Exhibit 10.69
BROWN & WILLIAMSON TOBACCO CORPORATION
HEALTH CARE PLAN
FOR SALARIED EMPLOYEES
(As Amended Through July 29, 2004)
BROWN & WILLIAMSON TOBACCO CORPORATION
HEALTH CARE PLAN
FOR SALARIED EMPLOYEES
(As Amended Through July 29, 2004)
Table of Contents
PREAMBLE 1
ARTICLE 1. Definitions.................................................... 1
1.01 Annual Out-of-Pocket Limit..................................... 1
1.02 Ambulance...................................................... 2
1.03 Bed Patient.................................................... 2
1.04 Benefit Period................................................. 2
1.05 Claims Administrator........................................... 2
1.06 Code........................................................... 2
1.07 Coinsurance.................................................... 2
1.08 Company........................................................ 2
1.09 Continuation Coverage.......................................... 3
1.10 Continued Stay Review.......................................... 3
1.11 Copayment...................................................... 3
1.12 Covered Charges................................................ 3
1.13 Covered Services............................................... 4
1.14 Custodial Care................................................. 4
1.15 Deductible..................................................... 4
1.16 Dental Benefits................................................ 5
1.17 Dentist........................................................ 5
1.18 Dependent...................................................... 5
1.19 Dependent-Participant.......................................... 6
1.20 Effective Date................................................. 6
1.21 Eligible Employee.............................................. 6
1.22 Emergency Care................................................. 7
1.23 Employee....................................................... 7
1.24 Experimental or Investigational................................ 8
1.25 Employee-Participant........................................... 8
1.26 ERISA.......................................................... 8
1.27 Family......................................................... 8
1.28 Flex Plan...................................................... 8
1.29 FMLA........................................................... 9
1.30 Home Health Care Agency........................................ 9
1.31 Hospice Agency................................................. 9
1.32 Hospice Facility............................................... 9
1.33 Hospital or Health Care Facility............................... 9
1.34 Illness........................................................ 9
1.35 Injury......................................................... 10
1.36 Immunization................................................... 10
1.37 Inpatient...................................................... 10
1.38 Maternity...................................................... 10
1.39 Medical Plan................................................... 10
1.40 Medically Necessary............................................ 10
1.41 Mental Health Condition........................................ 11
1.42 Network........................................................ 11
1.43 Network Provider............................................... 11
1.44 Non-Network Provider........................................... 12
1.45 Normal Cost.................................................... 12
1.46 Office Visit................................................... 13
1.47 Outpatient..................................................... 13
1.48 Outpatient Facility............................................ 13
1.49 Participant.................................................... 13
1.50 Physician...................................................... 13
1.51 Plan........................................................... 14
1.52 Plan Administrator or Administrator............................ 14
1.53 Pre-Admission Certification.................................... 14
1.54 Pre-Admission Review........................................... 14
1.55 Primary Residence.............................................. 14
1.56 Provider....................................................... 14
1.57 Psychiatric Facility........................................... 14
1.58 Related Company................................................ 14
1.59 Retirement Plan................................................ 15
1.60 Retired Participant............................................ 15
1.61 Review Deductible.............................................. 15
1.62 Schedule of Benefits........................................... 15
1.63 Schedule of Covered Dental Expenses............................ 16
1.64 Services....................................................... 16
1.65 Skilled Nursing Care........................................... 16
1.66 Skilled Nursing Facility....................................... 16
1.67 Spouse or Surviving Spouse..................................... 16
1.68 Substance Abuse................................................ 17
1.69 Substance Abuse Treatment Facility............................. 17
1.70 Therapy Services............................................... 17
1.71 Treatment Plan................................................. 17
1.72 Urgent Care Facility........................................... 17
1.73 Vision Plan.................................................... 18
1.74 Year of Service................................................ 18
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ARTICLE 2. Eligibility and Participation.................................. 18
2.01 Eligibility and Participation.................................. 18
2.02 Dependents..................................................... 19
2.03 Cessation of Participation..................................... 20
2.04 Right to Conversion Coverage................................... 21
2.05 HMO Options.................................................... 21
2.06 Enrollment; Contributions...................................... 22
2.07 Employee Assistance Program.................................... 22
2.08 Effect of Retirement........................................... 22
2.09 BATUS Retail Merger............................................ 31
2.10 Qualified Medical Child Support Orders......................... 31
2.11 American Tobacco Plan.......................................... 33
2.12 Medical Rule of 70 Coverage.................................... 34
2.13 Medical Rule of 70 Coverage - (Post-September 30, 2003
Restructuring).............................................. 35
2.14 Medical Rule of 70 Coverage - (Special Severance
Pay Plan -- B&W/RJR Business Combination)................. 36
2.15 Medical Rule of 70 (Contingent Coverage for Certain
Former B&W Employees)....................................... 38
2.16 Medical Rule of 70 Coverage (BATIC Employees).................. 40
ARTICLE 3. Medical Plan................................................... 41
3.01 In General..................................................... 41
3.02 Schedule of Benefits........................................... 42
3.03 Ambulance Services............................................. 49
3.04 Dental Services................................................ 50
3.05 Durable Medical Equipment...................................... 50
3.06 Home Health Care............................................... 51
3.07 Hospice Care................................................... 52
3.08 Hospital Confinement Limitations............................... 54
3.09 Hospital Inpatient Care........................................ 54
3.10 Infertility Diagnosis.......................................... 55
3.11 Mental Health Conditions....................................... 55
3.12 Obstetrical Care............................................... 56
3.13 Organ and Tissue Transplants................................... 56
3.14 Other Covered Services......................................... 58
3.15 Physician Services............................................. 60
3.16 Prosthetic Devices............................................. 61
3.17 Skilled Nursing Facility....................................... 61
3.18 Substance Abuse Conditions..................................... 61
3.19 Temporomandibular or Craniomandibular Joint Dysfunction........ 62
3.20 Therapy Services............................................... 62
3.21 Wellness Program............................................... 62
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ARTICLE 4. Deductibles and Annual Out-of Pocket Limit..................... 64
4.01 Deductibles.................................................... 64
4.02 Annual Out-of-Pocket Limit..................................... 64
ARTICLE 5. Exclusions..................................................... 65
5.01 Exclusions..................................................... 65
ARTICLE 6. Pre-admission Review, Continued Stay Review and Medical
Case Management............................................. 69
6.01 Pre-Admission and Continued Stay Review........................ 69
6.02 Medical Case Management........................................ 70
ARTICLE 7. Prescription Drug Plan......................................... 71
7.01 Prescription Drugs............................................. 71
7.02 Pre-Authorization.............................................. 73
7.03 Definitions.................................................... 73
7.04 Prescription Drug Limitations.................................. 73
ARTICLE 8. Dental Plan.................................................... 74
8.01 Dental Plan Options; Eligibility............................... 74
8.02 Deductible..................................................... 75
8.03 Limitations.................................................... 75
8.04 Cessation of Participation..................................... 75
8.05 Dental Expenses Not Subject to Deductible...................... 75
8.06 Dental Expenses Subject to Deductible.......................... 76
8.07 Orthodontics................................................... 78
8.08 Schedule of Covered Dental Expenses............................ 78
8.09 Predetermination of Dental Benefit Coverage.................... 78
8.10 Dentally Necessary............................................. 79
8.11 Exclusions..................................................... 79
ARTICLE 9. Vision Plan.................................................... 81
9.01 Vision Care Benefits........................................... 81
9.02 Exclusions..................................................... 82
ARTICLE 10. Continuation Coverage......................................... 83
10.01 In General..................................................... 83
10.02 Qualifying Event............................................... 84
10.03 Qualified Beneficiary.......................................... 85
10.04 Newborn and Adopted Children................................... 85
10.05 Period of Coverage............................................. 86
10.06 Premium Requirements........................................... 87
10.07 Insurability and Conversion Option............................. 87
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10.08 Qualified Beneficiary's Election............................... 87
10.09 Notices........................................................ 88
ARTICLE 11. Coordination of Benefits and Subrogation...................... 89
11.01 Coordination of Benefits....................................... 89
11.02 "Primary-Secondary" Payment Rule............................... 89
11.03 Medicare Eligibility........................................... 91
11.04 Other Insurance or Health Plans................................ 91
11.05 Amounts Reduced Due to Application of Rules.................... 91
11.06 Third-Party Liability.......................................... 91
11.07 Subrogation and Reimbursement.................................. 91
11.08 Excess Payments................................................ 93
ARTICLE 12. General Provisions............................................ 93
12.01 Rights and Benefits Not Assignable............................. 93
12.02 Care Rendered Outside the U.S.................................. 94
12.03 Filing Deadlines............................................... 94
12.04 Forfeiture of Unclaimed Benefits............................... 94
12.05 Family and Medical Leave Act................................... 94
12.06 Independent Agents............................................. 95
12.07 Military Service............................................... 95
12.08 Privacy Standards.............................................. 95
ARTICLE 13. Plan Administration........................................... 97
13.01 Named Fiduciary................................................ 97
13.02 Allocation of Fiduciary and Other Responsibilities............. 97
13.03 Quorum and Voting; Procedures.................................. 97
13.04 Service in Multiple Capacities................................. 98
13.05 Powers and Authority........................................... 98
13.06 Powers of Plan Administrator................................... 98
13.07 Powers of Benefit Finance Committee............................ 99
13.08 Advisors...................................................... 99
13.09 Powers not Exclusive........................................... 99
13.10 Limitation of Liability; Indemnity............................. 99
ARTICLE 14. Amendment and Termination..................................... 100
14.01 Amendment and Termination...................................... 100
ARTICLE 15. Funding....................................................... 100
15.01 Trust Agreement and Other Funding.............................. 100
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EXHIBIT A SPECIAL PROVISIONS APPLICABLE TO CERTAIN EMPLOYEES
WHO INCUR A "RESTRUCTURING TERMINATION"..................... 1
SCHEDULE A - EFFECTIVE JANUARY 1, 2004 SCHEDULE OF BASIC PLAN
DENTAL BENEFITS BASED ON CODE OF DENTAL PROCEDURES
AND NOMENCLATURE PREPARED BY COUNCIL ON DENTAL
CARE PROGRAMS OF ADA...................................... 1
SCHEDULE B SCHEDULE OF OPTIONAL PLAN DENTAL BENEFITS...................... 1
* * * * *
vi
BROWN & WILLIAMSON TOBACCO CORPORATION
HEALTH CARE PLAN
FOR SALARIED EMPLOYEES
(As Amended Through July 29, 2004)
PREAMBLE
BROWN & WILLIAMSON TOBACCO CORPORATION (the "Company") adopted the Brown &
Williamson Tobacco Corporation Comprehensive Health Care Plan and Separate
Options for Salaried Employees (the "Prior Plan"), effective as of July 1, 1988,
to provide health care benefits to Eligible Employees of Brown & Williamson
Tobacco Corporation, BATUS Inc., Brown & Williamson Industries, Inc., and
effective as of December 1, 1988, B.A.T Capital Corporation, and their eligible
dependents. Effective the close of business, December 31, 1990, health care
plans of certain companies previously included within a controlled group of
corporations with the Company were merged into this Plan for administrative
purposes, as set forth herein.
Effective January 1, 1992, the Company amended and restated in its entirety
the Prior Plan under the name of the Brown & Williamson Tobacco Corporation
Health Care Plan for Salaried Employees (the "Plan") which incorporated into a
single plan document all plans providing self-insured health care benefits to
salaried employees of the Company and their eligible dependents. In particular,
effective as of such date, the Brown & Williamson Tobacco Corporation Health
Care, Dental and Vision Plan for Salaried Employees, as then in effect, was
merged with this Plan. Effective August 6, 2002, the ATCO Plan (as defined in
Section 2.11) was merged into this Plan.
The Plan, as restated January 1, 1992, and as amended through December 16,
2002, was again restated to consolidate all amendments previously adopted, and
to incorporate certain technical and compliance revisions not previously
incorporated into the Plan, with effect from January 1, 2002 (except and to the
extent otherwise specifically noted in the Plan), which restatement was approved
and executed by an officer of this Company thereunto duly authorized, under date
of September 11, 2003.
The Plan, as restated effective January 1, 2002, and as amended through
March 8, 2004, was further amended by resolution of the Board of Directors of
the Company adopted July 29, 2004. As so amended the Plan reads as follows:
ARTICLE 1.
Definitions
1.01 Annual Out-of-Pocket Limit. The term "Annual Out-of-Pocket Limit" means
the specific amount of specified Covered Charges paid by a Participant in a
Benefit Period that is set
forth in Section 4.02. The calculation of the Annual Out-of-Pocket Limit
shall not include any of the following: Copayments; Review Deductibles; any
charges resulting from a reduction in benefits due to a Participant's
failure to comply with the requirements of Section 6.01; or other charges
and expenses not covered by the Plan, such as charges in excess of
reasonable and customary fees, charges in excess of Plan maximums, and
charges for non-Covered Services.
1.02 Ambulance. The term "Ambulance" means an air or ground vehicle designed
and used only for transporting the sick and injured that contains all life
saving equipment and staff required by state and local laws.
1.03 Bed Patient. The term "Bed Patient" means a Participant who must be
confined to a Hospital or other institutional Provider and for whom a room
and board charge is made.
1.04 Benefit Period. The term "Benefit Period" means the period of time against
which certain benefit allowances are measured. Each Benefit Period begins
on the first day of January of each year and ends on the last day of
December of the same year.
1.05 Claims Administrator. The term "Claims Administrator" means a person or
organization designated in accordance with Section 13.06(a)(5) to receive
and administer claims. The Claims Administrator shall have discretionary
authority to determine eligibility for benefits, including the approval and
denial of claims filed by or on behalf of Participants for benefits under
the Plan.
1.06 Code. The word "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.07 Coinsurance. The word "Coinsurance" means that percentage of Covered
Charges which is payable by the Plan or a Participant during a Benefit
Period, after any Deductible is paid, as set forth in the Schedule of
Benefits. The calculation of Coinsurance does not include charges and
expenses not covered by the Plan, such as charges in excess of reasonable
and customary fees and charges for non-Covered Services.
1.08 Company.
(a) The word "Company" means:
(1) Effective the date of closing (the "Closing") of the transactions
contemplated by the Business Combination Agreement dated October 27,
2003, between Brown & Williamson Tobacco Corporation and R.J. Reynolds
Tobacco Holdings, Inc. (the "Business Combination"), Reynolds American
Inc., and any successor thereto, and any Related Company that adopts
the Plan (collectively, "RAI"); and
(2) Prior to Closing (as defined in paragraph (1) above), Brown &
Williamson Tobacco Corporation, any successor thereto, and any Related
Company that adopts the Plan.
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Effective immediately prior to Closing, Brown & Williamson Tobacco
Corporation and each Related Company that had adopted the Plan prior to
Closing shall be deemed to have withdrawn from and shall no longer maintain
the Plan for its employees.
(b) [Reserved].
1.09 Continuation Coverage. The term "Continuation Coverage" means the coverage
which a Participant may elect, at such Participant's sole expense, as
provided in Article 10.
1.10 Continued Stay Review. The terms "Continued Stay Review" means a review in
which the Participant, subsequent to admission to a Hospital and/or
commencement of a course of treatment, receives an assessment by a health
care coordinator and/or a physician-advisor of the Medical Necessity of
such admission and/or course of treatment.
1.11 Copayment. The word "Copayment" means the set dollar amount a Participant
must pay at the time certain Covered Services are rendered by a Network
Provider, which shall not be more than the actual price of the Service. A
separate Copayment is payable for each Network Physician's Office Visit,
each Hospital Emergency Room visit, each Urgent Care Facility visit and
each prescription. Copayments for Prescription Drugs are specified in
Article 7 and Copayments for other Covered Services are specified in the
Schedule of Benefits. Copayments do not count toward the Deductible or the
Annual Out-of Pocket Limit.
1.12 Covered Charges.
(a) The term "Covered Charges" means, (1) with respect to Network Providers,
the negotiated fees that Network Providers have agreed to charge
Participants for Covered Services; (2) with respect to the Basic Dental
Plan, the fees set forth in Schedule A for Covered Services, subject to
Article 8; (3) with respect to the Vision Plan, the fees set forth in
Section 9.01 for Covered Services, subject to Section 9.02; and (4) travel
expenses to the extent covered in Section 3.13.
(b) The term "Covered Charges" means reasonable and customary fees for Covered
Services payable by the Plan (a) to Non-Network Providers in accordance
with column (c) of Section 3.02; (b) to Network and Non-Network Providers
in accordance with column (d) of Section 3.02; and (c) to Providers under
the Optional Dental Plan. The Claims Administrator shall have the sole
authority and discretion to determine the amounts which constitute
reasonable and customary fees. For purposes of this Section 1.12(b), a
reasonable and customary fee is an amount that is equal to the lesser of:
(1) The fee most often charged in the geographical area where the Service
was performed;
(2) The fee most often charged by the Provider for identical Services;
(3) The fee which is recognized as reasonable by a prudent person;
3
(4) The fee determined by comparing charges for similar Services to a
national database adjusted to the geographical area where the Services
or procedures were performed; or
(5) The fee determined by using a national relative value scale. Relative
value scale means a methodology that values medical procedures and
Services relative to each other that includes, but is not limited to,
a scale in terms of difficulty, work, risk, as well as the material
and outside costs of providing the Service, as adjusted to the
geographic area where the Services or procedures were performed.
(c) Covered Charges are subject to all provisions of the Plan, including
limitations and exclusions. The Plan shall treat a Covered Charge as
incurred on the date the Covered Service was provided. No fee, expense or
other charge shall be a Covered Charge unless it is incurred by a
Participant for Covered Services.
1.13 Covered Services.
(a) The term "Covered Services" means, the Services specifically described in
the provisions setting forth the Plan's benefits, subject to subsection
(b).
(b) Except as expressly provided otherwise in Sections 3.07, 3.14(c), 3.14(j)
and 3.21, a Service shall not be a "Covered Service" under the Plan unless
(1) the Service is incurred by a Participant due to Injury or Illness; (2)
the Service is expressly covered by the Plan; (3) the Claims Administrator
determines that the Service is Medically Necessary (or dentally necessary
as to the Dental Plan); (4) the Service is consistent with the condition
for which the Participant is being treated; and (5) the Service is ordered
or provided by a Physician. Covered Services are subject to Articles 5 and
6 and the other limits, exclusions, terms and conditions set forth in the
Plans.
1.14 Custodial Care. The term "Custodial Care" means care which is not
primarily provided for its therapeutic value in the treatment of an Illness
or Injury, but which is minimal, ambulatory, or part-time care Services, or
Services designed to assist in the activities of daily living. Custodial
Care includes, but is not limited to, help with walking, dressing, bathing,
eating, toileting, preparing special diets, taking medication and
supervision over self administration of medications not requiring constant
attention of trained medical personnel, without regard to whether a
Physician has prescribed, recommended or performed such Services.
1.15 Deductible. The word "Deductible" means, with respect to the Medical Plan,
the dollar amount of Covered Charges specified in Section 4.01 that must be
paid by a Participant before the Plan will pay any Covered Charge during a
Benefit Period. The word "Deductible" means, with respect to the Dental
Plan, the dollar amount of Covered Charges specified in Section 8.02 that
must be paid by a Participant before the Plan will pay any Covered Charges
listed in Sections 8.06 and 8.07. The calculation of a Participant's
Deductible shall not include any Copayments, Review Deductibles, or other
charges and expenses not covered by the Plan, such as charges in excess of
reasonable
4
and customary fees and charges for non-Covered Services. The calculation of
a Participant's Medical Plan Deductible shall not include any Dental Plan
Deductible paid by the Participant, and the calculation of a Participant's
Dental Plan Deductible shall not include any Medical Plan Deductible paid
by the Participant.
1.16 Dental Benefits. The term "Dental Benefits" means those benefits
specifically provided under the Dental Plan set forth at Article 8, subject
to all terms and conditions contained herein.
1.17 Dentist. The word "Dentist" means a Doctor of Dental Surgery (DDS), Doctor
of Dental Medicine (DDM), or Doctor of Dental Science (DS) who is duly
licensed by the applicable licensing authority.
1.18 Dependent.
(a) The word "Dependent" means an Employee-Participant's, or a Retired
Participant's (subject to Section 2.08), spouse, any unmarried child under
age 21, any unmarried child under age 25 who attends school as a full-time
student, and any eligible unmarried handicapped child. Notwithstanding any
other provision of this Section 1.18, an individual shall be classified as
a Dependent if and only if that individual is a dependent of the
Employee-Participant within the meaning of section 152 of the Code, except
that this sentence shall not apply to any child for whom the
Employee-Participant or the spouse-Participant has a legal obligation,
under a divorce decree or other court order, to provide health care
expenses. The term "child" includes a natural child, a stepchild and a
legally adopted child. Subject to the above age restrictions, the term
"child" also includes a child for whom legal guardianship (which includes
the obligation to provide health care expenses) has been awarded to the
Employee-Participant, and any child for whom the Employee-Participant or
the spouse-Participant has a legal obligation, under a divorce decree or
other court order, to provide health care expenses. A child will be
considered handicapped if, but only if, the Claims Administrator determines
that he or she satisfies each of the following requirements: (1) the child
is not able to earn his or her own living because of a mental or physical
disability that is expected to continue indefinitely; (2) such disability
commenced while the child was a Dependent-Participant and prior to the
child's attaining age 21, or age 25 if he or she attends school as a
full-time student; and (3) the child depends on the Employee-Participant
for more than 50 percent of his or her support. A child shall not be
eligible for Dependent coverage if the child is married. The Plan may
require proof of a child's marital status and handicapped status from time
to time.
(b) "Dependent" excludes anyone covered as an Employee or Retired Employee.
Effective prior to November 1, 2001, the term "Dependent" excluded anyone
in active military service, subject to Section 12.07. No
Employee-Participant shall be eligible for benefits as a
Dependent-Participant, and no Dependent-Participant shall be eligible for
benefits as an Employee-Participant. No person may be a Dependent of more
than one Employee (except in case of divorce).
