Los Angeles County Municipal Code Ch. 5.41 Options Dependent Care Reimbursement Plan

The Options Dependent Care Reimbursement Plan (the "Plan") was originally generally effective as of July 1, 1992 and formerly known as the Local 660 Dependent Care Spending Account. This amendment and restatement of the Plan is effective as of January 1, 2008, unless otherwise provided herein.

The Plan is designed to reimburse Qualifying Dependent Care Expenses of Covered Employees and is intended to qualify as a dependent care assistance plan under Code Section 129. Employee contributions to the Plan are made through The Local 660 Cafeteria Plan, set forth in Chapter 5.37 of the Los Angeles County Code, the provisions of which are incorporated by reference into this Plan to the extent applicable. County contributions may be made as provided under the terms of this Plan.

(Ord. 2008-0014 § 20 (part), 2008.)

A.

"Annual Contribution Credits" means the total amount of Employer Contributions and Employee Contributions credited to a Covered Employee's Dependent Care Account for a Plan Year.

B.

"Annual Enrollment" means the period before the start of each Plan Year during which Eligible Employees may elect to participate in the Cafeteria Plan and the programs offered thereunder, including this Plan, for that Plan Year.

C.

"Board" means the Board of Supervisors of the County.

D.

"Cafeteria" Plan means The Local 660 Cafeteria Plan established under Chapter 5.37 of the Los Angeles County Code.

E.

"Claims Administrator means" the person or entity, if any, to whom the Plan Administrator delegates claims administration, including responsibility for:

receiving and reviewing claims for Plan benefits,

determining benefit amounts payable,

disbursing benefit payments,

reviewing denied claims, and

determining appeals, under the terms and conditions of a written agreement with the Plan Administrator.

F.

"Code" means the Internal Revenue Code of 1986, as amended.

G.

"County" means the County of Los Angeles.

H.

"Coverage Period" means the period within each Plan Year during which a Covered Employee is covered for any incurred Qualifying Dependent Care Expenses. The Coverage Period for each Plan Year begins: (1) in the case of an Employee who becomes an Eligible Employee and enrolls pursuant to Section 5.41.030A.1 prior to Annual Enrollment, on the first day of the month following the date the Employee completes the enrollment process, and (2) following enrollment during an Annual Enrollment pursuant to Section 5.41.030A.2, the first day of the next following Plan Year, and continues for the remainder of the Plan Year; provided, however, that a Coverage Period does not include any period after which coverage has terminated or during which coverage is suspended in accordance with 5.41.030.

I.

"Covered Employee" means an Eligible Employee who satisfies the enrollment, participation and coverage requirements of 5.41.030.

J.

"Dependent Care Account" means the record-keeping account established by the Plan Administrator pursuant to Section 5.41.060B for each Eligible Employee who elects coverage under this Plan.

K.

"Dependent Care Center" means a facility which provides care for more than six individuals (other than individuals who reside at the facility) and receives a fee, payment, or grant for providing services to any of the individuals.

L.

"Earned Income" means wages, salaries, tips, other compensation, and net earnings from self-employment (as defined and limited by Code Section 32(c)(2)), but does not include amounts paid or incurred by an Employer for dependent care assistance to a Covered Employee. A spouse of a Covered Employee shall, for each month that spouse is a Full-Time Student or Incapable of Self-Care, be deemed to be gainfully employed and to have Earned Income of not less than $250 per month if the Covered Employee has one Qualifying Dependent and $500 per month if the Covered Employee has two or more Qualifying Dependents.

M.

"Effective Date" of this Plan as amended and restated is January 1, 2008.

N.

"Eligible Employee" means an Employee who is an eligible employee under the terms of the Cafeteria Plan and who works at least 8 hours or receives 8 hours of leave benefits in the prior calendar month.

O.

"Employee" means any person who has been determined by an Employer (regardless of any determination made by any other person or entity) to be currently an employee of the Employer for federal income and/or employment tax purposes. The term Employee does not include any individual who has been classified by the Employer as an independent contractor or leased employee, except to the extent leased employees within the meaning of Code Section 414(n) must be taken into account in applying nondiscrimination testing required under the Code. In the event that the Internal Revenue Service, another governmental agency with the authority to make a reclassification, or a court of competent jurisdiction, issues a final, binding decision that one or more individuals should be reclassified as employees for federal income and/or employment tax purposes, the Employer may change the status of such individuals to Employees, effective as of a date determined by the Employer following such decision.

P.

"Employee Contribution" means a contribution made to the Plan in accordance with Section 5.41.040A.1.

Q.

"Employer" means the County and (1) any governmental entity of which the Board is the governing body, (2) the Los Angeles County Superior Court to the extent participation is otherwise authorized by state law or rules of court, and (3) any related Employer which has adopted this Plan as a Participating Employer as described in Section 5.41.090.

R.

