Medical Expense Plan for MANAGEMENT AND OTHER ELIGIBLE RETIREES Summary Plan Description Effective 1/1/2005. Lucent Technologies

Transcription

1 Medical Expense Plan for MANAGEMENT AND OTHER ELIGIBLE RETIREES Summary Plan Description Effective 1/1/2005 Lucent Technologies Last Updated March 21, 2005

2 Disclaimer This is a summary plan description (SPD) that describes certain welfare benefits offered to eligible retirees under the Lucent Technologies Inc. Retiree Welfare Benefits Plan ( Retiree Medical Plan ). The SPD is provided for educational purposes and is intended to comply with Department of Labor requirements for SPDs. It is based on Plan provisions effective January 1, 2005 and replaces all previous SPDs and other descriptions of benefits provided by the Plan. More detailed information is provided in the official Retiree Medical Plan document, which is the final authority. In all instances, the Retiree Medical Plan document will control and govern the operation of the Retiree Medical Plan. In addition, if there is any conflict between the information in this SPD or Plan documents and the applicable law, the law will govern. The Board of Directors of Lucent Technologies Inc. (or its delegate) reserves the right to modify, suspend, change or terminate the Retiree Medical Plan at any time. Participants should make no assumptions about any possible future changes unless a formal announcement is made by the company. Questions regarding your benefits should be addressed as indicated in this document (see Contact Information ). Because of the many detailed provisions of the Retiree Medical Plan, no one is authorized to advise you as to your benefits, except as indicated in this document. Lucent Technologies Inc. cannot be bound by statements made by unauthorized personnel. In the event of a conflict between any verbal information provided to you by an authorized resource and information in the official Retiree Medical Plan document, the Plan document will govern. i /SPD004YB.DOCXP/

3 About This Material ii /SPD004YB.DOCXP/

4 Table of Contents Your Retiree Medical Plan At-a-Glance...1 Eligibility and Enrollment...17 What Happens to My Retiree Medical Coverage if I...25 How Medicare Works With Lucent Coverage...30 A Closer Look at POS...34 A Closer Look at Traditional Indemnity...42 What s Covered/What s Not Under POS and Traditional Indemnity?...47 Precertification Under POS, Traditional Indemnity and Rx Only (Including the Mental Health and Chemical Dependency Program)...66 Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only...69 Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity...75 A Closer Look at Rx Only Coverage...83 A Closer Look at the HMO/Medicare Advantage HMOs...84 A Closer Look at Waiving Coverage...88 Claims and Appeals...89 Continuation of Coverage Your Legal Rights Notice of Privacy Practices for the Lucent Health Plans Retiree Medical Plan Administrative Information Your Retiree Medical Plan Dictionary Contact Information Hewitt Associates iii 07544SPD01Ela.DOC/COMM09ms 09/2004

5 Your Retiree Medical Plan At-a-Glance Finding quality healthcare coverage at an affordable cost is a priority for everyone. And protection against the high expenses that can result from a serious illness or injury is critical to your financial and personal security. That s why Lucent provides you with access to quality healthcare coverage. The following is a summary of the key features of the Retiree Medical Plan: For important definitions of certain terms, see Your Retiree Medical Plan Dictionary. Feature Eligibility Medical Coverage Options Summary You re an eligible retiree if you re a former management employee or former nonrepresented occupational employee who terminated employment from a participating company and who is: Eligible to receive a service or disability pension under the Lucent Technologies Inc. Pension Plan or the Service Based Program of the Lucent Retirement Income Plan; or In the Account Balance Program (ABP) and at least 50 years old with 15 years of net credited service. Note that your eligible dependents generally must be covered under the same coverage option you choose for yourself. The Retiree Medical Plan offers different coverage options, including: Two different kinds of Point of Service (POS): POS: With POS, you have the choice each time you need medical care of receiving in-network or out-of-network care. When you receive in-network care, your out-of-pocket costs are generally lower; when you receive out-ofnetwork care, your out-of-pocket costs are usually higher; and Catastrophic POS: With Catastrophic POS, you receive the same basic range of services and supplies as under POS, but you pay more out of your own pocket. Traditional Indemnity: With Traditional Indemnity, you re covered for a wide range of medical services and supplies, but are subject to annual deductibles, coinsurance amounts and out-of-pocket maximums. In addition, you can use any provider you choose and the plan will reimburse you the same percentage whether you receive care from a PPO or non-ppo provider. You ll pay less out of your pocket if you use PPO providers, since they charge lower, negotiated prices for their services. Rx Only: If you choose this coverage, you only receive prescription drug /SPD004YB.DOCXP/

