MERCK LIFE INSURANCE PLAN SUMMARY PLAN DESCRIPTION

Transcription

1 MERCK LIFE INSURANCE PLAN SUMMARY PLAN DESCRIPTION Effective Jan. 1, 2016

2 This Summary Plan Description (SPD) describes the life insurance and accidental death and dismemberment benefits provided under the Merck Medical, Dental, Life Insurance and Long Term Disability Plan as it applies to U.S.-based 1 employees of the wholly owned U.S. subsidiaries of Merck & Co., Inc. (excluding Telerx Marketing, Inc., Comsort, Inc., Vree Health LLC, HMR Weight Management Services Corp. and Merck Global Health Innovation Fund, LLC and each of their subsidiaries) and excluding employees subject to a collective bargaining agreement with the United Steelworkers Union Local A list of the collective bargaining units whose members are eligible to participate in life insurance and accidental death and dismemberment benefits provided under the Merck Medical, Dental, Life Insurance and Long Term Disability Plan as described in this SPD is included as Exhibit A. Frequently Used Terms Key words that are frequently used in the SPD are capitalized and defined in the Glossary. The life insurance and accidental death and disability benefits provided under the Merck Medical, Dental, Life Insurance and Long Term Disability Plan are referred to in this SPD as the Life Insurance Plan or the Plan. About This SPD This SPD does not apply to any employee or former employee of Merck & Co., Inc. or its subsidiaries or joint ventures other than those specified above. This SPD merely summarizes the benefits and benefit coverage levels provided under the Life Insurance Plan effective Jan. 1, 2016, to the employees described above. All benefits and coverages described in this SPD are subject to the terms of the insurance policies under which the benefits are provided. If there is any conflict between this SPD and the insurance policies, the insurance policies will always govern. This SPD reflects the provisions of the Life Insurance Plan in effect as of Jan. 1, It replaces the Life Insurance SPD effective Jan. 1, 2015, entitled Merck Life Insurance Plan Summary Plan Description and all summaries of material modifications applicable to it dated before Jan. 1, For employees of Inspire Pharmaceuticals Inc. employed by that entity on Feb. 1, 2011, this SPD replaces the Certificate of Insurance for Group Term Life and AD&D from USAble dated Feb. 1, Excluded From This SPD The Merck Medical, Dental, Life Insurance and Long Term Disability Plan also provides life insurance and accidental death and dismemberment benefits to: Employees of Merck Sharp & Dohme Corp. who are members of the United Steelworkers Union Local collective bargaining unit Former employees of Merck Sharp & Dohme Corp. who were members of the United Steelworkers Union Local collective bargaining unit on their retirement date and who satisfy the plan s requirements for retiree life insurance benefits 1 A U.S.-based employee is an employee whose home country is designated in Merck s employee data base as one of the 50 U.S. states or District of Columbia (and includes employees on temporary international assignment outside one of the 50 U.S. states or District of Columbia) and excludes employees whose home country is designated in Merck s employee data base as a U.S. territory (e.g., Puerto Rico, Guam and U.S. Virgin Islands) or a country outside one of the 50 U.S. states or District of Columbia even if the employee is on temporary international assignment in one of the 50 U.S. states, District of Columbia or in a U.S. territory.

3 Former U.S.-based employees 1 of the wholly owned U.S. subsidiaries of Merck & Co., Inc. (excluding Telerx Marketing, Inc., Comsort, Inc., Vree Health LLC, HMR Weight Management Services Corp. and Merck Global Health Innovation Fund, LLC and each of their subsidiaries) who are coded in the employee database of Merck & Co., Inc. as S1 Legacy Organon, S2 Legacy Intervet or S5 Legacy Schering-Plough under Infotype 35 and who satisfy the plan s requirements for retiree life insurance benefits, and Former U.S.-based 1 employees of the wholly owned U.S. subsidiaries of Merck & Co., Inc. (excluding Telerx Marketing, Inc., Comsort, Inc., Vree Health LLC, HMR Weight Management Services Corp. and Merck Global Health Innovation Fund, LLC and each of their subsidiaries and excluding former employees of Merck Sharp & Dohme Corp. who were members of the United Steelworkers Union Local collective bargaining unit on their retirement date) who are coded in the employee data base of Merck & Co., Inc. with a blank indicator under Infotype 35, who retired before Jan. 1, 2011, and who satisfy the plan s requirements for retiree life insurance benefits. For active and retiree life insurance benefits provided to the United Steelworkers Union Local , see the Merck Life Insurance SPD for USW For retiree life insurance benefits provided to former non-union and union employees coded as S1 (Legacy Organon), S2 (Legacy Intervet) or S 5 (Legacy Schering-Plough) under Infotype 35, see the Legacy Schering Retiree Life Insurance SPD. For retiree life insurance benefits provided to former non-union and union employees who terminated before Jan 1, 2011, with a blank indicator under Infotype 35, see the Legacy Merck Retiree Life Insurance SPD. To receive a copy of the SPDs that describe the benefits provided to these groups, contact the at MERCK ( ). Right to Amend or Terminate the Plan The Plan Sponsor reserves the right to amend the Merck Medical, Dental, Life Insurance and Long Term Disability Plan, including but not limited to the life insurance and accidental death and dismemberment benefits provided under the Plan, in whole or in part, or to completely discontinue the Merck Medical, Dental, Life Insurance and Long Term Disability Plan or the Life Insurance Plan at any time. 1 A U.S.-based employee is an employee whose home country is designated in Merck s employee data base as one of the 50 U.S. states or District of Columbia (and includes employees on temporary international assignment outside one of the 50 U.S states or District of Columbia) and excludes employees whose home country is designated in Merck s employee data base as a U.S. territory (e.g., Puerto Rico, Guam and U.S. Virgin Islands) or a country outside one of the 50 U.S. states or District of Columbia even if the employee is on temporary international assignment in one of the 50 U.S. states, District of Columbia or in a U.S. territory.

