First Choice Health Network, Inc. Flexible Benefits Summary Plan Document

Effective September 1, 2010 First Choice Health Network, Inc. Flexible Benefits Summary Plan Document www.myfirstchoice.fchn.com

Table of Contents Introduction to FCH s Cafeteria Plan (Section 125)... 1 Flexible Benefits Plan Eligibility and Participation... 2 What is a Flexible Benefits Plan?...2 Eligibility...2 Reasons Why You May Not Want to Participate in This Flex Plan...3 Persons Who are Excluded From Participating in this Plan...3 Flexible Benefits Plan Election Form...3 Election Procedure for New Plan Years 4 Election to Participate Due to a Status Change...4 Plan Year...4 Grace Period...4 Forfeiture of Contributions: the Use or Lose Rule...4 Actual Medical And Dental Benefits Are Provided Under The Benefit Plans You Select...5 Other Important Considerations...5 Health Flexible Spending Arrangement... 6 Election...6 Maximum Contribution...6 Eligible Medical and Dental Expenses...6 Medical Expenses Not Eligible...7 Right of Recovery...7 Reimbursement Procedure...7 Account Statements...8 Limited Purpose Health FSA (Dental & Vision Only)... 9 What is the Limited Purpose Health FSA?...9 Maximum Contribution...9 Eligible Dental & Vision Expenses...9 Ineligible Dental & Vision Expenses...10 Reimbursement Procedure...10 Account Statements... 11 Health Savings Account... 12 High Deductible Health Plan...12 Election...12 Health Savings Account...13 HSA Eligibility Requirements...13 Establishing Your HSA...14 FCH Contributions...14

Employee Level...15 Contribution Amounts...15 Domestic Partners...16 Annual Limits...16 Distributions from Your HSA...17 IRS Reporting Issues...17 HSA Program is Voluntary...18 Dependent Care Assistance Program... 19 Election & Maximum Contribution...19 Reimbursement Procedure...20 Eligible Dependent Care Expenses...20 Definition of Dependent...21 Account Statements...21 Changing Your Elections During the Plan year... 22 Changing Your Election...22 Court Order...23 Medicare and Medicaid...23 The HEART Act...23 Notification of Election Changes...23 Health Savings Account Elections...23 Family and/or Medical Leave... 24 FMLA Leave...24 Paying for Continued Plan Participation While on Leave...24 Termination of Participation and Continuation of Coverage... 26 COBRA Coverage...26 Qualifying Events and Continuation Periods...27 Who is a COBRA Qualified Beneficiary?...28 Continuation of the Health FSA or the Limited Purpose Health FSA...28 If You Choose to Continue Health FSA or Limited Purpose Health FSA Participation...29 Dependent Care Assistance Program...29 Health Savings Account...29 Contribution Payment Requirements...30 Claim Denials and Appeals... 31 Flexible Benefits Plan Appeal Process for Enrollment and Elections...31 Health and Limited Purpose Health FSA...32 General Information about the Plan... 34 Amendment or Termination of This Plan...34 Plan Administration...34 No Contract of Employment...35 No Guarantee of Tax Consequences...35

Severability...35 Governing Law...35 General Information about the Plan - Health FSA and Limited Purpose Health FSA... 36 Statement of ERISA Rights - Your Health FSA and Limited Purpose Health FSA... 39 Plan Definitions... 41 Attachment A Health FSA Eligible Expenses... 44 Health Expenses Not Eligible...45 Attachment B Limited Purpose Health FSA - Eligible Expenses... 47 Dental Treatment...47 Dental Expenses Not Eligible for the Limited Purpose Health FSA...47 Vision...48

Introduction to FCH s Cafeteria Plan (Section 125) First Choice Health Network, Inc. (hereinafter referred to as FCH ) has established for its employees, a Section 125 Cafeteria Plan, also known as a Flexible Benefits Plan (the Plan ). The Section 125 Cafeteria Plan allows a participating employee to direct a portion of their pre-taxed salary into the Plan to be used to pay expenses such as their part of the benefit plan contribution payment, co-payments, co-insurances, deductibles, dental, vision or medical care as defined by Plan guidelines. There are several programs under Section 125 to choose from as a FCH participant: Contribution Payment Plan - the employee monthly contribution for medical and/or dental benefits, when applicable; Flexible Spending Arrangement: Health Flexible Spending Account (Health FSA)/Limited Health FSA reimburse covered expenses associated with an employee and their dependents medical, vision or dental care; and, Dependent Care Spending Account (DCAP) reimburse expenses for the care of a dependent child (12 years and under), for the care of a dependent elder (if in your home at least 8 hours a day), for the care of a physically or mentally disabled dependent, or for day camp (12 years and under). Health Savings Account (HSA) (for participants of a High Deductible Health Plan) contributions can be made by FCH as your employer, by the employee, or both. Your share of contributions (premiums) for FCH self-insured health and/or dental benefit plans are automatically deducted from your pay on a pre-tax basis. You save income tax, Social Security and Medicare tax with this plan because your W-2 taxable wages are reduced. However, your elections must be made prior to the effective date of your coverage and are binding for the entire Plan year (with a few exceptions). Please read the document carefully to determine if these programs will benefit you. The benefit plans you elect may cover you or your dependents (as defined by the Internal Revenue Code). Pre-tax contributions may be taken for yourself, your spouse and/or your dependents (as defined under Internal Revenue Code Section 152). You do not have to pay for your share of Plan contribution through this Plan. If you wish, you can pay your share of the cost of coverage on an after-tax basis outside this Plan. This Plan document also serves as the Summary Plan Description for the Health and Limited Purpose Health FSAs. Please contact your Plan Administrator if you require additional information on Section 125. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 1 of 49

