APPENDIX P
MODEL DOMESTIC PARTNER POLICY

DOMESTIC PARTNERS INFORMATION GUIDE

[Note: This model guide must be significantly modified to describe the specific benefits your organization intends to offer domestic partners. Details regarding the benefit plan offering must be obtained from the insurer and this guide amended accordingly.]

DUE TO STATE LAW, IRS REGULATIONS, AND BENEFIT PLAN PROVIDER POLICIES, SOME BENEFITS THAT ARE AVAILABLE FOR LEGAL SPOUSES MAY NOT BE AVAILABLE TO DOMESTIC PARTNERS. THEREFORE, FOR COMPLETE DETAILS ON THE BENEFITS AVAILABLE TO DOMESTIC PARTNERS, EMPLOYEES SHOULD REFER TO THIS DOMESTIC PARTNER INFORMATION GUIDE AND THE FORMAL SUMMARY PLAN DOCUMENTS.

PLEASE READ THIS DOCUMENT IN ITS ENTIRETY, AS IT CONTAINS IMPORTANT INFORMATION ON DOMESTIC PARTNER CRITERIA, ENROLLMENT INSTRUCTIONS, AFFIDAVITS, TAX IMPLICATIONS, AND THE AFFECTED BENEFIT PLANS.

Eligibility Criteria

Effective [ ], a variety of benefit plans became available to qualifying same gender domestic partners for the following category of participating employees:

· Regular full-time and regular part-time employees during active employment.

· Regular full-time and part-time employees who are on an approved leave of absence with benefits.

Who Qualifies as a Domestic Partner? A domestic partnership is the relationship between two people who meet all of the following criteria:

· They are of the same gender

· They share an intimate, committed relationship with each other; intend to do so indefinitely; and have no such relationship with any other person

· They are jointly responsible for each other's welfare and financial obligations

· They reside in the same household

· They are not related by blood to a degree of kinship that would prevent marriage from being recognized under the law of their state of residence

· Each of them is over age 18, of legal age, and mentally competent to enter a contract

· They reside in a state under the law of which marriage or an attempted marriage between two persons of the same gender is not recognized as a valid marriage

· Neither of them is married to a third party

Are the children of my domestic partner eligible for enrollment under my coverage? Any children adopted by you (including children of your domestic partner if you adopt them) would be eligible family members and covered by the provisions of the program for natural/adopted children. Children of your domestic partner, when you do not adopt them, will be considered eligible if the child meets all of the following criteria:

· Unmarried and under age 23

· Not employed full time

· Are principally dependent upon you, the employee, for maintenance and support

· When not in attendance at school, are permanently residing in your household in what is considered a parent/child relationship.

Children meeting the above requirements are considered the employee's dependents by the IRS. Therefore, employees will not be taxed on the value of the child's coverage.

Is my opposite gender domestic partner eligible for enrollment under my coverage? No. Benefit coverage is offered only to same gender partners only since opposite gender partners currently have the legal option to marry.

Entering a Domestic Partnership

What is required to prove a domestic partnership? A signed, notarized affidavit is required (see Affidavit of Domestic Partnership). You must contact [the Human Resources Department] within 30 days of signing the affidavit to enroll your domestic partner.

Does the affidavit need to be submitted to the employer as proof of a domestic partnership? You do not have to submit the signed, notarized affidavit to enroll a domestic partner for benefit coverage. However, you must keep the affidavit in a safe place, as the administrators of the benefit plans may, in their discretion, require submission of the affidavit of domestic partnership at some future time in determining eligibility for plan coverage or in deciding whether or not to pay/provide benefits. Note: It is important to complete an affidavit even if it does not have to be submitted, just as we may request a marriage certificate to prove the eligibility of a spouse.

After one domestic partnership ends, is there a waiting period before I can add a new domestic partner? No, there is no waiting period.

