L-3 Communications Corporation Aetna HealthFund Health Reimbursement Arrangement (HRA) Medical Plan

Transcription

1 S U M M A R Y P L A N D E S C R I P T I O N L-3 Communications Corporation Aetna HealthFund Health Reimbursement Arrangement (HRA) Medical Plan Effective January 1, 2014 L - 3 C O M M U N I C A T I O N S

2 Table of Contents The Aetna HealthFund Health Reimbursement Arrangement 1 Before You Begin 1 Eligibility and Participation 2 Who s Eligible 2 Enrolling for Coverage 5 When Coverage Begins 7 Medical Child Support Orders 8 Cost of Coverage 8 Waiving Medical Coverage 8 How the Plan Works 9 Your Health Reimbursement Account (HRA) 10 Incentive Credits 14 Health Coverage 15 How Your HRA and the Health Coverage Work Together 16 Health Tools and Resources 18 What s Covered Under the Plan 19 Understanding What s Covered 19 Lifetime Maximum Benefits 19 Benefit Limits 19 The Plan Year 19 A Note About Maternity Admissions 20 Notifying Aetna for Certain Types of Medical Care 20 How to Notify Aetna Member Services 21 Covered Expenses 22 Special Aetna Programs 28 ActiveHealth Management 28 Beginning Right Maternity Program 29 Aetna Vision 30 Other Aetna Discount Programs 30 How the Health Coverage Works 31 Health Coverage Expenses General Provisions 31 Health Coverage Expenses Specific Provisions: Option I 32 Health Coverage Expenses Specific Provisions: Option II 35 How In-Network Eligible Expenses Are Reimbursed 38 How Out-of-Network Eligible Expenses Are Reimbursed 42 What s Not Covered Under the Plan 43

3 Prescription Drug Coverage 47 Special Coverage for Preventive and Chronic Medications 47 Prescription Drug Expense Coverage 48 Important Information About Maintenance Medications 50 Special Coverage for Female Contraceptives 50 Coverage for Certain Over-the-counter Medicines 51 Specialty Drug Coverage 52 Glucometers 52 Rx Check sm 52 What s Not Covered Under the Prescription Drug Program 53 How to Claim Benefits 55 When to File Claims 55 Claiming Out-of-Network Medical Benefits 55 Assignment of Benefits 56 Filing Claims When You Are Covered by More Than One Plan 56 Other Information You Should Know 57 Your Rights as a Patient 57 How Benefits Are Coordinated With Other Coverage 57 Subrogation and Reimbursement 59 Claim Fraud 62 Overpayment of Benefits 62 How Benefits Can Be Forfeited or Delayed 62 What Happens When You Become Entitled to Medicare 62 Continued Coverage Under the Federal Family and Medical Leave Act 63 When Coverage Ends 63 Extended Coverage 64 COBRA Continuation Coverage 64 Continued Coverage During a Military Leave of Absence 69 Ownership of Benefits 70 Plan Administration 70 Compliance With Federal Law 70 Claims Procedures 71 The Women s Health and Cancer Rights Act of Confidentiality of Health Care Information 77 No Right to Continued Employment 78 Future of the Plan 78 Your Rights Under ERISA 79 Prudent Actions by Plan Fiduciaries 79 Enforcing Your Rights 80 Assistance With Your Questions 80 Plan Facts 81 Glossary 82

4 The Aetna HealthFund Health Reimbursement Arrangement L-3 Communications Corporation ( L-3 ) offers the Aetna HealthFund Health Reimbursement Arrangement (HRA) Medical Plan (the Plan ) administered by Aetna to eligible employees in certain business units of L-3. The Plan includes coverage for many medical care, mental health and substance abuse treatment, and prescription drug expenses. Summaries of Benefits and Coverage. The Patient Protection and Affordable Care Act requires L-3 to provide medical plan participants with Summaries of Benefits and Coverage (SBCs). All SBCs are available within the Resource Library on the L-3 Benefit Center website You may also request a paper copy from the L-3 Benefit Center. If you have any questions about the SBCs, contact an L-3 Benefit Center Service Representative at Before You Begin This Summary Plan Description (SPD) describes the most important features of the Plan. We have tried to explain things in everyday language, but you will see words and phrases that have specific meanings within the context of the Plan. To help you understand them, they are italicized when first used and included in the Glossary that starts on page 82. Also be sure to read the Other Information You Should Know section of this SPD for important information and facts about your rights under the Plan. This SPD does not describe any benefits that may be available to L-3 retirees. Most L-3 employees are not eligible for L-3 retiree medical coverage. If your business unit offers retiree medical coverage for which you may be eligible, you will be provided with a Supplement to this SPD that outlines eligibility rules and other important information concerning your possible eligibility for retiree medical benefits. That Supplement is intended to be a part of this SPD and you should keep it with this SPD so that you can refer to it in the future. Contact your local Human Resources Department if you are unsure whether you are eligible for retiree medical coverage. This Plan is designed to give you greater control over how your health care dollars are spent. It combines aspects of conventional coverage deductibles, coinsurance, access to a discounted provider network with Benefit Dollars in a Health Reimbursement Account (HRA) that you may spend on a variety of eligible medical expenses. aetna healthfund hra 1

