Q & A Update 3/29/18. Additions/Reminders:

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1 3/29/18 1

2 Additions/Reminders: Q & A Update 3/29/18 Medical if you are currently in the PPO plan, you must elect medical coverage for Medical if a spouse is eligible for medical coverage through their employer, they cannot be covered under Belk s medical plans. HSA/FSA if a spouse elects to contribute to a Health Care FSA (HC FSA) plan with their employer, the Belk associate cannot contribute to or use funds from a HSA plan. IRS regulations prohibit married couples from using both plans. You can still have a high deductible plan but you cannot contribute to or use funds from a HSA. The reverse is also true. If the Belk associate first contributes to a HSA, their spouse cannot contribute to a HC FSA with their employer. Critical Illness and Accident Plans Full-time Belk associates can sign up for these plans and not be covered under the Belk medical plans. STD starting 1/1/18, Belk will cover 60% of eligible earnings for all full time employees. LTD you do not have to provide evidence of insurability for this open enrollment window. Life basic life insurance (1 times salary) max coverage has been raised to $500,000, however, you will have the option to cap your basic life insurance at $50,000 to avoid imputed income tax. 3/29/18 2

3 Enrollment 1. How do I enroll? 2. Do I have to enroll? Mybelkbenefits.com is your one central resource for enrollment information. Go to this microsite to find all of the information needed to enroll in your benefits for There is an enrollment icon on the site that will lead you to Workday for the actual enrollment. Part-time associates who currently have dental and/or vision coverage do not have to re-enroll. Full-time associates are encouraged to make an enrollment elections to have coverage in Your Health Savings Account (HSA); Dependent Care Spending Account (DCSA); and, if you are in the PPO plan, your medical coverage will not roll over. Even if you choose not to elect coverage, you should go to the enrollment system to waive coverage and to make sure your personal information (e.g., address, , phone number) is up to date. Medical 3. Will Belk continue to offer three medical plans? Why is Belk offering three medical plans? 4. Are the medical plan premiums increasing? 5. Are our medical plans competitive? 6. When will I receive my insurance cards? 7. Will Belk continue to offer BridgeHealth, an optional Non- Emergency Surgery benefit. 8. Why is seed money not funded 100% at beginning of the year? Yes. We will continue to offer our associates three choices for their medical coverage, allowing our associates to select appropriate coverage to best suits their needs. Belk will offer three high deductible plans this year for associates. Each plan will have its own deductible and out of pocket maximums. The higher the deductible, the lower the per pay premiums. The plans will be complemented with a HSA to cover the out of pocket cost incurred under the higher deductible. The plan names for 2018 will be Premier, Standard and Basic. Yes, except for employee only coverage under the Basic plan, premiums for the 2018 medical plans are going up by approximately 3%. We have benchmarked our plans against our competitors and find that the approach of using high deductible plans along with HSA plans is quite common. Our plans are designed similarly to our competitors. Medical: United Healthcare will send new insurance cards at the first of the year. Pharmacy or Dental: If you are new to the plan, you will received a new card at the first of the year. If you are not new to the plan, you will not receive a new card. However, you can request a card through the provider s website. Vision: Since you do not need insurance cards to prove coverage, you not be mailed an insurance card for either of these plans. However, If you would like to have an insurance card, you can request a card through the UHC website. Yes, this benefit offers high quality non-emergency surgery service in specialized centers of excellence. An associate who uses this optional benefit must meet the deductible first and then any charges exceeding this amount are paid at 100%. The centers may require travel and overnight stay for associate and a care companion, both of which are covered by Belk. We considered funding all seed money at the beginning of the year, but felt this would be unfair to those associates hired during the first part of the year. Funding in January and July allows for those hired between February and June to still receive half of their seed money. 3/29/18 3

