, student status, or any
similar circumstance; and
(5) RESIDENCE. A change in the place of residence of the
Eligible Employee, spouse, or Dependent.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time. Reference to any section or subsection of the Code
includes reference to any comparable or succeeding provisions of any
legislation that amends, supplements, or replaces such section or
subsection.
"DEPENDENT" means a Participant's legal spouse or any dependent
as defined under the applicable benefit.
"EFFECTIVE DATE" means the date on which this Plan is effective,
January 1, 2001.
"ELECTION CHANGE" means a Participant's revocation of an
election during a Participation Year and new election for the remaining
portion of the Participation Year.
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"ELIGIBLE EMPLOYEE" means an Employee who is eligible to
participate in any of the benefits listed in Appendix A.
"EMPLOYEE" means any person who is classified by the Employer as
an employee of the Employer and who is receiving remuneration for
personal services rendered to the Employer, excluding any individual
whom the Employer classifies as a contract employee, an independent
contractor or an employee of a contractor or an independent contractor,
a nonresident alien, or covered by a collective bargaining agreement
(unless that agreement, by a specific reference to this Plan or to one
of the benefits offered under this Plan, provides for coverage under
this Plan and/or one of the benefits offered under this Plan. These
groups of individuals are excluded from coverage under this Plan based
on the Employer's classification even if the Internal Revenue Service or
any other agency or court determines that the Employer's classification
was incorrect or reclassifies that individual as an employee for
employment tax purposes or for any other purpose.
"EMPLOYER" means Landair Corporation ("Landair"), all
subsidiaries and affiliates of Landair that would be treated as a single
employer under Code Sections 414(b) and (c), and any Participating
Employers.
"ERISA" means Public Law 93-406, the Employee Retirement Income
Security Act of 1974, 29 U.S.C. ss. 1001 et seq., as amended.
"FLEXIBLE PAY" means the amount of a Participant's compensation
that, pursuant to Section 4.1, is applied on behalf of the Participant
to pay his Premiums for Pre-Tax Benefits or that (to the extent not
otherwise applied) he may elect to receive as additional cash
compensation. For each Participation Year, the maximum amount of
Flexible Pay available to any Participant for application to his
Premiums under the Plan shall be the sum of the costs of all Pre-Tax
Benefits available to any Participant under the Plan.
"FMLA LEAVE" means a leave of absence that the Employer is
required to allow by the terms of the Family and Medical Leave Act.
"HEALTH BENEFITS" means for purposes of COBRA continuation
coverage under Code Section 4980B or ERISA Section 601 et seq., a "group
health plan" as defined in ERISA Section 607(1). For purposes of FMLA
Leave, "Health Benefits" means a "group health plan" as defined in
Section 104(c)(1) of the Family and Medical Leave Act of 1993, 29 U.S.C.
xx.xx. 2601 et. seq. For all other purposes under this Plan, the term
"Health Benefits" means a "health plan" within the
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meaning of proposed Treasury Regulation Section 1.125-2, Q&A-6,
comparable or succeeding provisions of any proposed regulations that
amend, supplement, or replace such section or parallel provisions of
final regulations issued pursuant to Code Section 125.
"HEALTH PLAN" means Landair Corporation Health and Dental Care
Benefit Plan.
"PARTICIPANT" means an Eligible Employee who has commenced
participation in the Plan and has not terminated participation as
provided in Section 2.1 with respect to all benefits other than the
cafeteria plan benefits and as provided in Section 3.1 with respect to
the cafeteria plan benefits.
"PARTICIPATING EMPLOYER" means any other corporations or
entities that adopt this Plan in accordance with Section 8.12.
"PARTICIPATION YEAR" with respect to any Participant means the
twelve-month period beginning on February 1 and ending on the following
January 31.
"PLAN" means the Landair Corporation Section 125 Plan as set
forth herein, together with any and all amendments and supplements
thereto.
"PLAN YEAR" means the twelve-month period beginning each January
1 and ending on the following December 31.
