HOLOGIC, INC. WELFARE BENEFIT PLAN. Summary Plan Description

Transcription

1 HOLOGIC, INC. WELFARE BENEFIT PLAN Summary Plan Description JULY 1, 2014

2 TABLE OF CONTENTS PAGE SECTION 1 DEFINITIONS... 1 SECTION 2 INTRODUCTION... 2 SECTION 3 GENERAL INFORMATION ABOUT THE PLAN... 3 SECTION 4 ELIGIBILITY AND PARTICIPATION REQUIREMENTS... 5 SECTION 5 SUMMARY OF PLAN BENEFITS AND CONTRIBUTIONS SECTION 6 PLAN ADMINISTRATION SECTION 7 CIRCUMSTANCES THAT MAY AFFECT BENEFITS DENIAL OR LOSS OF BENEFITS SECTION 8 STATEMENT OF ERISA RIGHTS SECTION 9 SPECIAL RULES FOR GROUP HEALTH BENEFIT PLANS SECTION 10 CLAIMS PROCEDURES i.

3 SECTION 1 DEFINITIONS Capitalized terms used in the Plan have the following meanings: 1.1 AD&D means accidental death and dismemberment insurance. 1.2 Board of Directors means the Board of Directors of the Company. 1.3 Claims Administrator means the insurance company, third party administrator or other entity appointed by the Company to determine benefit eligibility or availability and pay claims for benefits under a Welfare Program. If no Claims Administrator is indicated then the Company shall be the Claims Administrator. 1.4 COBRA means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. 1.5 COBRA Administrator means the administrative entity or person(s) appointed by the Plan Administrator to act as COBRA Administrator. 1.6 Code means the Internal Revenue Code of 1986, as amended. 1.7 Company means Hologic, Inc. and its subsidiaries. 1.8 Dependent means a dependent of the Employee as defined in the applicable Welfare Program document. 1.9 Employee any person currently employed by the Employer who is receiving compensation for services performed, who is classified by the Employer as a regular full-time employee and meets the criteria of Section 4 of this SPD. Employee does not include any temporary, leased, seasonal or occasional worked employee Employer means the Company, and any other entity that has adopted and participates in the Plan. The Plan Administrator shall have the right to terminate any Employer s adoption of the Plan at any time ERISA means the Employee Retirement Income Security Act of 1974, as amended FMLA means the Family and Medical Leave Act of 1993, as amended Former Employee means any person formerly employed as an Employee of the Employer Group Health Benefits means a benefit through an employee welfare benefit plan, as defined in Section 3 of ERISA, in the form of medical care (as defined in Section 213(d) of the Internal Revenue Code) to Participants, directly, through insurance, reimbursement or otherwise.

4 1.15 Health Flexible Spending Account means a Group Health Benefit offering reimbursement for eligible medical expenses as described in the Hologic, Inc. Welfare Benefit Plan and in Internal Revenue Code Sections 105, 125 and the regulations thereunder, which reimburses qualifying Medical Care Expenses of eligible Employees and their eligible Dependents where such expenses are not otherwise covered under the Company s Group Health Benefit plans Health Savings Account means the Accounts established under Code section 223 ( HSA Accounts ) and Section HIPAA means the Health Insurance Portability and Accountability Act of 1996, as amended Participant means an Employee or Former Employee of the Employer who meets the requirements for eligibility and who properly enrolls in the Plan. A person shall cease to be a Participant when he or she no longer meets the requirements for eligibility as set forth in the Plan and in the specific Welfare Program. A Participant shall also include a Dependent properly enrolled in this Plan Plan means this plan, the Hologic, Inc. Welfare Benefit Plan and each Welfare Program incorporated by reference Plan Administrator means the Company or the person or persons appointed by the Company to act as Plan Administrator Plan Year Plan Year means each twelve (12) consecutive month period commencing on July 1 and ending on June QMCSO means a qualified medical child support order issued by a court or state agency to provide benefits to a dependent child Qualified Beneficiary means a covered Employee or covered Dependent SPD means any Summary Plan Description, Summary of Material Modifications or other employee communication that describes the benefits under a Welfare Program, and has been included by the Company and/or Employer as part of this Plan USERRA means the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended Welfare Program means a Welfare Program incorporated into this Plan that is offered by the Company and/or an Employer that provides an Employee a benefit that would be treated as an employee welfare benefit plan under Section 3(1) of ERISA if offered separately. Welfare Program may also mean any plan established pursuant to Section 125 of the Code. SECTION 2 INTRODUCTION 2

