Summary Plan Description

Transcription

1 Costco Employee Benefits Program Summary Plan Descripton Summary Plan Description Effective January 1, 2009 BN AB0116 9/08

2 COSTCO EMPLOYEE BENEFITS PROGRAM SUMMARY PLAN DESCRIPTION For provisions effective on or after January 1, 2008 Este Resumen de Descripción del Plan contiene un resumen en inglés de sus derechos y beneficios del plan bajo el Programa de Beneficios para Empleados de Costco. Si tiene dificultad para entender alguna parte de este Resumen de Descripción del Plan puede comunicarse con el departamento de beneficios Costco Wholesale Employee Benefit Department en 999 Lake Drive, Issaquah, WA o bien, puede llamar al También hay ayuda disponible por medio del Administrador de Reclamos listado en las páginas

3 COSTCO EMPLOYEE BENEFITS PROGRAM Your good health and well-being are important to Costco. That s why we are pleased to offer the Employee Benefits Program, designed to promote your health and personal welfare. The Program includes a wide range of plans that can help you and your family deal with many financial challenges such as: the high cost of healthcare and long term care, loss of income due to disability, the impact on your family if you were to die or become seriously injured, and your out-of-pocket costs for dependent care or healthcare. Keep in mind, the benefits provided by the Costco Employee Benefits Program are not accrued, guaranteed, or lifetime benefits. The Plan Sponsor, Costco Wholesale Corporation, may amend, change or discontinue them at any time. If Program provisions described in this Summary Plan Description change, Costco will send you a Summary of Material Modifications (SMM) describing the changes. ABOUT YOUR COSTCO SUMMARY PLAN DESCRIPTION This Summary Plan Description (SPD) is your copy of the plan document for the Costco Employee Benefits Program. Other plan documents are described below. Of course, it s not possible for this SPD to include every detail or circumstance that may apply to you. However, in here you ll find a general explanation of the plans that make up the Program and how they work, including: who is eligible to participate, how to enroll for coverage, what the plans pay in benefits, and plan exclusions and limitations. This SPD supersedes prior summaries, plan documents (other than the Cafeteria Plan and existing insurance contracts), and addenda. Provisions described in this SPD are effective on or after January 1, To understand benefits available for claims arising before that date, you should consult prior documents. COSTCO BENEFITS WEB SITE As a companion to this Summary Plan Description, please refer to Costco s benefit web site, designed to be a user-friendly information and enrollment resource especially for Costco Employees. Among other functions, this site lets you enter or change your benefit elections during initial or Annual Open Enrollment and after certain mid-year changes in your personal or job status. Throughout this SPD, you ll find references to and how you can use it to understand your benefits and make the Program work better for you and your family. For example, the site includes: Online versions of benefit-related booklets and plan highlights Benefit-related forms including claim forms Links to various benefit-related sites, such as Aetna Navigator, healthcare provider directories customized specially for Costco Employees and the Unum web site. Costco Employee Benefits Program Summary Plan Description Page 1

4 Personalized benefit information about you and your current coverage, on the secure portion of the site OFFICIAL PLAN DOCUMENTS This Summary Plan Description, the Costco Wholesale Corporation Cafeteria Plan (Cafeteria Plan), and various insurance contracts are the ERISA plan documents for the Costco Employee Benefits Program. You may request copies of any of these documents from the Costco Benefits Department. Costco Employee Benefits Program Summary Plan Description is the plan document for Costco healthcare plans, including the medical, vision care, prescription drug, mental health and substance abuse, and dental plans and the Care Network and Smoking Cessation Program. Costco Wholesale Corporation Cafeteria Plan is the plan document for the Cafeteria Plan under which you may make pre-tax contributions to the Health Care Reimbursement Account (HCRA) and Dependent Care Assistance Plan (DCAP) and pay pre-tax for healthcare and elective LTD premiums. Insurance contracts are the plan documents for the Life, AD&D, Business Travel Accident, Voluntary Short Term Disability, Long Term Disability and Long Term Care Insurance Plans. The plans and the benefits they pay are limited by all the terms, exclusions, and limitations of those contracts in force at the time of the covered incident. Costco Wholesale Corporation, as Plan Sponsor, reserves the right to change insurance carriers and contracts. If Costco Wholesale Corporation makes any such changes, the benefits coverage described in this SPD may not be accurate. In the event of conflict or ambiguity between this Summary Plan Description and the Cafeteria Plan document or insurance contracts, the Plan document or contracts will control unless otherwise noted in this book. Also, the Program, Costco, its Employees, program fiduciaries, and administrators are not bound by any oral or written communication that conflicts with these documents. Officers and Employees of Costco at the various Costco Locations and other third parties are not authorized to represent or speak on behalf of the Employee Benefits Program, the Plan Administrator, the Benefits Committee, the Claims Administrator or Claims Fiduciary for any plan. Costco Employee Benefits Program Summary Plan Description Page 2

