IBM Benefits Program 2011

Succeeding@IBM IBM Benefits Program 2011 For Employees Hired in 2011 December 12, 2010

Agenda IBM Benefits Overview Health Benefits Enrollment Choices Additional Benefits Programs Resources 2011 Benefits 2

Overview of IBM Benefits IBM offers a competitive benefits program, designed to help employees build a solid financial foundation to meet a diverse array of needs Key features: Health Benefits Portfolio that provides strong support for employee well-being and preventive care, comprehensive coverage to meet a range of medical situations and solid protection against the cost of serious illness or injury Retirement Program that helps build future financial security through the 401(k) Plus Plan and other capital accumulation programs Income Protection in case of serious illness, injury or death, including life insurance and disability benefits Opportunity to follow leisure pursuits through vacation and holiday programs 2011 Benefits 3

Health Benefits - Enrollment Choices Medical IBM PPO IBM PPO Plus IBM Exclusive Provider Organization (EPO) IBM High Deductible PPO with Health Savings Account (HSA) HMOs, where available None Vision IBM Vision Plan Vision Discount Card None Long Term Disability (LTD) 50% 66 2/3 % None 2011 Benefits 4 Dental IBM Dental Basic IBM Dental Plus CIGNA DMA, where available None Flexible Spending Accounts Health Care Spending Account Dependent Care Spending Account New Hire Healthy Living Rebate $150 Will Participate

IBM Medical Plan Options for 2011 IBM PPO: provides in- and out-of-network coverage, available at no cost for employee-only coverage Comprehensive coverage and flexibility IBM PPO Plus: provides a higher level of in-network benefits than the IBM PPO, in exchange for higher monthly contributions IBM Exclusive Provider Organization (EPO): you must use network providers in order to receive benefits; you pay either a coinsurance or a fixed copayment, depending on the service Lower out-of-pocket costs; higher contributions Higher benefit levels for those who want to purchase more coverage IBM High Deductible PPO with Health Savings Account (HSA): features a health savings account with IBM contributions up to $500, but requires the highest deductible; available at no cost for employee-only Broad provider network available for all plan options; HMOs available in certain locations 2011 Benefits 5

Comparing Medical Plan Features Plan Feature IBM PPO IBM PPO Plus IBM EPO IBM High Deductible PPO with HSA Typical HMO Annual deductible (individual/family) In-network: $964 / $2,892 Out-of-network: $1,686 / $5,238 In-network: None Out-of-network: $1,686 / $5,238 None $2,079 / $4,158 (in and out-of-network combined) None Routine Preventive Services In-network: No charge Out-of-network: You pay 45% Deductible-free In-network: No charge Out-of-network: You pay 45% Deductible free No charge In-network: No charge Out-of-network: You pay 45% Deductible free Varies by HMO Other Office Visits In-network: No charge for PCP, You pay 25% SCP Deductible free Out-of-Network: You pay 45% after deductible In-network: No charge for PCP, You pay 25% SCP Deductible free Out-of Network: You pay 45% after deduct. No charge for PCP, You pay 25% SCP In-network: No charge for PCP after deduct.; You pay 20% SCP after deductible Out-of-Network: You pay 45% after deductible Varies by HMO Hospital, Outpatient Surgery In-network: You pay 20% after deductible Out-of-network: You pay 45% after deductible In-network: You pay 20% Deductible-free Out-of-network: You pay 45% after deduct. $589 copay inpatient per admission Outpatient: You pay 25% Outpatient non-surgical facility: You pay 20% In-network: You pay 30% after deductible Out-of-network: You pay 45% after deductible Varies by HMO Lifetime Benefit Maximum Unlimited Unlimited Unlimited Unlimited Unlimited Annual out-of of- In-network: In-network: pocket maximum $6,425/ $11,566 $4,278/ $6,417 (includes Out-of-network: Out-of-network: deductible) $11,789 / $21,217 $11,789 / $21,217 2011 Benefits 6 In-network: $5,894/ $10,609 In-network: $5,950/ $11,789 Out-of-network: $12,573 / $18,860 Varies by HMO