"Employer Contribution" means a contribution made to the Plan in accordance with Section 5.41.040A.2.

S.

"Full-Time Student" means an individual who during each of five calendar months of the Plan Year is a full-time student at an educational organization.

T.

"Incapable of Self-Care" means that, due to physical or mental problems, an individual is incapable of caring for his hygienic or nutritional needs, or requires full-time attention of another person for his own safety or the safety of others.

U.

"Maximum Annual Benefit" means, with respect to any Plan Year, the lesser of

$4,800 ($2,500 for a married individual filing a separate federal income tax return),

the Covered Employee's Earned Income for the Plan Year, or

if the Covered Employee is married at the end of the Plan Year, the Earned Income of the Covered Employee's spouse for the Plan Year.

V.

"Non-Represented Employees' Plan" means the County of Los Angeles Non-Represented Employees' Dependent Care Reimbursement Plan.

W.

"Participating Employer" means an Employer which adopts this Plan in accordance with Section 5.41.090.

X.

"Plan" means this Options Dependent Care Reimbursement Plan, as amended from time to time.

Y.

"Plan Administrator" means the person, entity, or committee appointed according to Section 5.41.070A, who is responsible for managing the Plan's operation and administration. If a Plan Administrator is not appointed, the County shall serve as Plan Administrator.

Z.

"Plan Year" means the 12-month period beginning January 1 and ending December 31.

AA.

"Qualifying Dependent" means any of the following who has the same principal place of abode as the Covered Employee for more than half of the calendar year:

a qualifying child (as defined in Code Section 152(c)) of the Covered Employee who is under the age of 13, and

a spouse or other dependent (as defined in Code Section 152, determined without regard to subsections (b)(1), (b)(2) and (d) (1)(B)) of the Covered Employee who is Incapable of Self-Care. Notwithstanding the foregoing, if Code Section 152(e) applies to a child who is under age 13 or is Incapable of Self-Care, he shall be treated as a Qualifying Dependent of the Covered Employee if the Covered Employee is the custodial parent (as defined in Code Section 152(e)(4)(A)).

BB.

"Qualifying Dependent Care Expenses" has the meaning set forth in Section 5.41.050.

CC.

"Status Change" means:

a change in legal marital status, including marriage, death of spouse, divorce, legal separation, or annulment;

a change in the number of dependents, including birth, adoption, placement for adoption, or death of a dependent;

a change in the employment status of the Eligible Employee or the Eligible Employee's spouse, including an increase or decrease in the number of hours of employment by the Eligible Employee, a change in worksite, a strike or lockout, or commencement or return from an unpaid leave of absence;

a dependent satisfying or ceasing to satisfy the requirements for being a Qualifying Dependent, unless the dependent's ceasing to satisfy such requirements is due solely to attainment of age 13 (or attainment of age 14 to the extent such age is substituted for age 13 pursuant to Section 5.41.050(G)); and

any other event the Plan Administrator determines permits revocation of an election under Code Section 125 and the regulations, rulings or other guidance issued thereunder.

(Ord. 2021-0020U § 18, 2021; Ord. 2008-0014 § 20 (part), 2008.)

A.

Enrollment.

Initial Enrollment. An individual who first becomes an Eligible Employee after the Effective Date but prior to an Annual Enrollment initially may participate in the Plan by completing the Cafeteria Plan enrollment process within the 60-day period beginning on the date the Employee becomes an Eligible Employee. Coverage for an Eligible Employee who enrolls in accordance with this Section shall be effective on the first day of the calendar month next following the date he completes the Cafeteria Plan enrollment process; provided, however, that an Eligible Employee who completes enrollment during November will not participate until the start of the next Plan Year. Except as provided in section 5.41.030A.3, if an Eligible Employee fails to enroll, he or she will not participate in the Plan for the remainder of the Plan Year.

Annual Enrollment. Prior to the beginning of each Plan Year, the Plan Administrator will conduct an Annual Enrollment, during which Eligible Employees may make new elections or change existing elections effective for the next following Plan Year. An Eligible Employee may become or continue to be a Covered Employee under this Plan by completing the Annual Enrollment process by the end of the Annual Enrollment period established by the Plan Administrator. Coverage elected under this Plan during an Annual Enrollment shall be effective as of the first day of the Plan Year following the Annual Enrollment. If an Eligible Employee fails to enroll, he or she will not participate in the Plan for the next following Plan year.

Change in Employment Classification During Plan Year.

a.

If a participant in the Choices Dependent Care Reimbursement Plan or the Non-Represented Employees' Plan for a Plan Year ceases to be eligible thereunder but becomes an Eligible Employee under this Plan during that Plan Year, he will have the opportunity to enroll in this Plan under Section 5.41.030A.1, provided, however, that his coverage under this Plan will not become effective until the first day of the second month following the date he completes the enrollment process. If he fails to complete the enrollment process within the 60-day period described in Section 5.41.030A.1, he will automatically become a Covered Employee under this Plan effective as of the first day of the second month after the 60-day enrollment period ends, and his election regarding the level of his employee contributions under the Choices Dependent Care Reimbursement Plan or Non-Represented Employees' Plan will continue in effect under this Plan for the remainder of the Plan Year.

b.

