COSTCO EMPLOYEE BENEFIT PROGRAM ANNUAL OPEN ENROLLMENT 2010-2011 Welcome to the 2010-2011 Annual Open Enrollment for the Costco Benefits Program. This guide provides you with the information necessary for you to make your benefit choices for 2010-2011. The selections that you make will become effective on September 1, 2010. Annual Open Enrollment begins on July 1 st and ends on July 31 st. YOU DO NOT NEED TO TAKE ANY ACTION IF YOU ARE NOT MAKING ANY CHANGES FOR THE 2010-2011 PLAN YEAR During Annual Open Enrollment you can make these changes: Medical and Dental: Add or drop family members or decline coverage all together. Supplemental Life and Supplemental AD&D Insurance: Add, drop, increase or decrease coverage for you and your family members. You may need additional information and forms to complete Annual Open Enrollment. These forms are available on www.costcobenefits.com or from your location s payroll clerk or benefits representative. These include: Decline Coverage Acknowledgement Form Declaration of Domestic Partnership Puerto Rico Declaration of Legal Guardianship Beneficiary Designation Form Declaration of Eligibility for Foster Child Supplemental Life and AD&D Application Puerto Rico Declaration of Eligibility for Stepchild You can find answers to any questions you may have regarding the benefit plans and enrollment rules by contacting your payroll clerk or Benefits representative. You can also contact Costco s Benefit Department at 1-800-284-4882 or by e-mail to benefits@costco.com.
TIPS FOR SUCCESSFUL ANNUAL OPEN ENROLLMENT.. Tip #1: How to Make Changes to Your Benefits We are pleased to announce that you now have the option of making your Annual Open Enrollment changes electronically or by telephone. The enclosed Benefit Enrollment Worksheet has all of the instructions you need to use these options for making your 2010/2011 changes. While we are offering these alternate methods for this Open Enrollment, you can still make changes on paper forms. Triple S Enrollment Form Use this form to add or delete eligible family members. Supplemental Life and Accidental Death and Dismemberment Enrollment Form Use this form to add, drop, increase or decrease your Supplemental Life Insurance and Supplemental AD&D Insurance. If you chose to use paper forms for your enrollment elections, you must submit those forms to the Benefits Department no later than July 31, 2010. Your payroll clerk or your benefits representative may submit your documents directly to the Benefit Department in one of the following ways: by fax to 425/427-3069 by intercompany mail to Costco Benefits Department #99 Attn: Puerto Rico Open Enrollment by U.S. Mail to P.O. Box 34195, Seattle, WA 98024-1195 Attn: Benefits Department Puerto Rico Open Enrollment Tip # 2: Submitting Supporting Documentation You may be required to submit additional forms and supporting documentation before your elections can be processed and go into effect. All additional forms and documents must be received in the Benefit Department no later than July 31, 2010. Your payroll clerk or your benefits representative may submit your documents directly to the Benefit Department in one of the following ways: by fax to 425/427-3069 by intercompany mail to Costco Benefits Department #99 Attn: Puerto Rico Open Enrollment by U.S. Mail to P.O. Box 34195, Seattle, WA 98024-1195 Attn: Benefits Department Puerto Rico Open Enrollment 2
Tip #3: Adding Family Members To add a family member you can access the Enrollment Website, call the Enrollment Center or complete a Triple S Enrollment Form. You must also provide supporting documentation to prove that this family member is eligible for coverage under Costco s Benefits Program. This includes Government certified marriage certificate, Government certified birth certificates, proof of full-time student status, Declaration of Domestic Partnership, Declaration of Legal Guardianship, Declaration of Plan Eligibility for Stepchild and Declaration of Eligibility for Foster Child. Your completed Triple S Enrollment Form and supporting documentation must be received by the Costco Benefits Department no later than July 31, 2010. If your supporting documentation is received by the required deadline, coverage for your family member will be effective September 1, 2010. Tip #4: Enrolling in/or Increasing Supplemental Life Insurance To add, drop, increase or decrease Supplemental Life Insurance coverage for yourself or family members you must complete a Supplemental Life and AD&D Enrollment Form (Puerto Rico). If you are already enrolled in Supplemental Life Insurance you may increase your coverage by $20,000 and $10,000 for your spouse without completing the Evidence of Insurability forms. The insurance carrier must approve any additional amount you elect over $20,000 for yourself or $10,000 for your spouse or any amount you elect over $300,000 for yourself or $150,000 for your spouse before coverage will become effective. If you were eligible for Supplemental Life Insurance before this Annual Open Enrollment and are enrolling for the first time, the insurance carrier must approve any amount you elect before the coverage will become effective. NOTE: If you are on an approved Leave of Absence your coverage changes will not take effect until you