Op.En. O P E N ENROLLMENT. January 4 to February 3. Part-Time Associates. Now available at mykmxhr.com

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1 Op.En. O P E N ENROLLMENT 2011 Part-Time Associates January 4 to February 3 Now available at mykmxhr.com

2 Open Enrollment is here! From January 4 to February 3, you have the opportunity to make changes to your benefits during our annual Benefits Open Enrollment. Like last year, the Open Enrollment Handbook is available online at mykmxhr.com. It contains important information about Open Enrollment and changes to our benefit plans, designed to guide you through the process so you can make the best decisions for you and your family. Make your elections online by February 3. Log on to mykmxhr.com to view your Benefit Summary. Click on Open Enrollment to review and update your current benefit plan elections. If you re enrolled in the Health Care Flexible Spending Account Plan or the Day Care Savings Account Program, you must reenroll to continue participation. If you have any questions, please call (888) , or visit the CarMax World Benefits Tab. Don t forget to make your Benefits changes by February 3rd 2

3 Now available at mykmxhr.com Contents page What To Do...4 Open Enrollment: Benefits Explained Flexible Spending Accounts... 5 Who to Contact... 7 Enrollment Terms and Conditions... 8 Appendix

4 WHAT TO DO Log on to the mykmxhr.com website. Your User ID is your Employee ID number, printed on your paycheck. If this is your first log in, your password is your date of birth followed by the last four digits of your Social Security number (MMDDYYYY####). Review your current enrollment by clicking Benefits Summary on the left side of the screen. Your participation in the Health Care Flexible Spending Account Plan and/ or the Day Care Savings Account Program will not automatically continue from year to year. You must reenroll if you wish to participate after March 1. Revise your elections online by clicking on Open Enrollment on the left side of the screen and then making your new elections on the appropriate page. Remember to click on the Submit button at the end to save your elections! Print a copy of the online Confirmation Statement for your records. If you do not want to enroll in the Health Care Flexible Spending Account Plan or the Day Care Savings Account Program, there is no need to complete the online process. Remember: The deadline for Open Enrollment elections is February 3, For most Associates, this is your only opportunity to enroll in the Health Care Flexible Spending Account Plan and/ or the Day Care Savings Account Program until the next Open Enrollment period in 2012, unless you experience a Change in Status Event (as defined in each plan). Your Deadline for Open Enrollment is February 3 Your enrollment elections must be submitted electronically no later than midnight on February 3, 2011, or by calling the CarMax Benefits Service Center no later than 6 p.m. Eastern Time on February 3, If you are enrolling in the Health Care Flexible Spending Account Plan and/or the Day Care Savings Account Program, please complete your online enrollment as soon as possible. Print a copy of your Open Enrollment Confirmation Statement for your records. You will receive a second Confirmation Statement at your home address shortly after you make your elections online. Please check the Confirmation Statements for accuracy. Remember! If you are currently participating in the Health Care Flexible Spending Account Plan (HCFSA) and/or the Day Care Savings Account (DCSA) Program, claims for expenses incurred between March 1, 2010, and February 28, 2011, must be submitted for reimbursement no later than May 29, See page 5 for more information. After March 1 Review your paycheck benefits deductions for accuracy. The first paycheck with the changes in your deductions will be the paycheck you receive on March 11 or March 25, If you notice a discrepancy, call the CarMax Benefits Service Center at (888) , option 0. If you wish to participate in the Health Care Flexible Spending Account Plan or the Day Care Savings Account Program after March 1, 2011: You must re-enroll in these programs during this Open Enrollment period. If you do not enroll, your coverage will default to waive, which means you are not participating in the plans. Coverage does not automatically continue from year to year. 4