Flexible Benefits Plan Eligibility and Participation What is a Flexible Benefits Plan? A Flexible Benefits Plan is a plan under which an employee may elect to purchase group benefits with salary reduction dollars thus reducing their taxable income. The most common type of Flexible Benefits Plan is the Flexible Spending Arrangement (FSA). The FSA is a reimbursement plan that gives employees coverage under which eligible expenses may be reimbursed, subject to certain conditions and limits. The FSA plan which may include a Health FSA, a Limited FSA and/or a Dependent Care Assistance Program (DCAP). FCH employees who elect to participate in the FCH FSA may pay for FSA coverage through pre-tax salary reduction dollars. Eligibility You are in an eligible class if all of the following are true: FCH classifies you as you; You are on the W-2 payroll of FCH; You are an active, non-contracted, non-temporary, employee who has worked at least one (1) day. You are eligible to participate in the FCH Flexible Benefits Plan on the first of the month coincident with or next following your first date of employment in an eligible class if you have completed and returned a signed Flexible Benefits Plan Election Form to Human Resources on or before the first of the month. If you submit the Flexible Benefits Plan Election Form after the first of the month, your participation will begin on the first day of the pay period following receipt of your Flexible Benefits Plan Election Form. You must complete a Flexible Benefits Plan Election Form within 31 days of becoming eligible to participate. If you do not return your Flexible Benefits Plan Election Form within 31 days, the Plan deems that you have elected to pay your share of contributions for the health benefit Plans you select on an after-tax basis. Your compensation will not be reduced on a pre-tax basis, and you will have to wait until the next Plan year to join. Note: An employee with a domestic partner who is not an IRS Code 152 dependent of that employee, must pay for their domestic partner s medical coverage using after tax dollars. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 2 of 49

The Plan Administrator is entitled to rely upon information provided by participants. You are required to notify the Plan Administrator (FCH HR) immediately if you have any reason to believe that you may not be entitled to pre-tax treatment under this Plan. Participation in the Flexible Benefits Plan is voluntary, and for one (1) Plan year at a time (from September 1 through August 31.) Under IRS rules you must enroll each year you want to participate. Reasons Why You May Not Want to Participate in This Flex Plan Some people may not wish to have their compensation reduced on a pre-tax basis under this Plan, for any of the following reasons: Reducing your taxable compensation may reduce your Social Security benefits. Some employees may not want to be subject to the irrevocable election rule. This rule says that if you pay for benefit plans or contribute to a Health FSA, a Limited Purpose Health FSA and/or DCAP on a pre-tax basis, you may not change your benefit plans or your pre-tax contribution amount during the Plan year, except in a few situations. See Changing Your Elections During the Plan Year. Persons Who are Excluded From Participating in this Plan Certain classifications of persons are excluded from participating in this Plan. You may not participate in this Plan if you are: A leased employee (including but not limited to those individuals defined in Section 414(n) of the Internal Revenue Code) up to 1500 hours; Classified by FCH as an independent contractor; A temporary employee; or Working outside the United States. Flexible Benefits Plan Election Form On the Flexible Benefits Plan Election Form you may choose to pay for your share of the cost of your selected FCH benefit plans (employee contribution) on a pre-tax or after-tax basis. You may also choose to contribute on a pre-tax basis to the Health FSA, the HSA depending on your selected health benefit plans, and to contribute on a pre-tax basis to the DCAP. If you participate in an HSA, you may also choose to contribute on a pre-tax basis to the Limited Purpose Health FSA. To pay your share of the contribution for your selected benefit plans and to make your contributions to either the Health FSA, the HSA, the Limited Purpose Health FSA and/or the DCAP, your compensation will be reduced by an equal amount each pay period over the remaining Plan year, or on any other basis as set by the Plan Administrator. An election form filed by you is subject to acceptance, modification, or rejection by the Plan Administrator. The Plan Administrator may modify or reject an election in order to satisfy legal requirements or for other good cause. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 3 of 49