5 2.1 The Plan The Company maintains the Plan for the exclusive benefit of its eligible Employees and their spouses and eligible Dependents. The Welfare Programs are named in Appendix B of the Plan, as supplemented by the Plan Administrator. 2.2 The Welfare Programs Each of these Welfare Programs is summarized in a certificate of insurance issued by an insurance company, a benefit summary, a SPD or another governing document prepared by the insurer. A copy of each certificate, summary or other governing document is available, free of charge, upon request by calling your Human Resources representative. 2.3 Document Serves as SPD This document and its attachments constitute the Summary Plan Description ( SPD ) for each of the Welfare Programs to the extent required by ERISA 102. SECTION 3 GENERAL INFORMATION ABOUT THE PLAN 3.1 Human Resources The Contact for Plan Information If you have any general questions regarding the Plan, your eligibility for or the amount of any benefit payable under the self-funded Welfare Programs, please contact Human Resources. 3.2 Insurance Company The Contact for Insured Plan Information If you have any specific questions regarding your eligibility for or the amount of any benefit payable under the fully insured Welfare Programs, please contact the appropriate insurance company. Plan Name Plan Sponsor, Plan Administrator and Named Fiduciary Plan Sponsor s Employee Identification Number Type of Plan and Types of Benefits under the Plan Plan Year and Effective Date Hologic, Inc. Welfare Benefit Plan Hologic 35 Crosby Drive Bedford, MA Welfare Program providing medical, dental, life, long term and short term disability, accidental death and dismemberment and prescription drug benefits. The Plan includes a cafeteria plan under Code Section 125, however the cafeteria plan is not subject to ERISA. July 1 through June 30. The Plan initially became effective on July 1,

6 The end of the Plan Year is June 30. Plan Number 506 Funding Medium and Type of Plan Administration: Some benefits under the Plan are self-funded, and some are fully insured. Contributions for the self-insured Welfare Programs are made in part by the Company and in part by Employees pre-tax contributions. All benefits under a self-insured Welfare Program shall be paid exclusively from the general assets of the Company, shall constitute a general obligation of the Company, and the Company shall not, and shall not be obligated to, provide funding for such benefits through a trust, insurance or otherwise. Human Resources Contact Information Agent for Service of Legal Process Benefits under an insured Welfare Program shall be provided exclusively through the insurance policy or policies under such Plan. Insurance premiums for the fully insured benefits are either paid in part by the Company out of its general assets and in part by an Employees pre-tax payroll deductions, entirely by the Company out of its general assets or entirely by an Employees payroll deductions (pre-tax or post-tax). Hologic 35 Crosby Drive Bedford, MA Attention: Human Resources Hologic 35 Crosby Drive Bedford, MA Attention: Plan Administrator Insurance Companies and Claims and COBRA Administrator: Medical Blue Cross Blue Shield of Massachusetts P.O. Box Boston, MA CIGNA PO Box Wilmington, DE Blue Cross Blue Shield of Hawaii HMSA, PO Box 860 Honolulu, HI

7 Dental Prescription Drug Life and Accidental Death & Disability Long Term Disability Short Term Disability COBRA Continuation Coverage Administrator Employee Assistance Program The Hologic Health Flexible Spending Account The Hologic Health Savings Account (option 3) Delta Dental Plan of Massachusetts PO Box 9695 Boston, MA CVS Caremark One CVS Drive Woonsocket, RI Liberty Life Assurance Company of Boston 100 Liberty Way Mail Stop 02H-R824 Dover, NH Liberty Life Assurance Company of Boston P.O. Box 7211 London, KY Liberty Life Assurance Company of Boston P.O. Box 7211 London, KY CONEXIS P.O. Box Dallas, TX ACI Enterprises, Inc. (DBA ACI Specialty Benefits) 6480 Weathers Place, Suite 300 San Diego, CA PayFlex Systems USA, Inc. PO Box 3039 Omaha, NE HealthEquity 15 West Scenic Pointe Drive Draper, UT An Important Disclaimer About Insurance Contracts and Welfare Program Documents The Welfare Program benefits are provided through either an insurance contract or a governing plan document adopted by the Company. If the terms of this SPD conflict with the terms of an insurance contract or a governing plan document, then the terms of the insurance contract or governing plan document will control, unless otherwise required by applicable law. 5

8 3.4 Insured Benefits Provide Exclusively Through Insurance Contract Benefits through a Welfare Program provided through insurance are provided exclusively through the insurance contracts. The Company reserves the right to put in force, allow to lapse, cancel, substitute or otherwise deal with any insurance policy providing benefits under an insured Welfare Program under the Plan. Upon the lapse, termination, cancellation or other event causing any such insurance policy to no longer be in force, no benefits will be provided under this plan with respect to this Plan until any substitute or replacement policy of insurance is in force with respect to such benefit. This Plan and any Welfare Program thereunder does not provide self-funded benefits except as specifically provided herein, and all other benefits are provided through insurance products and policies exclusively. SECTION 4 ELIGIBILITY AND PARTICIPATION REQUIREMENTS 4.1 Eligibility Information in Welfare Program The Welfare Program may contain eligibility and participation information. If so, the information in the Welfare Program document will be determined by the Welfare Program document and not this SPD. To determine whether you or your dependents are eligible to participate in the Welfare Programs, please read the eligibility information contained in those specific program materials. 4.2 Eligibility You are eligible to participate in the Plan if you are currently employed by the Employer on a regular full-time or part-time basis, who is scheduled to work at least 30 hours or more per week and you are eligible to participate and receive benefits under one of more of the Welfare Programs offered under the Plan. You are not eligible to participate in the Plan if you are covered by a collective bargaining agreement (CBA), unless the CBA specifically provides for coverage under this Plan. 4.3 Participation Your participation in the Plan will begin for you and your eligible Dependents on the date you become a Participant in any of the Welfare Programs identified in Appendix B of the Plan. 4.4 Special Rules for Dependent Eligibility and Participation You may elect coverage for your eligible Dependents in the Plan, but there may be special eligibility rules under your specific Welfare Program. For information about the specific Welfare Program, please consult that program s certificate of insurance, SPD, and current benefit summary. 6

