Flexible Spending Accounts

Summary Plan Description

April 2018

04/2018 ii EHP FSA

Table of Contents

Introduction ........................................................................................................................ 1

For Help and Information .................................................................................................. 3

Eligibility and Enrollment ................................................................................................... 4

Eligibility .......................................................................................................................... 4

Enrollment ....................................................................................................................... 4

Contributions ...................................................................................................................... 5

Contribution Limits ......................................................................................................... 5

Changing Your Contribution Amounts ........................................................................... 5

Health Care Flexible Spending Account ........................................................................... 7

Eligible Expenses ............................................................................................................ 7

Claim Reimbursement .................................................................................................. 10

Dependent Care Flexible Spending Account .................................................................. 12

Eligible Expenses .......................................................................................................... 12

Dependent Care FSA vs. Federal Tax Credit ............................................................... 13

Claim Reimbursement .................................................................................................. 14

Restrictions and Appeal Process .................................................................................... 15

Annual Claim Submission Deadline ............................................................................ 15

Restrictions on Spending Accounts ............................................................................. 15

Denial of Claim and Benefits Appeal Process ............................................................ 16

When Coverage Ends ....................................................................................................... 17

Continuation of Coverage ................................................................................................ 18

During Illness or Injury .................................................................................................. 18

During Approved Leaves of Absence ........................................................................... 18

Under COBRA ................................................................................................................ 19

General Information ......................................................................................................... 20

Your Rights as a Plan Participant ................................................................................ 20

Plan Documents ........................................................................................................... 21

Discretionary Authority of Plan Administrator and Claims Administrator ................. 21

No Guarantee of Employment ..................................................................................... 22

Future of the Plan and Plan Amendment .................................................................... 22

04/2018 iii EHP FSA

Plan Administration ...................................................................................................... 23

Glossary ............................................................................................................................ 24

Refer to subsequent issues of benefits newsletters on MyInfo

at https://MyInfo.crc.com for any material changes to the Plan

made after the date of this document.

04/2018 1 EHP FSA

INTRODUCTION

The Elk Hills Power, LLC Flexible Spending Account (FSA) Plan lets you pay for health

care and dependent care expenses with tax-free dollars. Two types of spending

accounts are available—a Health Care FSA and a Dependent Care FSA.

• An FSA for health care lets you pay for eligible expenses not paid or

reimbursed from any other source such as a EHP or your spouse’s health care

plan. Some examples include plan deductibles and copayments, vision and

hearing care expenses, and many over-the-counter products such as

bandages and aspirin.

• An FSA for dependent care lets you set aside pretax dollars to pay for eligible

expenses you incur for your child(ren) or other eligible dependents, so that

you, and your spouse if you are married, can work.

Each year, you decide how much money you wish to set aside in each of these

accounts. The amount you elect to contribute is deducted automatically from your

paycheck throughout the year—before Social Security, federal and most state income

taxes are withheld. This means your taxable pay is reduced by amounts you

contribute to each account. An example of how an FSA can save you money is shown

below.

This example assumes that you expect to have $2,000 in out-of-pocket health care or

dependent care expenses during the year, to earn less than the Social Security wage

base, to pay federal income taxes of 15 percent and state income taxes of 5 percent,

and to not itemize deductions.

With an FSA Without an FSA

Money Set Aside: $2,000 $2,000

Less Taxes Paid:

- Federal (15%) 0 300

- State (5%) 0 100

- Social Security (7.65%) _0_ 153

Amount Available to Cover Expenses $2,000 $1,447

You could either have $2,000 in pretax dollars to pay for your eligible expenses,

or you could pay $553 in taxes on that money, reducing your net buying power to

only $1,447. Or, put another way, without a pretax account, you would need

$2,000 of taxable income to cover $1,447 in expenses.

When you incur an eligible expense during the Plan year, you pay for the expense and

then submit a claim to pay yourself back from your account.

04/2018 2 EHP FSA

It is important to estimate your contributions carefully. In many cases, the elections

you make cannot be stopped or changed until the next year. Also, under IRS

regulations, if you do not use all the money you set aside during the Plan year, you

must forfeit any unused amounts.

In most cases, using spending accounts provides greater tax savings than other

alternatives such as the federal income tax credit for dependent care.

The Flexible Spending Accounts described in this booklet are offered to Elk Hills

Power, LLC and/or affiliated company employees, as defined in the Eligibility and

Enrollment section. This information serves as your Summary Plan Description (SPD)

and is based on official Plan documents. You should keep and refer to it when you

have questions about your Flexible Spending Accounts. In the event that there is a

discrepancy between the SPD and the Plan documents, the Plan documents will

control.

Capitalized words or phrases used in this SPD are defined in the Glossary at the end

of this booklet.

04/2018 3 EHP FSA

FOR HELP AND INFORMATION

Contact Information

Provider: Address: Phone/Email:

PayFlex Systems USA, Inc.