5
(c) The term "adopted child" as used in subsection (a) above shall include
dependent children placed with an Employee-Participant for adoption,
irrespective of whether the adoption has become final. For this purpose the
words "placed" or "placement" mean the assignment and retention by the
Employee-Participant of a legal obligation for total or partial support of
such child in anticipation of adoption of such child.
(d) The Claims Administrator shall determine in its sole discretion whether a
child is a full-time student. The determination of a child's status as a
full-time student shall be based on such verification from the child's
school as the Claims Administrator shall deem appropriate, based on the
following guidelines:
Verification shall be provided to the Claims Administrator twice each Plan
Year, but not more than once with respect to the same semester or similar
academic period ("verification period"). Verification will be satisfactory
only if the student is enrolled as a full-time student as defined by the
school (generally, for at least 12 hours of credit during the verification
period), except as follows: If a student qualifies as a junior or a senior
(as defined by the school), the Claims Administrator will take into account
special circumstances resulting in enrollment in fewer than 12 hours in any
verification period such as the unavailability of required courses.
1.19 Dependent-Participant. The term "Dependent-Participant" means a Dependent
who is a Participant.
1.20 Effective Date. The term "Effective Date" means the day, month and year a
given Participant's coverage begins.
1.21 Eligible Employee.
(a) The term "Eligible Employee" means any Employee; provided, however, that an
Employee shall not be eligible during any period in which such Employee is:
(1) employed on a temporary or seasonal basis;
(2) employed on a part-time basis (i.e., the Employee's normal and
customary work week is less than 40 hours per week), except Prime-Time
Employees as defined in Section 1.23(a);
(3) included in a unit subject to collective bargaining unless the
applicable collective bargaining agreement provides otherwise;
(4) a non-resident alien who receives no earned income (within the meaning
of Section 911(d)(2) of the Code) from the Company which constitutes
earned income from a source within the United States (within the
meaning of Section 861(a)(3) of the Code); or
6
(5) covered by another health care plan of the Company or a Related
Company that provides similar health care coverage, unless and to the
extent the Employee and the Company have agreed otherwise in writing.
(b) The term "Eligible Employee" shall not, except with respect to the Optional
Dental Plan described in Article 8, include any employee whose primary
employment duties with the Company relate to a business operation which,
prior to March 1, 1995, was part of the American Tobacco Company or Golden
Belt Manufacturing Company.
1.22 Emergency Care. The term "Emergency Care" means the first treatment given
in a Hospital emergency room for the treatment of a sudden and, at that
time, unexpected Illness or Injury manifesting itself by acute symptoms of
sufficient severity that the absence of immediate medical attention could
reasonably result in (a) permanently placing the Participant's life in
jeopardy, (b) causing other serious medical consequences, (c) causing
serious impairment to bodily functions, or (d) causing serious and
permanent dysfunction of any body organ or part. The Claims Administrator
shall determine in its sole discretion whether treatment constitutes
Emergency Care, and its decision will be based on the symptoms at the time
of treatment, as documented by the treating Physician. Emergency Care does
not include Ambulance charges.
1.23 Employee.
(a) Subject to subsections (b), (c) and (d) below, the term "Employee" means
any individual who is classified by the Company as an employee of the
Company for federal income tax withholding purposes and is either (1) a
full-time salaried employee, or (2) a Prime-Time Employee. The term "full
time salaried employee" means a salaried employee whose normal and
customary work week is at least 40 hours per week. The term "Prime-Time
Employee" means a part-time employee who works at least 20 hours per week
and who has at least 5 years of prior continuous service with the Company
as a full time salaried employee. The term "Employee" includes an
hourly-paid employee if the Company has classified the employee as a
salaried employee for purposes of eligibility under this Plan.
(b) The term "Employee" excludes all employees of the Company employed within
the State of Hawaii, except that full-time salaried employees within Hawaii
shall be eligible for Dental Benefits.
(c) Notwithstanding Section 1.23(a), the term "Employee" shall include any
individual who is classified by the Company as a full-time salaried
employee, who is a bona fide resident of Puerto Rico (within the meaning of
Section 933 of the Code), and who is not domiciled in one of the fifty
United States or the District of Columbia, if, but only if, such individual
would be an employee of the Company for federal income tax purposes if he
or she were a resident of the United States.
(d) An individual who is determined by a governmental agency or court to be an
employee of the Company for federal income tax withholding purposes, even
though not previously so classified by the Company, shall be treated as
such from the date of such final and
7
nonappealable determination (even though the reclassification otherwise has
an earlier effective date), but shall in all events be treated as an
employee other than an "Employee."
1.24 Experimental or Investigational.
(a) The word "Investigational" means any treatment, equipment, new technology,
drug, device, supply, procedure, facility or Service that is not recognized
as effective medical practice or that is being studied to determine if it
should be used for patient care or whether it is effective. The Claims
Administrator shall have the sole right to determine in its sole discretion
what is Investigational.
(b) In determining whether any treatment, equipment, new technology, drug,
device, supply, procedure, facility or Service is Investigational, the view
of the state or national medical communities shall be considered as well as
whether:
(1) there has been final approval from the appropriate government
regulatory bodies;
(2) scientific evidence permits conclusions concerning the effect on
health outcome;
(3) the net health outcome for the patient is improved, as much or more
than established alternatives; and
(4) improvement in the patient's condition would be attainable through the
use of more conventional or widely recognized treatment alternatives.
Treatment may be considered Investigational within this definition even if
a Physician has previously prescribed, performed, ordered, recommended or
approved such treatment. The Claims Administrator shall not be bound by any
approval of the U.S. Food and Drug Administration (FDA), but any drugs or
devices classified as investigational by the FDA shall be Investigational.
Drugs or devices are Investigational if they not approved by the FDA for
treatment of the condition for which they are prescribed.
1.25 Employee-Participant. The term "Employee-Participant" means an Eligible
Employee who is a Participant.
1.26 ERISA. The acronym "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
1.27 Family. The word "Family" means the Participant and one or more
Dependents.
1.28 Flex Plan. The term "Flex Plan" means the Brown & Williamson Tobacco
Corporation Flexible Benefits Plan, a cafeteria plan within the meaning of
Section 125 of the Code, as adopted effective as of July 1, 1988, and as
amended from time to time thereafter. All terms of the Flex Plan, as
amended from time to time, are incorporated fully by reference herein.
8
1.29 FMLA. The term "FMLA" means the Family and Medical Leave Act of 1993, as
amended from time to time.
1.30 Home Health Care Agency. The term "Home Health Care Agency" means a
Hospital or non-profit or public home health care agency that satisfies
each of the following requirements: (1) it is licensed as a home health
agency by the state where it operates, or is certified to participate in
Medicare as a home health agency, (2) it primarily provides skilled nursing
Services and other therapeutic Services supervised by a Physician or
registered graduate nurse, (3) it maintains clinical records, and (4) it
does not primarily provide Custodial Care or care for Mental Health
Conditions.
1.31 Hospice Agency. The term "Hospice Agency" means an organization which has
the primary purpose of providing hospice Services and which either
participates in the Network or satisfies the following requirements: (a)
licensed and operated in accordance with the laws of the state in which it
does business; (b) certified as a home health care agency under Titles XVII
and XIX of the Social Security Act; (c) accredited by the joint Commission
on Accreditation of Hospitals as a hospice; and (d) provides in-home health
care Services which conform to the standards of a Hospice Program of Care
as adopted by the Board of Directors of the National Hospice Organization.
1.32 Hospice Facility. The term "Hospice Facility" means a facility or part
of a facility the principal purpose of which is to provide Hospice Care,
and which (a) is licensed and operated in accordance with the laws of the
state in which it does business; (b) provides treatment by or under the
care of Physicians whenever a Participant is in the facility; (c) keeps
medical records of each patient; (d) has an ongoing quality assurance
program; (e) provides 24-hour-a-day nursing Services under the direction of
a registered nurse; (f) and has a full-time Administrator.
1.33 Hospital or Health Care Facility.
(a) The terms "Hospital" or "Health Care Facility" mean a legally operated
institution which is accredited by the Joint Commission on the
Accreditation of Hospitals, and is supervised by a staff of Physicians, and
provides 24-hour-a-day nursing Services by registered nurses and is
primarily engaged in providing general or specialized medical/psychiatric
care and treatment through medical, diagnostic and/or major surgical
facilities on its premises or under its control.
(b) In no event will the term "Hospital" include a nursing home or an
institution or part of one which (1) is primarily a facility for
convalescence, nursing, rest, or the aged; (2) furnishes primarily
intermediate domiciliary or Custodial Care, including training in daily
living routines; or (3) is operated as a school.
1.34 Illness. The term "Illness" means a disorder or disease of the mind or
body, including dental and vision conditions, which, if left untreated,
will result in a deterioration of a Participant's state of health or body
systems. For purposes of this Plan, the term "Illness" shall include
pregnancy.
9
1.35 Injury. The term "Injury" means an injury, including complications arising
from that injury, to the body that is definite as to time and place and
that is a sudden or unforeseen result of an external agent or trauma, and
which is independent of Illness.
1.36 Immunization. The term "Immunization" means any immunization or injection
that is Medically Necessary, and the following without regard to Medical
Necessity: diphtheria, pertussis, tetanus, polio, measles, chicken pox,
mumps, rubella, hepatitis B, HIB, pneumonia, and influenza. The Plan
Administrator may, based on generally accepted medical standards, add any
other preventative injection treatment to the list of immunizations that
will be provided without regard to Medical Necessity.
1.37 Inpatient. A Participant who is a Bed Patient.
1.38 Maternity. The term "Maternity" means normal pregnancy and delivery,
ectopic pregnancy, miscarriage, cesarean section delivery and related
medical complications.
1.39 Medical Plan. The term Medical Plan" means the benefits specifically
described in Articles 3 and 7 and Section 2.07, subject to the applicable
Copayments, Deductibles, Coinsurance, Annual Out-of-Pocket Limits,
Pre-admission Review, Continued Stay Review and Case Management rules and
other limits, exclusions, terms and conditions set out in this Plan.
1.40 Medically Necessary.
(a) The term "Medically Necessary" or "Medical Necessity" means a Service
(including supplies, equipment and drugs) furnished by a Physician or
Hospital or prescribed by a Physician, if, but only if, the Claims
Administrator determines in its sole discretion that the Service is
required for the diagnosis or treatment of the Participant's Illness or
Injury. A Service shall be deemed "required" if, but only if,
(1) as to a diagnostic procedure, it is indicated by the health status of
the Participant and is as likely to result in information that could
affect the course of treatment as, and no more likely to produce a
negative outcome than, any alternative Service, both as to the Illness
or Injury involved and the Participant's overall health condition;
(2) as to treatment, it is as likely to produce a significant positive
outcome as, and no more likely to produce a negative outcome than, any
alternative Service, both as to the Illness or Injury involved and the
Participant's overall health condition; and
(3) as to diagnosis and treatment, it is no more costly (taking into
account all health expenses incurred in connection with the Service)
than any alternative Service to meet the tests set forth in this
definition.
(b) To be "Medically Necessary" a Service must be consistent with the
Participant's diagnosis and treatment, in accordance with standards of good
medical practice, not solely for the convenience of the Participant or the
Provider, and furnished in the least
10
intensive type of medical care setting required by the Participant's
medical condition. The fact that a Physician or another provider has
furnished, prescribed, ordered, recommended or approved a Service does not
of itself make the Service Medically Necessary. The determination of
Medical Necessity shall be made by the Claims Administrator based on a
review of the medical records describing the Participant's condition and
treatment. When applied to the care of an Inpatient, Medical Necessity
means that the Participant's medical condition or symptoms require that the
Services cannot be safely provided as an Outpatient.
1.41 Mental Health Condition. The term "Mental Health Condition" means a
condition which manifest symptoms that are primarily mental or nervous,
regardless of any underlying physical cause. A Mental Health Condition
includes, but is not limited to, psychoses, neurotic and anxiety disorders,
schizophrenic disorders, affective disorders, personality disorders, and
psychological or behavioral abnormalities associated with transient or
permanent dysfunction of the brain or related neurohormonal systems. In
determining whether or not a particular condition is a Mental Health
Condition, the Claims Administrator Plan may refer to the current edition
of the Diagnostic and Statistical manual of Mental Conditions of the
American Psychiatric Association, or the International Classification of
Diseases (ICD) manual.
1.42 Network.
(a) The term "Network" means certain Providers who have entered into agreements
through which their fees and expenses for Covered Services are established,
as follows:
(1) Prior to January 1, 2005, the Networks are: Secure Health Plan of
Georgia (only for Participants employed at the Company's Macon,
Georgia, facility); CIGNA (for Participants in Georgia, Tennessee,
South Carolina and North Carolina, and, effective May 1, 2001, for
Participants in Utah); Private Health Care System (for Participants in
all states except Georgia, Tennessee, South Carolina, North Carolina
and, prior to May 1, 2001, Utah); and the LifeSource Program for organ
and tissue transplants.
(2) Effective beginning on January 1, 2005, the Networks are: (1) Secure
Health Plan of Georgia only for Participants employed at the Company's
Macon, Georgia facility; (2) CIGNA for all Participants in all states,
and (3) the LifeSource Program for organ and tissue transplants.
(b) If the Network applicable to a Participant is not a member of the
LifeSource Program, then the above references to the LifeSource Program
shall be deemed references to the transplant network, if any, in which the
Participant's Network is a member. The CIGNA Network was formerly referred
to as the PPN Network.
1.43 Network Provider. The term "Network Provider" means a Provider that is a
party to an agreement through which the Provider's fees, including the
amount of any Copayment, for Covered Services are determined based on
negotiated fee structures.
11
1.44 Non-Network Provider. The term "Non-Network Provider" means a Provider
that does not satisfy the definition of a Network Provider.
1.45 Normal Cost.
(a) The term "Normal Cost" means, for each level of medical coverage provided
under the Plan for Retired Participants, the total cost of such coverage
(inclusive of claims cost and administrative expense), prior to the
allocation of such cost between the Company and the Retired Participant (or
Dependent, as applicable), determined as follows:
(1) for Retired Participants and Dependents under the age of 65 and not
eligible for Medicare, Normal Cost is based on the "total
active-Employee rate" for medical coverage in effect from time to time
under the Plan, based upon the medical claims experience for all
active Employee-Participants (and their Dependents) under age 65; and
(2) for Retired Participants and Dependents age 65 and above or eligible
for Medicare, Normal Cost is the "Medicare supplement rate" in effect
from time to time under the Plan, based upon the medical claims
experience for all Retired Participants (and their Dependents) age 65
and above.
(b) Subject to subsection (c) below, the Normal Cost shall be adjusted from
time to time in such amount as the Plan Administrator, in its sole
discretion, deems necessary in accordance with sound actuarial practice.
(c) Effective as of the closing date ("Closing Date") of the transactions
contemplated by the Business Combination Agreement dated October 27, 2003,
by and between Brown & Williamson Tobacco Corporation and R.J. Reynolds
Holdings, Inc. ("Agreement"), the provisions set forth below shall apply.
If the transactions contemplated by the Agreement do not occur, then this
subsection (c) shall have no effect.
(1) The Normal Cost for Retired Participants and Dependents under the age
of 65 and not eligible for Medicare (as described in subsection (a)(1)
above) and the Normal Cost for Retired Participants and Dependents age
65 and above or eligible for Medicare (as described in subsection
(a)(2) above) shall be based on the 2004 Plan Year Normal Cost for
each group, with future adjustments as described in paragraph (2)
below.
(2) Commencing with Plan Year 2005, and for each subsequent Plan Year,
annual increases in the Normal Cost shall be determined as follows:
(A) Normal Cost for Retired Participants and Dependents under the age
of 65 and not eligible for Medicare (as described in subsection
(a)(1) above) shall be limited to the annual increase applicable
to the medical plan of Reynolds American Inc, or its affiliates,
with the largest classification or group of active members that
has credible experience (irrespective of actual increases in the
total cost of coverage); provided that if experience
12
for any such classification or group falls below the
actuarially-determined threshold for credible experience, then
future annual increases shall be limited to the percentage
increase in the medical component of the CPI index applicable to
the then current Plan Year, as published by the US Department of
Labor (or other comparable index, if such index is discontinued
or not available).
(B) Normal Cost for Retired Participants and Dependents age 65 and
above or eligible for Medicare (as described in subsection (a)(2)
above) shall be limited to the annual increase applicable to the
medical plan of Reynolds American Inc, or its affiliates, with
the largest classification or group of Medicare-eligible members
that has credible experience (irrespective of actual increases in
the total cost of coverage); provided that if experience for any
such classification or group falls below the
actuarially-determined threshold for credible experience, then
future annual increases shall be limited to the percentage
increase in the medical component of the CPI index applicable to
the then current Plan Year, as published by the US Department of
Labor (or other comparable index, if such index is discontinued
or not available).
For purposes of this paragraph (2), a medical plan with credible
experience is defined as a plan having not fewer than 2,000 covered
lives (i.e. employees, retirees and dependents) as of the beginning of
any Plan Year
1.46 Office Visit. The term "Office Visit" means medical care services rendered
by a Physician in the Physician's office to a Participant for the
examination, diagnosis or treatment of a covered Illness or Injury.
1.47 Outpatient. The word "Outpatient" means a Participant who receives Covered
Services while not a Bed Patient.
1.48 Outpatient Facility. A permanent facility that is duly licensed by the
appropriate governmental agencies to diagnose and treat Illnesses and
Injuries and that is operating within the scope of its licenses, except
that the term "Outpatient Facility" does not include (a) any facility that
provides accommodations for patients to stay overnight, or (b) any
independent lab or X-ray facility.
1.49 Participant. The term "Participant" means any Eligible Employee or Retired
Participant, and their Dependents, who participate in the Plan in
accordance with Article 2 or Article 10.
1.50 Physician. The term "Physician" means any Doctor of Medicine (MD) who is
legally qualified and licensed to practice medicine and/or perform surgery.
13
1.51 Plan. The term "Plan" means the Brown & Williamson Tobacco Corporation
Health Care Plan for Salaried Employees, as set forth herein, and as
amended from time to time thereafter.
1.52 Plan Administrator or Administrator. The terms "Plan Administrator" or
"Administrator" mean the Plan Administrator, as described in Section 13.01.
1.53 Pre-Admission Certification. The term "Pre-Admission Certification" means
a certification or decision arrived at through Pre-Admission Review in
which a health care coordinator and/or a Physician advisor have determined
that a Hospital admission and/or course of treatment is Medically
Necessary.
1.54 Pre-Admission Review. The term "Pre-Admission Review" means a review as
provided under Section 6.01.
1.55 Primary Residence. The place where a Participant resides for the majority
of the Benefit Period with the intention of making his or her permanent
home there and not for a temporary purpose.
1.56 Provider.
(a) The term "Provider" means: (1) a practitioner who is licensed by the
appropriate state agency to diagnose or treat Injuries and Illnesses and
who provides Services within the scope of that license; (2) a facility,
institution or clinic that is duly licensed by the appropriate state agency
and is primarily established and operating within the scope of its license;
and (3) an Ambulance Service.
(b) Subject to subsection (a) above, the term "Provider" includes a Physician,
Hospital, Dentist, Skilled Nursing Facility, podiatrist (DPM), anesthetist,
nurse anesthetist, certified registered nurse, anesthetist, chiropractor,
licensed clinical social worker, community home healthcare agency,
independent clinical laboratory, independent radiology facility, licensed
practical nurse, outpatient psychiatric facility, psychiatric hospital,
registered nurse, rehabilitation facility, optometrist, pharmacy, midwife,
doctor of osteopathy (DO), physical therapist, occupational therapist,
speech pathologist (PO), Outpatient Facility, Urgent Care Facility,
freestanding dialysis facility, or clinical psychologist (Ph.D.). The term
Provider does not include a Participant or the Participant's spouse,
parent, child, grandparent, grandchild, or any sibling by blood, marriage
or adoption.
1.57 Psychiatric Facility. The term "Psychiatric Facility" means a Provider
primarily engaged in providing diagnostic and therapeutic Services for the
treatment of Mental Health Conditions. The facility must be operated in
accordance with the laws of the jurisdiction in which it is located and
provide treatment by or under the care of Physicians whenever the patient
is in the facility.
1.58 Related Company. The term "Related Company" means any trade or business,
whether or not incorporated, which, at the time of reference, is either a
member of a controlled group of corporations within the meaning of section
414(b) of the Code which includes
14
Reynolds American Inc. (or prior to Closing (as defined in Section
1.08(a)(1)) Brown & Williamson Tobacco Corporation), or is under common
control with Reynolds American Inc. (or prior to Closing (as defined in
Section 1.08(a)(1)) Brown & Williamson Tobacco Corporation) within the
meaning of section 414(c) of the Code.
1.59 Retirement Plan. The term "Retirement Plan" means a plan maintained by the
Company and qualified under Section 401 of the Code, and shall include any
other retirement plan designated by the Company.
1.60 Retired Participant.
(a) The term "Retired Participant" means an Employee-Participant whose
employment with the Company has terminated pursuant to the normal,
disability or early retirement provisions of the Retirement Plan applicable
to the Participant (except retirements under the "Rule of 60" or the "Rule
of 65" as defined therein), or who is deemed to be a Retired Participant
pursuant to Sections 2.08(c), 2.08(d), 2.12, 2.13, 2.14, 2.15 or 2.16 of
this Plan; provided that such person is an eligible Employee-Participant in
this Plan at the time of employment termination (except as provided in
Sections 2.15 and 2.16).
(b) The term "Retired Participant" shall not include any Employee-Participant
whose right to benefits under the Retirement Plan is based on Years of
Service, but not on age or disability, nor shall it include any
Employee-Participant whose right to benefits under the Retirement Plan is
based on the "Rule of 60", the "Rule of 65", or a similar provision of the
Retirement Plan, except to the extent such Employee-Participant is a deemed
Retired Participant under Section 2.08(c) or (d).
(c) An Employee who is a Prime-Time Employee on the date of termination of
employment shall not be a "Retired Participant" unless he or she has
completed ten (10) Years of Service as a full-time salaried employee.