5 TABLE OF CONTENTS INTRODUCING THE COSTCO EMPLOYEE BENEFITS PROGRAM... 8 YOUR BENEFIT ENROLLMENT WORKSHEET... 8 COSTCO BENEFITS WEB SITE... 8 PROGRAM AT A GLANCE... 9 YOUR BENEFIT PACKAGE ALTERNATIVE BENEFIT PACKAGES YOUR COSTS FOR COVERAGE PRE-TAX PAYMENTS UNDER THE COSTCO CAFETERIA PLAN REPORTING ELIGIBILITY AND ENROLLMENT ERRORS ELIGIBILITY FOR COVERAGE ELIGIBILITY WAITING PERIOD AND BENEFIT EFFECTIVE DATE BENEFIT MEASUREMENT PERIODS ELIGIBILITY FOR SPOUSES AND CHILDREN ELIGIBILITY FOR DOMESTIC PARTNERS AND CHILDREN QUALIFIED MEDICAL CHILD SUPPORT ORDER (QMCSO) ELIGIBILITY WHILE ON A LEAVE OF ABSENCE ELIGIBILITY WHILE ON USERRA MILITARY LEAVE OF ABSENCE WHEN COVERAGE ENDS RETURNING AFTER RESIGNATION OR TERMINATION RETURNING AFTER LAYOFF ENROLLING FOR COVERAGE ADDITIONAL ENROLLMENT PAPERWORK INITIAL ENROLLMENT ANNUAL OPEN ENROLLMENT MID-YEAR ELECTION CHANGES EXAMPLES OF MID-YEAR ELECTION CHANGES INTRODUCING COSTCO HEALTHCARE PLANS MEDICAL OPTIONS FOR ELIGIBLE HAWAII EMPLOYEES COSTCO BENEFITS WEB SITE YOUR COSTS FOR COVERAGE DUPLICATE COVERAGE RULES FOR HEALTHCARE YOUR PLAN ID CARDS EXCLUSION PERIOD FOR PRE-EXISTING CONDITIONS FILING HEALTHCARE PLAN CLAIMS COORDINATION OF BENEFITS (COB) COB ORDER OF BENEFIT DETERMINATION RULES COORDINATION WITH MEDICARE CONFIDENTIALITY OF HEALTH INFORMATION CONTINUATION OF HEALTHCARE COVERAGE (COBRA) COSTCO COBRA SUBSIDIES DURING A LEAVE OF ABSENCE MEDICAL PLAN BENEFITS Costco Employee Benefits Program Summary Plan Description Page 3

6 USING PARTICIPATING PROVIDERS AEXCEL DESIGNATED SPECIALISTS CHOICE PLUS OUTSIDE THE SERVICE AREA YOUR OUT-OF-POCKET COSTS INDIVIDUAL LIFETIME MAXIMUM BENEFIT WELLNESS AND HEALTH IMPROVEMENT BENEFITS ALTERNATIVE CARE PRE-CERTIFICATION OF HOSPITAL AND OTHER CARE ORGAN TRANSPLANTS EMERGENCY AND URGENT CARE CONDITIONS COSTCO MEDICAL PLANS, AT YOUR SERVICE INFORMED HEALTH LINE, 24 HOUR NURSELINE BEGINNING RIGHT sm MATERNITY PROGRAM CARE ADVOCATE TEAM (CAT) SUMMARY OF MEDICAL PLAN BENEFITS SUMMARY OF MEDICAL PLANS BENEFITS VISION CARE PLAN BENEFITS HOW THE PLAN WORKS NON-COSTCO OPTICAL PROVIDERS PRESCRIPTION DRUG PROGRAM BENEFITS HOW THE PLAN WORKS AETNA SPECIALTY PHARMACY SM CARE NETWORK BENEFITS HOW THE PLAN WORKS WHEN YOU NEED FURTHER CARE MENTAL HEALTH AND SUBSTANCE ABUSE PLAN BENEFITS HOW THE PLAN WORKS SEEKING EMERGENCY CARE UTILIZATION REVIEW REQUIREMENTS DENTAL PLAN BENEFITS USING PARTICIPATING PROVIDERS YOUR OUT-OF-POCKET COSTS ANNUAL MAXIMUM DENTAL BENEFIT LIFETIME MAXIMUM ORTHODONTIC BENEFIT PREDETERMINATION OF BENEFITS ALTERNATE TREATMENTS WHAT THE CORE AND PREMIUM DENTAL PLANS COVER SMOKING CESSATION PROGRAM BENEFITS HOW THE PROGRAM WORKS ENROLLING IN THE PROGRAM SUPPORT SERVICES Costco Employee Benefits Program Summary Plan Description Page 4

7 NICOTINE REPLACEMENT THERAPY HEALTHCARE PLAN EXCLUSIONS INTRODUCING COSTCO DISABILITY INSURANCE PLANS YOUR COSTS FOR COVERAGE DELAY OF COVERAGE MAKING A CLAIM FOR BENEFITS TAXATION OF BENEFITS DEDUCTIBLE SOURCES OF INCOME REHABILITATION AND RETURN-TO-WORK ASSISTANCE PROGRAM WHEN PLAN BENEFITS WILL STOP VOLUNTARY STD INSURANCE PLAN BENEFITS IF YOU WORK WHILE DISABLED RECURRENT DISABILITIES LTD INSURANCE PLAN BENEFITS HOW LONG LTD BENEFITS MAY CONTINUE HEALTHCARE PROTECT BENEFIT LTD SURVIVOR BENEFITS IF YOU WORK WHILE DISABLED BECOMING DISABLED AGAIN DURING THE ELIMINATION PERIOD RECURRENT DISABILITIES AFTER BENEFITS BEGIN DISABILITY INSURANCE PLAN EXCLUSIONS INTRODUCING COSTCO SURVIVOR BENEFIT PLANS YOUR COSTS FOR COVERAGE DUPLICATE COVERAGE RULES DELAY OF COVERAGE DESIGNATING A BENEFICIARY IF YOU DIE WITHOUT A BENEFICIARY REDUCTION OF BENEFITS AT AGE MAKING A CLAIM FOR BENEFITS PORTABILITY AFTER ELIGIBILITY ENDS COSTCO LIFE INSURANCE IF YOU ARE TERMINALLY ILL CONVERTING TO INDIVIDUAL INSURANCE ASSIGNMENT OF INTEREST LIFE INSURANCE PLAN BENEFITS BASIC LIFE INSURANCE SUPPLEMENTAL LIFE INSURANCE ACCELERATED DEATH BENEFIT (ADB) AD&D INSURANCE PLAN BENEFITS HOW AD&D WORKS BASIC AD&D SUPPLEMENTAL AD&D SPECIAL AD&D BENEFITS Costco Employee Benefits Program Summary Plan Description Page 5