9 4.5 Proof of Dependent Status You may be required to periodically provide proof of your eligible Dependent s tax dependent status. 4.6 Important Rules for Eligibility and Participation Only eligible Employees, eligible Former Employees and eligible Dependents may participate in the Plan. You may be covered as an eligible Employee or an eligible Dependent under the Plan, but not both. More than one eligible Employee cannot cover the same individual as an eligible Dependent. 4.7 Signed Statements Any statement regarding your health, age, full-time student status, coverage under another health plan or other information provided to obtain benefits in writing and signed by you, may be used to contest benefits you have received under the Plan. 4.8 Correct Age The Plan will only pay benefits based on your correct age. If you misstate your age, the Plan will either: a) adjust any required contributions; b) validate your age; or c) void coverage as necessary or appropriate, in the discretion of the Plan Administrator. 4.9 Fraudulently Obtaining Benefits is a Federal Crime It is a federal crime to receive benefits that you are not entitled to by falsely claiming to be an eligible Employee, an eligible Former Employee, or falsely enrolling or claiming to be an eligible Dependent under the Plan Enrollment The following information is generally applicable to all Welfare Programs; however, those Welfare Programs may have specific enrollment requirements. Please consult the Welfare Program materials to determine whether there are special rules that may apply to your participation in the Plan Time Limit for Enrollment You must enroll in the Plan within 31 calendar days of the day you become eligible for participation in the Plan (your enrollment period ). If you do not enroll during your enrollment period, you may not enroll yourself or any eligible Dependent until the next annual enrollment period, unless certain exceptions apply. You may only enroll after an enrollment period expires if: (i) you or your eligible Dependent experience an eligible status change event, (ii) you or your Dependent become a HIPAA special enrollee or (iii) Group Health Benefit coverage is mandated under a QMCSO Enrollment Through a Qualified Medical Child Support Order 7

10 A QMCSO is a court order requiring a Group Health Benefit plan to enroll a Dependent child of an eligible Employee in Group Health Benefit coverage under the Plan. Typically, a QMCSO is issued as part of a divorce or separation agreement. When the Plan receives a QMCSO, the Plan Administrator will provide written notice to the Employee, the Dependent child to whom the order applies and the custodial parent or the court or state agency issuing the order ( Alternate Recipient(s) ) of receipt of the order and of the applicable written procedures. The Plan Administrator shall determine in its exclusive discretion whether an order meets the requirements for a QMCSO and will notify the eligible Employee and any Alternate Recipients of the determination. Once a determination is made that an order is a QMCSO, the Dependent child will be treated as any other eligible Dependent covered under the Plan Effective Date of Coverage Your benefits under this Plan will be effective as stated in the specific Welfare Program document Special Enrollment Rules for Medical Benefits Following a Status Change Event The following rules apply only to Group Health Benefits. If a status change event occurs, you have 31 calendar days from the date the status change event occurred to enroll yourself and/or your eligible Dependents (as long as your enrollment change request is directly related to your change in status) Status Change Events: A status change event is any of the following events that affect a Participant s eligibility under the Plan: 1. Your marriage, legal separation, divorce, or annulment; 2. The birth, legal adoption of a child, or placement of a child with you for legal adoption; 3. The death of your Dependent; 4. A change in your or your Dependent s employment status that affects eligibility under the Plan; 5. A termination or commencement of employment; 6. A strike or lock-out; 7. A commencement of or return from an unpaid leave of absence; 8. A change in your or your dependent child s status (e.g., your Dependent child reaches the age limit for coverage) that affects your eligibility under the Plan; 8

11 9. A change in residence that results in a loss of eligibility or coverage under the Plan or a Welfare Program (not applicable to Health Flexible Spending Account elections); 10. A family status changes that result in special enrollment rights under the HIPAA; 11. A change in the eligibility under the welfare benefit plan of your spouse or eligible Dependent (not applicable to Health Flexible Spending Account elections); 12. A commencement of or return from a FMLA leave; 13. A judgment, decree, or order resulting from a legal separation, divorce, annulment, or change in legal custody (including a QMCSO) that requires accident or health coverage for a child or foster child who is a Dependent of the Employee; 14. You or your eligible Dependent becomes entitled to or loses eligibility for Medicare or Medicaid; 15. A significant change in cost or coverage of your current Welfare Program option(s) (not applicable to Health Flexible Spending Account elections); or 16. Loss of governmental/educational institutional group health coverage plan. If you experience a status change event and properly enroll in the Plan within 31 days of that event, your coverage will be effective no later than the first day of the month following the date the Plan Administrator receives the completed enrollment form. However, if you are requesting enrollment under the Plan due to a HIPAA special enrollment right because of the birth, adoption, or placement for adoption of a child with you and you have properly enrolled within 31 days of the birth, adoption, or placement, then the effective date of coverage will be the date the event, as applicable. If you do not act within this 31 day window, you will lose your right to enroll in the Plan and may not enroll yourself or any eligible Dependent until the next annual enrollment period unless: (i) another status change event occurs that would allow you to enroll in the Plan or, (ii) you or your Dependent becomes a special enrollee under HIPAA or (iii) Group Health Benefit coverage is mandated under a QMCSO. To change your election or to enroll in the Plan, please contact Human Resources no later than 31 days after the status change event Important Note about Enrolling your Newly Acquired Child Your newborn, adopted child or child placed for adoption is not automatically enrolled in the Plan even if you have other Dependents covered. You must enroll your child within 31 calendar days of birth, adoption or placement for adoption or the child will not be enrolled in the Plan. If you fail to enroll the child within 31 calendar days of birth, adoption or placement for adoption, you may not enroll the child until the next annual enrollment period Termination of Participation 9