6 Feature When to Enroll for Coverage When Retirement Coverage Begins Cost When You Have Coverage Through Another Employer Summary benefits and do not receive any other medical benefits. You can only choose this coverage if you re Medicare-eligible, since Medicare will be your sole coverage for any other medical expenses you incur. HMO or Medicare Advantage HMO: With an HMO, services are usually covered only if you receive care from HMO providers. However, there are exceptions to this rule, particularly when you need emergency care. In addition, with an HMO, there are generally low out-of-pocket costs and no bills or claim forms to fill out. Waive Coverage: When you waive coverage, you will not have any Lucent medical coverage and you may not elect to re-enroll in medical coverage (unless you have a qualified status change) until the next annual open enrollment. When you retire, enrollment materials and information about your coverage options will be sent to you at your address of record. You generally do not need to actively enroll if the coverage option you had as an active employee is available to you in retirement, you receive a company subsidy and you wish to remain in that option. You do need to enroll if: You re eligible to enroll in the Retiree Medical Plan but do not receive a subsidy from the company; You want a different coverage option than you had as an active employee; You want to waive or need to choose coverage, and you are eligible to receive a service or disability pension; or You want to make coverage changes for your Class I dependents, including your domestic partner dependents. To make any of the above changes, you have to make your enrollment elections by the date stated in your enrollment package. Your retirement coverage becomes effective as of the first day of the month following your retirement. While you may receive a subsidy from the company, it s likely that you ll be responsible for some portion of the cost of coverage. Log on to Your Benefits Resources at or call the Lucent Benefits Center (see Contact Information for the telephone number). Your coverage as an active employee (or the dependent of an active employee) is always primary to (that is, pays benefits before) your coverage as a Lucent retiree (or the dependent of a Lucent retiree). Your Benefits Resources is a trademark of Hewitt Management Company LLC /SPD004YB.DOCXP/

7 Feature When the Retiree Medical Plan Pays Benefits Before Medicare When Medicare Pays Benefits Before the Retiree Medical Plan For More Information About the Retiree Medical Plan Summary The Retiree Medial Plan is primary (that is, pays benefits first) for: Retired employees who are not Medicare-eligible; and Dependents who are not Medicare-eligible regardless of the age of the retired employee (except for dependents under age 65 who are Medicare-eligible as described in the next row, When Medicare Pays Benefits Before the Retiree Medical Plan ). Medicare takes over as the primary benefit plan for: Retired employees age 65 and older; Dependents age 65 and older regardless of the age of the retired employee; A retired employee or dependent regardless of age who has had ESRD (endstage renal disease) for 30 months (If under age 65, Medicare benefits apply only to covered expenses associated with end-stage renal disease; your Lucent coverage would be primary for all other covered expenses); and A retired employee or dependent regardless of age who is eligible for Medicare due to disability. At the time you become eligible for Medicare, you will be transferred to Traditional Indemnity, with Medicare as primary, regardless of the coverage you had previously. Traditional Indemnity is administered by UnitedHealthcare. If you have dependents who are not yet Medicare-eligible, they will also be covered under Traditional Indemnity, unless there is a UnitedHealthcare POS in your area. If there is a POS in your area, your dependents will be enrolled in the POS. If you or a covered dependent is eligible for primary coverage under Medicare, the Retiree Medical Plan will reduce its benefits by the amount Medicare would have paid for the same expenses. If you are enrolled in an HMO, you will need to check directly with the HMO about benefit levels for Medicare-eligible individuals. While you will be defaulted to Traditional Indemnity, you may be able to select coverage through a Medicare Advantage HMO if one is available in your area. For information about your Retiree Medical Plan benefits and eligibility, contact the appropriate administrator (see Contact Information ). To enroll, visit Your Benefits Resources at or call the Lucent Benefits Center /SPD004YB.DOCXP/

8 What Coverage Choices Are Available to Me Under the Retiree Medical Plan? Under the Retiree Medical Plan, the options available to you are based on your: Geographic location; Retirement date; and Medicare-eligibility status. The following charts highlight the options available to you based on the above criteria: If You re Not Medicare-Eligible and Live in a POS Area Retirement Date POS Traditional Indemnity HMO Catastrophic Rx Only POS Waive Coverage Before 3/1/90 Option Assigned Option N/A Option Option to you On or After 3/1/90 Assigned to you Not available Option N/A Option Option If You re Not Medicare-Eligible and Live in a Non-POS Area Retirement Date POS Traditional Indemnity HMO Catastrophic Rx Only POS Waive Coverage Before 3/1/90 Option Assigned Option N/A Option Option to you On or After 3/1/90 Option Assigned to you Option N/A Option Option * If your home ZIP code isn t in a designated POS area, you still may be eligible to elect POS coverage in a nearby network that is available to other Lucent retired employees. Contact the Lucent Benefits Center to find out if there are POS providers in your area. When Dependent Benefits May Differ While covered dependents must be enrolled in the same option and with the same healthcare company that you choose for yourself, dependent benefits may differ under the following circumstances: You are Medicare-eligible (regardless of your age), and you have one or more non-medicare-eligible dependents; or You are not Medicare-eligible, but you have one or more Medicare-eligible dependents (regardless of their ages) /SPD004YB.DOCXP/