Election Procedure for New Plan Years Before each new Plan year, the Plan Administrator (Human Resources) will provide you with a Flexible Benefits Plan Election Form. To become a participant for the new Plan year, complete the Flexible Benefits Plan Election Form and return it to Human Resources by the end of the election period set by Human Resources. If you fail to complete and return the Flexible Benefits Plan Election Form within the election period, you will be deemed to have elected not to participate in any portion of the Flexible Benefits Plan. Election to Participate Due to a Status Change If you are in an eligible class but did not enroll during an election period, you may elect to participate following a change in status (see Changing Your Elections During the Plan Year Change in Status) or by a special enrollment in a group health plan as permitted by the Health Insurance Portability and Accountability Act of 1996 ( HIPAA ) (see Section 980.1(f) of the Internal Revenue Code). Plan Year The Plan year is September 1 through August 31. Expenses must be incurred during the Plan year, or Grace Period (see below), and must coincide with your eligibility to participate in the Plan. Grace Period For participants of the Health FSA or the Limited Purpose Health FSA, the Plan allows an additional 30 days, following the end of each Plan year, to incur expenses before the Use or Lose forfeiture rule applies (see below). Thus, expenses incurred within the 30 days after the close of the Plan year may be reimbursed with funds carried over from the prior Plan year. However, any unused amounts from the prior Plan year that are not used to reimburse expenses by the end of the grace period remain subject to the Use or Lose rule and must be forfeited. The Grace Period does not apply to the DCAP. Forfeiture of Contributions: the Use or Lose Rule As defined under Internal Revenue Code 125, contributions to the Health FSA, Limited Purpose Health FSA or DCAP cannot be carried over from Plan year to Plan year. This IRS rule, commonly referred to as the use or lose rule, requires that any money remaining in your account at the end of the Plan year will be forfeited. Forfeitures, by law, become the general assets of FCH and will be used for employee benefits or other purposes as determined by FCH. Careful planning of your contribution amounts can help you limit any chance of forfeiture. This rule does not apply to an HSA see the section entitled Health Savings Accounts. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 4 of 49

Actual Medical And Dental Benefits Are Provided Under The Benefit Plans You Select Actual medical and dental benefits are provided under the benefit plans in which you enroll, not under this Plan. This Plan merely provides a tax-effective way for you to pay for your share of the contributions for the benefit plans you have selected. The medical and dental benefits available are described in separate Summary Plan Documents and are available from your Plan Administrator. If the terms of this Plan and the terms of another benefit plan (such as your medical or dental benefit plan) conflict, the terms of the benefit plan control; for example, with respect to who is eligible for benefits, dates of eligibility, conditions that must be satisfied to become covered, circumstances under which benefits terminate or change outside open enrollment, etc. Other Important Considerations Contributions are deducted equally, before taxes, from each paycheck after your participation begins to add up to the annual election amount you designate on your Flexible Benefits Plan Election Form. Once you make an election, you generally cannot change it until the next Plan year except as described under Changing Your Elections During the Plan Year. For a Health FSA, Limited Purpose Health FSA and DCAP accounts, unless you complete your claim form properly, provide FCH with your current address and submit other necessary information, your reimbursement could be delayed. For the Health FSA and Limited Purpose Health FSA, only expenses incurred as of the effective date of your participation through September 30 (30 day grace period from the end of the Plan year) or the last day of your eligibility to participate, whichever date comes first, are eligible for reimbursement. For the DCAP, only expenses incurred as of the effective date of your participation through August 31 (the end of the Plan year), or the last day of your eligibility to participate, whichever date comes first, are eligible for reimbursement. Reimbursement can be made only from the account that matches the claim (for example, medical expenses can be reimbursed only from your Health FSA or HSA, depending on the specific health benefit plan you have selected.) For a Health FSA, Limited Purpose Health FSA, DCAP or HSA, you may not seek reimbursement for benefits that have been paid by another benefit plan. While on an unpaid leave of absence or receiving workers compensation disability payments, your payroll deductions to the Flexible Benefits Plan may be suspended and will not be made retroactively when you return. Your election contribution will be reduced accordingly. If you die while enrolled in the Flexible Benefits Plan, any reimbursements you would have been entitled to receive can be paid to your surviving spouse or other beneficiary. The Plan Administrator can help your beneficiary fill out and submit the necessary claim forms. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 5 of 49

Health Flexible Spending Arrangement Election If you have not elected to participate in the High Deductible Health Plan (HDHP) you can elect to participate in the Health FSA for the Plan year by completing the applicable section of the Flexible Benefits Plan Election Form. Employees who elect to participate in the HDHP must waive their option to participate in the HSA in order to participate in the Health FSA. (See page 9 of this document for further information regarding HSAs.) Maximum Contribution The maximum amount that you may contribute for the Plan year to a Health FSA is $1500.00. The minimum amount is $240. The amount that you decide to contribute for the Plan year is called your election amount. Contributions made to the Health FSA that are not used during the Plan year may not be carried over to the next Plan year and are forfeited to the Plan. Eligible Medical and Dental Expenses In the Health FSA, you can receive reimbursement for certain allowed medical and dental expenses that may not be covered under your health benefit plan or dental benefit plan. Reimbursement is made from your Health FSA account, which holds your pre-tax contributions. A medical or dental expense of yours, your legal spouse, or your tax dependents can be eligible only if not reimbursed by any other benefit plan. Contributions for any health benefit plan or dental benefit plan are not eligible under the Health FSA. Also, remember that expenses reimbursed under the Health FSA cannot be taken as a deduction on your Federal income tax return. To be eligible, the expense must be a charge for services provided during the same period covered by your Health FSA. See Appendix A of this document for a partial list of eligible medical and dental expenses. These items are subject to change by the IRS. You may also call FCHA Member Services. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 6 of 49