5 FLEXIBLE SPENDING ACCOUNTS A Great Way to Save Money on Health and Day Care Expenses! With the Health Care Flexible Spending Account (HCFSA) Plan and Day Care Savings Account (DCSA) Program, you set aside money through before-tax payroll deductions to pay for qualified health and/or day care expenses. This lowers your taxable income, so you pay less in taxes! As you incur health or day care expenses throughout the Plan Year (March 1 through February 28), you can request reimbursements for those eligible expenses incurred. NOTE: The elections you make for a Health Care Flexible Spending Account are separate from the elections you make for a Day Care Savings Account. The accounts are not connected or related in any way. Detailed plan information is available on the CarMax World Benefits Tab or in the HR Resource Library at mykmxhr.com. Qualified Expenses for the HCFSA A variety of health care expenses are eligible for reimbursement through your HCFSA. Here are a few of the items covered for you and any qualified dependent: Annual Medical, Dental, and Vision Plan deductibles, copayments, and coinsurance payments Prescription medication copayments Medically necessary medical, dental, and vision expenses not reimbursed by any plan Un-reimbursed orthodontic expenses (upon completion of work) Prescription eyeglasses, contacts (and solutions), LASIK surgery, and eye exams not reimbursed by any plan Hearing exams and hearing aids Infertility treatments How to Enroll in the HCFSA or DCSA Enrollment is simple! Carefully estimate your health care expenses for the period March 1, 2011, through February 28, 2012 (the Plan Year). Use the applicable calculator worksheet on the CarMax World Benefits Tab to help you plan your spending for the year. Carefully estimate your day care expenses for the period March 1, 2011, through February 28, 2012 (the Plan Year). Use the applicable calculator worksheet on the CarMax World Benefits Tab to help you plan your spending for the year. Then enroll online at mykmxhr.com or call the CarMax Benefits Service Center at (888) You may contribute from $120 to $3,000 per year for eligible out-of-pocket health care expenses to your Health Care Flexible Spending Account; up to $5,000 may be contributed for eligible out-of-pocket day care expenses to your Day Care Savings Account. The amount(s) you elect to contribute will be divided equally between your paychecks for the Plan Year. The money you contribute to this account is not subject to federal, Social Security, Medicare, and in most cases, state and local taxes. 5

6 Health Care Flexible Spending Account Plan Change Under the Patient Protection and Affordable Care Act enacted in March 2010, you are no longer eligible to receive reimbursement for over-the-counter medications from the HCFSA. Beginning January 1, 2011, only those medications prescribed by a doctor will be eligible for reimbursement from the Plan. Expenses for over-thecounter medications incurred before January 1, 2011, will still be eligible for reimbursement. Grace Period The HCFSA includes a grace period of 2-1/2 months following the end of the Plan Year. This means that expenses incurred before May 15 will be eligible for reimbursement from the Plan based on your prior Plan Year election. Those claims must be submitted to ADP Flex Direct by May 29 following the end of the Plan Year. Qualified Expenses for the DCSA A qualified dependent can be a child under age 13 or a disabled dependent 13 or older, including a spouse or elderly parent, who needs supervised care and relies on you for support. Child Care: Day care provider (inside or outside your home) for eligible children under 13 Day care center for eligible children under 13 Before- and after-school programs Nursery school (before first grade) Sick childcare Summer day camp (does not include overnight camp) Adult Care: Adult day care center Elder care (inside or outside your home) Senior day care Dependent Care Provider Identification Your day care provider must claim the income received for services rendered for tax purposes. When you file reimbursement claims, you will be required to supply the name, address, and Social Security or tax identification number for the individual or organization providing day care. This information is also necessary to file an IRS Form 2441 with your federal income tax return. If you are currently participating in the Day Care Savings Account Program, claims for expenses incurred between March 1, 2010, and February 28, 2011, must be submitted for reimbursement no later than May 29, Other Important Information about Flexible Spending Accounts Federal regulations mandate that any amount remaining in your HCFSA or DCSA at the end of the Plan Year must be forfeited. Because of this use-itor-lose-it feature, it is important that you carefully estimate your out-of-pocket health care expenses before making an election to participate in this plan. Please keep in mind that enrollment in the HCFSA or DCSA is limited to Open Enrollment periods or when you experience a Change in Status Event. If you do not enroll during Open Enrollment, you will not be able to enroll during the year unless you experience a Change in Status Event as defined by federal regulations. In the same way, if you enroll during Open Enrollment, you cannot cancel participation during the year unless you experience a Change in Status Event. IRS Limitations The IRS regulates flexible spending accounts, including the HCFSA and DCSA, to ensure that highly compensated employees do not derive substantially greater benefits than non-highly compensated employees. Participants classified as highly compensated may be subject to reduced or suspended contributions at any time to ensure compliance with these regulations. We will let you know if you fit this category and if limits are required. 6

7 WHO TO CONTACT If you need more information or copies of the Open Enrollment materials, please contact the CarMax Benefits Service Center at (888) or log on to the CarMax World Benefits Tab. ADP Flexible Spending Account Service Center For HCFSA and DCSA Contact CarMax Benefits Service Center at (888) , option 6. Online: Claim forms for your HCFSA and DCSA may be obtained at flexdirect.adp.com. 7