12 Participating in the Plan for you and your eligible Dependents will terminate according to the provisions of the specific Welfare Program document. Coverage also may terminate if you fail to pay your share of an applicable premium, if your hours drop below any required hourly threshold, if you submit false claims or for any other reason set forth in the specific Welfare Program materials. You should consult the specific Welfare Program materials for the exact terms of termination of participation Continuation of Group Health Benefit Plan Coverage COBRA If Group Health Benefit coverage for you or your eligible Dependent ceases because of certain Qualifying Events specified in COBRA (such as termination of employment, reduction in hours, divorce, or a covered Dependent child s ceasing to be eligible under the Plan), then you and your eligible Dependents may have the right to purchase COBRA continuation coverage for a temporary period of time. For more information about your COBRA rights, please see the COBRA Continuation Coverage Section of this SPD. USERRA Continuation coverage and reinstatement rights lasting up to 24 months may be available if you are absent from employment due to service in the uniformed services pursuant to USERRA. More information about coverage available pursuant to USERRA is available from Human Resources. SECTION 5 SUMMARY OF PLAN BENEFITS AND CONTRIBUTIONS 5.1 Cost of Benefits and Contributions The Plan may provide you and your eligible Dependents with health, long-term disability, AD&D, group term life insurance, and Health Flexible Spending Account benefits. You must meet the eligibility requirements of both this Plan and the specific Welfare Program in order to receive benefits under that specific plan. The cost of the benefits provided through the Welfare Program will be funded either (i) in part by Company contributions and in part by pre-tax covered Employee contributions, entirely by the Company or (ii) entirely by covered Employee pre-tax or post-tax contributions. The Company will determine and periodically communicate your share of the cost of the benefits provided through each Welfare Program and it may change that determination at any time. The Company will make its contributions in an amount that (in the Company s sole discretion) is at least sufficient to fund the benefits or a portion of the benefits that are not otherwise funded by your contributions. The Company will pay its contribution and your contributions to an insurance carrier, or, with respect to benefits that are self-insured, will use these contributions in addition to the Company s own contributions to pay benefits directly to you, on behalf of you or on behalf of your Eligible Dependents from the Company s general 10

13 assets. Your contributions toward the cost of a particular benefit will be used in their entirety prior to using Company contributions to pay for the cost of self-funded benefits. SECTION 6 PLAN ADMINISTRATION 6.1 Rights and Duties of the Plan Administrator The administration of the Plan is under the supervision of the Plan Administrator, who has been designated to act on behalf of the Company. The principal duty of the Plan Administrator is to see that the Plan is carried out, in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan. The administrative duties of the Plan Administrator include, but are not limited to, interpreting the Plan, prescribing applicable procedures, determining eligibility for and the amount of benefits, and authorizing benefit payments and gathering information necessary for administering the Plan. The Plan Administrator may delegate any of these administrative duties among one or more persons or entities, provided that such delegation is in writing, expressly identifies the delegate(s) and expressly describes the nature and scope of the delegated responsibility. The Plan Administrator has the discretionary authority to interpret the Plan in order to make eligibility and benefit determinations as it may determine in its sole discretion. The Plan Administrator has the discretionary authority to make factual determinations as to whether any individual is entitled to receive any benefits under the Plan. The Company will bear its incidental costs of administering the Plan. 6.2 Power and Authority of Insurance Company Certain benefits under the Plan are fully insured. Group insurance contracts with the following insurers provide for the following benefits: life, AD&D and LTD. The insurance companies are responsible for: (1) determining eligibility for and the amount of any benefits payable under their respective Welfare Programs; and (2) prescribing claims procedures to be followed and the claims forms to be used by employees pursuant to the their respective Welfare Programs. SECTION 7 CIRCUMSTANCES THAT MAY AFFECT BENEFITS DENIAL OR LOSS OF BENEFITS 7.1 Loss or Denial of Benefits under the Plan Your benefits (and the benefits of your eligible Dependents) will cease when your participation in the Plan terminates. Your benefits will also cease upon the termination of the Plan. Please refer to Section 4 of this SPD for information about when your coverage under the Plan terminates. Your benefits will also cease upon termination of the Plan. 11