9 The following charts highlight how benefits may differ based on the circumstances above and the Retiree Medical Plan coverage option selected: If You re Medicare-Eligible You and Any Medicare-Eligible Dependent(s) Have Traditional Indemnity* Medicare Advantage HMO Rx Only Any Non-Medicare-Eligible Dependent(s) Have Traditional Indemnity, unless there is a UnitedHealthcare POS in your area** Regular HMO Catastrophic POS If You re Not Eligible for Medicare You and Any Non-Medicare-Eligible Dependent(s) Have Traditional Indemnity, unless there is a POS in your area** Regular HMO Any Medicare-Eligible Dependent(s) Have Traditional Indemnity with Medicare primary Medicare Advantage HMO Catastrophic POS Rx Only *Traditional Indemnity is generally the assigned option for Medicare-eligible retirees. Medicare pays first, with Traditional Indemnity paying second, if necessary. ** Non-Medicare-eligible dependents of Medicare-eligible retirees are automatically enrolled in Traditional Indemnity unless there is a UnitedHealthcare POS in the area. If there is a UnitedHealthcare POS in the area, dependents will be enrolled in the POS until they are Medicare-eligible. In this case, your dependents Mental Health/Chemical Dependency coverage will be administered by United Behavioral Health (UBH). What Happens When I (or One of My Dependents) Become Medicare-Eligible? When you or a covered dependent becomes eligible for Medicare (regardless of age), the Retiree Medical Plan will coordinate benefits with Medicare. The Medicare-eligible person will be enrolled in Traditional Indemnity, with Medicare as primary and the Retiree Medical Plan as secondary. Traditional Indemnity is generally administered by UnitedHealthcare. In certain limited circumstances, Aetna may administer this coverage; for example, for the Medicare-eligible dependents of non-medicare eligible retirees with Aetna POS coverage /SPD004YB.DOCXP/

10 Your Retiree Medical Choices At-a-Glance The following chart is intended to summarize some of the benefits that will be available through the Retiree Medical Plan as of January 1, To be covered, the service or supply generally must: Be medically necessary for the treatment of illness or injury, or it must be for the preventive-care benefits that are specifically stated as covered; Be provided under the order or direction of a physician; Be provided by a licensed and accredited healthcare provider practicing within the scope of his or her license in the state where the license applies; Be listed as a covered service and satisfy all the required conditions of services as shown in the following chart; and Not be specifically listed as excluded by the health plan. In addition, you may be required to meet certain conditions, as described throughout this SPD. Services and supplies meeting these criteria will be covered up to the allowable amount. Please keep in mind that if you or a covered dependent is eligible for primary coverage under Medicare, the Retiree Medical Plan will reduce its benefits by the amount Medicare would have paid for the same expenses. Note that all in-network benefits are based on negotiated rates; out-of-network and non-ppo benefits are based on the allowable amount. POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Choice of Doctors Select within a network of providers Select any qualified provider Select within a network of providers Select any qualified provider Traditional Indemnity Rx Only HMO Select any qualified provider or within a network of PPO providers Not applicable Select within a network of HMO providers SPD01Ela.DOC/COMM09ms 10/2004

11 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Annual Deductible Annual Out-of- Pocket Maximum Lifetime Maximum Benefit Not applicable $500/individual $1,000/two-person $1,500/family $1,000/individual $3,000/individual $2,000/two-person $6,000/two-person $3,000/family $9,000/family (excludes deductible) Not applicable Not applicable Ind.: $150 plus 1% of annual pension ($175 min. & $300 max.) Twoperson: 2x ind. deductible Family: 3x ind. deductible $7,500/individual (combined in- and out-of- network) $7,500/individual (combined in- and out-of-network) Traditional Indemnity Rx Only HMO $1,500/individual $3,000/twoperson $4,500/family Not applicable $1,500/individual Generally, not applicable Generally, not applicable Unlimited Unlimited Unlimited Unlimited Unlimited Not applicable Generally, unlimited Covered Services Physician Office Visits Maternity Office visits: pre/postnatal In-hospital delivery services You pay $25 copayment per visit Plan pays 90% after first office copayment Plan pays 70% after deductible is satisfied Plan pays 70% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Not applicable Not applicable Varies by HMO; go to Your Benefits Resources (YBR) or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Outpatient Lab/ X-ray Inpatient Hospitalization Plan pays 90% Plan pays 70% after deductible is satisfied Plan pays 90% Plan pays 70% after you pay $200/admission copayment Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% after you pay $200/admission copayment Plan pays 80% after deductible is satisfied Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

12 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Outpatient Surgery Plan pays 90% Plan pays 70% after deductible is satisfied Inpatient Surgery Plan pays 90% Plan pays 70% after you pay $200/admission copayment Anesthesia Plan pays 90% Plan pays 70% after deductible is satisfied Emergency Use of Emergency Room Nonemergency Use of Emergency Room You pay $50 copayment (waived if admitted) Plan pays 70% after you pay $50 copayment You pay $50 copayment (waived if admitted) Plan pays 70% after you pay $50 copayment Birthing Center Plan pays 90% Plan pays 70% after deductible is satisfied Home Healthcare Private Duty Nursing Extended Care Facility Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 100 visits/year Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 100 shifts/year Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 60 days/year Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% after you pay $200/admission copayment Traditional Indemnity Rx Only HMO Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 60% Plan pays 80% after deductible is satisfied Plan pays 40% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40%; limited to 100 visits/year Plan pays 60% Plan pays 40%; limited to 100 shifts/year Plan pays 60% Plan pays 40%; limited to 60 days/year Plan pays 80% after deductible is satisfied; limited to 200 visits/year Plan pays 80% after deductible is satisfied; limited to 200 shifts/year Plan pays 80% after deductible is satisfied; limited to 120 days/year Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