8 ENROLLMENT TERMS AND CONDITIONS My completion of online enrollment on the mykmxhr.com website or verbal enrollment through the CarMax Benefits Service Center indicates my understanding and acceptance of each of the Terms and Conditions as follows: I understand that my eligibility for participation in the CarMax, Inc. Associate benefit plans and my right to benefits under such plans are governed solely by the terms of such plans. I have reviewed the appropriate material included in this brochure and in the plan documents available on the CarMax World Benefits Tab and the mykmxhr.com HR Resource Library and understand any plan changes or provisions described. I understand that I must refer to the appropriate Summary Plan Description, plan document or Policy if I need more information concerning the eligibility, services, benefits, limitations, and conditions of each program. I understand that in the event of any conflict between the terms of a Plan document or Policy and any other written or oral statement, including this document and any Summary Plan Description, the terms of the Plan document or Policy will prevail. I understand that if I am declining enrollment for myself or my dependents (including my spouse) because of other coverage, I may in the future be able to enroll myself or my dependents if I or my dependents lose eligibility for that other coverage (or the employer stops contributing toward my or my dependents other coverage). However, I must request enrollment and provide documentation of the loss of that coverage as required by the Plan(s). In addition, if I have a new dependent as a result of marriage, birth, adoption, or placement for adoption, I may be able to enroll myself as well as my dependents, provided that I request enrollment as required by the Plan(s) (subject to IRS guidelines). I understand that I will have at least 30 days to make such elections following the loss of other coverage or addition of a new dependent. The effective date of any coverage added or removed is subject to the terms of the Plan as defined in the Summary Plan Descriptions for each Plan. I agree that I am responsible for reviewing the Plan rules and requirements and ensuring I understand them. I understand that I may be required to provide documentation of the event in order for coverage to become effective I understand that I cannot change my election to receive or decline coverage under the CarMax, Inc. Day Care Savings Program (the Day Care Savings Program) and/or the CarMax, Inc. Health Care Flexible Spending Account Plan (the Health Care Flexible Spending Account Plan) until the next annual Open Enrollment period, unless I experience a Change in Status Event or other event permitting a mid-year election change as described in the appropriate Summary Plan Description. My deductions/contributions for the Day Care Savings Account and/or Health Care Flexible Spending Account Plans will be made on a pre-tax basis except any portion of the cost for coverage related to my Domestic Partner (if applicable). I authorize my employer to make all required payroll deductions for the benefits I have selected. Where applicable, I agree to assist in the recovery of any benefits paid by these programs which were also paid by a source other than one of these programs to me and/or my dependent(s), including payments made as a result of claims or suits against a third party. I understand that the CarMax, Inc. employee benefit plans and programs reserve the right to reimbursement for benefits paid under the plan if I recover monies from a third party, whether by judgment, settlement, or otherwise, on account of an injury or illness covered by such plan. I understand that coverage/enrollment for me and/or my dependents may be terminated for falsification, fraud, or deception by representation or omission in requesting benefits under these plans, misrepresenting eligibility under these plans, or knowingly permitting such falsification, fraud, deception, or misrepresentation by another. I understand that by enrolling dependents in the plans, I am affirmatively representing that I have reviewed the plans eligibility requirements and that each of the dependents I am enrolling is eligible for coverage. By enrolling my dependents in the plans, I am also affirmatively representing that I will advise the plans immediately of any change in circumstances affecting the eligibility of any of those dependents. I understand that failure to advise the plans of such a change will be deemed a fraud or 8

9 8. 9. an intentional misrepresentation that could result in termination or rescission of coverage. I understand that acts, practices, or omissions that constitute fraud, as well as intentional misrepresentations of material fact, are prohibited by the plans. I understand that the plans may terminate or rescind coverage for me and my dependents as a result of such fraud or intentional misrepresentations. I understand that to receive a benefit coverage option I must elect coverage during the designated eligibility or Open Enrollment period as indicated in the appropriate Summary Plan Description and the Open Enrollment materials. I also may be able to elect to enroll in a coverage option if I experience a Change in Status Event (or other event permitting a midyear election change) as described in the appropriate Summary Plan Description or Policy. 10. I also authorize the use of my or my dependents Social Security numbers for the purpose of identification in relation to these plans. COVERAGE DISCLAIMER: In the event the relevant facts about your enrollment are inaccurate or if administrative errors occur, an adjustment will be made. Additional contributions from you or a refund to you may be required to correct the situation. In any event, the terms of the plan documents and/or Company policies will prevail. The benefits described in any communication do not constitute or imply employment contracts or any other contractual obligations between the Company and its Associates and/or other individuals eligible to participate in these plans. CarMax, Inc. retains the right to modify or terminate any plan, program, policy and/or benefits without the consent of or notice to Associates and/or other individuals eligible to participate in these plans, to the extent permitted by applicable law. The Company maintains these plans by choice, not obligation. 9