8 ASSIST AMERICA INC. (AAI) AD&D FOR COSTCO PILOTS AND CREWS AD&D PLAN EXCLUSIONS BUSINESS TRAVEL ACCIDENT INSURANCE BENEFITS HOW BTA WORKS SPECIAL CIRCUMSTANCES COVERAGE WHILE ON COSTCO AIRCRAFT BTA INSURANCE PLAN EXCLUSIONS INTRODUCING THE LONG TERM CARE INSURANCE PLAN INDIVIDUAL POLICIES FOR YOUR RELATIVES YOUR COSTS FOR COVERAGE IF YOU HAVE 10 YEARS OF SERVICE PROVIDING EVIDENCE OF INSURABILITY LIMITATION ON PRE-EXISTING CONDITIONS DELAY OF COVERAGE MAKING A CLAIM FOR LTC BENEFITS PORTABILITY AFTER ELIGIBILITY ENDS WHEN BENEFITS WILL STOP LTC INSURANCE PLAN BENEFITS HOW LTC WORKS ALTERNATE CARE LTC INSURANCE PLAN EXCLUSIONS INTRODUCING COSTCO REIMBURSEMENT ACCOUNTS COSTCO BENEFITS WEB SITE THE BEFORE-TAX ADVANTAGE USE IT OR LOSE IT RULE If YOU LOSE ELIGIBILITY DEPENDENT CARE ASSISTANCE PLAN (DCAP) BENEFITS DCAP BASIC MECHANICS HOW THE PLAN WORKS MAKING A CLAIM FOR REIMBURSEMENT FILING YOUR TAXES HEALTH CARE REIMBURSEMENT ACCOUNT (HCRA) BENEFITS HCRA BASIC MECHANICS HOW THE PLAN WORKS TAX DEDUCTION OR HEALTH CARE REIMBURSEMENT ACCOUNT? HEALTH CARE REIMBURSEMENT ACCOUNT EXCLUSIONS INTRODUCING GENERAL PLAN INFORMATION COLLECTIVE BARGAINING AGREEMENTS POWERS OF THE PLAN SPONSOR POWERS OF THE PLAN ADMINISTRATOR DELEGATION OF AUTHORITY Costco Employee Benefits Program Summary Plan Description Page 6

9 CURRENT COMMITTEE MEMBERS WRITTEN COMMUNICATIONS POLICY STATEMENT ON BENEFITS FRAUD STATEMENT OF YOUR ERISA RIGHTS PRUDENT ACTIONS BY PLAN FIDUCIARIES ENFORCING YOUR ERISA RIGHTS ASSISTANCE WITH YOUR QUESTIONS OTHER HEALTHCARE RIGHTS NEWBORNS AND MOTHERS HEALTH PROTECTION ACT OF NOTICE REGARDING WOMEN S HEALTH AND CANCER RIGHTS ACT FILING BENEFIT CLAIMS CLAIMS ADMINISTRATORS AND FIDUCIARIES HEALTHCARE CLAIM DETERMINATION BEFORE SERVICE OR TREATMENT (PRECERTIFICATION) OTHER CLAIM DETERMINATIONS IF YOUR CLAIM IS DENIED APPEALING A DENIED MEDICAL OR DISABILITY CLAIM APPEALING A NON-MEDICAL OR NON-DISABILITY CLAIM CONTENT OF APPEAL DENIAL DECISION VOLUNTARY EXTERNAL REVIEW APPEAL FOR MEDICAL CLAIMS LIMITATIONS PERIOD FOR LAWSUITS PLAN S RIGHTS TO RECOVERY PLAN S SUBROGATION, EQUITABLE LIEN, AND REIMBURSEMENT RIGHTS FACILITY OF PAYMENT ADMINISTRATIVE FACTS COSTCO EMPLOYEE BENEFITS PROGRAM GLOSSARY Costco Employee Benefits Program Summary Plan Description Page 7

10 INTRODUCING THE COSTCO EMPLOYEE BENEFITS PROGRAM Information Resources Costco Benefits Web Site, Costco Enrollment Center Benefits Department The Costco Employee Benefits Program includes a variety of health and welfare plans. These plans are available to Costco Employees and family members who meet certain eligibility requirements If you re eligible, Costco pays in full for your coverage under some of these plans, while you and Costco share in the cost of healthcare and certain other coverage. For most elective coverage, you must pay the full cost. Your share of any costs of coverage are withheld from your paychecks throughout the year. Program Glossary A number of key phrases and words capitalized throughout this section of your SPD have specific meanings as they apply to the Costco Employee Benefits Program. To understand your benefits, you may need to know the detailed definitions of those terms. These can be found in the Costco Employee Benefits Program Glossary starting page 144. To receive benefits from most Costco plans, you must be enrolled in the plans when you incur covered expenses. Once you become benefits-eligible, Default Coverage is automatic. As described in Initial Enrollment starting page 26, Default Coverage includes, for example, healthcare and certain other coverage for you but not your family. Instead of Default Coverage, within certain deadlines you can make your own elections, including family enrollment, over the enrollment web site available at or via the Costco Enrollment Center, You may first enter your elections during your initial enrollment period. After that, you may change your elections each year during the Annual Open Enrollment period. You may also be allowed to make limited mid-year election changes following certain changes in your personal and work status. YOUR BENEFIT ENROLLMENT WORKSHEET Depending on your current benefit status, Costco will send you a personalized Benefit Enrollment Worksheet at certain times during your career as an Employee. Each worksheet you receive will include benefit information specifically related to your circumstances. This may include, for example, your current coverage and family enrollment, your election options, how to make or revise your elections and the deadlines for entering those elections You can expect to receive a Benefit Enrollment Worksheet: During your initial eligibility waiting period, as notification that you are eligible to enroll for coverage. Before Annual Open Enrollment, as confirmation of your current coverage. After your work status or hours have changed, as reflected by payroll, in a way that will affect your current coverage or allow you to change your elections. COSTCO BENEFITS WEB SITE The Costco benefits web site, provides all kinds of functions related to eligibility and enrollment. For example, from the home page you can click on these buttons: Costco Employee Benefits Program Summary Plan Description Page 8