14 Other circumstances may also result in the termination, reduction or denial of benefits. For example, benefits may be denied under the medical or dental benefit programs if you have a preexisting condition and incur costs within the exclusionary period. You should consult the certificate of insurance booklets, summary plan descriptions and other governing documents of the specific Welfare Program for additional information. 7.2 Coordination of Benefits If a Participant has coverage under this Plan as well as Coverage from Another Source (defined below), benefits that are received through this Plan shall be coordinated with the benefits available under the plan containing the Participant's other source of benefits. This Coordination of Benefits ( COB ) provision shall apply to all Group Health Benefits provided under this Plan. 7.3 Coverage from Another Source For purposes of this Plan, Coverage from Another Source shall mean any other plan providing benefits or services for medical treatment, including but not limited to, one of the following: Group insurance, or any other arrangement of coverage for individuals in a group Health Maintenance Organization ( HMO ) or other group on an insured, selfinsured or uninsured basis, or state or federal programs providing health coverage; Group coverage sponsored through a school or other educational institution for a student; Group coverage under a franchise organization; or No-fault insurance required under any law of a government and provided on other than a group basis, but only to the extent the benefits are required under such nofault law. 7.4 Construction Coverage from Another Source will be construed separately with respect to each policy, contract or other arrangement for benefits or services, and separately with respect to that portion of any such policy, contract, or other arrangement which reserves the right to take the benefits or services of other plans into consideration in determining its benefits and that portion which does not. 7.5 Benefits in the Form of Services When a plan provides benefits in the form of services rather than cash payments, the reasonable cash value of each service rendered will, for purposes of this Plan, be considered to be both a covered charge and the amount of benefit paid. 7.6 Ordering of Benefits 12

15 When coverage is provided by two or more sources as stated above, the plan that is primary is established in the following order: The plan that has no COB provision will be considered primary to a plan that has COB provisions; The plan that has a COB provision, except that such COB provision is not similar to this Plan's COB provision, shall be considered primary to this Plan which has a COB provision; The plan covering the person as an active employee will be primary to the plan covering the person as a dependent; The plan covering a person as an active employee will be primary to the plan covering the person as a retired, terminated, inactive, suspended or laid-off employee; The plan covering a person in his or her own capacity will be primary to the plan covering a person as a dependent; however, if the person is a Medicare beneficiary, and Medicare is secondary to the plan covering the person as a dependent and primary to the plan covering the person as a non-dependent, then the plan covering the person as a dependent is primary, Medicare is secondary and the plan covering the person as a non-dependent is the tertiary plan; The plan covering a dependent as a dependent of an active employee is primary to the plan covering the dependent as the dependent of a former employee or as a COBRA participant; For the purposes of a dependent covered under the plans of both of his or her nondivorced parents (or parents who never married, but who live together) the plan covering the parent whose birthday falls first in the year will be primary to the plan covering the parent whose birthday falls later in the year. If both parents have the same birthday, then the plan covering the parent for the longest period of time will be primary; or For a dependent whose parents are divorced or legally separated (or if the parents never married and do not live together), and the dependent is covered by the plans of both parents, the plan covering the parent who is responsible for the dependent's health care under the terms of a court decree or state agency order will be the primary payor. In the absence of such court decree or state agency order payment will be made in the order as follows: the plan of the natural parent with custody; the plan of the step-parent with custody; and the plan of the natural parent without custody. 13

16 However, if none of the rules outlined in this Section 7 apply, then the plan covering the person for the longest period of time will be primary. 7.7 Reduction of Benefits Payable by the Plan Whenever this Plan is considered secondary to another plan, benefits will be payable by the primary plan to the extent that the expense is an incurred charge, and this Plan shall be liable for the remainder of the eligible expenses that would be payable in the absence of dual coverage up to the amount that would otherwise be payable to the extent payable in total under this Plan. 7.8 Subrogation and Reimbursement If a Participant becomes entitled to benefits under the Plan as a result of an injury or illness for which a third party is, or may be, held responsible for any reason, the Plan may: (1) make full or partial advance benefit payments to, or payments on behalf of, such Participant, subject to the Plan s subrogation and reimbursement rights; or (2) may delay payment of all or part of such benefits and either pay such benefits or require the third party to pay such benefits upon settlement or judgment. However, before any such reimbursements or payments will be conditionally made, the Participant shall execute a subrogation and reimbursement agreement in a form acceptable to the Plan that acknowledges and affirms: (1) the conditional nature of the reimbursements or payments; and (2) the Plan s rights of subrogation and reimbursement, as provided for below. However, payment by the Plan of any benefits prior to or without obtaining a signed subrogation and reimbursement agreement shall not operate as a waiver of the Plan s subrogation and reimbursement rights. For the purposes of the subrogation and reimbursement provision of this Section 7, the Company and any of its affiliates shall be considered a third party. If a Participant receives any benefits arising out of an injury or illness for which the Participant has or may have, or asserts any claim or right to recovery against a third party or parties, third-party insurance or first-party insurance, then any payment or payments under this Plan for such benefits shall be made on the condition and with the understanding that this Plan will be reimbursed. Such reimbursement will be made by the Participant to the extent of, but not exceeding, the total amount payable to or on behalf of the Participant or recovered by the Participant from: (1) any policy or contract from any insurance company or carrier (including the Participant s insurer and specifically including the Participant s own or any other person s uninsured/under-insured automobile coverage, medical pay, personal injury protection or no fault benefits); and/or (2) any third party, plan or fund as a result of a judgment, settlement or otherwise. The Participant acknowledges and agrees that this Plan will be reimbursed in full before any amounts (including attorney fees incurred by the Participant) are deducted from the gross policy proceeds, judgment or settlement. Any recovery the Participant (or his attorney, assign, legal representative, Dependent or beneficiary) receives shall be held in constructive trust for the benefit of the Plan, to the extent of the Plan s prior payments or provision of benefits. The Plan also has the right to withhold future payments and provisions of benefits and offset future obligations (whether or not related to the injury or illness in question) against any benefits for which the Participant 14