4 Medical 9. I have medical coverage for myself and my child, what seed money will I receive? 10. How does the Health Savings Account (HSA) work? 11. Who can have a HSA account? 12. Are my HSA funds limited to covering my own eligible expenses? 13. How to I set up a HSA account? 14. If I decline the opportunity to buy critical illness or accident insurance, can I elect coverage in the second year without evidence of insurability? Paid Time Off 15. Are there any changes to the PTO program for 2018? Associates covering themselves and a spouse/domestic partner, or a child, will receive the family seed contribution amount. Associates only covering themselves will receive the associate seed contribution amount. There is a lot of valuable information on the open enrollment site that explains the HSA plans in detail. Please visit the site for more information. But briefly, an HSA is a savings account that can be used for qualified medical related expenses. You can contribute pre-tax dollars to the account. And Belk puts seed money into associate HSA accounts if you are enrolled in one of the High Deductible Plans. The seed money varies by plan. The account is yours to keep like a 401(k) and the account is portable. You are eligible to contribute to a HSA account if you meet the following criteria: You are covered under a High Deductible Health Plan, and You have no other health coverage except what is permitted by IRS, and You are not enrolled in Medicare, and You cannot be claimed as a dependent on someone else s tax return. Your HSA funds can be reimbursed for eligible costs incurred by you, by your legal spouse, or by your tax dependents. Your HSA funds cannot be used to cover expenses for your domestic partner or for your domestic partner s dependents, even if they are covered by Belk s medical plan. Contact Bank of America either through their website: healthbenefits.bankofamerica.com or by phone at You may be asked to provide additional identification as required by the Patriot Act. If you do not complete your application process by providing requested documentation to Bank of America, your account will not be active and you may not receive seed money or wellness incentives. Yes, anyone can enter at annual enrollment without evidence of insurability. We will allow associates to rollover up to 40 hours of PTO each year. In addition, part-time associates who work hours per week, will have the same PTO accrual schedule. The accrual schedule is: Under 5 years 10 hours 5 years but less than 10 years 20 hours 10 or more years 30 hours 3/29/18 4

5 Paid Time Off 16. What happens if I don t use all of my PTO time by the end of the year? Will those days be rolled over? 17. Do I use my PTO bank when I need a sick day? 18. I m hiring a new associate; when will she be eligible for PTO? 19. How is my PTO accrued each year? 20. I need to go to the doctor and it will take two hours. Do I use PTO for the doctor s visit? 21. What happens when all of my PTO time is used and I need a sick day. 22. I have some accrued sick time as a result of my long service. Will this be carried over? 23. Specifically describe the years of service tiers within the PTO bank Up to 40 hours of accrued and unused PTO can be rolled over and must be used by January 27, Yes. Consider the PTO bank to be a combination of sick, vacation, and personal time off. There will be no separate sick and vacation policies. Hourly associates will have access to their PTO bank after six months of employment. Salaried associates have access to their PTO bank after 30 days of employment. Once eligible (30 days for salaried, six months for hourly), your PTO begins accruing on a monthly basis and you will be eligible for a portion of PTO for the remainder of the calendar year. So, for example, if you are hourly and join Belk on February 1, you will be eligible for PTO on August 1 and you will accrue each month the portion of time allotted for the remaining five months. Beginning on January 1 of the following year, you will begin accruing time each month. A new salaried associate would accrue 1/12 of 20 days or 1.67 days which converts to hours. Yes. Your PTO bank is denominated in hours. You would simply report two hours of use against your PTO bank for this doctor s visit. Unpaid time is used once sick and PTO days are exhausted. For all associates, any amount of unused sick time as of December 31, 2016 will be available and frozen as of January, No further sick time will accrue. These frozen sick time hours are available to use for sick or disability time. You must report this time as sick time or it will be charged against your PTO bank. Corporate Hourly, and all Store/DC/FCs Associates will retain their sick time balance until it has been exhausted; Corporate Salaried Associates and associates whose classification changes from salaried to hourly must use this frozen sick time balance by 12/31/2017. The sick time balance does not pay out if you leave the company. A new associate is in the first tier of PTO (e.g. 20 days) from the first day of employment until his or her 5 th anniversary date. At the beginning of the next month, he or she goes to the next tier of PTO (e.g. 25 days. The second tier of service is from that point until the 10 th anniversary date. The third tier begins on the month following the 10 th anniversary date. 3/29/18 5