IBM High Deductible PPO with Health Savings Account (HSA) The HSA lets you use tax-free dollars to pay for current health care expenses or save for future health care needs If you enroll in the IBM High Deductible PPO with HSA, IBM will contribute up to $500 in 2011 ($250 for hires after June 30) Employees receiving full IBM contribution of $500 may make additional tax-deductible contributions: up to $2,550 for a single employee and $5,650 for a couple or family Unlike Health Care Spending Account, you can roll over unused amounts every year Deductible and out-of-pocket maximum are administered differently compared to other plan options Those who enroll dependents: Must meet family deductible before the plan will pay benefits for covered services Must meet family out-of-pocket maximum before plan will begin paying 100% for the remainder of the year Certain preventive prescription drugs, however, are not subject to the deductibles Additional forms and agreements required to enroll in HSA feature You may not contribute to an HSA if: Your spouse covers you or any eligible dependents under a different health plan You or your spouse participates in a health care flexible spending account 2011 Benefits 7

IBM Medical Plan Carriers by State AK WA ME OR CA HI NV ID AZ UT MT WY CO NM ND SD NE KS OK TX MN WI IA IL MO AR MS LA MI IN KY TN AL OH GA WV PA SC FL NY MD VA NC VT NH MA CT Albany/Poughkeepsie/ RI NJBinghamton/Endicott DE DC DC = Aetna Raleigh/Durham/Chapel Hill Aetna CIGNA Empire BCBS MVP United 2011 Benefits 8

IBM Managed Pharmacy Program Medco provides negotiated prices on prescription drugs at 60,000 network pharmacies and through home delivery Included in the IBM PPO, IBM PPO Plus, IBM EPO, IBM High Deductible PPO with HSA plans Home delivery required for all long-term prescriptions If a generic is available and you choose the equivalent brand name drug, you pay the generic coinsurance plus the difference in cost Some prescriptions require prior authorization Traditional No Special Handling Retail Pharmacy Mail Order Non-Participating Pharmacies Generic 20% of discounted cost, up to $22 20% of disc. cost, up to $24 30% of actual cost Formulary Brand 20% of discounted cost, up to $71 20% of disc. cost, up to $160 30% of actual cost Non- Form. Brand 45% of discounted cost, up to $143 45% of disc. cost, up to $322 55% of actual cost Specialty Medications Special Handling Req. Retail Pharmacy Mail Order Non-Participating Pharmacies Generic 20% of discounted cost, up to $24 20% of disc. cost, up to $26 30% of actual cost Formulary Brand 20% of discounted cost, up to $77 20% of disc. cost, up to $173 30% of actual cost Non- Form. Brand 45% of discounted cost, up to $155 45%of disc. cost, up to $349 55% of actual cost 2011 Benefits 9

2011 Dental Benefits Plan Feature IBM Dental Basic IBM Dental Plus CIGNA DMA Annual deductible None In network: None Out-of-network: $50 per person None Annual benefit maximum (excludes orthodontia) $500 $2,000 per person (excluding orthodontia) None Lifetime benefit maximum None None None Diagnostic/preventive care In network: No charge Out-of-network: 20% of U&P plus any amount over the U&P In network: No charge Out-of-network: 20% of U&P plus any amount over the U&P No charge Minor restorative care In network: 20% of negotiated fee Out-of-network: 20% of U&P plus any amount over the U&P In network: 20% of negotiated fee Out-of-network: 20% of U&P plus any amount over the U&P No charge Major restorative care Not covered In network: 35% of negotiated fee Out-of-network: 35% of U&P rate plus any amount over the U&P Copayments vary ( $0 - $310) Orthodontic treatment Not covered In network: 50% of negotiated fee Out-of-network: 50% of U&P plus any amount over the U&P Up to $1,735 Orthodontic lifetime benefit maximum N/A $2,500 None 2011 Benefits 10