What if marriage becomes a legal option in the State in which my domestic partner and I reside? If marriage becomes a legal option in the State in which you reside, you must marry your domestic partner within six (6) months for him or her to retain eligibility for benefits coverage.

Tax Implications

Are there any tax implications to me if I cover my domestic partner? Yes, since state law does not currently recognize a same gender partner as a legal "spouse", the value of the employer-provided portion of the domestic partner's coverage is subject to income tax and FICA withholding and are reportable as income in your W-2, unless the partner qualifies as a dependent" under Section 152 of the Internal Revenue Code (IRC).

The domestic partner will qualify as a "dependent" if all of the following criteria are met:

· More than half of the partner's support for the year comes from the employee

· The partner is a member of the household maintained and occupied by the employee

· The relationship between the employee and the domestic partner is not a violation of state or local law.

As most domestic partners do not qualify as a "dependent" under the IRS, it is important to understand the financial impact on your what is elections.

Why is the value of coverage of a domestic partner subject to income tax, FICA withholding and W-2 reporting (unless the domestic partner is the employee's "dependent" as defined by the IRS)? The tax-favored treatment which the tax laws make available for employee health benefit plan coverage applies only to coverage of the employee, and his or her "spouse" (as defined by applicable state law) and "dependents" (as defined by the IRS). Unless applicable state law recognizes marriages between persons of the same gender, an employee's domestic partner is not a "spouse" under state law or for federal tax purposes. Therefore, unless the domestic partner qualifies as a "dependent" of the employee, the value of coverage for the domestic partner that exceeds the contribution paid by the employee for that coverage is imputed to be income to the employee, under IRS regulations.

Note: Contributions for the employee's and domestic partner's coverage will be taken on a pretax basis when paid for from payroll deduction. The imputed income on the value of coverage will not count for purposes of any benefit plan which calculates benefits on the basis of some portion of compensation. Thus, for example, it is not considered part of retirement eligible earnings, "regular monthly compensation" or the like.

How does employer determine the "value" of domestic partner coverage under a health benefits plan? [This will vary, depending on the health benefit plan. It may be based on transitional medical benefits provided under COBRA. For example, the rate for single coverage is subtracted from the transitional medical coverage for dual coverage for the plans the domestic partner is enrolled in.]

If my domestic partner is not my "dependent" under tax law, and I enroll my domestic partner in my health benefit coverage, how will the resulting imputed income and withhold taxes be calculated and reported? The portion of your monthly contribution attributable to your domestic partner's coverage is the difference between:

· The monthly contribution you would pay for covering only yourself, and

· The monthly contribution for covering yourself and your domestic partner

This amount will always be used even if adding your domestic partner would not result in any incremental contribution. The difference is then subtracted from the value of your domestic partner's coverage and the remainder is imputed income to you. The total income imputed to you in a year will be included in your income on your W-2 which is issued after the plan year ends.

Taxes on imputed income will be withheld quarterly. Income tax withholding rates will be in accordance with your W-4. "PBP Impute" will print on your pay statement in the same field as "Current Gross Payments". Monies are imputed (included) for taxing purposes only; therefore no additional monies are received in your paycheck.

If an employee on unpaid leave of absence, retirement or long-term disability covers a domestic partner, how will taxes be withheld when the employee does not draw a paycheck? While employee contributions will continue to be billed on a monthly basis, the value of your domestic partner's coverage will be imputed as income and billed to you on a quarterly basis. Income tax withholding rates on the imputed value will be calculated using a flat tax as follows:

· Federal: 28%

· FICA: 7.65%- 6.2% Social Security (unless you have reached the FICA Social Security maximum) and 1.45% Medicare

· State: according to your state of residence

· Local: if applicable

You will receive a W-2 after the plan year ends. PLEASE NOTE: If you fail to pay the monthly contributions or the quarterly tax on the imputed value of your domestic partner's coverage, you will be defaulted to NO COVERAGE retroactively to the beginning of the quarter for you and your family for the remainder of the plan year. Also, you will be obligated to reimburse the employer for any benefit payments that were made on behalf of you, your domestic partner or any eligible dependent(s).