10 Op.En. page What is a Change in Status Event?...10 Flexible Spending Account Expense Planner Worksheet con tent k n'tent What is a Change in Status Event? Because the contributions for the Flexible Spending Account Plans are withheld from your pay on a pre-tax basis, the IRS limits allowable changes in your elected coverage. Special enrollment is allowed only if you experience a Change in Status Event as defined by the IRS. Change in Status Events are limited to the following: Marriage Divorce or Legal Separation (as defined by state law) Birth, Adoption, or Placement for Adoption Death of a Dependent Change in Dependent Child Status (see Dependent Eligibility Rules) A Loss of Coverage - May be due to termination of employment, status change, divorce, death, or Open Enrollment A Gain of Coverage - If your spouse or domestic partner becomes eligible for coverage due to new employment, a status change, or Open Enrollment Gain of a Domestic Partnership Termination of Domestic Partnership In all cases, the change in coverage must be consistent with the Change in Status Event. This summary is for informational purposes only and does not all include all provisions associated with Change in Status events. For more information, please refer to the Summary Plan Description for each plan if you experience one of these events. 10

11 Health Care Spending Account Expense Planner Worksheet This worksheet is a way to help you estimate your eligible health care expenses for the Plan Year (March 1 through February 28/29) so that you may contribute a reasonable amount to your Health Care FSA account. Please be aware that this is a Use it or Lose it account, so any money not used by the end of the Plan Year will be forfeited. Once you have determined the total of your eligible expenses, enter that amount into the Health Care FSA Enrollment Form on mykmxhr.com to receive your per paycheck calculation. The maximum that you may contribute to your Health Care FSA is $3,000 per Plan Year. Medical, Dental, and Vision Eligible Expenses Eligible Expenses Estimated Annual Expense Plan Deductibles Co-Payments for office visits (Medical & Vision) Prescription Drug co-payments Dental Care Vision Care *Other Total estimated expenses for the plan year: * For a full list of eligible expenses, visit flexdirect.adp.com. Expenses eligible for reimbursement include, but are not limited to: Out of Pocket Medical, Dental, and Vision Expenses; including copayments, deductibles & exams Prescriptions Braille books and magazines Certain special schooling for disabled persons Cost for smoking cessation programs and prescribed smoking cessation drugs Detoxification, drug abuse or other treatment centers Hearing exams and hearing aids Infertility treatments Orthopedic shoes, only to the extent that costs exceed regular shoes Radial Keratotomy Specialized equipment for disabled persons Sterilization surgery Wheelchairs Wigs (where necessary for individual who loses hair due to disease) Effective January 1, 2011, over-the-counter medications are not eligible for reimbursement from your Health Care Flexible Spending Account. Only those medications which are prescribed by a doctor will be allowed expenses from the plan. 11

12 Day Care Savings Account Expense Planner Worksheet This worksheet is a way to help you estimate your eligible dependent care expenses for the Plan Year (March 1 through February 28/29) so that you may contribute a reasonable amount to your Day Care FSA account. Please be aware that this is a Use it or Lose it account, so any money not used by the end of the Plan Year will be forfeited. Once you have determined the total of your eligible expenses, enter that amount into the Day Care FSA Enrollment Form on mykmxhr.com to receive your per paycheck calculation. The maximum that you may contribute to your Day Care FSA is $5,000 per Plan Year. Dependent Care Eligible Expenses Eligible Expenses* Estimated Annual Expense Total estimated expenses for the plan year: * For a full list of eligible expenses, visit flexdirect.adp.com. Expenses eligible for reimbursement include, but are not limited to: Child Care: Day care provider (inside or outside your home) for eligible children under 13 Day care center for eligible children under 13 Before- and after-school programs Nursery school (before first grade) Sick childcare Summer day camp (does not include overnight camp) Adult Care: Adult day care center Elder care (inside or outside your home) Senior day care Note: A qualified dependent can be a child under age 13 or a disabled dependent 13 or older, including a spouse or elderly parent, who needs supervised care and relies on you for support. 12 Copyright 2010 CarMax Business Services, LLC