"PREMIUMS" means the amount the Participant is required or
elects to pay for the benefits under the Plan.
"PRE-TAX BENEFITS" means the benefits a Participant may elect to
receive on a pre-tax basis through the Plan and that are listed in
Appendix A.
ARTICLE II
ELIGIBILITY, PARTICIPATION, AND BENEFITS
2.1 GENERAL. With respect to each of the benefits offered under the
Plan, the applicable Benefit Description shall determine an Eligible Employee's
or Dependent's:
(A) Eligibility to participate;
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(B) Commencement, recommencement, and termination of
participation; and
(C) Terms of Coverage.
2.2 INCORPORATION BY REFERENCE. This Plan shall constitute the Plan
document for each of the benefits listed in Appendix A. The terms of the Benefit
Descriptions are incorporated into this Plan as if those terms were fully set
forth in this Plan document.
2.3 PREMIUMS. The Participant shall pay on a pre-tax basis the cost (if
any) of any Pre-Tax Benefit he chooses under this Plan. The Participant shall
pay on an after-tax basis the cost (if any) of any other benefits he chooses
under this Plan.
ARTICLE III
PARTICIPATION AND ENROLLMENT
3.1 PARTICIPATION.
(A) COMMENCEMENT OF PARTICIPATION. An Eligible Employee shall
commence (or recommence) participation in the Plan on the later of the
Effective Date or the date he commences or recommences participation in
any of the benefits listed in Appendix A.
(B) NO AFTER-TAX OPTION FOR PRE-TAX BENEFITS. If an Eligible
Employee chooses to participate in a Pre-Tax Benefit and if the Eligible
Employee is receiving remuneration from the Employer from which Premiums
can be deducted, the Eligible Employee shall be deemed to have elected
to pay the Premium for that Pre-Tax Benefit on a pre-tax basis through
the Plan. An Eligible Employee shall not have the option of paying the
Premium for any of the Pre-Tax Benefits on an after-tax basis unless the
individual is not receiving remuneration from the Employer from which
the Premiums may be deducted. Otherwise, all such Premiums for Pre-Tax
Benefits must be paid on a pre-tax basis under this Plan.
(C) TERMINATION OF PARTICIPATION. A Participant shall continue
to participate in the Plan until the Participant terminates
participation in all of the benefits offered under the Plan. However,
any such Participant who otherwise would terminate participation may
elect to remain a Participant under the limitations and conditions set
forth in Section 3.6.
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(D) TERMS AND CONDITIONS OF PARTICIPATION. Additional terms and
conditions governing eligibility for, participation and termination of
participation in, and the terms of each of the benefits offered under
the Plan are set forth in the applicable Benefits Description.
3.2 ENROLLMENT. An Eligible Employee may enroll in, re-enroll in, or
change his or her benefit elections by submitting to the Administrator an
enrollment form that specifies the benefits he has chosen for the Participation
Year, which will constitute his agreement to use the necessary part of his
Flexible Pay or other compensation to pay any Premiums and that meets such other
standards for completeness and accuracy the Administrator establishes. The
enrollment form must be submitted during an enrollment period described in
Section 3.4 below. A Participant's enrollment form shall not be effective before
the date such form is submitted to the Administrator. An Eligible Employee may
not enroll in a benefit unless he meets the eligibility requirements applicable
to that benefit.
3.3 TERMINATION OF ENROLLMENT. A Participant who enrolls in any of the
Pre-Tax Benefits must maintain that coverage in effect until the end of the
Participation Year, except that any enrollment form submitted by a Participant
in accordance with this Article III shall remain in effect until the earlier of:
(A) The date the Participant terminates participation in all of
the benefits provided under the Plan;
(B) The effective date (as determined by the Administrator) of a
subsequently filed enrollment form as provided in Section 3.4; or
(C) The date the Plan no longer offers any benefits.