Medical Expenses Not Eligible Medical and dental expenses are not eligible for reimbursement from your Health FSA if the IRS does not recognize them as legitimate deductions. Expenses also are not eligible if they are for general health purposes and not to prevent or correct a specific ailment. See Appendix A for a partial list of expenses that are not eligible. Right of Recovery Whenever benefits have been paid by FCH with respect to allowable expenses in total amount, at any time, in excess of the maximum amount of payment necessary at that time to satisfy the intent of this provision, or when Health FSA money was paid on ineligible claims, the Plan Administrator shall exercise its right to recover such excess payments from any person(s), insurer(s), or other organizations, as deemed appropriate by the Plan Administrator. Reimbursement Procedure The Plan will reimburse you from your Health FSA for eligible medical expenses or dental expenses that you, your spouse or your tax dependents incur during the Plan year while you are a participant in the Plan. You may use your check card (debit card) at MasterCard merchants, or you may submit your claims for reimbursement manually. The process is described below: Use the claim form provided by the Plan Administrator. Along with your claim form, submit a written bill or statement from an independent third party stating the date the expense was incurred, the type of service, and the amount of the expense. Submit such other evidence, as the Plan Administrator deems necessary to substantiate the nature, amount and the timeliness of the expenses you are claiming. Make sure the claim is for expenses that have already been incurred during the Plan year or the 30 day Grace Period. A medical expense is incurred at the time the medical care or service is furnished, regardless of when you are billed or pay for the service. This means, for example, that advance payments you make to an orthodontist are not an incurred expense. The expense will be incurred when the orthodontist actually performs the service; and Submit your claim no later than 90 days after the close of the Plan year. If you are covered by another health care plan such as your spouse s, you must submit your health care expenses to both Plans before you can claim reimbursement from your Health FSA. Attach both sets of Explanation of Benefits (EOBs) to the claim form. Your entire election amount less the reimbursements the Plan has already paid you is available to you at any time during the Plan year. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 7 of 49

The Plan will reimburse your claims for $10 or more on predetermined dates (at least monthly) and will notify you of those dates. If your claims are for less than $10, they will be held until they add up to $10 or more. At the end of the Plan year, you will be reimbursed for any remaining eligible claims under $10, as long as a claim is submitted according to the above timeframes. Health FSA participants can elect to open a debit card account for use with their Health FSA. Terms of use are fully explained in the Card Holders Agreement issued by the debit card vendor. Please read through any and all debit card account information you receive after opening your account. The debit account Card Holders Agreement does not replace or amend the provisions of the Plan document. In general, copay amounts paid with the debit card will autoadjudicate. However, certain other claims paid by debit card transaction will require a receipt as substantiation. You may open the Health FSA debit card account by completing the applicable section of the Flex Plan enrollment form. You may call the FCHA FSA Department at (206) 268-2900 for information. Account Statements Every time you submit a claim for Health FSA reimbursement, you will receive an Explanation of Benefits (EOB) that shows if the claim was paid or denied and the balance amount remaining in your Health FSA account. Semiannually, you ll receive a statement showing the current status of your account, even if you have not yet filed a claim. The statements show the balance remaining in your account so you can spend it by the end of the Plan year and avoid forfeiture. They also help you estimate expenses for the next Plan year Health FSA enrollment. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 8 of 49

Limited Purpose Health FSA (Dental & Vision Only) What is the Limited Purpose Health FSA? If you have elected to participate in the HDHP AND you elect the Health Savings Account, you cannot participate in the Health FSA. The Health FSA is considered impermissible coverage when you also have an HSA. (See IRS Rev. Rul. 2004-45.) However, certain other types of Plan coverage are permitted including dental and vision (See HSA Eligibility Requirements). Therefore, HDHP participants with an HSA have the option of participating in the Limited Purpose Health FSA - Dental & Vision. You may elect to participate in the Limited Purpose Health FSA for a Plan year by completing the applicable election form. Maximum Contribution The maximum amount that you may contribute for the Plan year to the Limited Purpose Health FSA is $1500.00. The minimum amount is $240. The amount that you decide to contribute for the Plan year is called your election amount. Contributions made to the Limited Purpose Health FSA that are not used during the Plan year may not be carried over to the next Plan year and are forfeited to the Plan. For this reason, participants in the Limited Purpose Health FSA may want to use their Limited Purpose Health FSA first for all eligible dental and vision expenses. Eligible Dental & Vision Expenses In the Limited Purpose Health FSA, you can receive reimbursement for certain allowed dental and vision expenses that may not be covered under your benefit plans. Reimbursement is made from your Limited Purpose Health FSA account, which holds your pre-tax contributions. Your expense or that of your legal spouse and your other tax dependents (as defined by Internal Revenue Code 152 definition of dependent amended) can be eligible only if not reimbursed by any other benefit Plan. The employee s cost of coverage (contributions) for participating in the dental benefit plan is not an eligible expense for reimbursement under the Limited Purpose Health FSA. Also, expenses reimbursed under the Limited Purpose Health FSA cannot be taken as a deduction on your Federal income tax return. To be eligible, the expense must be a charge for services provided during the same period covered by your Limited Purpose Health FSA. A complete list of reimbursable expenses can be found at the IRS website www.irs.gov/publications/ p502. See Appendix B for a partial list of eligible dental expenses. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 9 of 49

