MEDICAL EXPENSE REIMBURSEMENT PLAN

Company Name;_________________________________________________

Address;_______________________________________________________.

1. PURPOSE
The purpose of this plan is to encourage and help provide full and complete medical care for each participating employee and his/her spouse and dependents. For owners of the Company stock, this plan is intended to be a Single Employer Welfare Plan, and for employees who do not own stock in the Company, it is the intention of the company that this plan qualify as an accident and health plan within the meaning of Sections 105(e), and 125, of the Internal Revenue Code of 1986, as amended (“the Code”), and that the benefits payable under the plan be eligible for exclusion from gross income under Section 105(b), and Section 125, of the Code., and Revenue Ruling 2003-104 et. al., up to and including the most recent Revenue Rulings.

2. EFFECTIVE DATE
The effective date of this plan shall be January 1, ____________. The records of the plan shall be kept on a calendar year basis.

3. ELIGIBILITY
All full-time employees of the company shall be eligible to participate in this plan. A full-time employee is defined as any employee who customarily works forty hours or more per week and seven months or more per year.

4. PARTICIPATION
Each employee who is eligible to participate in the plan under Section 3 (an “eligible employee”) shall become a participant in the plan (“a participant”) on the effective date of the plan if on the effective date he/she is at least eighteen years old and has completed at least one year of continuous employment with the
company. Each other eligible employee shall become a participant on the first day of the month after he/she has both attained age eighteen and
completed at least one year of continuous employment with the
company. A participant who is discharged from employment with the company
for cause shall forfeit all rights to reimbursement under this plan.

5. BENEFITS
The company shall pay to each participant such amounts as he/she has expended while a participant for medical care for himself/herself and his/her spouse and dependents. It is not necessary that such amounts be related to or arise out of employment with the company. Amounts expended for medical care mean amounts for (a) hospitalization, medical and dental bills, prescription drugs and eyeglasses; (b) transportation primarily for and essential to medical care; (c) insurance (including amounts paid as premiums under Part B of Title XVII of the Social Security Act, relating to supplementary medical insurance for the aged) covering medical care referred to in subparagraphs (a) and (b); and (d) all other expenses that are considered to be for medical care as that term is used in Section 105(b) of the Code, including certain over-the-counter nonprescription drugs (see Appendix A). Dependent means a dependent as defined in Section 152 of the Code. A participant shall be entitled to benefits under this
plan only for expenses for medical care incurred after becoming a participant in the plan.

6. LIMITATION
No participant shall be entitled to receive more than $5,000 in reimbursements, in excess of the medical insurance premiums, under this plan for any calendar year.

7. BENEFITS FROM ANOTHER SOURCE
Reimbursement under this plan shall be made only in the event and to the extent that reimbursement for amounts expended, or payment, for medical care is not provided for under any insurance policy or under any other plan (including the Medical and,or Dental Benefit Plan) of the company or another employer or under any federal or state law. In the event that there is such a policy, plan or law in effect providing for such reimbursement or payment in whole or in part, then to the extent of the coverage under such policy, plan or law, the company shall be relieved of any and all liability hereunder.

8. CARRYOVER OF UNUSED BALANCE
If the reimbursements made with respect to any participant for any one fiscal year are less than the limitation amount specified in Section 6 hereof, the balance payable under Section 6 may be carried forward to pay additional benefits in a future year.

9. FORFEITURE OF UNUSED BALANCE
In the event that a participant ceases to be an employee, any unused balance shall remain the property of the company, and the participant shall forfeit all rights with respect to such balance.

10. CLAIM PROCEDURE
Each participant shall submit not later than thirty (30) days after the end of each calendar year quarter a request for reimbursement for medical expenses incurred by him/her during the preceding quarter, together with such evidence of payment of such expenses as shall be required by the congregation in accordance with rules uniformly applied. It is not necessary that the participant actually pay an expense prior to being reimbursed for it under the plan. If a participant requests reimbursement for an expense not yet paid, he/she shall submit a copy of the bill along with his/her request for reimbursement. The compnay will then make payments to the participant or directly to the billing party, as the participant may direct.