P.O. Box 4000

Richmond, KY 40476-4000

Website: www.payflex.com

888-678-8242

Fax: 888-AET-FLEX

(888-238-3539)

Benefits Department

Website: MyInfo.crc.com

Email: CRCBenefits@crc.com

Visit PayFlex at PayFlex.com

If you are an Aetna member, log in to your Aetna Navigator website and click on

Access Your Account to get to My Dashboard on the PayFlex website. Otherwise,

register on PayFlex with your Aetna member ID or Social Security number and your 5-

digit ZIP code.

PayFlex is a web-based portal designed to provide access to a wide range of tools

and information 24 hours a day, 7 days a week. The website is secure, private, and

accessible anywhere an internet connection is available. From PayFlex you can

obtain health and benefits information using self-service features and interactive

tools. After a simple registration process, a personal home page is created where you

can:

• Access your Explanations of Payment (EOPs) and check account balances,

• Review lists of eligible expenses,

• Access claims submission forms and guidelines,

• Sign up for Auto Pay and direct deposit, and

• Contact PayFlex Member Services.

eNotify

PayFlex offers an electronic notification service. When you elect eNotify you will

receive alerts and updates on your account. You can choose which notifications you

want to receive, including balance reminders and claim status.

Mobile Access

You can also access your benefits information on your mobile phone. To learn more,

review PayFlex Mobile™ under My Dashboard on the PayFlex website.

04/2018 4 EHP FSA

ELIGIBILITY AND ENROLLMENT

Eligibility

You are eligible to participate in the Plan if you are a regular, full-time, nonbargaining

hourly or salaried employee of Elk Hills Power, LLC or an affiliated company (EHP).

For this purpose, “affiliated company” means any company in which 80 percent or

more of the equity interest is owned by Elk Hills Power, LLC. Temporary employees

are not eligible to participate. You are considered a full-time employee if you are

regularly scheduled to work at least 30 hours per week. Generally, you are eligible to

participate if you are paid on a U.S. dollar payroll, are designated as eligible to

participate by your employer, and do not participate in a similar type of employer-

sponsored plan. If you are part of a collective bargaining group, you are eligible to

participate in the Plan only if your negotiated bargaining agreement specifically

provides for your participation.

You are not eligible to contribute to an FSA if you are scheduled to terminate or retire

prior to the end of the Plan year.

Enrollment

During an enrollment period, you will receive enrollment information and instructions

on how to enroll in a Health Care FSA or Dependent Care FSA (or both). Regardless of

whether you participate in a EHP medical or dental plan, you may participate in an

FSA, if you enroll within 31 days of your date of hire or eligibility. If you do not enroll

within this period, you will not be eligible to enroll until the next Open Enrollment

Period. FSAs operate on a calendar year basis. In your first calendar year, eligible

expenses are limited to those you incur after your date of hire or eligibility. Elections

and any unused balance(s) do not carry over from one year to the next. You must

reenroll each year to participate in an FSA for the following year.

04/2018 5 EHP FSA

CONTRIBUTIONS

Pretax contributions are deducted from your pay before federal income and Social

Security taxes are calculated and withheld. If you live in a state that recognizes the

federal tax treatment of pretax medical contributions, your state income tax also will

be withheld after your contributions are deducted.

Contribution Limits

There are limits to the amount that employees can contribute to FSAs. Your annual

pretax contributions to each account must be a minimum of $100 and may not

exceed the following:

Health Care FSA: ................................................................... $2,650

Dependent Care FSA:

• Single, or Married filing a joint tax return ................ $5,000

• Married filing a separate tax return ......................... $2,500

• Other Dependent Care FSA restrictions:

If you are married and file a joint return, and your spouse also participates

in a dependent care flexible spending account through his or her

employer, your combined contributions may not exceed $5,000.

The annual amount you set aside may not exceed your earned income or

your spouse’s earned income, whichever is lower. If your spouse is a full-

time student or is disabled and has no income, the IRS assumes your

spouse’s annual income is $3,000 if you claim expenses for one

dependent, and $6,000 if you claim expenses for two or more

dependents.

Changing Your Contribution Amounts

The IRS requires that your FSA elections stay in effect throughout the full Plan year.

Health Care FSA – Once you make your election for the Plan year, you may not stop

or change your contribution amount except in the event of the birth or adoption of a

dependent, or the death of a dependent.

Dependent Care FSA – Once you make your election for the Plan year, you may not

stop or change your contribution amount, unless you experience a change in status

that may include one of the following events.

• Change in your legal marital status

• Change in the number of your dependents

04/2018 6 EHP FSA

• Employment status change

• Work schedule change

• Change in a dependent’s coverage eligibility

• Change in work or residence location

• Compliance with a legal order

Please note: A change in dependent care provider is not considered to be a change

in status event.

If you increase your contribution amount as a result of a change in status event, the

annual contribution limits described in the section entitled Contribution Limits will

still apply. If you decrease your contribution amount as a result of a status change,

you may reduce or eliminate your future contributions only. To be approved, the

request must be consistent with the status change. To request a coverage change,

email the Benefits department at CRCBenefits@crc.com and submit any required

documentation within 31 days of the event. Any change in contribution will be

effective with the first available payroll period.