3.4 ENROLLMENT PERIODS.
(A) INITIAL ENROLLMENT PERIOD. An Eligible Employee shall have
an initial enrollment period that begins on the first day he becomes an
Employee. An Eligible Employee's initial enrollment period ends on the
first day of the month after the date (or on the date) the Eligible
Employee completes 90 consecutive days of employment as an Eligible
Employee. Enrollment forms submitted during an initial enrollment period
are effective as of the last day of the initial enrollment period.
(B) FAILURE TO ENROLL - INITIAL ENROLLMENT. An Eligible Employee
who fails to return a completed enrollment form to the Administrator on
or before the specified due date for his initial enrollment period shall
be deemed to have elected for the remainder of the Participation Year to
receive the same benefits (if any) as the Eligible Employee received
from
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the Employer during the preceding Participation Year. Thus, a newly
hired Employee who fails to return a completed enrollment form before
the end of his initial enrollment period will be deemed to have elected
not to participate in the Plan and shall receive no benefits under the
Plan for the remainder of the Participation Year. Likewise, an Employee
who, prior to his initial enrollment period, received none of the
benefits offered under the Plan and who fails to return a completed
enrollment form before the end of his initial enrollment period will be
deemed to have elected not to participate in the Plan and shall receive
no benefits under the Plan for the remainder of the Participation Year.
(C) ANNUAL ENROLLMENT PERIOD. Each Eligible Employee shall have
an annual enrollment period during which to make elections for each
Participation Year. The Administrator will designate an annual
enrollment period for each Participation Year before the first day of
that Participation Year. The annual enrollment period for any
Participation Year shall terminate on the date specified by the
Administrator, but not later than the last day of the immediately
preceding Participation Year. Enrollment forms submitted during an
annual enrollment period shall be effective on the first day of the next
Participation Year.
(D) FAILURE TO ENROLL - ANNUAL ENROLLMENT. An Eligible Employee
failing to return a completed enrollment form to the Administrator on or
before the specified due date for an annual enrollment period for any
subsequent Participation Year shall be deemed to have made the same
benefit choices (if any) as were in effect just before the end of the
preceding Participation Year. A Participant shall also be deemed to have
authorized the Administrator to withhold from his compensation an amount
of Flexible Pay or other compensation equal to his Premiums for the
benefits chosen.
(E) SPECIAL ENROLLMENT PERIOD. If a Participant incurs a special
enrollment event as defined below, then with respect to the Health Plan
only, the Participant will have a special enrollment period that begins
on the date of the special enrollment event and ends 30 days later.
Enrollment forms submitted during a special enrollment period shall be
effective as of the first day of the calendar month coinciding with or
immediately following the date the special enrollment form is submitted;
except that in the case of a Dependent's birth, such form shall be
effective as of the date of the birth; and in the case of a Dependent's
adoption or placement for adoption, such form shall be effective as of
the date of such adoption or placement for adoption.
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(1) SPECIAL ENROLLMENT EVENT: LOSING OTHER COVERAGE. An
Eligible Employee who is not enrolled in the Health Plan (or a
Dependent of such an Eligible Employee if the Dependent is
eligible but not enrolled in the Health Plan) may enroll in the
Health Plan if the following conditions are met:
(I) The Eligible Employee or Dependent was
covered under a group health plan or had health
insurance coverage at the time coverage was previously
offered to the Eligible Employee or Dependent.
(II) The Eligible Employee or Dependent stated
in writing at the time coverage was previously offered
to the Eligible Employee or Dependent that coverage
under a group health plan or health insurance coverage
was the reason the Eligible Employee declined
enrollment.
(III) The Eligible Employee's or Dependent's
coverage described in paragraph (i):
(A) Was under a COBRA continuation
provision and the coverage under such provision
was exhausted; or
(B) Was not under such a provision and
either the coverage was terminated as a result
of loss of eligibility for coverage (including
as a result of legal separation, divorce, death,
termination of employment, or reduction in the
number of hours of employment), or contributions
toward such coverage were terminated by the
sponsor (reasons that are not acceptable are
failure to pay on a timely basis or termination
of other coverage for cause (such as making a
fraudulent claim or an intentional
misrepresentation of a material fact in
connection with said plan)).