(d) Except as provided in Section 2.08(c)(2) or Section 2.15, effective as of
the Closing, the term "Retired Participant" shall exclude former employees
of Brown & Williamson Tobacco Corporation (or a Related Company) who had
not met the eligibility requirements of subsection (a) above as of the
first to occur of: (1) termination of employment for any reason after
Closing, or (2) commencement of regular employment with RAI (as defined in
Section 2.01(b)(3)).
1.61 Review Deductible. The term "Review Deductible" means the amount the
Participant is responsible to pay for otherwise covered charges incurred
for each failure to obtain or comply with a Pre-Admission Review and/or a
Continued Stay Review.
1.62 Schedule of Benefits. The term "Schedule of Benefits" means the schedule
at Section 3.02, which sets forth the Copayments, Coinsurance and
Deductibles payable by Participants each Benefit Period for Covered
Services, based on whether the Covered Services are performed by Network
Providers or by Non-Network Providers. Section
15
3.02 is subject to Sections 2.08 and 4.02, Article 6 and the other limits,
exclusions, terms and conditions of the Plan.
1.63 Schedule of Covered Dental Expenses. The term "Schedule of Covered Dental
Expenses" means the maximum benefits payable for dental Services and
supplies when performed or prescribed by a Dentist or Physician, according
to Schedules A and B.
1.64 Services. The term "Services" means procedures, surgeries, exams,
consultations, advice, diagnosis, referrals, treatment, room and board,
tests, supplies, drugs, devices, Ambulance transportation and technologies
rendered, dispensed or administered by Providers.
1.65 Skilled Nursing Care. The term" Skilled Nursing Care" means care needed
for Illness or Injury, which (a) requires the Services of skilled
professional medical personnel, such as registered nurses or professional
therapists, (b) is ordered by a Physician, and (c) is provided in
accordance with a treatment plan approved by a Physician.
1.66 Skilled Nursing Facility. The term "Skilled Nursing Facility" means a
voluntary or proprietary institution which is primarily engaged in
providing Skilled Nursing Care and related Services to Inpatients requiring
convalescent and rehabilitative care, and which is licensed and operated in
accordance with the laws of the jurisdiction in which it is located and
meets the standards established by the Joint Commission of Accreditation of
Hospitals and Related Facilities. Such care is rendered by or under the
supervision of a Physician and eligibility for coverage is based on care
rendered in compliance with Medicare established guidelines. A Skilled
Nursing Facility is not, other than incidentally, a place that provides (
a) Custodial Care, or (b) care or treatment of Mental Health Conditions,
alcoholism, drug abuse or pulmonary tuberculosis.
1.67 Spouse or Surviving Spouse.
(a) The terms "Spouse" or "Surviving Spouse" mean the spouse or surviving
spouse of the Participant or Retired Participant; provided, however, that
such a person claiming benefit under the Plan who is unable to produce a
certificate of marriage issued by an appropriate civil authority shall be
entitled to such benefits only if the Participant or Retired Participant
with respect to whom a marriage relationship is claimed notified the Plan
Administrator, in writing, of such marriage relationship and presented
acceptable proof thereof to the Plan Administrator prior to the time
benefits under the Plan are provided to the Spouse. The term "Spouse" shall
also include a spouse who is legally separated from a Participant or
Retired Participant until such time as such Participant and Spouse are
legally divorced.
(b) Notwithstanding subsection (a) above, if a Participant has been abandoned
(within the meaning of local law), no person claiming spousal benefits
arising under such relationship shall be treated as a Spouse or Surviving
Spouse for any purpose under this Plan.
16
1.68 Substance Abuse. The term Substance Abuse" means alcoholism, or
dependence, addiction or abuse of: alcohol, chemicals, or drugs.
1.69 Substance Abuse Treatment Facility. The term "Substance Abuse Treatment
Facility" means a Provider that is primarily engaged in providing
detoxification and rehabilitation treatment for Substance Abuse. The
facility must be operated and licensed in accordance with the laws of the
jurisdiction in which it is located and provide treatment by or under the
care of Physicians whenever the patient is in the facility.
1.70 Therapy Services.
(a) The term "Therapy Services" means Services or supplies used for the
treatment of an Illness or Injury to promote the recovery of the
Participant. Therapy Services include, but are not limited to:
(1) "Physical Therapy," which is the treatment by physical means,
hydrotherapy, heat or similar modalities, physical agents,
biomechanical and neurophysiological principles, and devices to
relieve pain, restore maximum function, and prevent disability
following Illness, Injury, or loss of a body part.
(2) "Respiratory Therapy," which is the introduction of dry or moist gases
into the lungs for treatment purposes.
(3) "Speech Therapy," which is treatment rendered to restore speech loss
or impairment to a person who has lost existing speech functions due
to an Illness or Injury.
(4) "Cardiac Rehabilitation," which is the treatment provided to
individuals who have suffered a heart attack, have had heart surgery,
or other cardiac problems.
(5) "Occupational Therapy," which is a treatment program of prescribed
activities, emphasizing coordination, designed to assist a person to
regain independence, particularly in the normal activities of daily
living, including occupational therapy rendered with respect to
confinement in a Hospital as a Bed Patient for nervous and mental
disorders and/or alcohol or drug abuse treatment.
(b) [Reserved].
1.71 Treatment Plan. The term "Treatment Plan" means a written report prepared
by a Dentist showing the recommended treatment for any dental disease,
defect, or injury to be rendered for a Participant while coverage under the
Plan is in effect. It shall include supporting oral examination findings,
X-rays, and a statement of charges.
1.72 Urgent Care Facility. A permanent facility that is licensed and provides
treatment by and under the supervision of Physicians for Injuries and for
Illnesses which are, at the time, unexpected and not chronic.
17
1.73 Vision Plan. The term "Vision Plan" means the benefits specifically
described in Article 9, subject to all limits, exclusions, terms and
conditions set forth in this Plan.
1.74 Year of Service. The term "Year of Service" means a year of Qualifying
Service counted under any Retirement Plan for an Eligible Employee. If an
Employee or the Employee's beneficiary becomes eligible for a disability or
death benefit under the Retirement Plan for Salaried Employees of Brown &
Williamson Tobacco Corporation, then for the purpose of determining the
cost of coverage under Section 2.08(b), such Participant's Years of Service
shall include the number of years and months (rounded up to the next whole
year) from the date of disability, or death, to normal retirement date.
ARTICLE 2.
Eligibility and Participation
2.01 Eligibility and Participation.
(a) Subject to subsection (b) below, an Employee who is otherwise an Eligible
Employee shall automatically begin participating in the Plan on the date
the Employee becomes an Eligible Employee, subject to elections available
under the Flex Plan and under Section 8.01. Participation in the Plan under
this subsection (a) includes the Medical Plan, the Prescription Drug Plan,
the Dental Plan, the Vision Plan and the Employee Assistance Program. If an
Eligible Employee is covered by another health plan of the Company or a
Related Company that does not include vision care, such Eligible Employee
shall automatically participate in the Vision Plan.
(b) Except as otherwise provided in Section 2.01, the following eligibility
rules shall apply:
(1) any Eligible Employee who is transferred from a business operation
which, prior to March 1, 1995, was part of The American Tobacco
Company or Golden Belt Manufacturing Company shall commence
participation in the Plan as provided in this Section 2.01 on the
later of March 1, 1995 or transfer to employment as an Eligible
Employee; and
(2) former employees of Brown & Williamson Tobacco Corporation (or a
Related Company) who are employed by RAI pursuant to the "Business
Combination" at and after "Closing" (as such terms are defined in
Section 1.08(a)) for a "transition period" (as defined in paragraph
(3) below), and who were Participants in the Plan immediately prior to
Closing, or who first become eligible to participate while in
"transitional employment" (as defined in paragraph (3) below) (taking
into account service before and after Closing), shall continue to be
(or, as applicable, shall become) eligible to participate in the Plan
in all respects until the first to occur of (i) termination of
employment for any reason, or (ii) commencement of "regular
employment" with RAI (as defined in paragraph (3) below).
18
(3) For purposes of this Plan, the term "regular employment" means full-
or part-time ongoing employment with RAI that is not classified by RAI
as transitional employment. An employee is considered to be in
"transitional employment" if his or her employment is transferred to
RAI in connection with the Business Combination and the employee is
employed within the B&W Division of RAI for a limited period of time
(a "transition period").
(c) Any other provision of the Plan to the contrary notwithstanding, the
following classes of workers are excluded from eligibility to participate
in the Plan:
(1) Individuals engaged by the Company pursuant to contracts that identify
them as independent contractors,
(2) Individuals who are not paid directly by the Company (or an affiliate
of the Company),
(3) Individuals who are not on the Company's U.S. payroll,
(4) Individuals who are "leased employees" within the meaning of Internal
Revenue Code Section 414(n) or (o),
(5) Individuals engaged pursuant to contracts that specify that they are
not entitled to participate in the Plan,
(6) Individuals whom the Company does not treat as its employees for
federal income tax withholding or employment tax purposes, except
individuals described in Section 1.23(c), and
(7) Individuals whom the Company does not classify as its employees,
regardless of whether a court or administrative agency subsequently
concludes that they are common-law employees (or salaried employees)
of the Company or a Related Company.
(8) any individual who was not an Employee of the Company as defined in
Section 1.08(a)(2) immediately prior to Closing; and
(9) salaried Employees who enter into "regular employment" (as defined in
Section 2.01(b)(3)) with RAI at and after Closing, effective the date
such regular employment commences.
(d) For purposes of this Plan, the date of hire of a secondee shall be the
Employee's date of hire by any Related Company. A secondee is an individual
who has been temporarily assigned by a Related Company, by whom he or she
was previously employed, to perform services as an Employee.
2.02 Dependents. A Dependent of an Employee-Participant shall become a
Participant on the date such Employee becomes a Participant, or the date
such person becomes a Dependent,
19
whichever is later, provided such person is otherwise eligible under this
Plan and the Flex Plan, such person has been properly enrolled pursuant to
the Flex Plan, and the Employee agrees or has agreed to make required
contributions for such Dependent coverage, if any. If permitted under the
Flex Plan, a Dependent may become a Participant on a later date upon
compliance with the requirements for participation set forth in the Flex
Plan. If a Dependent ceases to be a Participant for any reason after the
Dependent's Employee-Participant has become a Retired Employee, that former
Dependent-Participant shall not again be eligible to become a
Dependent-Participant.
2.03 Cessation of Participation.
(a) Any Employee-Participant and his Dependents, and any Retired-Participant
and his Dependents, shall cease to be Participants under this Plan at the
earliest of the following applicable events:
(1) An election to cease participation under the Flex Plan.
(2) Termination of employment of the Employee-Participant for any reason,
other than (A) retirement under a Retirement Plan, or (B) separation
under, and subject to the terms of, a Company severance pay plan
providing for the continuation of coverage for a term certain, in
which event coverage shall terminate in accordance with the severance
pay plan.
(3) An Employee ceases to be an Eligible Employee or transfers to an
ineligible employment status or to a Related Company, provided that if
any such Participant shall by reason of such transfer be immediately
covered by another health care plan, participation under this Plan
shall cease immediately;
(4) Military leave (except that this paragraph (4) shall not be effective
after October 30, 2001);
(5) Layoff;
(6) Death of an Employee-Participant or a Retired Participant; provided,
however, that, in the case of an Employee-Participant who is married
at the time of death, coverage for Dependent-Participants may continue
as follows:
(A) Coverage for a Surviving Spouse shall continue until the earlier
of death or termination of the Plan,
(B) Coverage for a surviving Dependent child shall continue until
such child is no longer a Dependent as defined in Article 1.
(7) Termination of the Plan;
(8) Termination of the Flex Plan in such a manner that benefits hereunder
are thereby terminated.
20
(9) For a Dependent, when he ceases to be a Dependent, or, subject to
Section 2.08, the date on which the related Employee-Participant's
coverage terminates for any reason, if earlier;
(10) Failure to make any required payments when due: or
(11) If the Employee-Participant is on an unpaid FMLA leave, the date the
Company determines the unpaid FMLA leave is terminated and the
Employee-Participant does not return to work for the Company.
(12) If a Dependent ceases to be a Participant for any reason after the
Dependent's Employee-Participant has become a Retired Employee, that
former Dependent-Participant shall not again be eligible to become a
Dependent-Participant.
(b) [Reserved].
2.04 Right to Conversion Coverage.
(a) Upon termination of employment or Continuation Coverage (if any), an
Employee-Participant shall be notified of his or her option to purchase
coverage from an insurance company selected by the Company on a direct-pay
basis with accumulated time under this Plan applicable against waiting
periods normally required by that insurance company. The
Employee-Participant must apply for this coverage within 31 days of such
termination and pay for the coverage by making timely payment of the
appropriate premium.
(b) Such conversion option shall also be afforded to a Dependent-Participant
who loses their status as a Dependent because of their attained age or
marriage or, in the case of a Spouse, because of divorce, annulment or the
like, and to a Dependent-Participant upon termination of Continuation
Coverage (if any), provided, however, that such Dependent-Participant
applies for such coverage within 31 days of termination of their status as
a Dependent.
(c) The conversion option described in this Section 2.04 shall be subject to
the following additional rules: (1) The conversion option does not include
any right to obtain vision, dental or employee assistance coverage. (2) The
conversion option, (including continuing coverage under the conversion
policy) is not available to any individual who is (or becomes) eligible for
Medicare. (3) An individual shall not be eligible for the conversion option
unless he or she has been covered under the Medical Plan for at least three
full consecutive months. (4) An individual shall not be eligible for
coverage under a conversion policy if the conversion policy carrier
determines that the individual would be over insured.
2.05 HMO Options.
(a) As an alternative means of providing health care benefits, the Plan may
offer certain Participants the option of membership in one or more health
maintenance organizations
21
(HMOs), provided such Participant resides within an applicable HMO service
area. Upon request of any Participant, the Plan Administrator shall provide
the names and limited information regarding available HMOs. Upon receipt of
such information, it shall be the Participant's responsibility to request
further, detailed information directly from any such HMO.
(b) If a Participant does enroll in an HMO, his, and, if applicable, his
dependent's eligibility for benefits shall be limited to benefits provided
by the HMO, and he shall no longer be eligible to receive benefits under
the provisions of the Plan (with the exception of the Dental Plan and the
Vision Plan, as long as no dental or vision coverage is provided under the
HMO).
2.06 Enrollment; Contributions. The Plan Administrator shall prescribe
applicable enrollment forms, and shall determine from time to time the
amount of required contributions under the Plan, if any.
2.07 Employee Assistance Program. The Plan may offer Participants the option of
utilizing an employee assistance program (EAP) to provide benefits
including, but not limited to, short-term counseling and referral services.
The Company may adopt more than one EAP and designate the program in which
certain Participants are eligible to participate. To the extent an EAP is
available to Participants, it shall, for all purposes, be deemed to be a
part of the Plan and its provisions are hereby incorporated into the Plan
by this reference. Upon request of any Participant, the Plan Administrator
shall provide information regarding EAP availability.
2.08 Effect of Retirement.
(a) Retiree Coverage/Benefits. Subject to this Section 2.08 and subject to
applicable Pre-Admission Review, Continued Stay Review and Case Management
rules and other limits, exclusions, terms, conditions and pre-authorization
requirements set out in this Plan, the Plan shall pay all Covered Charges
incurred by a Retired Participant and his Dependent-Participants, subject
to the following:
(1) If a Retired Participant has not attained age 65, the Plan benefits of
the Retired Participant and his or her Dependent-Participants shall be
determined as if the Retired Participant were an Employee, and Covered
Charges shall be payable by the Plan in accordance with Section 3.01
and column (b) or (c) of Section 3.02, subject to Sections 4.01 and
4.02. The Retired Participant shall be covered under the Prescription
Drug Plan in accordance with Article 7.
(2) Beginning on the date a Retired Participant attains age 65, the
Retired Participant's and his or her Dependents' (regardless of age)
Covered Charges shall be payable by the Plan in accordance with
Section 3.01 and column (d) of Section 3.02, subject to Section
4.01(a) and to the Annual Out-of-Pocket Limits for Network Providers
set forth in Section 4.02(a). The amount of Covered Charges shall be
determined in accordance with Section 1.12(b), whether performed by
22
Network Providers or by Non-Network Providers. The Retired Participant
shall be covered by the Prescription Drug Plan in accordance with
Article 7.
(3) If a Retired Participant dies and is survived by a Spouse who was a
Dependent-Participant at the time of the Retired Participant's death,
the Surviving Spouse shall be eligible for coverage under the Plan as
follows (regardless of the Retired Participant's age at the time of
death):
(A) If the Surviving Spouse has not attained aged 65, the Surviving
Spouse's benefits under the Plan shall be determined as if he or
she were a Dependent of an Employee and the Covered Charges shall
be payable by the Plan in accordance with Section 3.01 and column
(b) or (c) of Section 3.02, subject to Sections 4.01 and 4.02.
The Surviving Spouse shall be covered under the Prescription Drug
Plan in accordance with Article 7.
(B) On and after the later of the date a Surviving Spouse attains age
65 or becomes a Surviving Spouse, the Surviving Spouse's Covered
Charges shall be payable by the Plan in accordance with Section
3.01 and column (d) of Section 3.02, subject to Section 4.01(a)
and to the Annual Out-of-Pocket Limits for Network Providers set
forth in Section 4.02(a). The amount of the Covered Charges with
respect to the Surviving Spouse shall be determined in accordance
with Section 1.12(b), whether performed by Network Providers or
Non-Network Providers. The Surviving Spouse shall be covered
under the Prescription Drug Plan in accordance with Article 7.
(4) The coverage of Dependents of a Retired Participant shall be
determined as follows:
(A) During the lifetime of the Retired Participant, the benefits of
his or her Dependent-Participants shall be determined under
either Section 2.08(a)(1) or 2.08(a)(2), which ever applies to
the Retired Participant.
(B) If a Retired Participant dies, the following provisions shall
apply:
[i] If the Retired Participant is survived by a Spouse who is a
Dependent-Participant, the benefits of the Surviving Spouse
shall be determined under either Section 2.08(a)(3)(A) or
2.08(a)(3)(B) above and the benefits of the Retired
Participant's non-Spouse Dependents shall be determined
under either Section 2.08(a)(3)(A) or 2.08(a)(3)(B), which
ever applies to the Surviving Spouse.
[ii] If the Retired Participant is survived by a Spouse who is a
Dependent-Participant, and if the Surviving Spouse then dies
and is survived by a non-Spouse Dependent, the benefits of
the non-Spouse Dependent shall be determined under either
Section
23
2.08(a)(3)(A) or 2.08(a)(3)(B), whichever applied to the
Surviving Spouse at the time of the Surviving Spouse's
death.
[iii] If a Retired Participant dies and is not survived by a
Spouse who is a Dependent-Participant, but is survived by
other Dependents (other than a Spouse), the benefits of the
Surviving Dependents shall be determined under either
2.08(a)(1) or 2.08(a)(2), whichever applied to the Retired
Participant at the time of his or her death.
(5) In all cases, coverage under the Dental Plan, the Vision Plan and the
Employee Assistance Program for a Retired Participant and his or her
Dependents shall cease as of the date of retirement or the date of
termination due to disability.
(b) Cost of Retiree Coverage. Coverage for a Retired Participant (and
Dependents, as applicable), shall in each case be subject to the applicable
paragraph below. The following definitions and conditions shall apply to
this subsection (b): (1) The word "hire" (and its derivatives) shall in
each case refer to the most recent date of hire of the Employee-Participant
by the Company; (2) The percentage share of the Normal Cost of coverage
allocable to a Retired Participant and Dependents shall be determined as of
the date the Employee-Participant becomes a Retired Participant (or date of
death, where applicable), and the percentage share may not thereafter be
increased. However, increases to the Normal Cost shall apply to the same
extent such increases apply to the active Employee rate as established by
the Company from year to year; and (3) If an Employee-Participant ceases to
participate in the Plan because he is no longer an Eligible Employee, and
he subsequently becomes an Eligible Employee, then his "most recent date of
hire" is the date on which he subsequently becomes an Eligible Employee,
except as follows: If an Employee-Participant who is a Rule of 60
Participant ceases to participate in the Plan because he or she is no
longer an Eligible Employee and such Rule of 60 Participant subsequently
becomes an Eligible Employee, his or her "most recent date of hire" status
shall be determined based on his or her "most recent date of hire" status
on December 31, 1994. A "Rule of 60 Participant" is any
Employee-Participant who was an active employee of the Company on January
1, 1994 and who satisfies, or who the Company designates as having
satisfied, the conditions for a "Rule of 60" retirement under the
Retirement Plan for Salaried Employees of Brown & Williamson Tobacco
Corporation on or before December 31, 1994.
(1) Post January 1, 1992 Rules: Retired Participant. An
Employee-Participant hired on or after January 1, 1992 who becomes a
Retired Participant must pay the required premium in order to continue
either Employee or Dependent coverage hereunder. The Retired
Participant's maximum required premium shall be fifty percent (50%) of
the Normal Cost of coverage for the Retired Participant, if covered,
and any Dependent-Participant who is covered. For each Year of Service
greater than ten (10), the Retired Participant's maximum required
premium shall be decreased by two percent (2%), provided that the
Retired Participant's required premium shall not fall below ten
percent (10%) of the Normal Cost of coverage
24
for such Retired Participant and Dependent-Participant. The Company
paid portion of the Normal Cost of such coverage shall increase in
proportion to the decrease to the Retired Participant's maximum
premium but in no instance be greater than ninety percent (90%) of the
Normal Cost of coverage for such Retired Participant and
Dependent-Participant.
(2) Post January 1, 1992 Rules: Survivor Continuation Coverage. A
Dependent-Participant shall be eligible to continue Dependent coverage
hereunder if, but only if, (A) the Dependent-Participant pays the
required premium, and (B) the Dependent-Participant's related
Employee-Participant was hired on or after January 1, 1992 and that
Employee-Participant either dies while actively employed after
becoming a participant in the Retirement Plan or dies after becoming a
Retired Participant. The Dependent-Participant's maximum required
premium shall be fifty percent (50%) of the Normal Cost of coverage
for each such Dependent-Participant. For each Year of Service, based
on the deceased Employee-Participant's Years of Service, greater than
ten (10), the Dependent-Participant's required premium shall be
decreased by two percent (2%), provided that the
Dependent-Participant's required premium shall not fall below ten
percent (10%) of the Normal Cost of coverage for each such
Dependent-Participant. The Company paid portion of the Normal Cost of
such coverage shall increase in proportion to the decrease to the
Dependent-Participant's required premium but in no instance be greater
than ninety percent (90%) of the Normal Cost of coverage for each such
Dependent-Participant.