Pretax Contributions: Effect on Benefits

In most cases, pretax contributions under the Plan will reduce the amount of your

earnings that are reported for Social Security purposes. Therefore, if you earn less

than the Social Security wage base (SSWB) or if pretax contributions reduce your

earnings below the SSWB, your Social Security withholding will be reduced. This

reduction could decrease any Social Security benefits you may receive because these

benefits are based on your career earnings history.

In some states, certain other statutory benefits for which you may become eligible

(such as unemployment insurance, workers’ compensation and state disability

insurance) are based on taxable earnings. Therefore, any benefit payments from

these sources could be slightly reduced.

Your pay for purposes of determining pay-related EHP benefits, such as EHP’s

savings, disability and life insurance plans, will continue to be based on your base

pay before Plan contributions are deducted.

If you are eligible to participate in the Plan and you participate in the EHP Medical,

Dental, and/or Vision Plans, your contributions to those plans will be deducted from

your pay on a pretax basis. This pretax treatment will apply to you regardless of

whether you elect to contribute to an FSA and regardless of the Medical, Dental,

and/or Vision Plan options in which you enroll. Eligibility and other provisions of the

Medical, Dental, and Vision Plans are described in their respective Summary Plan

Descriptions or other plan documents.

04/2018 7 EHP FSA

HEALTH CARE FLEXIBLE SPENDING ACCOUNT

Eligible Expenses

Generally, eligible health care expenses are those that:

• Are incurred by:

you or your spouse;

a child for whom you provide at least half of the financial support (if you

are a divorced or separated parent, both you and your former spouse may

be entitled to deduct expenses incurred for your child’s health care); or

any other person whom you claim as a dependent on your federal income

tax return;

• Qualify as health care expense deductions for federal income tax purposes;

• Are not claimed as itemized health care expenses on your federal income tax

return; and

• Are not reimbursed to you or paid to your health care provider(s) from any

other source.

Generally, you can use your Health Care FSA to reimburse yourself for health care

expenses that are considered “medical care” under section 213(d) of the Internal

Revenue Code (IRC), as long as the expenses are not reimbursed by any health care

plan. You can obtain additional information about eligible health care expenses from

IRS Publication 502, Medical and Dental Expenses, which is available on the IRS

website at irs.gov, or you may call 800-TAX-FORM. Note that certain expenses that

are deductible as medical care are nonetheless prohibited from being reimbursed

under this type of plan.

The IRS has historically considered the expenses listed below to be deductible for

income tax purposes and therefore may be reimbursable from your FSA. Also keep in

mind that your FSA will reimburse you only for expenses incurred during the Plan year

by you or your eligible dependents.

If you have questions regarding eligible expenses, you may call PayFlex Member

Services at 888-678-8242 or log on to PayFlex.com.

Note: Expenses for longer term treatment, other than for orthodontia, may be reimbursed

only for services actually performed in a given tax year, regardless of the payment schedule

you have established with your provider. Orthodontic expenses will be reimbursed based on

the year in which the expenses are paid.

04/2018 8 EHP FSA

Listed below are some examples of eligible expenses and ineligible expenses under a

Health Care FSA. For a current listing, go to Products & Services for FSAs on

PayFlex.com, and scroll down to find “Eligible health care expenses” or refer to IRS

Publications 502 and 969 at www.irs.gov.

Examples of Eligible and Ineligible Health Care Expenses

Eligible for Reimbursement: Not Eligible for Reimbursement:

• Acupuncture

• Auto equipment to assist the physically disabled

• Birth control pills and other contraceptive devices

• Braille books and magazines

• Crutches

• Deductibles, coinsurance or copayments required by

a health care plan or HMO

• Dental expenses not covered in full by a dental plan

• Expenses that exceed limits imposed by a health

care plan

• Eye exams, prescription glasses and contact lenses,

and most corrective vision surgeries such as LASIK

• Household visual alert system for the hearing

impaired

• Hearing exams and aids

• Infertility treatment

• In-home elevators for the disabled

• Invalid chairs and wheelchairs

• Organ donor expenses

• Orthodontia expenses not covered in full by a dental

plan

• Physical exams and school or camp physicals for

children

• Prescription drug expenses not covered in full by a

prescription drug plan

• Seeing-eye or guide dog or other animal and its

maintenance for the visually or hearing impaired or a

person with other physical disabilities

• Smoking cessation programs, patches and gum

• Special devices, such as a tape recorder or

typewriter for the visually impaired

• Specialized equipment for the disabled

• Speech therapy

• Sterilization surgery

• Transportation expenses if primarily for and essential

to medical care

• Weight-loss programs undertaken at a physician’s

direction to treat an existing disease such as obesity

or heart disease

• Wig advised by a doctor as essential for a person

who has lost all hair from disease

• Expenses for which you've already been

reimbursed by other health care plans (including

Medicare, Medicaid, and your employer's or any

other medical, dental and vision care plans)

• Expenses incurred by anyone other than you or

your qualified dependents

• Expenses that are not considered medical care

under IRC §213(d)