6 Paid Time Off 24. What happens if I used more of my PTO hours than are accrued? 25. Will the deadline to take PTO be consistent across the company or will it vary by Division / Region / Stores. 26. Will I still have personal days? If you use more hours than are currently accrued (e.g. someone uses 10 days in February for a long vacation even though only less than two days are accrued), your PTO bank will have a negative balance. As long as this balance is brought positive by year end through the ongoing accrual, there is no impact. If an associate leaves with a negative balance, the negative accrued amount will be deducted from final pay. Business needs will influence when an associate is able to take PTO. The deadline for taking PTO is a local issue that is determined within the division or business unit. If an associate is sick after any division or business unit deadline, the associate would still utilize PTO time only if you had exhausted all PTO hours and had rolled over sick time if applicable. Yes. At corporate, Belk associates receive seven holidays; six of these are taken on the holiday and there is one personal holiday. In the stores and DCs, the number of holidays and personal holiday may vary but associates will have seven days for personal use. These personal holidays are outside of the PTO bank. Parental Benefits 27. What do I need to do to take two weeks of paternity leave? 28. It takes several weeks to finalize an adoption. What time off may I take for this? 29. How do my Parental benefits coordinate with FMLA? 30. As an hourly associate how much maternity leave will I receive? Wellness Incentives 31. When do I receive my wellness incentive if I complete the required screenings and testing? 32. What do I have to do as a nontobacco user to receive a premium discount? Speak with your manager to gain approval for the paid time off. You may take the two continuous weeks within the first 12 months following the birth or adoption of your child. The hours will be recorded as time off for paternity leave. This leave is outside of the PTO bank. Our adoption benefit is designed to assist parents with time away following the adoption process. An associate may take up to two continuous weeks of paid time off (unless stipulated differently based on state laws) during the first 12 months following the adoption of your child. This leave is outside of the PTO bank. Parental benefits run concurrent with FMLA. For example, if you use two weeks of adoption leave, that will count toward your 12 weeks of FMLA leave. Our maternity policy covers six weeks of paid maternity leave for both hourly and salaried associates and eight weeks if a C-section is required. Associates that complete wellness activities by the end of the current month will receive their incentive by the end of the following month. There is a menu of wellness activity options available, please visit our website for more details. Please remember all activities and forms must be completed and/or submitted by 9/30 to receive an incentive. You must be actively employed at the time incentives are funded. When you go through open enrollment you will simply indicate that you are a non-smoker. The premium discount will automatically be applied as a result of your declaration. 3/29/18 6

7 Wellness Incentives 33. How do I sign up for Quit For Life? Either visit their website or call How does Quit For Life affect my premiums? Life Insurance 35. I see the Life Insurance cap has been raised to $2 M. Do I have to provide evidence of insurability? 36. If I provided evidence of insurability last year when I increased my life insurance coverage, do I have to provide it again this year? Short Term Disability/Long Term Disability 37. How do I buy up Short Term Disability? 38. I have filed a Short Term Disability claim, when do I start receiving benefits? 39. How will I receive my Short Term Disability benefits? If you participate in Quit For Life program, you can receive the discounted premium by confirming you are no longer a tobacco user. Yes, for any coverage over $500,000 for new hires requires evidence of insurability. Thereafter, any increase in coverage requires evidence of insurability. Yes, if you are increasing your current coverage amount. You no longer need to buy up additional coverage for Short Term Disability. Starting 1/1/18, all full time associates will have Short Term Disability for 60% of their eligible earnings covered by Belk. For non-maternity related disability claims, once your claim is approved, you will receive benefits for the period of time you are disabled (max 12 weeks), starting on the 8 th calendar day of being disabled. You can use available PTO to cover the elimination period (first 7 days of disability). For maternity claims, once your claim is approved, your benefit coverage begins on the first day of your disability. Claims with a disability start date through 12/31/17 will be paid by Liberty, throughout the duration of your disability. Once your claim is approved, Liberty will mail you a paycheck, weekly. This paycheck will consist of your gross pay, less Federal and State taxes. All of your benefit premiums will stop being withheld from your check while you are on disability benefits and you will be responsible for sending in payment to cover the cost of your benefits. Belk will mail you a billing statement for the cost of your benefits. If your balance is not paid, your benefits may be terminated. Claims with a disability start date on or after 1/1/18, disability benefits will be paid by Belk. Your benefits will be paid on the same bi-weekly payroll schedule and the following deductions will be withheld: Federal and State taxes Benefit premiums 401(k) deferrals (deferral participation can be adjusted at any time) Voluntary deductions (participation can be adjusted at any time) 3/29/18 7

8 Short Term Disability/Long Term Disability 40. Now that I do not have to buy up short term disability, I would like to get Long Term Disability coverage, do I have to provide evidence of insurability? Dependents 41. Will there be a dependent eligibility audit during 2018? 42. What happens when my dependent reaches age 26? Other 43. How is imputed income tax paid? 44. Can I suspend benefits while on a leave of absence (LOA)? No, you do not have to provide evidence of insurability as long as you elect Long Term Disability coverage during this open enrollment period. If you skip this enrollment period and enroll next year, you may be required to provide evidence of insurability. Belk reserves the right to audit dependent eligibility at any time. Dependents over the age of 26 cannot be covered under our plans. Any dependents attached to medical, dental or vision plans will be automatically dropped once they turn 26. Since associates can cover more than one child on our child life plans, associates will need to actively remove child coverage if their only covered child turns 26. You may be subject to imputed income tax if your basic life insurance coverage exceeds $50,000 or if you are covering a domestic partner or a domestic partner s dependent(s) on Belk s medical plan. If either, or both, situations apply to you, your imputed income tax will be calculated by Belk and withheld from your paycheck, like normal payroll taxes. No, benefit coverage is not suspended for any event. If you need to go on a leave of absence, please reach out to the LOA team and work with them in coordinating the details of your leave. 3/29/18 8