13 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Hospice Care Plan pays 90%; limited to 210 days/lifetime, combined in- and out-of-network Rehabilitation Therapy Emergency Air Ambulance Used for Emergency Ambulance From Hospital to Hospital (if admitted to first hospital) Emergency Use of Ambulance Nonemergency Use of Ambulance You pay $25 copayment/visit Chiropractic You pay $25 copayment/visit; limited to 30 visits/year combined with out-of-network Plan pays 70% after deductible is satisfied; limited to 210 days/lifetime, combined in- and out-of-network Plan pays 70% after deductible is satisfied; speech therapy limited to 30 visits/year Plan pays 60%; limited to 210 days/lifetime, combined in- and out-of-network Plan pays 40%; limited to 210 days/lifetime, combined in- and out-of-network Plan pays 60% Plan pays 40%; speech therapy limited to 30 visits/year Traditional Indemnity Rx Only HMO Plan pays 80% after deductible is satisfied; limited to 210 days/year Plan pays 80% after deductible is satisfied; speech therapy limited to 30 visits/year Plan pays 90% Plan pays 90% Plan pays 60% Plan pays 60% Plan pays 80% after deductible is satisfied Plan pays 90% Plan pays 90% Plan pays 60% Plan pays 60% Plan pays 80% after deductible is satisfied Plan pays 90% Plan pays 90% Plan pays 60% Plan pays 60% Plan pays 80% after deductible is satisfied Not applicable Not applicable Not applicable Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Not covered Not covered Not covered Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly Plan pays 70% after deductible is satisfied; limited to 30 visits/year combined with in-network Plan pays 60%; limited to 30 visits/year combined with outof-network Plan pays 40%; limited to 30 visits/year combined with innetwork Plan pays 80% after deductible is satisfied; limited to 30 visits/year Not applicable Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

14 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Acupuncture Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 30 visits/year Durable Medical Equipment Blood and Blood Derivatives Second Surgical Opinion Plan pays 90% Plan pays 70% after deductible is satisfied Plan pays 90% Plan pays 70% after deductible is satisfied Plan pays 90% Plan pays 70% after deductible is satisfied In-Office Surgery Plan pays 90% Plan pays 70% after deductible is satisfied Radiation Therapy Plan pays 90% Plan pays 70% after deductible is satisfied Chemotherapy Plan pays 90% Plan pays 70% after deductible is satisfied Physician Hospital Visits and Consultations Plan pays 90% Plan pays 70% after deductible is satisfied Podiatrist Plan pays 90% Plan pays 70% after deductible is satisfied Plan pays 60% Plan pays 40%; limited to 30 visits/year Traditional Indemnity Rx Only HMO Plan pays 80% after deductible is satisfied; limited to 30 visits/year Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

15 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Cardiac Rehabilitation (phase three maintenance not covered) Plan pays 90% Plan pays 70% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Traditional Indemnity Rx Only HMO Not applicable Varies by HMO; go to YBR or contact HMO directly Nutritionist Plan pays 90% Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly Birth Control (prescription birth control or medication only) See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table Varies by HMO; go to YBR or contact HMO directly Smoking Deterrents (prescription only) See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table See Prescription Drug Program in this table Varies by HMO; go to YBR or contact HMO directly Wigs Preventive Care Routine Physical Exams Well-Child Care Childhood immunizations Up to $300/Plan Year $25 copayment/ visit $25 copayment/ visit Up to $300/Plan Year Up to $300/Plan Year Up to $300/Plan Year Up to $300/Plan Year Not applicable Varies by HMO; go to YBR or contact HMO directly Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly Plan pays 90% Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

16 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Well-Woman Care (OB/GYN exam) $25 copayment/ visit Traditional Indemnity Rx Only HMO Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly Mammogram Screening $25 copayment/ visit Plan pays 70% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Not applicable Varies by HMO; go to YBR or contact HMO directly Pap Smear in doctor s office $25 copayment/ visit Plan pays 70% after deductible is satisfied Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Not applicable Varies by HMO; go to YBR or contact HMO directly Digital Rectal Exam and a blood test for PSA for prostate cancer for men age 50 and older Newborn In-Hospital Care Plan pays 90% Plan pays 70% after deductible is satisfied Plan pays 90% Plan pays 70% after deductible is satisfied; limited to one visit Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied Plan pays 60% Plan pays 40%; limited to one visit Not applicable Plan pays 80% Not applicable after deductible is satisfied; limited to one visit Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Centers of Excellence Yes Yes Yes Yes Yes No Varies by HMO; go to YBR or contact HMO directly Cost Monthly Cost See How Much Do I Pay for Coverage? under Eligibility and Enrollment See How Much Do I Pay for Coverage? under Eligibility and Enrollment See How Much Do I Pay for Coverage? under Eligibility and Enrollment See How Much Do I Pay for Coverage? under Eligibility and Enrollment See How Much Do I Pay for Coverage? under Eligibility and Enrollment See How Much Do I Pay for Coverage? under Eligibility and Enrollment Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