If a Covered Employee ceases to be a Covered Employee and becomes eligible to participate in the Choices Dependent Care Reimbursement Plan or Non-Represented Employees' Plan during a Plan Year, he will have a 60-day period in which to complete the enrollment process for that plan; provided, however that his coverage under the Choices Dependent Care Reimbursement Plan or Non-Represented Employees' Plan will not become effective until the first day of the second month following the date he completes the enrollment process. If he fails to complete the enrollment process within the 60-day period, he will automatically begin participating in the Choices Dependent Care Reimbursement Plan or Non-Represented Employees' Plan, as applicable, effective as of the first day of the second month after the 60-day enrollment period, and his election regarding the level of Employee Contributions under this Plan will continue in effect under the Choices Dependent Care Reimbursement Plan or Non-Represented Employees' Plan, as applicable, for the remainder of the Plan Year.

Enrollment Information and Deadlines. In order to complete the enrollment process during initial enrollment or Annual Enrollment as described in this Section 5.41.030, an Eligible Employee shall specify the amount of Employee Contributions, if any, to be credited to his Dependent Care Account and the corresponding Annual Contribution Credits for the Plan Year, and shall provide any other information required by the Plan Administrator. The form and content of any enrollment materials, and any limitations with respect to the time for completing the enrollment process, shall be determined by the Plan Administrator and communicated to Eligible Employees prior to enrollment.

Limits. The maximum Annual Contribution Credits that may be elected under the Plan for any Plan Year is the Maximum Annual Benefit as defined in Section 5.41.020U. The amount that may be excluded from the gross income of a Covered Employee and his spouse, if any, with regard to Qualifying Dependent Care Expenses reimbursed under this Plan or any other dependent care reimbursement plan in any calendar year shall be limited in accordance with Code Section 129.

B.

Coverage.

Initial Coverage. An Eligible Employee may become a Covered Employee during a Plan Year as of the first day of the calendar month next following the date he completes the Cafeteria Plan enrollment process in accordance with Section 5.41.030A.1. Except as otherwise provided in this Section 5.41.030, coverage shall remain effective for the balance of the Plan Year.

Annual Enrollment. Prior to the beginning of each Plan Year, the Plan Administrator will conduct an Annual Enrollment, during which Eligible Employees may make new elections or change existing elections effective as of the first day of the next following Plan Year. Except as otherwise provided in this Section 5.41.030, benefit elections shall remain effective for the entire Plan Year.

Change in Employment Classification During Plan Year. An Eligible Employee who enrolls or is defaulted into coverage in accordance with Section 5.41.030A.3.a shall become a Covered Employee as of the first day of the second calendar month after either (a) the date he completes enrollment or, (b) if he is defaulted into the Plan, the end of the 60-day enrollment period. Except as otherwise provided in this Section 5.41.030, coverage shall remain effective for the balance of the Plan Year.

Coverage During Leave of Absence or When Not Receiving Pay. A Covered Employee's coverage under the Plan shall continue while he is on a paid or unpaid leave of absence even if no Employer Contributions or Employee Contributions are credited to his Dependent Care Account during that period; provided, however, that the Covered Employee's Annual Contribution Credits will be reduced to reflect any Employee Contributions and Employer Contributions that are not made during that period.

C.

Termination of Coverage.

Date Coverage Ceases. Plan coverage ceases upon the earliest to occur of:

a.

the first day of the second month immediately following the date the Covered Employee ceases to be an Employee or an Eligible Employee, unless the Covered Employee has changed employment classification and plan participation during the Plan Year as described in Section 5.41.030A.3.b;

b.

in the case of a Covered Employee who changes employment classification and plan participation during the Plan Year as described in Section 5.41.030A.3.b., the first day of the second month following the earlier of (1) the date he completes the enrollment process under the Options Dependent Care Reimbursement Plan or Non-Represented Employees' Plan, or (2) the end of the 60-day enrollment period;

c.

the effective date of the Covered Employee's election not to participate, or failure to elect to participate, in the Plan under Section 5.41.030A.1 or 2;

d.

the effective date of any Plan amendment that terminates coverage for the Covered Employee's job category; or

e.

the date of Plan termination.

Effect of Termination of Coverage. No benefits are payable for Qualifying Dependent Care Expenses incurred after Plan coverage terminates (and before the date, if any, that it is reinstated).

D.

Revoking and Changing Elections.