How will taxes be withheld for my domestic partner if I leave the employer? The portion of your monthly contribution for your domestic partner will be subtracted from the value of your domestic partner's coverage and the remainder will be imputed as income to you. The amounts due from you for FICA, federal and state withholding on the imputed value for any portion of time not previously paid will be calculated using a flat tax as follows:

· Federal: 28%

· FICA: 7.65% - 6.2% Social Security (unless you have reached the FICA Social Security maximum) and 1.45% Medicare

· State: according to your state of residence

· Local: if applicable

Please Note: Since you are obligated to pay any taxes due on the value of your domestic partner's coverage when you terminate employment, and since the employer is obligated by law to withhold and remit for income taxes and FICA taxes (both Social Security and Medicare, as applicable), the employer will automatically add the imputed amount of the value to your gross earnings and reduce your federal withholding by the amount due for your portion of FICA taxes in order to recover and remit FICA taxes to the IRS. You will be given the opportunity to pay the taxes within 30 days if you do not wish your federal withholding to be reduced. You will receive a W-2 after the plan year ends.

The following example shows how imputed income is calculated for an employee who enrolls a non-"dependent" domestic partner.

Monthly contribution for dual coverage

- Subtract monthly contribution for single coverage

(A) = Equals monthly "contribution value" for domestic partner coverage

Monthly transitional medical coverage rate for dual coverage

- Subtract monthly transitional medical coverage rate for single coverage

(B) = Monthly "value" for domestic partner coverage

(B) Monthly "value" for domestic partner coverage

(A)- Subtract monthly "contribution value" for domestic partner coverage

(C) = Equals monthly imputed income

(C) Monthly imputed income

x Use appropriate tax as per Employee's W-4 if actively employed

--or--

x Use flat tax if on inactive status (e.g., leave of absence, retired, etc.)

(D) = Monthly tax implication for domestic partner coverage *

* The taxes on the imputed value will be deducted on a quarterly basis for the previous three months for those in active pay status. Employees not drawing a paycheck will be billed on a quarterly basis for the previous 3 months.

What is the value of domestic partner coverage for each of employer's health

benefit plans for the current year? [Insert.]

What is the contribution value of domestic partner coverage for each of

employer's health benefit plans for the current year? [Insert.]

Enrollment Considerations

Is there any information I should consider before enrolling my domestic partner? Because of the special tax implications for domestic partner coverage as well as the non-duplication feature for coordination of benefits with other group health plans, you should consult with your tax advisor and consider the financial impacts of your enrollment decision by reviewing the following:

· In addition to the monthly contribution for the plans in which you choose to enroll your domestic partner, there are special tax implications for domestic partner coverage.

· If your domestic partner has other group health plan coverage in addition to the employer's coverage, the employer's health benefits will be coordinated with the other coverage to avoid duplication of payment. The employer's plan will not pay a benefit for an eligible expense until the other coverage has paid, and the benefit amount which would normally apply will be reduced by the amount the other coverage paid. You should consider enrolling in one plan or each enrolling separately in your own individual plan.

· If your domestic partner is an also an employee of this organization and is eligible to participate in health benefit plans, you can avoid the tax implications if you each enroll separately.

Enrollment

Please Note: The same 30-day notice requirement in the event of a Qualified Status Change applies to domestic partners as to other family members for purposes of the employer's health benefits.

What benefit program plan options are available for my domestic partner and the eligible children of my domestic partner? Available benefit program options for the current year include:

[Insert.]

[Note: Due to IRS regulations, the Health Care Reimbursement Account (HCRA) and the Voluntary Plan for Dependent Care (VPDC) will not reimburse expenses for care of domestic partners, except those who meet the applicable tax law definition of "dependent". Also, an employee with a domestic partner cannot be treated as "married" in determining the maximum allowable VPDC contribution.]