5 Eligibility and Participation Who s Eligible You can enroll your eligible dependents in the Plan if you enroll, as long as you provide proper documentation (see Enrolling your dependents for coverage, page 5), including a Social Security number for each dependent. Employees. You are eligible to participate in the Plan if it is offered at your business unit and you are: q a U.S.-based employee working in the U.S. and regularly scheduled to work 20 hours or more per week; q employed in a job classification designated as benefits-eligible; and/or q 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. If you have any questions about your eligibility, contact the L-3 Benefit Center at Dependents. You can enroll your eligible dependents in the Plan if you enroll, as long as you provide proper documentation (see Enrolling your dependents for coverage, page 5), including a Social Security number for each dependent. (If the dependent does not yet have a Social Security number, you must provide one within 60 days, unless the process is delayed for reasons beyond your control. You are not required to report a Social Security number for a dependent who is not a U.S. citizen (and therefore does not have a Social Security number nor is eligible for Medicare). If the dependent becomes eligible for a Social Security number, you must provide it as soon as it is received.) Your eligible dependents are your spouse/same-sex domestic partner and your children, defined as follows. o Spouse. Your spouse is your lawfully married spouse. A common-law spouse will also be considered a spouse for Plan purposes, provided the common-law marriage took place in a state that treats common-law marriage as legal marriage and you satisfy applicable state law requirements (including any documentation requirements). Please note that a decree of divorce or legal separation requiring you to provide health coverage for your ex-spouse does not make your ex-spouse eligible for coverage under the Plan (see COBRA Continuation Coverage, page 64, for information about coverage that may be available to an ex-spouse). o Same-sex civil union partner/domestic partner. A same-sex civil union partner or same-sex domestic partner is eligible for dependent coverage under the medical, dental and vision care plans if, subject to the special rules described below, the state where you reside does not permit same-sex marriage. Please note that for benefit administration and tax reporting purposes, same-sex civil union partners will be enrolled as and referred to as same-sex domestic partners. To enroll a same-sex civil union partner or domestic partner for dependent coverage as a same-sex domestic partner you must live together in the same household and submit certification and documentation in support of your relationship, as follows: o If the state where you live permits same-sex civil union partner registration, your same-sex civil union partner will be considered eligible for dependent coverage as a same-sex domestic partner only if you provide the Plan with a valid certificate of civil union registration issued by your state. 2 eligibility and participation

6 o If the state where you live permits same-sex domestic partner registration, your same-sex domestic partner will be considered eligible for dependent coverage as a same-sex domestic partner only if you provide the Plan with a valid certificate of domestic partner registration issued by your state. o If the state where you live does not permit same-sex domestic partner registration or same-sex civil union registration, your same-sex domestic partner will be considered eligible for dependent coverage as a same-sex domestic partner only if you execute the L-3 Affidavit of Domestic Partnership and submit valid documentation that demonstrates that you have established and continue in your relationship. Examples of valid documentation include: common ownership of real property (joint deed or mortgage agreement) or a common leasehold interest in property federal income tax returns showing a common address driver s licenses listing a common address proof of joint bank, investment or credit accounts a valid certificate of domestic partner registration issued by your county, city or municipality. Under current federal tax law, the value of medical, dental and vision coverage for your same-sex domestic partner and his or her enrolled children is considered taxable income to you unless such individuals can otherwise qualify as dependents for federal income tax purposes. IRS regulations require L-3 to report this income on your paychecks, as well as your W-2 form. State tax treatment of these benefits will vary from state to state. If you have any questions about this taxable income, contact the Benefit Center or your tax advisor. Special rules apply if you are covering a same-sex domestic partner and your state subsequently permits same-sex domestic partnership registration, the establishment of civil unions or same-sex marriage. If you live in a state that permits both same-sex marriage and either same-sex domestic partner registration or same-sex civil union partner registration, only your same-sex spouse will be eligible for enrollment and you will not be able to enroll your same-sex domestic partner or same-sex civil union partner. Special rules apply if you are covering a same-sex domestic partner and your state subsequently permits same-sex domestic partnership registration, the establishment of civil unions or same-sex marriage. You will not be required to comply with the new state requirements to continue covering your same-sex domestic partner as long as your enrolled same-sex domestic partner retains coverage under the Plan without interruption. However, if your same-sex domestic partner loses coverage for any reason after a change in the law, you will not be able to re-enroll your same-sex domestic partner without complying with any change in the law. For example, if your state previously permitted registration of same-sex domestic partners and subsequently permits same-sex marriage beginning July 24, 2014, your same-sex domestic partner already enrolled in the Plan prior to that date will continue to be covered as long as coverage continues without interruption. However, if your same-sex domestic partner loses coverage under the Plan for any reason on or after July 24, 2014 and later wishes to enroll, you may not re-enroll him or her in the Plan unless you get married. If you cover a same-sex domestic partner and you move from a state that does not offer legal recognition to same-sex couples to a state that does, you may continue to cover your same-sex domestic partner, as long as there is no interruption in the same-sex domestic partner s coverage. However, if your same-sex domestic partner loses coverage for any reason after you move, you may not re-enroll your same sex domestic partner without complying with the law of your new state. Likewise, if you move from a state that permits same-sex eligibility and participation 3