IBM Vision Plan The IBM Vision Plan provides coverage for standard eye exams; benefits are also paid for glasses and contact lenses. Participants can choose to receive benefits from an eye doctor who participates in the VSP network, or go outside the network and receive reimbursement according to a schedule of benefits. The Vision Plan is administered by Vision Service Plan (VSP) Plan Feature Annual eye exam Glasses - Lenses Full eligible charge In-Network IBM Vision Plan Full eligible charge for one pair; certain lens options not included Up to $35 Out-of of-network Single vision: up to $25 Bifocal: up to $40 Trifocal: up to $55 Lenticular: up to $80 Glasses - Frames Up to $120 for frames; you may pay a portion for others Up to $35 Contact lenses Laser vision correction surgery Elective: up to $120 Medically necessary: no charge with prior approval No benefit coverage; possible savings for LASIK or PRK surgery 2011 Benefits 11 Elective: up to $105 Medically necessary: up to $165 Not applicable

VSP Vision Care Discount Card A free vision discount card that enables you to save money on eye exams, eyewear and other vision care services from VSP network providers: Annual eye exam: 20% discount Prescription glass lenses and frames: 20% discount Contact lens exam: 15% discount ( not on lenses) Laser vision Correction Surgery: On average,15% discount Convenient and easy to use just show card to VSP network provider when you purchase eyewear (no forms to complete) Note: you can choose to enroll in the IBM Vision Plan, or to receive the Vision Care Discount Card, but not both (enrolling in the Vision Plan provides you the same discounts offered by the VSP Vision Card) 2011 Benefits 12

2011 New Hire Healthy Living Rebate $150 Rebate: To encourage and support newly hired employees who want to take steps to identify their preventive care needs and personal health risks, Program Requirements: Sign up during the initial enrollment period by indicating Will Participate for the New Hire Healthy Living Rebate Complete the online Health Risk Assessment Initiate use of your online Personal Health Record Access IBM s Wellness for Life Web site and learn which wellness tools would be most valuable for you this year If you sign up for this rebate, you ll receive an email after your benefits enrollment period ends with information about program requirements and deadlines for completion To receive the New Hire Healthy Living Rebate, employees must complete the following program requirements by December 31, 2011. 2011 Benefits 13

2011 Monthly Contributions Plan Cost for Employee Additional Cost for Spouse/Domestic Partner Additional Cost for Each Child (Up to 6) IBM PPO $0 $151 $84 IBM PPO Plus $65 $216 $116 IBM EPO $75 $226 $121 IBM PPO with HSA $0 $56 $37 HMO Varies Varies Varies IBM Dental Basic $0 $20 $13 IBM Dental Plus $29 $49 $32 CIGNA DMA $13 $32 $20 IBM Vision Plan $11.35 $11.35 $11.35 Vision Discount Card No Cost No Cost No Cost Note: Premiums will vary for regular part-time employees 2011 Benefits 14

No coverage If you decline Medical and/or Dental coverage, you can receive cash back: $30 per month for opting out of Medical $5 per month for opting out of Dental Cash back is paid in semi-monthly paycheck; treated as taxable income If you decline coverage, you won t be able to enroll until the next annual enrollment period, unless you experience a qualified status change that allows you to enroll 2011 Benefits 15

Flexible Spending Accounts Health Care Spending Account (HCSA) You can set aside $10 to $425 monthly in pre-tax dollars to pay for eligible, unreimbursed health care expenses (annual maximum of $5,100) Eligible expenses include deductibles, coinsurance, amounts over the usual and prevailing (U&P) rates. Over-the-counter medications except insulin are no longer eligible unless prescribed by a physician or other medical provider Monies not used during the coverage period are subject to forfeiture A Health Debit Card can be used at a participating Medco retail pharmacy or through Medco s mail order service to purchase prescription drugs or eligible over-the-counter medications You may enroll in the HCSA or the HSA but not both Dependent Care Spending Account (DCSA) You can set aside as little as $20 monthly and as much as $5,000 annually in pretax dollars to pay for eligible, dependent care expenses Reimburses care that enables both you and your spouse to work, or you to work and your spouse to attend school full-time Eligible expenses include day care and certain elder care expenses Monies not used during the participation period are subject to forfeiture 2011 Benefits 16