[Note: Not all HMOs/DMAs offer domestic partner coverage. If yours does not, the following may be used:

Why don't all HMOs/DMAs provide coverage for domestic partners? The reasons for this, generally are: 1) some states do not allow coverage for domestic partners under health and welfare plans and some HMOs/DMAs are regulated by state law; and 2) the HMO/DMA has not yet obtained the necessary approvals from the state regulatory commission for adding domestic partner coverage; 3) their eligibility criteria is inconsistent with ours; or 4) they intended to increase their rates to an amount that the employer felt was excessive. If you are enrolled in an HMO/DMA that does not allow domestic partner coverage, you will need to switch to an eligible HMO/DMA.

How do I enroll my domestic partner for benefit coverage? After you have signed and notarized the Affidavit, call [ ]

to enroll your domestic partner for benefits coverage. You will need to supply your domestic partner's full name, Social Security number, date of birth, the date the affidavit was signed and notarized, whether or not your domestic partner qualifies as your "dependent" as defined by the IRS, and information on non-employer group health plan coverage (if applicable).

YOU MUST CALL THE WITHIN 30 DAYS AFTER YOU SIGN AND NOTARIZE THE AFFIDAVIT, in which case coverage will be effective the date of the Affidavit. Otherwise, you cannot enroll your domestic partner until another qualified status change recognized by the Plan occurs, or during the next open enrollment period for coverage effective at the start of the next plan year.

Employee contributions will be assessed retroactively to the coverage effective date. Your monthly contributions will be the same as those for other benefits program participants. However, the value of your domestic partner's coverage will be subject to income tax and FICA withholding and W-2 reporting, unless your partner qualifies as a "dependent" as defined by the IRS.

How do I enroll the children of my domestic partner for benefits? Ensure that they meet the eligibility criteria as stated in this Guide. Then call [ ] to enroll them for coverage. You will need their full names, Social Security numbers, dates of birth and non-employer group health plan coverage information (if applicable). You must inform the employer in writing within 30 days of the qualifying event for coverage to be effective the date such a child meets the eligibility criteria. Otherwise, you cannot enroll your children until another qualified status change recognized by the plan occurs or during the next open enrollment period for coverage effective at the start of the next plan year.

Can I change my plan elections after I enroll? The plan options and coverage levels you elect will remain in effect through the end of the plan year. Certain limited changes are allowed if you experience a qualified status change during the year (e.g., adoption, birth, commencement or termination of a domestic partnership, etc.). You must inform the employer within 30 days of the status change if you wish to make a change in coverage.

Termination of Domestic Partnership

What should I do if my domestic partner dies or the partnership is terminated in some other manner? You must notify [ ] in writing within 30 days to

inform the employer of the change. You must also compete the Affidavit of Termination of Domestic Partnership and submit a completed, notarized copy to the employer. If the domestic partner is living, a copy of this Affidavit should be mailed to the partner. Eligibility of your domestic partner will cease upon death or on the last day of the month in which the partnership ends.

Will continuation coverage be available to my domestic partner if the partnership is terminated? Yes, although not legally required, continuation coverage under the employer group health plans is available for purchase by former domestic partners in such situations for a limited time (generally up to 36 months) at group rates. You or your former domestic partner must notify [ the contract administrator, ] within 60 days from the end of the month in which the domestic partnership terminated, otherwise the opportunity for your domestic partner to purchase continuation coverage will be lost. Information concerning coverage and eligibility may be obtained by contacting [ ].

Will continuation coverage be available to the children of my domestic partner when they cease to meet the eligible family member criteria? Yes, continuation coverage will be available as explained above when the children no longer meet the eligibility criteria of the employer's plan (e.g., they marry, become employed full-time, no longer reside in your household, are no longer principally dependent on you, or reach age 23). Coverage will cease on the last day of the month in which they no longer meet the eligibility criteria. [ ] must be notified within 60 days from the end of the month when they cease to meet the eligible family member criteria, otherwise the opportunity to purchase continuation coverage will be lost.