(2) SPECIAL ENROLLMENT EVENT: NEW DEPENDENTS. If an
individual becomes a Dependent of an Eligible
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Employee through marriage, birth, adoption, or placement for
adoption, the Dependent (or, if the Eligible Employee is not
otherwise enrolled, the Eligible Employee) may be enrolled in
the Health Plan as a Dependent and/or Eligible Employee. In the
case of the birth or adoption of a child, the spouse of the
Eligible Employee may be enrolled as a Dependent of the Eligible
Employee if the spouse is otherwise eligible for coverage.
(3) EFFECTIVE DATE OF COVERAGE. Enrollment forms
submitted during a special enrollment period shall be effective
as of the first day of the calendar month coinciding with or
immediately following the date the special enrollment form is
submitted except that:
(I) In the case of marriage, coverage will be
effective as of the date the completed request is
received;
(II) In the case of a Dependent's birth,
coverage will be effective as of the date of the birth;
and
(III) In the case of a Dependent's adoption or
placement for adoption, coverage will be effective as of
the date of such adoption or placement for adoption.
(F) CHANGE IN STATUS ENROLLMENT PERIOD. If a Participant incurs
a Change in Status, and the consistency rules in Section 3.4(g) have
been met, such Participant shall have a Change in Status enrollment
period that begins on the date of such event and terminates 30 days
following such event. If the Change in Status event results in the
individual gaining or losing coverage under a spouse's or a Dependent's
employer's plan, then the 30-day Change in Status enrollment period will
not begin until the date the individual gains or loses such other
coverage. Enrollment forms submitted during a Change in Status
enrollment period shall be effective as of the first day of the calendar
month coinciding with or immediately following the date the Change in
Status enrollment form is submitted.
(G) CONSISTENCY RULES FOR CHANGE IN STATUS. The enrollment
change under Section 3.4(f) must be on account of and correspond with
the Change in Status that affects eligibility for coverage. A Change in
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Status that affects eligibility for coverage also includes a Change in
Status that results in an increase or decrease in the number of an
Eligible Employee's family members or Dependents who may benefit from
coverage.
(1) CONSISTENCY RULE - ACCIDENT OR HEALTH INSURANCE
COVERAGE - ENROLLMENT CHANGE ONLY FOR AFFECTED DEPENDENT. If the
Change in Status is the Eligible Employee's divorce, annulment,
or legal separation from a spouse, death of a spouse or
Dependent, or a Dependent ceasing to satisfy the eligibility
requirements for coverage, an Eligible Employee's election under
the Plan to cancel accident or health insurance coverage (as
that term is used in Treas. Reg. ss. 125-4(c)(3)(iii)) for any
individual other than the spouse involved in the divorce,
annulment, or separation; the deceased spouse or Dependent; or
the Dependent that ceased to satisfy the eligibility requirement
for coverage shall not satisfy the consistency rules.
(2) GAINING ELIGIBILITY UNDER FAMILY MEMBER'S PLAN. If
an Eligible Employee, spouse, or Dependent gains eligibility for
coverage under a family member's plan as a result of a change in
marital status or a change in employment status, an Eligible
Employee's election under the Plan to cease or decrease coverage
for that individual under the Plan shall not satisfy the
consistency rules unless the coverage for that individual
becomes applicable or is increased under the family member's
plan.
(3) COBRA CONTINUATION COVERAGE. If the Eligible
Employee, spouse, or Dependent becomes eligible for continuation
coverage under the Health Plan as provided in Code Section 4980B
or any similar state law, the Participant may choose to increase
payments under the Plan to pay for the continuation coverage.