4 TABLE OF CONTENTS Introduction... 1 Your Life Insurance coverage... 1 Your Life Insurance Plan Options... 1 Benefits Contacts and Resources... 2 General Information... 4 About Your Life Insurance coverage... 4 Life Insurance Eligibility... 4 Eligible Dependents... 4 Enrolling in Life Insurance Coverage... 5 Enrollment... 6 How to Enroll... 7 How to Designate Your Beneficiary... 8 Assigning Benefits... 9 When Life Insurance Coverage Begins... 9 EOI Paying for Life Insurance Coverage Making Changes to Your Coverage When Life Changes How to Make a Change to Your Coverage How Basic, Optional, AD&D and Dependent Life Insurance Benefits Are Paid When Life Insurance Coverage Ends How Basic Life Insurance Works Basic Life Insurance About Basic Life Insurance Your Coverage Conversion Options and Rights Portability How Employee Optional Life Works Optional Life Insurance About Optional Life Insurance Your Coverage Conversion Options and Rights Portability Other Important Information About Optional Life Insurance... 23

5 How Accidental Death and Dismemberment (AD&D) Insurance Works AD&D Insurance About AD&D Insurance Your Coverage Exclusions and Limitations Conversion Options and Rights Portability How Dependent Life Insurance Works Dependent Life Insurance About Dependent Life Insurance Coverage Exclusions and Limitations Conversion Options and Rights Portability Important Information About the Plan Administrative Information Your Rights Under USERRA Your Rights Under ERISA Claims and Appeals Claims and Appeals for Eligibility to Participate in the Life Insurance Plan Plan Disclosure Information Glossary Exhibit A... 44

6 1 INTRODUCTION YOUR LIFE INSURANCE COVERAGE This section provides a brief overview of all the Life Insurance Plan coverages and resources that are available to you as an Eligible Employee. KEY POINT INFORMATION FOR RESIDENTS OF CERTAIN STATES There are state-specific requirements that may change the provisions under the coverages described in this SPD. If you live in a state that has such requirements, those requirements will apply to your coverages and are made a part of this SPD. Prudential, the Claims Administrator of the Life Insurance Plan, has a website that describes these state-specific requirements. You may access the website at When you access the website, you will be asked to enter your state of residence, your Access Code and the current date. Your Access Code is If you are unable to access this website and want to receive a printed copy of these requirements, or if you have any questions, call Prudential at Your Life Insurance Plan Options Eligible Employees may enroll themselves and their Eligible Dependents for coverage under the Life Insurance Plan. Eligibility for a particular option depends on a variety of factors, including your employment status. The Life Insurance Plan is designed to provide financial protection for your family and offers the following coverage options: Basic Life Insurance. Eligible Employees automatically receive Basic Life Insurance at no cost. The amount of coverage equals 1x Base Pay, up to the Plan maximum (see Your Coverage ). Optional Life Insurance. Eligible Employees may elect No Coverage or you may elect from among a range of optional term life coverage amounts from 1x Base Pay up to 8x Base Pay (in 1 Base Pay increments), up to the Plan maximum (see About Optional Life Insurance ). Accidental Death and Dismemberment (AD&D) Insurance. AD&D Insurance is designed to protect your family in the event of your accidental death or if you sustain certain serious injuries as the result of an accident. You may elect No Coverage or you may elect coverage from among a range of coverage amounts from 1x Base Pay up to 8x Base Pay (in 1x Base Pay increments), up to the Plan maximum (see About AD&D Insurance ). Dependent Life Insurance. Dependent Life Insurance is designed to ease your financial burden if your Spouse/Domestic Partner or Dependent Children die. You may elect No Coverage, coverage for your Spouse/Domestic Partner, and/or coverage for your Dependent Children (see About Dependent Life Insurance ).

7 2 Benefits Contacts and Resources Several vendors administer and help answer questions about the Life Insurance Plan benefits. This chart will help you decide who to contact depending on your needs. When You Want to Contact How Obtain Plan literature and forms View the SPDs Report a death If you re an Eligible Employee: Enroll in your benefits when first hired, during annual enrollment or when making changes to your coverage. Depending on when you enroll, different Evidence of Insurability (EOI) requirements will apply Report a Life Event change Update dependent information Make or change your Beneficiary designation Access information and updates about all of your benefits If you want to convert your life insurance after it terminates If you want to port your life insurance after it terminates If you re enrolled in the Life Insurance Plan, to ask about: The status of EOI The status of a life claim Merck Benefits Service Center at Fidelity Prudential MERCK ( ) TDD: Customer Service Representatives are available Monday through Friday (excluding New York Stock Exchange holidays) between 8:30 a.m. and 8:30 p.m. ET. Overseas: Dial your country s toll-free AT&T USADirect access number then enter In the U.S., call to obtain AT&T USADirect access numbers PRU Representatives are available Monday through Friday (excluding holidays) between 8:00 a.m. and 8:00 p.m. ET. Report a death Fidelity Survivor Services :30 a.m. to 5:00 p.m. ET, Monday through Friday KEY POINT ENROLLING IN LIFE INSURANCE PLAN BENEFITS Enrollment in the Life Insurance Plan is through the the service provider for administration of Merck s health and insurance benefits. Eligible Employees can enroll in their life insurance benefits online or by phone. Please see How to Enroll in the About Your Life Insurance Coverage section of this SPD for detailed enrollment instructions.

