AUTHORITY: Implementing Sections 105(h), 125, and 213(d) of the Internal Revenue Code (26 USC 105(h), 125, and 213(d)), Section 405-110 of the Civil Administrative Code of Illinois [20 ILCS 405/405-110], Section 30c of the State Finance Act [30 ILCS 105/30c], and Sections 3 and 9 of the State Employees Group Insurance Act of 1971 [5 ILCS 375/3 and 9] and authorized by Section 5-625 of the Civil Administrative Code of Illinois [20 ILCS 5/5-625].

SOURCE: Emergency rules adopted at 12 Ill. Reg. 11810, effective July 1, 1988, for a maximum of 150 days; adopted at 12 Ill. Reg. 17296, effective October 17, 1988; amended at 14 Ill. Reg. 18998, effective November 14, 1990; amended at 16 Ill. Reg. 13811, effective August 28, 1992; amended at 19 Ill. Reg. 8595, effective June 14, 1995; amended at 21 Ill. Reg. 2955, effective February 21, 1997; amended at 30 Ill. Reg. 15119, effective September 6, 2006; emergency amendment at 33 Ill. Reg. 6110, effective April 13, 2009, for a maximum of 150 days; amended at 33 Ill. Reg. 11791, effective August 3, 2009; amended at 37 Ill. Reg. 4241, effective March 22, 2013.

SUBPART A: INTRODUCTION AND DEFINITIONS

 

Section 2120.10  Summary and Purpose of Plan

 

This Plan is intended to qualify as a medical care assistance program under Sections 105, 125, and 213(d) of the Internal Revenue Code (26 U.S.C. 105, 125, and 213(d)) (Code) and is to be interpreted in a manner consistent with the requirements of these Sections.  The purpose of the Plan is to enable Participants to elect to receive Reimbursements of their Medical Care Expenses that are excludable from their taxable Compensation pursuant to Code Section 105(b).

 

Section 2120.20  Plan Number

 

The number of this Plan for purposes of reporting statistical information to the Internal Revenue Service is 502.

 

Section 2120.30  Definitions

 

a)         Wherever used in the Plan, the following terms have the following meanings:

 

"Anticipated Payroll" means those payrolls in which the Participant is issued a paycheck during the pay period that the deduction is taken.

 

"Card" means the stored value card provided by the Plan Administrator that deducts funds electronically from a Participant's medical care assistance account to pay for eligible expenses.

 

"Change in Family Status" means marriage, divorce, death of spouse or dependent, birth or adoption of child, commencement or termination of employment of spouse, significant change in cost or benefits coverage of the Participant or spouse due to the spouse's employment, switch from full-time to part-time status of spouse, or from part-time to full-time, or unpaid leave of absence of Participant or spouse, or any other events that the Department determines constitute a change in family status.

 

"Code" means the Internal Revenue Code of 1954 (26 USC 1 et seq.) and applicable regulations, or any successor statute.

 

"Compensation" for purposes of this Plan is defined under Code section 414.  It means wages, salaries and other employee compensation received by a Participant as reported on the Participant's W-2 from this employer.  For purposes of discrimination testing, it may include or exclude all amounts not currently includible in the Participant's gross income.

 

"Delayed Payroll" means those payrolls in which the Participant is issued a paycheck following the pay period that the deduction is taken.

 

"Department" means the Illinois Department of Central Management Services.

 

"Dependent" means a Participant's spouse, qualifying child or qualifying relative as defined in Internal Revenue Code sections 152 and 213(d)(5).

 

"Discriminatory Excess" is the excess of any "Highly Compensated Participant" over the highest permitted benefit.