17 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Copayments You pay $25 copayment/visit for office visits and $50 emergency room copayment/visit Coinsurance Whether you are responsible for charges in excess of allowable amounts Lifetime Maximum Benefit Generally, the Plan pays 90% of the innetwork rate You pay $200 hospital copayment/ admission and $50 emergency room copayment/visit Generally, the Plan pays 70% of the allowable amount Not applicable You pay $200 hospital copayment/ admission Generally, the Plan pays 60% of the in-network rate Generally, the Plan pays 40% of the allowable amount Traditional Indemnity Rx Only HMO Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly Generally, the Plan pays 80% of the reasonable and customary charge, while you pay the remaining 20% Not applicable No Yes No Yes Yes In-Network: No Out-of-Network: Yes Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly None None None None None None Varies by HMO; go to YBR or contact HMO directly Who is responsible for precertification? Penalty for failure to precertify care Your PCP You Your PCP You You Not applicable Varies by HMO; go to YBR or contact HMO directly Not applicable 20% reduction in benefits up to $400 maximum/ occurrence Not applicable 20% reduction in benefits up to $400 maximum/ occurrence 20% reduction in Not applicable benefits up to $400 maximum/ occurrence Varies by HMO; go to YBR or contact HMO directly Do you have to file claim forms? No Yes No Yes Yes In-Network: No Out-of-Network: Yes Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

18 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Prescription Drug Program Separate Annual Out-of-Pocket Maximum* Retail Copayments (limited to 30-day supply using participating pharmacy) Medco By Mail: (limited to 90-day supply) Traditional Indemnity Rx Only HMO $1,500/individual $1,500/individual $1,500/individual $1,500/individual Not applicable $10 generic $25 formulary brand $40 nonformulary $20 generic $50 formulary brand $80 nonformulary Plan pays 70% after you pay separate $100/individual ($300/family) deductible Not applicable $10 generic $25 formulary brand $40 nonformulary $20 generic $50 formulary brand $80 nonformulary Plan pays 70% after you pay separate $100/individual ($300/family) deductible Not applicable In-Network: $10 generic $25 formulary brand $40 nonformulary Out-of-Network: Plan pays 70% after you pay separate $100/individual ($300 family) deductible $20 generic $50 formulary brand $80 nonformulary In-Network $10 generic $25 formulary brand $40 nonformulary Out-of-Network: Plan pays 70% after you pay separate $100/individual ($300 family) deductible $20 generic $50 formulary brand $80 nonformulary *This prescription drug out-of-pocket maximum is separate from any other out-of-pocket maximums that apply to your other healthcare benefits. Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

19 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Non-Medicare-Eligible Mental Health and Chemical Dependency Program Inpatient Alternative Care (may include partial hospitalization, residential treatment, and services of a halfway house or group home) Outpatient $25/day; limited to 120 days/year (in- and out-ofnetwork combined) $25/day; limited to 120 days/year $25/visit; limited to 50 visits/year (in- and out-ofnetwork combined) Plans pays 50% after $200/individual deductible is satisfied; $500/admission copayment; limited to 30 days/year (in- and out-of-network combined) Plan pays 60%; limited to 120 days/year (in- and out-of-network combined) (inand out-ofnetwork combined) Not covered Plan pays 60%; limited to 120 days/year Plan pays 50% after $200/individual deductible is satisfied; limited to 50 visits/year (in- and out-ofnetwork combined) Plan pays 60%; limited to 50 visits/year (in- and out-of-network combined) Plan pays 40% after $200/individual deductible is satisfied; $500/admission copayment; limited to 30 days/year (in- and out-of-network combined) Not covered Plan pays 40% after $200/individual deductible is satisfied; limited to 50 visits/year (in- and out-ofnetwork combined) Traditional Indemnity Rx Only HMO In-Network: $25/day; limited to 120 days/year (in- and out-ofnetwork combined) Out-of- Network: Plan pays 50% after $200/individual deductible is satisfied; limited to 30 days per year (in- and outof-network combined) In-Network: $25/day; limited to 120 days/year Out-of-Network: Not covered In-Network: $25/day; limited to 50 visits/year (in- and out-ofnetwork combined) Out-of- Network: Plan pays 50% after $200/individual Not applicable Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly SPD01Ela.DOC/COMM09ms 10/2004