7 domestic partner registration or establishment of civil unions to a state that permits samesex marriage and you had enrolled your same-sex domestic partner in the Plan before you moved, your same-sex domestic partner will be able to retain coverage as long as there is no interruption in coverage. Please contact the Benefit Center for details. Participation in the Plan is not automatic; you must enroll to have coverage. o Children. Dependent children are your children under age 26 for whom proper documentation has been provided, including: your biological children your lawfully adopted children. If you have started legal adoption procedures, the child is considered a dependent if he/she lives with you full-time and depends on you for support. If you are adopting a child from birth, the child is considered a dependent from birth 4 eligibility and participation the children of your same-sex civil union partner or same-sex domestic partner, provided they would qualify as your dependent(s) on your federal income tax return if your partner were your spouse your stepchildren any other child, including a grandchild, niece, nephew, etc. for whom you have proof of legal guardianship, as long as the child lives with you in a parent-child relationship and depends on you for support. If you have started legal guardianship procedures, coverage is effective with the filing of the application. For coverage to continue, you must be appointed a legal guardian within three months of filing your application. You may also cover any other dependent children for whom Plan coverage has been court-ordered through a Qualified Medical Child Support Order (QMCSO) or through a National Medical Child Support Notice (NMCSN). See page 8 for more information on QMCSOs and NMCSNs. Continued coverage for handicapped children. While coverage normally ends on a dependent child s 26th birthday, you can apply for continued coverage for a handicapped dependent child. Children are considered handicapped when they are primarily dependent on you for financial support and maintenance because of a mental or physical condition that started before age 26. You must provide proof to Aetna that your child s handicap began before the child reached age 26, and you must do so within 60 days after the child s 26th birthday. Coverage stays in force for as long as dependent coverage under the Plan continues and the child remains handicapped, as defined above. For all handicapped children age 26 and over, Aetna periodically requires substantiation of the child s continued handicap, which may include a physical exam. Without this proof, coverage will not be continued. Please note: You are required to notify the L-3 Benefit Center within 60 days if your child is age 26 or over and no longer meets the criteria described above for continued coverage for handicapped children. When family members work for L-3. An employee cannot be enrolled as both an employee and a dependent. Similarly, dependent children of married couples who both work for L-3 can be enrolled under only one parent s coverage. In addition, a person cannot be covered as both an employee and a retiree, or as a dependent of both an employee and a retiree. If an employee and spouse or same-sex domestic partners work at different L-3 business units, the couple may choose family coverage at either business unit, and enroll either spouse s/same-sex domestic partner s children.

8 Enrolling for Coverage Participation in the Plan is not automatic; you must enroll to have coverage. You and your dependents can enroll: o within 31 days of your eligibility date; o during the annual enrollment period, which is held in the fall; or o within 60 days of a qualifying event (see Making changes mid-year, page 6) HIPAA special enrollment rights. If you decline enrollment for yourself and/or your dependents (including your spouse/same-sex domestic partner) because you have other medical insurance or group health plan coverage and the other coverage ends, you may enroll yourself and/or your dependents in the Plan if you request enrollment within 60 days after your other coverage ends. To enroll for coverage, you must provide written proof that your other coverage has ended. Similarly, if you decline coverage because you have other employer-sponsored coverage (such as through your spouse s/same-sex domestic partner s employer) and the employer stops contributing toward your or your dependents other coverage, you may enroll yourself and/or your dependents in the Plan if you request enrollment within 60 days after employer contributions for your other coverage end. To enroll for coverage, you must provide written proof that employer contributions for your other coverage have ended. In addition, if you have a new dependent as a result of a marriage, birth, adoption or placement for adoption, you may enroll yourself and your dependent(s) if you request enrollment within 60 days after the marriage, birth, adoption or placement for adoption. You must provide documented proof that your dependents are eligible, as described below. When you enroll your dependents for coverage, you will be required to complete the L-3 Dependent Eligibility Questionnaire and provide certain documents to prove that your dependents are eligible. This requirement applies in ALL circumstances in which you may want to enroll a dependent. To request special enrollment or obtain more information, contact the L-3 Benefit Center. Enrolling your dependents for coverage. When you enroll your dependents for coverage, you will be required to complete the L-3 Dependent Eligibility Questionnaire and provide certain documents to prove that your dependents are eligible. This requirement applies in ALL circumstances in which you may want to enroll a dependent, whether that s as a new hire, at annual enrollment, or when you have a qualifying event that allows you to add a dependent during the Plan Year (see Making changes mid-year, page 6). L-3 reserves the right to confirm any dependent s eligibility at any time, including during annual enrollment or by conducting a formal dependent eligibility audit. Such an audit may be conducted by L-3 or by a third party authorized by L-3. If you do not respond to an audit request, coverage for your dependents will be terminated. Please note: You are required to notify the L-3 Benefit Center within 60 days of any event that affects a dependent s eligibility. Annual enrollment. L-3 holds an annual enrollment each fall during which you can: o enroll for coverage; o change your previous election; o cancel your own and/or your dependents coverage; or o add dependent coverage (documentation will be required). The election you make during annual enrollment 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, page 6). eligibility and participation 5