(H) CHANGE IN ENROLLMENT - JUDGMENT, DECREE, OR ORDER. This
Section 3.4(h) applies in the case of a judgment, decree, or order
resulting from a divorce, legal separation, annulment, or change in
legal custody that meets the requirements of a qualified medical child
support order ("QMCSO") as defined in ERISA Section 609 that requires
health coverage for an Eligible Employee's child or for a xxxxxx child
who is a Dependent of the Eligible Employee. The Eligible Employee may:
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(1) Change his enrollment to provide coverage for the
child if the QMCSO required coverage for the child under the
Health Plan; or
(2) Make a change to cancel coverage for the child if
the QMCSO required the spouse, former spouse, or other
individual to provide coverage for the child, and such coverage
is provided for the child pursuant to the QMCSO.
An Eligible Employee must make any enrollment change pursuant to this
Section 3.4(h) within 31 days after the order is approved by the plan to
which the order applies.
(I) MEDICARE, MEDICAID, OR OTHER COVERAGE SPONSORED BY A
GOVERNMENTAL OR EDUCATIONAL INSTITUTION.
(1) GAINING COVERAGE UNDER MEDICARE OR MEDICAID. If an
Eligible Employee, spouse, or Dependent is enrolled in the
Health Plan and becomes enrolled under Part A or Part B of 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), the
Eligible Employee may make a prospective enrollment change to
cancel or reduce coverage under the Health Plan for that
Eligible Employee, spouse, or Dependent.
(2) LOSING MEDICARE, MEDICAID, OR OTHER COVERAGE
SPONSORED BY A GOVERNMENTAL OR EDUCATIONAL INSTITUTION. In
addition, if an Eligible Employee, spouse, or Dependent who has
been entitled to such coverage under Medicare, Medicaid, or
other coverage sponsored by a governmental or educational
institution (such as a state children's health insurance
program) loses eligibility for such coverage, the Eligible
Employee may make a prospective enrollment change to commence or
increase coverage of that Eligible Employee, spouse, or
Dependent under the Health Plan.
(3) ENROLLMENT CHANGES. An Eligible Employee must make
any enrollment changes pursuant to this Section 3.4(i) within 31
days after the Eligible Employee, spouse, or Dependent gains or
loses coverage (as applicable) as described in paragraphs (1)
and (2) above.
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(J) CHANGE IN ENROLLMENT - FMLA LEAVE. If the Participant takes
FMLA Leave, the Participant may revoke his Pre-Tax Benefit enrollments
within 14 days of taking leave or before the end of the leave, whichever
is earlier. The Participant also may choose to be reinstated in his
enrollments under the Plan when the Participant returns from FMLA Leave.
Before beginning unpaid FMLA Leave, the Participant may prepay on a
pre-tax or after-tax basis the Premiums for a Pre-Tax Benefit that would
be due during the FMLA Leave for coverage under the Health Benefits.
However, the Participant may not prepay Premiums that would be due for a
future Participation Year. Alternatively, the Participant may choose to
have these Premiums deducted from any sick pay or vacation pay the
Participant receives during the FMLA Leave or the Participant may make
payments during unpaid FMLA Leave on an after-tax basis.
3.5 LIMITATION ON ENROLLMENT CHANGES. A Participant's right to enroll in
certain benefit coverage shall be additionally limited to the extent such rights
are limited in the applicable benefit or in rules adopted by the Administrator
pursuant to a written procedure. Furthermore, a Participant shall not be
entitled to revoke an enrollment choice after a Participation Year has commenced
and to make a new enrollment choice with respect to the remainder of the
Participation Year except as provided in Section 3.4.
3.6 COBRA COORDINATION. Any Participant or Dependent who is a qualified
beneficiary (as defined in Code Section 4980B(g)(1) or ERISA Section 607(3)) and
is actually participating in the Health Benefits on the date of qualifying event
(as defined in Code Section 4980B(f)(3) or ERISA Section 603) shall have the
right to choose the continuation group health coverage that is required under
Code Section 4980B or ERISA Sections 601 et seq. Such continuation coverage
shall be provided by the Health Benefits in the manner provided in the
applicable Benefit Description. Any such qualified beneficiary actually choosing
such continuation coverage will, during the period of such coverage, have the
same right as Participants to change his enrollments under the Health Benefits.