Ineligible Dental & Vision Expenses Dental and vision expenses are not eligible for reimbursement from your Limited Purpose Health FSA if the IRS does not recognize them as legitimate deductions. Expenses also are not eligible if they are for general health purposes and not to prevent or correct a specific ailment. In addition, prescriptions written by your dentist for dental related medical care are not an eligible expense under the Limited Purpose Health FSA. See Appendix B for a partial list of expenses that are not eligible. Reimbursement Procedure The Plan Administrator will reimburse you from your Limited Purpose Health FSA for eligible dental and vision expenses that you, your legal spouse or your tax dependents incur during the Plan year while you are a participant in the Plan. To submit your claims for reimbursement: Use the claim form provided by the Plan Administrator. Along with your claim form, submit a written bill or statement from an independent third party stating the date the expense was incurred, the type of service, and the amount of the expense. Submit such other evidence, as the Plan Administrator deems necessary to substantiate the nature, amount and timeliness of the expenses you are claiming. Make sure the claim is for expenses that have already been incurred during the Plan year or the 30 day Grace Period. An expense is incurred at the time the care or service is furnished, regardless of when you are billed or pay for the service. This means, for example, that advance payments you make to an orthodontist are not an incurred expense. The expense will be incurred when the orthodontist actually performs the service; and Submit your claim no later than 90 days after the close of the Plan year. If you are covered by another health care plan such as your spouse s, you must submit your dental or vision care expenses to both Plans before you can claim reimbursement from your Limited Purpose Health FSA. Attach both sets of Explanation of Benefits (EOBs) to the claim form. Your entire election amount less the reimbursements the Plan Administrator has already paid you is available to you at any time during the Plan year. The Plan Administrator will reimburse your claims for $10 or more on predetermined dates (at least monthly) and will notify you of those dates. If your claims are for less than $10, they will be held until they add up to $10 or more. At the end of the Plan year, you will be reimbursed for any remaining eligible claims under $10, as long as a claim is submitted according to the above timeframes. There is no debit card option available with the Limited Purpose Health FSA. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 10 of 49

Account Statements Every time you submit a claim for Limited Purpose Health FSA reimbursement, you will receive an Explanation of Benefits (EOB) that shows if the claim was paid or denied and the balance amount remaining in your Limited Purpose Health FSA account. Semiannually, you ll receive a statement showing the current status of your account, even if you have not yet filed a claim. The statements show the balance remaining in your account so you can spend it by the end of the Plan year and avoid forfeiture. They also help you estimate expenses for the next Plan year Limited Purpose Health FSA enrollment. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 11 of 49

Health Savings Account High Deductible Health Plan Sometimes referred to as a catastrophic health insurance plan, an HDHP is a health insurance plan that generally does not pay for the first several thousand dollars of health care expenses (i.e., deductible ) but will generally cover you after that. The FCH HDHP is a qualifying high deductible health plan under Internal Revenue Code 223(c)(2). A HDHP is defined by the IRS as a health plan with an annual deductible of not less than a certain dollar amount determined each year. Likewise, a HDHP must not have annual out-ofpocket expenses (deductibles, co-payments and other amounts, but not premiums) that exceed certain dollar amounts decided upon each year by the IRS. Minimum Deductible Amount IRS Indexed Amounts 2010 2011 Individual $1,200 $1,200 Family $2,400 $2,400 Maximum Out-of-Pocket Amount Individual $5,950 $5,950 Family $11,900 $11,900 Election If you have no other impermissible coverage; you can elect to establish a Health Savings Account as of the first day of the month you are covered. If you are married, you cannot be covered by your spouse on a family plan that does not qualify as a HDHP under Code 223(c)(2). Note: You are required to notify the Plan Administrator immediately of any changes in other coverage that might affect your HSA contribution eligibility. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 12 of 49

