A NNUA L ENROLLMENT 2014

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1 BenefitsConnection YOUR BENEFITS CONNECTED A NNUA L ENROLLMENT 2014 October 23 to vember 6, 2013 New year, easier enrollment still great Verizon coverage.

ANNUAL ENROLLMENT 2014 Dear Verizon Employee: During Annual Enrollment you have the opportunity to make changes to your Verizon coverage for the next year.

These are outlined in this booklet, so please read it carefully to ensure you are aware of what is changing on January 1, 2014. There are no changes to your dental or vision coverage.

As you prepare for Annual Enrollment and make your decisions for your 2014 coverage, you may be thinking about the impact of Health Care Reform on your Verizon benefits.

2 ANNUAL ENROLLMENT 2014 Dear Verizon Employee: During Annual Enrollment you have the opportunity to make changes to your Verizon coverage for the next year. However, if you are satisfied with your current coverage, you do not need to take any action. As a result of your 2012 labor contract, there are some changes to medical plan provisions. These are outlined in this booklet, so please read it carefully to ensure you are aware of what is changing on January 1, There are no changes to your dental or vision coverage. Premium contributions will increase for 2014 and are outlined in this booklet. You can also see your costs online on BenefitsConnection. As you prepare for Annual Enrollment and make your decisions for your 2014 coverage, you may be thinking about the impact of Health Care Reform on your Verizon benefits. In September, we sent you information about the Health Insurance Marketplace as required under the Affordable Care Act (ACA). It s important to note that while all Americans will be eligible to participate in the Marketplace beginning in 2014, you need to understand the following potential implications if you elect to forego your Verizon-sponsored health care coverage and enroll in a Marketplace option instead. When Verizon employees enroll in a government-sponsored health care plan, they will lose the company provided subsidy that covers about 90% of the premium cost. Because Verizon offers health care coverage that is affordable to most employees and meets the government s minimum value requirements, our employees likely will not be eligible for a government-provided tax credit or subsidy. Premiums paid for your Verizon-sponsored coverage are paid through pre-tax dollars taken out of your paycheck, while premiums paid for coverage through the Marketplace will be made with after-tax dollars direct-billed to you eliminating a valuable tax benefit. Again, because Verizon is providing you with access to quality and affordable health care coverage, it is not necessary for you to participate in a Marketplace option, and for the reasons stated above, your Verizonsponsored coverage will likely continue to be your best option. This year, new enhancements will make enrollment even easier, things like having your non-tobacco user status designation, discount for completing the Health Assessment, and your Flexible Spending Account elections automatically carry over to That means if you like your current coverage and wish to continue it, you truly do not need to take any action during Annual Enrollment. We are excited about these improvements, and we are very proud of the quality of health care benefits we provide to more than 740,000 employees, retirees and eligible dependents of Verizon. Please review the enclosed materials and decide if you d like to make any changes for Otherwise, you do not need to take any action. Sincerely, Donna Chiffriller Vice President Benefits 2

3 Annual Enrollment is October 23 to vember 6, 2013 This year, Annual Enrollment is easier than ever. Most employees won t need to take any action during this year s Annual Enrollment. For 2014, you ll have the same choice of plan options, with a few changes resulting from your 2012 labor contract. action is needed unless you want to make a change. New enhancements will make enrollment even easier this year for 2014, the following will continue automatically: Medical, dental, and vision choices Tobacco user designation Spending Account contributions Contribution credit for completing the Health Assessment So, if you are satisfied with your current benefit elections, no action is needed. If You Need to Make a Change for 2014 To review or make changes to your current benefit elections or dependents, visit BenefitsConnection from About You or log on at before midnight, Eastern time on vember 6. Beneficiaries can be changed at any time. You need to take action if you want to: Change your medical or dental plan option Add or remove a dependent Change the amount you contribute to your Health Care and/or Dependent Day Care Spending Account Change the amount of your life insurance coverage for yourself or your eligible dependents Change your tobacco user/non-tobacco user status Complete the online Health Assessment Remember: Annual Enrollment is generally the only time during the year that you can make changes to your coverage, unless you have a qualified life event. For information on what is considered a qualified life event, refer to your Summary Plan Description (SPD) available on BenefitsConnection. 3