9 Choosing a coverage level. You may elect one of the following coverage levels: o employee only o employee and spouse/same-sex domestic partner o employee and child(ren) You can t change your election during the Plan Year unless you have a qualifying event. Generally 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. o employee and family. Some collective bargaining agreements may provide for different coverage levels. You will be notified which coverage levels are available to you. 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. Contact the Benefit Center to discuss your specific situation. L-3 abides by the IRS s definition of qualifying events, which includes: o your legal marital status changes (e.g., through marriage, divorce, legal separation or annulment) o 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) o you are required to cover a child pursuant to a Qualified Medical Child Support Order or a National Medical Child Support Notice 6 eligibility and participation o your spouse or your dependent becomes employed or unemployed o you, your spouse or your dependent takes or returns from an unpaid leave of absence o your, your spouse s or your dependent s employment status changes from full-time to part-time (or vice versa) or from hourly to salaried (or vice versa) o your dependent first meets or no longer satisfies the requirements for coverage because he/she reaches the limiting age, or any similar circumstance o you, your spouse or your dependent goes on strike or is locked out, or returns from a strike or lockout o the coverage options available to you change because you, your spouse or your dependent changes residences or work sites o you previously waived participation because you were covered under your spouse s group medical plan and you subsequently lose coverage under that plan o you, your spouse or your dependent either becomes eligible or loses eligibility for Medicare or Medicaid coverage o according to Internal Revenue Service guidelines, there s a significant change in your, your spouse s or your dependent s medical coverage o you, your spouse or your dependent makes a change (or a change is made) under another employer group health plan

10 o you or your dependent loses eligibility under a Medicaid plan or a state child health insurance plan (SCHIP) o you or your dependent becomes eligible for government assistance under a Medicaid plan or an SCHIP designed to help you pay for Plan coverage. Employees will be able to make the listed changes for their same-sex domestic partners when a qualifying event occurs as long as all notification and documentation rules are followed. Please keep in mind that you should consider the tax implications of any change you make involving your same-sex domestic partner. 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 are widowed mid-year, you could change from employee and spouse/same-sex domestic partner coverage to employee only coverage, but you couldn t drop your coverage.) 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. An election change will not become effective until you provide the required enrollment materials, including appropriate written documentation of the reason for the change. Please note that you will need a dependent s Social Security number to enroll that dependent. (If the dependent does not yet have a Social Security number, you must provide one within 60 days, unless the process is delayed for reasons beyond your control. You are not required to report a Social Security number for a dependent who is not a U.S. citizen (and therefore does not have a Social Security number nor is eligible for Medicare). If the dependent becomes eligible for a Social Security number, you must provide it as soon as it is received.) You also will need to complete the L-3 Dependent Eligibility Questionnaire and provide certain documents to prove that the dependent is eligible. Contact the L-3 Benefit Center at as soon as you know that a qualifying 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. Contact the L-3 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 L-3 Benefit Center will explain the procedure to you. When Coverage Begins For you. If you enroll for coverage, it starts on your first day at work, unless otherwise specified in your collective bargaining agreement (if applicable). For your dependents. If you enroll your eligible family members when you enroll, their coverage begins when yours does, as long as you have provided the required documentation, including a Social Security number for each dependent. If a dependent becomes eligible as a result of a qualifying event, coverage for that dependent starts on the date described above as long as you provide appropriate written documentation. If you enroll during the annual enrollment period. If you enroll for coverage during the annual enrollment period held each fall, coverage for you and your enrolled dependents starts on the following January 1. If you change your coverage because of a qualifying event. If a qualifying event occurs (as described on page 6) and you change your coverage as a result of that event, your coverage is effective as described above as long as you provide appropriate written documentation. eligibility and participation 7

11 You and L-3 share the cost of your coverage. Your contributions are deducted from each paycheck on a pre-tax basis (before taxes are taken out). That means you pay less out of your pocket for coverage than if you were paying on an after-tax basis (after taxes are taken out). Medical Child Support Orders If you are eligible for coverage under the Plan, 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 medical 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 Plan receives a QMCSO or a NMCSN requiring you to provide Plan coverage 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 L-3 Benefit Center or L-3 s QMCSO administrator: Aon Consulting, Inc. ATTN: L-3 Communications Qualified Order Team P.O. Box 1542 Lincolnshire, IL Phone: Fax: Cost of Coverage You and L-3 share the cost of coverage. Your contributions are deducted from your paycheck each pay period. Contact the L-3 Benefit Center to find out current contribution amounts. Since your share of the cost is deducted from your paycheck on a pre-tax basis, L-3 does not withhold federal income taxes, state income taxes (for most states) or Social Security taxes on your contributions. However, keep in mind that, as a result of the tax savings, you may pay less into Social Security, which means your Social Security benefit could be slightly lower. Waiving Medical Coverage You also have the option of waiving participation. However, if you do so and want to enroll later, you will have to wait until the next annual enrollment or until you have a qualifying event, as described on page 6. Written proof of the qualifying event will be required. 8 eligibility and participation