8 3 The ( Benefits Service Center ) can help you with enrollment and eligibility information and questions. It is administered by Fidelity Investments and available online and by phone. Online: Fidelity NetBenefits at If you have an existing NetBenefits account, use the same username/login information you used previously. By Phone: MERCK ( ) or TDD at Customer Service Representatives are available Monday through Friday (excluding New York Stock Exchange holidays) between 8:30 a.m. and 8:30 p.m. ET. For overseas calls dial your country s toll-free AT&T USADirect access number then enter In the U.S., call to obtain AT&T USADirect access numbers. KEY POINT CONTACTING THE BENEFITS SERVICE CENTER To contact the Benefits Service Center, online or by phone, you will need a password. Your password provides security to ensure that only you can access your benefits information. Keep your password in a confidential place. You can establish your password directly online or by calling the Benefits Service Center. If you have an existing NetBenefits account, use the same username/password information you used previously. If you have forgotten your username or password, you will need to reset it using Having trouble with your username or password? on the login page. When you change your username or password, the change will apply to all your Fidelity accounts and services going forward.

9 4 GENERAL INFORMATION ABOUT YOUR LIFE INSURANCE COVERAGE This section provides Eligible Employees with important information about life insurance coverage including eligibility, enrollment, contributions and when you can make changes to your coverage. Life Insurance Eligibility If you are an Eligible Employee, you are eligible for coverage in the Life Insurance Plan as of your date of hire, rehire or transfer, subject to any Actively-at-Work and Evidence of Insurability (EOI) requirements. The Company pays the full cost of Basic Life Insurance coverage. You are not eligible for coverage under the Life Insurance Plan if you are not an Eligible Employee, or you are an Excluded Employee or an Excluded Person. Eligible Dependents As an Eligible Employee with Eligible Dependents on file, you may elect Dependent Life Insurance (see definition of Eligible Dependents in the Glossary ), subject to any Actively-at-Work and EOI requirements. Domestic Partnerships The Plan Sponsor extends coverage under the Life Insurance Plan to Eligible Employees Domestic Partners and Domestic Partners eligible Dependent Children. (See Eligible Dependents in this section of this SPD for a definition of eligible Dependent Children.) To elect Domestic Partner benefits, you and your partner must meet the Life Insurance Plan s definition of a Domestic Partnership as described in the Glossary. You Must Maintain Eligible Dependents on File It s up to you to monitor whether your dependents are eligible for coverage. By electing coverage for your dependents (either by affirmative election or automatically), you are confirming that they meet the Plan s dependent eligibility requirements and agree to notify the Benefits Service Center within 30 days after an event that causes any of these dependents to no longer meet the definition of an Eligible Dependent under the Plan. The Plan Administrator, in its sole discretion, maintains the right to audit any and all dependent information on file, and may require that you promptly provide sufficient documentation verifying your dependents continued eligibility at any time. For example, if you cover your Spouse/Domestic Partner as a dependent for Dependent Life Insurance and become divorced, your Spouse s/domestic Partner s life insurance coverage will end as of the date of the divorce regardless of when you notify the Benefits Service Center by phone or online. At the Company s discretion, premium overpayments may or may not be refunded. If you do not promptly provide documentation sufficient to verify your Covered Dependents continued eligibility or if the Plan Administrator determines that any of the information you provide (or provided) regarding your Covered Dependents is untrue, incomplete or misleading, or if you fail to promptly notify the Benefits Service Center of an individual s loss of eligibility, the Plan Administrator may determine, in its sole and absolute discretion, that your dependent does not satisfy the Plan s definition of an Eligible Dependent and take such action as it deems appropriate under the circumstances. If permitted by applicable law, those actions may include, but are not limited to, requiring you to repay the Plan for any benefits/contributions paid with respect to your dependent the Plan Administrator determines is not an Eligible Dependent and requesting that your Employer subject you to disciplinary action. If you provide fraudulent information or make intentional