• Babysitting, child care and nursing services for a

normal, healthy baby. This includes the cost of a

licensed practical nurse (L.P.N.) to care for a

normal and healthy newborn

• Cosmetic dental work and cosmetic surgery

• Custodial care in an institution

• Electrolysis

• Funeral and burial expenses

• Health care plan contributions

• Health club dues

• Household help, even if such help is

recommended by a physician

• Long-term care premiums

• Meals while away from home for medical

treatment

• Medicare premiums

• Over-the-counter health aids that do not treat a

specific medical condition, including those

recommended by your physician

• Over-the-counter drugs that may be beneficial to

health, but are not for medical care (for example:

vitamins, weight-loss aids)

• Nutritional supplements, unless obtained with a

physician's prescription

• Personal use items, unless the item is used

primarily to prevent or alleviate a physical or

mental defect or illness

• Prescription drugs for cosmetic purposes

• Weight-loss programs not prescribed by a doctor

• Special schooling for a problem child, even if the

child may benefit from the course of study or

disciplinary methods

• Vitamins or minerals taken for general health

purposes

04/2018 9 EHP FSA

The IRS, through Revenue Ruling 2003-102, has determined that certain over-the-

counter (OTC) items could qualify as “medical care” and be reimbursed through an

FSA. You must provide documentation that validates the expense, including the date

of service and amount of purchase on a separate Over-the-Counter Flexible Spending

Account reimbursement claim form. In addition, OTC medications, other than insulin,

may only be reimbursed through an FSA if they are accompanied by a bona fide

prescription. Listed below are examples of eligible OTC expenses under a Health Care

FSA.

Over-the-Counter Medications and Products

Eligible for Reimbursement

(Medications require a prescription):

Not Eligible for Reimbursement:

• Acne treatment products

• Antacids, digestive, urinary pain relief, laxative

and motion sickness medications (such as

Pepcid®, Prilosec® and Dramamine®)

• Analgesics for fever and pain relief (such as

aspirin, Tylenol®, Motrin® and Aleve®)

• Antibiotic, hydrocortisone, pain, itch relief and

anti-fungal creams and ointments

• Eye care products including contacts, saline

solution and eye lubricant drops

• Family planning products such as pregnancy

tests, contraceptive creams and condoms

• First aid products such as Band-aids®,

bandages, dressings, heat wraps, and

compresses

• Humidifiers and vaporizers

• Joint support bandages and hosiery

• Medical monitoring and testing equipment for

diabetes, blood pressure and cholesterol

• Shampoo treatments for psoriasis and lice

• Sunscreen products with SPF-30 or higher

• Vaginal infection and incontinence products

• Vitamins, nutritional and dietary

supplements such as homeopathic

medicines, unless prescribed in writing by a

physician

• Sleep aid products, unless prescribed in

writing by a physician

• Cosmetics, including make-up, Q-tips®,

cotton balls and lotions

• Suncreen with SPF lower than 30 or lotions

and cosmetics that contain sunscreen

• Hair care products such as shampoo,

conditioner and hair loss treatments

• Personal grooming products such as combs,

brushes, clippers, facial steamers, etc.

• Dental care products such as toothpaste,

floss, mouthwash, fluoride and plaque

rinses, whitening/breath strips, denture

cleaners and adhesives

• Baby care products such as formula, baby

food, diapers, creams, lotions, and powders

For a current listing, go to Products & Services for FSAs on PayFlex.com, and scroll

down to find “Eligible health care expenses.”

04/2018 10 EHP FSA

Health Care FSA vs. Itemized Deductions

If you have eligible health care expenses, you can achieve tax savings through a

Health Care FSA or by itemizing deductions when you file your income tax return.

If you decide to itemize eligible medical expenses on your income tax return, you are

permitted to deduct only out-of-pocket, unreimbursed health care expenses that

exceed 10 percent of your annual adjusted gross income. The IRS does not allow you

to take a tax deduction for the same expenses that are reimbursed through a Health

Care FSA.

If you expect to incur substantial out-of-pocket health care expenses exceeding 10

percent of your adjusted gross income, you may want to consider the itemized

deduction. If your expenses do not exceed 10 percent of your adjusted gross income,

the Health Care FSA may be the better alternative. Consult your personal tax advisor

if you have questions about which method is best for you.

Claim Reimbursement

How to File a Claim for Reimbursement

Claims for expenses incurred during the Plan year must be received by PayFlex no

later than March 31 of the following Plan year. Expenses for longer term treatment,

other than for orthodontia, may be reimbursed only for services actually performed in

a given tax year, regardless of the payment schedule you have established with your

provider. Orthodontic expenses will be reimbursed based on the year in which the

expenses are paid.

The Plan offers two methods for submitting claims for reimbursement to your Health

Care FSA. With either method, you may set up your FSA to have your reimbursement

checks directly deposited through the My Accounts and Services option on PayFlex.