17 has received a third party recovery (whether or not already paid or provided by the Plan). As part of the Plan s subrogation and reimbursement rights, any recovery from a third party will be applied first to reimburse the Plan (or discharge its obligation for future payments or benefits), even if the Participant is not paid for all of his or her claim for damages against the third party or otherwise made whole, and even if the payment the Participant receives is for, or is described as being for, damages other than health care expenses or benefits paid, provided, or covered by the Plan. This means that any third party payment will be automatically deemed to first cover the medical expenses or benefits previously paid, provided, or otherwise covered by the Plan, and will not be allocated to or designated as reimbursement for any other costs or damages the Participant may have incurred, until the Plan is reimbursed in full or otherwise made whole. The Plan s first dollar priority lien means that the Plan must be paid first from any recovery, prior to deduction for attorney s fees. In addition, the Plan is not responsible for a Participant s legal fees, is not required to share in any way for any payment of such fees, and its lien shall not be reduced by any such fees. In addition, by participating in the Plan and receiving benefits hereunder, the Participant automatically grants a lien to the Plan to be impressed upon all rights of recovery against any other parties described above. To perfect this lien, the Plan or Plan Administrator may file a copy of a subrogation and reimbursement agreement (signed by the Participant) with such other parties, or the Plan or Plan Administrator may notify any other parties of the existence of the lien. This Plan will be subrogated to all claims, demands, actions and rights of recovery against any entity, including, but not limited to, third parties and insurance companies and carriers (including the Participant s own insurer). The amount of such subrogation and reimbursement will equal the total amount paid under this Plan arising out of the injury or illness for which the Participant has or may have, or asserts a cause of action. In addition, this Plan will be subrogated for attorney s fees and other expenses incurred in enforcing its subrogation and reimbursement rights under this Plan. The Participant specifically agrees to do nothing to prejudice this Plan s rights to reimbursement or subrogation. In addition, the Participant agrees to cooperate fully with the Plan in asserting and protecting the Plan s subrogation and reimbursement rights. The Participant on behalf of him or herself agrees to execute and deliver all instruments and papers (in their original form) including a subrogation and reimbursement agreement and do whatever else is necessary to fully protect this Plan s subrogation and reimbursement rights. By participating in the Plan, the Participant automatically agrees to all the terms of this provision of the Plan and of the subrogation and reimbursement agreement. Should a Participant make or file a claim, demand, lawsuit or other proceeding against a third party or against the Participant s own first-party insurance coverage, who may be liable for the amount of benefits covered or paid by the Plan, the Participant shall, as part of such claim, demand, lawsuit or other proceeding, on behalf of the Plan, also seek payment or reimbursement for the full amount of such benefits covered or paid by the Plan. A Participant must notify the Plan Administrator prior to making or filing any such claim, demand, lawsuit or other proceeding. The Plan Administrator may, in its sole discretion, at that time or any other time: (1) instruct the Participant to seek, not to seek, or to discontinue seeking payment 15

18 or reimbursement on behalf of the Plan; and (2) pursue such payment or reimbursement independently in the same or in a separate lawsuit or other proceeding or may abandon such payment or reimbursement altogether. Any compromise or settlement entered into by a Participant purporting to reduce or limit the amount of the payment designated as reimbursement for medical or any other expenses covered under the Plan to an amount which is less than the benefits paid or covered by the Plan shall not be effective unless the Plan Administrator consents thereto in writing. The Participant specifically agrees to notify the Plan Administrator, in writing, of whatever benefits are paid under this Plan that arise out of any injury or illness that provides or may provide the Plan subrogation and/or reimbursement rights under Section 7. For purposes of the subrogation and reimbursement provisions of this Section 7, the term Participant shall include, as applicable, the Participant and/or the Participant s estate or legal guardian and any legal representative appointed by the Participant, as appropriate. 7.9 Amendment or Termination of the Plan The Company or the Board of Directors has the right to amend or terminate the Plan at any time. The Plan may be amended or terminated by a written instrument duly adopted by the Company or any of its delegates. The Company (or its duly appointed representative) may sign insurance contracts for this Plan on behalf of the Company, including amendments to those contracts, and may adopt (by a written instrument) amendments to the Plan that he or she considers to be administrative in nature or advisable in order to comply with applicable law. Any amendment or termination of this Plan will not affect your rights under the Plan prior to the amendment or termination, unless the Company determines that such amendment or termination is necessary to comply with applicable law No Contract of Employment The Plan is not intended to be, and may not be construed as constituting, a contract of employment or other arrangement between you and the Company to the effect that you will be employed for any specific period of time. SECTION 8 STATEMENT OF ERISA RIGHTS As a participant in welfare benefit plan governed by ERISA, you (all references to you in this Section 8 shall include your covered Dependents) are entitled to certain rights and protections under ERISA. ERISA provides that, as a participant, you are entitled to: Examine, without charge, at the Plan Administrator s office and at other specified locations, the Plan documents, including insurance contracts, and copies of all documents filed by the Plan with the U.S. Department of Labor (if any) such as annual reports and Plan descriptions; 16