10 5 misrepresentations regarding your Covered Dependents, the Plan Administrator may retroactively terminate benefits for those dependents that the Plan Administrator determines are not Eligible Dependents. KEY POINT LOSING ELIGIBILITY FOR THE MEDICAL PLAN WILL AFECT OTHER PLANS A dependent eligibility audit is required when you enroll a dependent for coverage under a Companysponsored Medical Plan. However, if the audit determines that your dependent does not meet the requirements to be an Eligible Dependent under the terms of the Medical Plan (either because you do not timely submit the required documentation or because the auditor determines that the documentation submitted is insufficient to verify your dependent s status as an Eligible Dependent under the terms of the Medical Plan), causing that dependent to lose Medical Plan coverage, that dependent will be dropped from coverage under this Plan as well. If you have more than one child enrolled for Dependent Life Insurance, you must contact the Benefits Service Center to ensure that coverage is not ended for any Dependent Child who remains eligible for Plan coverage. Enrolling in Life Insurance Coverage Life Insurance Options The Life Insurance Plan options for which you are eligible appear on. You may also call the Benefits Service Center. Generally, you must enroll within 30 days after becoming eligible. KEY POINT TIME LIMITS AND EOI MAY APPLY You may enroll for coverage or make a Plan change at any time during the year; however, depending on when you make your election and the amount of coverage you request, you may be required to submit EOI. For more information, see the EOI sections in each section of this book: Optional Life Insurance, AD&D Insurance, and/or Dependent Life Insurance. You will be automatically enrolled in Basic Life Insurance: 1x Base Pay, up to a maximum of $5 million at no cost to you. You may choose from among the following optional coverages: Optional Life Insurance: 1x Base Pay to 8x Base Pay, up to a maximum of $16 million. You also have the option to elect No Coverage. AD&D Insurance, 1x Base Pay to 8x Base Pay, up to a maximum of $1 million. You also have the option to elect No Coverage. Dependent Life Insurance: No Coverage $10,000 per Dependent Child $10,000 Spouse/Domestic Partner $25,000 Spouse/Domestic Partner $50,000 Spouse/Domestic Partner, or $100,000 Spouse/Domestic Partner.

11 6 KEY POINT IMPUTED INCOME The IRS requires you to be taxed on the value of Employer-provided group life insurance over $50,000.The taxable value of your Basic Life Insurance coverage is called imputed income. Even though you don t receive cash, you are taxed as if you received cash in an amount equal to the value of this coverage. KEY POINT SMOKER/NON-SMOKER RATES APPLY Your contributions for Optional Life Insurance increase if you are a smoker. As part of the enrollment process, you are required to certify your smoker status. See Smoker/Non-Smoker Rates in the Optional Life Insurance section of this SPD for more information. KEY POINT DECREASE COVERAGE AMOUNTS AT ANY TIME You may decrease any of your Optional Life Insurance coverages (Optional Life Insurance, AD&D and Dependent Life Insurance) at any time. No EOI is required to decrease coverage. Enrollment As an Eligible Employee, you are automatically enrolled for Basic Life Insurance equaling 1x Base Pay, up to a maximum of $5 million at no cost to you. You do not need to enroll for this coverage. Changing Your Life Insurance Plan Options Within Your 30-Day Initial Enrollment Period You may elect your Optional Life Insurance, AD&D and Dependent Life Insurance Plan options within your 30- day Initial Enrollment Period, by contacting the Benefits Service Center online or by phone. As long as you enroll for coverage within your 30-day Initial Enrollment Period, your coverage will be effective as of your hire/rehire date or Transfer Date, as applicable. See How to Enroll for more detailed instructions. For more information see the EOI sections in each section of this SPD: Optional Life Insurance, AD&D Insurance, and/or Dependent Life Insurance. If You Do Not Enroll Within Your 30-Day Initial Enrollment Period If you do not elect to enroll in your Optional Life Insurance, AD&D and Dependent Life Insurance Plan options within your 30-day Initial Enrollment Period, you will receive Basic Life Insurance and you will be enrolled in the No Coverage option for Optional Life Insurance, AD&D and Dependent Life Insurance. However, you are permitted to change your Life Insurance Plan options outside of the annual enrollment period. See When Life Changes for more information.

12 7 KEY POINT LIFE EVENTS You may increase your Optional Life Insurance by 1x Base Pay without providing EOI if you have certain Life Events, provided you elect that increase within 30 days after the Life Event by contacting the Benefits Service Center online or by phone for example: Gaining a new Eligible Dependent through birth, adoption or placement for adoption or foster care You get married or divorced or legal separation/annulment (in states where legal separation equals divorce) Starting a Domestic Partnership (by meeting all the criteria as defined by the terms of the Plan) or ending a Domestic Partnership Your Eligible Dependent losing eligibility as a result of reaching the maximum coverage age Your status switches from Regular Full-Time Employee to Regular Part-Time Employee (or vice versa) A change to the employment status of your Spouse/Domestic Partner or Dependent Child, including the beginning or end of an unpaid leave of absence, a Family and Medical Leave Act (FMLA) leave or a change in work status (such as a switch from salaried to hourly pay or full-time to part-time hours) You or your Spouse or Domestic Partner take an unpaid leave of absence Your health coverage changes significantly due to your Spouse s/domestic Partner s employment status The death of your Dependent Child or Spouse/Domestic Partner, or Your Spouse s/domestic Partner s employment status changes. You may increase your life insurance by other amounts or at times other than during a Life Event, but you will need to provide EOI before the change will become effective. You may decrease any of your Optional Life Insurance coverages (Life Insurance, AD&D and Dependent Life Insurance) at any time. No EOI is required to decrease coverage. See When Life Changes for information about how your Life Insurance Plan coverage may be affected by certain Life Events and rules for supplying EOI. How to Enroll You enroll in the Life Insurance Plan through the Benefits Service Center, either online or by phone. You may be required to complete an EOI form; this will be provided to you if it is necessary. Online Follow these steps: Log on to NetBenefits and click Review Your Checklist at the top of the home page. Under the Starting at Merck section, expand the Set up your health and insurance benefits section, and then click Enroll. Before you select your benefits, click Review to update your dependent information. To enroll, change, or decline your coverage, click Review next to each benefit offering.

