The Dental and Vision Flexible Spending Account

Transcription

1 S U M M A R Y P L A N D E S C R I P T I O N L3 Technologies, Inc. The Dental and Vision Flexible Spending Account Effective January 1, 2017

2 Table of Contents The Dental and Vision Flexible Spending Account 1 The Plan Year 1 Before You Begin 1 Eligibility and Participation 2 Who s Eligible 2 Enrolling for Participation 2 Medical Child Support Orders 4 How the Dental and Vision FSA Works 5 Funding Your Dental and Vision FSA 5 Eligible Dental and Vision Expenses 6 Reimbursements 7 The WageWorks Card 7 Receipts 8 Account Statements 9 WageWorks Website 9 EZ Receipts Mobile Application 9 Other Information You Should Know 10 How Reimbursements Can Be Forfeited or Lost 10 Right of Recovery 10 Continued Participation During a Leave of Absence 11 If You Are Transferred 11 When Participation Ends 11 Extended Participation 12 Continuing Your Participation Under COBRA 12 Continued Coverage During a Military Leave of Absence 15 Ownership of Benefits 15 Plan Administration 15 Compliance with Federal Law 16 Benefit Review Procedure 16 Claims Procedures 16 Confidentiality of Health Care Information 18 No Right to Continued Employment 19 Future of the Dental and Vision FSA 20 Your Rights Under ERISA 21 Prudent Actions by Plan Fiduciaries 21 Enforcing Your Rights 22 Assistance with Your Questions 22 Plan Facts 23

3 The Dental and Vision Flexible Spending Account The Dental and Vision Flexible Spending Account (the Account ) lets you set aside tax-free dollars which you can then use to pay certain eligible dental and vision expenses for you and your dependents. Since you are using tax-free dollars to pay these expenses, you lower your federal income and Social Security taxes. This can offset the cost of many of your out-of-pocket dental and vision expenses. The Dental and Vision FSA is for Aetna HSA Medical Plan participants only. Medical expenses are not eligible for reimbursement through the DVFSA. Participation in the Dental and Vision Flexible Spending Account (DVFSA) is completely voluntary. For information about eligible and ineligible DVFSA expenses, please see the accompanying Dental and Vision Flexible Spending Account Expenses Supplement. The DVFSA lets you set aside tax-free dollars from your pay that you can then use to pay certain dental and vision expenses. WageWorks is the DVFSA Administrator. The Plan Year The DVFSA is administered on a calendar-year basis (January December), so all references to a Plan Year mean a calendar year. Before You Begin This booklet describes the most important features of the DVFSA and also serves as the Summary Plan Description (SPD). We ve tried to explain things in everyday language, but you will come across some words and phrases that have specific meanings within the context of the Account. To help you understand them, we ve included their definitions in the text. Also be sure to read the Other Information You Should Know section of this booklet for important information and facts about your rights under the DVFSA. the dental and vision fsa 1

4 Participation in a DVFSA is not automatic; you must re-enroll each Plan Year that you wish to participate in a DVFSA. Eligibility and Participation You can use the Dental and Vision Flexible Spending Account (DVFSA) to pay for eligible dental and vision expenses that are not covered by your L3-sponsored health care coverage or any other health care coverage you may have. You can participate in the DVFSA only if you are enrolled in the Aetna HSA Medical Plan. The DVFSA may be used to reimburse your dependents eligible dental and vision expenses, as well as your own. Who s Eligible You are eligible to participate in the DVFSA if it is offered at your business unit and you are: enrolled in the Aetna HSA Medical Plan; a U.S.-based employee working in the U.S. and regularly scheduled to work 20 hours or more per week; employed in a job classification designated as benefits-eligible; and/or on an approved leave of absence that allows for continuation of benefits. If you are a collectively bargained employee, the terms of your collective bargaining agreement will govern your eligibility. Your spouse and dependent children under age 26 are considered eligible dependents for DVFSA purposes. If you have any questions about your eligibility, contact the L3 Benefit Center at NOTE: Dental and vision expenses incurred by a same-sex civil union partner or same-sex domestic partner who is not the participant s dependent for tax law purposes are not eligible for reimbursement by the DVFSA. Enrolling for Participation Participation in the DVFSA is not automatic; you must enroll to participate, and you must re-enroll every Plan Year if you want to continue participating. You can enroll: within 31 days of your eligibility date; during the annual enrollment period, which is held in the fall; or within 60 days of a qualifying event (see Making changes mid-year, on page 3). Your election. When you first join L3, you ll be asked during enrollment whether you want to establish a DVFSA, and the amount you want to contribute. If you elect to participate, your election takes effect on your first day at work or the first day you became eligible, and stays in effect throughout the rest of the Plan Year, unless you have a qualifying event (see Making changes mid-year, on page 3). 2 eligibility and participation

