Page 60 - Employee Handbook 1-2015 rev9

of your medical and dental premiums, along with flexible spending account contributions, from
your gross salary before Federal, State and Social Security taxes are applied. This benefits you
by lowering your gross taxable income and by using "tax-free" dollars to fund the premiums and
spending account contributions.

Premium conversion plans are governed by State and Federal guidelines which impose
strict requirements, particularly when it comes to plan enrollments and changes. For these plans,
it is important to note that changes can only be made once a year during the annual open
enrollment period, unless there is a documented family status change or other qualifying event.
As defined by Section 125 of the Internal Revenue Code, these events include:

 marriage
 divorce
 legal separation or annulments
 death
 birth
 adoption
 loss of dependent eligibility (i.e. aging out, change in student status)
 gain or loss of spouse's employment and benefits
 you, or your spouse's unpaid leave of absence
 loss or gain of Medicare or Medicaid benefits
 court order, judgment or decree requiring coverage for an employee's child or foster
child
 significant changes in plan costs or benefit options
 change in hours from part-time to full-time (or vice-versa)
 relocation

It is also important to remember that in order for a change to be made as a result of a
qualifying event, Section 125 guidelines require that the appropriate forms and supporting
documentation must be submitted to Human Resources within 30 days of the event date.
Changes received after the 30-day window will be rejected and must wait until the following
open enrollment for processing.

Employees may elect or decline participation in the City’s sponsored health insurance
plans.

Y. Public Health Services Act (PHSA)

Under the provisions of this Federal Law, any employee who terminates employment
with the City is eligible to continue in the City’s Group Health and Dental Plans for a period not
to exceed 18 months. However, the terminated employee must pay the full cost of coverage plus
2% administrative costs.

City of Winston-Salem Employee Handbook November 2014 Revision 51