12 How the Plan Works The Plan puts you the consumer of health care services and supplies in charge of spending health care dollars wisely. The Plan has three parts: o Your Health Reimbursement Account (HRA). The Plan establishes an individual Health Reimbursement Account, known as an HRA, for you (and your covered family members, if applicable) that contains a certain amount of L-3-funded Benefit Dollars. The amount of Benefit Dollars provided to your HRA depends on the coverage level you elect (employee only, employee and spouse/same-sex domestic partner, employee and child(ren), or employee and family). You may use your Benefit Dollars to cover eligible In-Network or Out-of-Network expenses. (Please note that In-Network preventive care is paid at 100% of the negotiated charge with no annual deductible and no payments made from your HRA.) Benefit Dollars remaining in your HRA at the end of each Plan Year, if any, roll over to the next Plan Year and are added to that year s HRA allocation to help you cover future medical costs. o Your Responsibility. If you spend all of the Benefit Dollars in your HRA, you pay 100% of your eligible health care expenses out of pocket until you meet the annual deductible. Once you satisfy the annual deductible, the Health Coverage phase of the Plan begins, as described below. o Health Coverage. Accompanying the HRA is a high-deductible Preferred Provider Organization (PPO) medical plan that uses the Aetna Choice POS II network. It pays benefits for your eligible expenses once you satisfy the annual deductible; you and L-3 share the cost of your eligible medical expenses through coinsurance. Coverage depends on the Plan option you elect and whether you go In-Network or Out-of-Network for your care. (In-Network preventive care is paid at 100% of the negotiated charge and not subject to the annual deductible.) If you reach the annual out-of-pocket maximum, the Plan will pay 100% of eligible expenses for the rest of the Plan Year. When you go In-Network for preventive care, it is covered in full and is not deducted from your Health Reimbursement Account (HRA), nor is it subject to the annual deductible. There is no cost to you for eligible In-Network preventive care services. In summary, when you incur eligible medical expenses, you pay them by first using the L-3-provided Benefit Dollars deposited in your HRA, then by using money out of your own pocket (Your Responsibility), until you reach the annual deductible. Once you meet the annual deductible, Health Coverage begins and you pay coinsurance. Plan options. There are two options offered under the Aetna HealthFund HRA: o Option I: You pay less out of pocket when you receive care because you have a larger HRA allocation and lower coinsurance (10% In-Network/30% Out-of-Network) to pay, but your payroll deductions are higher than Option II. o Option II: You pay more out of pocket when you receive care because you have a smaller HRA allocation and higher coinsurance (20% In-Network/40% Out-of-Network) to pay, but your payroll deductions are lower than Option I. how the plan works 9

13 Your Health Reimbursement Account (HRA) When you first enroll in the Plan, a Health Reimbursement Account (HRA) is established on your behalf. The Benefit Dollars in your HRA are provided by L-3; you may not contribute to this account. The annual amount of Benefit Dollars that L-3 allocates to your HRA is based on the option and coverage level you choose, as follows: Benefit Dollars that are unused at the end of each Plan Year remain in your HRA and are added to the next Plan Year s allocation. There is no limit to the amount of Benefit Dollars that may roll over from one Plan Year to the next. Coverage Level HRA Allocation Each Plan Year Benefit Dollars Allocated to HRA Account* Option I Option II Employee $800 $300 Employee and spouse/same-sex domestic partner $1,100 $350 Employee and child(ren) $1,300 $550 Employee and family $1,600 $600 * You may increase your HRA allocation by participating in the incentive program described on page 14. Please note: The Benefit Dollars allocated to your HRA each Plan Year are provided per coverage level, not per person. Also note that the amount of Benefit Dollars you receive each Plan Year may change. (See the definition of Benefit Dollars in the Glossary, on page 82.) Spending your Benefit Dollars. You may use your Benefit Dollars to: o meet your annual deductible (see page 31) o meet your annual out-of-pocket maximum o pay the portion of an eligible expense for which the Plan s Health Coverage pays partial benefits (eligible expenses are described starting on page 22). When you go to a doctor or pharmacy, show your Plan ID card. The amount of the eligible expense will be deducted from your HRA, based on the balance in your account at the time your claim is processed. In-Network preventive care and your HRA. The Plan pays 100% of the negotiated charge for eligible preventive care services received from In-Network providers, with no deductible or coinsurance required. Benefit Dollars are not used to pay for these expenses. How your HRA account balance and your deductible are affected by mid-year enrollment or changes. If you are hired during the Plan Year, your initial HRA account balance will be prorated on a monthly basis; your annual deductible will not be prorated. If you change your coverage level during the Plan Year due to a qualifying event, your Benefit Dollars and annual deductible will be adjusted accordingly. 10 how the plan works