5 Annual enrollment. L3 holds an annual enrollment each fall during which you can elect to establish a DVFSA. Your election takes effect on the next January 1 and stays in effect for that full Plan Year, unless you have a qualifying event (see Making changes mid-year, below). Making changes mid-year. The IRS requires that your election stays in effect throughout the full Plan Year unless you have a qualifying event. Please note that not all qualifying events enable you to make mid-year changes, and any change you are permitted to make must be directly related to the impact of the event on your benefits or eligibility. For example, it is not a qualifying event if you are a benefits-eligible part-time employee and you become a benefits-eligible full-time employee (or vice versa). Contact the Benefit Center to discuss your specific situation. L3 abides by the IRS s definition of qualifying events, which includes: your legal marital status changes (e.g., through marriage, divorce, legal separation or annulment) the number of your dependents changes (e.g., through the birth or adoption of a child; a change in dependent status under the Internal Revenue Code; or the death of a child or spouse) you are required to cover a child pursuant to a Qualified Medical Child Support Order or a National Medical Child Support Notice your spouse or your dependent becomes employed or unemployed You can t change your election during the Plan Year unless you have a qualifying event. Not all qualifying events enable you to make mid-year changes, and any change you are permitted to make must be directly related to the impact of the event on your benefits or eligibility. you, your spouse or your dependent takes or returns from an unpaid leave of absence your, your spouse s or your dependent s eligibility for benefits changes as a result of employment status changing from full-time to part-time (or vice versa) or from hourly to salaried (or vice versa) your dependent first meets or no longer satisfies the requirements for coverage because he/she reaches the limiting age, or any similar circumstance you, your spouse or your dependent goes on strike or is locked out, or returns from a strike or lockout the health care plan coverage options available to you change because you, your spouse or your dependent changes residences or work sites you previously waived participation because you were covered under your spouse s group health plan and you subsequently lose coverage under that plan you, your spouse or your dependent either becomes eligible or loses eligibility for Medicare or Medicaid coverage you or your dependent loses eligibility under a Medicaid plan or a state child health insurance plan (SCHIP) you or your dependent becomes eligible for government assistance under a Medicaid plan or an SCHIP designed to help you pay for Plan coverage. eligibility and participation 3

6 If you have a qualifying event, you have 60 days from the event to change your coverage election. The change in your election must be due to and consistent with the qualifying event. (For example, if you and your spouse adopted a second child or a second child was born to you during the Plan Year, you could increase your contributions to the Account but you could not decrease or stop your contributions.) If you have a qualifying event, you have 60 days from the event to change your coverage election. Contact the L3 Benefit Center at as soon as you know that an event is about to take place. Effective date of election changes. The effective date of your election change is the date of the qualifying event. For example, if your election change is due to the birth of a child, the change is effective as of the child s date of birth. Likewise, if your election change is due to divorce, coverage for your ex-spouse will be terminated retroactive to the date of the divorce. An election change will not become effective until you provide the required enrollment materials, including appropriate written documentation of the reason for the change. Contact the L3 Benefit Center at as soon as you know that an event is about to take place (or immediately after it takes place) to make sure you allow yourself enough time to take the appropriate action. The L3 Benefit Center will explain the procedure to you. Medical Child Support Orders If you are eligible for participation in the DVFSA, you may be required to provide coverage for your child pursuant to a Qualified Medical Child Support Order (QMCSO) or a properly completed National Medical Child Support Notice (NMCSN). A QMCSO is a judgment, decree or order issued by a state court or agency that creates or recognizes the existence of an eligible child s right to receive health care coverage. A NMCSN is a standardized medical child support notice that is used by state child support enforcement agencies to require children to be enrolled in an employer s group health plan. The Order or Notice must comply with applicable law and must be approved and accepted as a QMCSO or a NMCSN by the Plan Administrator in accordance with Plan procedures. If the DVFSA receives a QMCSO or a NMCSN requiring you to provide reimbursement of eligible expenses for an eligible child, deductions will be made automatically from your pay beginning as of the date specified in the QMCSO or the NMCSN. To get a free copy of the procedure followed by the Plan in determining whether an order is qualified, contact the L3 Benefit Center or L3 s QMCSO administrator: Aon Hewitt ATTN: L3 Technologies Qualified Order Team P.O. Box 1542 Lincolnshire, IL Phone: Fax: eligibility and participation