• Auto Pay

This method lets you automatically claim reimbursement for most expenses from

your Health Care FSA without submitting a claim form. If you do not coordinate

with another health care plan, such as your spouse’s health care coverage, you

may elect to have the unpaid portion of your medical, prescription and dental

claims that are processed by Aetna or Express Scripts automatically forwarded to

your Health Care FSA for reimbursement. You may set up your account with Auto

Pay at any time on PayFlex.com.

Keep in mind, you should not elect Auto Pay if:

you are coordinating benefits with another health plan, such as your

spouse’s medical, dental or prescription drug coverage, or

04/2018 11 EHP FSA

you expect to use your FSA to reimburse orthodontic care if you will be

advance billed or if you will pay for the service in more than one calendar

year.

• Separate Submission

You can submit your claims for reimbursement of out-of pocket expenses either:

Online claim submission directly on the PayFlex website

­ Via mail or fax, using the applicable FSA Claim form

Include the following with your reimbursement claim form:

For expenses that are partially covered by your health care plan(s), or your

spouse’s or dependent’s health care plan(s), attach copies of the

Explanations of Benefits (EOBs) you received from all insurance companies.

For eligible expenses not covered or paid elsewhere, attach a copy of an

itemized bill or receipt that shows the:

• Name and address of health care provider,

• Patient’s name,

• Date(s) of service,

• Type of service,

• Dollar amount charged (if a copay, the receipt must clearly state that it is a

copay), and

• Prescription name.

Reimbursement claim forms are available under Documents & Forms, once you log in

to your PayFlex.com account.

Claim Payment

Eligible health care expenses will be reimbursed up to the total amount you elect to

contribute to your Health Care FSA for the Plan year. FSA reimbursements are

payable to you and are processed daily.

Explanation of Payment (EOP) statements are available online. You may also elect to

receive a paper copy of your EOP. The EOP will provide a summary of your year-to-

date claims and how much money remains in your account. You may also view your

account on PayFlex.com. It is important to review your account activity carefully to

assure that you use all of the money you set aside in your Health Care FSA before the

end of the Plan year.

04/2018 12 EHP FSA

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT

Eligible Expenses

Eligible dependent care expenses are those that are incurred by you for a:

• Qualifying child under age 13 who can be claimed as a dependent on your federal

income tax return, or

• Qualifying relative (e.g., child, sibling, parent, grandparent) who is physically or

mentally incapable of caring for himself or herself, and with whom you share your

principal place of abode for more than half of the taxable year.

and the expenses are for:

• Day care received in your home, as long as you cannot claim your care provider as

a dependent for federal income tax purposes, or the provider is not one of your

children under age 19 at the end of the year; or

• Day care received outside of your home. However, any care facility that cares for

more than six persons at the same time must comply with all applicable state and

local government laws and regulations and be properly licensed.

As a rule, eligible dependent care expenses are those incurred so that you can work.

If you are married, both you and your spouse must be working or looking for work, or

your spouse must be a full-time student.

The terms “qualifying child” and “qualifying relative” are further described in IRS

Publication 503, Child and Dependent Care Expenses. The publication is available

online at irs.gov or you may call the IRS at 800-TAX-FORM.

04/2018 13 EHP FSA

Listed below are some examples of eligible expenses and ineligible expenses under a

Dependent Care FSA:

Examples of Eligible and Ineligible Dependent Care Expenses

Eligible Expenses Ineligible Expenses

• At-home day-care provider(s)

• Properly licensed day-care centers

• Day camps

• Preschools

• Nursery schools

• Services of a housekeeper or domestic

as long as they also provide significant

day-care services

• Babysitting so you can attend a social event

• Generally, food and education expenses for a

child at kindergarten level or above

• Overnight camps

• Payment for dependent health care expenses

• Transportation expenses for your day-care

provider

• Dependent day-care services necessary

because you are home from work due to illness

Eligible expenses are based on guidelines contained in IRS Publication 503, Child

and Dependent Care Expenses. The publication is available online at irs.gov or you

may call the IRS at 800-TAX-FORM. You may also refer to “Common Eligible Expense

Items” for examples of eligible and ineligible expenses under the Resource Center

tab of PayFlex.com.

Dependent Care FSA vs. Federal Tax Credit

In addition to the Dependent Care FSA, the IRS offers another tax savings alternative

when you file your federal income tax return—a tax credit. You may not use the tax

credit for the same expenses reimbursed through your flexible spending account. It is

possible, however, to divide your eligible expenses between a Dependent Care FSA

and the tax credit.

In most cases, you will have higher tax savings from a Dependent Care FSA or a

combination of a Dependent Care FSA and the tax credit. However, depending on

your income, your individual tax situation will determine which method results in the

greater tax savings. To determine the best method for you, consult your tax advisor.

04/2018 14 EHP FSA

Claim Reimbursement

How to File a Claim for Reimbursement

You can submit your claims for reimbursement of qualifying dependent care

expenses either online or by submitting a completed claim form.

The copied receipts you attach to your reimbursement claim must include the

following information:

• Name of the person receiving care,

• Name and address of the person or organization who provided the service,

along with the provider’s Social Security number, federal tax identification

number, or nonprofit equivalent, which is required by the IRS,

• Type of service provided,

• Date(s) of service, and

• Amount of the expense.