(3) Post December 1, 1986 Rules: Retired Participant. The total cost of
coverage will be paid by the Company with respect to Retired
Participants who were hired on or after December 1, 1986, but prior to
January 1, 1992.
(4) Post December 1, 1986 Rules: Dependent-Participant. An
Employee-Participant who is hired on or after December 1, 1986, but
prior to January 1, 1992, and who becomes a Retired Participant with
less than twenty-five (25) Years of Service, may continue Dependent
coverage hereunder by paying the required premium with respect to such
Dependent(s). The required premium shall be five percent (5%) of the
Normal Cost of coverage for each Year of Service less than twenty-five
(25), up to a maximum of fifty percent (50%).
The Dependent-Participant, of an Employee-Participant hired on or
after December 1, 1986 but prior to January 1, 1992 and who dies while
actively employed after becoming a participant in the Retirement Plan,
or who dies after becoming a Retired-Participant, must pay the
required premium in order to continue the Dependent coverage
hereunder. The Dependent-Participant's premium shall be five percent
(5%) of the Normal Cost of coverage for each such
Dependent-Participant for each Employee-Participant Year of Service
less than twenty-five (25), up to a maximum premium of fifty percent
(50%) of Normal Cost. If an Employee-Participant has at least 25 Years
of Service, he is not obligated to pay any Dependent-Participant
premium.
25
(5) Pre December 1, 1986 Rules. The total cost of Dependent coverage will
be paid by the Company with respect to Retired Participants who were
hired prior to December 1, 1986. The total cost of Dependent coverage
will also be paid by the Company with respect to an
Employee-Participant hired prior to December 1, 1986 who dies while
actively employed after becoming a participant in the Retirement Plan
or who dies after becoming a Retired Participant.
(6) Key Employees With Grantor Trusts. This paragraph 6 shall apply to
any Retired Participant (i) who is a key employee (within the meaning
of Code Section 419A(d)(3)) with respect to whom an additional reserve
for post-retirement medical benefits under Code Section 419A(c)(2) has
not been established by the Company and (ii) who is the grantor
("Grantor") of a trust established with State Street Bank and Trust
Company, its successor or successors in trust, as trustee ("Trust
Agreement"), which Trust Agreement is maintained, in whole or in part,
to obtain continuing health coverage under the Plan for the Retired
Participant. Notwithstanding any other provision of the Plan to the
contrary, the Grantor (and Dependents, as applicable) shall be
entitled to coverage as a Retired Participant only upon payment of the
Normal Cost of such coverage. Such payment shall be paid by funds held
in the Trust Agreement; provided that if the balance of the Trust
Agreement at any time is or becomes insufficient to pay the Normal
Cost, the Grantor (and Dependents, as applicable) shall, beginning on
or as of the date of such insufficiency, be obligated personally to
pay to the Plan the Normal Cost to continue such coverage.
(7) Prime-Time Employee Cost. The following rules shall apply to a
Retired Participant who was a Prime-Time Employee on the date of his
or her termination of employment, without regard to his or her date of
hire or years of service:
(A) In order to continue either Employee or Dependent coverage, the
Retired Participant must pay 50% of the total of the Normal Cost
of Coverage for the retired participant, if covered, and any
Dependent-Participant who is covered.
(B) In order to continue Dependent-Participant coverage after the
Retired Participant's death, any Dependent-Participant who is
covered must pay 50% of the total of the Normal Cost of Coverage.
(8) Rehire of Retired Participant: Coverage and Cost. Coverage as a
Retired Participant under this Section 2.08 shall be suspended during
any period of employment after retirement from the Company during
which the Retired Participant has been rehired by the Company as an
Eligible Employee; provided that upon a subsequent termination of
employment, such Retired Participant shall be entitled to reactivate
such coverage as a Retired Participant on the same basis and at the
same premium percentage (if applicable) that applied to the Retired
Participant prior to such suspension of Section 2.08 coverage (subject
to any adjustments to the Normal Cost applied to all similarly
classified Retired
26
Participants); provided that if the Participant's service during such
period of reemployment, when added to the Participant's prior service,
results in a lower premium percentage, the lower premium percentage
shall be applied.
Likewise, a Retired Participant whose employment with the Company was
terminated after becoming eligible for coverage as a Retired
Participant under subsection (d) hereof, but whose coverage has not
yet commenced, who is later rehired, may, upon a subsequent
termination of employment, elect to receive coverage based on his or
her original hire date (i.e. the Employee's hire date as defined in
this subsection (b), determined prior to such rehire date), or rehire
date if such date provides more valuable coverage. This paragraph (8)
shall supercede any provision to the contrary contained in subsection
(b) hereof.
(c) Special Eligibility Provisions. An Employee-Participant who terminates
employment with the Company and is not a Retired Participant shall not be
eligible for coverage under this Section 2.08 in any event or for any
purpose (including, without limitation, retirement under a Retirement Plan
pursuant to the Rule of 65 or otherwise), except as provided in Exhibit
A-Section 2.05, subsection (d) of this Section 2.08, Plan Sections 2.12,
2.13, 2.14, 2.15, or 2.16, and as follows:
(1) 1990 Restructure. An Employee-Participant who was age 50 but not yet
55 on December 31, 1990, and who terminated employment prior to
September 1, 1991, pursuant to the early retirement program made
available under Section 3.03 of the Retirement Plan for Salaried
Employees of Brown & Williamson Tobacco Corporation, shall be deemed
to be a Retired Participant who qualifies for coverage under this
Section 2.08 as of the date of such Employee-Participant's termination
of employment.
(2) 2001 Restructure. If not otherwise qualified as a Retired Participant
under any other provision of this Plan, an Employee-Participant who is
eligible for and elects (A) the Special Early Retirement Incentive
Benefit made available under Part I Section 4.04, or Part IV, Article
V(q), of the Retirement Plan for Salaried Employees of Brown &
Williamson Tobacco Corporation, (B) the incremental Supplemental
Benefit made available under Section 3.02(e) of the Supplemental
Pension Plan for Executives of Brown & Williamson Tobacco Corporation
(or, if applicable, a similar benefit under a separate written
agreement between the Company and the Employee-Participant), or (C) an
alternative benefit provided to an Employee-Participant in connection
with the Special Early Retirement Incentive Benefit program referred
to above, shall be deemed to be a "Retired Participant" who qualifies
for coverage under this Section 2.08 as of the date of such
Employee-Participant's termination of employment (provided that in no
event shall coverage be available under this paragraph (2) for an
Employee-Participant who terminates employment with the Company
(including employment with Reynolds American Inc., or its affiliates,
after Closing (as defined in Section 1.08(a)(1)) prior to age 50).
27
(3) Petersburg Restructure. A Petersburg Retiree shall be deemed a
Retired Participant under this Section 2.08, except to the extent
otherwise provided in this paragraph (3). A Petersburg Retiree is a
former Employee at the Petersburg Branch, (i) who at the time of
termination of employment was eligible for the Deferred Early
Retirement Plan under the Petersburg Branch Closure Salaried Reduction
in Force Plan ("RIF Plan"), effective February 1984, and (ii) who, in
accordance with the RIF Plan, completed thirty or more full years of
pensionable service. The following rules shall apply to a Petersburg
Retiree:
(A) If the Petersburg Retiree is less than age 65, the Company shall
pay the total cost of his or her coverage, and the Company shall
pay 50% of the total cost of coverage for each of his or her
Dependent-Participants. If the Petersburg Retiree is age 65 or
older, he or she shall pay 100 percent of the total cost of his
or her coverage and 100 percent of the total cost of coverage for
each of his or her Dependent-Participants.
(B) A Dependent-Participant of a Petersburg Retiree shall cease being
a Dependent-Participant covered under the Plan upon the earlier
of (i) death of the Petersburg Retiree, or (ii) an event
described in Section 2.03(7), (8) or (9).
(d) Rule of 60. An Employee-Participant (i) who is an active employee of the
Company on January 1, 1994, (ii) who satisfies, or who the Company
designates as having satisfied, the conditions for a "Rule of 60"
retirement under the Retirement Plan for Salaried Employees of Brown &
Williamson Tobacco Corporation on or before December 31, 1994, and (iii)
retires prior to age 55 shall be deemed to be a Retired Participant who
qualifies for coverage under this Section 2.08 (except that in all events
participation in and all rights to benefits under the Dental Plan, the
Vision Plan and the Employee Assistance Program shall cease as of the date
of retirement) in accordance with and subject to the following rules and
conditions:
(1) Coverage provided hereunder shall commence on the later of (A) the
Employee-Participant's 50th birthday (subject to such
Employee-Participant's election, as described in paragraph (3) below)
or (B) his termination of employment by the Company prior to age 55.
(2) An Employee-Participant who is entitled to coverage by reason of this
subsection (d) who terminates employment prior to age 50 may elect to
receive coverage hereunder upon attainment of age 50 (or at any time
thereafter). Such election must (A) be initiated by the
Employee-Participant, (B) be in writing on a form approved by the Plan
Administrator, (C) specify the date upon which coverage is to
commence, and (D) be filed with the Plan Administrator at least 60
days prior to the later of attainment of age 50 or the time such
Employee-Participant elects for benefits to commence.
28
(3) In the event of the death prior to age 50 of an Employee-Participant
who is entitled to coverage by reason of this subsection (d), any
Dependent of such Employee-Participant may elect the coverage provided
hereunder at the time such Employee-Participant would have attained
age 50, and upon the terms and conditions set forth in paragraph (2)
above; provided, however, that such Dependent qualified as a Dependent
at the time such Employee-Participant terminated employment and
continued to be a Dependent at the time of election.
(4) An Employee-Participant who is entitled to coverage by reason of this
subsection (d) who terminates employment prior to age 50 may, subject
to subsection (f) below, elect Dependent coverage hereunder upon
attainment of age 50 (or at any time thereafter) and upon satisfaction
of the election requirements in paragraph (2) above.
(5) The cost of coverage under this subsection (d) shall be determined in
accordance with Section 2.08(b).
(e) Nonforfeitability of Coverage for Certain Retired Participants.
(1) The rights and entitlement of an Employee-Participant (and eligible
Dependents) to coverage as a Retired Participant (or Dependent) under
subsections (a), (c) and (d) of this Section 2.08 shall become and be
fully vested and nonforfeitable as of the date the
Employee-Participant first satisfies the conditions set forth in the
applicable provisions of this Section 2.08 for such coverage. The
coverage to which an Employee-Participant shall be entitled as a
Retired Participant shall be the coverage provided under the Plan to
Retired Participants at and as of the time coverage as a Retired
Participant becomes fully vested and nonforfeitable hereunder,
regardless of whether the Employee-Participant retires at such time
with a right to the immediate commencement of coverage (or, if
applicable, is eligible to defer commencement of coverage), or
subsequently retires with a right to the immediate commencement of
coverage (or, if applicable, is eligible to defer commencement of
coverage), and, except as provided in paragraph (2) below, regardless
of any changes made to the Plan after the date such coverage becomes
fully vested and non-forfeitable.
(2) At and after the time an Employee-Participant's right and entitlement
to coverage as a Retired Participant becomes fully vested and
non-forfeitable as provided in paragraph (1) above, the Company shall
have no right or authority to modify, amend or terminate coverage as a
Retired Participant under the Plan with respect to such
Employee-Participant (and Dependents, as applicable); it being the
intent of the Company that each Employee-Participant be guaranteed
coverage at and during retirement based on all plan provisions in
effect at the time the right and entitlement to such coverage becomes
fully vested and nonforfeitable; provided, however, that amendments
may be adopted by the Company with respect to coverage available to
each such Employee-Participant as a Retired Participant to the extent
that:
29
(A) overall coverage, after amendment, is the same as or greater than
the coverage provided prior to amendment, except that no
amendment shall cause an increase in any direct or indirect cost
factor applicable to the eligible Employee-Participant at the
time of vesting, including without limitation, deductibles,
co-insurance, co-payments, annual and total out-of-pocket
maximums, the method for determining Normal Cost under the Plan
(as defined in Section 1.45 at and as of the time coverage as a
Retired Participant becomes fully vested and nonforfeitable
hereunder), the percentage of the Normal Cost allocable to a
Retired Participant under Sections 2.08(b)(1)-(8), 2.12, 2.13,
2.14, 2.15 or 2.16, the definition of Year of Service set forth
in Section 1.74 as it pertains to determining the percentage of
Normal Cost allocable to a Retired Participant, and similar
direct and indirect participant costs; or
(B) changes are mandated by law.
(3) This subsection (e) shall be effective April 1, 2001, with respect to:
(i) all actively employed Employee-Participants (whether actively
employed on April 1, 2001, or subsequently employed in an eligible
position), and (ii) all Retired Participants (and eligible Dependents)
who are then receiving coverage, or who are eligible for and have a
right to defer commencement of coverage, as a Retired Participant as
of such date. In no event shall this Section 2.08(e) apply to or
benefit any individual who is covered under a merged Plan as described
in Section 2.09, Section 2.11 or Exhibit B-1.
General Rules for all Retired Participants:
(f) If an Employee-Participant who is eligible to continue coverage under this
Section 2.08, elects, at retirement, disability or a later date, not to
continue coverage, such former Employee-Participant shall not thereafter be
eligible for any coverage under this Section 2.08. Notwithstanding the
preceding sentence, if an Employee-Participant refuses coverage under this
Section 2.08 because he or she is covered as a Dependent of another
Employee-Participant, such individual shall be eligible to participate
under this Section 2.08 at such time as his or her Dependent coverage
terminates, or at any earlier date; provided that such right shall be
irrevocably forfeited if he or she does not notify the Company within
thirty (30) days of such event.
(g) Notwithstanding any other provision of the Plan, for purposes of this
Section 2.08, the term Dependent is limited to an individual who qualified
as a Dependent at the time such individual's related Employee-Participant
became a Retired Participant. A former Employee-Participant shall become a
Retired Participant on the earliest date he or she satisfies the definition
of a Retired Participant under Section 1.60. To be covered, an eligible
Dependent meeting this criteria must be a Dependent for whom coverage is
elected at the time the related Employee-Participant becomes a Retired
Participant or the date coverage is elected under Section 2.08(d).
Otherwise, with the exception of a child born to an Employee-Participant or
their Spouse within nine (9) months after retirement
30
or termination of employment under Section 2.08(d), no Dependents may be
added for coverage.
(h) A former Employee-Participant who is eligible for coverage under this
Section 2.08 may reject individual coverage under the Plan and continue
Dependent coverage only, or vice versa, without regard to the Continuation
Coverage provisions of Article 10. If a former Employee-Participant rejects
coverage, then Dependent coverage and costs shall be determined under
Section 2.08 as if the Employee-Participant were a retired Participant,
except that Section 2.08(a)(3) and (4) shall apply as if the Retired
Participant were deceased at the date he or she rejected coverage. If
coverage is rejected, or if a Dependent ceases to be a Participant for any
other reason after the Dependent's Employee-Participant has become a
Retired Participant, the individual shall not again be eligible to become a
Participant under this Section 2.08, except as follows: If an individual
rejects coverage under the Plan and enrolls in Medicare Plus Choice, he or
she may re-elect coverage under the Plan one time during any calendar year
if they demonstrate to the Claims Administrator that (1) they were
continuously enrolled in Medicare Plus Choice from the time coverage was
discontinued under the Plan until the re-enrollment, and (2) they have
discontinued Medicare Plus Choice upon re-enrollment in the Plan.
(i) The provisions of Section 11.03 respecting eligibility for Medicare are
incorporated in this Section 2.08 and made applicable to each Participant
and/or Dependent having post-retirement coverage hereunder.
2.09 BATUS Retail Merger.
(a) Effective the close of business, December 31, 1990, certain health care
plans of companies formerly included within a controlled group of
corporations with the Company were merged with this Plan for administrative
purposes. Participants and beneficiaries under such plans, shall not be
entitled to coverage under this Plan in any event, but shall continue to be
covered under the terms of the merged plans, as set forth therein. The
terms and conditions of such merger are set forth in Exhibit B to this
Plan.
(b) Effective immediately prior to Closing (as defined in Section 1.08(a)(1)),
the health care plans identified in subsection (a) above and listed in
Exhibit B to this Plan (the "BATUS Retail Plans") were transferred to a
separate health care plan of Brown & Williamson Tobacco Corporation,
together with all liabilities and assets related thereto. As of the time of
transfer, the Plan shall have no obligation or duty with respect to such
transferred plans.
2.10 Qualified Medical Child Support Orders.
(a) Purpose: Pursuant to the ERISA Section 609(a), the following procedures for
determining whether medical child support orders are qualified shall apply
to this Plan. These procedures also apply to the administration of payments
and other provisions under Qualified Medical Child Support Orders (QMCSOs).
The Company may alter, amend or
31
terminate these procedures and substitute alternative procedures to satisfy
legal requirements.
(b) Definitions: For purposes of the QMCSO requirements, the following terms
have these meanings:
(1) "Qualified Medical Child Support Order" means a medical child support
order which creates or recognizes an Alternate Recipient's right to
receive benefits for which a participant or beneficiary is eligible
under a group health plan, and has been determined by the Plan
Administrator to meet the qualification requirements of subsection (c)
below:
(2) "Medical Child Support Order" means any court judgment, decree or
order (including approval of settlement agreement) which:
(A) provides for child support for a child of a participant under the
group health plan, or
(B) provides for health coverage to such a child under state domestic
relations law or enforces a law relating to medical child support
as described in Section 1908 of the Social Security Act; and
(C) relates to benefits under this Plan.
(3) "Alternate Recipient" means any child of a participant who is
recognized under a Medical Child Support Order as having a right to
enroll in a group health plan with respect to the participant.
(4) "Plan" means the Brown & Williamson Health Care Plan for Salaried
Employees, including all supplements and amendments in effect. Any
term used in these QMCSO procedures and defined in the Plan shall have
the meaning assigned to such term under the Plan.
(c) General Requirements of a QMCSO: A QMCSO is a Medical Child Support Order
which (i) is entered into on or after August 10, 1993, (ii) creates or
recognizes an Alternate Recipient's right to, or assigns to an Alternate
Recipient the right to, receive benefits for which an Employee-Participant
or beneficiary is eligible, and (iii) the Plan Administrator has determined
meets the requirements of paragraphs (1) and (2) below.
(1) A Medical Child Support Order to be qualified must clearly:
(A) specify the name and the last known mailing address (if any) of
the Employee-Participant and the name and mailing address of each
Alternate Recipient covered by the order;
32
(B) include a reasonable description of the type of coverage to be
provided by the Plan to each Alternate Recipient, or the manner
in which such type of coverage is to be determined;
(C) specify each period to which such order applies; and
(D) specify each plan to which such order applies.
(2) A Medical Child Support Order to be qualified must not require the
Plan to provide any type or form of benefits or any option not
otherwise provided under the Plan, except to the extent necessary to
meet the requirements described in Section 1908 of the Social Security
Act (relating to enforcement of state laws regarding child support and
reimbursement of Medicaid).
(d) Procedures: Upon receipt of a Medical Child Support Order, the Plan
Administrator shall:
(1) Promptly notify in writing the Employee-Participant, each Alternative
Recipient covered by the order, and each representative for these
parties of the receipt of the Medical Child Support Order. Such notice
shall include a copy of the order and these QMCSO procedures for
determining whether such order is a QMCSO.
(2) Permit the Alternate Recipient to designate a representative to
receive copies of notices sent the Alternate Recipient regarding the
medical child support order.
(3) Within a reasonable period after receiving a Medical Child Support
Order, determine whether it is a qualified order and notify the
parties indicated in paragraph (1) above of such determination.
(4) Ensure that the Alternate Recipient is treated by the Plan as a
beneficiary for purposes of ERISA, and in particular that the
Alternate Recipient is considered a participant under the Plan for
purposes of the reporting and disclosure requirements of part 1 of
ERISA.
2.11 American Tobacco Plan. Effective as of August 6, 2002, The American
Tobacco Company Group Medical Insurance Plan (a.k.a. the Comprehensive Plan
of American Tobacco Company) (the "ATCO Plan") was merged into and became a
part of this Plan. The terms and conditions of coverage for participants
and beneficiaries under the ATCO Plan, as in effect immediately prior to
such merger, shall be determined solely by and be strictly limited to
coverage provided under the ATCO Plan immediately prior to merger, and as
it may be amended thereafter. The ATCO Plan consists of several self-funded
plans and the following insurance company contracts: (a) Connecticut
General Life Insurance Company policies: 0270833-02, 0270833-03 and
0270833-04 (effective as of February 17, 1988, such policies were combined
under a single "Combined Policy Certificate," designated as account
#0270833); (b) Blue Cross Blue Shield of North Carolina group medical
expense contract for "American Tobacco Company -- Reidsville Retirees,"
with effect from February 1, 1991, contract #A79285; and (c) Blue Cross
Blue
33
Shield of South Carolina contract #15-02158-00-6 and #15-02158-01-5.
Participants and beneficiaries under the ATCO Plan shall not be entitled to
any benefits or rights under this Plan, except to the extent they were
otherwise covered under the ATCO Plan immediately prior to this merger. The
ATCO Plan is identified for ERISA purposes as plan #61-0144470/520.