General Rule. Except in extraordinary circumstances described in this subsection D, or as permitted otherwise through regulations, rulings, or other guidance issued by the Secretary of Treasury or IRS and set forth in the summary plan description for the Local 721 Cafeteria Plan (the "Options Plan"), benefit elections shall be irrevocable for the Plan Year for which they are made. Any new benefit election made under this subsection D must be made within 90 days beginning on the date of the event that is the reason for the new election. Any new benefit election shall be effective on the first day of the month following the correct and timely completion and submission of all required forms. This subsection D shall be interpreted and applied in accordance with applicable Treasury regulations and in a nondiscriminatory manner in accordance with Code Sections 125 and 129.

Revocation of Elections for Status Change; Consistency Rule.

a.

General Rule. The Plan Administrator may, in its discretion, permit (i) a Covered Employee to revoke a benefit election under the Plan and make a new benefit election or (ii) an Eligible Employee who is not participating in the Plan to make a benefit election and commence participation in the Plan, if a Status Change occurs and the election change or new election satisfies the consistency requirements described in subparagraph 2.b below.

b.

Consistency Rules. An election change or new election satisfies the requirements of this paragraph if the election change or new election is on account of and corresponds with a Status Change that affects (i) eligibility for coverage under an employer's dependent care reimbursement account plan, or (ii) expenses described in Code Section 129.

Cost Changes.

a.

Significant Cost Changes. If the cost of a Covered Employee's Qualifying Dependent Care Expenses significantly increases or significantly decreases during a Plan Year, or if the cost to the Covered Employee (e.g., the necessary level of Employee Contributions) to maintain the elected Annual Contribution Credits for the Plan Year increases due to the reduction or termination of Employer Contributions under Section 5.41.040A.2, the Plan Administrator, in its discretion, may permit any affected Covered Employee to revoke his existing election and make a new election to reflect the increased or decreased cost.

b.

Limitation. Notwithstanding anything to the contrary in this Section 5.41.030D.3, no election changes under the Plan shall be permitted as a result of a change in cost for Qualifying Dependent Care Expenses imposed by a dependent care provider unless such change in cost is imposed by a dependent care provider who is not a qualifying relative (as defined in Code Section 152(d)) of the Covered Employee.

Significant Improvement or Curtailment of Coverage (Services). If the dependent care services being provided to a Covered Employee are significantly improved or curtailed (e.g., if the entity or person providing dependent care services changes or if the hours of services provided change), the Plan Administrator, in its discretion, may permit the Covered Employee to revoke his existing election and make a new election to reflect the cost of the modified services.

Change in Coverage Under Another Employer Plan. The Plan Administrator may permit a Covered Employee to prospectively change or revoke an existing benefit election under the Plan if the election change is on account of and corresponds with a

change made under another Employer plan (including a plan of the same Employer or of another Employer) that would be permitted under this Section (without regard to this subsection 5.). The Plan Administrator also may permit a Covered Employee to make a prospective election to drop coverage under the Plan if dropping such coverage is on account of and consistent with adding coverage under another Employer's plan provided that the period of coverage or plan year under the plan does not correspond with the period of coverage or Plan Year under this Plan.

Additionally, solely during the 2020 and 2021 Plan Years, in accordance with IRS Notice 2020-29 and the Consolidated Appropriations Act 2021, a Covered Employee is permitted to increase or decrease his or her contributions to his or her Dependent Care Account (and related coverage level thereunder) prospectively for the remainder of the Plan Year, provided, however, that he or she may not reduce his or her total contribution amount for the Plan Year below the amount that already has been reimbursed to him or her from such account.

(Ord. 2021-0020U § 19, 2021; Ord. 2020-0036U § 12, 2020; Ord. 2008-0014 § 20 (part), 2008.)

A.

Contributions.

Employee Contributions. During enrollment in accordance with Section 5.41.030, and pursuant to the terms of the Cafeteria Plan, an Employee may elect to have his Employer credit a portion of his Contribution (as defined in the Cafeteria Plan) to his Dependent Care Account. The amount elected may not be less than $10 or more than the amount that, together with any monthly Employer Contribution, would cause his Annual Contribution Credits to exceed the Maximum Annual Benefit. To the extent permitted under Code Sections 125 and 129, Employee Contributions will be treated like non-taxable Employer contributions.

Employer Contributions. Each Employer may contribute up to a designated dollar amount per month to the Plan on behalf of each Covered Employee employed by that Employer who elects to receive an Employer Contribution. Subject to negotiation with the certified bargaining organizations that represent an Employer's Eligible Employees, the Employer shall establish the maximum amount of the monthly Employer Contribution that it will make on behalf of each Covered Employee, as well as any annual cap on total Employer Contributions, for each Plan Year. The Plan Administrator shall disclose to Eligible Employees prior to enrollment the maximum level of Employer Contribution that may be made on behalf of each Covered Employee and the existence of the cap. Effective with the 2023 Plan Year, a covered employee must make a minimum monthly Employee Contribution of $10 to receive an Employer Contribution. An Eligible Employee who does not enroll in the Plan will not be entitled to an Employer Contribution.