have returned to active employment and, if required, Costco receives approval from the Insurance Carrier. If Evidence of Insurability is required, Unum will mail the Evidence of Insurability forms along with a letter to you at your home address in August 2010. The letter will include instructions and due dates for completing the Evidence of Insurability forms. Forms that are not received by the deadline will not be processed and you will be required to reapply during the next Annual Open Enrollment. To check the status of your Supplemental Life Insurance election contact Unum at 1-877-403-9348 Supplemental Life Insurance payroll deductions are listed on the chart below. Age Rate per $10,000 of Coverage Under Age 30 $0.19 30 to 34 $0.22 35 to 39 $0.27 40 to 44 $0.43 45 to 49 $0.79 50 to 54 $1.24 55 to 59 $1.93 60 to 64 $3.01 65 to 69 $4.98 70 and over $8.88 Please Note: Your actual payroll deductions reflected on your paycheck may be different than these printed rates due to rounding. 3
Tip #5: Enrolling in or Increasing Supplemental AD&D To add, drop, increase or decrease Supplemental AD&D coverage for yourself or family members you can access the Enrollment Website, call the Enrollment Center or complete a Supplemental Life and AD&D Enrollment Form (Puerto Rico). You can elect the maximum amount allowed under the Supplemental AD&D plan without evidence of insurability. The Benefit Enrollment Worksheet refers you to this chart to determine the cost of your Supplemental AD&D elections: Full Benefit Amount & Children & Family & Children & Family Only Full Benefit Amount Only $50,000 $0.37 $0.44 $0.63 $800,000 $5.91 $7.02 $9.97 $100,000 $0.74 $0.88 $1.25 $850,000 $6.28 $7.46 $10.60 $150,000 $1.11 $1.32 $1.87 $900,000 $6.65 $7.90 $11.22 $200,000 $1.48 $1.76 $2.50 $950,000 $7.02 $8.34 $11.84 $250,000 $1.85 $2.20 $3.12 $1,000,000 $7.39 $8.77 $12.47 $300,000 $2.22 $2.64 $3.74 $1,050,000 $7.76 $9.21 $13.09 $350,000 $2.59 $3.07 $4.37 $1,100,000 $8.13 $9.65 $13.71 $400,000 $2.96 $3.51 $4.99 $1,150,000 $8.50 $10.09 $14.34 $450,000 $3.33 $3.95 $5.61 $1,200,000 $8.87 $10.53 $14.96 $500,000 $3.70 $4.39 $6.24 $1,250,000 $9.24 $10.97 $15.58 $550,000 $4.07 $4.83 $6.86 $1,300,000 $9.60 $11.40 $16.20 $600,000 $4.44 $5.27 $7.48 $1,350,000 $9.97 $11.84 $16.83 $650,000 $4.80 $5.70 $8.10 $1,400,000 $10.34 $12.28 $17.45 $700,000 $5.17 $6.14 $8.73 $1,450,000 $10.71 $12.72 $18.07 $750,000 $5.54 $6.58 $9.35 $1,500,000 $11.08 $13.16 $18.70 4
Dear Benefit Eligible, The Women s Health and Cancer Rights Act of 1998 requires group health plans that provide coverage for mastectomies to also cover reconstructive surgery and prostheses following mastectomies. We are pleased to inform you that Costco Wholesale s health plan already provided these benefits before the law was passed. As the Act requires, we have sent you this letter to inform you annually about the law s provisions. The law mandates that if a plan provides coverage for a medically necessary mastectomy, it must also cover: Reconstruction of the breast on which the mastectomy has been performed Surgery and reconstruction of the other breast to produce a symmetrical appearance Prostheses Treatment of physical complications at all stages of the mastectomy, including lymphedema This coverage will be provided in consultation with the attending physician and the patient and will be subject to the same annual deductibles, coinsurance, maximum limitations and other plan provisions that apply to the mastectomy. [To find the annual deductibles, coinsurance and other provisions for the particular plan in which you have enrolled, refer to your Summary Plan Description or call the Costco Wholesale Benefit Department.] Coverage will only be provided for expenses incurred while you are covered by the plan. If you have any questions about coverage for mastectomies and reconstructive surgery, please contact Member Services at the number noted on your medical plan ID card. You may also contact the Costco Wholesale Benefit Department at (800) 284-4882. Sincerely, Benefits Department Costco Wholesale 5
Important Notice from Costco Wholesale Corporation About Your Prescription Drug Coverage and Medicare Please read this notice carefully and keep it where you can find it. This notice has information about your current prescription drug coverage under the Costco Benefits Program and about your options under Medicare s prescription drug coverage. This information can help you decide whether or not you want to join a Medicare drug plan. If you are considering joining, you should compare your current coverage, including which drugs are covered at what cost, with the coverage and costs of the plans offering Medicare prescription drug coverage in your area. Information about where you can get help to make decisions about your prescription drug coverage is at the end of this notice. There are two important things you need to know about your current coverage and Medicare s prescription drug coverage: 1. Medicare prescription drug coverage became available in 2006 to everyone with Medicare. You can get this coverage if you join a Medicare Prescription Drug Plan or join a Medicare Advantage Plan (like an HMO or PPO) that offers prescription drug coverage. All Medicare drug plans provide at least a standard level of coverage set by Medicare. Some plans may also offer more coverage for a higher monthly premium. 