Claim Processing

How do I submit claims for eligible expenses incurred by my domestic partner? If a claim form is required, submit claims for your domestic partner in the normal manner. All claim forms have a designation for "domestic partner". Forms are available at [ ].

ID Cards

Will my domestic partner receive an identification card? Yes, if you enrolled your domestic partner in a medical plan, you will receive an identification card from the plan you enrolled in as follows:

[Insert.]

Reimbursements

Will there be a tax on the reimbursements paid for my domestic partner's health care expenses under the employer's health plans? No, these reimbursements are not taxed.

Other Benefit Plans, Programs, or Services

What other EMPLOYER plans, programs or services can my domestic partner or my domestic partner's child benefit from?

[Insert. Examples include retirement benefits, group life insurance, etc.]

Disclaimer

The "Domestic Partner Information Guide" is not a summary plan description, and is not intended to provide full details. Complete details are found in the formal plan documents, which remain the final authority and, in the event of a conflict with this Guide, shall govern in all cases. The plan administrator retains exclusive authority and discretion to interpret the terms of the benefits plans and programs described herein.

The employer reserves the right, at its discretion, to amend, change or terminate any of its benefits plans, programs, practices or policies, as the employer requires. Nothing contained in this Guide shall be construed as creating an expressed or implied obligation on the part of the employer to maintain such benefits plans, programs, practices or policies.

Eligibility to participate in a plan or program does not render any person an employee of the employer.

Employer does not endorse any HMO or other provider, or represent or warrant the quality of care they provide. The decision to choose any health plan option or use any provider is the participant's responsibility.

Affidavit of Domestic Partnership

Note: Do not sign this form before you have read and understood the information included under "NOTICE".

It is also recommended that, before signing this form, you consult your personal attorney regarding applicable domestic relations law and tax laws, and the implications and consequences of your signing this affidavit in the circumstances of your particular situation.

State of _________________________}

} ss:

County of ____________________}

Each of the undersigned persons, namely ______________________________(print name) and _________________________________(print name), having duly sworn, does for himself or herself solemnly declare the following under oath:

1. I am over age 18, of legal age, and mentally competent to enter into contracts.

2. I have joint responsibility, with the other person named above, for his or her welfare and financial obligations.

3. I reside in the same household as the other person named above.

4. I have an intimate, committed relationship with the other person named above; I intend to continue such relationship indefinitely; and I have no such relationship with anyone other than that person.

5. I am not related by blood to the other person named above to a degree of kinship that would prevent a marriage between us from being recognized under the law of__________________ (the state in which we reside).

6. I am not married to any third party.

7. The law of__________________ (the state in which we reside) is such (to the best of my knowledge, information, and belief) that no marriage or attempted marriage between me and a person of my own gender would be recognized under such law as a valid marriage.

8. I am of the same gender as the other person named above.

______________________________ ____________________________

Signature of first person named above Social Security Number

________________________________ ____________________________

Signature of second person named above Social Security Number

Note: TWO IDENTICAL ORIGINALS OF THIS AFFIDAVIT SHOULD BE EXECUTED, AND EACH OF THE ABOVE-NAMED INDIVIDUALS SHOULD RECEIVE AND RETAIN ONE OF THEM.

This document, in duplicate originals, has been signed and sworn to before me by

________________________ and ____________________________ on

this ____________ day of , in the year____.

Signature: __________________________

Name: _____________________________

Notary Public in and for the (seal)

State of____________________________

County of __________________________

My commission expires:_______________

NOTICE:

1. Some courts may interpret the Affidavit of Domestic Partnership as creating (or evidencing the creation of) legally enforceable rights and obligations between the two attesting parties. These may include, for example, community property rights, and/or obligations to make support payments. They may include rights and obligations that apply during the period of domestic partnership and/or rights and obligations that apply after a termination of the domestic partnership.