7 How the Dental and Vision FSA Works Funding Your Dental and Vision FSA Consider the following before making your DVFSA election: The DVFSA allows you to put away part of your pay tax-free to pay for eligible dental and vision expenses. Your contributions are deducted from your pay before taxes are taken out, so less of your income is taxed. Once you decide how much you ll contribute for the Plan Year, you cannot change your election unless you have a qualifying event. (See page 3.) You can be reimbursed with tax-free dollars from your DVFSA to pay for eligible expenses. You will not pay taxes on your reimbursement. Only you can enroll in the DVFSA, but the Account may be used to reimburse your dependents eligible dental and vision expenses, as well as your own. You cannot deposit cash directly into your DVFSA, nor can you transfer money from your DVFSA to a Health Care FSA or a Dependent Day Care FSA (or vice versa). You should estimate your eligible expenses for the Plan Year carefully because only $500 of your unused DVFSA funds will roll over into the next Plan Year. You must re-enroll during the annual enrollment period for each Plan Year that you wish to participate in the DVFSA. How much you can contribute. You can contribute from $100 to $2,550 per Plan Year to the DVFSA. The amount you choose will be deducted from your pay and credited to your Account equally throughout the year. You have until March 31 of the following Plan Year to submit claims for eligible expenses you had the previous Plan Year. The tax advantages. The Internal Revenue Code allows L3 to take the money you direct to your DVFSA out of your pay before federal income and FICA taxes are deducted. That lowers your taxable income, so you pay less federal income, Social Security and, in most states, state income tax. What s more, any reimbursements you receive from your DVFSA are free from federal income tax as long as you have not taken (or do not intend to take) a tax deduction or credit for related expenses when you file your federal income tax return. how the DVFSA works 5

8 Issues to consider. Here s an overview of how having a DVFSA can affect your cash flow, your annual income tax return and your other benefits. Tax laws are complex and subject to change. You should consult with a tax advisor before signing up for a DVFSA, especially since you can t change your election mid-year once you ve made it, unless you have a qualifying event. The DVFSA lets you pay many of your otherwise unreimbursed dental and vision expenses with tax-free dollars. Since not every dental and vision expense you and your dependents have is eligible for reimbursement through your DVFSA, it s important to know which are reimbursable and which are not. $500 DVFSA carryover allowed. Up to $500 of your unused DVFSA funds will roll over into the next Plan Year. Any funds remaining in your DVFSA above $500 will be forfeited. The rollover amount is in addition to and does not affect the $2,550 maximum annual amount you are permitted to elect. You are not required to enroll in the DVFSA for the next Plan Year to use your carryover funds. Please note that carryover funds are available for immediate use but will not appear in your account until after the March 31 filing deadline for the prior Plan Year. Project your dental and vision expenses carefully. You cannot decide how much to contribute to your DVFSA as you go along; you must decide how much to deposit for the Plan Year before each Plan Year begins. Once you decide your contribution amount, you generally cannot change it during the Plan Year unless you have a qualifying event, as determined by the IRS. (See page 3.) Consider your tax strategy. Participating in a DVFSA can affect your tax strategy when you file your income tax return. Using a DVFSA limits your deductions for dental and vision expenses on your income tax return. Keep in mind that you can deduct unreimbursed dental and vision expenses from your federal income taxes only if they exceed the annual threshold established by the Internal Revenue Service. Transfers not permitted. If you elect to participate in a Dependent Day Care FSA as well as a DVFSA, you cannot transfer money from one Account to another. Consider your other pay-related benefits. While you are reducing your pay for tax purposes, your pay-related benefits (such as your L3-sponsored life and disability insurance) are not reduced. Your benefits from these plans will be based on your full salary. However, since your FICA taxes are based on your reduced pay, your future Social Security benefits may be slightly lower. Eligible Dental and Vision Expenses In general, expenses that are deductible dental and vision expenses for income tax purposes are reimbursable from your DVFSA. However, amounts paid for insurance premiums are not reimbursable under the DVFSA. Examples of eligible expenses that qualify for reimbursement under the DVFSA include: expenses that exceed dental and vision plan limits (e.g., more than the Dental Plan s limit on orthodontia care); and dental and vision care expenses not covered under any health plan (such as contact lens solution). Please see the Dental and Vision Flexible Spending Account Expenses Supplement for a list of dental and vision expenses for which you can receive reimbursement under the DVFSA. 6 how the DVFSA works

