As a Hays Medical Center Associate, you are very important to us and we know your Associate's benefits program is important to you. That is why we provide a special benefits program which allows you to make contributions with before-tax dollars.

DEFINITION
These accounts are not insurance arrangements, but individual accounts used by Associates for their own personal, unique needs. There are two flexible spending accounts:

• Health Care Account
• Dependent Care Account

These accounts provide a way for you to pay for certain unreimbursed health care and dependent day care expenses with tax-free dollars. You save money because these contributions are made before taxes are deducted. You contribute before-tax dollars directly from your pay to either or both spending accounts. Then you can use the money in these accounts to pay for eligible expenses.

ELIGIBILITY
Health Care Account: Full or part-time status
Dependent Care Account: Full or part-time status

ENROLLMENT
You may enroll in this program within the first 30 days of your employment or due to a status change in your employment (i.e., prn to full-time). Thereafter, you will need to make an annual election each open enrollment for the following year. An election form must be completed to activate your participation. This form can be obtained from the human resources department.

CHANGE IN ENROLLMENT
The following is a list of qualifying events that allows you to make a change in this program. You must enroll within 30 days of the event.

• marriage
• divorce
• birth or adoption of a child
• death of spouse/dependent
• spouse's employment terminates
• employment status change (i.e., prn to part-time)
• unpaid leave of absence
• spouse's health coverage changes significantly due to your spouse's employment.

HEALTH CARE ACCOUNT
Nearly every Associate can take advantage of this account. In order to determine how much to contribute, you should first estimate what your expenses will be for you, your spouse, and your dependents during the plan year January 1 through December 31.

ELIGIBLE HEALTH CARE EXPENSES
In general, health care expenses for you and your dependents are eligible for reimbursement from your flexible spending account if they:

• were incurred on or after the effect date of your participation in the plan
• would qualify as a medical expense for federal income tax purposes under Section 213 of the Tax Code
• have not been or will not be paid by your health benefit plan(s) or by another employer's group health benefit plan
• have not been or will be not deducted on your tax return.

A more complete list of eligible expenses is available from the human resources department. Submit these billed expenses with a claim form for reimbursement. Your claim forms should be accompanied by:

1. a written, dated statement from an independent third party stating the health care expense has been incurred and the amount of the expense. [This means that you are required to submit an explanation of benefits (EOB) or, if the expense is totally ineligible for reimbursement, a statement from the service provider rather than just a proof of payment, such as a cancelled check]; and,
2. a written statement that the health care expense has not been reimbursed under any other health plan coverage.

DEPENDENT CARE ACCOUNT
The dependent care account allows you to pay for your dependent day care expenses, like baby-sitting and day care fees with before-tax dollars.

ELIGIBLE DEPENDENT CARE EXPENSES
Eligible dependent day care expenses are work-related expenses incurred for qualifying individuals. These expenses include:

• schooling costs for children not yet in the first grade
• baby-sitting and licensed day care center costs
• housekeeping services in your home which include day care.

Qualifying individuals are:

• your children age 12 or younger
• any other individuals who live in your house and who rely on you for at least half of their support and are physically or mentally unable to care of themselves
• your spouse, if he/she is physically or mentally incapable of caring for him/herself.

Submit these qualified receipted expenses on a claim form for reimbursement. A claim form can be obtained from the human resources department.

Remember that . . . . . . .

1. Expenses reimbursed from your account(s) cannot be claimed as deductions or credits on your income tax.
2. If you terminate your employment, you may only submit expenses incurred during your period of employment.
3. Expenses submitted for reimbursement must have incurred during the plan year ending December 31. However, you have 90 days to submit dependent care and health care claims for reimbursement.

The Use-It-Or-Lose-It Rule
At the end of each plan year, as required by the IRS, you forfeit any before-tax dollars left in either of your accounts. Unfortunately, the remaining balance cannot:

• be paid to you in cash
• be made available to you in any other way
• be carried over to the next plan year.

Official documents governing these benefits are available for your review during normal working hours in the human resources department. Should there be a need for interpretation of any Plan benefit provision, the Plan Benefit Document will take precedence over this Summary.