2. Costco has determined that the prescription drug coverage offered by the Costco Benefits Program is, on average for all plan participants, expected to pay out as much as standard Medicare prescription drug coverage pays and is therefore considered Creditable Coverage. Because your existing coverage is Creditable Coverage, you can keep this coverage, and you will not pay a higher premium (a penalty) if you later decide to join a Medicare drug plan. When Can You Join A Medicare Drug Plan? You can join a Medicare drug plan when you first become eligible for Medicare and each year from November 15th through December 31st. However, if you lose your current creditable prescription drug coverage through no fault of your own, you will also be eligible for a two (2) month Special Enrollment Period (SEP) to join a Medicare drug plan. 6
What Happens To Your Current Coverage If You Decide To Join A Medicare Drug Plan? If you decide to join a Medicare drug plan, your current Costco coverage will not be affected. You may keep your current prescription drug coverage under the Costco Benefits Program and not enroll in a Medicare Part D plan, or you may enroll in a Medicare Part D plan in addition to your coverage under the Costco Benefits Program, and the Costco prescription drug plan will coordinate with the Medicare Part D plan. Your current coverage with Costco pays for other health expenses in addition to prescription drugs. If you enroll in a Medicare prescription drug plan, you and your eligible enrolled dependents will still be eligible to receive all of your current health and prescription drug benefits as long as you meet the requirements for participation in the Costco Benefits Program. Your current Costco Medical Plan includes prescription drug coverage at no additional premium cost to you. Although this coverage is provided to you, Costco does not require that you use it. If you wish to drop your Costco prescription drug coverage and instead enroll in a Medicare Part D plan, you must also drop your Costco Medical Plan coverage. If you do decide to join a Medicare drug plan and drop your Costco Medical Plan coverage, be aware that you and your dependents will not be able to get this coverage back unless you have a qualified change in status (as defined by the Costco Medical Plan) or during Annual Open Enrollment for the Costco Benefits Program. When Will You Pay A Higher Premium (Penalty) To Join A Medicare Drug Plan? You should also know that if you drop or lose your current coverage with Costco and do not join a Medicare drug plan within 63 continuous days after your current coverage ends, you may pay a higher premium (a penalty) to join a Medicare drug plan later. If you go 63 continuous days or longer without creditable prescription drug coverage, your monthly premium may go up by at least 1% of the Medicare base beneficiary premium per month for every month that you did not have that coverage. For example, if you go nineteen months without creditable coverage, your premium may consistently be at least 19% higher than the Medicare base beneficiary premium. You may have to pay this higher premium (a penalty) as long as you have Medicare prescription drug coverage. In addition, you may have to wait until the following November to join. 7
For More Information About This Notice Or Your Current Prescription Drug Coverage Contact the office listed below for further information, or call Katherine Miller, Manager, Benefits and Retirement Plans, at (425) 313-8298. NOTE: You will get this notice each year. You will also get it before the next period you can join a Medicare drug plan, and if this coverage through the Costco Benefits Program changes. You also may request a copy of this notice at any time. For More Information About Your Options Under Medicare Prescription Drug Coverage More detailed information about Medicare plans that offer prescription drug coverage is in the Medicare & You handbook. You will get a copy of the handbook in the mail every year from Medicare. You may also be contacted directly by Medicare drug plans. For more information about Medicare prescription drug coverage: Visit www.medicare.gov Call your State Health Insurance Assistance Program (see the inside back cover of your copy of the Medicare & You handbook for their telephone number) for personalized help Call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. If you have limited income and resources, extra help paying for Medicare prescription drug coverage is available. For information about this extra help, visit Social Security on the web at www.socialsecurity.gov, or call them at 1-800-772-1213 (TTY 1-800-325-0778). Remember: Keep this Creditable Coverage notice. If you decide to join one of the Medicare drug plans, you may be required to provide a copy of this notice when you join to show whether or not you have maintained creditable coverage and, therefore, whether or not you are required to pay a higher premium (a penalty). Date: July 30, 2008 Name of Entity/Sender: Costco Wholesale Corporation Contact--Position/Office: Costco Benefits Division Address: 999 Lake Drive, Issaquah, WA 98027 Phone Number: 800-284-4882 8