19 Obtain copies of the Welfare Program documents and other program information upon written request to the Plan Administrator (the Plan Administrator may make a reasonable charge for the copies); and Receive a summary of the Plan s annual financial report, if any (the Plan Administrator is required by law to furnish each participant with a copy of this summary annual report). 8.1 Fiduciary Obligations In addition to creating rights for participants, ERISA imposes duties on the people who are responsible for the operation of the Welfare Program. These people, called fiduciaries of the program, have a duty to operate the program prudently and in the interest of you and other program participants. Fiduciaries who violate ERISA may be removed and may be required to make good any losses they have caused the program. 8.2 No Discrimination No one, including the Company or any other person, may fire you or discriminate against you in any way with the purpose of preventing you from obtaining welfare benefits or exercising your rights under ERISA. 8.3 Right to Review If your claim for a welfare benefit is denied in whole or in part, then you must receive a written explanation of the reason for the denial. You have a right to have the Plan Administrator review and reconsider your claim. 8.4 Filing Suit Under ERISA, there are steps that you can take to enforce these rights. For instance, if you request materials from the Plan Administrator and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 per day until you receive the materials, unless the materials were not sent due to reasons beyond the control of the Plan Administrator. If you have a claim for benefits that is denied or ignored in whole or in part, and you have exhausted all available claims procedures under the Plan, then you may file suit in a state or Federal court. If it should happen that any Welfare Program fiduciaries misuse the Plan s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose (for example, if the court finds your claim to be frivolous), the court may order you to pay these costs and fees. 8.5 Questions 17

20 If you have any questions about this statement or your rights under ERISA, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor (listed in your telephone directory), or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C Introduction SECTION 9 SPECIAL RULES FOR GROUP HEALTH BENEFIT PLANS The following provisions apply to Welfare Programs that offer Group Health Benefit plans under the Plan. The Company complies with several important laws that affect your participation and coverage in the Plan. A brief overview of these laws is provided below. Please contact the Plan Administrator if you need additional information about these laws. 9.2 COBRA Continuation Coverage The Consolidated Omnibus Budget Reconciliation Act of 1985 ( COBRA ) allows you and your covered Dependents who are Qualified Beneficiaries (see below) to temporarily continue group health benefit coverage such as medical, dental, vision and Health Flexible Spending Account Plan benefits beyond the time when it would otherwise end under the Plan. Federal law under COBRA created the right to COBRA continuation coverage. Under COBRA you may elect to temporarily continue your group health coverage for yourself, and any covered Dependents who are Qualified Beneficiaries covered by a Welfare Program that is a group health plan on the day your group health plan participation ceased because of a Qualifying Event. You and your covered Dependents who are Qualified Beneficiaries are eligible to elect COBRA continuation coverage even if you have health coverage under another group health plan. COBRA continuation coverage can also become available to other eligible Dependents who are Qualified Beneficiaries and who are covered under a Welfare Program that is a group health plan when they would otherwise lose their group health coverage due to a Qualifying Event. This COBRA continuation coverage section, in addition to the initial COBRA continuation coverage notice that you received upon enrolling in the Plan, provides a brief overview of your rights and obligations under the continuation coverage provisions of COBRA. The Plan provides no greater COBRA rights than what the law requires, and this section should be construed accordingly. Both you and your Dependents should read this section carefully and keep it with your records as it generally explains COBRA continuation coverage, when it may be available to you and your family and what you need to do to protect the right to receive it. For more information about your COBRA continuation coverage rights and obligations, please call Human Resources. 9.3 Who to Contact Contact Human Resources to ensure your termination of employment or reduction in hours has been processed, and that your benefits information has been passed on to the 18

