isolved Benefit Services – Service Agreement
Fringe Benefit Plan Administration
Additional Service Agreement

Employer has established a Health Flexible Spending Account (“Health FSA”) under Internal Revenue Code Sections 105 and 125, and/or a Dependent Care Flexible Spending Account (“Dependent Care FSA”) under Internal Revenue Code Sections 129 and 125. In addition, Employer may have established one or more Health Reimbursement Arrangements (“HRAs”) under Code Section 223 as described in IRS Notice 2002-45, a Qualified Transportation Fringe Benefit Plan under Code Section 132 or a tuition reimbursement arrangement subject to Code Section 127. All such plans shall be referred to collectively as the “Plans” or as “Reimbursement Accounts”. Employer has asked isolved Benefit Services to assist it with its administrative obligations under one or more of the Plans. This Additional Service Agreement describes the rights and responsibilities of isolved Benefit Services and Employer with respect to various administrative services provided by isolved Benefit Services with respect to the Plans. isolved Benefit Services will also provide current and updated information to Employer relating to compliance with IRS Code Sections 105, 125, 129 and/or 132, including any changes or modifications in compliance requirements, notification language and related steps necessary to act in accord with said changes or modifications. These notifications will be based on isolved Benefit Services’s interpretation as a consultant/benefits administrator of applicable law and should not be construed as tax or legal advice. The rights and obligations outlined below apply only to the extent this service is chosen by Employer in the Service Agreement. This Additional Service Agreement is incorporated into and made a part of the Service Agreement (including the General Terms and Conditions). The effective date of this Additional Service Agreement is the effective date of the Service Agreement or, if later, the Service Date related to the services hereunder. The responsibilities of the Parties set forth in this Additional Service Agreement are in addition to any responsibilities set forth in the Service Agreement (including the General Terms and Conditions). If there is a conflict between this Additional Service Agreement and the Service Agreement (including the General Terms and Conditions), the Service Agreement (including the General Terms and Conditions) controls.

A. Responsibilities of isolved Benefit Services

1. Adoption of the Plan(s). isolved Benefit Services shall assist Employer in evaluating the benefits, terms and conditions of the Plan(s), and shall assist Employer in selecting available benefits and funding options. isolved Benefit Services shall be under no obligation to specify benefits or funding options.
2. Communication of Plan to Eligible Employees (FSA Plans only). isolved Benefit Services will provide communication and enrollment materials for downloading via isolved Benefit Services website at no additional charge. Paper enrollment “kits” are available for an additional fee as outlined in Section 4 of the Service Agreement. isolved Benefit Services will conduct meetings and/or provide audiovisual materials or presentations (for an additional fee as outlined in Section 4 of the Service Agreement), at which time the benefits, terms and conditions of the Plans dictated by Employer shall be described to the eligible employees.
3. General administration of Plan(s). isolved Benefit Services will keep a record of each Plan participant and maintain separate notational bookkeeping records and accounts based on the participants’ Reimbursement Account elections for each Plan Year. The records shall include the level of coverage, reimbursements and account balances. isolved Benefit Services will process midyear election changes under the Plans in accordance with the terms of the Plans and applicable law. isolved Benefit Services will examine each claim for benefits under the Plan in accordance with the claim review procedures of the Plans and applicable law, take reasonable steps to verify its validity, compute the amount payable and either disburse the benefit due under the Plan, to the extent Employer has provided sufficient funds as required by this Additional Service Agreement, or deny the claim in accordance with the provisions of the Plan and the applicable rules and regulations. isolved Benefit Services will provide each participant submitting a claim with an explanation of payment or denial in accordance with the Plan’s claim review procedures and applicable regulations and an explanation of the year-to-date activity in the participant’s account. In the event the Service Agreement is terminated, all requests for reimbursement submitted to isolved Benefit Services after the effective date of termination will be returned to Employer, or at Employer’s request, submitted to another third party. isolved Benefit Services will have no further responsibility with respect to such claims submitted after the effective date of termination.
4. Nondiscrimination Testing. isolved Benefit Services makes available the following nondiscrimination testing required under the Code (collectively referred to as the “Nondiscrimination Tests”) with respect to the Plan (s) (to the extent isolved Benefit Services provides related administrative services):
   • a. Key Employee Concentration Test required under Code §125.
   • b. The 55% Average Benefits Test required under Code §129.
   • c. The 25% Shareholder Concentration Test required under Code §129.
   • d. The Highly Compensated Individual Eligibility and Benefits Test required under Code § 105.
   isolved Benefit Services will provide Employer with Nondiscrimination Testing online questionnaires or tool which employer will complete and provide to isolved Benefit Services. isolved Benefit Services will notify Employer if, based on isolved Benefit Services interpretations, any of the tests fail to pass. The results will be based on information received from Employer and/or any information obtained and maintained by isolved Benefit Services in the course of performing services required under the Service Agreement, including but not limited to this Additional Service Agreement. Note that additional Nondiscrimination Tests required under Code Sections 105, 125 and 129 based on the plan design and other criteria. isolved Benefit Services will conduct additional Nondiscrimination Tests required under Code §125, §105 and/or §129 only upon Employer’s written request and for an additional fee as set out in Section 4 of the Service Agreement.
5. Plan Documents and Summary Plan Descriptions (SPDs). Based on Employer’s completion of a plan design worksheet, isolved Benefit Services shall prepare the text for the initial drafts of the required Plan document(s) and SPD(s) pursuant to information provided by Employer. To the extent the isolved Benefit Services prepared plan documents and summary plan descriptions need to be updated based on changes in the law, isolved Benefit Services will provide updated language to the Employer.
6. Form 5500 Data. isolved Benefit Services will assist Employer with information to complete Form 5500 for the Health FSA and/or HRA, if applicable, by providing any information maintained in an isolved Benefit Services database that is required to be included on the Form 5500 with respect to such reimbursement accounts to the extent requested in writing by Employer.
7. Positive Pay Tool. Positive Pay is an automated check fraud detection tool required by some banks. Positive Pay matches key information for each check against a special electronic file provided by isolved Benefit Services. This requires special work between isolved Benefit Services and its software vendor on an initial and ongoing basis. If Employer’s bank requires use of Positive Pay for its banking activity, isolved Benefit Services shall provide the files as and when required, provided that Employer pays the additional fees set forth in Section 4 of the Service Agreement. In the alternative, Employer may require all participants to be reimbursed via direct deposit, thereby eliminating the need for the Positive Pay tool.