14 If your coverage level increases mid-year. If your coverage level increases during the Plan Year (for example, from employee only to employee and spouse/same-sex domestic partner ), your Benefit Dollar allocation will increase on a monthly, prorated basis to account for the time you are enrolled under each coverage level during the Plan Year. Your annual deductible will increase to the new coverage level amount, taking into account any expenses already applied toward meeting your annual deductible during the Plan Year. Your annual deductible will not be prorated. o Example 1. Assume you are single at the beginning of the Plan Year and you choose employee only coverage under Option I. Your Benefit Dollar allocation would be $800 and your annual deductible would be $2,000. Also, assume that you have not incurred any medical expenses by June 15, which is when you get married and change your coverage level to employee and spouse/same-sex domestic partner. With your change in coverage level, your Benefit Dollar allocation would be $950, which is calculated as follows: $400 ($800 x 50%, where $800 is the employee only HRA allocation and 50% represents the January through June 15 six-month period in which you were enrolled in the Plan at the employee only coverage level) PLUS $550 ($1,100 x 50%, where $1,100 is the employee and spouse/same-sex domestic partner HRA allocation and 50% represents the June 16 through December six-month period in which you were enrolled in the Plan at the employee and spouse/same-sex domestic partner coverage level) In addition, your annual deductible would increase to $3,000 the employee and spouse/same-sex domestic partner deductible level. To track your HRA account balance, log in to Aetna Navigator TM, which you can do from Aetna s website ( or call Aetna Member Services at , from 8:00 a.m. to 6:00 p.m., local time zone. (Outside the U.S., call collect: , 8:00 a.m. to 4:15 p.m., ET.) o Example 2. Again, assume you are single at the beginning of the Plan Year, you choose employee only coverage under Option I and you get married June 15. However, in this example, you have used $600 in Benefit Dollars from your HRA by the time you get married, and that this amount was applied to your annual deductible. With your change in coverage level, your Benefit Dollar allocation would be $350, which is calculated as follows: $400 ($800 x 50%, where $800 is the employee only HRA allocation and 50% represents the January through June 15 six-month period in which you were enrolled in the Plan at the employee only coverage level) PLUS $550 ($1,100 x 50%, where $1,100 is the employee and spouse/same-sex domestic partner HRA allocation and 50% represents the June 16 through December six-month period in which you were enrolled in the Plan at the employee and spouse/same-sex domestic partner coverage level) MINUS $600 (Benefit Dollars used by the time you get married) In addition, your annual deductible for the remainder of the Plan Year would be $2,400 the $3,000 employee and spouse/same-sex domestic partner deductible level minus the $600 in Benefit Dollars used from your HRA and applied toward meeting the annual deductible. how the plan works 11

15 If your coverage level changes during the year, your Benefit Dollar allocation will change on a monthly, prorated basis. Your annual deductible will not be prorated. If your coverage level decreases mid-year. If your coverage level decreases during the Plan Year (for example, from employee and spouse/same-sex domestic partner to employee only ), your Benefit Dollar allocation will decrease on a monthly, prorated basis to account for the time you are enrolled under each coverage level during the Plan Year. Your annual deductible will decrease to the new coverage level amount, taking into account any expenses already applied toward meeting your annual deductible during the Plan Year. Your annual deductible will not be prorated. o Example 1. Assume you are married at the beginning of the Plan Year and you choose employee and spouse/same-sex domestic partner coverage under Option I. Your Benefit Dollar allocation would be $1,100 and your annual deductible would be $3,000. Also, assume that you have not incurred any medical expenses by June 15, which is when you get divorced and change your coverage level to employee only. With your change in coverage level, your Benefit Dollar allocation would be $950, which is calculated as follows: $550 ($1,100 x 50%, where $1,100 is the employee and spouse/same-sex domestic partner HRA allocation and 50% represents the January through June 15 six-month period in which you were enrolled in the Plan at the employee and spouse/same-sex domestic partner coverage level) PLUS $400 ($800 x 50%, where $800 is the employee only HRA allocation and 50% represents the June 16 through December six-month period in which you were enrolled in the Plan at the employee only coverage level) In addition, your annual deductible would decrease to $2,000 the employee only deductible level. o Example 2. Again, assume you are married at the beginning of the Plan Year, you choose employee and spouse/same-sex domestic partner coverage under Option I and you get divorced June 15. However, in this example, you have used $600 in Benefit Dollars from your HRA account by the time you get divorced, and that this amount was applied to your annual deductible. With your change in coverage level, your Benefit Dollar allocation would be $350, which is calculated as follows: $550 ($1,100 x 50%, where $1,100 is the employee and spouse/same-sex domestic partner HRA allocation and 50% represents the January through June 15 six-month period in which you were enrolled in the Plan at the employee and spouse/same-sex domestic partner coverage level) PLUS $400 ($800 x 50%, where $800 is the employee only HRA allocation and 50% represents the June 16 through December six-month period in which you were enrolled in the Plan at the employee only coverage level) MINUS $600 (Benefit Dollars used by the time you get divorced) In addition, your annual deductible for the remainder of the Plan Year would be $1,400 the $2,000 employee only deductible level minus the $600 in Benefit Dollars used from your HRA and applied toward meeting the annual deductible. 12 how the plan works