20 POS Catastrophic POS Feature In-Network Out-of-Network In-Network Out-of-Network Medicare-eligible Mental Health and Chemical Dependency Benefits Traditional Indemnity Rx Only HMO deductible is satisfied; limited to 50 visits/year (in- and out-ofnetwork combined) Inpatient Your coverage is provided under Traditional Indemnity; the Plan is secondary to Medicare and pays up to a total of 80% of the Medicare-approved amount (including any amounts payable by Medicare). Chemical Dependency benefits are limited to 30 days/confinement and 2 confinements/lifetime. Ou Outpatient Your coverage is provided under Traditional Indemnity; the Plan is secondary to Medicare and pays up to a total of 50% of the Medicare-approved amount (including any amounts payable by Medicare). Varies by HMO; go to YBR or contact HMO directly Varies by HMO; go to YBR or contact HMO directly For more information about your POS and Catastrophic POS options, see A Closer Look at POS. For additional information about Traditional Indemnity, see A Closer Look at Traditional Indemnity. For more information about HMO/Medicare Advantage HMOs, see A Closer Look at the HMO/Medicare Advantage HMOs. For specific HMO provisions, log on to Your Benefits Resources, or call your HMO s Member Services phone line SPD01Ela.DOC/COMM09ms 10/2004

21 Eligibility and Enrollment Am I Eligible for Coverage? You can participate in the Retiree Medical Plan if you are an eligible retiree that is, if you re a former management employee or former non-represented occupational employee who terminated employment from a participating company and is: Eligible to receive a service or disability pension under the Lucent Technologies Inc. Pension Plan or the Service Based Program of the Lucent Retirement Income Plan; or In the Account Balance Program (ABP) and at least 50 years old with 15 years of net credited service. Are My Dependents Eligible for Coverage? Your Class I dependents are eligible for coverage. If you retired before March 1, 1990, or if you retired on or after March 1, 1990 and earned an annual base salary of less than $65,000 at the time you retired, eligible Class I dependents include: Your spouse (or common-law spouse if recognized in your state of residence); Your surviving spouse (or common-law spouse if recognized in your state of residence); Your same- or opposite-sex domestic partner and his or her children; Your children up to the end of the year in which they reach age 23; Children for whom you re required to provide coverage under a Qualified Medical Child Support Order (QMCSO); and Does Lucent Subsidize Dependent Coverage? Effective January 1, 2004, Lucent no longer subsidizes dependent coverage for retirees who: Retired from Lucent on or after March 1, 1990; and Had an annual base salary of $65,000 or more at the time they retired. If you re affected by this rule, you can still cover your eligible dependents through a separate plan, called the Lucent Technologies Inc. Medical Expense Plan for Eligible Dependents of Retired Employees. To do so, you will have to pay 100 percent of their cost for coverage at group rates. Your monthly contribution for dependent coverage will be deducted from your pension check if your check is large enough to cover it; otherwise, you ll be billed for your coverage. Incapacitated children if unmarried and eligible dependents if certified by Claims Administrator (see the definition of Class I Dependents in Your Retiree Medical Plan Dictionary ). You can also cover your eligible Class II dependents who have been continuously covered prior to January 1, No new Class II dependents may be enrolled. Class II dependents are defined as: Your unmarried dependent children not included as Class I dependents; /SPD004YB.DOCXP/

22 Your unmarried dependent stepchildren not included as Class I dependents; Your unmarried grandchildren, your unmarried brothers and sisters and your parents and grandparents; and Your lawful spouse s parents and grandparents. Class II dependents must also meet the following requirements: They receive less than $12,000 per year in income from all sources (other than your support); They live with you or in a nearby household provided by you (note that unmarried dependent stepchildren must live with you throughout the period of coverage); and They either: Have been continuously re-enrolled during each annual open enrollment since January 1, 1996 and continue to be re-enrolled each year; or Were enrolled before June 1, 1986 (grandfathered dependents). Note: If your Class II dependent was enrolled as of January 1, 1996 under the corresponding plan offered by AT&T, and you are enrolled in a POS option, he or she would be covered under Traditional Indemnity and covered for Other Covered Charges (OCC) Only coverage, which is limited to the following benefits only: extended hospital confinements, nursing services, physician visits, physical therapy, blood, prostheses, rental of durable medical equipment, replacement of durable medical equipment, local professional ambulance services, air ambulance services, mammography, chiropractic care, podiatric care, orthotic care, physiotherapy and hemodialysis/peritoneal dialysis for chronic renal disease. Benefits will be administered by UnitedHealthcare. What Happens When I (or One of My Dependents) Become Medicare-Eligible? When you or a covered dependent becomes eligible for Medicare (regardless of age), the Retiree Medical Plan will coordinate benefits with Medicare. The Medicare-eligible person will be enrolled in Traditional Indemnity, with Medicare as primary and the Retiree Medical Plan as secondary. Traditional Indemnity is administered by UnitedHealthcare. What if I Have Eligible Dependents Who Are Also Eligible for Lucent Coverage as an Employee or Retiree? There are many Lucent families, consisting of retired employees and their lawful spouses, their domestic partners or their children who have also retired from or have been employed by Lucent. These situations may affect coverage under the medical options. How Does This Situation Affect Enrollment Rules? One occupational retired or active Lucent employee can t enroll another occupational or management retired or active occupational or management Lucent employee as a dependent. This means if you re eligible as a retired Lucent employee, you must enroll as a retired employee. You can t enroll as a dependent of another retired or active Lucent employee, even if you re the employee s lawful spouse or domestic partner. (There may be an exception to this rule; see the /SPD004YB.DOCXP/