21 COBRA Administrator for the Plan. You should continue to call Human Resources or the Claims Administrator when you have questions about coverage and claims incurred while you were actively employed. When your information has been processed, you will receive a letter from the COBRA Administrator at your home address. Once you receive this letter, you should contact the COBRA Administrator directly with your questions about your COBRA continuation coverage eligibility, contributions and benefit claims. 9.4 Eligibility for COBRA Continuation Coverage COBRA continuation coverage is continuation of group health plan coverage when coverage would otherwise end because of a life event known as a Qualifying Event. The specific Qualifying Events are listed later in this Section 9. After a Qualifying Event, COBRA continuation coverage must be offered to each Plan Participant who is a Qualified Beneficiary. You and/or your Dependents could become Qualified Beneficiaries if group health plan coverage under a Welfare Program of the Plan is lost because of a Qualifying Event. Qualified Beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation coverage. 9.5 Qualified Beneficiaries People entitled to COBRA continuation coverage are called Qualified Beneficiaries. People who may be Qualified Beneficiaries include: The covered Employee The spouse of a covered Employee The dependent children of a covered Employee, including a child who is born to the covered Employee, or who is placed for adoption with the covered Employee, during a period of COBRA continuation coverage In order to be a Qualified Beneficiary, a person must generally be covered under a group health plan on the day before the Qualifying Event that causes a loss of coverage (such as a termination of employment, or a divorce from or death of the covered employee). Under the Plan, a Qualified Beneficiary who elects COBRA continuation coverage must pay for COBRA continuation coverage. If it is determined by the Company that an individual is not eligible for COBRA continuation coverage, the Company will notify the individual of his or her failure to qualify for COBRA continuation coverage. This notice will explain why the individual in not entitled to COBRA continuation coverage and will be sent within 14 days after the COBRA Administrator receives notice of the Qualifying Event. 9.6 Qualifying Events and Maximum Coverage Periods 19

22 The Qualifying Events for COBRA continuation coverage and the maximum COBRA continuation coverage period are shown below. 9.7 Employee COBRA Coverage If you are a covered Employee and are covered by a group health plan that is a Welfare Program under the Plan, you may be a Qualified Beneficiary and have the right to continue coverage if you lose coverage due to the following Qualifying Events: Qualifying Event Termination of employment (for reasons other than gross misconduct) Reduction in hours of employment resulting in a loss of eligibility Maximum Continuation Period 18 months 18 months 9.8 Spouse of an Employee COBRA Coverage If you are the spouse of a covered Employee and are a covered dependent of a group health plan that is a Welfare Program under the Plan, you may be a Qualified Beneficiary and have the right to continue coverage if you lose coverage due to the following Qualifying Events: Qualifying Event The Employee s termination of employment (for reasons other than gross misconduct) or a reduction in the employee s hours of employment resulting in a loss of eligibility The death of the Employee Divorce, legal separation from the Employee The Employee s entitlement to Medicare Maximum Continuation Period 18 months 36 months 36 months 36 months 9.9 Dependent Children of an Employee COBRA Coverage A Dependent child of a covered Employee who is a covered Dependent of a group health plan that is a Welfare Program under the Plan, may be a Qualified Beneficiary and have the right to continue coverage if they lose coverage due to the following Qualifying Events: Qualifying Event The Employee s termination of employment (for reasons other than gross misconduct) or a reduction in the employee s hours of employment resulting in a loss of eligibility The death of the Employee The Employee s divorce or legal separation Maximum Continuation Period 18 months 36 months 36 months 20

23 The Employee s entitlement to Medicare Losses of eligible dependent status (e.g., reach maximum age) 36 months 36 months 9.10 Subsequent Qualifying Event If a subsequent Qualifying Event that is not your termination of employment or reduction in work hours affecting your eligibility for a group health plan (such as your divorce, legal separation, your death or your Dependent child ceasing to be eligible under the plan) occurs during the initial 18 month period of coverage COBRA continuation coverage, that coverage may be extended for your eligible dependents (who are Qualified Beneficiaries) for up to a maximum period of 36 months measured from the date of the first Qualifying Event. An event shall not be a subsequent Qualifying Event unless that event would cause a loss of coverage under the Plan independent of the initial Qualifying Event. The Qualified Beneficiary who was the covered Employee will not be eligible for an extension of the maximum 18-month period of COBRA continuation coverage for a subsequent Qualifying Event. Notice of a subsequent Qualifying Event must be given to the COBRA Administrator within a maximum of 60 days in order to extend the coverage. If you fail to inform the COBRA Administrator, you will lose your right to extend your COBRA continuation coverage and this right will not be reinstated Responses to Information Regarding a Qualified Beneficiary s Right to Coverage Upon request, the Plan will inform health care providers of the Qualified Beneficiary s right to continuation coverage. In addition, the Plan will respond to inquiries from health care providers regarding the Qualified Beneficiary s right to coverage during the enrollment period and the right to retroactive coverage if COBRA continuation coverage is chosen Changes in Benefits under COBRA If you or any Qualified Beneficiaries choose COBRA continuation coverage, your group health plan benefits will be the same that were in effect at the time you became eligible for COBRA. If Plan benefits provided to active Employees change, then group health plan benefits will also change for you and/or your eligible Dependents on COBRA continuation coverage. You will also be able to change your group health plan benefits option (e.g. PPO to HMO) during annual enrollment if you are on COBRA continuation coverage Extension of Maximum COBRA Continuation Coverage An extension of the maximum period of COBRA continuation coverage is available only if certain Qualifying Events (i.e., the covered Employee dies or gets divorced or legally separated, or an eligible Dependent child ceases to be an eligible Dependent) occur after a preceding Qualifying Event that is a termination of employment or reduction of hours Disability Extension 21