16 If the Plan is no longer available to you. If the Plan is no longer available to you because you change residences or work sites or because L-3 no longer offers the Plan to employees any Benefit Dollars remaining in your HRA cannot be paid to you. However, if your Plan participation ends because you are transferred abroad on overseas assignment, any Benefit Dollars remaining in your HRA as of the date of the transfer will be restored upon your return, provided you return from your transfer within two years and immediately re-enroll in the Plan. (Benefit Dollars may be restored in other limited circumstances; contact Aetna for details.) The HRA and the Health Care FSA. While your HRA may appear similar to the L-3-sponsored Health Care Flexible Spending Account (FSA), the two are not the same, and they are used for different purposes. If you are enrolled in the Plan, you may also participate in the Health Care FSA. However, if you do so, you must estimate your eligible expenses for the Plan Year carefully. You also may want to consider the issues summarized in the table below before you decide whether to participate in the Health Care FSA. Comparing the HRA and the Health Care FSA The HRA Account The Health Care FSA Can you elect participation No. You may not enroll in the Yes. You may have a Health separately from enrolling in HRA (nor the Health Coverage) Care FSA regardless of whether the Aetna HealthFund Health separately from enrolling in the you choose coverage under Reimbursement Arrangement Plan. the Aetna HealthFund HRA Medical Plan? or any L-3 Medical Plan. What type of funds does the Benefit Dollars, provided only Your pre-tax contributions account hold? by L-3 Who determines how much L-3, based on the coverage You, up to the annual goes into your account? level you choose and any contribution limit incentive credits you and/or your spouse/same-sex domestic partner earn What type of expenses Only those eligible expenses Eligible unreimbursed health may be reimbursed through shown starting on page 22 care expenses, as described in the account? the Health Care Supplement included with the Health Care Flexible Spending Account and the Dependent Care Flexible Spending Account SPD. Can money left over at the Yes. Any Benefit Dollars remaining Yes. You may carry over up to end of the Plan Year, after in your HRA account at year-end $500 of your unused Health all reimbursements have roll into your HRA account for Care FSA funds into the next been made, be used for the the new Plan Year. Plan Year as long as you following Plan Year? remain enrolled in an L-3 Health Care FSA. However, any funds remaining in your Health Care FSA at year-end above $500 will be forfeited. Can money left over at the end of the Plan Year, after all reimbursements have been made, be transferred from one account to another? You may not transfer Benefit Dollars from your HRA to your Health Care FSA or money from your Health Care FSA to your HRA. If you are enrolled in the Plan, you may also participate in the L-3 Health Care FSA. If you participate, estimate your eligible expenses for the Plan Year carefully. The IRS only allows you to carry over up to $500 of your unused Health Care FSA funds into the next Plan Year (as long as you remain enrolled in an L-3 HCFSA). Any funds remaining in your Health Care FSA at year-end above $500 will be forfeited. Some expenses that are not covered under the Plan may be reimbursed from your Health Care FSA. Check the Health Care Supplement to the Health Care Flexible Spending Account and the Dependent Care Flexible Spending Account SPD if you participate in a Health Care FSA. how the plan works 13

17 Incentive Credits You and your spouse/same-sex domestic partner have up to three opportunities each year to increase the Benefit Dollars in your HRA by earning incentive credits: If you are not eligible for disease management, the maximum incentive reward you can earn Healthy Behavior Take an online Health Assessment through ActiveHealth Get an annual physical Complete a four-call telephonic engagement with ActiveHealth (if eligible for disease management) Incentive Credit $75 per person $125 per person $200 per person is $200 in additional Benefit Dollars ($400 if both you and your spouse/same-sex domestic partner participate). If you are eligible for disease management, you can earn up to $400 in additional Benefit Dollars ($800 if your spouse/same-sex domestic partner is also eligible for disease management). Please note the following about earning incentive credits: o Health Assessment: To access the Health Assessment, log on to l-3com. (Please note that you must complete the Health Assessment within the allotted time period to receive incentive credits; contact the L-3 Benefit Center for more information.) You may save your answers at any time and return later, but you will not receive incentive credits until you have completed and submitted the Health Assessment. If you previously submitted a Health Assessment through ActiveHealth, you must update your assessment within the allotted time period to receive incentive credits. o Annual physical: It is important that your doctor s office code your visit as preventive to get credit for an annual physical. When you schedule your annual physical, be sure to inform the office your visit should be coded as preventive. o Working with ActiveHealth: Please note that this incentive is for employees/spouses/ same-sex domestic partners who have been invited to participate in the Disease Management Program only. A telephone session is a minute phone call in which you and a nurse coach address existing or potential issues related to your chronic condition(s) and set health-related goals. Please note that just scheduling an appointment with a nurse coach does not count as a session. How incentives work. Your incentive credits are added automatically to your HRA as additional Benefit Dollars. There is no action required on your part. Your incentive credits are available as soon as administratively possible after you complete the applicable task. Please note that incentive credits cannot be used to reimburse claims processed before the date the reward is credited to your HRA. If the Benefit Dollars are added to your HRA before you meet the annual deductible, you may use these additional Benefit Dollars to pay for eligible health care expenses. If they are added to your account after you meet the annual deductible (i.e., when you are in the Health Coverage portion of the Plan), they will be used to pay your coinsurance. Incentive balances roll over from year to year. Any Benefit Dollars remaining in your HRA at the end of the Plan Year will be available in the following Plan Year. Credits are never paid out in cash, nor do they become payable when your L-3 coverage ends. If you have unspent Benefit Dollars in your HRA when your coverage ends, you forfeit them. However, if you elect COBRA, unspent credits remain available to you for as long as your COBRA coverage continues. 14 how the plan works