4 If You Have a Qualified Life Event If you have a qualified life event between now and the end of the year, you will need to make any necessary changes on BenefitsConnection for both 2013 and Out-of-Pocket Maximum Required by ACA An additional layer of out-of-pocket cost protection is being added to the VCS MCN and VCS MEP PPO medical options beginning in 2014 so that your total out-of-pocket costs (including medical plan copays) will not exceed $6,350 for individual coverage and $12,700 for family coverage. Verifying Your Dependents If you add a dependent to your coverage during Annual Enrollment, or at any time during the year, you will need to provide documentation to verify his or her eligibility. Instructions for completing the dependent verification will be sent to your home after you have enrolled your dependent. Verizon is committed to ensuring only eligible dependents are covered under the Company s plans. If you have any questions about eligibility, please refer to your SPD, available on BenefitsConnection. Adding an ineligible dependent to your Verizon coverage may result in disciplinary action. New: Automatic Full-Time Student Verification for Dental Coverage Beginning this year, full-time student dependents, age 19 to 25 with dental coverage under a Verizon plan, will be automatically verified through the National Student Clearinghouse. If student status cannot be verified, you ll receive instructions in the mail about what you need to do. Otherwise, you won t need to do anything to verify student status Medical Plan Changes There are some changes to the VCS MEP PPO medical option as a result of the 2012 labor contract which are outlined below. VCS MEP PPO PLAN PROVISION Deductible: In-Network Deductible: Out-of-Network Out-of-Pocket Maximum: In-Network 2013 $400 Individual/$1,000 Family $650 Individual/$1,625 Family $1,050 Individual/$2,625 Family 2014 $450 Individual/$1,125 Family $700 Individual/$1,750 Family $1,100 Individual/$2,750 Family 4

5 2014 Medical Plan Contributions Following are your contributions for the medical plans based on whether you and your covered family members use tobacco products and whether or not you have completed a Health Assessment. VCS MCN AND VCS MEP PPO n-tobacco User Credit? Completed Health Assessment? MONTHLY CONTRIBUTION Individual Employee + 1 or More EPO AND HMOS n-tobacco User Credit? Completed Health Assessment? $50.00 $ $58.33 $ $ $ $ $ Important te Your current tobacco user status will continue for If your status changes (you become a non-tobacco user, complete a smoking cessation program, or start using tobacco), update your status on BenefitsConnection. MONTHLY CONTRIBUTION (will be no greater than the amounts in this chart) Individual $75.00 $83.33 $ $ Employee + 1 or More $ $ $ $ Medical Coverage If you do not want medical coverage, you need to choose Coverage during Annual Enrollment. If you choose Coverage, you cannot enroll in coverage during the year unless you have a qualified life event or as otherwise required by law. Please refer to your SPD for guidelines on qualified life events. 5

6 Health Incentives: Reduce Your Annual Medical Plan Contributions Verizon offers two incentives to help keep you and your family healthy and reduce your annual contributions for your medical coverage. Save Money by Completing a Health Assessment Up to $100 The Health Assessment is a simple, confidential online health questionnaire that can help you understand and manage health risk factors. The Health Assessment takes about 10 minutes to complete and can be accessed from WellConnect on BenefitsConnection. If you are currently receiving the credit for completing the online Health Assessment, no action is necessary. The credit will automatically apply for If you are not currently receiving the Health Assessment credit, complete the Health Assessment by the end of 2013 and receive a $100 credit toward your annual medical plan contributions for Completion of the Health Assessment after December 10 but before December 31 may delay your full credit. n-tobacco Users Pay Less Up to $600 You are eligible for a non-tobacco user credit if you and your covered dependents do not use any tobacco products, or have completed a Tobacco Cessation program, such as QuitNet, within the past six months. If you are a tobacco user and would like to quit, visit BenefitsConnection > WellConnect > My Healthy Living > Tobacco Cessation. Completion of a tobacco cessation program may result in lower contributions. Important te about Supplemental Life Insurance The rates for Supplemental Life Insurance are based on age ranges. This means you may see an increase in the amount you are paying if you will be in the next rate tier during