 

"Eligible Employee" means any employee working full time or not less than half-time who is eligible to participate in the Health Plan authorized by the State Employees Group Insurance Act of 1971.  It includes those employees who have lost eligibility to participate in the Health Plan because of a reduction in hours worked but chosen continuation coverage through payroll deduction as authorized by the Consolidated Omnibus Budget Reconciliation Act (COBRA) (P.L. 99-272) as long as there is no break in coverage or payroll deductions.  It also includes those employees who retire, terminate employment or go on an unpaid leave of absence, but choose to continue to make contributions to their MCAP for the balance of the Plan Year.  An eligible employee of the employer excludes independent contractors, temporary employees, and retirees who return to work for not longer than 75 days per year after they retire.

 

"Employer" means the State of Illinois, which includes all officers, boards, commissions, and agencies created by the Illinois Constitution, whether in the executive, legislative or judicial branch, all officers, departments, boards, commissions, agencies, institutions, authorities, universities, bodies politic and corporate of the State; and administrative units or corporate outgrowths of the State government that are created by or pursuant to statute other than units of local government and their officers, school districts and boards of election commissioners, and all administrative units and corporate outgrowths of the above as may be created by executive order of the Governor.

 

"Enrollment Form" means the form provided by the Department for the purpose of filing an election and compensation reduction agreement and for making changes authorized by the Plan.

 

"Grace Period" means the period following the close of the Plan Year in which the Participant can incur a medical care expense eligible for reimbursement from his or her medical care assistance account from the just completed Plan Year.  The grace period goes from July 1 until September 15 of each calendar year.

 

"Health Plan" means health, dental and vision coverage offered by the Department to eligible persons.

 

"Highly Compensated Participant" means any Participant who was in either of the following categories at any time during the current Plan Year:

 

an employee of the State or its administrative units or corporate outgrowths who has annual total compensation greater than $75,000 or any other amount established by the Internal Revenue Service; or

 

an employee of the State who receives compensation in excess of $50,000 or any other amount established by the Internal Revenue Service and is in the top 20% of all State employee salaries.

 

"Medical Care Expense" means any expense incurred by a Participant or dependent of the Participant that was paid for as a medical service expense eligible under Internal Revenue Code section 213(d). Expenses that result in a double deduction for tax purposes are not eligible. For example:

 

Premiums for health insurance coverage carried by the eligible employee, spouse or dependent; and

 

Premiums for other health coverage carried by the Participant.

 

"Participant" means each eligible employee who participates in the Plan in accordance with Section 2120.210 of this Part.

 

"Pay Period" means a regular accounting period established by the State of Illinois for measuring and paying compensation earned by employees.  A pay period may be monthly, semi-monthly or biweekly.

 

"Plan" means the State of Illinois Medical Care Assistance Plan as set forth in this Part, and as may be amended from time to time in compliance with the Illinois Administrative Procedure Act [5 ILCS 100].

 

"Plan Administrator" means an organization, company or other entity designated by the Director to perform certain duties related to the administration of a specific plan in accordance with the terms of the contract between the organization and the Department.

 

"Plan Year" means the 12-consecutive-month period beginning July 1 comprising the State fiscal year.

 

"Qualifying Child" means an individual 26 years old or younger at the end of the taxable year who has a specified family-type relationship to the Participant, lives in the Participant's household for more than half of the taxable year and has not provided more than one-half of his or her own support during the taxable year.  There is no age requirement if the individual is physically and/or mentally incapable of self care.

 

"Qualifying Relative" means an individual who has a specified family-type relationship with the Participant, is not someone else's qualifying child and receives more than one-half of his or her support from the Participant during the taxable year or, if no specified family-type relationship to the Participant exists, is a member of and lives in the Participant's household (without violating local law) for the entire taxable year and receives more than one-half of his or her support from the Participant during the taxable year.

 

"Reimbursement" means to pay a Participant in this Plan for medical care expenses from his or her medical care assistance account.

 

"Spouse" means the person to whom the Participant is married.  Spouse does not include a person separated from the Participant under a decree of divorce.

 

"Termination" means the permanent severance of the Participant's employment relationship with the employer as provided by the appropriate rules of the employer.