B. Responsibilities of Employer Employer is responsible for all Plan administration not set forth above, including but not limited to the following:

1. Adoption and Maintenance of the Plans. Employer has the exclusive right and duty to select, implement, amend or modify benefits or funding options adopted in connection with the Plans.
2. General Administration. Employer is responsible for establishing eligibility criteria and determining which employees and/or dependents have met those criteria. Employer will establish a claims appeal procedure for handling disputes regarding claims for benefits or the payment of benefits. Although isolved Benefit Services may process claims and handle the initial determination and up to the first level of appeal, Employer has final authority as to the denial or payment of a claim on appeal and is the claim fiduciary responsible for handling the final appeal level set forth under the Plan.
3. Information Provided to isolved Benefit Services. Employer shall provide the following information to isolved Benefit Services:
   • a. Enrollment forms (or enrollment information) for all new participants added to the Plan and a list of participants terminated or deleted from the Plan, including their date of termination.
   • b. A confirmation of payroll deductions (and/or contributions) on a per pay period basis for the Health FSA and Dependent Care FSA plans and the Qualified Transportation Fringe Benefit Plan, if applicable.
   • c. All other information relating to the Plans and its participants necessary for isolved Benefit Services to perform its duties under the Service Agreement.
   • d. With respect to a Code §132 Qualified Transportation Fringe Benefit Plan, information concerning Employer’s ability to make cash reimbursements for transit expenses in accordance with Treas. Reg. 1.132-9 Q-16.
4. Plan Documents and SPDs. It shall be Employer’s obligation to complete the plan design worksheet completely and accurately and ensure that draft documentation provided by isolved Benefit Services complies with the applicable laws and regulations for the Employer’s particular plans and plan designs.
5. Deposit of Funds. Employer shall make sufficient funds from its general assets available to pay all eligible claims presented to isolved Benefit Services by granting isolved Benefit Services withdrawal authority over an Employer-owned and named account (the “Account”) at a financial institution selected by Employer. The Account shall be sufficient to enable it to pay benefits under Employer’s Plans in accordance with the following method:
   • a. If claims are paid pursuant to an electronic payment card, Employer will make funds available in accordance with the Electronic Payment Card Additional Service Agreement incorporated into and made a part of the Service Agreement. isolved Benefit Services will provide Employer daily (if claims were processed the previous day) with a debit card funding report indicating the amount of funds to be withdrawn via electronic funds transfer (ACH) by isolved Benefit Services the following business day.
   • b. If claims are not paid pursuant to an electronic payment card, Employer will make funds available to reimburse isolved Benefit Services for claims settled the previous business day. isolved Benefit Services will provide Employer daily (if claims were processed the previous day) with a claims reimbursement notification indicating the amount of funds to be pulled (via ACH) by isolved Benefit Services the following business day.
   In the event funds in the Account are not available to fully reimburse isolved Benefit Services within 24 hours of such notice, isolved Benefit Services may immediately shut down all associated Cards and suspend reimbursement of non-electronic debit card claims until funds are provided. Employer bears sole responsibility for any fees imposed with respect to the Account by the financial institution. Employer shall pay isolved Benefit Services an additional fee for each ACH transfer that fails due to any reason within Employer’s control as set forth in Section 4 of the isolved Benefit Services Service Agreement. isolved Benefit Services is under no obligation to advance funds on behalf of Employer.
6. COBRA Notification. Employer shall be responsible for complying with its obligation under the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to the Plans. No assistance will be provided by isolved Benefit Services except to the extent Employer has elected Federal COBRA, USERRA, and State Continuation Coverage Services as set out in the Service Agreement.
7. Execution of Documents. Employer shall ensure that the Plan Document is properly executed and shall provide a copy of the SPD to all Plan participants in accordance with applicable law.
8. Reviewing Reports. Employer is responsible for reviewing the reports submitted by isolved Benefit Services and notifying isolved Benefit Services of any errors of which it is aware within a reasonable period of time after reviewing them.
9. Positive Pay Tool. Employer is responsible for cooperating with isolved Benefit Services in setting up and maintaining all relevant information related to Positive Pay.