Dependent eligibility Your spouse An eligible domestic partner Your natural and legally adopted children to age 26 Your stepchildren to age of 26 Other children for whom IBM determines that you have been granted permanent legal guardianship by a court of law. Both conditions to be met: The child is subject to a court order under which the employee has been granted permanent legal guardianship of the child s person and property. A parent/child relationship exists between the employee and child. Note: If you have a dependent child with a disability, your child may be eligible for coverage beyond age 26 if IBM determines, on the basis of the child s condition, that your child is mentally or physically disabled, that the disability existed prior to the child s 26 th birthday, that the child is incapable of self-support due to the mental or physical disability, and that the child is not married. 2011 Benefits 17

Dependent Eligibility Confirmation Employees must provide documentation supporting their eligibility after enrollment Sample of DEC envelope mailed to your home Within three weeks, you will receive a package from the Dependent Eligibility Confirmation Center, administered by Budco, describing the process, the due date, and acceptable documents you need to provide to confirm your dependent s eligibility If you do not provide sufficient documentation by the required date indicated in your package, your dependent will be removed from IBM benefits coverage 2011 Benefits 18

New IBMer enrollment After your IBM hire date, you may enroll via http://netbenefits.com You may also call the IBM Employee Services Center at 1-800-796-9876 (TTY: 1-800-426-6537) between 8:30 a.m. and 8:30 p.m. ET to enroll. You must make your elections by the enrollment deadline date; otherwise, you and your eligible dependents will have No Medical, Dental, or Vision Coverage for the 2011 Plan Year. You will also be defaulted to 50% LTD coverage and be charged for any associated premium Coverage is generally effective as of your date of hire 2011 Benefits 19

Additional Benefit Plans and Offerings Short Term Disability Long Term Disability Travel Accident Insurance Group Life Insurance Group Universal Life Insurance Long Term Care Insurance Employee Stock Purchase Plan 401(k) Plus Plan IBM MoneySmart 2011 Benefits 20 Vacation Plan Holiday Plan Employee Assistance Program Post Employment Medical (Access) Special Care for Children Assistance Plan Adoption Assistance Program Lifeworks Discount Offerings & Services

Short-term Disability Short-term Disability provides wage replacement if you become disabled and are unable to work Company-paid Maximum benefit of 26 weeks (or 1040 hours) in a period of 12 consecutive months Employees with less than 5 years of service: 100% of wage replacement for the first 13 weeks 66 2/3% of wage replacement for an additional 13 weeks Employees with 5 or more years of service: 100% of wage replacement for 26 weeks Eligible from first day of employment Prorated for reduced work schedule 2011 Benefits 21

Long-term Disability Long-term Disability provides wage replacement after Short-term Disability benefit has been exhausted New employees: May elect to purchase the 50% LTD option, the 66 2/3% LTD option or No Coverage. Evidence of insurability will be required if employee later increases coverage during annual enrollment, or had previously elected No Coverage and subsequently wishes to enroll After five years of service with IBM, new employees will automatically receive the company-paid 50% benefit level coverage for LTD and may elect to purchase the 66 2/3% benefit level during enrollment periods Coordinates with other sources of payment such as Social Security Disability Income and Worker s Compensation 2011 Benefits 22

Group Life Insurance Plan Coverage is equal to one times annual salary IBM pays the entire cost of coverage Employees pay tax liability on the value of GLI coverage over $50,000: Coverage over $50K can be waived (within 30 days of hire, during annual waiver period, and other select life events) or you can designate a taxexempt charity as beneficiary for amount over $50K Coverage begins from first day of employment; no application or medical exam required Accelerated Death Benefit: 50% to a max of $50,000 with 6 month or less life expectancy Coverage ends on last day of active employment Benefits payable to the beneficiary(ies) you name; if none named, beneficiary determined by plan policy 2011 Benefits 23

Travel Accident Insurance Plan Coverage for accidental injuries while traveling on authorized company business Benefits of up to five times annual eligible compensation ($50,000 minimum) for bodily injuries which result in death, dismemberment, or loss of sight, hearing or speech IBM pays the entire cost of coverage Coverage begins from first day of employment Benefits payable to the beneficiary(ies) you name; if none named, beneficiary determined by plan policy 2011 Benefits 24

