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City of Arden Hills Summarv Plan Descriotion . GENERAL INFORMATION . . WHAT IS THE PURPOSE OF TillS PLAN? City of Arden Hills has established this Plan to make available to Eligible Employees on a pre-tax basis different combinations of health care benefits, dental care benefits, health care reimbursement benefits, dependent care reimbursement benefits, and direct (taxable) compensation. WHAT ARE SOME DEFINITIONS? Here are some definitions that will help you beltcr understand this summary of the Plan: a) AFFILIATE - means an entity (other than the Employer) that is part of a group of entities that includes the Employer and constitutes (i) a controlled group of cOIporations (as defined in Section 414(b) of the Code), (ii) a group of trades or businesses, whether or not incorporated, under common control (as defined in Section 414(c) of the Code), or (iii) an affiliated service group (within the meaning of Section 414(m) of the Code). b) EMPLOYER - City of Arden Hills. c) DEPENDENT - A person whom you can claim as a dependent on your federal income tax return. In general, a person will qualify as your dependent for a year if you provide more than one-half (1/2) of his or her support during the year and certain other tests are met. Your dependents will usually include your children who were under the agc of nineteen (19) at the end of the year or who were full-time students. Your dependents may also include other persons who are either related to you by blood or marriage or lived in your home as a member of your household during the entire year if they had less than $2,700 of gross income during the year (excluding nontaxable amounts such as social security or welfare benefits). The instructions to your federal income tax return discuss in some detail who qualifies as your Dependent. d) EFFECTIVE DATE - The Effective Date this plan became effective was January I, 1994. The Effective Date of this Amendment and Restatement is January 1,2005. e) ELIGIBLE EMPLOYEE - Generally, an Employee who is eligible for the Employer-sponsored Health Plan. Employees are eligible to participate on their date of hire. Employees electing COBRA coverage due to a qualifying event may continue eligibility for the remainder of the Plan Year in which the Employee ceased to be employcd by the Employer. f) PERIOD OF COVERAGE - For dependent care benefits the Period of Coverage is generally the same as the Plan Year. However, if a person becomes a participant after a Plan Year has started, that participant's Period of Coverage begins on his or her first day of participation and continues for the remainder of the Plan Year. For example, if a person becomes a participant on October 1,2005, that person's Period of Coverage' for Dependent Care reimbursement benefits for that Plan Year is October I, 2005 through December 31,2005. SPD-I