Health Savings Account A Health Savings Account (hereinafter HSA ) is an account that allows you to pay for certain medical expenses on a tax-free basis. HSA contributions can be made by you or on your behalf. Contributions are non-taxable and contributions made by you will qualify for certain tax deductions (up to the maximum annual contribution allowed). Your HSA account balance is nonforfeitable and will automatically carry forward from year to year for future medical expenses. Earnings on your HSA account balance are generally not taxed while held in the HSA, which means that your account can grow on a tax-free-basis. In other words, your HSA offers three forms of tax savings: tax-free contributions, tax-free growth, and tax-free distributions. For more information on HSAs, visit http://www.treas.gov/offices/public-affairs/hsa/. Note: Neither the Plan Sponsor s arrangement for making contributions to an eligible employee HSA nor the HSA itself is an ERISA welfare benefit Plan under the Employee Retirement Income Security Act of 1974 (ERISA). HSA Eligibility Requirements Federal tax law requires that in order to establish an HSA and be eligible to make contributions to your HSA, you must be covered under a qualifying high deductible health plan with no other impermissible coverage. Special Rule for Married Individuals: If you are married and your spouse has family coverage under another plan, your spouse s family coverage must qualify as a high deductible health plan under the above referenced tax law in order for you to be eligible for an HSA. Permitted Insurance and Permitted Coverage: The only other types of health insurance coverage that you may have, in addition to high deductible health plan coverage, are: (i) insurance in which substantially all of the coverage relates to liabilities incurred under workers compensation laws, tort liabilities, liabilities relating to ownership or use of property (e.g., home-owner or auto insurance), or similar liabilities as specified by the IRS; (ii) insurance for a specified disease or illness (e.g., cancer insurance); (iii) insurance that pays a fixed amount per day (or other period) of hospitalization (e.g., hospital indemnity insurance); and (iv) coverage for accidents, disability, dental care, vision care, or long-term care. Note: A Health FSA that is not a Limited FSA is impermissible coverage. You also cannot be claimed as another person s tax-dependent and cannot be enrolled in Medicare Benefits. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 13 of 49

Establishing Your HSA FCH has chosen to make its HSA contribution, and any contribution you choose to make, by direct deposit to a preferred HSA trustee (also known as the Custodian) under Code 223. You will be provided with the forms necessary to establish an HSA and appropriate contact information will be provided for any questions you may have. You will be responsible for choosing how your HSA funds are invested. Once the FCH contributions have been deposited in your HSA, you will have a non-forfeitable interest in the funds and you will be free to request a distribution of the funds or to move them to another HSA trustee to the extent allowed by law. FCH Contributions You will receive an HSA contribution from FCH based on your number of service years (the number of consecutive years you have been employed at FCH) and level of coverage you select i.e. employee only coverage under the FCH HDHP, Employee + 1, or Employee + 2 or more (which may only change mid-year if a qualifying event has occurred). The FCH employer contribution is made four (4) times during the Plan year and is subject to change with notice as deemed necessary by the Plan Administrator or as directed by the Plan Sponsor. FCH employer HSA contributions are prorated for the those employees who reach the length of service seven (7) plus years, or for new hire employees, effective after the September 1 Plan renewal date. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 14 of 49

Employee Level HSA Funding Levels Percentage of Deductible Family Size Level A Income 90% Single / Family Level B Income 80% Single / Family Level C Income 70% Single / Family Level D Income 60% Single / Family Level E Income 50% Single / Family Longevity Benefit (over 7 years) Salary Level Less than $30,000 / $40,000 Less than $40,000 / $50,000 Less than $50,000 / $60,000 Less than $60,000 to $100,000 Greater than $100,000 100% Single / Family 100% funded Contribution Amounts Contribution Level Employer HSA Contribution Level A HSA Contribution 90% Annually EE Only $1,260 EE+ 1 $2,160 EE + 2 or more $2,520 Level B HSA Contribution 80% Annually EE Only $1,120 EE+ 1 $1,920 EE + 2 or more $2,240 Level C HSA Contribution 70% Annually EE Only $980 EE+ 1 $1,680 EE + 2 or more $1,960 Level D HSA Contribution 60% Annually EE Only $840 EE+ 1 $1,440 EE + 2 or more $1,680 Level E HSA Contribution 50% Annually EE Only $700 EE+ 1 $1,200 EE + 2 or more $1,400 First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 15 of 49

Annual Limits In general, the maximum annual contribution is available only for individuals who are eligible for all 12 months during the year. Additional HSA contributions into the same or a separate HSA may be made, so long as the total contributions made by you and/or made on your behalf do not exceed the maximum calendar year contribution limit that applies to you. The annual limits, as determined by the IRS, for calendar years 2010 and 2011 are as follows: The annual contribution limits for calendar years 2010 and 2011 for an individual with self-only coverage under a high deductible plan are: 2010 $3,050 2011 $3,050 The annual contribution limits for calendar years 2010 and 2011 for an individual with family coverage under a high deductible plan are: 2010 $6,150 2011 $6,150 You may start, stop or change your HSA contributions in any month, however changes are made prospectively. General Monthly Contribution Rule An individual s annual HSA contributions may not exceed the sum of the monthly limitations for all months within the individual s taxable year in which he or she actually is - or, under the full-contribution rule discussed in the next section, is treated as - an eligible individual. An individual who ceases to be an eligible individual during a year may still contribute to his or her HSA for the months of the year in which he or she was an eligible individual. For example, Employee #1 had self-only coverage and worked for FCH from January through June of 2010. She resigned on June 30 and became eligible for other non-hdhp group health plan coverage effective July 1, 2010. During January through June she was eligible to contribute up to $254.16 each month (1/12 of $3,050). If she had not met those limits upon resignation, she may continue to make retroactive contributions until her HSA contribution amount equaled $1,524.99 (6 months x $254.16). Full-Contribution Rule for Mid-Year HDHP Enrollees Mid-year enrollees into the HDHP may take advantage of the full-contribution rule which permits an individual to make a full year s worth of HSA contributions if s/he is an eligible individual on December 1st of that year. However, there is a testing period that one must First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 16 of 49