11 Benefit Enrollment and Changes to log onto the secure enrollment site. This is where you can go to enter your initial benefit elections, to make permitted mid-year election changes, or to see your current coverage including family elections. Annual Open Enrollment (available only during Annual Open Enrollment period) to change your current elections, including family coverage, for the coming year. Booklets and Forms to obtain benefit-related booklets, any additional paperwork you may need to complete enrollment, and other forms such as claim forms. To access personalized information from the site, you will need to enter your six-digit Employee ID number shown on your Benefit Enrollment Worksheet. You will also need to use a Personal Information Number (PIN). Initially, your PIN will be the last four digits of your Social Security Number. However, you will be required to change this to the PIN of your choice the first time you log on to the system. PROGRAM AT A GLANCE Following is an overview of the various benefit plans included in the Employee Benefits Program along with a list of who to contact for questions about coverage or claims. For general questions, feel free to contact the Benefits Department at weekdays from 7:00 am to 5:00 pm Pacific Time. Costco Employee Benefits Program Plans Options Toll-free numbers and web sites Medical plans pay benefits for covered healthcare expenses Choice Plus; Choice Plus for Part-Time Employees; Freedom of Choice. Enrollment in medical plans includes automatic coverage under the Costco Prescription Drug, Vision Care and Mental Health and Substance Abuse Plans HMSA HMO or PPO, in Hawaii. Enrollment in HMSA includes automatic coverage under the Costco Prescription Drug and Vision Care Plans Medical Plans, Aetna or link to Aetna Navigator from Vision Voucher, Costco Vision Voucher Line or HMSA Confidential Assistance and Resources for Everyone(Care) Network provides assistance with personal, work and family issues at no cost to you Dental plans pay benefits for covered routine and other dental services, including orthodontia Web-based or telephone access to information and community resources Short-Term Counseling Referral for Costco Mental Health and Substance Abuse Plan benefits, required for most Covered Expenses Core Dental Premium Dental Care Network, Unicare or link to the Care Network site from Dental Plans, Aetna or link to Aetna Navigator from Costco Employee Benefits Program Summary Plan Description Page 9

12 Costco Employee Benefits Program Plans Options Toll-free numbers and web sites Smoking Cessation Telephone and online Smoking Cessation, Healthways Program provides counseling support QuitNet or link to the assistance to help quit Nicotine Replacement QuitNet site from tobacco Therapy (click on Get Survivor Benefit Plans pay for loss of life and other covered physical losses Disability Insurance Plans pay benefits to employees unable to work due to covered disabilities Long Term Care (LTC) Insurance Plan pays benefits for covered care in nursing homes and other settings Reimbursement Accounts (also known as Flexible Spending Accounts or FSAs ) provide tax-savings on eligible out-of-pocket costs YOUR BENEFIT PACKAGE Basic Life and Supplemental Life Insurance Basic and Supplemental Accidental Death and Dismemberment (AD&D) Insurance Business Travel Accident (BTA) Insurance for Salaried Employees Voluntary Short Term Disability (STD) Insurance for eligible Hourly Employees in all states except California, Hawaii, New Jersey, and New York State mandated coverage in California, Hawaii, New Jersey, and New York Long Term Disability (LTD) Insurance for eligible Hourly and Salaried Employees LTC Insurance Basic Benefit LTC Insurance Buy-Up Benefits Dependent Care Assistance Plan (DCAP) Health Care Reimbursement Account (HCRA) Healthy, Stay Healthy ) Life and AD&D Insurance, Unum or link to the Unum web site from BTA Insurance, The Hartford Insurance Company Voluntary STD Insurance, Unum State mandated coverage, Unum in New York and Hawaii. In California or New Jersey, contact your payroll or Benefits Representatives for phone numbers. LTD Insurance, Unum or link to the Unum web site from LTC Insurance, Unum DCAP or HCRA, or link to Aetna Navigator and FSA site from If you are enrolled for medical coverage under the Program, you will have a wide range of benefit options. This includes automatic coverage under the following plans at no additional cost to you: Vision plan, prescription drug plan, and mental health and substance abuse plan Care Network Smoking Cessation Program Basic Life Insurance Basic AD&D Insurance Long Term Disability Insurance Long Term Care Insurance Basic Benefit if you have 10 or more years of Service Business Travel Accident Insurance if you are a salaried employee Also, by having medical coverage you have the option to elect coverage under the following plans: Costco Employee Benefits Program Summary Plan Description Page 10