Reimbursement claim forms are available under Documents & Forms, once you log in

to your PayFlex.com account.

Claim Payment

Eligible dependent care expenses will be reimbursed up to the balance in your

account. Claims submitted for dependent care expenses that exceed your account

balance will be reimbursed automatically as additional contributions are credited to

your account.

FSA reimbursements are payable to you and are processed daily. You may set up

your FSA to have your reimbursement checks directly deposited to a bank account

through your PayFlex.com Account Settings.

An EOP statement will accompany your reimbursement check or direct deposit. The

EOP will provide a summary of your year-to-date claims and how much money

remains in your account. You may also view your account on PayFlex.com. It is

important to review your account activity carefully to assure that you use all of the

money you set aside in your Dependent Care FSA before the end of the Plan year.

04/2018 15 EHP FSA

RESTRICTIONS AND APPEAL PROCESS

Annual Claim Submission Deadline

All eligible health care and dependent care expenses must be incurred (services

provided) during the Plan year, January 1 through December 31. PayFlex must

receive all claims by March 31 of the following Plan year.* Claims received after this

deadline will not be processed or reimbursed, and you will forfeit any remaining

balance in your account(s).

Restrictions on Spending Accounts

Forfeitures

If you do not use all the money in your FSA(s), you will lose it. The IRS requires that

any money remaining in your account(s) at the close of the Plan year—for which you

have not incurred eligible expenses or claimed reimbursement—must be forfeited.

Forfeitures cannot be deducted on your income tax return. You cannot carry forward

any unspent balance in your account(s) into the next Plan year.

Remember, claims for eligible expenses incurred during the Plan year must be

received by PayFlex no later than March 31 of the following Plan year. When you

enroll in the Plan, it is important that you estimate carefully the amount of money you

set aside in your spending accounts and remember to submit your claims before the

deadline.

Non-Discrimination Testing

The IRS requires that Flexible Spending Accounts pass certain non-discrimination

tests. This may result in a portion of the contributions of some highly compensated

employees being taxable. If this occurs, affected employees will be notified.

Separation of Accounts

You cannot transfer dollars set aside in your Health Care Spending Account to your

Dependent Care Spending Account, or vice versa. The accounts are separate, and

the money you allocate for one account cannot be used for the other.

Nonassignment of Benefits

You (or your beneficiary) may not assign or transfer amounts eligible to be

reimbursed under the Plan. Similarly, these amounts cannot be used to pay debts or

obligations of any nature.

It is important to note that IRS regulations governing flexible spending accounts have

changed in the past and may change again in the future.

* Plan provisions do not include the Department of Treasury’s 2½ month allowable extension.

04/2018 16 EHP FSA

Denial of Claim and Benefits Appeal Process

If your claim is entirely or partially denied, the reason(s) for the denial will appear on

the EOP you receive from PayFlex.

Please note: If PayFlex does not process your FSA claim because information is missing

from your claim submission, PayFlex will notify you in writing of the specific information

needed to complete processing. This is not considered a denied claim.

Health Care FSA Claims

If you think your claim has been wrongfully denied, you have 180 days after receiving

the written denial to request a review. Your request for a review, called an appeal,

must be submitted to PayFlex in writing. Be sure to explain why you think you are

entitled to reimbursement, and attach any documentation that will support your

claim. PayFlex must respond to your written request for a review within 30 days of

receiving it, explaining the reasons for their decision in clear, understandable

language. If more than 30 days is needed to review your claim, PayFlex will notify you.

PayFlex decision is final and binding.

You can also follow this procedure if you do not receive any response to your claim

within 30 days after you have initially filed it with PayFlex.

Dependent Care FSA Claims

If you think your claim has been wrongfully denied, you have 60 days after receiving

the written denial to request a review. Your request for a review, called an appeal,

must be submitted to PayFlex in writing. Be sure to explain why you think you are

entitled to reimbursement, and attach any documentation that will support your

claim. PayFlex must respond to your written request for a review within 60 days of

receiving it. (PayFlex will notify you if a longer review period is required.) PayFlex’s

decision is final and binding.

You can also follow this procedure if you do not receive any response to your claim

within 90 days after you have initially filed it with PayFlex.

Legal Proceedings

Unless prohibited by applicable law, no legal action may be commenced prior to the

completion of the benefits claims procedures described in this SPD. In addition, no

legal action may be commenced after the later of: (i) 180 days after receiving a

written response of PayFlex to an appeal or (ii) 365 days after an applicant’s original

application for benefits.

04/2018 17 EHP FSA

WHEN COVERAGE ENDS

Your eligibility to contribute to the Medical, Dental, FSA, and LTD Plans on a pretax

basis will end on the first to occur of the following events:

• Termination of your employment;

• The end of the last full calendar year prior to your scheduled termination or retirement (FSA only);

• Your death;

• The coverage described in this Summary Plan Description is terminated; or

• You are no longer eligible as defined in the Eligibility and Enrollment section of this document.