pass in order not to be taxed on these excess contributions. The testing period is defined as December 1 of the year the person becomes a mid-year HDHP enrollee through December 31st of the following year. If the individual does not remain eligible for this testing period, the excess contributions would be includible in gross income and subject to a 10% penalty in the next tax year. Rollover contributions may also be made to an HSA from another HSA, from an Archer MSA, or FSA; rollover contributions are not subject to the HSA contribution limitations. Catch-Up Contributions for Enrollees 55 or over The general HSA contribution limit is increased by an additional contribution amount for HSAeligible individuals who have attained age 55 by the end of the taxable year. This additional contribution amount is $1,000 for 2009 and subsequent years. As with the general HSA contribution limit, the additional HSA catch-up contribution limit may be determined under the full-contribution rule. A married couple may make two HSA catch-up contributions, so long as both spouses are at least age 55 however, separate HSAs must be established in the name of each spouse. Note: For IRS tax purposes, HSA contributions are calculated on a calendar year basis. It is the responsibility of the employee to calculate their calendar year maximum contributions. The Plan makes no guarantee of tax consequences. Consult with your tax advisor if you have questions. Domestic Partners FCH will not establish or administer an HSA for an employee s enrolled domestic partner. For employees enrolled on the HDHP as employee + domestic partner, FCH limits the employer HSA contribution to the employee only amount. However, the employee may make additional contributions up to the amount of their annual HDHP deductible. contributions may also be made to an HSA from another HSA, from an Archer MSA, or FSA; rollover contributions are not subject to the HSA contribution limitations. Distributions from Your HSA Distributions from your HSA will be tax-free if they are for expenses incurred for your medical care as defined in Code 213(d) or the medical care of a legal spouse or tax dependents for dates of service incurred after the establishment of your HSA. The normal method of taking distributions from your HSA will be by debit card (Benny card) transaction at MasterCard merchants or by submitting an Account Withdrawal Request directly to the HSA Custodian, the Bancorp Bank (Bancorp). Bancorp will issue reimbursement directly to the Account Holder. The HSA Custodian may permit other methods of distribution from time to time at the Custodian s discretion. Please call the FCHA Flex Department at (206) 268-2900 for more information. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 17 of 49

IRS Reporting Issues You are responsible for reporting contributions made to your HSA (whether made by you or on your behalf) and for reporting distributions from your HSA. You must determine whether your HSA distributions are taxable or whether they are used for qualified medical expenses (and, therefore, tax-free). You should also maintain records sufficient to show that any distributions that you do not report as taxable were made exclusively for qualified medical expenses. And you may not take an additional tax deduction for qualified medical expenses for which you were reimbursed through your HSA. IRS Form 8889 is available as an attachment to Form 1040 on which you will report your HSA contributions and distributions. Please consult with your tax preparer or the IRS. (www.irs.gov). HSA Program is Voluntary Your participation in the HSA described in this Flexible Benefits Summary Plan Document is entirely voluntary and you may terminate your participation at any time by notifying FCH as provided for under Changing Your Elections During the Plan Year. Although FCH expects to continue this HSA program indefinitely, it has the right to amend or terminate all or any part of the HSA program at any time for any reason. It is also possible that changes to the program may be necessary or advisable as a result of future changes in State or Federal tax laws. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 18 of 49

Dependent Care Assistance Program Internal Revenue Code section 129 permits a taxpayer to exclude up to $5,000 from gross income, deducted from one s paycheck, for dependent care assistance. This is called a Dependent Care Assistance Program, or DCAP. One is able use those dollars to reimburse expenses for the care of qualifying individuals, defined below. Qualifying Individuals For purposes of a DCAP, under IRS Code section 21(b)(1), qualifying individual means: A dependent of the taxpayer as defined in Code section 152(a)(1) (i.e., a qualifying child) who has not reached age 13; A dependent of the taxpayer (i.e., a qualifying child or qualifying relative who (1) is physically or mentally incapable of care for himself or herself; and (2) lives in the same home as the taxpayer for more than half of the year; or The spouse of the taxpayer, if the spouse (1) is physically or mentally incapable of caring for himself or herself; and (2) lives in the same home as the taxpayer for more than half of the year. Important note: The definition of Qualifying Individual for purposes of the DCAP differs from that of Qualifying Child and Qualifying Relative for purposes of Internal Revenue Code 152. Dependent Care Programs other than DCAPs It is important to know that there are other programs allowed per the IRS for payment of dependent care. For instance, taxpayers may claim a Dependent Care Tax Credit under Internal Revenue Code 21. Depending on your tax bracket, a DCAP will save most employees more tax dollars but in some cases (again, according to your tax bracket), claiming the Dependent Care Tax Credit could be more advantageous than participating in a DCAP on a salary reduction basis. To compare the two options available see the following publications: http://www.irs.gov/pub/ irs-pdf/p503.pdf and https://www.fsafeds.com/forms/dcfsa_worksheet.pdf. Please note the latter is a worksheet created by the federal government for their own employees, neither the Plan nor FCHA bears any responsibility for results yielded from use of the worksheet. (The web address was active as of the publication of this document.) Important note: In general (there are exceptions to this rule), if you take advantage of the DCAP you cannot also take advantage of the Dependent Care Tax Credit. This is known as double-dipping. Please seek the advice of a tax advisor with questions about which program would be more beneficial to you, or to discuss what exceptions would enable you to take advantage of both programs. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 19 of 49