13 Dental Supplemental Life Insurance Supplemental AD&D Insurance Dependent Care Assistance Plan (DCAP) Health Care Reimbursement Account (HCRA), election allowed only during Annual Open Enrollment Long Term Care Insurance Basic Benefit if you have less than 10 years of Service Long Term Care Insurance Buy-Up options In addition, you will be automatically enrolled in the Voluntary Short Term Disability Insurance Plan if it is available at your Location and you are an Hourly Employee. You may decline this coverage as described in Special Initial Enrollment Rules for Voluntary STD, starting page 27. ALTERNATIVE BENEFIT PACKAGES You can decline healthcare coverage and elect one of the following alternative benefit packages instead. The alternative package you choose will determine the benefit options available to you. 1. Decline medical because you are covered as a family member by another Costco benefitseligible Employee, including your Spouse, Domestic Partner, or parent. With this package, your healthcare benefits, including medical and dental, can only be provided through family coverage under your Spouse s, Domestic Partner s or parent s plans. In addition, you will have automatic coverage paid in full by Costco under: Care Network Smoking Cessation Program Basic Life and Basic AD&D Insurance Business Travel Accident Insurance if you are a salaried employee Long Term Disability Insurance Long Term Care Insurance Basic Benefit if you have 10 or more years of Service Otherwise, you will have the same options as any other Costco Employee who is eligible for benefits. This includes elective coverage under the following plans: Supplemental Life Insurance Supplemental AD&D Insurance Dependent Care Assistance Plan (DCAP) Health Care Reimbursement Account (HCRA), election allowed only during Annual Open Enrollment Long Term Care Insurance Basic Benefit if you have less than 10 years of Service Long Term Care Insurance Buy-Up options In addition, you will be automatically enrolled in the Voluntary Short Term Disability Insurance Plan if it is available at your Location and you are an Hourly Employee. You may decline this coverage as described in Special Initial Enrollment Rules for Voluntary STD, starting page Decline medical but elect a package that includes Long Term Disability (LTD) insurance. Along with LTD, the following benefits are automatically included as part of your benefit package, paid in full by Costco: Care Network Smoking Cessation Program Basic Life Insurance Basic AD&D Insurance Business Travel Accident Insurance if you are a Salaried Employee Long Term Care Insurance Basic Benefit if you have 10 or more years of Service Also, you may elect coverage under these plans: Costco Employee Benefits Program Summary Plan Description Page 11

14 Supplemental Life Insurance Supplemental AD&D Insurance Dependent Care Assistance Plan (DCAP) Health Care Reimbursement Account (HCRA), election allowed only during Annual Open Enrollment Long Term Care Insurance Buy-Up options In addition, you will be automatically enrolled in the Voluntary Short Term Disability Insurance Plan if it is available at your Location and you are an Hourly Employee. You may decline this coverage as described in Special Initial Enrollment Rules for Voluntary STD, starting page Decline Costco benefits coverage altogether. If you decline coverage, you will not be able to participate in the Costco medical or dental plans, Smoking Cessation Program, Life or AD&D Insurance, Reimbursement Accounts or Long Term Care Insurance. However, you will be eligible for the: Care Network Voluntary Short Term Disability Insurance if it is available at your Location and you are an Hourly Employee you will be automatically enrolled. You may decline this coverage as described in Special Initial Enrollment Rules for Voluntary STD, starting page 27. Business Travel Accident Insurance you will be enrolled automatically if you are a Salaried Employee. YOUR COSTS FOR COVERAGE You and Costco share in the cost of your Costco healthcare plan coverage. Costco also pays for your Long Term Disability Insurance coverage and, if you have 10 or more years of service, your Basic Benefit under the Long Term Care Insurance Plan. If you or family members participate in the Smoking Cessation Program, Costco will pay in full for those covered costs as well. You will pay the full cost of coverage for any of the following elective plans: Voluntary Short Term Disability for Hourly Employees (if applicable to you) Supplemental Life Insurance Supplemental AD&D Insurance Long Term Care Insurance Basic Benefit (if you have less than 10 years of Service) and Buy-Up options Also, if you decline medical plan coverage but choose the benefit package that includes Long Term Disability Insurance, you must pay a share of the cost of LTD. How you pay. When you enroll for benefits (or fail to complete enrollment and therefore receive Default Coverage), you agree to have your wages reduced by the amount needed to pay for the benefits you have chosen. Your pay stub will reflect your election (or Default Coverage) to pay for benefits by showing the deduction for each plan, line by line. Your contributions start with the first bi-weekly paycheck after you enroll and your coverage goes into effect. Throughout the rest of the year, your contributions will be withheld from each bi-weekly paycheck. The contributions withheld from each paycheck pay for your coverage and that of your enrolled family members through that pay date. Depending on the coverage start date, you may also have to pay contributions for coverage before this pay period. What you pay. Current bi-weekly contributions are shown in the Costco Benefit Rate Booklet provided during initial enrollment. Your Employee contributions towards the cost of your coverage may change from one year to the next. After initial enrollment, you can contact your Location s payroll or Benefits Representative or the Costco Benefits Department for an updated Benefit Rate Booklet. Costco Employee Benefits Program Summary Plan Description Page 12

15 If your share of costs for coverage decreases or increases by an insignificant amount during the year, your payroll reduction will be decreased or increased automatically to reflect that change. PRE-TAX PAYMENTS UNDER THE COSTCO CAFETERIA PLAN You pay for coverage under the Supplemental Life, Supplemental AD&D, Voluntary Short-Term Disability, and Long-Term Care Insurance plans from your after-tax wages. Under the Costco Wholesale Corporation Cafeteria Plan, you can pay for your share of the cost of the following coverage on a pre-tax basis: Medical Dental Long Term Disability Insurance (applies only if you declined medical, but elect LTD) Health Care Reimbursement Account, and Dependent Care Assistance Plan. Electing to pay for benefit coverage pre-tax through the Cafeteria Plan means that the payments are not considered part of your wages and therefore not subject to federal income tax or FICA (Social Security/Medicare) taxes. Note that this could potentially but not necessarily result in reduced future Social Security retirement payments to you. Paying COBRA costs pre-tax. If you or your family members lose eligibility for Costco healthcare plan coverage, continued coverage is available under a federal law known as COBRA, described starting page 45. For children who are your tax dependents, as long as you are still working for Costco and receiving a paycheck you may be able to elect to pay the costs of their COBRA coverage through pre-tax payroll deductions. Opting out of pre-tax payments. You may elect to have your healthcare or elective LTD contributions deducted from your paychecks after taxes are withheld, rather than on a pre-tax basis. For more information, contact the Benefits Department. REPORTING ELIGIBILITY AND ENROLLMENT ERRORS You have an obligation to review your pay stubs and Program eligibility and enrollment determinations. If you find any errors you should promptly report those to your payroll or Benefits Representative or to the Costco Benefits Department. This would apply, for example, if: Your Spouse or children lose eligibility for coverage for any reason, such as due to divorce or annulment, a change in student status, or death. You are reported to be enrolled in coverage that is different from the one you elected. Your payroll deductions for your coverage are not correct. Your Spouse or children are not enrolled according to your written request. Failure to promptly report any errors may impact your coverage or the coverage for family members, as well as your financial responsibilities. Costco Employee Benefits Program Summary Plan Description Page 13