Group Universal Life Insurance With evidence of good health, employee can purchase coverage up to eight times annual base pay in increments of.25. Minimum coverage is the greater of.25 x annual base pay or $30,000 Maximum coverage is $3 million. Insurance also available for spouse/domestic partner ( $30k - $200k), and children ($10k for all) If eligible and enrolled within 90 days of hire: Employee: Non-medical guaranteed issue of 2X base salary up to $750 K Spouse/DP: Non-medical guaranteed issue of $50,000 Short form Evidence of Insurability for amounts over guaranteed issue amount. Long form may be required based on assessment of short form Accelerated Death Benefit: 50% to a max of $500,000 with 6 mo life expectancy Monthly premium based on the amount of insurance chosen, age and whether smoker or non-smoker Portability/continuation of coverage feature provided at higher rates Optional AD&D coverage and cash accumulation features are available Administered and underwritten by The Prudential Insurance Company of America (not sponsored or endorsed by IBM) 2011 Benefits 25

Long-term Care Insurance Plan Provides financial assistance to employees and their families by covering a wide range of services associated with chronic illness or disability Available option to all employees who are actively at work, their spouse/domestic partner, parents, and parents-in-law New hires who apply within 90 days of their date of hire are guaranteed acceptance without completing the Statement of Health Daily benefit maximum varies by type of care and coverage level selected Lifetime benefit maximum varies by option selected Levels of care include nursing home, home health care, adult day care, alternate care facilities and respite care LTC plan administered by John Hancock Insurance Company 2011 Benefits 26

Employee Stock Purchase Plan Broad-based access for IBMers to share in company ownership Convenient payroll deduction Automatic 5% discount from market price on date of purchase Purchase with up to 10% of your pay, in any whole increment, up to a maximum of $25,000 worth of shares in a calendar year Dividend payout option cash or re-investment, at your choice Flexible enrollment eligible employees can join any time during the offering period Typically two offering periods each year: January 1 June 30 July 1 Dec 31 2011 Benefits 27

IBM 401(k) Plus Plan Automatically enrolled at 5% of your pre-tax eligible earnings approx. one month after receiving enrollment package if no action taken; funds are immediately vested Contributions up to 80% of pre-tax earnings (subject to IRS limits) After one year IBM will: Contribute 1% to employee s pre-tax account regardless of their savings pattern Match 100% of first 5%; matched funds are immediately vested ROTH 401(k) feature available: Contributions made on after-tax basis investments grow tax free must be held for 5 years Contributions are also eligible for IBM match Employees may make either or both pre-tax or Roth contributions, up to IRS limits Additional after-tax feature available (up to 10% ) with no company match Investment Options: 32 primary funds plus a Mutual Fund Window providing access to 200 name-brand mutual funds. Disability protection insurance (enrollment only during Fall Annual Enrollment Period) 2011 Benefits 28

IBM MoneySmart Financial education and planning to help employees with financial decision-making on a range of issues, including retirement and estate planning, debt management, college savings, tax and investment strategies and other topics Offered at no cost to all IBM U.S. regular employees MoneySmart is brought to IBMers through world-class third parties who are trained in financial planning and investments: The Ayco Company L.P., a Goldman Sachs Company, and Fidelity Investments MoneySmart coaches are credentialed financial representatives trained in IBM programs and benefits Robust MoneySmart portal on w3 includes: educational seminars financial tools, calculators and quick links a library of financial topics Scheduling software to schedule a one-on-one phone counseling session with MoneySmart coaches 2011 Benefits 29

IBM Vacation Plan Based on years of service: Length of service Days of vacation Less than 10 years 15 10+ years 20 Vacation is earned and accrued on calendar year basis (Jan. 1 through Dec. 31) In year of hire, vacation is based on the number of full months worked as a regular employee Vacation can be taken at any time during the year in weeks, days or half-days Vacation taken before it is accrued is considered a salary advance Vacation earned but not used is considered excess and will result in a reduction to the maximum number of new days you can earn the following year Vacation days are prorated for employees on a reduced work schedule 2011 Benefits 30