18 Health Coverage Once you have met the annual deductible, the Health Coverage portion of the Plan pays benefits for eligible expenses. (Keep in mind that eligible preventive care received In-Network is covered at 100% of the negotiated charge with no annual deductible, copays or coinsurance, and no payments are made from your HRA.) For the first Plan Year in which you are enrolled in the Plan, it will take both the Benefit Dollars in your HRA and money out of your pocket (called Your Responsibility) to meet the annual deductible, as shown below. Option I Your Responsibility Coverage HRA Allocation + (paid out of = Annual Level Each Plan Year your pocket) Deductible Employee only $800 + $1,200 = $2,000 Employee and $1,100 + $1,900 = $3,000 spouse/same-sex domestic partner Employee and $1,300 + $1,700 = $3,000 child(ren) Employee and $1,600 + $2,400 = $4,000 family Option II Your Responsibility Coverage HRA Allocation + (paid out of = Annual Level Each Plan Year your pocket) Deductible Employee only $300 + $1,700 = $2,000 Employee and $350 + $2,650 = $3,000 spouse/same-sex domestic partner Employee and $550 + $2,450 = $3,000 child(ren) Employee and $600 + $3,400 = $4,000 family For the first Plan Year in which you are enrolled in the Plan, you will need both the Benefit Dollars in your HRA and money out of your pocket to meet the annual deductible. In future Plan Years, you may have Benefit Dollars left over in your HRA at year-end. If so, your Benefit Dollars will be rolled over automatically to your HRA for the next Plan Year and may be used to satisfy Your Responsibility. In future Plan Years, you may have Benefit Dollars left over in your HRA at year-end. If so, your Benefit Dollars will be rolled over automatically to your HRA for the next Plan Year and may be used to satisfy Your Responsibility. Once you have satisfied the annual deductible, Option I will pay 90% of the negotiated charge for eligible In-Network expenses and 70% of the reasonable and customary charge for eligible Out-of-Network expenses. You will be responsible for the remaining 10% (In-Network) or 30% (Out-of-Network) known as your coinsurance. Under Option II, after the deductible is met, the Plan will pay 80% of the negotiated charge for eligible In-Network expenses and 60% of the reasonable and customary charge for eligible Out-of-Network expenses. You will be responsible for the remaining 20% (In-Network) or 40% (Out-of-Network). Your out-of-pocket costs are limited each year. For more information on annual out-of-pocket limits, and to understand how eligible expenses are reimbursed In- and Out-of-Network, see the charts starting on page 31. how the plan works 15

19 In most cases, In-Network coverage for medically necessary eligible expenses is based on the negotiated The Plan s Health Coverage gives you direct access to providers (doctors, hospitals and other medical facilities) affiliated with the Aetna Choice POS II network. Network providers charge lower fees for services they provide to eligible participants. You may see any physician or specialist in the network at any time; you do not need to designate a Primary Care Physician or get a referral. To find out if a provider participates in the Aetna Choice POS II network, call Aetna Member Services at , from 8:00 a.m. to 6:00 p.m., local time zone, or log in to Aetna Navigator, which you can do from Aetna s website ( (Outside the U.S., call collect: , 8:00 a.m. to 4:15 p.m., ET.) How Your HRA and the Health Coverage Work Together This chart summarizes how the Plan s components work together to help you pay for eligible expenses. charge while Out-of-Network coverage is based on the reasonable and customary charge. If Your Eligible Expenses For the Plan Year Are Less than or equal to the Benefit Dollars in your HRA More than the Benefit Dollars in your HRA but less than the annual deductible More than the annual deductible Your Eligible Expenses Are Covered in the Following Way You use only Benefit Dollars to pay them,* which means you pay nothing out of your pocket toward your covered expenses for the Plan Year. Any Benefit Dollars remaining in your HRA at year-end roll over to your HRA for the following Plan Year. You use both Benefit Dollars and your own money to pay them.* Once you use all your Benefit Dollars, you must spend your own money to meet Your Responsibility, until you satisfy the annual deductible. Then, the Health Coverage starts paying benefits. If you contribute to a Health Care FSA, keep in mind that you may use it to reimburse yourself tax-free for amounts you pay out of pocket toward meeting the annual deductible. You use Benefit Dollars and your own money to meet Your Responsibility and then pay applicable coinsurance amounts.* Once you use all your Benefit Dollars and meet Your Responsibility, the Plan s Health Coverage pays benefits as follows: Option I: 90% of the negotiated charge if you go In-Network for your care 70% of the reasonable and customary charge if you go Out-of-Network for your care Option II: 80% of the negotiated charge if you go In-Network for your care 60% of the reasonable and customary charge if you go Out-of-Network for your care * In-Network preventive care is covered at 100% of the negotiated charge and is not paid from your HRA. 16 how the plan works

20 Example 1. Assume you re married with one child. You enroll in Option I and choose employee and family coverage (which provides $1,600 in Benefit Dollars), Your Responsibility is $2,400 and your Health Coverage pays 90% of the negotiated charge because you received all care from In-Network providers. (Note that eligible In-Network preventive care expenses are covered at 100% of the negotiated charge.) Here s a summary of some expenses you could have in your first year as a Plan participant and how they would be paid through your HRA account and the Health Coverage. Benefit Dollars allocated to your HRA: $1,600 Expense Amount In-Network preventive care (paid at 100% of the negotiated charge $200 with no copay, deductible or Benefit Dollars from your HRA) Eligible In-Network preventive care expenses are covered at 100% of the negotiated charge. Non-Preventive Care Urgent care visits (1) $100 Doctor s office visits (3) $200 Physical therapy (6) $400 Prescriptions (5) $200 Total (preventive and non-preventive) $1,100 How It s Paid HRA Account $900 Your Responsibility $0 Health Coverage (preventive paid by the Plan) $200 Health Coverage (non-preventive paid by the Plan) $0 Health Coverage (paid by you) $0 Total $1,100 HRA Rollover Benefit Dollars $700 With $900 paid from your HRA for the Plan Year, you would have $700 in Benefit Dollars remaining ($1,600 $900), which would roll over to the next Plan Year. how the plan works 17