16 ELIGIBILITY FOR COVERAGE The Costco Employee Benefits Program is available to all U.S. Employees who: are classified by Costco on its Issaquah, Washington payroll system as regular Salaried Employees or as Full-Time or Part-Time Employees, have completed their benefit eligibility waiting period described below and maintain eligibility by working an average of 20 or more Eligible Paid Hours per benefit Measurement Period as described starting page 15 (10 hours or more per week for Voluntary STD). Individuals who are not eligible include: Employees working and paid in Puerto Rico because they have their own special Costco Employee benefits program Seasonal or utility Employees (except in Hawaii) as defined in the Employee Agreement Temporary or limited part-time employees as defined in the Employee Agreement Individuals classified by Costco on its Issaquah, Washington payroll system as independent contractors or leased Employees, notwithstanding subsequent reclassification by a court, governmental agency, or settlement agreement Any person who resides or works outside the United States, except Employees who are paid out of the Costco payroll system located in Issaquah, Washington Illegal immigrants Any person classified by Costco on its Issaquah, Washington payroll system as an intern or who is working in connection with his or her training or education Employees enrolled in a college student retention program Union Employees except to the extent a collective bargaining agreement expressly requires coverage under the Program In addition, certain executive Employees who are covered under a separate medical and dental plan are not eligible for the Costco medical and dental plans described in this Summary Plan Description. ELIGIBILITY WAITING PERIOD AND BENEFIT EFFECTIVE DATE After you first come to work for Costco, you must complete an eligibility waiting period before you will become eligible for the Employee Benefits Program. Once you complete the waiting period, healthcare and most other coverage will begin as of your Benefit Effective Date. To elect the coverage you want at that time, you must complete enrollment in a timely manner. For more information, see Initial Enrollment, starting page 26. As follows, your Benefit-Effective Date depends on your Employee classification: 1. Salaried Employees, first day of the month after date of hire 2. Full-Time Hourly pharmacists, first day of the month after date of hire 3. Full-Time Hourly senior hearing aid specialists, first day of the month after date of hire 4. Full-Time Hourly Employees (other than pharmacists or senior hearing aid specialists), first day of the month after 90 days of Service 5. Part-Time Employees, first day of the month after 180 days of Service (90 days for Voluntary Short Term Disability) 6. Hourly Hawaii Employees, first day of the month after four weeks of Service, during which they worked a minimum of 20 hours per week 7. Employees in a college student retention program who accept a regular position, first day of their change in status provided they have met the eligibility requirements for their new Employee classification 8. Employees who have been working for Costco in another country then transfer to the U.S., the day of their transfer if they transfer without interruption Costco Employee Benefits Program Summary Plan Description Page 14

17 If your Employee classification changes during your eligibility waiting period. You will become benefits-eligible the first of the month after you complete the waiting period for your new classification. However: If you have already passed the first of the month after completing your new eligibility waiting period, you will be immediately eligible for benefits. If your new classification has a longer eligibility waiting period than your prior classification, you will not be benefits-eligible until the first of the month after you complete the new waiting period. BENEFIT MEASUREMENT PERIODS Costco s fiscal year is divided into two benefit Measurement Periods. Costco uses the Eligible Paid Hours you work each Measurement Period to determine your ongoing eligibility for Program benefits. If you are a Full-Time Employee, benefit Measurement Periods are also used to determine your status for full-time versus part-time Employee healthcare, Basic Life and Basic AD&D Insurance benefit options. 1. The specific starting and ending dates for each benefit Measurement Period vary based on payroll dates: One Measurement Period is the first 13 biweekly pay periods of the fiscal year, generally from early September through the end of February. The other Measurement Period is the second 13 biweekly pay period of the fiscal year, generally from early March through the end of August. 2. At the end of each Measurement Period, all of your Eligible Paid Hours are added together The total number of your Eligible Paid Hours is then divided by 26 which is the number of weeks in the Measurement Period. The number of weeks is reduced by any of the following: The number of weeks you were on a Leave of Absence, including intermittent leave, as defined in the Costco Employee Agreement The number of weeks in the Measurement Period prior to your initial Benefit Effective Date The number of weeks in the Measurement Period prior to your hire date The number of weeks your Location is closed due to a natural disaster The number of weeks prior to a change in status from Part-Time Employee to Full-Time Employee Note: Every five years Costco has a 53 week fiscal year, in which case the Measurement Period will consist of the typical 13 biweekly pay periods plus a one-week pay period. Maintaining your eligibility for Program benefits. Each subsequent Measurement Period after you become eligible, you must average at least 20 Eligible Paid Hours per week to maintain your eligibility and continue coverage for most benefit options. (The exception is Voluntary STD, for which Hourly Employees remain eligible as long as they work at least 10 Eligible Paid Hours per week.) Your eligibility for most benefits will: End after any Measurement Period in which you work an average of less than 20 Eligible Paid Hours per week Resume after you complete any Measurement Period during which you work an average of 20 Eligible Paid Hours or more per week. That will happen: March 31 or September 30 immediately following the end of that measurement period April 1 or October 1 after the end of that Measurement Period Note, Care Network services will continue to be available to you and your family for up to 60 days after you loose eligibility for other benefits. Determining full-time versus part-time benefit status for Full-Time Employees. If you are classified as a Full-Time Employee on Costco s payroll, each Measurement Period you must average at least 34 Eligible Paid Hours per week to be considered full-time for benefit purposes. Costco Employee Benefits Program Summary Plan Description Page 15