9 Reimbursements WageWorks offers three ways to use the money in your DVFSA to reimburse your eligible health care expenses: Use your WageWorks Card. You will receive a personalized WageWorks Card by mail once you enroll in the DVFSA. Whenever you make an eligible dental and vision purchase or pay a provider, you can use it just like a debit card. Simply swipe the card at dental and vision merchants that take Visa and the expense is paid directly from your Account so there s no need to pay the expense out-of-pocket, file a claim form and wait for reimbursement. In effect, you re reimbursing yourself immediately, on the spot. Please note that when using your WageWorks Card to pay for qualified expenses, you must do so at the time of service to ensure you are using your money in the current Plan Year. See page 8 for IRS limitations on where you can use your card. Pay online through Pay My Provider. You can pay bills directly from your DVFSA using the online Pay My Provider tool. Simply log in at select Request Pay My Provider and fill in the requested information. You will be required to submit a copy of your itemized receipt to WageWorks for the payment to be processed. With Pay My Provider, you can request a one-time payment or schedule a recurring payment for eligible services, such as orthodontia treatments. WageWorks will issue payment to your provider within two to three business days of your request being approved. The WageWorks Card is similar to an ordinary debit card and is accepted at any merchant that has been IIAS-certified. It draws directly from your Account, so there s no need to file claims or wait for reimbursement. File a claim with Pay Me Back. You can use Pay Me Back to get reimbursed for eligible expenses you pay for out of pocket. To do so, log in at select Health Care, and print out a Pay Me Back form. Fill in all the information requested on the form, attach your receipt(s), sign it and follow the instructions to fax or mail it to WageWorks. See Receipts, page 8, for more information about receipt requirements. You can also file Pay Me Back claims online by selecting the online claim form and filling in all the information requested. Scan your receipt(s) and other supporting documentation and upload them, or print the pre-populated online claim form, attach your receipt(s), sign it and follow the instructions to fax or mail it to WageWorks. The WageWorks Card Consider the following when using your WageWorks Card: Dental and vision only. You may use the WageWorks Card to pay for eligible dental and vision products and services only. The WageWorks Card cannot be used to reimburse dependent day care expenses under the Dependent Day Care Flexible Spending Account (DDCFSA). Activation required. You will receive a WageWorks Card automatically when you enroll in the DVFSA. To use it, you must activate it first. Follow the directions with your card to complete the activation process. how the DVFSA works 7

10 Don t discard your card. If you re a new DVFSA participant and are receiving a WageWorks Card for the first time, please note that your card will come in a plain, unmarked envelope (just as your credit cards do). Please don t discard it by mistake. Up to $500 of your unused DVFSA funds will roll over into the next Plan Year. You are not required to enroll in the DVFSA for the next Plan Year to use your carryover funds. In addition, please check the expiration date on your card before discarding it at the end of the Plan Year. If you elect to participate in the DVFSA in the following Plan Year and your card has not yet expired, your new elections will be loaded onto your current card; you will not receive a new card. Credit, not debit. When you swipe your WageWorks Card at the checkout, choose credit and then sign for the transaction or contact WageWorks to enable a PIN for use as a debit card option. Merchant limitations. The WageWorks Card may be used only at merchants that have been certified for the IRS-required Inventory Information Approval System (IIAS). All merchants (health care and non-health care) must be IIAS-certified in order for your card to work at those locations. If a merchant is not IIAS-certified, you will need to pay the eligible expense out of pocket and file a claim with Pay Me Back to be reimbursed. Visit for a complete list of IIAS-certified merchants. Save your receipts. Save your receipts or other documentation that describes the items you have paid for with your card, even if you used it at an IIAS-certified merchant. It may be requested by WageWorks or the IRS to verify you used your Account to pay for eligible products or services. You will be required to reimburse your Account if you cannot show the card was used for eligible dental and vision products or services. See Receipts, below, for more information about receipt requirements. Current expenses only. You may use the WageWorks Card only for expenses incurred while you are a DVFSA participant. IRS regulations prohibit use of the card to pay for eligible expenses received in the past or to be received in the future.* If you need more cards. If you lose your card, if it is stolen or if you want to order additional cards, contact WageWorks by phone, or log in to your account at to order cards for yourself and/or your dependents. Please note that you may order an additional card for each of your dependents. Receipts Keep the following in mind when using receipts or other documentation to file a Pay Me Back claim or verify eligible expenses: The receipt/documentation must contain: provider name (who provided the service or where the item was purchased); date of service (the date the service occurred or the item was purchased); service description (a detailed description of the service provided or product purchased; a bag tag will suffice for prescriptions); amount (the amount paid and/or the portion not reimbursed through your insurance carrier); and patient name (the person who received the service or who the item is for; not required for retail store purchases). * Please note that if you make upfront payments for orthodontia services, you may use your DVFSA to reimburse yourself for them, even if treatment will extend over more than one Plan Year. For more information, contact WageWorks. 8 how the DVFSA works

11 Include a receipt or other documentation for every expense. An Explanation of Benefits (EOB) is recommended if your insurance carrier covered part of the expense. Handwritten receipts must have provider information stamped on them. Cancelled or carbon copy checks and carbon copy receipts are not considered acceptable forms of documentation. Do not send original receipts. (Save these for the IRS.) If you attach multiple receipts, circle or check the dollar amount that is being claimed for each receipt. Do not use a highlighter to highlight the dollar amount. Account Statements Once you register on WageWorks website, you can print a Statement of Activity at any time. Be sure to update your WageWorks profile with your address to take advantage of automatic notifications regarding the status of your claims, direct deposits and card transactions. You have until March 31 of the following Plan Year to submit claims for eligible expenses you had the previous Plan Year. Check your Statement of Activity regularly to be sure all expenses are verified as eligible. If a charge has been identified as unverified, you must complete a Card Use Verification (CUV) form, which is available on the WageWorks website. In most cases, you will need to submit a receipt or Explanation of Benefits (EOB) from your insurance company. If you do not take any action to verify your unverified expenses within 75 days from the transaction date(s) and if the total unverified amount exceeds more than 50% of your remaining Account balance your WageWorks Card spending privileges will be suspended. WageWorks Website The WageWorks website is a convenient one-stop location for information about your account, including claim activity. When you register on WageWorks website, be sure to include your address in your profile to take advantage of automatic notifications regarding the status of your claims, direct deposits and card transactions. EZ Receipts Mobile Application The WageWorks EZ Receipts app allows you to check your current Account balance on-the-go. You also can submit claims and WageWorks Card receipts instantly. how the DVFSA works 9