2.12 Medical Rule of 70 Coverage.
(a) This Section 2.12 applies to Employee-Participants: (i) whose employment is
terminated by the Company due to a restructuring (as defined by the
Company) and elect coverage hereunder in lieu of fifty percent (50%) of an
available severance benefit (if applicable), (ii) who, at the date of
actual termination of employment, are at least forty-five (45) years of age
and whose age (in full years) and qualifying service (as defined in the
Brown & Williamson Tobacco Corporation Salaried Employees Retirement Plan)
equal at least seventy (70), and (iii) who are not otherwise eligible for
coverage as a Retired Participant under Section 2.08 hereof as of the date
of actual employment termination (an "eligible restructured
Employee-Participant"). This Section 2.12 shall be effective beginning
January 1, 2003. An Employee-Participant shall not be eligible to become an
"eligible restructured Employee-Participant" under this Section 2.12 if the
Employee's employment by the Company terminates after September 30, 2003.
(b) Coverage provided under this Section 2.12 is subject to the following terms
and conditions:
(1) Coverage. The coverage provided hereunder is described in and limited
to coverage provided under Section 2.08 for Retired Participants, and
an eligible restructured Employee-Participant shall be treated as a
Retired Participant for all purposes effective with the commencement
of coverage and ending at the expiration of its term.
(2) Cost of Coverage. Notwithstanding any provision of the Plan to the
contrary (and in particular, subsection 2.08(b) thereof), the total
cost of coverage hereunder, whether for the Employee-Participant or a
Dependent, shall be paid by the Company.
(3) Duration of coverage. Coverage shall be available for a maximum
period of ten (10) years, measured from the commencement thereof.
(4) Dependent Eligibility. Dependents of an eligible restructured
Employee-Participant are eligible for Dependent coverage, provided
they (i) were Dependents as of the date of actual employment
termination of the eligible restructured Employee-Participant, (ii)
continue to be a Dependent through and after the date of commencement
of coverage hereunder, and (iii) otherwise satisfy the requirements of
Section 2.08(g).
34
(5) Commencement of Coverage: An eligible restructured
Employee-Participant may designate the date coverage provided under
this Section 2.12 shall commence; provided that once begun coverage
shall continue without interruption until the expiration of its term
(or until otherwise terminated under the terms of the Plan). Coverage
shall commence without regard to pre-existing conditions, irrespective
of the actual date of commencement. To initiate coverage, an eligible
restructured Employee-Participant (or, if applicable, an eligible
Dependent of a deceased Employee-Participant) must provide written
notice to the Company not later than sixty (60) days prior to the
desired coverage effective date.
2.13 Medical Rule of 70 Coverage - (Post-September 30, 2003 Restructuring).
(a) This Section 2.13 applies to an Employee-Participant who is located in the
Supply Chain & Manufacturing Department at Macon, Ga., and (i) who receives
written notice from the Company during the period October 1, 2003 through
December 31, 2003 that his/her employment is being terminated by the
Company under a plan of restructuring (as defined by the Company), (ii) who
under such plan is entitled to and elects coverage hereunder in lieu of
fifty percent (50%) of a severance benefit available thereunder (subject in
all events to the execution of a valid and binding release of
employment-related claims against the Company), (iii) who, at the date of
actual termination of employment, is at least forty-five (45) years of age
and has been credited with at least ten (10) years of qualifying service
(as defined in the Brown & Williamson Tobacco Corporation Salaried
Employees Retirement Plan), (iv) whose age (in full years) and qualifying
service at the date of actual employment termination equal at least seventy
(70), and (v) who is not otherwise eligible for coverage as a Retired
Participant under Section 2.08 as of the date of actual employment
termination (referred to herein as an "eligible Section 2.13
Employee-Participant").
(b) Coverage provided under this Section 2.13 is subject to the following terms
and conditions:
(1) Coverage. The coverage provided hereunder is described in and limited
to coverage provided under Section 2.08 for Retired Participants, and
an eligible Section 2.13 Employee-Participant shall be deemed to be a
Retired Participant for all purposes effective with the commencement
of coverage.
(2) Cost of Coverage. The cost of such coverage for each eligible Section
2.13 Employee-Participant (and Dependent, as applicable) shall be
determined in accordance with the applicable provision of Section
2.08(b).
(3) Dependent Eligibility. A Dependent of a Section 2.13
Employee-Participant shall be eligible for Dependent coverage,
provided he/she (A) was a Dependent as of the date of actual
employment termination of the Section 2.13 Employee-Participant, (B)
continues to be a Dependent through and after the date of commencement
of coverage hereunder, and (C) otherwise satisfies the requirements
for Dependent coverage under Section 2.08.
35
(4) Commencement of Coverage: Coverage provided hereunder shall commence
on the later of (i) the eligible Section 2.13 Employee-Participant's
50th birthday (subject to his/her election, as described in paragraphs
(B) and (C) below) or (ii) his or her actual termination of employment
by the Company.
(A) An eligible Section 2.13 Employee-Participant who is entitled to
coverage by reason of this Section 2.13 who terminates employment
prior to age 50 may elect to receive coverage hereunder upon
attainment of age 50 (or at any time thereafter). Such election
must (i) be initiated by the eligible Section 2.13
Employee-Participant, (ii) be in writing on a form approved by
the Plan Administrator, (iii) specify the date upon which
coverage is to commence, and (iv) be filed with the Plan
Administrator at least 60 days prior to the later of attainment
of age 50 or the time such eligible Section 2.13
Employee-Participant elects for benefits to commence.
(B) In the event of the death prior to age 50 of an eligible Section
2.13 Employee-Participant, any Dependent of such eligible Section
2.13 Employee-Participant may elect the coverage provided
hereunder at the time the eligible Section 2.13
Employee-Participant would have attained age 50, and upon the
terms and conditions set forth in this subsection (b); provided,
however, that such Dependent qualified as a Dependent at the time
such eligible Section 2.13 Employee-Participant terminated
employment and continued to be a Dependent at the time of
election.
(C) An eligible Section 2.13 Employee-Participant who terminates
employment prior to age 50 may, subject to subsection 2.08(f),
elect Dependent coverage hereunder upon attainment of age 50 (or
at any time thereafter) and upon satisfaction of the eligibility
rules in paragraph (3) above.
2.14 Medical Rule of 70 Coverage - (Special Severance Pay Plan -- B&W/RJR
Business Combination).
(a) This Section 2.14 applies to an Employee-Participant: (i) who receives
written notice from the Company that his/her employment is being terminated
under the provisions of the "Special Severance Pay Plan - B&W/RJR Business
Combination" ("SSP"), (ii) who under the SSP is eligible to and elects
coverage as a Retired Participant under Plan Section 2.08, pursuant to the
terms of "Option 1" or "Option 2" described below (subject in all events to
the execution of a valid and binding release of employment-related claims
against the Company and the continuation of employment until the
Participant's Release Date), (iii) who, at the date of actual termination
of employment, is at least fifty (50) years of age and has been credited
with at least ten (10) years of qualifying service (as defined in the Brown
& Williamson Tobacco Corporation Salaried Employees Retirement Plan), (iv)
whose age (in full years) and qualifying service at the date of actual
employment termination equal at least seventy (70), and (v) who is not
otherwise eligible for coverage as a Retired Participant as of the date of
actual employment termination (or
36
who is otherwise eligible for coverage as a Retired Participant as of such
date and elects, in writing on a form approved by the Plan Administrator,
to be included as an eligible Employee-Participant under this Section 2.14)
(referred to herein as a "Section 2.14 Employee-Participant").
Notwithstanding any other provision of the Plan to the contrary, a Section
2.14 Employee-Participant shall be deemed to be and treated as a Retired
Participant for all purposes under the Plan.
(1) Option 1: Option 1 is provided upon its election by the
Employee-Participant under the SSP (subject to a reduction of 50% of
the cash severance payment otherwise payable thereunder). Such
election shall in all events be irrevocable as of the date of actual
employment termination. Coverage under this Option 1 is subject to the
following terms and conditions:
(A) Cost of Coverage. The cost of such coverage for each Section
2.14 Employee-Participant (and Dependent, as applicable) shall be
20% of the Normal Cost of coverage.
(B) Dependent Eligibility. A Dependent of a Section 2.14
Employee-Participant shall be eligible for coverage as a
Dependent, provided he/she [i] was a Dependent as of the date of
actual employment termination of the Section 2.14
Employee-Participant, [ii] continues to be a Dependent after the
date of commencement of coverage hereunder, and [iii] otherwise
satisfies the requirements for Dependent coverage under Section
2.08.
(C) Commencement of Coverage. The right to coverage as a Retired
Participant (and Dependent, as applicable) shall be effective as
of the effective date of a Section 2.14 Employee-Participant's
election hereunder, and shall commence upon expiration of the
period of Company-paid health care continuation coverage provided
through the SSP.
(2) Option 2: Option 2 is provided upon its election by the
Employee-Participant under the SSP (not subject to a reduction in
amount of cash severance payable thereunder). Such election shall in
all events be irrevocable as of the date of actual employment
termination. Coverage under this Option 2 is subject to the following
terms and conditions:
(A) Cost of Coverage. The cost of such coverage for each Section
2.14 Employee-Participant and Dependent shall be determined as
follows:
[i] The entire cost of coverage for the Section 2.14
Employee-Participant shall be paid by the Company prior to
the date the Section 2.14 Employee-Participant attains age
65.
[ii] Prior to the date a Dependent of a Section 2.14
Employee-Participant attains age 65, the Company shall pay
fifty percent (50%) of the Normal Cost of coverage for such
Dependent and the
37
Section 2.14 Employee-Participant (or Dependent, as
applicable) shall pay fifty percent (50%) of the Normal Cost
thereof.
[iii] On and after the date a Section 2.14 Employee-Participant
attains age 65, the Normal Cost of coverage for the Section
2.14 Employee-Participant shall be paid entirely by the
Section 2.14 Employee-Participant.
[iv] On and after the date a Dependent of a Section 2.14
Employee-Participant attains age 65, the Normal Cost of
coverage for such Dependent shall be paid entirely by the
Section 2.14 Employee-Participant (or Dependent, as
applicable).
(B) Dependent Eligibility. A Dependent of a Section 2.14
Employee-Participant shall be eligible for coverage as a
Dependent, provided he/she [i] was a Dependent as of the date of
actual employment termination of the Section 2.14
Employee-Participant, [ii] continues to be a Dependent after the
date of commencement of coverage hereunder, and [iii] otherwise
satisfies the requirements for Dependent coverage under Section
2.08.
(C) Commencement of Coverage. The right to coverage as a Retired
Participant (and Dependent, as applicable) shall be effective as
of the effective date of a Section 2.14 Employee-Participant's
election hereunder, and shall commence upon expiration of the
period of Company-paid health care continuation coverage provided
through the SSP.
(b) [Reserved].
2.15 Medical Rule of 70 (Contingent Coverage for Certain Former B&W Employees).
(a) This Section 2.15 applies to Employee-Participants who satisfy the
following conditions (referred to individually as a "Section 2.15
Employee-Participant"):
(1) the Section 2.15 Employee-Participant accepts regular full-time
employment with RAI, or its affiliates, to take effect on or after the
date of Closing of the transactions contemplated by the Business
Combination (as defined in Section 1.08(a)), and transfers to such
employment without interruption of service with the Company;
(2) upon such transfer, such Employee-Participant is eligible for coverage
as an active employee under a health care plan of RAI as of the date
of transfer (for him- or herself and eligible Dependents);
(3) such Employee-Participant would have satisfied the requirements for
retiree coverage under a Medical Rule of 70 for this Plan as of
December 31, 2005, had the Employee-Participant continued to
participate in the Plan as an active Employee-Participant through
December 31, 2005 [i.e., as of December 31, 2005,
38
the Employee-Participant would have satisfied the following
requirements: (i) attainment of age fifty (50), (ii) credit for at
least ten (10) years of qualifying service (as defined in the Brown &
Williamson Tobacco Corporation Salaried Employees Retirement Plan),
and (iii) combined age (in full years) and qualifying service equal at
least seventy (70)]; and
(4) such Employee-Participant accepts coverage under a health care plan of
RAI (for him- or herself and eligible Dependents) for retirees, to the
extent available.
(b) A Section 2.15 Employee-Participant shall be entitled to elect coverage
under the Plan as a Retired Participant upon the occurrence of any of the
following conditions:
(1) such Employee-Participant's employment is involuntarily terminated by
the Company without cause prior to satisfying the retiree health care
eligibility rules of RAI, or
(2) such Employee-Participant retires from RAI, or its affiliates, after
having satisfied the minimum age and service requirements for RAI
retiree health care coverage (age 55 and 20 regular full-time years of
service), and there is:
(A) no retiree health care plan of RAI, or its affiliates, available
to the Section 2.15 Employee-Participant (or eligible
Dependents), or such coverage is eliminated; or
(B) a reduction in the RAI retiree health care company contribution
cap that exists at the date of Closing; or
(C) any RAI retiree health care plan design change (excluding premium
adjustments and legally-mandated changes including changes to
integrate the plan with Medicare revisions) that results, or
could result, in a total increase of greater than 25% from the
date of Closing of the actuarially equivalent value of
Employee-Participant out-of-pocket costs as a percent of total
eligible charges in the RJR Med Choice Comprehensive Plan;
provided that, for a Section 2.15 Employee-Participant with respect to
whom Section 2.08(b)(6) applies (pertaining to coverage and premium
payments for key employees with grantor trusts), this subsection (b)
and subsections (c) and (d) below shall not apply, and such Section
2.15 Employee-Participant may elect coverage as a Retired Employee
upon termination of employment with RAI, or its affiliates, and upon
satisfaction of the requirements of subsections (a)(1), (a)(2) and
(a)(3) above.
(c) Coverage as a Retired Participant under this Section 2.15 shall be subject
to the following additional rules:
39
(1) Cost of Coverage. The cost of such coverage for each Section 2.15
Employee-Participant (and Dependent, as applicable) shall be 20% of
the Normal Cost of coverage.
(2) Dependent Eligibility. A Dependent of a Section 2.15
Employee-Participant shall be eligible for coverage as a Dependent,
provided he/she [i] was a Dependent as of the date of Closing (as
defined in Section 1.08(a)(1)) and [ii] otherwise satisfies the
requirements for Dependent coverage under Section 2.08.
(3) Commencement of Coverage. The right to coverage as a Retired
Participant (and Dependent, as applicable) shall be effective as of
the effective date of a Section 2.15 Employee-Participant's election
hereunder. A Section 2.15 Employee-Participant who elects and obtains
coverage hereunder may, in no event, thereafter elect or obtain
coverage under a retiree health care plan of RAI, or its affiliates.
(d) Notwithstanding the foregoing provisions of this Section 2.15, in the event
a Section 2.15 Employee-Participant (1) terminates employment voluntarily
prior to having satisfied the minimum age and service requirements (age 55
and 20 regular full-time years of service) for RAI retiree health care
coverage, or (2) is terminated for cause, such Employee-Participant shall
in no event be eligible for coverage as a Retired Participant hereunder.
2.16 Medical Rule of 70 Coverage (BATIC Employees).
(a) This Section 2.16 applies to an Employee-Participant: (i) who transfers to
transitional employment with RAI at Closing (as defined in Section 1.08(a))
and thereafter, but on or prior to December 31, 2005, immediately accepts a
position with BATIC, Inc. or any of its affiliates (collectively "BATIC"),
(ii) who, at the date of actual commencement of employment with BATIC, is
at least fifty (50) years of age, has been credited with at least ten (10)
years of qualifying service (as defined in the Brown & Williamson Tobacco
Corporation Salaried Employees Retirement Plan), and whose age (in full
years) and qualifying service equal at least seventy (70), and (iii) whose
employment is terminated (1) under the provisions of a severance plan
comparable to the "SSP" described in Section 2.14 (referred to herein as
the "BATIC SSP") or (2) by reason of retirement at or after age 55
(referred to herein as a "Section 2.16 Employee-Participant").
(b) Coverage as a Retired Participant under this Section 2.16 shall be subject
to the following additional rules:
(1) Cost of Coverage. The cost of such coverage for each Section 2.16
Employee-Participant (and Dependent, as applicable) shall be 20% of
the Normal Cost of coverage.
(2) Dependent Eligibility. A Dependent of a Section 2.16
Employee-Participant shall be eligible for coverage as a Dependent,
provided he/she [i] was a Dependent as of the date of Closing (as
defined in Section 1.08(a)(1)) and [ii] otherwise satisfies the
requirements for Dependent coverage under Section 2.08.
40
(3) Commencement of Coverage. The right to coverage as a Retired
Participant (and Dependent, as applicable) shall be effective as of
the effective date of a Section 2.16 Employee-Participant's election
hereunder.
(4) Contingent on Reimbursement. Coverage of an Employee-Participant
under this Section 2.16 is contingent on BATIC's payment to the
Company of the amount provided in that certain Reimbursement Agreement
entered into by the Company and BATIC as of the Closing (as defined in
Section 1.08(a)(1)) and in the event BATIC fails to make such payment,
no coverage shall be provided to an otherwise eligible Section 2.16
Employee-Participant.
(c) Notwithstanding the foregoing provisions of this Section 2.16, in the event
a Section 2.16 Employee-Participant (1) terminates employment voluntarily
prior to having satisfied the minimum age and service requirements for
health care coverage as a Retired Participant under this Plan, or (2) is
terminated for cause, such Employee-Participant shall in no event be
eligible for coverage as a Retired Participant hereunder.
ARTICLE 3.
Medical Plan
3.01 In General.
(a) Subject to the applicable Copayments, Deductibles, Coinsurance, Annual
Out-of-Pocket Limits, Pre-admission Review, Continued Stay Review and Case
Management rules and other limits, exclusions, terms and conditions set out
in this Plan, the Plan shall pay all Covered Charges incurred by
Participants. The Schedule of Benefits below sets forth the amounts each
Participant must pay each Benefit Period for Covered Charges. The amounts
payable by the Plan as Covered Charges depend in part on whether the
Covered Services are performed by Network Providers or by Non-Network
Providers as set forth in the Schedule of Benefits. The Plan shall not pay
any portion of any fees or expenses of Non-Network Providers which are in
excess of Covered Charges determined in accordance with Section 1.12(b).
Any reference in the Plan to the payment of Covered Charges or the coverage
of Services by the Plan shall be subject to this Section 3.01.
(b) The service area of each Network shall consist of certain counties and
geographical areas designated from time to time by the Network
administrator. Each Participant shall be covered by the Network that
comprises the service area in which the Participant's Primary Residence is
located. Column (b) of Section 3.02 shall apply when Covered Services are
provided to a Participant by a Network Provider that is a member of the
Network that covers such Participant. Column (c) of Section 3.02 shall
apply when Covered Services are provided to a Participant by a Provider
that is not a member of the Network that covers such Participant.
(c) If, at the time Covered Services are rendered, a Participant's Primary
Residence is in not within a Network service area, determined under
subsection (b) above, the Participant
41
shall pay Covered Charges by Non-Network Providers in accordance with
column (c) of Section 3.02, except that (1) the Participant's Coinsurance
amount shall be 20% rather than 30%, (2) the Network Deductible described
in Section 4.01(a) shall apply, and (3) the Annual Out-of-Pocket Limits for
Network Providers described in Section 4.02(a) shall apply. If, at the time
Covered Services are rendered, a Participant's Primary Residence is not
within a Network service area, determined under subsection (b) above, the
Participant shall pay Covered Charges by Network Providers in accordance
with column (b) of Section 3.02.
(d) If a Participant requires Covered Services that the Claims Administrator
determines are not available through a Network Provider in the Network
service area in which the Participant's Principal Residence is located, the
Participant may obtain such Covered Services from a Non-Network Provider
and the Plan will pay the Non-Network Provider's Covered Charges in
accordance with column (c) of Section 3.02, except that (1) the
Participant's Coinsurance amount shall be 20% rather than 30%, (2) the
Network Deductible described in Section 4.01(a) shall apply, and (3) the
Annual Out-of-Pocket Limits for Network Providers described in Section
4.02(a) shall apply.
(e) If a Network Provider, who is providing Services to a Participant in a
Network facility, selects a Non-Network Provider to provide Services
related to those being provided by the Network Provider, and the
Participant does not have an opportunity to choose a Network Provider for
the related Services (such as radiologist, pathologist or anesthesiologist
Services), then the Services, to the extent they are Covered Services,
shall be covered under column (b) of Section 3.02.
3.02 Schedule of Benefits. The benefits described in this Section 3.02 are
subject to the applicable Copayments, Deductibles, Coinsurance, Annual
Out-of-Pocket Limits, Pre-admission Review, Continued Stay Review and Case
Management rules and other limits, exclusions, terms and conditions set out
in this Plan.