13 8 Click Save & Submit when you are done. A confirmation screen will display the elections you submitted. Print this page for your records as evidence of your successful enrollment. If additional EOI steps are required, your insurance does not take effect until you complete this process. KEY POINT COMPLETING ENROLLMENT IS YOUR RESPONSIBILITY When you enroll, it is your responsibility to complete all the required steps described above. You should print a copy of your enrollment confirmation statement and keep it with your important papers as evidence of your successful completion of the enrollment process. By Phone Customer Service Representatives can take your benefit elections by phone between 8:30 a.m. and 8:30 p.m. ET, Monday through Friday (excluding New York Stock Exchange holidays). Once you enroll by phone, it s a good idea to confirm your benefit elections online and print your confirmation statement. If you are unable to print your confirmation statement and would like to request a paper copy, you can contact the Benefits Service Center. In the U.S.: Call MERCK ( ). TDD service for the hearing impaired: Call For overseas calls: Dial your country s toll-free AT&T USADirect access number then enter In the U.S., call to obtain AT&T USADirect access numbers. From anywhere in the world, access numbers are available online at or from your local operator. How to Designate Your Beneficiary It s important that you designate a Beneficiary to receive benefits under your Basic Life Insurance, Optional Life Insurance and AD&D coverage in the event of your death. You may designate or change your Beneficiary at any time online via or you may complete and submit a Beneficiary form, available online through NetBenefits or by calling the Benefits Service Center. Please note that your Beneficiary designation must be on record with the Benefits Service Center to be valid. Any Beneficiary designations not on record with the Benefits Service Center are considered invalid. Any document other than a Beneficiary form which purports to designate or change your Beneficiary (e.g., a will, qualified domestic relations order, divorce decree, etc.) will not be recognized as a designation or change in your Beneficiary. KEY POINT CHANGING YOUR BENEFICIARY You may change your Beneficiary at any time. In the event of marriage, divorce, birth or death of a dependent, you may want to review your Beneficiary designation and make a change. Contact the Benefits Service Center online or by phone to change your Beneficiary at. Beneficiary for Employee Basic Life, Optional Life and AD&D Insurance You may name your estate, a trust, or any persons you designate as Beneficiary to receive your Basic Life Insurance and your Optional Life Insurance benefit, if you elected coverage, in the event of your death. Your Beneficiary for a death claim under AD&D Insurance is automatically the same Beneficiary on file for your Basic

14 9 Life Insurance, unless you make a different designation. For an injury claim under AD&D Insurance, the benefit is payable to you. If you do not have a valid Beneficiary designation on file with the Benefits Service Center at the time of your death, any Basic Life Insurance, Optional Life Insurance and/or AD&D Insurance proceeds will be paid to your estate. If you wish to name a minor child as a Beneficiary, you should keep in mind that some states limit payments to minors unless a legal guardian is appointed for either the child or the child s property. If you assign your coverage, your ability to designate a Beneficiary may be limited. See Assigning Benefits for more information. Beneficiary for Dependent Life Insurance You are automatically the Beneficiary for any Dependent Life Insurance you elect. Assigning Benefits You are permitted to assign your Basic Life Insurance, Optional Life Insurance, Dependent Life Insurance and AD&D Insurance coverage only as a gift (unless state insurance law requires otherwise). You may assign any rights, benefits or privileges that you have as an employee under this coverage to a person or entity (the assignee), including your right to name a Beneficiary or to convert this coverage to an individual policy. You are not permitted to assign such coverage for compensation or any other kind of consideration (unless state insurance law requires otherwise). (In accordance with state insurance law, residents of California and New York are permitted to assign their coverage for compensation or any other type of consideration.) If you assign your right to name a Beneficiary and you die without a Beneficiary being chosen by your assignee, your assignee will be the Beneficiary. (If your assignee/beneficiary is a person, that person must be alive at the time of your death. If not, the proceeds will go to the assignee/beneficiary s estate.) To the extent you assign your rights, your ability to make changes, including changes to your Beneficiary and/or coverage levels, will be limited and must be made by your assignee. Contact the Benefits Services Center (see Benefits Contacts and Resources ) for more information about assigning your life insurance benefits. When Life Insurance Coverage Begins Eligible Employees Your Life Insurance Plan coverage begins on your date of hire or rehire, subject to any Actively-at-Work and EOI requirements. Transferred Employees Life Insurance Plan coverage for you and your Eligible Dependents continues without interruption on your Transfer Date subject to the availability of those options under the Life Insurance Plan described in this SPD. If you change your coverage option within 30 days after your Transfer Date, your new coverage begins on your Transfer Date, subject to any Actively-at-Work and EOI requirements. Actively-at-Work Requirement You may be required to be Actively-at-Work on the date your Life Insurance Plan coverage (or any increase in coverage) begins. For more information see Actively-at-Work Requirement in the following sections of this SPD Basic Life Insurance, Optional Life Insurance, AD&D Insurance and/or Dependent Life Insurance.