12 This section contains important administrative information and facts about your rights as a participant in the Dental and Vision Flexible Spending Account. Other Information You Should Know This Summary Plan Description (SPD) describes the benefits that are offered under the Dental and Vision Flexible Spending Account (DVFSA) and the steps you must follow to take full advantage of the Account. The previous sections describe the most important features of the DVFSA; what you ll find here is important administrative information and facts about your rights as a participant in the DVFSA. This booklet and the Dental and Vision Flexible Spending Account Expenses Supplement comprise the SPD for the DVFSA. Together, they provide a complete description of the benefits offered under the DVFSA. The DVFSA is part of the L3 Technologies Group Health Plan for Active Participants ( Group Health Plan ). There is an official Plan document for the Group Health Plan. If the terms of this SPD conflict with the terms of the official Plan document for the Group Health Plan, the terms of the Group Health Plan document will govern. How Reimbursements Can Be Forfeited or Lost Reimbursements can be forfeited or lost under certain situations. Most of these circumstances are also described in other sections. However, reimbursement also may be forfeited or lost if: you or your legal representative does not properly file a reimbursement request within the time period required; your claim for reimbursement and appeals are denied and you do not start legal action to recover benefits under the Plan within two years of the date the initial claim for reimbursement was filed with WageWorks; or you do not furnish information required by WageWorks to complete or verify your claim. Your reimbursement also may be delayed or lost entirely if your current address is not on file with L3 or with WageWorks. You should also know that reimbursements are not payable for dental and vision expenses your dependents may incur after they become ineligible due to age or divorce. Right of Recovery If WageWorks mistakenly pays more for your claim than you re entitled to, it has the right to recover the excess. You must give WageWorks any documents or paperwork it asks for, and you must return any benefit payments that were made in error. 10 other information

13 Continued Participation During a Leave of Absence If you take a leave of absence, including one that qualifies under the federal Family and Medical Leave Act (FMLA), here s what happens to your participation in the DVFSA: Paid leaves of absence. If you are on a paid leave of absence, you may continue your participation in the DVFSA by making pre-tax contributions through payroll deduction. You may change (or revoke) your DVFSA election due to a qualifying event (as explained on page 3) if your change in election is due to and consistent with the circumstances of your leave. Unpaid leaves of absence. If you are on an unpaid leave of absence, you may continue your DVFSA participation by making after-tax contributions by personal check before or during your leave. You may change (or revoke) your DVFSA election due to a qualifying event (as explained on page 3) if your change in election is due to and consistent with the circumstances of your leave. When you return from your leave, contributions will resume at the level in effect prior to your leave, or you may increase contributions to make up for contributions you were unable to make during your leave. Contact the L3 Benefit Center for further information. DVFSA participation generally ends when your employment with L3 ends. If You Are Transferred If you are currently participating in a DVFSA and are transferred to another L3 business unit that offers a DVFSA, your Account balance will be transferred automatically to the new business unit, with your same contributions continued through the end of the Plan Year (unless you change your election because of a qualifying event). If you continue participating, your full Account balance would be available for reimbursement of expenses incurred anytime during the Plan Year. If the business unit to which you are transferred does not offer a DVFSA to its employees, your contributions will end and you can be reimbursed according to the same rules that apply as if you left L3 (see page 12), except that you are not eligible to elect COBRA when you transfer from one L3 business unit to another. If you are an employee of a business unit that does not offer a DVFSA and you are transferred to a business unit that offers a DVFSA, you have 60 days from the date of your transfer to enroll in the DVFSA. When Participation Ends Your participation in the DVFSA ends when any of the following happens: your employment terminates you are no longer an eligible employee you transfer to a business unit that does not offer a DVFSA you retire you die you experience a qualifying event that causes you to end your participation during annual enrollment you do not submit an enrollment form showing a DVFSA election for the following year L3 stops offering a DVFSA. other information 11