In the event an Employer establishes an annual cap on Employer Contributions on behalf of Covered Employees, the Employer may, without prior notice to Covered Employees and at any time during the Plan Year, reduce or terminate the Employer Contribution to be made for some or all Covered Employees in any manner consistent with Code Section 129(d) and the terms negotiated with the Eligible Employees' bargaining unit representative(s) to prevent the cap from being exceeded. The Plan Administrator shall notify affected Covered Employees if their Employer Contributions will be reduced or terminated and their Annual Contribution Credits reduced due to imposition of a cap.

Termination or Suspension of Contributions. An Employer will not make an Employer Contribution or Employee Contribution for a month on behalf of a Covered Employee if he works less than 8 hours or receives less than 8 hours of leave benefits in

the prior month. An Employer also will not make an Employer Contribution or Employee Contribution on and after the first day of the second month after the Covered Employee ceases to be an Employee or an Eligible Employee unless the Covered Employee changes employment classifications and plan participation as described in Section 5.41.030A.3.a. If the Covered Employee changes employment classifications and plan participation as described in Section 5.41.030A.3.a, he will not receive an Employer Contribution or Employee Contribution on or after the date his coverage under the Plan terminates in accordance with Section 5.41.030C.1.b.

B.

Plan Funding. The Plan is not required to be and is not funded or insured. Benefits paid to a Covered Employee are paid solely out of the general assets of the Employee's Employer.

(Ord. 2022-0046 § 19, 2022; Ord. 2008-0014 § 20 (part), 2008.)

A.

Reimbursement of Qualifying Dependent Care. Subject to the terms and limits set forth in this Section 5.41.050, Covered Employees may be reimbursed for Qualifying Dependent Care Expenses as defined in Section 5.41.050B.

B.

Qualifying Dependent Care Expenses Defined. Qualifying Dependent Care Expenses means expenses incurred by the Covered Employee for household services or for the care of a Qualifying Dependent but only if such expenses are incurred to enable the Covered Employee (and the Covered Employee's spouse, if any) to be gainfully employed or to search for gainful employment for any period for which there are one or more Qualifying Dependents with respect to the Covered Employee, and subject to the exclusions set forth in Section 5.41.050C. For these purposes:

A Covered Employee's spouse is deemed gainfully employed for each month that he is a Full-Time Student or is Incapable of Self-Care.

Volunteer work for a nominal salary does not constitute gainful employment.

Expenses paid for a period during only part of which a Covered Employee or spouse is gainfully employed or in active search of gainful employment must be allocated on a daily basis, unless such expenses are incurred during a short, temporary absence from work (such as for vacation or minor illness) and the dependent care arrangement requires payment for care during the absence. An absence of two consecutive calendar weeks is deemed a short, temporary absence.

Expenses are for the care of a Qualifying Dependent only if their primary purpose is to assure the individual's well-being and protection. Expenses incurred for the care of a Qualifying Dependent may include employment taxes on the wages of a care provider, the additional costs of room and board for a care provider over usual household expenditures, and expenses that relate to, but are not directly for, the care of a Qualifying Dependent such as application fees, agency fees and deposits if the Covered Employee is required to pay those expenses to obtain the related care. Forfeited deposits or other payments are not for the care of a Qualifying Dependent if care is not provided in connection with those amounts.

Expenses are paid for household services if they are paid for the performance in and about the Covered Employee's home of ordinary and usual services necessary to the maintenance of the household, provided the expenses are attributable to the

care of a Qualifying Dependent. Services of a housekeeper are household services if the services are provided, at least in part, to the Qualifying Dependent.

Expenses that are incurred for services outside the Covered Employee's household may qualify as Qualifying Dependent Care Expenses only if such expenses are incurred for the care of a Qualifying Dependent described in subsection 5.41.020.AA.1 of this Plan or any other Qualifying Dependent who regularly spends at least 8 hours each day in the Covered Employee's household.

Expenses that are incurred for services provided outside the Covered Employee's household by a Dependent Care Center may qualify as Qualifying Dependent Care Expenses only if such center complies with all applicable state and local laws and regulations applicable to such facility.

The cost of transportation by a care provider of a Qualifying Dependent to or from a place where care of the Qualifying Dependent is provided may be for the care of the Qualifying Dependent.

Qualifying Dependent Care Expenses are incurred on the date the dependent care is provided, not on the date charged, billed, or paid.

C.

Exclusions. Notwithstanding any other provision of this Plan to the contrary, Qualifying Dependent Care Expenses do NOT include:

Any amounts paid for services outside the Covered Employee's household at a camp where the Qualifying Dependent stays overnight.