Election & Maximum Contribution You can elect to participate in the Dependent Care Assistance Program (DCAP) for a Plan year by completing the applicable section of the Flexible Benefits Plan Election Form. The maximum amount that you may exclude from your gross income for a Plan year (this will be referred to as your contribution amount in this document) is $5,000. The minimum amount allowed by FCH is $240. The amount you decide to contribute for the Plan year is called your election amount. $5,000 ($2,500 if you are married and file a separate Federal income tax return). An employee s election amount is limited to the smallest of the following amounts: $5,000 if the employee is married and filing a joint return or if the employee is single ($2,500 if the employee is married but filing separately); The employee s earned income for the year (as defined in IRS Publication 503); or If the employee is married at the end of the taxable year, the spouse s earned income. The spouse of a married employee is deemed to be gainfully employed and to have an earned income of not less than $250 per month ($500 per month if there are two or more qualifying individuals) in each month during which he or she (a) is a full-time student; or (b) is incapable of self-care and lives in the same home as the employee for more than half the year. Exception to Maximum Contribution based on Marital Status As noted above, the maximum contribution under a DCAP for married individuals filing a joint tax return (or for an unmarried employee) is $5,000. Married individuals filing separately are subject to a lower contribution of $2,500. In some circumstances however, individuals who were married may be considered not married, and in that case, the $5,000 maximum contribution would apply. For example, if the employee is divorced or legally separated from his or her spouse, then the employee is not considered to be married and could take advantage of the maximum contribution of $5,000. Also, in certain circumstances when married individuals are living apart, they may be considered, for purposes of the Dependent Care tax Credit rules, as not married. If this is true, one of the individuals, if enrolling in a DCAP, could take advantage of the maximum contribution of $5,000. Please seek the advice of a tax advisor if the above scenarios speak to your situation. Neither the Plan nor FCHA can offer tax advice or interpret your personal situation for purposes of enrolling and/or selecting an appropriate contribution amount for your DCAP. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 20 of 49

Reimbursement Procedure The Plan Administrator will reimburse you for eligible dependent care expenses that you incur during the Plan year while you are a participant in the Plan. To submit your claims for reimbursement: Use the claim form provided by the Plan Administrator. Along with your claim form, submit a written bill or statement from an independent third party stating the range of dates over which the expense was incurred, the type of service, and the amount of the expense. Alternatively, you may simply have the dependent care provider sign the claim form where indicated. Submit such other evidence if requested, as the Plan Administrator deems necessary to substantiate the nature, amount and timeliness of the expenses you are claiming. Make sure the claim is for expenses that have already been incurred during the Plan year. An expense is incurred at the time the dependent care is provided, regardless of when you are billed or pay for the dependent care. This means, for example, that advance payments you make to a summer day camp are not an incurred expense. The expense will be incurred when the day camp visit is completed. Submit your claim no later than 90 days after the close of the Plan year. You will be reimbursed up to the amount you have contributed to date, minus prior reimbursements. Any un-reimbursed amounts will be carried over to the subsequent months and reimbursed to you as soon as the contributions are available. The Plan Administrator will reimburse your claims for $10 or more on predetermined dates (at least monthly) and will notify you of those dates. If your claims are for less than $10, they will be held until they add up to $10 or more. At the end of the Plan year, you will be reimbursed for any remaining eligible claims under $10, as long as a claim is submitted according to the above timeframes. There is no debit card option available with the DCAP. Eligible Dependent Care Expenses Eligible dependent care expenses meet all the requirements listed below: The claim is for expenses incurred for the care of a dependent (defined below), or for related incidental household services. The expenses are incurred for services rendered on or after the day you begin to participate in the DCAP and during the Plan year to which your election applies. The expenses are incurred so you (and your spouse, if you are married) can work or look for work. Exception: If your spouse is not working or looking for work when the expenses are incurred, he or she may be a full-time student or may be physically or mentally incapable of caring for him or herself. First Choice Health One Union Square 600 University Street, Suite 1400 Seattle, WA 98101 21 of 49