ARTICLE IV
CONTRIBUTIONS
4.1 CONTRIBUTIONS WITHHELD. Each Participant shall be deemed to have
authorized the Administrator to withhold from his compensation for the
Participation Year an amount of Flexible Pay or other compensation equal to his
Premiums for the benefits elected for such Participation Year.
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(A) EQUAL INSTALLMENTS. Any amounts that are withheld from a
Participant's compensation pursuant to this Section shall be withheld in
approximately equal installments during the Participation Year as the
Administrator designates.
(B) COMPENSATION PAYABLE OVER LESS THAN ONE YEAR. For an
Eligible Employee whose compensation during the year is payable to him
over a period of time less than a year, Flexible Pay amounts will be
withheld in approximately equal installments over such period.
(C) PARTICIPATION DURING PARTICIPATION YEAR. If an Eligible
Employee becomes a Participant after the beginning of the first pay
period of the Participation Year, the amount withheld from his
compensation during such year shall be a pro rata share of the amount
that would have been withheld had he been a Participant in the Plan as
of the beginning of the Participation Year.
4.2 CARRYOVER PROHIBITED. In no event may an Eligible Employee carry
over unused Flexible Pay from one Participation Year to the next. An Eligible
Employee may not use contributions for one Participation Year to purchase
Pre-Tax Benefits that will be provided in a subsequent Participation Year.
4.3 ENROLLMENT. An Eligible Employee's enrollment under Section 4.1 to
authorize withholding of Flexible Pay shall be made on an enrollment form
submitted in accordance with Section 3.2.
4.4 PREMIUM REBATES AND POLICY DIVIDENDS. The Administrator, in its sole
discretion, may pay to Participants reasonable premium rebates and policy
dividends with respect to benefits provided under the Plan. Any such rebates or
dividends must be paid before the close of the 12-month period immediately
following the year to which such rebate and dividend relates.
4.5 EFFECT OF CHANGE IN DEPENDENT STATUS. If a Participant makes an
enrollment change during the Participation Year pursuant to Section 3.4, then in
accordance with written rules adopted by the Administrator, appropriate
adjustments shall be made in the amount withheld from or added to the
Participant's pay for the balance of the Participation Year to reflect any
changes in the Participant's enrollments under the Plan.
4.6 CASH BENEFIT. Any Flexible Pay not expended to purchase Pre-Tax
Benefits shall be considered a cash benefit under the Plan payable to the
Participant.
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4.7 COST CHANGES.
(A) AUTOMATIC CHANGES. If the cost of a benefit under the Plan
increases or decreases during the Participation Year, a corresponding
change will automatically be made in the Participants' Premiums under
the Plan.
(B) SIGNIFICANT COST INCREASES/DECREASES. If the Administrator
determines that the cost of a Pre-Tax Benefit or of a benefit package
option significantly increases or decreases during a Participation Year,
the Administrator may permit Participants either to make a corresponding
prospective increase in their Premiums or to revoke their enrollment
choice and, in lieu thereof, to receive on a prospective basis coverage
under another Pre-Tax Benefit or benefit package option providing
similar coverage. If another Pre-Tax Benefit or benefit package option
does not provide similar coverage, the Administrator may permit
Participants to cancel coverage. If there is a significant decrease in
the cost of a Pre-Tax Benefit or benefit package option, all Eligible
Employees shall be given the right to enroll in the Plan at that time,
regardless of whether they have declined enrollment in the past.