Expenses incurred in connection with services rendered by: (a) a Covered Employee's child or a child of the Covered Employee's spouse who is under the age of 19 as of the end of the Plan Year, or (b) a person who qualifies as a dependent of the Covered Employee or a dependent of the Covered Employee's spouse and for whom a deduction is allowable under Code Section 151(c) to the Covered Employee or to the Covered Employee's spouse for the Plan Year.

The costs of a Qualifying Dependent's food, clothing, entertainment, or education (unless for a child below kindergarten) unless those costs are incidental, minimal, and inseparable from the cost of caring for a Qualifying Dependent.

The costs of transportation other than as provided in subsection 5.41.050B.8.

D.

Coverage Period Limitations. Qualifying Dependent Care Expenses reimbursed by the Plan for a Plan Year must have been incurred during the Coverage Period. Accordingly, with regard to each Plan Year, the Plan will not reimburse any expenses incurred:

before the start of the Plan Year or after the end of the Plan Year,

before a benefit election becomes effective in accordance with Section 5.41.030, or

after coverage terminates or during a period in which coverage is suspended in accordance with Section 5.41.030.

E.

Amount Payable. Reimbursement of Qualifying Dependent Care Expenses may not exceed the Annual Contribution Credits elected for the Plan Year, or the balance credited to a Covered Employee's Dependent Care Account at the time such reimbursement is made. Any unused balance in a Covered Employee's Dependent Care Account after the claims period described in Section 5.41.060C has expired shall be forfeited. Notwithstanding the foregoing, in the case of a Covered Employee who has a balance credited to his Dependent Care Account as of the end of the 2020 Plan Year and/or 2021 Plan Year (and after the processing of all claims for such Coverage Period), the entire unused balance shall be carried over to the Covered Employee's Dependent Care Account for the following Plan Year.

F.

Code Limitations on Benefits. Benefits payable under the Plan to each highly compensated Employee, as defined in Code Section 414(q), are limited to the extent necessary to avoid violating the nondiscrimination requirements contained in Code Section 129.

G.

In the case of a Covered Employee (i) with a Dependent Care Account during the 2020 Coverage Period; and (ii) whose Qualifying Dependent (as defined in Section 5.41.020.AA.1.) attains the age of 13 during the 2020 Plan Year, the words "under the age of 14" are substituted for the words "under the age of 13" in Section 5.41.020.AA.1. during the 2020 Plan Year. Additionally, in the case of a Covered Employee (i) whose Qualifying Dependent (as defined in Section 5.41.020.AA.1.) attains the age of 13 during the 2020 or 2021 Plan Year; and (ii) who has a balance credited to their Dependent Care Account as of the end of the 2020 Plan Year (and after processing all claims for such Plan Year), that balance shall be carried over to the 2021 Plan Year, and solely with regard to that carried over balance, the words "under the age of 14" are substituted for the words "under the age of 13" in 5.41.020.AA.1 during the 2021 Plan Year.

(Ord. 2021-0020U § 20, 2021; Ord. 2008-0014 § 20 (part), 2008.)

A.

Enrollment and Election Procedures. Eligible Employees may enroll, specify the amount of his Employee Contributions and designate the corresponding Annual Contribution Credits for a Plan Year only by completing the enrollment procedure in accordance with Section 5.41.030. Upon initial eligibility and during Annual Enrollment, the Plan Administrator will provide all Eligible Employees with information about permissible benefit elections under the Plan and procedures for enrollment and benefit elections.

B.

Dependent Care Accounts. The Plan Administrator shall establish a Dependent Care Account for each Covered Employee. Each Covered Employee's Dependent Care Account will be credited with Employee Contributions and/or Employer Contributions in accordance with Section 5.41.040, and will be debited by the amount of any Qualifying Dependent Care Expenses paid or incurred on behalf of the Covered Employee under the Plan for the Plan Year. The amount of Qualifying Dependent Care Expenses payable from the Plan at any time shall be limited pursuant to Section 5.41.050E of the Plan. Any unused balance in a Covered Employee's Dependent Care Account after the claims period described in Section 5.41.060C

has expired for any Plan Year shall be forfeited. Notwithstanding the foregoing, in the case of a Covered Employee who has a balance credited to his Dependent Care Account as of the end of the 2020 Plan Year and/or 2021 Plan Year (and after the processing of all claims for such Plan Year), the entire unused balance shall be carried over to the Covered Employee's Dependent Care Account for the following Plan Year.

C.

Claim Procedures. Any Covered Employee (or duly authorized representative) seeking Plan benefits shall assert a claim under the procedures of this Section regardless of the basis asserted for the claim or when the act or omission occurred on which the claim was based. The Plan Administrator or Claims Administrator will provide, upon request, forms required for filing a claim for Plan benefits and instructions on the information that must be submitted for the claim to be processed. The Plan Administrator shall determine the information that must be included in any claim submission. Such information may include, but is not limited to:

itemized bills or receipts,

the amount, date, and nature of the expense,

the name, address, social security number or tax identification number and signature of the provider,

the name of the person for whom the expense was incurred and the person's relationship to the Covered Employee,

the amount, if any, that has been reimbursed or is reimbursable from any other source, and

any other information required by the Plan Administrator. Claimants must complete and file the appropriate forms with the Claims Administrator by June 30th following the close of the Plan Year to which the claim relates.