15 10 EOI You do not need to provide EOI in order for your Basic Life Insurance or AD&D coverage to become effective. You may be required to provide EOI when you elect (or elect to increase) your amount of Optional Life Insurance and section of this SPD: Optional Life Insurance and/or Dependent Life Insurance. How to Provide EOI To provide EOI, you must provide Prudential proof of good health as part of your enrollment process within 60 days after the date of the request to enroll or change coverage. Prudential may request additional information, such as records from your health care provider or test results in evaluating your insurability. A physical exam, at your own expense, may be required. If EOI is required to add or change your coverage, such addition or change in coverage will not be effective unless Prudential determines that you have met the EOI requirements. If Prudential determines that you have met the EOI requirements, the change in coverage is effective on the date the insurance carrier approves the EOI application, provided you were Actively-at-Work on the day of the change. If you were not Actively-at-Work on that day, the change in coverage will become effective on the date you return to Actively-at-Work status. Paying for Life Insurance Coverage Regular Full-Time Employees, Regular Part-Time Employees, Merck Temporary Employees and U.S. Expatriates If you are an Eligible Employee, the Employer pays the full cost of your Basic Life Insurance coverage (see Key Point regarding Imputed Income). You pay the cost of any Optional Life Insurance, AD&D Insurance and Dependent Life Insurance coverage you elect through regular payroll deductions. Your employee contributions start the first of the month following or coincident with your date of hire/rehire, subject to any Actively-at-Work and EOI requirements. Current employee contributions for the different Life Insurance Plan options are listed on. Note that employee contributions will change periodically due to a variety of factors including age, salary, volume or plan experience. Transferred Employees If you are a Transferred Employee, you contribute toward the cost of your life insurance coverage as of your Transfer Date. For the month in which your Transfer Date occurs, any difference in your employee contribution between your coverage under your former Life Insurance Plan and your coverage under the Optional Life Insurance options will be adjusted in your paycheck as soon as administratively feasible. Employees on Leaves of Absence, Layoff or Long-Term Disability (LTD) Employees If you take a leave of absence, are placed on layoff or become an LTD Employee, see When Life Changes for information. After-Tax Contributions Your contributions toward the cost of Optional Life Insurance, Dependent Life Insurance and AD&D Insurance coverage are deducted from your paycheck on an After-Tax basis. This means your contributions come out of your pay after federal and state income and Social Security taxes are deducted.

16 11 Smoker/Non-Smoker Rates (Optional Life Insurance only) Eligible Employees are required to select smoker or non-smoker rates for Optional Life Insurance. See Smoker/Non-Smoker Rates in the Optional Life Insurance section of this SPD. KEY POINT IMPUTED INCOME The IRS requires you to be taxed on the value of Employer-provided group life insurance over $50,000.The taxable value of your Basic Life Insurance coverage is called imputed income. Even though you don t receive cash, you are taxed as if you received cash in an amount equal to the value of this coverage. Making Changes to Your Coverage Annual Enrollment Each year during annual enrollment, you may elect to make changes to your Life Insurance Plan coverage or keep your current life insurance elections, subject to its continued availability. Generally, the benefit elections you make will remain in effect for the entire Plan Year (Jan. 1 Dec. 31) unless you make a change to your coverage. Changes made during the annual enrollment period are effective Jan. 1 of the following year, subject to any Actively-at-Work and EOI requirements. If you do not make a change during annual enrollment, you will be deemed to have elected your current Life Insurance Plan options for the new year (subject to continued availability). Each year, you will be notified of the annual enrollment procedures, coverage costs and timeframes for enrolling in or changing your elections for the upcoming Plan Year. Since the Plan Sponsor may make changes to the Life Insurance Plan at any time, it is important to review your annual enrollment materials carefully when you receive them. You may access annual enrollment materials, obtain contact information, review Plan design changes and confirm most benefits through. Between annual enrollment periods, you may change or enroll in (if you had waived coverage) Life Insurance Plan coverage, subject to Actively-at-Work and EOI requirements. KEY POINT FROZEN VOLUME OF OPTIONAL LIFE COVERAGE FOR LEGACY MERCK EMPLOYEES ONLY The Survivor Income Protection option terminated midnight Dec. 31, If you are a Legacy Merck Employee and were enrolled in survivor income as of Dec. 31, 2010, that coverage terminated as of midnight on Dec. 31, Effective Jan. 1, 2011, that coverage was mapped to an amount of additional Optional Life Insurance equal to the actuarial equivalent dollar value of the survivor income coverage in which you were enrolled as of Dec. 31, 2010, as determined by Prudential. If the mapped amount, when added to your Optional Life Insurance in effect as of Dec. 31, 2010, exceeded the new Optional Life Insurance maximum of 8x Base Pay, up to a maximum of $16 million, your volume of coverage was frozen and does not change unless you take (or took) action. You may continue your frozen coverage volume as long as you make the required contributions. You may reduce your frozen coverage volume to 8x Base Pay or less at any time, but once you make a change, the frozen volume of coverage amount will no longer be available to you. Please note that as your salary increases over time, choosing 1x to 8x Base Pay in Optional Life Insurance may allow you to receive coverage in excess of your frozen volume of coverage amount, provided you satisfy the EOI requirements.