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ---------------------- ------------------------ ----------------------
AMBULANCE
Air or ground 10% of Covered Charges 20% of Covered Charges, 10% of Covered Charges
after Deductible subject to Network after Deductible
Deductible and Network
Annual Out-of-Pocket
Limit
42
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ---------------------- ------------------------ ----------------------
CHIROPRACTIC THERAPY
Up to a combined $10 Copayment 20% of Covered Charges, 10% of Covered Charges
maximum benefit of subject to Network after Deductible
$500 per calendar year Deductible and Network
Annual Out-of-Pocket
Limit
DENTAL SERVICES
DMD or Dentist's $10 Copayment 30% of Covered Charges 10% of Covered Charges
Office, including after Deductible after Deductible
surgical procedures
performed in the office
Inpatient Facility; 10% of Covered Charges 30% of Covered Charges 10% of Covered Charges
Outpatient Facility; after Deductible after Deductible after Deductible
or Physician's
Services rendered
outside office setting
DIABETIC SUPPLIES
10% of Covered Charges 20% of Covered Charges, 10% of Covered Charges
after Deductible subject to Network after Deductible
Deductible and Annual
Out-of-Pocket Limit
DOCTOR'S OFFICE VISITS
(excluding Mental Health
and Substance Abuse)
For Illness or Injury, $10 Copayment 30% of Covered Charges 10% of Covered Charges
including surgical after Deductible after Deductible
procedures performed in
office
Allergy Treatment $10 Copayment 30% of Covered Charges 10% of Covered Charges
after Deductible after Deductible
43
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ---------------------- ------------------------ ----------------------
DURABLE MEDICAL
EQUIPMENT 10% of Covered Charges 20% of Covered Charges, 10% of Covered Charges
after Deductible subject to Network after Deductible
Deductible and Network
Annual Out-of-Pocket
Limit
FAMILY PLANNING
Office Visits, $10 Copayment 30% of Covered Charges 10% of Covered Charges
including tests, after Deductible after Deductible
counseling and office
surgical sterilization
procedures
Voluntary surgical 10% of Covered Charges 30% of Covered Charges 10% of Covered Charges
sterilization after Deductible after Deductible after Deductible
procedures performed
out of Physician's
office
HOME HEALTH CARE
Up to a maximum of 120 10% of Covered Charges 20% of Covered Charges, 10% of Covered Charges
visits per Benefit after Deductible subject to Network after Deductible
Period Deductible and Network
Annual Out-of-Pocket
Limit
HOSPICE CARE
Inpatient and 10% of Covered Charges 20% of Covered Charges, 10% of Covered Charges
Outpatient after Deductible subject to Network after Deductible
Bereavement Deductible and Network
Counseling is limited Annual Out-of-Pocket
to three counseling Limit
sessions
HOSPITAL EMERGENCY ROOM
(including
doctor's charge) $50 Copayment (Waived 30% of Covered Charges 10% of Covered Charges
if admitted) after Deductible after Deductible
44
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ---------------------- ------------------------ ----------------------
INFERTILITY TREATMENT
Surgical procedures $10 Copayment 30% of Covered Charges 10% of Covered Charges
for diagnosis of after Deductible after Deductible
infertility performed
out of Physician's
office
Office Visits, 10% of Covered Charges 30% of Covered Charges 10% of Covered Charges
including tests and after Deductible after Deductible after Deductible
office surgical
procedures for
diagnosis of
infertility
INPATIENT HOSPITAL
FACILITY SERVICES 10% of Covered Charges 30% of Covered Charges 10% of Covered Charges
after Deductible after Deductible after Deductible
INPATIENT HOSPITAL
PHYSICIAN'S
VISITS/CONSULTANTS 10% of Covered Charges 30% of Covered Charges 10% of Covered Charges
after Deductible after Deductible after Deductible
INPATIENT HOSPITAL
PROFESSIONAL SERVICES 10% of Covered Charges 30% of Covered Charges 10% of Covered Charges
after Deductible after Deductible, after Deductible
subject to reduction for
multiple surgeries
45
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ----------------------- ----------------------- ---------------------
LAB AND X-RAY SERVICES
(Facility and
Professional Services)
Independent Lab and 10% of Covered Charges 20% of Covered Charges, 10% of Covered
X-ray Facility and after Deductible subject to Network Charges after
Professional Services (Includes in-network Deductible and Network Deductible
coverage for specimens Annual Out-of-Pocket
referred to Limit.
non-participating lab
by participating
doctor).
Doctor's Office No charge. Included in 30% of Covered Charges 10% of Covered
$10 per visit Copayment after Deductible Charges after
if performed and billed Deductible
by treating physician
Hospital 10% of Covered Charges 30% of Covered Charges 10% of Covered
after Deductible after Deductible after Charges
Deductible
MATERNITY
Initial Office Visit $10 Copayment 30% of Covered Charges 10% of Covered
to determine pregnancy after Deductible Charges after
Deductible
All subsequent 10% of Covered Charges 30% of Covered Charges 10% of Covered
prenatal visits, after Deductible after Deductible Charges after
postnatal visits and Deductible
delivery Inpatient
Hospital Birthing
Center
Licensed nurse midwife 10% of Covered Charges 20% of Covered Charges, 10% of Covered
after Deductible subject to Network Charges after
Deductible and Network Deductible
Annual Out-of-Pocket
Limit
46
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ----------------------- ----------------------- ---------------------
MENTAL HEALTH AND
SUBSTANCE ABUSE
CONDITIONS
Inpatient Limited to $10 Copayment 30% of Covered Charges 10% of Covered
45 days per Benefit after Deductible Charges after
Period Deductible
Outpatient Limited to 10% of Covered Charges 30% of Covered Charges 10% of Covered
30 visits per Benefit after Deductible after Deductible Charges after
Period Deductible
Licensed clinical 10% of Covered Charges 20% of Covered Charges, 10% of Covered
social worker after Deductible subject to Network Charges after
Deductible and Network Deductible
Annual Out-of-Pocket
Limit
NON-ELECTIVE ABORTION
Inpatient Hospital or 10% of Covered Charges 30% of Covered Charges 10% of Covered
Outpatient Facility, after Deductible after Deductible Charges after
including Physician's Deductible
services
ORGAN TRANSPLANTS
Facility Care, 10% of Covered Charges 30% of Covered Charges, 10% of Covered
Physician Services and after Deductible after Deductible Charges after
other related Deductible
Providers Donor
expenses
OUTPATIENT FACILITY
10% of Covered Charges 30% of Covered Charges 10% of Covered
after Deductible after Deductible Charges after
Deductible
OUTPATIENT
PHYSICIAN'S SERVICES 10% of Covered Charges 30% of Covered Charges 10% of Covered
at an Outpatient Facility after Deductible after Deductible Charges after
Deductible
47
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ----------------------- ----------------------- ---------------------
OUTPATIENT PRE-ADMISSION
TESTING
Office Visit $10 Copayment 30% of Covered Charges 10% of Covered
after Deductible Charges after
Deductible
Outpatient Facility 10% of Covered Charges 30% of Covered Charges 10% of Covered
after Deductible after Deductible Charges after
Deductible
OUTPATIENT PRIVATE
DUTY NURSING 10% of Covered Charges 20% of Covered Charges, 10% of Covered
after Deductible subject to Network Charges after
Deductible and Network Deductible
Annual Out-of-Pocket
Limit
PODIATRIC SERVICES
Office Visits, $10 Copayment 20% of Covered Charges, 10% of Covered
including surgical subject to Network Charges after
procedures performed in Deductible and Network Deductible
the office Annual Out-of-Pocket
Limit
Physician's Services 10% of Covered Charges 20% of Covered Charges, 10% of Covered
rendered outside an after Deductible subject to Network Charges after
office setting Deductible and Network Deductible
Annual Out-of-Pocket
Limit
PROSTHETIC DEVICES
10% of Covered Charges 20% of Covered Charges, 10% of Covered
after Deductible subject to Network Charges after
Deductible and Network Deductible
Annual Out-of-Pocket
Limit
48
(d)
RETIRED PARTICIPANTS,
(b) (c) AGE 65 AND OLDER, AND
(a) NETWORK PROVIDER NON-NETWORK THEIR DEPENDENTS
COVERED SERVICES Cost to Participant Cost to Participant Cost to Participant
- -------------------------- ----------------------- ----------------------- ---------------------
SECOND OPINIONS FOR
SURGERY
$10 Copayment 30% of Covered Charges 10% of Covered
after Deductible Charges after
Deductible
SKILLED NURSING FACILITY
Up to a maximum of 60 10% of Covered Charges 30% of Covered Charges 10% of Covered
days per calendar year after Deductible after Deductible Charges after
Deductible
TEMPOROMANDIBULAR
JOINT DYSFUNCTION (TMJ)
Office Visits, $10 Copayment 30% of Covered Charges 10% of Covered
including office after Deductible Charges after
surgery Deductible
Facility care and 10% of Covered Charges 30% of Covered Charges 10% of Covered
Physician's Services after Deductible after Deductible Charges after
outside office Deductible
THERAPY SERVICES
10% of Covered Charges 30% of Covered Charges 10% of Covered
after Deductible after Deductible Charges after
Deductible
URGENT CARE FACILITY
$10 Copayment 20% of Covered Charges, 10% of Covered
subject to Network Charges after
Deductible and Network Deductible
Annual Out-of-Pocket
Limit
WELLNESS PROGRAM
Doctor's Office Visit $10 Copayment 30% of Covered Charges 10% of Covered
after Deductible Charges after
Deductible
3.03 Ambulance Services. The Plan covers Ambulance Services for Emergency Care.
The Plan covers Ambulance Services for non-Emergency Care if the Claims
Administrator determines that an Ambulance is Medically Necessary.
49
3.04 Dental Services.
(a) The Plan covers dental Services, except implants, rendered by a Physician
or dentist which are required as a result of Accidental Injury to the jaws,
sound natural teeth, mouth or face occurring on or after the Participant's
Effective Date. Injury as a result of chewing or biting is not considered
an Accidental Injury. The term "sound natural teeth" means teeth that are
organic (not manufactured), have not been extensively restored, and have
not become extensively decayed or involved in periodontal disease. The Plan
also covers certain oral surgical procedures as described in Section
3.04(b).
(b) The Plan covers the following oral surgical procedures: (1) Extraction of
impacted teeth. (2) Excisions of tumors or cysts (when not related to
dental origin). (3) Exostosis (when not related to dental origin). (4)
Treatment of Illnesses and Injuries of the jaw including fractures and
dislocations. If a Participant is not covered under the Medical Plan, but
is covered under the Dental Plan, the benefits described in this subsection
(b) shall be provided under the Dental Plan.
3.05 Durable Medical Equipment.
(a) The Plan covers durable medical equipment for a Participant as follows:
(1) Durable medical equipment is equipment that the Claims Administrator
determines to be (A) primarily and customarily used for medical
purposes, (B) designed and able to withstand repeated used, (C)
prescribed a Physician and Medically Necessary for the Participant.
Examples of durable medical equipment include apnea monitors,
breathing equipment, hospital-type beds, walkers, crutches and wheel
chairs. Equipment will not be covered by the Plan, even if prescribed
by a Physician, simply because its use has an incidental health
benefit.
(2) The Plan covers the rental of durable medical equipment. The Plan may,
at the option of the Claims Administrator, purchase durable medical
equipment in lieu of its rental if the rental price is projected to
exceed the purchase price. The Plan shall own purchased durable
medical equipment and shall be entitled to its return upon termination
of proper use by the Participant. The Plan covers necessary fittings,
adjustments, delivery and installation of durable medical equipment.
Coverage is also provided for necessary repairs to keep such equipment
serviceable. Replacement coverage for durable medical equipment is not
available unless the Claims Administrator determines that the
equipment to be replaced can no longer be made serviceable. No
coverage is provided for replacement of durable medical equipment that
is lost or stolen. The Plan does not cover the replacement or repair
of durable medical equipment if the Claims Administrator determines
that the equipment is broken as a result of abuse or lack of
maintenance.
(3) Items that are not considered durable medical equipment include, but
are not limited to: air conditioners, air purifiers, humidifiers,
dehumidifiers, elevators,
50
ramps, stair glides, emergency alert equipment, handrails, heat
appliances, improvements made to the participant's home or place of
business, waterbeds, whirlpool, baths, exercise and massage equipment,
and adjustments to vehicles.
(b) [Reserved].
3.06 Home Health Care.
(a) Home Health Care means medical care administered, pursuant to a treatment
plan, by a Home Health Care Agency or a Hospital to a Participant in his or
her home. The Plan does not cover Home Health Care unless the Plan has
received a letter from the Participant's attending Physician supporting
that the Home Health Care is Medically Necessary. All payments for Home
Health Care will be to the Home Health Care Agency or a Hospital.
(1) A Home Health Care treatment plan means a written plan for continued
medical care, which includes an estimate of duration and which is
approved in writing by the Physician under whose care the Participant
is currently receiving treatment for the Illness or Injury which
requires the Home Health Care. The treatment plan may include the
following:
(A) Care by or under the supervision of a registered nurse (RN) or a
licensed practical nurse (LPN). Private duty nursing Services are
covered under the Plan only if ordered by the Participant's
Physician and only if the Claims Administrator determines that
the Participant's condition requires the skills of an RN or LPN.
Benefits for private duty nursing Services will not exceed three
(3) nurses per day.
(B) Therapy Services in accordance with Section 3.20 of the Plan.
(C) Other Services, such as laboratory Services, that are otherwise
covered under the Plan.
(2) Home Health Care will not be covered under the Plan unless the Claims
Administrator determines that:
(A) The treatment plan satisfies the requirements of this Section
3.06;
(B) Necessary care and treatment are not available from a family
member or other persons residing with the Participant; and
(C) The Home Health Care Services will be provided or coordinated by
a Home Health Care Agency.
(b) Limitations:
51
(1) The Plan will not cover more than 120 Home Health Care visits in a
Benefit Period, unless such visits and related Services are
coordinated through medical case management pursuant to section 6.02.
(2) A visit by a Home Health Care Provider of four hours or less during
any period of four consecutive hours is treated as one Home Health
Care visit; provided that, no hour of Home Health Care Service shall
be counted in more than one period. Each visit by a Home Health Care
Provider for evaluating the need for Home Health Care and developing a
treatment plan will be considered one Home Health Care visit.
(3) Benefits under this Plan do not include: (A) Services or supplies not
included in the treatment plan or not prescribed by a Physician, (B)
Services or supplies which are not Medically Necessary, as determined
by the Claims Administrator, (C) food, housing, homemaker services,
home delivered meals or Custodial Care, (D) social worker services,
(E) transportation, or (F) services of a person who ordinarily resides
in the Participant's home or is a member of the Participant's or the
Participant's spouse's family.
3.07 Hospice Care.
(a) Benefits: Hospice Care coverage is as follows, subject to subsection (b):
(1) Hospice Care means a coordinated interdisciplinary program
administered by a Hospice Agency in accordance with a plan of care to
meet the physical, physiological, spiritual and social needs of
Participants who are terminally ill, as well as their families.
Terminally ill means life expectancy of 6 months or less. The
diagnosis of terminal Illness must be certified by the Participant's
Physician. Hospice Care may be furnished either in a Hospice Facility
or in the Participant's home. Hospice Care is covered by the Plan when
it is elected in lieu of continued attempts at cure. A plan of care is
a written plan developed by the Hospice Agency and approved by the
Participant's Physician to ease pain and provide supportive medical,
nursing and other health Services in the Participant's home or in a
Hospice Facility during the terminal Illness. The plan of care must
include an assessment of the hospice Participant's medical and social
needs and a detailed description of the care required to meet those
needs. Hospice Care will not be covered under the Plan unless the
Claims Administrator determines that the plan of care satisfies the
requirements of this Section 3.07. All payments for Hospice Care will
be to the Hospice Agency.
(2) The Plan covers Covered Charges for the following hospice Services:
(A) Covered Charges by a Hospice Facility.
52
(B) Part-time skilled nursing by a Registered Nurse; a Licensed
Practical Nurse, or a Nurse's Aide working under the supervision
of a Registered Nurse for up to eight (8) hours in any one day.
(C) Medical social Services and counseling provided to the
Participant or the Participant's immediate family under the
direction of a Physician, which include the following: (i)
assessment of social, emotional and medical needs, and the home
and family situation; (ii) identification of community resources
available; (iii) assistance in obtaining those resources; and
(iv) nutritional counseling.
(D) Medical supplies, drugs and medicines prescribed by a Physician
for symptom management and pain relief.
(E) Part-time home health aide Services up to eight (8) hours in any
one day. Home health aides provide personal care Services that
are necessary for the maintenance of safe and sanitary conditions
in the areas of the house used by the Participant.
(F) Physical therapy and inhalation therapy provided for the purposes
of symptom control or to enable the patient to maintain
activities of living at home and basic functional skills.
(G) Bereavement counseling consisting of Services provided to the
Participant's immediate family after the Participant's death.
Counseling is limited to three visits provided within three
months after the Participant's death. For purposes of this
Section 3.07, a Participant's immediate family is limited to the
Participant's parents, spouse, children and step-children.
(b) Limitations: Hospice Care does not include the following:
(1) Housekeeping services, transportation, delivered or prepared meals,
and convenience and comfort items, including sitter and companion
services, not necessary for the medical palliation or management of
the Participant's terminal Illness.
(2) Confinement in a Hospice Facility unless required for pain control or
other acute chronic symptom management.
(3) Supportive environmental items such as air conditioners, air
fresheners, ramps, handrails, or intercom systems.
(4) Transportation, chemotherapy, radiation therapy, enteral and
parenteral feeding, home hemodialysis, and other services supportive
to research, diagnosis, and lengthening patterns of treatment.
(5) Visits made to the home by a Physician.
53
(6) Private duty nursing services when confined in a Hospice Facility;
(7) Funeral arrangements and financial or legal counseling, including
estate planning or drafting of a will.
(8) Comfort items not directly related to relieving pain or managing the
Participant's terminal Illness.
(9) Services provided by volunteer agencies or pastoral counseling
services, and items, services or expenses not specifically and
expressly covered under this Section 3.07.
3.08 Hospital Confinement Limitations.
(a) Hospital benefits are subject to Article 6 and shall be paid only if, and
to the extent that, the Plan Administrator determines that Hospital
confinement is Medically Necessary. Notwithstanding anything else herein to
the contrary, Hospital benefits shall be paid only for days of actual
confinement, and shall not include any charges for holding or reserving
space, or for pass or therapeutic leave days.
(b) Hospital benefits with respect to Mental or Substance Abuse Conditions are
subject to Sections 3.11 and 3.18.
3.09 Hospital Inpatient Care.
(a) A Participant who is admitted to a Hospital as a Bed Patient shall, subject
to Section 6.01, be entitled to the following benefits for Services when
consistent with the diagnosis and treatment of the condition for which
confinement is required:
(1) The Plan covers "semi-private accommodations," (two beds) including
bed, meals, special diets, and general nursing Services in a Hospital.
If the Participant receives bed and board in "private accommodations"
(including meals, special diets, and general nursing Service), an
allowance equal to the Covered Charges for "semi-private
accommodations" will be covered, except that if no semi-private
accommodations are available, the Plan covers private accommodations.
The Plan covers stays in critical care units and intensive care units.
(2) Use of operating room and delivery room.
(3) Recovery room.
(4) Anesthetic materials.
(5) Administration of anesthetics when administered by an employee of such
Hospital as a regular Hospital Service.
(6) Dressing and bandages, casts and splints.
54
(7) Laboratory examinations including tissue examinations.
(8) Basal metabolism tests.
(9) X-ray examinations.
(10) Electrocardiograms.
(11) Oxygen as provided by such Hospitals.
(12) Administration of blood, blood plasma, and plasma substitutes.
(13) All drugs and medicines which are officially accepted by the Food and
Drug Administration for general use at the time of such confinement.
(14) Electroencephalograms.
(15) Admissions for diagnostic studies when the studies are directed toward
the definite diagnosis of an Illness or Injury.
(16) Any additional medical Services and supplies which are customarily
provided by a Hospital, unless otherwise specifically excluded by
provisions of the Plan.
(b) [Reserved].
3.10 Infertility Diagnosis. The Plan covers tests and surgical procedures,
whether in or out of a Physician's office, for diagnosis of infertility.
3.11 Mental Health Conditions. The Plan covers Services for the diagnosis and
treatment of Mental Health Conditions when rendered by a Hospital,
Physician, or other Provider as follows:
(a) Inpatient Services. Inpatient Hospital or Psychiatric Facility Services,
subject to Section 6.01. Benefits are also provided for individual
psychotherapy treatment, group psychotherapy treatment, psychological
testing, convulsive therapy treatment, electroshock treatment and
convulsive drug therapy, including anesthesia when administered
concurrently with the treatment of the Mental Health Condition by the same
Physician or other professional Provider. If anesthesia is administered by
a different Physician or other licensed Provider, then the anesthesia is
considered a Service that is separate from the treatment of the Mental
Health Condition. The number of days of Inpatient treatment of Mental
Health and Substance Abuse Conditions shall be combined, and the Plan's
coverage for Inpatient Services is limited to 45 combined days per Benefit
Period, without regard to whether the Services are Network or Non-Network.
(b) Outpatient Services. The diagnosis and treatment of a Mental Health
Condition when rendered by a Hospital, Physician, or other applicable
Provider for Services to an Outpatient, including individual and group
psychotherapy treatment and psychological
55
testing. The number of days of Outpatient visits for treatment of Mental
Health and Substance Abuse Conditions shall be combined, and the Plan's
coverage for Outpatient visits is limited to 30 combined visits per Benefit
Period, without regard to whether the visits are to Network or Non-Network
Providers.
3.12 Obstetrical Care.
(a) The plan covers obstetrical care for the Employee-Participant, or the
Spouse-Participant of the Employee, including Dependent children.
Obstetrical care includes the Medically Necessary treatment of an Inpatient
and Outpatient for prenatal, Maternity, routine newborn and postpartum care
as provided in this Section 3.12, and includes Medically Necessary
obstetrical care by a licensed nurse midwife. A newborn who satisfies the
definition of "Dependent" shall be covered automatically under the Plan as
a Dependent for 30 days after date of birth. Thereafter, a newborn will be
covered under the Plan only from the date coverage is elected for the child
in accordance with the Flex Plan.
(b) No provision of this Plan shall be interpreted to restrict benefits for a
Hospital stay in connection with childbirth for a mother or her newborn to
less than 48 hours following a vaginal delivery or 96 hours following a
delivery by cesarean section. If delivery occurs in a Hospital, the
Hospital length of stay for the mother or newborn child begins at the time
of delivery (or in the case of multiple births, at the time of the last
delivery). If delivery occurs outside a Hospital, the Hospital length of
stay begins at the time the mother or newborn is admitted as a hospital
inpatient in connection with childbirth. The determination of whether an
admission is in connection with childbirth is a medical decision to be made
by the attending provider.
(c) If a decision to discharge a mother earlier than the period specified in
subsection (b) is made by an attending provider, in consultation with the
mother, the requirements of subsection (b) do not apply for any period
after the discharge. If a decision to discharge a newborn child earlier
than the period specified in subsection (b) is made by an attending
provider, in consultation with the mother (or the newborn's authorized
representative), the requirements of subsection (b) do not apply for any
period after the discharge. For purposes of this Section, attending
provider means an individual who is licensed under applicable State law to
provide maternity or pediatric care and who is directly responsible for
providing maternity or pediatric care to a mother or newborn child.
3.13 Organ and Tissue Transplants.
(a) Benefits: The Plan covers human organ and tissue transplants, subject to
all provisions of the Plan applicable at the time the Services are
rendered, including but not limited to, the limitations and exclusions in
articles 5 and 6, and the following provisions:
(1) If both the recipient and the donor are Participants in the Plan, each
is entitled to benefits under the Plan.