D.

Claim Determination. The Plan Administrator or Claims Administrator shall determine all matters pertaining to claims for Plan benefits. If the Plan Administrator or Claims Administrator denies a Covered Employee's claim for benefits, the entity reviewing such claim shall notify the Covered Employee in writing of such denial within a reasonable period of time.

E.

Claim Review Procedures.

Appeal Process. A Covered Employee may appeal an adverse benefit determination under the Plan to the Plan Administrator by filing an appeal to the Plan Administrator within 180 days of receiving notice of the adverse benefit determination. If the Plan Administrator upholds the adverse benefit determination on appeal, it shall provide written notification to the Covered Employee of such determination as soon as reasonably possible.

Determination Final. The Plan Administrator's decision on appeal shall be final and binding on all persons.

(Ord. 2021-0020U § 21, 2021; Ord. 2008-0014 § 20 (part), 2008.)

A.

Plan Administrator. The County of Los Angeles shall act as Plan Administrator except to the extent that it delegates its responsibilities in accordance with Section 5.41.070.

B.

Plan Administrator's Duties. The Plan Administrator's duties include:

Management of Plan operations and administration according to the Plan's terms and for the exclusive benefit of Covered Employees;

Maintenance of:

a.

records and data necessary or desirable for the Plan's proper operation and administration; and

b.

governing documentation of the Plan for inspection by any Covered Employee under the Plan;

Notification of Eligible Employees of the Plan's availability and terms; and

Preparation and filing of all annual reports or returns, Plan descriptions, financial statements, and other documents required by law or under the Plan's terms.

C.

Plan Administrator's Powers. The Plan Administrator may exercise, in a uniform and nondiscriminatory manner, sole and absolute discretion in the Plan's operation and administration, including:

Establishment of such rules and regulations not inconsistent with the terms of the Plan as it deems necessary or proper for the efficient administration of the Plan and for the payment of benefits under the Plan;

Interpretation of the Plan, making decisions regarding all questions of the eligibility of persons to participate in the Plan and making factual determinations under the Plan, construction of any ambiguous provision of the Plan, correction of any defect, supplying any omission, or reconciliation of any inconsistency, in such manner and to such extent as the Plan Administrator in its discretion may determine, and any such action of the Plan Administrator will be binding and conclusive upon all Covered Employees;

Appointment of such agents, counsel, accountants, consultants, and other persons as may be required to assist in administering the Plan, including, without limitation, Employees of an Employer or a third-party Claims Administrator; and

Allocation and delegation of responsibilities under the Plan and designation of such departments, Employees, committees, entities, or persons including, without limitation, a third-party administrator (such as a third-party Claims Administrator), to carry out any of its responsibilities under the Plan.

D.

Plan Administrator Determinations and Actions. The Plan Administrator shall use ordinary care and diligence in performing its duties.

Expenses and Compensation. Unless the County agrees otherwise, the Plan Administrator shall serve without compensation. The County shall pay all reasonable expenses the Plan Administrator incurs in performing its duties.

Indemnification. The County shall indemnify and hold harmless any Employee who serves or served as Plan Administrator from all claims, liability, and costs (including reasonable attorneys' fees) arising out of being the Plan Administrator or performing the Plan Administrator's duties, except if the claim, liability, or cost is the result of such individual's willful misconduct or bad faith.

(Ord. 2008-0014 § 20 (part), 2008.)

A.

Permanence of the Plan. The Plan shall continue in full force and effect unless amended or terminated by the County as provided in Section 5.41.080B hereto.

B.

Plan Amendment or Termination. The County reserves the right to amend or terminate the Plan at any time; provided, however, that the termination of the Plan or the amendment of any provisions subject to negotiation under applicable law shall be negotiated with the affected certified bargaining organizations.

C.

Effect of Amendment or Termination; No Vested Rights. No amendment or termination of the Plan shall have any retroactive effect so as to deprive any Covered Employee of any benefit then payable. Notwithstanding the foregoing, any amendment or termination of the Plan may be made retroactive to the extent necessary for the Plan to comply with any applicable law. No Covered Employee has any vested right to continue to receive benefits under the Plan.

(Ord. 2008-0014 § 20 (part), 2008.)

A.

No Employment Rights. Nothing contained in the Plan shall be construed as a contract of employment between an Employer and any Employee, or as the right of any Employee to continue in the employment of an Employer, to be employed for any specific period of time.

B.

Exclusive Obligations and Rights. The County, an Employer, and the Plan Administrator do not have any obligation or duty other than as stated in the Plan and, except as specified in this document, no one has a right to Plan benefits or a legal or equitable right against the County, the Board, an Employer, the Plan, or the Plan Administrator.

