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Orion Township
ordinance to amend Ordinance No. 127, Flexible Benefits Plan

April 06, 2011






The Charter Township of Orion Board of Trustees, at the regular meeting of Monday, April 18, 2011, to be held at 7:00 p.m., at the Orion Township Hall, 2525 Joslyn Rd., Lake Orion, Michigan 48360, proposes to adopt an ordinance to amend Ordinance No. 127, Flexible Benefits Plan of the Charter Township Of Orion to comply with provisions of the Patient Protection and Affordable Care Act of 2010 and to provide for changes to the coverage of the plan.

The CHARTER Township of ORION OrdainS:

SECTION 1 of Ordinance

The Preamble of Ordinance No. 127 shall be amended by placing the hereinafter described language in the Section as follows:


The purpose of the plan is to provide eligible Employees of the Employer with the opportunity to choose among those benefits available to them under the Plan. This Plan shall be a cafeteria plan under the provisions of Section 125 of the Internal Revenue Code of 1986.

Adoption and Effective Date of Amendment. The Employer adopts the Amendment to Charter Township of Orion Flexible Benefits Plan ("Plan") to reflect certain provisions of the Affordable Care Act of 2010 (The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act.) The sponsor intends this Amendment as good faith compliance with the requirements of these provisions. This Amendment shall be effective on or after the date the Employer elects in Section 2.1 below.

Supersession of Inconsistent Provisions. This Amendment shall supersede the provisions of the Plan to the extent the Plan provisions are inconsistent with the provisions of this Amendment.

Construction. Except as otherwise provided in this Amendment, any reference to "Section" in this Amendment refers only to sections within this Amendment, and is not a reference to the Plan. The Article and Section numbering in this Amendment is solely for purposes of this Amendment, and does not relate to any Plan article, section or other numbering designation.

SECTION 2 of Ordinance


Definitions are amended to add the following:

1.23 Change in Reimbursement. Effective January 1, 2011, the Plan's definition of "Medical Expenses" under the Health Care Reimbursement Arrangement or Health Flexible Spending Account is amended by the addition of the following:

Notwithstanding anything in the Plan to the contrary, a Participant may not be reimbursed for the cost of any medicine or drug that is not "prescribed" within the meaning of Code Section 106(f) or is not insulin. In addition, only medicine or drugs considered to be prescription drugs under Code Section 106(f)(not "over-the-counter" drugs obtained under prescription) shall be able to be purchased by debit and/or credit cards issued to be used in conjunction with the Plan.

1.24 "Dependent" shall include any child of a Participant up to age 26 for each Plan year after September 23, 2010.

A Participant's "Child" includes his natural child, stepchild, foster child, adopted child, or a child placed with the Participant for adoption. An Employee's Child will be an eligible Dependent until reaching the limiting age of 26, without regard to student status, marital status, financial dependency or residency status with the Participant or any other person. When the child reaches the applicable limiting age, coverage will end at the end of the calendar year.

The phrase "placed for adoption" refers to a child whom the Participant intends to adopt, whether or not the adoption has become final, who has not attained the age of 18 as of the date of such placement for adoption. The term "placed" means the assumption and retention by such Participant of a legal obligation for total or partial support of the child in anticipation of adoption of the child. The child must be available for adoption and the legal process must have commenced.

Exhibit C of the Ordinance Change in Status is hereby amended to add subsection 6 to read as follows:

6. Notwithstanding anything in this Section to the contrary, the gain of eligibility or change in eligibility of a child up the end of the year in which a child attains age 26, as allowed under Code Sections 105(b) and 106 and IRS Notice 2010-38, shall qualify as a change in status.

SECTION 3 of Ordinance


Section 2.01 is amended to read as follows:

Eligibility to Participate.

Every full-time employee and every permanent part-time employee of the Employer shall be eligible to participate in this the Plan by filing an election and in salary reduction form with the Employer. A permanent part-time employee is an employee who regularly works at least twenty (20) hours per week for the Employer.

To participate in the Health Savings Account component, the individual must be an HSA-eligible (i.e. participate in a High Deductible Health Plan, not be Medicare eligible) individual and shall also be subject to the additional requirements, if any, specified in the High Deductible Health Plan.

SECTION 4 of Ordinance


Section 6.01(d) and (e) are amended to read as follows:

a. Medical and Hospital Coverage. The Employer maintains a medical and hospital plan which plan is separate from and in addition to the benefits provided under this plan. Those employees, who are eligible to participate in such plan and who have alternative medical and hospitalization insurance, may elect to receive a monthly amount of Two Hundred Fifty and 00/100 Dollars ($250.00) Dollars or Three Thousand and 00/100 ($3,000.00) Dollars per year for union employees or Three Hundred Thirty Three and 33/100 ($333.33) Dollars per month ($4,000.00 per year) for non-union employees) in lieu of such coverage. This amount shall be paid on the first pay date in December, or earlier in the event of termination of participation under Section 2.02.

b. Limited Purpose Medical Expense Reimbursement Benefit. Under such plan, an individual covered by the High Deductible Health Plan is eligible to participate in the Limited Purpose Medical Expense Reimbursement Plan that pays or reimburses only permitted coverage, permitted insurance, or preventive care without regard to the HDHP deductible (i.e. covers vision, dental). Such a participant can then participate in the Health Savings Account (as described in Section 6.01(f)) as well as the Limited Purpose Medical Expense Reimbursement Plan. In no event may the annual benefit provided for any Participant during any Plan Year under this Section exceed Two Thousand Five Hundred and/00/100 ($2,500.00) DollarsDollars ($2,000).

SECTION 5 of Ordinance


Exhibit A is amended to read as follows:

Available Levels of Benefits; Payments

A Participant may choose his or her applicable level of Medical, Dental and Vision Expense Reimbursement benefit (as available to the Participant determined under Section 6 of the document) to a maximum yearly amount of Two Thousand Five Hundred and 00/100 ($2,500.00) Dollars ($2000).

Dollar Limitation

In no event may the annual value of benefits provided hereunder for any Participant pursuant to the Participant's Benefit Election and Salary Reduction Agreement exceed Two Thousand Five Hundred and 00/100 ($2,500.00) Dollars ($2,000).

Effective Date. The provisions of this Amendment, unless otherwise indicated, are effective as of December 31, 2010.

SECTION 6 of Ordinance

Section 5 Severability

The various parts, sections and clauses of this Ordinance are declared to be severable. If any part, sentence, paragraph, section or clause is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of the Ordinance shall not be affected.If this Ordinance or any portion thereof is held to be invalid by any court of competent jurisdiction said decision shall not affect the validity of the remaining provisions.

Section 9 - Effective Date

This Ordinance shall be published in a newspaper of general circulation in the Charter Township of Orion, qualified under State law to publish legal notices, and shall become effective as provided by law.

This Ordinance is hereby declared to have been adopted by the Board of Trustees of the Charter Township of Orion at a meeting thereof duly called and held on the 18th day of April, 2011, and ordered to be given publication in the manner prescribed by the Charter of the Township of Orion.

Copies of the proposed Ordinance are on file in the office of the Township Clerk, 2525 Joslyn Road, Lake Orion, Michigan, 48360, and may be examined during normal business hours, 8:30 a.m. to 4:30 p.m., Monday through Friday. Written comments may be submitted before the meeting to Penny S. Shults, Clerk, at the address listed above.

Penny S. Shults, Clerk

Publish: 04.06.11 Charter Township of Orion