17 12 When Life Changes Life Events and Permitted Plan Changes You are permitted to make Plan changes at any time during the year. You may increase your Optional Life Insurance by 1x Base Pay without providing EOI if you experience a Life Event that allows you to make Permitted Plan Changes and you elect to increase your coverage by contacting the Benefits Service Center and enrolling in increased coverage within 30 days after the Life Event. You may increase your life insurance by other amounts or at times other than during a Life Event, but you will need to provide EOI before the change will become effective. In general, Life Events may include: Gaining a new Eligible Dependent through birth, adoption or placement for adoption or foster care You get married or divorced or legal separation/annulment (in states where legal separation equals divorce) Starting a Domestic Partnership (by meeting all the criteria as defined by the terms of the Plan) or ending a Domestic Partnership Your Eligible Dependent losing eligibility as a result of reaching the maximum coverage age Your status switches from Regular Full-Time Employee to Regular Part-Time Employee (or vice versa) A change to the employment status of your Spouse/Domestic Partner or Dependent Child, including the beginning or end of an unpaid leave of absence, an FMLA leave or a change in work status (such as a switch from salaried to hourly pay or full-time to part-time hours) You or your Spouse/Domestic Partner take an unpaid leave of absence Your health coverage changes significantly due to your Spouse s/domestic Partner s employment status The death of your Dependent Child or Spouse/Domestic Partner, or Your Spouse s/domestic Partner s employment status changes. KEY POINT COVERAGE AVAILABLE FOR ELIGIBLE DEPENDENTS ONLY Coverage for your dependents will end in accordance with the Plan s provisions regardless of whether you have notified the Plan Administrator. For example, if you cover your Spouse as a dependent under the Dependent Life Plan and become divorced, your Spouse s life insurance coverage will end as of the date of the divorce regardless of when you notify the Benefits Service Center. At the Plan Administrator s discretion, premium overpayments may or may not be refunded. How to Make a Change to Your Coverage You can request your change by contacting the Benefits Service Center. Any requested increase to your coverage may be subject to EOI. If your dependent is no longer eligible for coverage, you must drop coverage for that dependent immediately. When Changes Go Into Effect The effective date for the change will be the date of the event itself, subject to any Actively-at-Work and EOI requirements. Any changes to your contribution amount will take effect the first of the month following or coincident with the date of notification, subject to any Actively-at-Work and EOI requirements.

18 13 KEY POINT IF YOU HAVE A NEW SPOUSE/DOMESTIC PARTNER OR YOUR FIRST CHILD To enroll your new Spouse/Domestic Partner and/or your first child under Dependent Life Insurance, you must have a Spouse/Domestic Partner and/or a child on file with the Benefits Service Center. To add a new dependent online, log on to or call the Benefits Service Center. You may be asked to provide proof of your dependent s eligibility. If You Take a Leave of Absence Approved Paid Leave of Absence. If you take an approved paid leave of absence, your Employer will continue to deduct the cost of life insurance coverage through payroll deductions. Deductions will be on an After-Tax basis. Approved Unpaid Leave of Absence. If you take an approved unpaid leave of absence, you will be billed by the Benefits Service Center starting the first of the month following the commencement of your leave for coverage during your leave. Unpaid amounts for coverage for the period prior to the first day of the month after your leave will be payable by you upon your return from leave by payroll deduction. If you fail to pay premiums to continue coverage during your leave in the time and manner specified by the Plan Administrator, your coverage will end and you will not be able to re-enroll for coverage unless and until you return to active employment, subject to EOI requirements. Please note that upon your return to active employment, you will not be able to re-enroll in coverages that exceed the Plan maximums such as the Optional Life Volume Plan for certain Legacy Merck employees, and Dependent Life Spouse/Domestic Partner and Dependent Life Child(ren) for certain Legacy OBS employees. Information on the cost of coverage will be provided at the time of your leave. If You Are Placed on Layoff If you are placed on layoff, you may continue or decrease your Life Insurance Plan coverage. At the Plan Administrator s discretion, you will either be billed for the applicable portion of the cost of coverage during your layoff or the amount will accumulate and you will be billed at the end of your leave. For employees who return to work at the expiration of a layoff, any accumulated amounts will be deducted from your paychecks. If you fail to pay premiums to continue coverage in the time and manner specified by the Plan Administrator, your coverage will end and you will not be able to re-enroll for coverage unless and until you return to active employment, subject to EOI requirements. If at the time you go on layoff you are eligible for continuation of life insurance benefits while on layoff under the terms of the separation program described in the collective bargaining agreement applicable to you, the terms of the collective bargaining agreement and not the terms described in this section above apply to continuation of your life insurance benefits while on layoff. If You Receive LTD Benefits If you are or become an LTD Employee, you will continue to be eligible for Basic Life Insurance Plan coverage of 1x your Base Pay in effect on the date you become eligible for LTD Benefits while you are an LTD Employee. You may not add or increase any of your Life Insurance Plan coverage while you are an LTD Employee, but you may decrease your Life Insurance Plan coverage at any time while you are an LTD Employee.