C.

No Assignment of Benefits. Except to the extent required in accordance with applicable law, Plan benefits are not subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, levy or charge of any kind, and any attempt to effect any of these actions is void.

D.

Misrepresentation or Fraud. A Covered Employee who receives a Plan benefit as a result of false or incomplete information or a misleading or fraudulent representation shall repay all amounts the Plan paid and is liable for all collection costs including attorneys' fees and court costs.

E.

Legal Action.

Exhaustion of Administrative Procedures. Before pursuing legal action, a person claiming Plan benefits or seeking redress related to the Plan shall first exhaust all claim, review and appeal procedures provided by the Plan. No action at law or in equity may be brought to recover Plan benefits or seek redress related to the Plan until the claim procedures contained in Section 5.41.060 have been exhausted.

Necessary Parties. Unless otherwise required by law, the County and the Plan Administrator are the only necessary parties to any action or proceeding that involves the Plan or its administration. No Employee, Employer or other person or entity is entitled to notice of any legal action, unless a court with appropriate jurisdiction orders otherwise.

F.

Governing Law. The Plan's provisions and all Plan matters, including actions of the parties involved, are construed and enforced according to applicable California laws unless preempted by federal law.

G.

Governing Instrument. This writing, together with any documentation incorporated by reference, is the legal instrument governing the Plan. In case of conflict between this document and any of the writings incorporated by reference, the provisions of the documentation govern in the following order: this document, any other plan document, any summary plan description, any enrollment or election form, and, finally, any other writing; provided, however, that in the event of a conflict between this document and an applicable memorandum of understanding with a certified bargaining organization representing Eligible Employees, the conflict shall be resolved in accordance with County Code section 6.28.140. Except as provided in this section 5.41.090G., no writing or evidence may contradict or interpret the Plan's terms or provisions unless specifically incorporated by reference herein.

H.

Savings Clause. If a Plan provision or its application is held invalid under governing law by a court of appropriate jurisdiction, the remainder of the Plan and its application will not be affected.

I.

Parties' Liability. Neither the County, the Board, an Employer, the Plan Administrator, nor any delegate thereof, shall be liable for:

good faith reliance on any fact or absence of fact, good faith action, or good faith omission,

another person's act or omission, unless required by law, or

the tax consequences of contributions to or benefits paid from the Plan.

J.

Tax Consequences Not Guaranteed. Neither the County, the Board, an Employer, the Plan, the Plan Administrator, nor any other person connected with any such person or entity guarantees that Plan benefits are or will be excludable from a Covered Employee's gross income for federal, state, or local income tax purposes, or that any other tax treatment is or will be applicable or available. Covered Employees themselves shall determine whether Plan benefits are excludable for these purposes, and shall notify the Plan Administrator if they have reason to believe a payment is not excludable. If the Plan Administrator determines at any time after the end of a Plan Year that contributions to the Plan or benefits paid exceeded limits allowed by law for any reason including, but not limited to, erroneous information, administrative error or failure to satisfy prohibitions on discrimination, then affected Covered Employees shall:

pay any local, state, and federal income taxes and related penalties and interest due with respect to the excess contributions or benefits, and

reimburse the Employer for the Employee's share of any local, state, and federal tax contributions the Employer would have withheld or other applicable deductions the Employer would have taken had the excess contributions or benefits been treated as taxable income.

K.

Nondiscrimination. If, in the judgment of the Plan Administrator, the Plan may fail to meet the requirements of Section 129(d) of the Code, the Plan Administrator will take such action as it deems appropriate to assure compliance with such requirements. The action taken by the Plan Administrator may include, without limitation, a modification of the elections of certain Covered Employees who are defined as "highly compensated employees" under Code Section 414(q). Such action may be taken by the Plan Administrator without consent of the affected Covered Employee.

L.

Participating Employers. With the County's consent, an Employer may adopt or withdraw from this Plan.

Each Participating Employer shall file with the Plan Administrator a notice of adoption specifying:

the effective date of its adoption, and

any other information the Plan Administrator may require to carry out its duties under the Plan. Except for functions reserved to the County, the Plan Administrator has exclusive authority over all Plan matters and acts as agent of all Employers that have at any time adopted the Plan.

An adopting Employer may withdraw from Plan participation by giving the County and the Plan Administrator 60 days advance written notice of its withdrawal. Similarly, the County may terminate an Employer's Plan participation by giving the Employer and Plan Administrator 60 days advance written notice of the termination. Upon an Employer's withdrawal or termination of participation, the Plan Administrator must provide the Employer with copies of all records that the Plan Administrator determines necessary for the Employer to terminate and administer its portion of the Plan. An Employer's withdrawal or termination of Plan participation operates only as to that Employer's Employees.

(Ord. 2008-0014 § 20 (part), 2008.)