56
(2) If the recipient is a Participant, but the donor is not, the Plan
covers donor expenses that are not covered by the donor's health plan
or any other available resource.
(3) If the recipient is not a Participant, but the donor is, the Plan
covers the donor's expenses, but only if the recipient is the donor's
spouse, child, sibling or parent.
(4) The term "donor expenses" means, subject to subsection (5), the
charges for acquiring and preserving the organ or tissue, including
pre-diagnostic testing, Hospital and surgical Services, storage, and
preservation and transportation of the donated organ or tissue. The
Plan does not cover any travel expenses of a donor.
(5) All donor expenses for human organ and tissue transplants are subject
to the following dollar limitations:
(A) The Plan shall cover Medically Necessary expenses up to $25,000
per recipient for an organ transplant.
(B) The Plan shall cover Medically Necessary expenses up to $10,000
per recipient for bone marrow and stem cell transplants if not
provided through the National Marrow Donor Program. If a bone
marrow or stem cell transplant is provided through the National
Marrow Donor Program, the Plan shall cover Medically Necessary
expenses up to $25,000 per recipient.
(6) The Plan shall cover 100 percent of travel expenses for the recipient
and one companion in accordance with this subsection (6), except that
the Plan shall not pay more than $10,000 in the aggregate for travel
expenses with respect to a transplant. The Plan shall not cover any
travel expenses unless (A) the transplant Services are provided at a
facility that is a member of the LifeSource Program and the facility
is more than 60 miles from the recipient's Principal Residence, and
(B) the expenses are approved in advance by the Claims Administrator.
The Plan covers travel expenses if, but only if, the Claims
Administrator determines the expenses are reasonable for travel to and
from the transplant site. Travel expenses include lodging and food,
but only while at or traveling to and from the transplant site. The
term "companion" means any individual other than the donor who is
actively involved as the recipient's care giver, who may be a spouse,
family member, guardian or other person. If the Network applicable to
a Participant is not a member of the LifeSource Program, then the
above reference to the LifeSource Program shall be deemed a reference
to the transplant Network, if any, in which the Participant
participates.
(b) Non-Eligible Expenses:
57
(1) The Plan does not cover any expenses related to the transplant of any
artificial or nonhuman organ or tissue, or expenses which are repaid
under any private or public research fund.
(2) The Plan does not cover expenses for and related to autologous bone
marrow or stem cell harvesting and storage when the transplant does
not occur within six months of the harvesting.
(3) The Plan does not cover bone marrow or stem cell transplants if the
human leukocyte antigen (HLA) is not an identical five out of six
allogeneic match between donor and recipient. Charges for a procedure
or expense which are denied under this Section 3.13 are not eligible
for payment under any other provision of this Plan.
(4) Notwithstanding any other provision of this Plan, the Plan covers
Services for and related to organ and tissue transplants only to the
extent the Services are expressly covered by the Claims
Administrator's claims standards for organ and tissue transplants in
effect at the time the Services are rendered. Such claims standards
may change at any time and from time to time after the date of the
Plan, and such changes are hereby incorporated into the Plan by
reference.
3.14 Other Covered Services.
(a) Medical supplies and surgical dressings including:
(1) Colostomy bags and supplies required for their use.
(2) Catheters.
(3) Casts and splints.
(4) Dressings when Medically Necessary for such conditions as cancer,
burns, or diabetic ulcers.
(b) Private duty nursing Services in a Hospital which require the skills of a
registered nurse (RN) or licensed practical nurse (LPN); or an RN outside
the Hospital, provided:
(1) The Services are Medically Necessary as determined by the Claims
Administrator and are of such an intensive skilled level that they
cannot be provided by the Hospital's general nursing staff;
(2) The Services are prescribed by the patient's attending Physician and
such prescription is documented in the medical record;
(3) The care being rendered is at the skilled level (Custodial Care,
intermediate care and personal care are not covered); and
58
(4) The Hospital does not have an intensive care unit or similar
accommodations or there is no space available in such facilities.
(c) Regardless of Medical Necessity, the Plan covers Physician, Hospital and
Outpatient Facility Covered Charges incurred for the sole purpose of
voluntary tubal ligation and vasectomy sterilization procedures.
(d) Drugs and medicines requiring a prescription if administered while the
Participant is a Bed Patient or in a Physician's office.
(e) Chiropractic Services for diathermy, subluxations and misplacement of
vertebrae, or strains and sprains of soft tissue related to the spine when
performed by a licensed chiropractor acting within the scope of the rules
and regulations promulgated by the applicable licensing authority, subject
to the dollar limitation of Section 5.01(a)(42).
(f) The Plan covers Emergency Care. Benefits for Emergency Care include charges
for facility costs, Physician Services, supplies and prescriptions. If
Emergency Care is provided at a Hospital that is a Non-Network Provider,
the Participant's share of Covered Charges shall be determined under column
(b) of Section 3.02 if the Claims Administrator determines that the
Participant's medical condition was life threatening and so severe that the
Participant had no choice except to go to the nearest Hospital that is a
Non-Network Provider.
(g) If at the time of the occurrence of a sudden and unexpected Illness or
Injury that requires Covered Services, a Participant is not physically
located within the Network Service Area in which his or her Primary
Residence is located, and if Covered Services are provided by a Non-Network
Provider, then benefits for the Covered Services shall be determined under
column (b) of Section 3.02 if, but only if, the Claims Administrator
determines that at the time of the occurrence of the Illness or Injury, the
Participant did not expect to be out of the Network Service Area for more
than twenty-one consecutive days. In no event shall any Services be covered
under this subsection (g) if the travel outside the Participant's Network
Service Area is for the purpose of obtaining any Services.
(h) Services provided by Urgent Care Facilities.
(i) Services provided by Outpatient Facilities.
(j) If a Participant is receiving benefits under the Plan in connection with a
mastectomy and if the Participant elects breast reconstruction in
connection with such mastectomy, the Plan shall provide coverage in a
manner determined in consultation with the attending Physician and the
Participant, for (1) reconstruction of the breast on which the mastectomy
has been performed, (2) surgery and reconstruction of the other breast to
produce a symmetrical appearance, and (3) prostheses and physical
complications at all stages of the mastectomy, including lymphedemas.
(k) The Plan covers the following diabetic supplies: insulin pump needles,
glucose monitors and lancet devices.
59
3.15 Physician Services.
(a) The Plan covers Physicians' Services as follows:
(1) Surgical Services: Surgical Services wherever performed, including
treatment for fractures and dislocations and routine pre-operative and
post-operative care. If multiple surgeries are performed during one
operating session, the Plan will cover the most expensive procedure as
otherwise determined under the Plan, and the Plan will cover 50
percent of the charges for the remaining surgery or surgeries as
otherwise determined under the Plan.
(2) Anesthesia Services: Administration of anesthesia by injection or
inhalation, except by local infiltration.
(3) Radiation Therapy Services: Treatment for malignant/non-malignant
growths by X-ray, radium, or radioactive isotopes.
(4) Consultation Services: Consultation requested by the attending
Physician and rendered to a Participant in conjunction with surgical,
obstetrical or medical Services during a confinement.
(5) In-Hospital Concurrent Medical Care with Surgery: Services rendered
concurrently by other than the attending Physician when warranted by
the need for supplemental skills of a different nature from that
customarily rendered as surgical or obstetrical Services. The criteria
for determining a patient's eligibility for concurrent medical care
will be when a patient has a separate and complicated diagnosis,
which, if left untreated, would adversely affect his prognosis and is
a condition whose management requires skills not ordinarily possessed
by the surgeon or obstetrician.
(6) Surgical Assistance: Surgical assistance rendered to the Physician in
charge of the case, if the type and complexity of the procedure
requires such assistance.
(7) In-Hospital Medical Services:
(A) Medical services rendered by the attending Physician to a
Participant while confined in a Hospital. Benefits are also
subject to the limitations on confinements in Sections 3.08 and
6.01
(B) Medical services means services which do not involve: (i)
surgical procedures, (ii) treatment of fractures, dislocations,
and other accidental injuries, (iii) obstetrical procedures
including prenatal and post-natal care, or (iv) radiation
therapy.
(C) Hospital calls made by the operating Physician in rendering
necessary pre-operative and postoperative care 10 or less days
before and 30 or less days
60
after surgical procedures shall be considered a part of such
surgical procedures, and no allowance for medical services shall
be made.
(8) Out-of-Hospital Diagnostic X-ray and Laboratory Services: X-ray or
laboratory examinations which are required in the diagnosis of any
condition, disease, or injury made or recommended by a Physician and
performed outside of a Hospital or performed as an outpatient in a
Hospital.
(9) Office Visits for Illness and Injury.
(10) Office Visits for Services covered under Section 3.21.
(b) [Reserved].
3.16 Prosthetic Devices. The Plan covers the purchase, fitting, necessary
adjustments and repairs of prosthetic and orthotic devices and supplies
which replace all or part of an absent body part (including contiguous
tissue), or replace all or part of the basic minimal function of a
permanently inoperative or malfunctioning body part. The Plan covers
replacements only if Medically Necessary due to pathological changes or if
replacement is less costly than repair. Dental appliances are excluded,
except to the extent covered under the Dental Plan. The replacement of
cataract lenses is excluded, except when new cataract lenses are Medically
Necessary because of prescription change.
3.17 Skilled Nursing Facility. The Plan covers bed and board, including special
diets and general nursing Services, in semi-private accommodations (two
beds) in an approved Skilled Nursing Facility for Skilled Nursing Care.
Coverage is limited to 60 days per Benefit Period. Admission to a Skilled
Nursing Facility is covered only if prescribed by a Physician or if in lieu
of Hospital confinement. The allowance toward private room accommodations
shall be equal to the Covered Charges for semi-private accommodations.
3.18 Substance Abuse Conditions. The Plan covers Services for the diagnosis and
treatment of Substance Abuse Conditions when rendered by a Hospital,
Physician, or other applicable Provider as follows:
(a) Inpatient Services. Inpatient Hospital or Psychiatric Facility Services
only if the Claims Administrator determines that Inpatient treatment is the
least restrictive mode of treatment. Benefits are also provided for
individual treatment, group treatment, and testing. The number of days of
Inpatient treatment of Mental Health and Substance Abuse Conditions shall
be combined, and the Plan's coverage for Inpatient Services is limited to
45 combined days per Benefit Period, without regard to whether the Services
are Network or Non-Network.
(b) Outpatient Services. The diagnosis and treatment of a Substance Abuse
Condition when rendered by a Hospital, Physician, or other applicable
Provider for Services to an Outpatient, including individual and group
treatment and testing. The number of days of Outpatient visits for
treatment of Mental Health and Substance Abuse Conditions shall be
61
combined, and the Plan's coverage for Outpatient visits is limited to 30
combined visits per Benefit Period, without regard to whether the visits
are to Network or Non-Network Providers.
3.19 Temporomandibular or Craniomandibular Joint Dysfunction. The Plan covers
Services incurred for surgical treatment of Temporomandibular Joint (TMJ)
or Craniomandibular Joint (CMJ) dysfunction or orthognathic conditions. TMJ
or CMJ dysfunction is a jaw/joint disorder which may cause pain, swelling
clicking and difficulties in opening and closing the mouth, and
complications include arthritis, dislocation and bite problems of the jaw.
Covered Services incurred for nonsurgical treatment of TMJ or CMJ
dysfunction or orthognathic conditions are limited to: (a) diagnostic
examination; (b) diagnostic x-rays; (c) injection of muscle relaxants; (d)
therapeutic drug injections; (e) Physical Therapy; (f) diathermy therapy;
and (g) ultrasound therapy. This Section 3.19 does not provide for the
coverage of Services not expressly listed in the preceding sentence,
including but not limited to; (1) any appliance or the adjustment of any
appliance including orthodontics; (2) any electronic diagnostic modalities;
(3) occlusal analysis; and (4) muscle testing.
3.20 Therapy Services. The Plan covers Therapy Services when performed by a
Physician, or a licensed or certified therapist under the direction of a
Physician, if, and only if, the Therapy Services are restorative, subject
to the following: (1) The Plan covers Speech Therapy only if the therapy is
expected to restore speech to a Participant who has lost existing speech
function (the ability to express thoughts, speak words and form sentences)
as the result of an Illness or Injury; (2) The Plan does not cover Speech
Therapy if the speech loss or impairment is due to a mental, psychoneurotic
or personality disorder of any type; and (3) If speech loss or impairment
is due to a congenital anomaly, the Plan does not cover Speech Therapy
unless surgery to correct the anomaly has been performed prior to the
therapy.
3.21 Wellness Program. The Plan covers the following Services, without regard
to Medical Necessity, Illness or Injury, but subject to the Deductibles,
Copayments and Coinsurance provisions set forth in the Schedule of Benefits
with respect to the Wellness Program:
Birth through Age 1 Six well child exams in the first year
(including diagnostic testing)
Immunizations
Ages 1 up to 2 Two well child exams in the second year;
(including diagnostic testing)
Immunizations
Ages 2 up through 6 One well child exam per year
(including diagnostic testing)
Immunizations
Ages 7 through 12 One well child exam per two years (including
62
diagnostic testing)
Immunizations
Ages 13 through 39 One routine physical exam per two years
(including diagnostic testing)
Immunizations
Annually: Clinical testicular exam
Gynecological exam (including pap smear)
Ages 35 through 39 One baseline Mammogram
Ages 40 through 49 One routine physical exam per two years
(including diagnostic testing)
One routine colonoscopy
Immunizations
Annually: Clinical testicular exam
Gynecological exam (including pap smear)
Mammogram
Digital rectal exam and fecal occult blood
testing (including prostrate exam)
Ages 50 and after One routine physical exam per year
(including diagnostic testing)
Routine colonoscopy: Once every 5 years
Immunizations
Bone density testing: Once every 10 years
Sigmoidoscopy: Once every 3 years
Annually: Clinical testicular exam
Gynecological exam (including pap smear)
Mammogram
Prostate Specific Antigen (PSA)
Digital rectal exam and fecal occult blood
testing (including prostrate exam)
63
ARTICLE 4.
Deductibles and Annual Out-of Pocket Limit
4.01 Deductibles.
(a) This subsection (a) shall apply with respect to Covered Charges incurred
for Covered Services of Network Providers. In addition, references in
column (d) of Section 3.02 to "Deductibles" shall mean Deductibles as
determined under this Section 4.01(a), whether the Covered Services are
provided by Network or Non-Network Providers. Each Participant shall be
required to pay as a Deductible the first $100 of Covered Charges for such
Participant in any Benefit Period. In general, each Participant shall be
required to satisfy the Deductible once in each Benefit Period. However, if
a Participant and one covered Dependent or any two or more covered
Dependents incur a total of $200 or more of Covered Charges during a
Benefit Period, no further Deductible shall be required on any such
Participant or any of his Dependents for the remainder of the Benefit
Period. In attaining the $200 Family Deductible, no one individual shall be
given credit for more than $100 of Covered Charges in any Benefit Period.
Amounts paid by a Participant for Network Covered Charges in a Benefit
Period shall be included in the calculation of the Deductible for
Non-Network Covered Charges for that Benefit Period. Amounts paid by a
Participant for Non-Network Covered Charges in a Benefit Period shall be
included in the calculation of the Deductible for Network Covered Charges
for that Benefit Period. The above Deductible shall be in addition to any
Review Deductible required under Article 6.
(b) This subsection (b) shall apply with respect to Covered Charges that are
incurred for Covered Services of Non-Network Providers. Unless otherwise
stated in the Schedule of Benefits, references to column (c) of Section
3.02(b) refer to the Deductibles in this subsection (b). Section 4.01(a)
shall apply to Non-Network Covered Charges, except that the Deductibles
shall be $400 and $800, rather than $100 and $200.
4.02 Annual Out-of-Pocket Limit.
(a) The Annual Out-of-Pocket Limit for each Participant is as follows:
Network Non-Network
- ---------------------- ----------------------
$1,000 Single Coverage $2,500 Single Coverage
$2,000 Family Coverage $5,000 Family Coverage
(b) When the Covered Charges in a Benefit Period exceed the applicable Annual
Out-of-Pocket Limit set forth above, the Participant's Coinsurance shall be
zero for the balance of the Benefit Period, and the Plan shall, subject to
the Participant's Copayment obligation, pay 100% of such Participant's
Covered Charges for the balance of such period. In attaining the Family
Coverage level, however, no one individual shall be given credit for
payment of more than the Single Coverage amount in any Benefit Period.
64
Amounts paid by a Participant for Network Covered Charges in a Benefit
Period shall be included in the calculation of the Annual Out-of-Pocket
Limit for Non-Network Covered Charges for that Benefit Period. Amounts paid
by a Participant for Non-Network Covered Charges in a Benefit Period shall
be included in the calculation of the Annual Out-of-Pocket Limit for
Network Covered Charges for that Benefit Period. The above payment
percentages are expressly subject to the requirements of Article 6 and
payment of the Review Deductible, if applicable.
ARTICLE 5.
Exclusions
5.01 Exclusions.
(a) Following is a list of Services, charges and other items that are not
covered under the Plan, except as otherwise expressly provided. This list
is not a limitation on, or a complete listing of, items that are not
treated as Covered Services or Covered Charges.
(1) Any Service that the Claims Administrator determines is not Medically
Necessary for the diagnosis or treatment of an Injury, Illness or
symptomatic complaint, subject to Sections 3.08, 3.14(c), 3.14(h), and
3.21 and any Service that is not prescribed or recommended by a
Physician.
(2) Any Service when information necessary to evaluate the claim (e.g.,
completed claim form, medical records, diagnostic test results,
written reports, etc.) is not provided to the Claims Administrator or
the Named Fiduciary. A Participant shall provide to the Claims
Administrator and the Named Fiduciary such information and documents
as may be required.
(3) Services for any condition, Illness or Injury (1) arising out of, or
in the course of, the Participant's employment, unless it arises out
of, or is in the course of, the Participant's activities as a
self-employed individual, or (2) for which benefits are payable to the
Participant under any workers' compensation law or similar
legislation.
(4) Dental care and treatment (including examinations, research studies,
screening routine physical examinations or checkups, fluoroscopy
without films, or dental x-rays), dental surgery, or dental appliances
unless such Services necessary to diagnose a symptomatic condition or
Illness or Injury, and except as provided herein for oral surgery.
Hospital expenses related to oral surgery are covered only when
certified by a Physician other than a Dentist that confinement was
necessary to safeguard the life or health of the patient from the
effects of the dental procedure because of the existence of a specific
non-dental organic impairment and when the dentistry was performed by
a licensed Doctor of Medicine "MD" or a licensed Doctor of Dental
Surgery "DDS".
65
(5) Treatment in a state or federal hospital, unless in the absence of
insurance there is a legal obligation for the Participant to pay for
such treatment; or treatment for which indemnification or hospital
care is available under the laws of the United States, any state or
political subdivision thereof, or the Veterans Administration.
(6) Any Services received as a result of Injury or Illness sustained as a
result of war, declared or undeclared, or any act of war, or by an act
of international armed conflict or conflict involving armed forces of
any international authority, if such war or act occurs after the
patient becomes a Participant in the Plan.
(7) Subject to Sections 11.06 and 11.07, any Services to the extent that
benefits are available from or provided by any other coverage,
including personal injury protection, homeowner's insurance, or
related coverage. Also, benefits shall not be provided to the extent
that Medicare benefits are available, except in cases where the Plan
must be primary to Medicare as a matter of law.
(8) Services related to sex transformation or sexual dysfunctions or
inadequacies. This limitation will not apply to a penile prosthesis
(implant) necessitated by a functional defect caused by a congenital
disease or following either an Injury or surgery resulting from
Illness.
(9) Services or supplies deemed by the Claims Administrator not Medically
Necessary for the diagnosis or treatment of an Injury, Illness or
symptomatic complaint. The Plan shall have the right to submit
disputed cases to a medical review committee. Charges for medical or
surgical care deemed not Medically Necessary, in whole or in part,
shall be borne by the Participant.
(10) Except as otherwise specifically provided in Section 2.05, Services
and supplies provided by or available from a health maintenance
organization ("HMO"), preferred provider organization or
association(PPO/PPA) or similar arrangement, including charges for
Services and supplies that are available through another plan but
which are not covered because of failure to comply with the provisions
of that plan (such as pre-certification and second opinion
requirements).
(11) Services or supplies for cosmetic purposes, except for correction of
defects incurred through Injury which occurred while the Participant
was covered under the Plan. This limitation shall not apply to
Services which are incidental to or follow surgery resulting from
trauma, infection or disease of the involved part or is caused by a
congenital disease or anomaly of a covered Dependent child which has
resulted in a functional defect.
(12) Hearing examinations and hearing aids; orthoptics; examinations to
determine need for or adjustment of eyeglasses or lenses of any type:
eyeglasses or lenses of any type except initial replacements for loss
of a natural lens and as provided under the Vision Plan; eye surgery
such as radial keratotomy and LASIK, when the primary purpose is to
correct myopia, hyperopia or astigmatism.
66
(13) Travel, whether or not recommended by Physician, except as provided in
Section 3.13.
(14) Treatment of corns, bunions (except capsular or bone surgery),
callouses, nails of the feet (except surgery for ingrown nails), flat
feet, fallen arches, weak feet, chronic foot strain or symptomatic
complaints of the feet (except when surgery is performed).
(15) Acupuncture, anesthesia by hypnosis or charges (whether or not related
to the treatment of another medical condition) for anesthesia for
non-covered Services.
(16) Weight reduction or exercise programs or treatment for obesity,
including any prescription or non-prescription drugs; Services at a
health spa, gymnasium or similar facility.
(17) Any confinement in a Skilled Nursing Facility not requiring daily
planned medical and skilled professional nursing care and supervision
for Illness or Injury, in accordance with regulations established by
the Claims Administrator.
(18) Any types of services, supplies or treatments not specified. Such
items not covered include, but are not limited to, the following:
(A) Educational, vocational or self-help training and other forms of
non-medical care.
(B) Routine physical examinations, including x-rays, laboratory tests
and similar diagnostic Services, except as provided in the
Wellness Program; examinations related to employment; and routine
pre-marital examinations.