14 If you leave L3. If you leave L3 during the Plan Year, you have two choices for your DVFSA: You can take no action, in which case your DVFSA participation ends and you have until March 31 of the following Plan Year to submit claims for expenses you incurred through the later of your date of employment termination or the date your DVFSA participation ends, or If you leave L3 during the Plan Year, you can continue DVFSA participation by electing COBRA. You can continue your contributions on an after-tax basis by electing COBRA coverage (see below). In this case, you can still claim reimbursements from your DVFSA for expenses you incurred after your date of employment termination through the end of the Plan Year, provided you continue your DVFSA participation by making after-tax contributions. As provided by law, to continue your DVFSA coverage under COBRA, you must continue to contribute the amount you were contributing as an active employee, plus 2% for administrative expenses. If you leave L3 and do not submit claims for expenses by March 31 of the following Plan Year, any funds remaining in your DVFSA will be forfeited. If you re rehired. If you leave L3 and are rehired within 30 days of your termination, your election that was in effect before your termination will be reinstated; you cannot make a new election. If you are rehired more than 30 days after your termination, you may make a new election as a new hire; your prior election will not be reinstated automatically. Extended Participation Extended participation is provided through the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA). Under the following circumstances, you and your eligible dependents can still participate in the DVFSA even after your participation otherwise would normally end: your employment terminates for any reason other than gross misconduct you become ineligible due to reduced work hours you retire you divorce or legally separate you die. Continuing Your Participation Under COBRA Even if you re no longer eligible, you (and in some cases, your dependents) can still contribute to the DVFSA for the remainder of the current Plan Year, on an after-tax basis. If you elect to continue participating in the DVFSA under COBRA, the same rules that govern active employees apply. However, please note that the WageWorks Card is available to active participants only. If you elect to continue participating in the DVFSA under COBRA, you will not receive a WageWorks Card; you must use Pay My Provider or Pay Me Back to reimburse eligible health care expenses. Please note: The explanation of COBRA in this section is not intended to give you or your enrolled dependents any rights to COBRA that are not otherwise required by law. 12 other information

15 The following chart shows the qualifying events for COBRA continuation coverage. If You Lose Coverage Because Your employment terminates for reasons other than gross misconduct You become ineligible due to reduced work hours You die You divorce or legally separate Your dependent children no longer qualify as dependents You become entitled to Medicare These People Would Be Eligible to Continue Participating Through Year-end You and your eligible dependents You and your eligible dependents Your dependents Your dependents Your dependent children Your dependents To continue your DVFSA coverage under COBRA, you must pay 102% of the amount you were contributing as an active employee. Please note that entitlement to Medicare means you are eligible for and enrolled in Medicare. Please note the following about COBRA continuation coverage: Notification. In general, the L3 Benefit Center is responsible for notifying ADP, the COBRA Administrator, if you or your dependents become eligible for COBRA continuation coverage because of your death, termination of employment, reduction in hours of employment or Medicare entitlement. This notification must be made within 30 days after the qualifying event. Under the law, you or your covered dependent is responsible for notifying ADP in writing of your divorce, your legal separation or a child s loss of dependent status. The notification must be made within 60 days after the qualifying event (or the date on which coverage would end because of the qualifying event, if later). You must provide written notice of the qualifying event to ADP, at the address shown on page 14, and should include the following: Date written notice is submitted (month/day/year) Employee s name Employee s Social Security number/id number Reason for loss of coverage Loss of coverage date (month/day/year). If you do not notify ADP in writing within the applicable 60-day period or you do not follow the procedures prescribed for notifying ADP, you will lose your right to elect COBRA continuation coverage. other information 13

16 COBRA enrollment. Within 14 days after ADP is notified that a qualifying event has occurred, they will send you an election form and notice of your right to elect COBRA. (If you do not receive this notification, please contact the L3 Benefit Center.) To receive COBRA continuation coverage, you must elect it by returning a completed COBRA election form to ADP within 60 days after the date of the notice of your right to elect COBRA (or within 60 days after the date you would lose coverage, if later). To protect your family s rights to COBRA coverage, you should keep the L3 Benefit Center informed of any changes of address for you and your family members. If you make this election and pay the required contribution within the required deadlines, COBRA coverage will become effective on the day after DVFSA participation would otherwise end. If you do not elect COBRA, your participation in the DVFSA will end in accordance with the provisions listed under When Participation Ends, page 11. Cost of coverage. As provided by law, to continue your DVFSA coverage under COBRA, you must continue to contribute the amount you were contributing as an active employee, plus 2% for administrative expenses. Your payments will be made with after-tax dollars instead of tax-free dollars. Time for payment. You must send the initial payment for COBRA coverage to ADP within 45 days of the date you first notify ADP that you choose COBRA coverage. (A U.S. Post Office postmark will serve as proof of the date you sent your payment.) You must submit payment to cover the number of months from the date of regular coverage termination to the time of payment (or to the time you wish to have COBRA coverage end). After your initial payment, all payments are due on the first of the month. You have a 30-day grace period from the due date to pay your contribution. If you fail to pay by the end of the grace period, your coverage will end as of the last day of the last fully paid period. Once coverage ends, it cannot be reinstated. To avoid cancellation, you must send your payment on or before the last day of the grace period. (Again, a U.S. Post Office postmark will serve as proof.) Please note that if your check is returned unpaid from the bank for any reason, that may prevent your COBRA premiums from being paid on time and may result in cancellation of coverage. Losing extended participation. Continued contributions will end sooner than the end of the current Plan Year if L3 no longer offers the DVFSA to eligible employees or if you do not make your contributions on time. COBRA Administrator. The COBRA Administrator for the DVFSA is: ADP Continuation Services P.O. Box Louisville, KY Phone: All notices to ADP must be in writing and sent to ADP at this address. Any notice that you send must be postmarked by the U.S. Post Office no later than the last day of the required notice period. The notice must state the name of the Plan under which you request COBRA continuation coverage, your name and address, the qualifying event and the date it happened. If the qualifying event is a divorce or legal separation, you must include a copy of the divorce decree or legal documentation of the legal separation. Other applicable documentation (such as birth certificates or adoption papers) may also be required. Unavailability of coverage. If you notified ADP in writing of your divorce, your legal separation or a child s loss of dependent status, but you are not entitled to COBRA, ADP will send you a written notice stating the reason why you are not eligible for COBRA. This notice will be provided within the same time frame the Plan follows for election notices. 14 other information