23 exception for HMOs in When Does a Contribution Waiver Apply? in this section.) However, a retired management or active Lucent employee may enroll another retired management or active management Lucent employee as a dependent. Each retired or active Lucent employee may choose any of the options available to him or her, regardless of the option the other family member selects. Only one employee or retiree may enroll any given eligible dependent. Either you or your Lucent Technologies Inc. lawful spouse or domestic partner, as an employee or retiree, may cover your dependent children. However, a child may not be covered by both parents at the same time. How Does This Situation Affect Benefits? Expenses incurred by you and any dependents enrolled with you under your selected option count toward the two-person or family deductible and two-person or family out-of-pocket maximum under that option. The following rules apply for each family member who enrolls separately from you as a Lucent employee or retiree: The individual, two-person or family out-of-pocket maximum limit applies separately. The two-person or family deductible will apply only if at least one of you is eligible to claim the other as a Class I dependent, and the retired employee is enrolled in Traditional Indemnity. If your lawful spouse, domestic partner or dependent is a retired or occupational Lucent employee, the retiree must be enrolled in Traditional Indemnity. If the family deductible does apply, it s not automatic. You ll need to submit your explanation of benefits statements to your healthcare company to show you paid more toward the family deductible than required. You ll also need to submit a claim for reimbursement. When Does a Contribution Waiver Apply? A contribution waiver applies when: Two retired Lucent employees or one retired and one active Lucent employee enroll in the same HMO; and At least one of the retired or active employees would qualify as a Class I dependent of the other. In this case, only one active or retired employee will be required to pay the full employee contribution. The other may be covered at the lesser dependent contribution rate. If this applies for you, one of you must notify Lucent. Lucent reserves the right to verify these situations. How Do I Enroll? When you retire, enrollment materials and information about your coverage options will be sent to you at your address of record. You generally do not need to actively enroll if the coverage option you had as an active employee is available to you in retirement and you wish to remain in that option. You do need to enroll if: You re eligible to enroll in the Retiree Medical Plan but do not receive a subsidy; /SPD004YB.DOCXP/

24 You want a different coverage option than you had as an active employee and received a company subsidy; You want to waive or need to choose coverage and are eligible to receive a service or disability pension; or You want to make coverage changes for your Class I dependents, including your domestic partner dependents. To make any of the above changes, you have to make your enrollment elections by the date stated in your enrollment package. If You Do Not Enroll If you are eligible to receive a service or disability pension, you receive a company subsidy and you do not make any elections by the date shown in your enrollment package, you will be assigned the same coverage option you (and your covered dependents) had as an active employee. If that option is not available to you (or your dependents) in retirement, you will be assigned coverage in an assigned option. If you are eligible to enroll for coverage but do not receive a subsidiary, and you do not enroll by the date shown in your enrollment package, you will not have coverage after your coverage as an active employee ends. Annual Open Enrollment Elections made during annual open enrollment take effect on the first day of the next calendar year. Domestic Partner Benefits As a retired employee, you cannot add any new domestic partner dependents under the Retiree Medical Plan once in retirement. If, however, you had a domestic partner dependent covered under the Lucent Technologies Inc. Medical Expense Plan for Management Employees on the date of your retirement, you may continue coverage for the enrolled domestic partner dependent. You should note that your coverage may be affected if you don t act during annual open enrollment; for example, if you don t reenroll your Class II dependents, they cannot be covered in the future. Will I Receive a Confirmation of My Enrollment? You ll receive a confirmation statement after you enroll or change benefits during annual open enrollment or at any other time during the year. Be sure to review the information carefully and report any discrepancies immediately. How Do I Pay for Medical Coverage? Your contribution, if any, toward the cost of coverage under the Retiree Medical Plan will be deducted from your monthly pension check. If you do not receive a pension from Lucent, you will submit your payment for coverage to your enrollment administrator. During annual open enrollment, you ll have access to cost information for all the available options. How Do Retiree Medical Caps Work? Lucent may subsidize a portion of your annual medical premiums up to a certain percentage, which is typically based on your status, your date of retirement and your years of service. The /SPD004YB.DOCXP/