2. Enrollment of a domestic partner as one's beneficiary under a benefit plan, and/or payment of benefits by the plan with respect to such beneficiary, may give rise to tax liabilities on the part of the plan participant and/or a surviving domestic partner. It may also result in tax withholding and/or income reporting by the employer. Consequences may vary from case to case--depending, for example, on which laws apply and/or on whether the domestic partner is a "dependent" of the plan participant/subscriber under applicable law.

3. The employer's benefit plans may rely on this Affidavit of Domestic Partnership signed by two parties, and/or on an Affidavit of Termination of Domestic Partnership signed by either party, in determining eligibility for plan coverage and in deciding whether or not to pay/provide benefits. If it is determined by the plan that the plan's criteria defining eligible domestic partners are no longer met, eligibility for coverage under a benefits plan as a domestic partner will end as specified in the applicable provisions of the plan.

4. By enrolling in or accepting domestic partner coverage under a benefit plan, or applying for, assigning, or accepting payment of domestic partner benefits under such a plan (either as plan participant/subscriber or as a domestic partner of a plan participant/subscriber), you represent to the plan that the assertions made by you in this Affidavit of Domestic Partnership, are true, and you obligate yourself to:

· personally retain one of the signed and notarized originals of this Affidavit of Domestic Partnership, and promptly produce it for inspection by or on behalf of the plan administrator, if and when requested to do so;

· promptly inform the employer in writing, in the event you become aware that a statement made in the Affidavit of Domestic Partnership, by you or by the other person named in it, has ceased to be true (or was inaccurate when made); and

· within thirty (30) days after any change in circumstance which makes a statement in the Affidavit of Domestic Partnership no longer accurate, (for example, the death of the other person named in such Affidavit), execute and send to the plan administrator an Affidavit of Termination of Domestic Partnership, attesting to the change in circumstance and the date the change occurred, and affirming your mailing of a copy to the other person if still living.

5. Knowingly providing false, deceptive, or misleading information to a benefit plan or deceptive or misleading omission of information may result in termination of employment, loss of plan coverage, civil litigation, and/or criminal prosecution.

6. The employer reserves the right, at its discretion, to amend, change, or terminate any of its benefit plans, programs, practices or policies, at any time, as the employer requires.

Affidavit of Termination of Domestic Partnership

NOTE: The facts attested to in this Affidavit may impact on the eligibility of an individual to be covered under the employer's benefit plans as the domestic partner of a plan participant or as the domestic partner of a purchaser of continuation coverage.

State of______________________________}

}ss:

County of____________________________}

The undersigned person, _____________________________ (print name) being duly sworn, solemnly declares under oath:

1. On __________________ (date), an Affidavit of Domestic Partnership was executed by me and ___________________________ (print name), the other person named in that Affidavit.

2. Because of death of such person or because of another change in circumstances, one or more of the statements attested to by me or by him/her in the Affidavit of Domestic Partnership has ceased to be accurate.

3. The other person named in the Affidavit of Domestic Partnership, Died on ________ (date)

OR

The earliest date on which one or more of the statements attested to in the Affidavit of Domestic Partnership became no longer accurate was ____________________ (date).

4. If the other person named in the Affidavit of Domestic Partnership is still living, I have mailed a completed, signed and notarized copy of this Affidavit of Termination of Domestic Partnership to him/her on ______________________(date), addressed to him/her at: ___________________________________________________________________________

which is his/her most current address known to me.

I declare, under penalty of perjury, that the above statements are true and correct.

Signature: ______________________________Social Security Number:___________________

Signed and sworn to by _______________in my presence on this__day of____, in the year ___.

Signature: _____________________________

Name: ________________________________

Notary Public in and for the (Seal)

State of _____________________________

County of ___________________________

My commission expires: _______________

A COMPLETED `AFFIDAVIT OF TERMINATION OF DOMESTIC PARTNERSHIP' MUST BE SUBMITTED TO: [Insert.]