IBM Vacation Plan Accrual Table Service Attained During Calendar Year (Full-time Employees) Full Months Worked Less than 10 Years 10+ Years 12 11 10 9 8 7 6 5 4 3 2 1 Days 15.0 14 12.5 11.5 10.0 8.5 7.5 6.5 5.0 4.0 2.5 1.0 Days 20.0 18.5 16.5 15.0 13.5 11.5 10.0 8.5 6.5 5.0 3.5 1.5 Note: A full month worked means working from first workday of the month through the last workday of month. 2011 Benefits 31

IBM Holiday Plan Plan provides twelve holidays each year, six of which are generally observed nationally: New Year s Day Independence Day Thanksgiving Day Memorial Day Labor Day Christmas Day Other six holidays vary by location based on operating requirements or local custom With management approval, personal choice holidays are taken at employee s option Unused days cannot be carried over or cashed out Holidays prorated for employees on reduced work schedule Personal choice holidays during year of hire, rehire or return from leave of absence will be prorated 2011 Benefits 32

Employee Assistance Program Provides support for a variety of life events and everyday challenges including: Work stress Coping with change Family/parenting issues Grief or bereavement Anxiety or depression Communicating effectively EAP provides up to 8 free counseling sessions with a licensed mental health professional Available to all employees and eligible dependents even those who opt out of health benefits coverage 2011 Benefits 33

Post Employment Medical (Access) If certain age and service requirements are met, employees will have access to post-employment health care coverage Eligible if you leave IBM at age 55 with at least five years of service, AND if age plus service equals 65. For example: 55 years old + 10 years of service 58 years old + 7 years of service 60 years old + 5 years of service Can continue IBM health care coverage for yourself and eligible dependents Pay full retiree group rates 2011 Benefits 34

Special Care for Children Assistance Plan Assists with expenses outside the scope of the IBM Medical and Dental Plans for the care of a child with mental, physical or developmental disabilities. Maximum lifetime benefit of $50,000 per child Eligible expenses may include: Special education facilities Independent practitioners and services Academic remediation Evaluation and testing Special devices Coverage ends when child reaches age 26, no longer eligible, or benefits under the plan are exhausted, whichever occurs first. 2011 Benefits 35

Adoption Assistance Program Provides financial assistance towards expenses incurred in the adoption of a child IBM pays 80% of eligible expenses related to adoption, up to $2,500 per family for each adoption Eligible expenses may include: Application fee Adoption agency fees Placement fees Legal fees Hospital expenses for birth mother and baby 2011 Benefits 36

Lifeworks Free resource and referral program Provides information on a variety of topics, including: Elder care referral Adoption planning Time management Balancing work and family Available to all employees and their eligible dependents No cost to employees for this service 2011 Benefits 37

Discount Offerings and Services IBM Club: Discounts on national/regional entertainment & local services Website: http://w3.ibm.com/ibmclub Discounts for IBMers One stop destination for IBM employee discounts and services Includes Employee Purchase Program for Lenovo laptops and more Website: http://www2.beneplace.com/ibmer 2011 Benefits 38

Resources available IBM Employee Services Center (ESC) 1-800-796-9876 (TTY 1-800-426-6537) Service representatives are available from 8:30 a.m. to 8:30 p.m. ( Eastern Time) to answer benefits questions and to take your Health care benefits enrollments. NetBenefits Web site at http://netbenefits.fidelity.com After you are connected to IBM systems: You and IBM Web site at http://w3.ibm.com/hr/us/ Summary Plan Descriptions, available on w3, provide complete details on IBM benefits programs This presentation is intended to provide highlights of certain IBM plans and programs in which you may be eligible to participate. Complete details can be found in the official plan documents which remain the final authority in the event of a conflict. IBM reserves the right, at its discretion, to amend, change or terminate any of its plans, programs, policies, practices, as the company requires. Nothing contained in this information shall be construed as creating an expressed or implied obligation on the part of IBM. 2011 Benefits 39