 

"Unsubstantiated Expenses" are expenses for medical care paid for with the Card for which the Plan Administrator requires additional documentation to substantiate the expense.

 

b)         A pronoun or adjective in the masculine gender includes the feminine gender and the singular includes the plural, unless the context clearly indicates otherwise.

 

(Source:  Amended at 37 Ill. Reg. 4241, effective March 22, 2013)

SUBPART B: ADMINISTRATION

 

Section 2120.110  Role of the Department/Plan Administrator

 

a)         The Plan shall be administered by the Plan Administrator.

 

b)         The Department reserves the right to enter into agreements with other agencies to delegate various record keeping and other administrative functions to the employing agencies of Participants.

 

c)         It shall be a principal duty of the Department to see that the Plan is carried out for the exclusive benefit of persons entitled to participate in the Plan without discrimination among them.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.120  Expenses of Administration

 

Any expenses incurred relative to the administration of the Plan shall be paid by the Department.

SUBPART C: PARTICIPATION

 

Section 2120.210  Date of Participation

 

a)         An eligible employee will become a Participant upon an election under this Plan to receive medical care assistance.

 

b)         New eligible employees may become Participants upon an election to receive medical care assistance that is made within 60 days after becoming an employee.

 

c)         Employees who are eligible because they have chosen continuation coverage as authorized by COBRA must continue their medical assistance deductions.  Otherwise, they will be considered revoked as described in Section 2120.220.

 

d)         Eligible employees who experience a change in family status may elect to participate at any time within the Plan Year.  The election must be made within 60 days after the change in family status.

 

e)         Elections from new eligible employees or those who have had a change in family status will be effective the first pay period after the signature date of the Participant on the enrollment form or the date of the change in family status, whichever is later.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.220  Insufficient Salary

 

a)         Participation can only be through payroll deduction except as specifically allowed in this Part.

 

b)         In the event the Comptroller fails to make a deposit in the Participant's account because there are inadequate funds to satisfy the Participant's elected deduction, the Participant's deduction will be revoked.

 

c)         The revoked Participant described in this Section can request reimbursement of medical care expenses in accordance with Subpart F of this Part.

 

d)         The revoked Participant described in this Section can re-enroll the next election period in accordance with Section 2120.310.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.230  Errors

 

a)         Participants are responsible for monitoring their accounts and notifying the employer of any payroll or other errors.

 

b)         In the event a deduction is missed or an incorrect amount is taken because of payroll or other processing errors, the error must be corrected on a later payroll or direct billed to the Participant if he or she is off payroll.

 

c)         If the correction of the error causes an economic hardship for the Participant, the funds sufficient to correct the error will be deducted from the Participant's paycheck over the two months immediately following the discovery of the error.

 

d)         In the event of overpayment because of error, the Participant will be asked to refund to the Department the excess reimbursement.

 

e)         If the Participant refuses to reimburse the Department for the overpayment, the Department will request the Comptroller to withhold the required amount from the Participant's next available paycheck pursuant to 74 Ill. Adm. Code 285.  If the Participant is off payroll, the overpayment will be added as income to the Participant's W-2.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

SUBPART D: ELECTION TO RECEIVE MEDICAL CARE ASSISTANCE

 

Section 2120.310  Election Procedure

 

a)         An eligible employee may elect to receive medical care assistance under this Plan by making an election and compensation reduction agreement on an enrollment form provided by the Department.

 

b)         The enrollment period will be at a time to be determined by the Department prior to the beginning of the Plan Year.  The enrollment period shall be sufficient to allow eligible employees to enroll in the Plan and shall in no case be less than 30 days prior to the beginning of the Plan Year.

 

c)         Eligible employees must participate for a full 12-month period. Participants who terminate, retire or go on unpaid leave of absence may continue participation by making the elected monthly deduction via a personal check or money order. As the payments are not made through payroll deduction, no tax benefits are allowed. If continuation is not elected, eligible expenses will include only those expenses incurred through the date of the last pay period following the pay period in which the last deduction was made.