4.8 COVERAGE CHANGES.
(A) SIGNIFICANT IMPROVEMENT/CURTAILMENT. If the coverage under a
Pre-Tax Benefit or benefit package option is significantly improved or
curtailed or if a new benefit package option is offered during a
Participation Year, the Administrator may permit affected Participants
to revoke such Pre-Tax Benefit enrollment choice under the Plan. In that
case, each affected Participant must make a new enrollment on a
prospective basis for coverage under another Pre-Tax Benefit or benefit
package option providing similar coverage. Coverage under the Health
Plan is significantly curtailed only if there is an overall reduction in
coverage provided to Participants under the Health Plan so as to
constitute reduced coverage to Participants generally. If the coverage
under a Pre-Tax Benefit or benefit package option is significantly
curtailed resulting in a loss of coverage, the Administrator may permit
Participants to cancel coverage. A loss of coverage shall mean a
complete loss of coverage under the Pre-Tax Benefit or benefit package
option, such as a health maintenance organization ceasing to be
available in the area where the Participant, his spouse, or Dependent
reside; losing all coverage by reason of an overall lifetime or annual
limitation; a substantial decrease in medical care providers; a
reduction in the benefits for a specific type of medical condition or
treatment with respect to which the Participant, the Participant's
spouse, or Dependent
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is currently in a course of treatment; or any other similar fundamental
loss of coverage as determined by the Administrator.
(B) ADDITION OR ELIMINATION OF BENEFIT PACKAGE OPTION PROVIDING
SIMILAR COVERAGE. If during a Participation Year, the Plan adds a new
Pre-Tax Benefit or if a benefit package option or other coverage option
is added to an existing Pre- Tax Benefit (or if an existing benefit
package option or other coverage option is eliminated from an existing
Pre-Tax Benefit or a Pre-Tax Benefit is eliminated from the Plan), the
Administrator may permit affected Participants to choose the newly added
option or Pre-Tax Benefit (or choose another option or Pre-Tax Benefit
if an option or Pre-Tax Benefit has been eliminated) prospectively on a
pre-tax basis and make corresponding enrollment changes with respect to
the other benefit package options providing similar coverage.
(C) CHANGE IN COVERAGE UNDER OTHER EMPLOYER'S PLAN. A
Participant may make a prospective enrollment change that is on account
of and corresponds with a change made under another employer's plan if:
(1) ELECTIVE CHANGE UNDER OTHER PLAN. A cafeteria plan
or qualified benefits plan permits an election change that would
be permitted under the cafeteria plan regulations; or
(2) DIFFERENT PERIODS OF COVERAGE. The Participation
Year under the Plan is different from the period of coverage
under the cafeteria plan or qualified benefits plan.
ARTICLE V
ADMINISTRATION
5.1 ALLOCATION OF RESPONSIBILITY. The following persons shall have only
those powers, duties, responsibilities, and obligations specifically given or
delegated to them under the Plan.
(A) Landair shall have the sole authority to appoint and remove
the Administrator, and to amend or terminate the Plan in whole or in
part.
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(B) The Administrator shall have the sole responsibility for
administering the Plan, which responsibility is specifically described
herein.
5.2 ADMINISTRATION. The Plan shall be administered by the Administrator
which may appoint or employ persons to assist in administering the Plan and may
appoint or employ any other agents it deems advisable, including legal counsel,
actuaries, auditors, bookkeepers, and recordkeepers to serve at the
Administrator's direction.
5.3 EXPENSES. All usual and reasonable expenses of the Plan and the
Administrator may be paid by the Employer, but the Employer shall not be
obligated to do so.
5.4 DENIAL OF CLAIMS. The Administrator, or a party designated by the
Administrator, shall make all determinations as to the right of any person to
payment or reimbursement under the Plan. If an assertion of any such right by a
Participant or Dependent is wholly or partially denied, the Administrator, or
the designated party, will provide such claimant written notice within 90 days
after receipt of the claim, unless circumstances warrant an extension of time
not to exceed an additional 90 days, setting forth:
(A) The specific reason or reasons for such denial;
(B) Specific reference to pertinent Plan provisions on which the
denial is based;
(C) A description of any additional material or information the
claimant must submit to perfect the claim and an explanation of why such
material or information is necessary; and
(D) A description of the Plan's claims review procedure. The
review procedure is available on written request by the claimant to the
Administrator, or the designated party, within 60 days after receipt by
the claimant of written notice of the denial of the claim.