17 If you have questions. If you have any questions about your COBRA continuation coverage, contact ADP or the nearest office of the Employee Benefits Security Administration (EBSA), U.S. Department of Labor, listed in your telephone directory. Addresses and phone numbers of EBSA offices are available at To protect your family s rights to COBRA coverage, keep the L3 Benefit Center informed of any changes of address for you and your family members. Continued Coverage During a Military Leave of Absence If you are on a military leave of absence, your and your dependents coverage under the Plan will continue in accordance with the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). You may request a copy of L3 s USERRA policy from your Human Resources Department. Ownership of Benefits The benefits described here are exclusively for DVFSA participants. The coverage and any benefits under the Plan, including the right to receive payments under the Plan, are not assignable by any participant or dependent or anyone else without the written consent of the Plan, except as required by a Qualified Medical Child Support Order (QMCSO) or a properly completed National Medical Child Support Notice (NMCSN), as described on page 4. If there is a conflict between the information you receive from WageWorks, the L3 Benefit Center or L3 s Human Resources Department and the terms of the Group Health Plan document, the terms of the Group Health Plan document will prevail. Plan Administration L3 Technologies, Inc., as the Plan Administrator, is responsible for the administration of the Plan. The L3 Benefit Center and L3 s Human Resources Department act on behalf of the Plan Administrator and are responsible for routine Plan administration and answering questions about eligibility and coverage. The Plan Administrator has the full and complete discretionary authority and responsibility to administer the Plan and may delegate any or all of its authority and responsibility to any individuals or entities. The Plan Administrator has delegated to WageWorks the discretionary authority and responsibility to determine claims for benefits under the DVFSA. WageWorks has the full and complete discretionary authority and responsibility to decide whether you are entitled to benefits under the Plan. However, if WageWorks denies your appeal, you may request that the Health Claims Appeals Committee consider your claim. If you request review by the Health Claims Appeals Committee, its decision will be final and binding on all persons, to the full extent permitted by law. If you do not request review by the Health Claims Appeals Committee, WageWorks decision will be final and binding on all persons, to the full extent permitted by law. The Health Claims Appeals Committee can be reached at the following address and phone number: L3 Technologies, Inc. c/o Chairman, Health Claims Appeals Committee 600 Third Avenue New York, NY other information 15

18 You may have to file a claim with WageWorks to receive benefits from your DVFSA. See page 7 for more information about DVFSA reimbursement options. If conflicts arise. The L3 Benefit Center, the L3 Human Resources Department and WageWorks will always try to give you the most complete and accurate information regarding the DVFSA. If there is a conflict between the information you receive from WageWorks, the L3 Benefit Center or L3 s Human Resources Department and the terms of this Summary Plan Description, the terms of this Summary Plan Description will prevail. If there is a conflict between the information in this Summary Plan Description and the Group Health Plan document, the terms of the Group Health Plan document will prevail. Compliance with Federal Law As a group health plan, the DVFSA is governed by the Employee Retirement Income Security Act of 1974, as amended (ERISA), the Internal Revenue Code (the Code ) and certain other federal laws. In general, ERISA preempts state law that relates to group health plans subject to ERISA. The DVFSA will be construed and administered in accordance with ERISA, the Code and other applicable federal law, in all respects. Benefit Review Procedure ERISA requires that the plans it covers include certain procedures for paying benefits and for reviewing benefit claims that are denied. If you are not receiving DVFSA benefits that you think you have a right to receive, you may file a claims appeal with the Health Claims Appeals Committee. Claims Procedures To receive the benefits for which you may be eligible under the Plan, you or your beneficiary may first be required to file a claim with WageWorks. Below is a summary of how the claims for benefits will be handled. Initial Claim Approval or Denial Action WageWorks will notify you of claim approval or denial WageWorks will notify you if your claim didn t include enough information You must provide more information to WageWorks, if necessary Timing Within 30 days after claim is received Within 45 days after claim is received At least 45 days from the date you are notified 16 other information