 

d)         The election must be for a specified annual dollar amount evenly divisible by the number of pay periods in the Plan Year.

 

e)         The Participant must re-enroll each year to continue participation.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.320  Irrevocability of Election

 

a)         An election to participate shall be irrevocable during the Plan Year unless a change in family status has occurred.

 

b)         A change in family status will permit a change or revocation of an election during a Plan Year under the Code.  To the extent consistent with the Code, this provision shall be liberally construed by the Department to maximize the benefit to the Participant.

 

c)         Election changes must be consistent with changes in family status.

 

d)         The form requesting the change in the election must be filed with the Department within 60 days after the change in family status.

 

e)         The Department shall require documentation substantiating the change in family status consisting of group insurance records maintained by the Department or personnel transaction records maintained by the employing agency or other documents substantiating the claimed change in family status.

 

f)         Any new election under this Section shall be effective the first pay period after the signature date of the Participant on the enrollment form or the date of the change in family status, whichever is later.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.330  Maximum Medical Care Assistance

 

a)         The maximum amount that the Participant may payroll deduct for use under this Plan during the Plan Year shall not exceed $2,500 for tax year 2013 and, after tax year 2013, an amount adjusted for cost of living to the extent provided under Section 125(i) of the Code (indexed to the CPI-U, with any increase that is not a multiple of $50 rounded to the next lowest multiple of $50).

 

b)         The pay period maximum is the annual maximum divided by the number of pay periods in the Plan Year.

 

c)         The pay period maximum cannot be exceeded if there is a change in family status, as provided in Section 2120.610 of this Part, or if there are circumstances requiring prepayment of the contributions for the balance of the year.

 

d)         If the Department determines during the Plan Year that highly compensated Participants are benefiting from the Plan more than non-highly compensated Participants, the Department shall reduce the maximum deduction for the highly compensated Participants the minimal amount necessary to bring the Plan into compliance with the non-discrimination requirements of the Code (26 USC 125).

 

(Source:  Amended at 37 Ill. Reg. 4241, effective March 22, 2013)

 

Section 2120.340  Minimum Medical Care Assistance

 

The minimum level of participation in this Plan is $20 per month.

SUBPART E: MEDICAL CARE ASSISTANCE ACCOUNTS

 

Section 2120.410  Establishment of Accounts

 

The Plan Administrator will establish and maintain a medical care assistance account for each Plan Year for each Participant who has enrolled for the Plan Year.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.420  Crediting of Accounts

 

a)         There shall be credited to a Participant's medical care assistance account for each Plan Year, as of each Pay Period, an amount equal to the reduction made in the Participant's Compensation in accordance with the Participant's election.

 

b)         All amounts credited to each such medical care assistance account shall be the property of the State until paid out pursuant to Subpart F of this Part.

 

c)         No interest will be credited to the Participants Accounts on balances in the medical care assistance account.

 

Section 2120.430  Debiting of Accounts

 

A Participant's medical care assistance account for each Plan Year shall be debited as of the date the reimbursement is processed by the Plan Administrator under Section 2120.520.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.440  Forfeiture of Accounts

 

a)         The amount credited to a Participant's medical care assistance account for any Plan Year shall be used:

 

1)         only to reimburse the Participant for medical care expenses incurred during the applicable Plan Year or during the grace period (until September 15) following the close of the Plan Year; and

 

2)         only if the Participant applies for reimbursement on or before September 30 following the close of the Plan Year.

 

b)         If any balance remains in the Participant's medical care assistance account for any Plan Year after all reimbursements under the Plan, the balance shall not be carried over to reimburse the Participant for medical care expenses incurred during a subsequent Plan Year, with the exception of expenses incurred during the grace period, and shall not be available to the Participant in any other form or manner.

 

c)         Any remaining balance shall be used to reimburse the Plan for any reimbursements to Participants in excess of deposits that were not recovered as provided in Section 2120.610.