18 Note, the determination of your status for benefits is different from Costco s payroll classification of your status. If payroll classifies you as a Part-Time Employee, you will not be eligible for full-time benefits regardless of your average paid hours per week. Your status for benefit purposes will: Change to part-time after any Measurement Period in which you average at least 20 but less than 34 Eligible Paid Hours per week Return to full-time after you complete any Measurement Period during which you work an average of 34 Eligible Paid Hours or more per week That will happen: March 31 or September 30 immediately following the end of that measurement period April 1 or October 1 after the end of that Measurement Period As described in Mid-Year Election Changes, starting page 28, Full Time Employees may revise their current coverage within 30 days after their benefit status changes. For those who don t enter revised elections within the 30 day deadline, certain automatic changes will apply. For example, if you have declined healthcare you will not be automatically enrolled. However, if you do have healthcare coverage and you are: Reclassified from full-time to part-time, your current medical plan will switch to Choice Plus for Part-Time Employees (HMSA HMO in Hawaii). If you re currently in the Premium Dental Plan, you will switch to the Core Dental Plan. Reclassified from part-time to full-time, your current medical plan will switch to Choice Plus for Full-Time Employees but you will continue to be covered by Core Dental. Also, when your status changes, your Life and AD&D Insurance coverage will change to the level available to other Employees with the same benefit status and years of Service as you. ELIGIBILITY FOR SPOUSES AND CHILDREN If you re eligible for the Program, your Spouse and children who meet the requirements listed below are eligible for coverage under the Costco healthcare plans, Basic and Supplemental Life Insurance, Supplemental AD&D Insurance and, if over age 18 and under age 85, Long Term Care Insurance. Eligible Dependent Children. Dependent Children who rely on you for their principal support and qualify to be claimed as your dependents on your federal income tax return are eligible for coverage. This includes: 1. Your unmarried biological and adopted children through age 18. If you are divorced, you may enroll your Dependent Children even if you are not the custodial parent. 2. Your unmarried Dependent Children over age 18 through age 22 who are full-time students at an Accredited School. Eligible Stepchildren. Unmarried Stepchildren who rely on you for their principal support and qualify to be claimed as your dependents on your federal income tax return are eligible for coverage. This includes: 1. Your unmarried dependent Stepchildren through age 18 if each of the following tests are met: your home is their primary residence, they live with you for more than nine months of the year, they are eligible to be claimed as your Spouse s dependent for federal income tax purposes, your Spouse acts as their primary custodial parent, you have a parent-child relationship with them which you expect to be permanent, and they rely on you for their principal support. 2. Your unmarried dependent Stepchildren over age 18 through age 22 who are full-time students at an Accredited School and otherwise meet the eligibility requirements for Stepchildren. Costco Employee Benefits Program Summary Plan Description Page 16

19 To enroll eligible Stepchildren for coverage, you must complete and submit a Declaration of Plan Eligibility for Step-Children along with documentation proving their relationship to you. Before their coverage may begin, this proof must be reviewed and approved by Costco. Declaration forms are available online at and from your payroll or Benefits Representative. Note, If your Spouse dies while your Stepchildren are enrolled in the Costco healthcare plans, you may continue their coverage only if you have been granted custody of them by court order, they are your dependents under the Tax Code, and they continue to satisfy the other requirements for eligible Stepchildren. Once you drop coverage for these Stepchildren, they cannot be re-enrolled. Eligible children for whom you serve as a Legal Guardian. Your grandchildren, siblings, nieces or nephews living in your home are eligible, provided the court has granted you or your Spouse full and plenary Legal Guardianship for them and their estate. In addition, they must: be unmarried, be no older than age 18 or, if full-time students at an Accredited School, no older than age 22, rely on you for their principal support and be eligible to be claimed as your dependents for federal income tax purposes. To enroll eligible children who meet these qualifications, you must complete and submit a Declaration of Legal Guardianship form. The form is available online at or from your payroll or Benefits Representative. Also, you will be required to provide certain documentation proving their relationship to you including a court order granting the Legal Guardianship. Before their coverage may begin, this proof must be reviewed and approved by Costco. Note, legal custody of a child is not Legal Guardianship and is not enough to establish eligibility for that child. Eligible disabled children. Your Dependent Children, Stepchildren or children for whom you are the Legal Guardian and who are mentally or physically disabled and incapable of self-sustaining employment are eligible past the normal age limits provided: their mental or physical disability occurred before the age of 19 (or before age 23 if covered under the Program as full-time students at an Accredited School), they are incapable of self-sustaining employment due to their disability, they are chiefly dependent on you for support and maintenance, they permanently reside with you, they were covered by the Costco Employee Benefits Program before age 19 and have continued to be covered without interruption after age 19, they are eligible to be claimed as your dependents for federal income tax purposes, you would otherwise be able to elect healthcare coverage for them except for their age, they remain unmarried, and they remain incapacitated. To establish eligibility for your disabled child, you must contact Aetna (HMSA in Hawaii) to complete the application process and provide medical documentation to substantiate the child s disability within 31 days after eligibility would normally end. If your child is approved for continued coverage, Aetna (HMSA in Hawaii) will send you an approval letter. At reasonable intervals after that, the Program may require you to provide proof that the child continues to be disabled and that he or she meets the requirements listed above. It is your responsibility to make sure that you apply for approval within 31 days after the expiration dated noted on Aetna s (HMSA in Hawaii) approval letter. The Program reserves the right to have the child examined by a doctor of the Program s choice at the Program s expense to determine the existence and duration of his or her disability. If there is an interruption in the child s coverage for any reason, his or her coverage will not be reinstated regardless of subsequent disability. The exception is if you and your family lose eligibility because you are Costco Employee Benefits Program Summary Plan Description Page 17