Succeeding@IBM IBM Benefits Program - 2011

Backup Slides 2011 Benefits 41

2011 Regional IBM Medical Plan Carriers Aetna Arkansas Connecticut District of Columbia Delaware Maryland Nebraska New Jersey Oklahoma Texas CIGNA Colorado, Vermont, North Carolina (Raleigh/Durham/Chapel Hill) Empire Blue Cross/ Blue Shield Alabama California Hawaii Iowa Illinois Indiana Kansas Kentucky Louisiana Massachusetts Maine Michigan Minnesota Missouri Mississippi North Carolina - except Raleigh/Durham/Chapel Hill North Dakota New Hampshire New York City (and suburbs) Northern/Western New York Ohio Pennsylvania Rhode Island South Carolina South Dakota Tennessee Virginia Wisconsin West Virginia MVP New York (Albany/Poughkeepsie/Binghamton/Endicott) United Alaska Arizona Florida Georgia Idaho Montana New Mexico Nevada Oregon Utah Washington Wyoming 2011 Benefits 42

IBM s approach to cost sharing IBM contributes a significant amount toward the total cost of employee health care coverage each year IBM focuses its financial commitment on employees first, while providing a significant, but lower level of subsidy for dependents For 2011, the subsidy amount is based on the cost to provide free employee-only coverage under the IBM PPO and High Deductible PPO with HSA Employees who choose more expensive options pay the difference between the total plan cost and the IBM subsidy through monthly contributions The amount of the IBM subsidy, along with the costs for medical services, will be adjusted each year based on IBM s health care cost experience Employees pay per person, with separate price tags for employee, spouse/domestic partner, and child dependent coverage (employees pay for each child separately up to six children) IBM PPO, IBM High Deductible PPO with HSA and IBM Dental Basic are free for individual coverage for all full-time employees; contributions are required to cover dependents 2011 Benefits 43

100% Routine Preventive Care Coverage Further details on what s covered: Well Woman: Well woman exam: Cervical (PAP) test General Adult: Well Adult exam: Lipid profile, CBC, routine multi-channel blood test,glucose, EKG. Cholesterol Screening with or without general adult exam Hypertension Screening with or without general adult exam Osteoporosis Screening exam: Including bone mineral density tests. Adult Cancer Screening: Fecal occult blood screening; Sigmoidoscopy & Screening biopsy and polyp removal; Colonoscopy & Screening biopsy and polyp removal( including anesthesia and facility charge); Prostate Cancer Screening; PSA & Digital Rectal Exam (DRE); Mammography; Skin Cancer Screening Newborn: State required congenital screenings; PKU; hearing testing; sickle cell, hemoglobin & hematocrit, glucose, bilirubin and galactose Child: Well Child Exam: Hemoglobin and/or Hematocrit, TB, Lead, Urinalysis Adolescent: Well adolescent exam; Cervical (PAP) test starting at 18 Immunizations: Diphtheria, Tetanus. Pertussis (DPT); Hemophilus influenza B vaccine; Hepatitis A vaccine, Hepatitis B vaccine, Influenza virus vaccine, MMR (Measles, Mumps, Rubella) Pneumococcal vaccine, Poliovirus vaccine, Varicella vaccine, Cholera vaccine, Meningococcal polysaccharide vaccine, Typhoid vaccine, Yellow fever vaccine, Rotavirus and Gardasil 2011 Benefits 44

Care Advantage: Comprehensive Care and Condition Management Targeted outreach and one-on-one care management for potentially complex medical needs IBM-dedicated, specially-trained registered nurses employed by each of IBM s regional health plans serve as Care Coordinators Condition management support (administered by Alere) for participants with the following chronic conditions: Asthma Congestive heart failure Coronary artery disease Depression Diabetes Available to participants in the IBM PPO, IBM PPO Plus, IBM EPO, and IBM High Deductible PPO with HSA 2011 pilot for employees enrolled in IBM medical plans in Florida and Georgia (United) and New Jersey (Aetna): All clinical services will be provided by a single vendor. 2011 Benefits 45

Health Management Center Single, integrated source for health and wellness information and decisionmaking tools Offers authoritative health information from WebMD Provides personalized messaging and outreach Allows IBM employees to more proactively manage and monitor their health 2011 Benefits 46

Mental Health/Substance Abuse 2011 Benefits 47