 

d)         Any remaining balance in the fund shall be distributed to the 202 Fund.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

SUBPART F: PAYMENT OF MEDICAL CARE ASSISTANCE ACCOUNTS

 

Section 2120.510  Claims for Reimbursement

 

a)         A Participant who has enrolled for a Plan Year may apply to the Plan Administrator for reimbursement of medical care expenses incurred by the Participant between July 1 of the Plan Year and September 15 of the following Plan Year. For purposes of this Part, expenses are treated as having been incurred when the Participant is provided with the medical care that gives rise to the expenses, and not when the Participant is formally billed, charged for, or pays for the medical care.

 

b)         New Participants who enrolled during the open enrollment period may apply for reimbursement of medical care expenses incurred between the first day of the Plan Year (in accordance with Section 2120.210) and September 15 of the following Plan Year.  New Participants who enroll through a mid-year enrollment due to a change in family status may apply for reimbursement of medical care expenses incurred between the first day of the pay period following the signature date on the enrollment form, or the date of the change in family status, whichever is later, and September 15 of the following Plan Year.

 

c)         Participants who revoke participation in accordance with Sections 2120.220 and 2120.320 before the end of the Plan Year may apply for reimbursement of medical care expenses incurred between July 1 and, if on an anticipated payroll, the last day of the pay period that the last deduction was taken or, if on a delayed payroll, the last day of the pay period following the pay period when the last deduction was taken.

 

d)         Participants who terminate, retire or go on unpaid leave of absence and choose to pay any contributions for the balance of the Plan Year, in accordance with Section 2120.310(c), will have coverage for the entire Plan Year and may apply for reimbursement of medical care expenses incurred between July 1 of the Plan Year and September 15 of the following Plan Year.

 

e)         The Participant may apply for reimbursement by submitting an application in writing to the Plan Administrator on a claim form provided by the Plan Administrator setting forth:

 

1)         the amount, beginning and ending service date and type of service for which reimbursement is requested;

 

2)         the name of the person, organization or entity to which the expense was paid;

 

3)         third party verification of the expense, such as bills, invoices, receipts, or other statements showing the amounts of such expenses; and

 

4)         a statement that the medical expense has not been reimbursed and is not reimbursable under any health plan coverage.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.520  Reimbursement of Participant

 

a)         The Plan Administrator shall reimburse the Participant from the Participant's medical care assistance account for medical care expenses incurred during the Plan Year through September 15 of the following Plan Year for which the Participant submits documentation in accordance with Sections 2120.510 and 2120.525.

 

b)         The reimbursement schedule will be established by the Plan Administrator in a manner that allows the Participant to receive reimbursement no less than once a month.

 

c)         The Plan Administrator will reimburse Participants who have filed claims in the prescribed manner:

 

1)         at least once a month if the claim equals or exceeds $5, and if there is eligibility for reimbursement remaining in the account; and

 

2)         at least once the twelfth month (or the final month of participation) regardless of the amount.

 

d)         If a claim for reimbursement under this Section exceeds the balance of the Participant's medical care assistance account, the Participant will be paid the amount of the claim as long as the claim is no greater than the annual election amount less any reimbursements paid to date.

 

e)         Claims for expenses incurred between July 1 and September 15 will be paid, first, from any funds remaining from the previous Plan Year and, then, from funds available under the current Plan Year.

 

(Source:  Amended at 33 Ill. Reg. 11791, effective August 3, 2009)

 

Section 2120.525  Electronic Card Reimbursement Program

 

a)         A Participant may elect to pay medical care expenses through the use of a stored value card (Card) provided by the Plan Administrator.  The Card deducts funds directly from the Participant's medical care assistance account and avoids any up-front, out-of-pocket expenses for the Participant.

 

b)         In order to be eligible for the Card, the Participant must agree to abide by the terms and conditions associated with the Card as established by the Plan Administrator and provided to the participant prior to enrollment, limitations as to Card usage and the Plan Administrator's right to withhold and offset payment for unsubstantiated expenses.  The Participant must further certify that the Card will be used only for eligible medical care expenses.