20 on a Leave of Absence or you fail to average the required number of Eligible Paid Hours during a Measurement Period. In that case, once you again become eligible you may re-enroll the child, provided he or she continues to meet the criteria listed above and is still disabled as determined by Aetna (HMSA in Hawaii). ELIGIBILITY FOR DOMESTIC PARTNERS AND CHILDREN If you re a benefits-eligible Employee, your Domestic Partner may also be eligible for coverage under the Costco healthcare plans, Basic Life and Supplemental Life Insurance, and Supplemental AD&D Insurance plans, as well as the Long Term Care Insurance plan (if under age 85). If your Domestic Partner is eligible and enrolled for Program coverage, you may also enroll your Domestic Partner s eligible children, including his or her biological or adopted children or children for whom he or she has been named the Legal Guardian by court order. Domestic Partners and their eligible children may only be enrolled during the initial enrollment or Annual Open Enrollment period. Mid-year enrollment is not allowed. The exception is if you and your Domestic Partner have a baby together or adopt a child, in which case you may change elections as described in Mid-Year Election Changes for Domestic Partners and Their Children, starting page 30. Declaration of Domestic Partnership. To enroll your Domestic Partner and his or her children for coverage, you will have to complete and submit a Declaration of Domestic Partnership form. Also, Costco must approve the enrollment. The Declaration of Domestic Partnership sets out a specific set of requirements that must be met in order for your Domestic Partner to be eligible for coverage. It also includes an overview of special eligibility and enrollment rules that apply to Domestic Partners. The Declaration and overview are available at under Booklets and Forms or from your Location s payroll or Benefits Representative. Eligibility requirements for Domestic Partners. As specified in the Declaration of Domestic Partnership, your Domestic Partner is eligible for benefit coverage only if you and he or she meet each of the following requirements: 1. You have shared the same household for at least six months and intend to continue to do so indefinitely, 2. You are engaged in a committed relationship of mutual caring and support and intend to remain so indefinitely, 3. You share responsibility for each other s common welfare and living expenses, 4. You share financial interdependence, 5. You consider yourselves to be life partners, 6. You are not married to, in a committed relationship with, or legally separated without a dissolution of marriage, from anyone else, 7. You have not had another Domestic Partner or Spouse within the prior six months (this does not apply if your previous Domestic Partner has died), 8. You are over 18 years old, 9. You are not related by blood to a degree of closeness that would prohibit legal marriage, 10. You are not in the relationship solely for the purpose of obtaining benefits coverage, and 11. You have not been previously legally married to each other while covered under the Program. Eligibility requirements for children of Domestic Partners. You may enroll your Domestic Partner s eligible children through age 18 (through age 22 if full-time students at an Accredited School) for Costco healthcare plan coverage, Basic and Supplemental Life and AD&D Insurance Plans and the Long Term Care Insurance Plan (if over age 18) provided they meet all the following requirements: 1. your home is their primary residence, 2. they are not eligible to be covered under a Costco medical plan as a family member of another Employee, Costco Employee Benefits Program Summary Plan Description Page 18

21 3. they live with you more than nine months of the year, 4. they are eligible to be claimed as your Domestic Partner s dependents for federal income tax purposes, 5. your Domestic Partner acts as their primary custodial parent, 6. you have a parent-child relationship with the children which you expect to be permanent, 7. you and your Domestic Partner provide the children s principal support, and 8. the children are unmarried. Also, if your Domestic Partner s children are disabled and meet the other requirements specified for disabled children, starting page 17, they may be eligible for continued coverage past the normal age limits. Dropping Domestic Partners from coverage. Coverage for your Domestic Partner and his or her children will end immediately the date your partnership ends. This would happen, for example, if: you and your partner no longer live together, you get married to or begin a committed relationship with someone else, you are no longer jointly responsible for each other s common welfare and living expenses, or your Domestic Partner dies. As described in When Coverage Ends, starting page 22, you must notify Costco within 60 days after your partnership ends. To do that, complete and submit a Declaration of Termination of Domestic Partnership. This form is available on at Booklets or Forms or from your Location s payroll or Benefits Representative. Tax consequences of covering a Domestic Partner. When you enroll your Domestic Partner and his or her children in an employer-sponsored benefit plan, there may be certain tax implications to you. For example: the value of healthcare coverage provided to your Domestic Partner and his or her children is reported as taxable wages, your share of the cost of their healthcare coverage is withheld from your wages on an after-tax, rather than a pre-tax basis, and you cannot use the Health Care Reimbursement Account or Dependent Care Assistance Plan to pay for unreimbursed expenses they incur. The overview that comes with the Declaration of Domestic Partnership includes examples of some of the potential tax implications of enrolling a Domestic Partner. To discuss your own personal situation, be sure to contact your personal tax advisor. QUALIFIED MEDICAL CHILD SUPPORT ORDER (QMCSO) If Costco receives a medical child support order or medical support notice for your child, the Benefits Department will determine whether this conforms with Costco s requirements regarding Qualified Medical Child Support Order procedures. (For a copy of QMCSO procedures, contact the Benefits Department.) If Costco determines the order or notice does meet these requirements, you will be notified that a QMCSO has been received for your child. Then, if your child is otherwise benefits-eligible, that child will be automatically enrolled for healthcare plan coverage as follows and you ll pay the cost of coverage through payroll deduction: If you are currently enrolled in a medical and dental plan, your child will be enrolled in those plans. If you are benefits-eligible but not currently enrolled, you and your child will be enrolled in the medical and dental plans that are part of your Default Coverage. If you have not yet satisfied your benefit eligibility waiting period, you and your child will be enrolled as of your Benefit-Effective Date. This will be in the medical and dental plans you elect or, if you do not complete enrollment, your healthcare Default Coverage. Costco Employee Benefits Program Summary Plan Description Page 19