5.5 CLAIMS REVIEW PROCEDURE.
(A) REQUEST FOR RECONSIDERATION. Any Participant, former
Participant, or beneficiary of either, who has been denied a benefit by
a decision of the Administrator pursuant to Section 5.4 is entitled to
request that the Administrator give further consideration to his claim
by filing with the Administrator a written request for a review of the
denial of his claims. The claimant shall file with the Administrator
such
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request, together with a written statement of the reasons why the
claimant believes his claim should be allowed, no later than 60 days
after the claimant receives the written notification provided for in
Section 5.4. As a condition of coverage and of receiving benefits under
the Plan, each Participant or beneficiary agrees that requests for
review received by the Administrator more than 60 calendar days after
the date of receipt of the claim denial will not be considered. No legal
recourse will be available after this period. The claimant should
include in his written appeal the following information to support his
claim for benefits:
(1) A list of which issues, if any, in the claim denial
that he chooses to contest and that he wishes the Administrator
to review on appeal;
(2) His position on each issue;
(3) Any additional facts that he believes support his
position on each issue; and
(4) Any legal or other arguments he believes support his
position on each issue.
He may, if he chooses, obtain legal counsel, and he may examine any
related Plan documents.
(B) FINAL DECISION. The Administrator shall make a final
decision as to the allowance of the claim within sixty (60) days of
receipt of the request for review (unless there has been an extension of
sixty (60) days due to special circumstances, provided the Administrator
communicates to the claimant the delay and the special circumstances
occasioning it within the sixty (60) day period). Such communication
shall be written in a manner calculated to be understood by the claimant
and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is
based. If the decision on review is not furnished within the time
period(s) set out above, the claim will be deemed denied on review.
(C) FURTHER ACTIONS. No legal action related to the Plan to
recover benefits or with respect to any other matter related to the Plan
may be commenced before the claimant has timely exhausted the claim and
claim review procedures described above. In no event may any such action
be brought more than two (2) years after the claim was first
17
incurred or after the occurrence of the event on which the claim is
based, whichever is earlier.
5.6 OTHER ADMINISTRATIVE POWERS AND DUTIES. The Administrator shall have
such powers and duties necessary to discharge its functions hereunder, including
the discretionary power to:
(A) construe and interpret the Plan, decide all questions of
eligibility for participation or benefits and determine the amount,
manner, and time of payment of any benefit or reimbursement hereunder;
(B) prescribe procedures to be followed by Participants choosing
benefit coverages or filing applications for reimbursements;
(C) prepare and distribute, in such manner as the Administrator
determines to be appropriate, information explaining the Plan;
(D) receive from Employees, agents, and Participants such
information as is necessary to properly administer the Plan;
(E) receive, review, and keep on file (as it deems convenient or
proper) reports of the receipts and disbursements of the Plan;
(F) appoint or employ individuals or other parties to assist in
administering the Plan and any other agents it deems advisable,
including accountants, legal counsel, bookkeepers, and recordkeepers;
and
(G) designate or employ persons to carry out any of the
Administrator's fiduciary duties or responsibilities under the Plan.
The foregoing list is not intended to be complete or all-inclusive. The
Administrator shall have all powers, whether or not expressly authorized, that
it may deem necessary, desirable, or proper for the supervision and
administration of the Plan.
5.7 RULES AND DECISIONS. The Administrator may adopt such written rules
and procedures as it deems necessary, desirable, or appropriate to administer
the Plan. When making a determination or calculation, the Administrator shall be
entitled to rely on information furnished by a Participant, a Dependent, the
duly authorized representative of a Participant or Dependent, or the legal
counsel of the Administrator.
5.8 FORMS AND REQUESTS FOR INFORMATION. The Administrator may require a
Participant to complete and file such forms as are provided for herein and all
other
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