 

c)         Use of this Card is limited to payments for Medical Care Expenses. 

 

d)         The maximum reimbursable amount under the Card is the full amount of the Participant's contribution to the medical care assistance account for the Plan Year, less any previously submitted reimbursements.

 

e)         The Participant must obtain a receipt or third party statement (i.e., explanation of benefits form or invoice) each time the Card is used.  The receipt must be retained for 1 year following the end of the Plan Year in which the expense was incurred and must be available for presentation to the Plan Administrator upon request.  At a minimum, the receipt must contain the following information:

 

1)         the type of service provided (i.e., office visit; prescription; over-the-counter purchase);

 

2)         the date the medical care was provided (i.e., when the expense was incurred);

 

3)         the amount of the expense;

 

4)         the provider's or vendor's name; and

 

5)         the patient's name.

 

f)         If the Participant fails to provide the requested documentation to the Plan Administrator within the requested time frame, the expenses will be deemed unsubstantiated and the Participant will be required to repay the unsubstantiated expenses.  Repayments may be made by either:

 

1)         submitting payment to reimburse the Plan for the cost of the unsubstantiated expense.  Payment must be in the form of a check payable to the State of Illinois, submitted to the Plan Administrator; or 

 

2)         submitting other paper claims for the fiscal year with third-party receipts in amounts equal to, or greater than, the unsubstantiated expenses.  These paper claims will automatically be substituted to offset the outstanding Card transactions. 

 

g)         Failure to submit requested documentation or provide payment for unsubstantiated expenses will result in suspension of the Card and termination of future use of the Card.  Participants may be subject to involuntary withholding for the unsubstantiated expenses or outstanding transactions may be reported to the IRS as income and the Participant's W-2 form adjusted accordingly. 

 

h)         Participants may elect the Card at any time during the Plan Year.  Cards are automatically suspended upon termination or cancellation of participation in the Plan. 

 

(Source:  Amended at 37 Ill. Reg. 4241, effective March 22, 2013)

 

Section 2120.530  Exclusions

 

A Participant shall not be reimbursed for any expense that would otherwise be a medical care expense if:

 

a)         the expense was incurred at a time when the Participant was not a Participant in the Plan; or

 

b)         a claim for reimbursement of the expense has not been filed in accordance with provisions of Section 2120.510; or

 

c)         the expense was claimed as a credit or deduction on the Participant's federal or state income tax form; or

 

d)         the expense is reimbursable under any other benefit plan maintained by the employer or purchased privately by the Participant.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.540  Statements

 

a)         On or before January 31 of each year, the Department shall furnish to each Participant who was enrolled in the Plan during the prior calendar year a written statement showing the amount of contributions into his or her account during that year with respect to the Participant.

 

b)         The Plan Administrator shall notify each Participant electing a Card in writing, or electronically if the Participant has opted for electronic communication, via a quarterly statement of the unused balance in his or her account.  Any unsubstantiated expenses will be clearly delineated on the quarterly statement.

 

c)          The Plan Administrator shall notify each Participant not activating a Card in writing, or electronically if the Participant has opted for electronic communication, via a quarterly statement of the unused balance in his or her account.  

 

(Source:  Amended at 37 Ill. Reg. 4241, effective March 22, 2013)

SUBPART G: TERMINATION OF PARTICIPATION

 

Section 2120.610  Termination or Death of Participant

 

a)         In the event that a Participant terminates State service or dies, the Participant's participation shall terminate unless continuation of coverage as authorized by COBRA has been elected.  If COBRA is not elected, eligible medical care expenses will include only those expenses incurred through the last day of the pay period when the last deduction was taken, if on an anticipated payroll, or on the last day of the pay period following the pay period when the last deduction was taken, if on a delayed payroll.