19 14 You will also be eligible to continue your Optional Life Insurance and Dependent Life Insurance coverage at the level in effect on your first day absent due to disability, but if you fail to pay Optional Life Insurance coverage or Dependent Life Insurance coverage premiums, your eligibility for this continued coverage will end and you will not be able to re-enroll for coverage unless and until you return to actively at work status and provided you then satisfy any EOI requirements. Merck may elect to amend these eligibility rules at any time, and cease to provide Basic, Optional or Dependent Life Insurance coverage to an LTD Employee. Your Life Insurance Coverage During Your Absence Due to LTD Basic Life Insurance Optional Life Insurance AD&D Insurance Dependent Life Insurance You will continue to be eligible for Basic Life Insurance coverage of 1x Base Pay, up to $5 million, which coverage will be paid for by the Company as long as you continue to be eligible for this benefit. Eligibility for this coverage will end when you cease to be an LTD Employee, or the Plan is amended to modify this eligibility provision. To continue any Optional Life Insurance you must pay the applicable premiums in the time and manner required by the Plan Administrator. If you fail to pay timely the required premium, your Optional Life Insurance coverage will be terminated and you will not be eligible to purchase Optional Life Insurance Plan coverage until you return to active employment. You will not be able to increase your Optional Life Insurance coverage while you are an LTD Employee, or the Plan is amended to modify this eligibility provision. Your AD&D Insurance coverage will end at the end of the month in which you become an LTD Employee. To continue any Dependent Life Insurance, you must pay the applicable premiums in the time and manner required by the Plan Administrator. If you fail to pay timely the required premium, your Dependent Life Insurance coverage will be terminated and you will not be eligible to purchase Dependent Life Insurance coverage until you return to active employment. You may increase your Dependent Life Insurance coverage while you are receiving LTD Benefits, subject to EOI. Eligibility for this coverage will end when you cease to be an LTD Employee, or the Plan is amended to modify this eligibility provision. Waiver of Premium for Certain Legacy Merck Employees If you met certain conditions your premiums are waived while your death benefit protection will be extended while you are totally disabled. Eligible Legacy Merck Employees (other than IUC Members) whose first day absent due to total disability occurred on or after Jan. 1, 1999, are not eligible for a waiver of premium. IUC Members whose first day absent due to total disability occurred on or after Jan. 1, 2001, but before Jan. 1, 2003, or on or after Jan. 1, 2007, are not eligible for a waiver of premium. Eligible Legacy Merck Employees (other than IUC Members) whose first day absent due to total disability occurred before Jan. 1, 1999, may have been eligible for a waiver of premium. IUC Members whose first day absent due to total disability occurred before Jan. 1, 2001, or on or after Jan. 1, 2003, but before Jan. 1, 2007, may have been eligible for a waiver of premium. To have been eligible for the waiver, you must have been Actively-at-Work the day before your disability began. You must also have submitted evidence of your total disability by application to Prudential not earlier than 9 months and not later than 12 months from the first day you were absent from work due to disability (NOT from

20 15 the day you were approved for LTD Benefits under the Long Term Disability Plan). You are totally disabled if Prudential determined that you are not working at any job for wage or profit and due to sickness, injury or both you are not able to perform for wage or profit the material and substantial duties of any job for which you are reasonably fitted by your education, training or experience. To have been eligible for the waiver of premium, you must have timely submitted your application to Prudential and your total disability must have been approved by Prudential. If your application was approved, the waiver began not earlier than 10 months from the first day you were absent from work due to total disability and will continue until the earlier of age 65 or the date your total disability ends, as determined by Prudential. To remain eligible for the waiver, from time to time you may be required to provide evidence of your continuous total disability to Prudential. If you do not pay the applicable premiums (unless you are subject to a valid waiver of premium) for the coverage described above while you are receiving LTD Benefits under the Long Term Disability Plan, such coverages will be terminated and will not be reinstated unless and until you return to active employment. If You Die If you die, eligibility for coverage ends for you and your dependents. Your Beneficiary may be entitled to receive benefits under the Basic Life Insurance, Optional Life Insurance and, depending on your elections and the cause of your death, AD&D Insurance, subject to any exclusions in the policy with Prudential. See How Basic, Optional, AD&D and Dependent Life Insurance Benefits Are Paid. Also note that your covered dependents may convert or port their Dependent Life Insurance coverage when it ends. If You Apply For Disability Retirement If you apply for disability retirement your eligibility for Basic Life Insurance and Optional Life Insurance coverage continues as long as you and the Employer pay the applicable premiums. In the event you die before your disability retirement application is approved or denied, your Basic Life Insurance and Optional Life Insurance will be paid to your Beneficiary, provided the applicable premiums have been paid. If your disability retirement is approved, you may convert or port your coverage, subject to Prudential s rules. The 30-day period to convert/port will begin on the date you are notified that you are approved for disability retirement (not the retroactive effective date of the disability retirement). If you are absent from work due to disability before retirement, you may convert your coverage; however, you will not be eligible to port coverage. See Conversion Options and Rights and Portability in the Basic Life Insurance, Optional Life Insurance and Dependent Life Insurance sections of this SPD for more details about converting your coverage. When You Retire If you are a Legacy Merck Employee or a Legacy Schering Employee not described in this section and you retire on or after Jan. 1, 2011, you are not eligible for retiree life insurance. You may convert or port your Employee Basic Life Insurance, Employee Optional Life Insurance and Dependent Life Insurance coverage when those coverages end. Note that certain Legacy Schering Employees who retire on or after Jan. 1, 2011, may be eligible for retiree life insurance coverage. See the Legacy Schering Retiree Life Insurance SPD for information. If you retired prior to Jan. 1, 2011, you may have been eligible for retiree life insurance at the time of your retirement date. For Legacy Merck Employees, see the Legacy Merck Retiree Life Insurance SPD for information. For Legacy Schering Employees, see the Legacy Schering Retiree Life Insurance SPD for information.