8 Important Changes to Your Plan Change in Definition of Spouse For medical, dental and vision plan purposes, the term spouse has been changed to include a person of the same sex to whom you are married under state* law. If you cover a same-sex spouse and provide proof of legal marriage, you can now pay for spousal coverage on a pre-tax basis. In this case, Verizon is no longer required to report additional income reflecting the value of health coverage provided for a same-sex spouse or the child of a same-sex spouse for federal tax reporting purposes even if you reside in a state different from where you and your same-sex spouse were legally married. In addition, you can use the health care and dependent day care spending accounts to pay for eligible expenses for your same-sex spouse or a child of a same-sex spouse. Employees covering a same-sex domestic partner who is not a spouse and/or does not satisfy the definition of a federal tax dependent for group health plan purposes will continue to be taxed on the value of group health plan coverage. Please contact the Verizon Benefits Center for eligibility and enrollment information. * The term state means any domestic or foreign jurisdiction having the legal authority to sanction marriages. Medical Option Changes Under Health Care Reform Verizon is making the following changes to your non-grandfathered medical options as of January 1, 2014: Out-of-Pocket Maximum Changes. An additional layer of out-of-pocket cost protection is being added to the Anthem VCS MCN and VCS MEP PPO medical options beginning in 2014 so that your total out-of-pocket costs (including medical plan copays) will not exceed $6,350 for individual coverage and $12,700 for family coverage. Your current negotiated out-of-pocket maximums remain unchanged, and copays will not apply toward such amounts. Contact your health plan administrator for details. Coverage for Individuals Participating in Approved Clinical Trials: You will be eligible for coverage of routine costs for items and services furnished in connection with your participation in an approved clinical trial. The clinical trial must relate to the treatment of cancer or another life-threatening disease or condition. Contact your health plan administrator for details. 7

9 Important Legal tices Update to the tice of Privacy Practices for the Verizon Communications Inc. Health Plans The tice of Privacy Practices for the Verizon Communications Inc. Health Plans ( HIPAA Privacy tice ) explains the uses and disclosures the Verizon Health Plans may make of your protected health information, your rights with respect to your protected health information, and the Plans duties and obligations with respect to your protected health information. In response to final HIPAA regulations issued by the U.S. Department of Health and Human Services earlier this year, Verizon updated the HIPAA Privacy tice to reflect applicable changes to Verizon s HIPAA privacy policies and procedures effective on and after September 23, The material changes to the HIPAA Privacy tice address areas including: additional language that the Plan does not use protected health information that is genetic information for underwriting purposes, as defined in the HIPAA Privacy Rule; uses and disclosures of protected health information that require your individual authorization, such as uses and disclosures of protected health information for marketing purposes and for a sale of protected health information under the HIPAA Privacy Rule; disclosures of a deceased individual s PHI to persons involved in the individual s care or payment for health care prior to death; modifications to your individual right to request a restriction on the use and disclosure of your protected health information, and your right to request access to your protected health information. With respect to your right to request access to your protected health information, the HIPAA Privacy tice includes additional information on your right to request and receive an electronic copy of protected health information maintained in one or more designated record sets electronically. The HIPAA Privacy tice can be found on BenefitsConnection. You may view the notice and/or print a paper copy from the website; or you also may request a paper copy by calling the Verizon Benefits Center at VzBens ( ). Summary Health Information Required by the Patient Protection and Affordable Care Act Summaries of Benefits and Coverage (SBCs) required by the Affordable Care Act are available on BenefitsConnection at: If you would like a paper copy of the SBCs (free of charge), you may contact the Verizon Benefits Center at Vz-Bens ( ). Verizon is required to make SBCs, which summarize important information about health benefit plan options in a standard format, available to help you compare across plans and make an informed choice. The health benefits available to you provide important protection for you and your family in the case of illness or injury and choosing a health benefit option is an important decision. SBCs are being made available in addition to other information regarding your health benefits including Health Plan Comparison Charts which also can be found on BenefitsConnection. 9

10 This Annual Enrollment Guide provides updates to your existing Summary Plan Description(s) as of January 1, Please keep this Guide and any other summaries of material modifications with your SPDs. This Guide does not describe other benefit changes that will become effective in 2015 under the new labor contracts. As always, the official plan documents determine what benefits are provided to Verizon employees, retirees and their dependents.your SPDs are available at or you can call the Verizon Benefits Center and request a printed copy free of charge. As explained in your SPD, Verizon reserves the right to amend or terminate any of its plans or policies at any time with or without notice or cause, subject to applicable law and any duty to bargain collectively. VZN A7 VCS

WE VE GOT YOU COVERED

WE VE GOT YOU COVERED Your Verizon Benefits ANNUAL ENROLLMENT 2015 October 21 to vember 4, 2014 BenefitsConnection www.verizon.com/benefitsconnection Dear Verizon Employee: During Annual Enrollment, you