 

b)         If the Participant returns to State service the same Plan Year, the Participant can re-enroll in accordance with the provisions of Section 2120.210.  If re-enrollment occurs within 30 days after termination or departure from State service, the contribution amount per pay period must be the same as the amount contributed prior to termination.

 

c)         If the Participant's employment status has changed from full time or part time (equal to or greater than 50 percent of a normal work period) to a status that no longer allows participation in the State Employees Group Health Plan, the Participant will be considered revoked as described in Section 2120.220 unless the Participant has chosen continuation coverage as authorized by COBRA.

 

d)         If participation continues in this Plan because of COBRA-qualification, the Participant shall be considered terminated from State service at the end of the 18-month period of COBRA-coverage or whenever COBRA-qualification ceases.

 

(Source:  Amended at 37 Ill. Reg. 4241, effective March 22, 2013)

 

Section 2120.620  Fraud

 

In the event a Participant knowingly supplies the Department or Plan Administrator with false information or knowingly files a claim that is not qualified for reimbursement as adjudicated by the Internal Revenue Service or a court of competent jurisdiction, the Department shall exclude the Participant from further participation in the Plan for all subsequent Plan Years.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

SUBPART H: MISCELLANEOUS

 

Section 2120.710  Non-discrimination

 

a)         This Plan shall meet the requirements of Code sections 125 and 414 that require that all benefits provided for Participants who are highly compensated are provided for all other Participants.

 

b)         If this Plan fails to meet these requirements, the discriminatory excess will be included in the high compensated Participants' taxable income for the Plan Year.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.720  Illegality of a Particular Provision

 

The illegality of any provision of this Plan shall not affect the other provisions of the Plan and the Plan shall be construed in all respects as if the invalid provision were omitted.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.730  Applicable Law

 

To the extent not preempted by federal law, the Plan shall be governed by and construed according to the laws of the State of Illinois.

 

Section 2120.740  Effect on Pension

 

Participation in this Plan will not affect the amount paid into a Participant's pension nor reduce benefits received.

 

Section 2120.750  Effect on Social Security

 

Participation in this Plan reduces a Participant's Social Security wages by the amount contributed and may therefore reduce the benefits received.

 

Section 2120.760  Benefits Solely From General Assets

 

The benefits provided by this Plan will be paid solely from the general assets of the State.  The State will not be required to maintain any fund or segregate any amount for the benefit of any Participant, and no Participant or other person shall have any claim against, right to, or security or interest in, any asset of the State from which any payment under the Plan may be made.

 

(Source:  Amended at 21 Ill. Reg. 2955, effective February 21, 1997)

 

Section 2120.770  Nonassignability of Rights

 

The right of any Participant to receive Reimbursement under the Plan shall not be alienable by the Participant by assignment or any other method.  Any attempt to alienate a Participant's interest will not be recognized.

 

Section 2120.780  Tax Consequences

 

Once enrolled it shall be the obligation of each Participant to determine whether each payment under Section 2120.420 of this Part is excludable from the Participant's Compensation for federal and state income tax purposes. Participants should notify the Department if there is reason to believe that any payment is not excludable.

 

Section 2120.790  Indemnification of State by Participants

 

If any Participant receives reimbursements under Section 2120.520 or 2120.525 that are not for medical care expenses, the Participant shall indemnify and reimburse the State for any liability the State may incur for failure to withhold federal or state income tax or Social Security tax from the reimbursements.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)

 

Section 2120.800  Right to Amend and Terminate Reserved

 

a)         The Department has established the Plan with the bona fide intention and expectation that it will be continued indefinitely, but the Department will have no obligation to maintain the Plan for any given length of time and may discontinue or terminate the Plan at any time without liability.

 

b)         Upon termination or discontinuance of the Plan, all elections and reductions in compensation relating to the Plan shall terminate, and the Department will pay any remaining balances to the Participants as additional taxable compensation.

 

(Source:  Amended at 30 Ill. Reg. 15119, effective September 6, 2006)