11. REVIEW PROCEDURE
If any claim for benefits under this plan is denied in whole or in part, the claimant shall be furnished promptly by the company with a written notice (a) setting forth the reason for the denial, (b) making reference to pertinent Plan provisions, (c) describing any additional material or information from the claimant which is necessary and why, and (d) explaining the claim review procedure set forth herein. Failure by the company to respond to a claim within a reasonable time shall be deemed a denial. Within sixty (60) days after denial of any claim for benefits under this plan, the claimant may request in writing a review of the denial by the president of the company. Any claimant seeking review hereunder is entitled to examine all pertinent documents, and to submit issues and comments in writing. The president shall render a decision on review
of a claim not later than sixty (60) days after receipt of a request for review hereunder. The decision of the president on review shall be in writing and shall state the reason for the decision, referring to the plan provisions upon which it is based.

12. ADMINISTRATION
The treasurer of the company shall have authority and responsibility to control and manage the operation and administration of this plan.

13. AMENDMENTS; TERMINATION
This plan may be amended or terminated at any time provided that termination shall not affect the right of any participant to claim reimbursement for amounts expended for medical care prior to termination.

14. MISCELLANEOUS
This plan shall not be deemed to constitute a contract between the company and any participant or to be a consideration or an inducement for the employment of any participant or employee. Nothing contained in this plan shall be deemed to give any participant or employee the right to be retained in the service of the company or to interfere with the right of the company to discharge any participant or employee at any time regardless of the effect which such discharge shall have upon him/her as a participant of this plan.

15. GOVERNING LAW
This plan shall be construed and enforced according to the laws of the State of California, other than its laws respecting choice of law, to the extent not preempted by any federal law.

16. APPENDIX A: REIMBURSABLE OVER-THE COUNTER MEDICAL ITEMS

Eligible Expenses
The following are over-the-counter (OTC) items that the I.R.S. has determined to be primarily for medical care and that can be reimbursed when purchased in reasonable quantities without a medical practitioner’s note:
_ Allergy Medicine
_ Antacids
_ Bactine
_ Band-Aids/bandages
_ Bug-bite medicine
_ Anti-diarrhea medicine
_ Calamine lotion
_ Carpal-tunnel wrist supports
_ Cold medicines
_ Cold/hot packs for injuries
_ Condoms
_ Contact lens cleaning solution
_ Cough drops
_ Diaper rash ointments
_ First aid cream
_ First aid kits
_ Hemorrhoid medication
_ Incontinence supplies
_ Laxatives
_ Liquid adhesive for small cuts
_ Menstrual cycle products for pain
and cramp relief
_ Motion sickness pills
_ Nasal sinus sprays
_ Nasal strips
_ Nicotine gum or patches for stopsmoking
purposes
_ Pain reliever
_ Pedialyte for ill child’s dehydration
_ Pregnancy test kits
_ Products for muscle or joint pain
_ Reading glasses
_ Rubbing alcohol
_ Sinus medications
_ Sleeping aids used to treat occasional
insomnia
_ Special ointment or cream for
sunburn
_ Spermicidal foam
_ Thermometers (ear or mouth)
_ Throat lozenges
_ Visine and other eye products
_ Wart remover treatment

Dual Purpose:
Some dual-purpose OTC items can be reimbursed if they are used for a medical purpose. They must be accompanied by a medical practitioner’s note stating that the person has a specific medical condition and the doctor recommends the OTC drug to treat it and the treatment is not a cosmetic procedure.
_ Acne treatment (Retina A)—only to
treat a specific medical condition
such as acne vulgaris
_ Dietary supplements or herbal
medicines to treat a specific medical
condition in narrow circumstances
_ Glucosamine / chondroitin for
arthritis or other medical condition
_ Orthopedic shoes (extra cost over
non-orthopedic shoes) and inserts
_ Pills for persons who are lactose
intolerant
_ Prenatal vitamins
_ St. John’s Wart – for depression
_ Sunscreen
_ Weight-loss drugs to treat a specific
disease (including obesity)
Ineligible Expenses:
These OTC items will not be reimbursed under any circumstances since they are toiletries or
cosmetics or likely to be primarily for general health and well-being:
_ Chap stick
_ Face cream, moisteners
_ Medicated shampoos and soaps
_ One-a-day vitamins
_ Suntan lotion
_ Teeth whitening
_ acupuncture, chiropractic, massage therapy
_ hearing aids, and glasses
_ co-pays to health insurance companies
_ braces and dental work
_ this plan covers you, your spouse, and your children
_ addiction therapy
_ contact lens insurance
_ and any other medical expenses that have been allowed by the court system in the U.S.

17. REIMBURSEMENTS
When the medical insurance policy is in the name of the employee, or the owner, this corporation shall reimburse the employee for the cost of the medical insurance, or make the reimbursement by directly paying the medical insurance company premiums.


Signed;_________________________, President of _______________________________, Inc.

Date;______________________