You may not be reimbursed for any health care or dependent care FSA expenses

incurred after the date on which your participation ends. You may, however, continue

to submit claims and be reimbursed for expenses incurred prior to the date of your

termination. You can submit eligible dependent care expenses up to the current

balance in your account. You may submit eligible health care expenses up to the

amount you elected to contribute for the Plan year. All claims must be received no

later than March 31 of the following Plan year.

However, you may have a right to continue contributing to your Health Care FSA as

described in the section entitled Continuation of Coverage.

04/2018 18 EHP FSA

CONTINUATION OF COVERAGE

During Illness or Injury

If you are enrolled in an FSA and you are absent from work because of illness or

injury, your contributions continue to be deducted from your pay while you are

disabled, even if your salary is reduced. If you do not return to active employment at

the end of your plan benefits under EHP’s Short-Term Disability Plan or similar

company-sponsored plan, your participation in the Plan will cease, as described in

this section under “Termination of Employment.”

During Approved Leaves of Absence

If you are on an approved leave of absence, including a leave under the Family and

Medical Leave Act of 1993 (FMLA) or applicable state law, you may elect one of the

following options under the Plan:

• Continue your monthly payroll contributions, if you are on a paid leave of absence;

• Make monthly contributions on an after-tax basis if you are on an unpaid leave of

absence;

• Postpone your monthly contributions until you return to work, and authorize

retroactive pretax payroll deductions to bring your account(s) up-to-date;

• Discontinue your participation in the Plan on the day your leave of absence

begins, and elect:

Not to resume contributions upon return to work; or

To resume contributions upon your return to work without bringing your

account up-to-date, thus decreasing your annual election amount and the

period for which you may submit claims.

During the paid transition period under an approved military leave, your pretax

contributions will continue.

If you do not continue contributions during your leave of absence, claims may only be

submitted for eligible expenses incurred through the date your leave of absence

begins.

04/2018 19 EHP FSA

Under COBRA

Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), you

may have the right to continue Health Care FSA coverage on an after-tax basis as

described below. This will allow you to submit eligible expenses incurred after your

termination date. There is no COBRA continuation coverage for a Dependent Care

FSA.

Your eligibility to contribute to a Health Care FSA may not extend beyond the end of

the Plan year and you must pay the required contributions.

Electing COBRA Continuation Coverage

PayFlex will provide detailed information about how to continue coverage under

COBRA at the time you become eligible.

You will need to elect continued coverage within 60 days of the “qualifying event” or

the date of the COBRA notice, if later. The election must include an agreement to pay

required premiums.

When COBRA Continuation Ends

Continued coverage ends on the first of the following events:

• The end of the maximum COBRA continuation period;

• Failure to pay required premiums;

• Coverage under another group plan that does not restrict coverage for preexisting

conditions;

• EHP no longer offers a group health plan; or

• Your death.

When you or a family member on COBRA becomes enrolled in Medicare, continued

Plan coverage is secondary to Medicare.

Other Continuation Provisions

Contact the Benefits department at CRCBenefits@crc.com for information on how

other continuation provisions may affect COBRA continuation provisions.

Keep the Plan Informed of Changes

In order to protect your family’s rights, you should keep the Plan informed in writing

of any changes in the addresses of your family members and any changes in your

marital status. You should also keep a copy, for your records, of any notices you

provide. You may email such notices to the Benefits department at

CRCBenefits@crc.com, or mail to CRC Benefits, P.O. Box 2900, Long Beach, CA

90801-2900.

04/2018 20 EHP FSA

GENERAL INFORMATION

Your Rights as a Plan Participant

As a participant in this Plan, you are entitled to certain rights and protections under

the Employee Retirement Income Security Act of 1974 (ERISA), as follows:

Receive Information About Your Plan and Benefits

• Examine, without charge, at the Plan Administrator’s office and at other specified

locations, all documents governing the Plan, including insurance contracts and a

copy of the latest annual report (Form 5500 Series) that is filed by the Plan with

the U.S. Department of Labor and available at the Public Disclosure Room of the

Employee Benefits Security Administration.

• Obtain, upon written request to the Plan Administrator, copies of all documents

governing the operation of the Plan, including insurance contracts and the latest

annual report (Form 5500 Series), and an updated summary plan description.

The Plan Administrator may make a reasonable charge for the copies.

• Receive a summary of the Plan’s annual financial report. The Plan Administrator

is required by law to furnish each participant with a copy of this summary annual

report.

Prudent Action by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the

people who are responsible for the operation of the employee benefit plan. The

people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so

prudently and in the interest of you and other Plan participants and beneficiaries.

No one, including your employer or any other person, may fire you or otherwise

discriminate against you in any way to prevent you from obtaining a welfare benefit or

exercising your rights under ERISA.

Enforce Your Rights

If your claim for a welfare benefit is denied or ignored, in whole or in part, you have a

right to know why this was done, to obtain documents relating to the decision without

charge and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance,

if you request materials from the Plan and do not receive them within 30 days, you

may file suit in a Federal court. In such a case, the court may require the Plan

Administrator to provide the materials and pay up to $110 a day until you receive the

materials, unless the materials were not sent because of reasons beyond the control

of the Plan Administrator.