19 Timing of Appeal Decision Action You can appeal to WageWorks, in writing WageWorks will notify you about the appeal decision WageWorks automatically will file a second appeal on your behalf with the WageWorks Claims Appeal Board WageWorks will notify you about the second appeal decision You can make a third appeal to the Health Claims Appeals Committee, in writing The Health Claims Appeals Committee will notify you of its final decision, in writing Timing Within 180 days after the date you were notified Within 30 days after an appeal is received Automatically filed for you when your first appeal is denied Within 30 days after a second appeal is received Within 60 days after a denial is received from WageWorks As soon as administratively feasible If you receive notice that your claim has been denied, either in full or in part, you have 180 days after receipt of the denial to file an appeal in writing with WageWorks. Timing of claim approval or denial. You will be notified of the denial of your claim not later than 30 days after your claim is received. WageWorks may extend this 30-day period to 60 days if it needs more time to review your claim. If a longer period of time is required, you will be notified within the initial 30-day period of the reasons for the extension and the date by which a decision will be made. If your claim did not include enough information to make a decision, you will be notified, and you will have at least 45 days from receipt of the notice to provide the specified information. Contents of claim denial notice. If you receive notice that your claim has been denied, either in full or in part, the claim denial notice will include: the specific reasons for the denial reference to the specific Plan provisions on which the denial is based a description of any additional material or information WageWorks requires and an explanation of why it is necessary a description of the Plan s appeal procedures and the time limits applicable to such procedures, including a statement that you have the right to bring a civil action under Section 502(a) of ERISA but only after you have followed the Plan s claims and appeals procedures if an internal rule, guideline or protocol was relied on in making the adverse determination, either a copy of the specific rule, guideline or protocol, or a statement that it will be provided on request, free of charge. Appeal to WageWorks. You have 180 days after receipt of the denial to file an appeal in writing with WageWorks. Be sure to explain why you think you are entitled to benefits, and attach any documentation that will support your claim. Approval or denial of appeal. WageWorks will send you its decision within 30 days. There are additional levels of appeal, which are described below. If WageWorks denies your appeal, the denial notice will include: the specific reasons for the denial reference to the specific Plan provisions on which the denial is based other information 17

20 a statement that you have the right to bring a civil action under Section 502(a) of ERISA after you have followed the Plan s claims procedures and received an adverse decision on your second appeal if an internal rule, guideline or protocol was relied on in making the adverse determination, either a copy of the specific rule, guideline or protocol, or a statement that it will be provided on request, free of charge. L3 s health plans, including the DVFSA, are required to protect the confidentiality of your private health information. Voluntary request for review by the Health Claims Appeals Committee. If WageWorks denies your appeal, you may request that the Health Claims Appeals Committee review your claim. You have 60 days from receiving WageWorks denial to send a written request to the Health Claims Appeals Committee. The Health Claims Appeals Committee will send you its final written decision as soon as administratively feasible. Authorized representative. If you appeal an adverse decision to WageWorks or the Health Claims Appeals Committee, you may have an authorized person represent you (at your own expense), and you have the right to examine the relevant portions of any documents that WageWorks referred to in its review. Legal action. You must follow these claims and appeals procedures completely, which require an appeal to WageWorks, before you can take legal action. After you receive the final decision from WageWorks, you have the choice to request that the Health Claims Appeals Committee review your claim, or you can take legal action. Any legal action for benefits under the Plan must be started within two years of the date that an initial claim for benefits was filed with WageWorks. Filing an appeal with the Health Claims Appeals Committee is voluntary. Your decision whether to file a voluntary appeal with the Health Claims Appeals Committee will have no effect on your rights to any other benefits under the Plan. Also, if you decide to file an appeal with the Health Claims Appeals Committee and the Health Claims Appeals Committee denies your appeal, you will still have the right to file a civil action in court. Effects of appeal decision. Decisions on appeal will be made at the sole discretion of WageWorks and the Health Claims Appeals Committee, in their respective roles, and will be final and binding on all persons. Confidentiality of Health Care Information L3 s health care plans, including the Dental and Vision Flexible Spending Account, are required to protect the confidentiality of your private health information under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the rules issued by the U.S. Department of Health and Human Services. The official HIPAA Privacy Notice, which is distributed to all participants, is summarized here. The intent of HIPAA is to make sure that private health information that identifies (or could be used to identify) you is kept private. This individually identifiable health information is known as protected health information (PHI). The Plan will not use or disclose your PHI without your written authorization except as necessary for treatment, payment, Plan operations and Plan administration, or as permitted or required by law. In particular, the Plan will not, without your written authorization, use or disclose PHI for employment-related actions and decisions or in connection with benefits under another employee benefit plan. 18 other information