25 applicable percentage of the retiree medical cap the maximum amount contributed by the company is the amount Lucent will contribute annually to the cost of the monthly premiums for your Retiree Medical Plan. The amount provided by Lucent is dependent upon whether you are eligible for Medicare or not and the level of coverage you select (individual, two-person or family). Subject to the terms of the Plan, in 2004 the company will provide the subsidy for which you are eligible based on the following chart: If You Retired As a non-represented occupational employee with a service or disability pension Before March 1, 1990 with a service or disability pension On March 1, 1990 through December 31, 1997 with a service or disability pension On January 1, 1998 through December 31, 2000 with a service or disability pension and are qualified for retirement under the pre-january 1, 1998 pension eligibility requirements After January 1, 1998 and you are not qualified for retirement under pre-1/1/1998 pension eligibility requirements and: Your service as of June 30, 2001 is 25 years or more or you retired under the 2001 Voluntary Retirement Program. Your service as of June 30, 2001 is 20 years but less than 25. Your service as of June 30, 2001 is 15 years but less than 20. Then Lucent Provides 100% of the cost for coverage* 100% of the cost for coverage* 100% of the retiree healthcare cap 90% of the retiree healthcare cap, regardless of your years of service 90% of the retiree healthcare cap 75% of the retiree healthcare cap. 50% of the retiree healthcare cap. Your service as of June 30, 2001 is less than 15 years and you retire with at least 15 years of service and after reaching age 50. *You may be required to pay a premium contribution for some HMOs. 0% of the retiree healthcare cap with an opportunity to purchase retiree health insurance at group rates without proof of insurability /SPD004YB.DOCXP/

26 If you are eligible for a percentage of the retiree medical cap, subject to the terms of the plan, the company will provide an amount based on the following chart. If You re NOT Medicare-Eligible If You ARE Medicare-Eligible* Single Family Single Family Annual retiree medical cap $3, $7, $1, $3, Monthly retiree medical cap $ $ $ $ *Since Medicare becomes your primary coverage after you turn age 65, your retiree healthcare cap subsidy amount reflects that change. Visit the Your Benefits Resources Web site at or call the Lucent Benefits Center for your actual contributions. When Does Coverage Begin? Coverage you elect for yourself and/or your eligible dependents during retirement begins on the first day of the month following your retirement date. When Can I Change My Coverage? At Annual Open Enrollment You may change your benefit elections only once each year during annual open enrollment, unless you have a qualified status change (see Qualified Status Changes in this section for more information). You can always drop coverage at any time, for any reason. During the Year In general, once you enroll for coverage, your election remains in effect for the entire calendar year until the next annual open enrollment period. However, under certain circumstances, you may enroll for or change coverage during the year. If you experience a qualified status change or other eligible circumstance, you must make a change within 31 days of the date the change occurs. You can generally switch into or out of a Medicare Advantage HMO at any time. Qualified Status Changes A qualified status change is a specific change in circumstance that affects eligibility for coverage under the Retiree Medical Plan. A change may be made only if it s on account of and consistent with the qualified status change. Most changes allow you to change coverage level, enroll for coverage or drop coverage. Typically, there are few changes that would allow you to change Retiree Medical Plan options. Qualified status changes include the following: Qualified Status Change Marital Status Number of Family Members Employment Status Description A change in your legal marital status, including marriage, death of your spouse, divorce, legal separation or an annulment. Events that change the number of eligible family members, including birth, adoption, placement for adoption or death. A termination or commencement of employment by you, your spouse or child /SPD004YB.DOCXP/

27 Work Schedule for Your Spouse Family Member Meets or No Longer Meets the Eligibility Requirements Residence A reduction or increase in hours of employment by you, your spouse or child, including a switch between part-time and full-time or the start of or return from an unpaid leave of absence. An event that causes a member of your family to meet or to no longer meet the Retiree Medical Plan s eligibility requirements for coverage. This may include a child reaching the maximum age for coverage, etc. A change in your place of residence. The company also generally considers corresponding changes for domestic partner dependents as qualified status changes. However, you may not enroll a new domestic partner dependent in the Retiree Medical Plan unless you were covering that dependent at the time you retired, in which case you may continue his or her coverage or re-enroll this domestic partner. Other Changes in Circumstance There are other events that permit you to make a change in coverage during the year. The change that you make due to these events must be consistent with the event. These events are: The Retiree Medical Plan or your spouse s, former spouse s or other individual s plan receives a judgment, decree or court order for example, a QMCSO that requires you or another individual to provide healthcare coverage for a dependent. You, your spouse or your dependent becomes eligible for or loses Medicare or Medicaid coverage. You had elected No Coverage for you and your family because you had coverage elsewhere (for example, under a spouse s plan), but later that other coverage ends. That coverage must end due to a loss of eligibility, such as a divorce or termination of employment, or the other employer s ceasing to make contributions to the plan. You can t make a change during the year if your other coverage is lost due to your own fault, such as failing to make your required contributions. COBRA coverage from another employer for you, your spouse or dependent is exhausted. You must continue COBRA coverage for the full duration of the COBRA coverage period. The enrollment period is different from the enrollment period under this Plan. Special Enrollment Rules due to New Dependent Eligibility The following special enrollment rules also apply. The Health Insurance Portability and Accountability Act (HIPAA) gives you additional flexibility in who can enroll when you experience certain qualified status changes (specifically, marriage, birth, adoption or placement for adoption). Nonenrolled retiree: If you re eligible but have not yet enrolled, you may enroll as of the date of your marriage, or the date of the birth, adoption or placement for adoption of your child. Nonenrolled spouse: If you re already enrolled, you may enroll your spouse at the time of his or her marriage to you. In addition, you may enroll your spouse if you acquire a child through birth, adoption or placement for adoption /SPD004YB.DOCXP/