04/2018 21 EHP FSA

If you have a claim for benefits that is denied or ignored, in whole or in part, you may

file suit in a state or Federal court.

If it should happen that Plan fiduciaries misuse the Plan’s money or if you are

discriminated against for asserting your rights, you may seek assistance from the

U.S. Department of Labor or you may file suit in a Federal court. The court will decide

who should pay court costs and legal fees. If you are successful, the court may order

the person you have sued to pay these costs and fees. If you lose, the court may

order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Help With Your Questions

If you have any questions about your Plan, you should contact the Plan Administrator.

If you have any questions about this statement or about your rights under ERISA, or if

you need assistance with obtaining documents from the Plan Administrator, you

should contact:

• The nearest office of the Employee Benefits Security Administration, U.S.

Department of Labor, listed in your telephone directory; or • Division of Technical Assistance and Inquiries

Employee Benefits Security Administration

U.S. Department of Labor

200 Constitution Avenue, N.W.

Washington, D.C. 20210

You may also obtain certain publications about your rights and responsibilities under

ERISA by calling the publications hotline of the Employee Benefits Security

Administration.

Plan Documents

This benefit plan description summarizes the main features of the Plan for

employees, and is not intended to amend, modify, or expand the Plan provisions. In

all cases, the provisions of the Plan document and any applicable contracts control

the administration and operation of the Plan. If a conflict exists between a statement

in this summary and the provisions of the Plan document or any applicable contracts,

the Plan document will govern.

Discretionary Authority of Plan Administrator and Claims Administrator

In accordance with sections 402 and 503 of Title I of ERISA, the Plan sponsor has

designated a Named Fiduciary under the Plan, who has complete authority to review

all denied claims for benefits under the Plan. The Plan Administrator has

discretionary authority to determine who is eligible for coverage under the Plan and

the Claims Administrator has discretionary authority to determine eligibility for

benefits under the Plan. In exercising its fiduciary responsibilities, the Named

04/2018 22 EHP FSA

Fiduciary shall have discretionary authority to determine whether and to what extent

covered Plan participants. are eligible for benefits, and to construe disputed or

doubtful Plan terms. The Named Fiduciary shall be deemed to have properly

exercised such authority unless it has abused its discretion hereunder by acting

arbitrarily and capriciously.

No Guarantee of Employment

By adopting and maintaining the Elk Hills Power, LLC Flexible Spending Account Plan

for certain eligible employees, EHP has not entered into an employment contract with

any employee. Nothing contained in the Plan documents or in this summary gives any

employee the right to be employed by EHP or to interfere with EHP’s right to

discharge any employee at any time. Similarly, this Plan does not give EHP the right

to require any employee to remain employed by EHP or to interfere with the

employee’s right to terminate employment with EHP at any time.

Future of the Plan and Plan Amendment

EHP expects and intends to continue this Plan but does not guarantee any specific

level of benefits or the continuation of any benefits during any periods of active

employment, inactive employment, disability or retirement. Benefits are provided

solely at EHP’s discretion. EHP reserves the right, at any time or for any reason,

through an action of the President of Elk Hills Power, LLC, to suspend, withdraw,

amend, modify, or terminate the Plan (including altering the amount you must pay for

any benefit), in whole or in part. In the case of material change in this description of

the Plan, such action will be evidenced by a written announcement to affected

individuals.

04/2018 23 EHP FSA

Plan Administration

The additional information in this section is provided to you in accordance with the

Employee Retirement Income Security Act of 1974 (ERISA) regarding the Flexible

Spending Account Plan and the persons who have assumed responsibility for its

operation.

Plan Name Elk Hills Power, LLC

Flexible Spending Account Plan

Employer Identification Number 95-4729983

Plan Administrator Employee Benefits Committee

Plan Sponsor and Elk Hills Power, LLC

Address for Legal Process 27200 Tourney Rd, Suite 315

for the Plan Santa Clarita, California 91355

CRCBenefits@crc.com

888-848-4754

Claims Administrator PayFlex Systems USA, Inc.

and Address for Legal 10802 Farnam Drive, Suite 100

Process Omaha, NE 68154

Named Fiduciary Elk Hills Power, LLC

Plan Year Ends December 31

Plan Type Under ERISA, this plan is considered a hybrid

welfare/fringe benefit plan

Source of Contributions Employee Contributions

04/2018 24 EHP FSA

GLOSSARY

Following are definitions of the capitalized terms and phrases used throughout this

document.

Open Enrollment Period

The period of time during which you must make an election to participate for the

following Plan year.

Plan

“Plan” means the Elk Hills Power, LLC Flexible Spending Account Plan, and as used in

this Summary Plan Description, unless the context otherwise plainly requires, “Plan”

further means the pretax contributions and flexible spending accounts described

here. Also, in this Summary Plan Description, “Plan” is used interchangeably with

“Flexible Spending Account Plan.”