(C) Immunizations (except as specifically provided in the Wellness
Program).
(D) Supplies and accessories that the Claims Administrator determines
are not medical supplies or that could be used by family members
for purposes other than medical care, such as adhesive tape,
gauze, bandages, creams, support hose and pressure garments.
(E) Support or corrective shoes (unless they are a permanent part of
a brace), shoe inserts or modifications.
(F) Dietary counseling.
(19) Services or supplies for which the Participant is not legally
obligated to pay. Services or supplies, paid, or which the Participant
is entitled to have paid, or to obtain without cost under the laws or
regulations of the federal, state, provincial or local government or
any political subdivision thereof.
67
(20) Charges in excess of either the reasonable and customary charge for,
or the value of, the Service or item as determined by the Claims
Administrator.
(21) Experimental or Investigative treatment, equipment, new technology,
drugs, procedures or supplies as defined in Article 1, and drugs not
approved by the U.S. Food & Drug Administration.
(22) All fertility testing (except diagnostic testing) and Services,
including any artificial means to achieve pregnancy or ovulation and
any surgical impregnation procedures, such as artificial insemination,
in vitro fertilization, spermatogenesis, gamete intra fallopian
transfer (GIFT), zygote intra fallopian transfer (ZIFT), tubal ovum
transfer, embryo freezing or transfer and sperm banking.
(23) Educational, recreational or family/collateral therapy.
(24) Marriage, pastoral, or financial counseling or similar services.
(25) Services for completion of claim forms or for providing other records
or reports.
(26) Any Illness or Injury arising from an intentional or accidental atomic
explosion or other release of nuclear energy, whether in peacetime or
wartime; participation in a civil revolution or a riot; service as a
member of the armed forces of any state or country; war or any act of
war, whether declared or not, including any conflict involving the
armed forces of any authority.
(27) Vocational or training services and supplies.
(28) Expenses for broken appointments or telephone calls.
(29) Hospital charges for take-home prescription drugs and personal comfort
or service items while confined in a Hospital, such as, but not
limited to, admission kits, radio, television, telephone, cots and
guest meals.
(30) Complications arising from any non-covered surgery.
(31) Expenses for job training or care for learning disorders or behavioral
problems, whether or not services are rendered in a facility that also
provides medical and/or mental/nervous treatment.
(32) Equipment such as air conditioners, air purifiers, dehumidifiers,
heating pads, hot water bottles, water beds, swimming pools, hot tubs
and any other clothing or equipment which could be used in the absence
of an Illness or Injury.
(33) Convalescent, intermediate, Custodial Care, sanatoria care, or rest
cures, including Services and care rendered by or in a rest home,
health resort, home for the aged or a place primarily for domiciliary
or Custodial Care.
68
(34) Charges for non-Covered Services.
(35) Services for elective abortions unless the pregnancy is a
life-threatening physical condition of the Participant.
(36) Expenses incurred after coverage under the Plan ends.
(37) Nursing care that does not require the education and training of a
registered nurse or a CPN, such as transportation, meal preparation,
charting vital signs and companion activities.
(38) R.A.S.T. testing to determine allergies unless determined by the
Claims Administrator to be Medically Necessary.
(39) Prescription drugs that are subject to the Prescription Drug Plan.
(40) Any Illness or Injury due to the commission or attempted commission of
a civil assault or battery or any illegal act
(41) Any reversal or any attempted reversal of a previously performed tubal
ligation or vasectomy sterilization procedure.
(42) Covered Charges for chiropractic Services for a Participant are
subject to a combined benefit limit of $500 per Benefit Period. The
combined limit includes, but is not limited to, (a) Charges for
diagnostic Services and X-rays requested by a chiropractor, and (b)
Network Covered Charges and Out-of-Network Covered Charges for
chiropractic Services.
(43) Nutritional supplements, unless the Claims Administrator determines
that the Participant's only means of receiving nutrition is through a
feeding tube.
(44) The Plan is also subject to the exclusions set forth in other Sections
of the Plan, including Sections 3.06, 3.07, 3.08, 3.11, 3.13, 3.17,
3.18, 3.20, 3.21, 7.04, 8.11 and 9.02.
(b) [Reserved].
ARTICLE 6.
Pre-admission Review, Continued Stay Review and
Medical Case Management
6.01 Pre-Admission and Continued Stay Review.
(a) Prior to any Hospital admission that is not for Emergency Care, including
admission to a Psychiatric Facility, and/or course of treatment, the
Participant or his Physician shall contact the medical review agency
selected by the Plan Administrator for the purpose of
69
obtaining a Pre-Admission Review. The Pre-Admission Review shall establish
whether the Hospital Admission is Medically Necessary and the appropriate
length of stay for an admission. A Continued Stay Review, which shall be
initiated by the Participant, and certification shall be required for any
additional days. Pre-Admission Review is not required if the admission is
related to Maternity, or if Medicare is the primary payer.
(b) In the case of a Participant's Hospital admission and/or course of
treatment where there is an admission for Emergency Care (including
Maternity and Maternity-related conditions), a Continued Stay Review shall
be initiated by or on behalf of the Participant within 48 hours of such
admission. The review shall be conducted by a medical review agency
selected by the Plan Administrator. The purpose of the Continued Stay
Review shall be to determine the Medical Necessity of such admission, as
well as the Medical Necessity of any continued hospitalization. The
Continued Stay Review shall establish the appropriate length of stay for
the admission. Continued Stay Review shall be required for approval of days
beyond those certified through Pre-Admission Review and Continued Stay
Review. No Pre-Admission Review or Continued Stay Review shall be required
for coverage of the mother's or newborn's Hospital stay of 48 hours or less
following vaginal delivery or of 96 hours or less following a cesarean
section delivery. Continued Stay Review and favorable certification shall
be required for coverage of the mother's or newborn's Hospital stay of more
than 48 hours following vaginal delivery or of more than 96 hours following
a cesarean section delivery.
(c) If a request for Pre-Admission Review or Continued Stay Review is not made
within the period prescribed above, or the request is denied, and the
Participant nevertheless obtains treatment on an Inpatient basis, the
Participant shall be subject to the Review Deductible in each such case in
the amount of $500 per Participant per occurrence. In addition, the Plan
shall not pay charges for room and board to the extent that a Continued
Stay Review indicates that the Hospital admission and/or course of
treatment is not Medically Necessary.
(d) To the extent that a hospitalization and/or course of treatment is not
certified as Medically Necessary by the medical review agency, in either
case described in Section 6.01(a) or 6.01(b) above, then the Participant's
attending Physician shall be notified of such decision in writing. The
medical review agency shall forward a copy of the decision to the
Participant.
6.02 Medical Case Management.
(a) A Participant who suffers a severe Injury or Illness may be eligible to
participate in the Medical Case Management Program. The term "severe Injury
or Illness" shall mean a condition with respect to which treatment in the
Medical Case Management Program would be medically appropriate and a cost
effective alternative, and may include: major head trauma, spinal cord
injury, amputation, multiple fractures, severe burns, neonatal high-risk
infancy, severe stroke, multiple sclerosis, amyotrophic lateral sclerosis,
or acquired immune deficiency syndrome.
70
(b) Participation in the Medical Case Management Program shall be voluntary on
the part of the Participant. In addition, the Claims Administrator shall
determine a Participant's eligibility for participation according to
procedures that shall be applied by the Claims Administrator in a uniform
fashion with respect to Participants who are similarly situated. In no
event shall the application of such procedures cause the Plan to
discriminate in favor of highly compensated individuals, as that term is
defined in Section 414(q) of the Code.
(c) Benefits provided hereunder shall be paid notwithstanding the fact that
such payment may be inconsistent with other provisions of the Plan. The
amount of any benefits to be paid under this section shall be determined by
the Claims Administrator or his agent, based upon uniform standards. The
Claims Administrator's determination of whether and to what extent benefits
shall be paid hereunder shall be based upon his or his agent's review of
the following specific factors:
(1) The Participant's current and anticipated medical status;
(2) The Participant's current treatment plan;
(3) The Participant's projected treatment plan;
(4) The anticipated long-term cost implications of the Participant's
treatment; and
(5) The anticipated effectiveness of the care to be provided.
(d) If such Participant is selected for and voluntarily participates in the
Medical Case Management Program, then the Claims Administrator may direct:
(1) Payment of benefits for reasonable and customary charges (as defined
in Section 1.12(b)) for rehabilitation Services and supplies furnished
to such Participant; and
(2) Payment of benefits even though such payments may be in excess of
total benefits otherwise payable for such charges under other
provisions of the Plan.
ARTICLE 7.
Prescription Drug Plan
7.01 Prescription Drugs. The Plan covers Prescription Drugs as follows:
(a) If the prescription is dispensed by a Network Pharmacy or the Mail Order
Pharmacy, the Participant must pay the Copayment at the time the drug is
dispensed and the Plan will pay the balance of the drug cost. If the
prescription is not dispensed by a Network Pharmacy or the Mail Order
Pharmacy, the Participant must pay the full cost of the drug at the time it
is dispensed and file a claim with the Claims Administrator for
reimbursement. If the Claims Administrator determines the drug is covered
under the
71
Prescription Drug Plan, the Plan will reimburse the Participant for the
drug costs, less the applicable Copayment.
(b) Following is a description, which is exclusive, of the Prescription Drugs
and supplies covered by the Prescription Drug Plan:
(1) Any Legend Drug, or compound medication of which at least one
ingredient is a Legend Drug.
(2) Vitamins and minerals (Legend Drugs only).
(3) Diabetic supplies: Syringes, needles, insulin, blood glucose test
strips, lancets and urine glucose test strips.
(4) Acne treatments (excluding over the counter treatments).
(5) Injectable (IV, IMIJ) and Interferon injectables.
(6) A drug or class of drugs shall be subject to pre-authorization if it
is included in the standard prior authorization program of the Network
Pharmacy or Mail Order Pharmacy. A drug that is subject to
pre-authorization shall be deemed a covered Prescription Drug only if
it is pre-authorized in accordance with Section 7.02. Examples of
drugs subject to pre-authorization are: injectable growth hormones,
medication for acne if over age 25 and non-oral fertility drugs.
(c) A Copayment shall be payable toward the cost of each separate prescription,
each diabetic supply and each refill under the Prescription Drug Plan and
shall be determined according to the following schedule, except that the
Copayment for Retired Participants and their Dependents for a Brand Drug at
a Network Pharmacy shall be $20.00 without regard to whether the Retired
Participants or their Dependents are treated as Employees under Section
2.08:
If Dispensed By Generic Drugs Brand Drugs
- --------------- ------------- -----------
Network Pharmacy $ 5.00 $15.00
Mail Order Pharmacy $10.00 $30.00
Effective January 1, 2004, the following co-payments shall apply: (1) to
the Mail Order Pharmacy Program (except Retired Participants): Generic -
$20; Preferred Brand Drugs -$40; Non-Preferred Brand Drugs - $70. For
Retired Participants, Mail Order Pharmacy Program co-payments shall be:
Generic - $10; Brand Drugs - $30, and (2) to the Network Pharmacy Program
(except Retired Participants): Generic - $10; Preferred Brand Drugs - $20;
Non-Preferred Brand Drugs - $35. For Retired Participants, Network Pharmacy
Program co-payments shall be: Generic - $5; Brand Drugs - $20.
(d) Plan coverage for each prescription or refill by a Network Pharmacy is
limited to the quantity that is Medically Necessary for use in 30 days.
Plan coverage for each
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prescription or refill by the Mail Order Pharmacy is limited to medications
for an on-going condition and to the quantity that is Medically Necessary
for use within 90 days.
7.02 Pre-Authorization. If coverage of a drug is subject to pre-authorization,
the drug will not be covered as a Prescription Drug unless the prescription
is approved by a medical review agency selected by the Plan Administrator.
The drug will not be pre-authorized unless the medical review agency
determines that the drug is both Medically Necessary and is covered under
the Prescription Drug Plan.
7.03 Definitions.
(a) The following terms used in this Article 7 shall have the meanings set
forth below:
(1) "Brand Drug" means a Legend Drug manufactured by the company named on
the application to the Food and Drug Administration (FDA) for new drug
approval. For purposes of the Copayment, diabetic supplies shall be
treated as Brand Drugs.
(2) "Generic Drug" means a Legend Drug that is not a Brand Drug, that
contains exactly the same amount of the same active ingredients in the
same dosage form as its Brand Drug equivalent, that meets the FDA
standards of bioequivalence, strength, purity and identity and that is
manufactured in compliance with current FDA good manufacturing
practices regulations.
(3) Legend Drug" means any medicinal substance the label of which, under
the Federal Food, Drug and Cosmetic Act, is required to bear the
legend: "Caution: Federal law prohibits dispensing without
prescription."
(4) "Mail Order Pharmacy" means a Network Pharmacy that dispenses
Prescription Drugs through the mail.
(5) "Network Pharmacy" means a Network Provider that is a pharmacy.
(6) "Non-Preferred Brand Drug" means a Brand Drug that does not appear on
Express Scripts' Preferred Formulary list. A "Preferred Brand Drug" is
a Brand Drug that does appear on Express Scripts' Preferred Formulary
list. A Non-Preferred Brand Drug has an alternative substitute
available (i.e., Preferred Brand Drug or Generic Drug) that is
therapeutically equivalent and available at a lower price.
(b) [Reserved].
7.04 Prescription Drug Limitations.
(a) The Prescription Drug Plan does not cover the following
(1) Non-Legend Drugs (except insulin for diabetics), Legend Drugs that are
not Medically Necessary.
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(2) Therapeutic devices or appliances, including hypodermic needles,
syringes (except needles and syringes for diabetics), support garments
and other non-medical substances.
(3) Nicotine-containing drugs or devices or any other drug or device used
for the purpose of smoking cessation.
(4) Any drug used for cosmetic purposes.
(5) Any drug or medication which is eligible for payment under the Medical
Plan.
(6) Any Experimental or Investigational drug or medicine.
(7) Any refill or a prescription which is in excess of what is prescribed,
or any refill dispensed after one year from the initial prescription
order.
(8) Drugs (A) dispensed by a Network Pharmacy, in a quantity which is in
excess of a 30-day supply; (B) dispensed by the Mail Order Pharmacy in
a quantity which is in excess of a 90-day supply; and (C) in a
quantity which is in excess of the amount prescribed.
(9) Any drug for which the dispenser's charge is less than the Copayment
amount.
(10) Any drug dispensed when a person is not covered under the Prescription
Drug Plan and any drug dispensed without pre-authorization, if
pre-authorization is required.
(11) Any drug prescribed in connection with Services that are not Covered
Services.
(12) All limitations and exclusions which would result in non-coverage
according to the terms of Article 5, which is incorporated by
reference into this Article 7.
(13) Drugs prescribed for sexual dysfunction (such as Viagra).
(14) Allergy serums.
(15) Fluoride products.
(b) [Reserved].
ARTICLE 8.
Dental Plan
8.01 Dental Plan Options; Eligibility.
(a) Dental Benefits are available under two options, as follows:
74
(1) Basic Plan. The Basic Plan pays a fixed dollar amount for dental
Services, as set forth in Schedule A.
(2) Optional Plan. The Optional Plan pays a fixed percentage of the
Covered Charges for dental Services, as set forth in Schedule B.
(b) Eligibility and Coverage: Coverage under the Dental Plan of an Eligible
Employee shall begin as provided in Section 2.01 subject to the following:
(1) Eligible Employees hired before November 1, 1994 may elect Basic Plan
coverage or Optional Plan coverage, or they may reject coverage
entirely, pursuant to the Flex Plan.
(2) An Eligible Employee hired on or after November 1, 1994, may elect
Optional Plan coverage or reject coverage entirely pursuant to the
Flex Plan.
(3) Notwithstanding (1) and (2), a Prime-Time Employee may elect Optional
Plan coverage or reject coverage entirely pursuant to the Flex Plan.
8.02 Deductible. For purposes of Article 8, the Deductible shall be $25 per
Participant per Benefit Period, and applies only to those Covered Charges
listed in Sections 8.06 and 8.07.
8.03 Limitations. Benefit payments under Sections 8.05 and 8.06 are limited to
$1,000 per Participant per Benefit Period. Benefit payments under Section
8.07 are limited to a separate lifetime maximum of $1,250 per Dependent
Participant if the Participant is covered under the Basic Plan, or $1,500
per Dependent Participant if the Participant is covered under the Optional
Plan.
8.04 Cessation of Participation. Participation for all Dental Coverage shall
cease as provided in Section 2.03.
8.05 Dental Expenses Not Subject to Deductible.
(a) Preventative and Diagnostic. The following dental expenses will be paid or
reimbursed in accordance with the applicable "Schedule of Covered Dental
Expenses" referred to in Section 8.08, without regard to the Deductible:
(1) Routine oral examinations: but not more than twice in any Benefit
Period. Such category includes procedures performed by a Dentist that
aid in making diagnostic conclusions about the oral health of a
patient and the dental care required. Examinations include but are not
limited to case history, charting of existing restorations and
defects, pocket probing, and vitality tests. Also included are recall
examinations for review and recording of changes occurring since the
last examination.
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(2) Prophylaxis, cleaning and scaling of teeth: but not more than twice in
any Benefit Period. Charges for such treatment performed by a licensed
dental hygienist are also included as a covered dental expense if such
Service is rendered under the supervision and guidance of the Dentist.
(3) Topical Application of fluoride (for a Participant's child under age
21 who is a Dependent-Participant) one per Benefit Period: topical
application of fluoride performed by a Dentist or a licensed dental
hygienist (if rendered under the supervision and guidance of the
Dentist).
(4) Space Maintainers (for a Participant's child under age 21 who is a
Dependent-Participant): a fixed or removable appliance designed to
prevent adjacent and opposing teeth from moving and that replace
prematurely lost or extracted teeth. Coverage is provided solely for
charges incurred to maintain existing space including fixed unilateral
band type, fixed lingual and palatal arch band type, fixed cast type,
fixed stainless steel crown type, and movable acrylic space
maintainers. In addition, adjustments of space maintainers are covered
if such Services are required because of a relative change in the
condition of the mouth. This Section 8.05 covers only non-orthodontic
Services, and excludes any treatment described in Section 8.07.
(5) X-rays: dental X-rays (radiographs) including full mouth X-rays (but
not more than one time in any three consecutive Benefit Periods),
supplementary bitewing X-rays (but not more than twice in any Benefit
Period), panoramic X-rays (but not more than once in any 3 consecutive
Benefit Periods), and such other dental X-rays as are required in
connection with the diagnosis of a specific condition requiring
treatment.
(6) Palliative Treatment: includes emergency treatment required to ease
pain or infection (Code 09110) (but not treatment to cure the pain or
discomfort resulting from extractions or permanent fillings).
(7) Sealants (for a Participant's child under age 21 who is a
Dependent-Participant): topical application of Sealants, but limited
to posterior teeth and not more than one treatment in a Benefit
Period.
(b) [Reserved].
8.06 Dental Expenses Subject to Deductible.
(a) The dental expenses described in subsections (b) and (c) below shall be
paid or reimbursed in accordance with the Schedules referred to in Section
8.08 after the applicable Deductible has been satisfied:
(b) Restorative.
76
(1) Restoration of carious teeth to a state of functional acceptability.
Benefits are provided for restorations with amalgam, silicate,
synthetic porcelain, acrylic, composite resin, or other similar
restorative materials.
(2) Oral surgery, including extractions and other dental-related surgery,
except surgical removal of impacted teeth or tumors and cysts, which
is covered under the Medical Plan.
(3) Endodontics, including necessary procedures used for the prevention
and treatment of diseases of the dental pulp and the surrounding
periapical structures. Coverage is provided for but not limited to
root canal therapy, pulp capping, pulpotomy, and apicoectomy.
(4) Injection of antibiotic drugs by the attending dentist or Physician.
(5) Repair or recemeting of crowns, inlays, bridgework or dentures or
relining of dentures.
(6) General anesthesia when Medically Necessary, such as for a current
ongoing medical condition, including epilepsy, mental retardation and
cardiac problems. The Claims Examiner shall determine in its sole
discretion whether general anesthesia is Medically Necessary.
(c) Major.
(1) Periodontics: includes necessary procedures for treatment of the
tissues supporting the teeth.
(2) Prosthodontics: includes
(A) the necessary Services to replace one or more anterior teeth or
posterior teeth (not including wisdom teeth) which are extracted
while covered under the Plan, to include:
[i] Initial installation of fixed bridgework (including inlays
and crowns to form abutments).
[ii] Initial installation of partial or full removable dentures
(including adjustments during the six month period following
installation) or a prosthetic Service (including crowns and
inlays which form abutments for fixed bridgework).
[iii] The addition of teeth to an existing partial removable
denture or to bridgework.
[iv] A permanent full denture that replaces an immediate
temporary denture within 12 months of installation.
77
(B) the replacement of an existing partial denture, full removable
denture, or fixed bridgework is covered, provided that the
existing denture or bridgework cannot be made serviceable and was
installed at least five years prior to its replacement. However,
should additional extractions or other changes as a result of a
surgical procedure require the replacement of dentures or
bridgework, the five year requirement is waived.
(d) Dental expenses include the cost of precious metals only when used in
connection with abutments for a unit of a bridge including crowns and
inlays.
8.07 Orthodontics. Orthodontic Services shall be reimbursed at 50% of the
charge, after the applicable Deductible has been satisfied. Orthodontics
Services include: the correction of malocclusion and abnormal tooth
position. Coverage is provided for diagnostic procedures and treatment
consisting of appliance therapy and functional therapy when deemed to be
functionally necessary for severe dental dysplasia as determined by a
dental consultant appointed by the Plan Administrator. Orthodontic Services
are provided only for Dependent children whose course of treatment
commenced prior to age 21.
8.08 Schedule of Covered Dental Expenses. The Schedules attached hereto show
the maximum benefit payable (either as a fixed dollar amount or as a
percentage of the charge) for each dental procedure. Such schedules may be
amended from time to time by action of the Plan Administrator. Schedule A
benefits will be paid in accordance with the lesser of the scheduled amount
or the Dentist's actual charge. The Plan shall not pay for any Service
under either Schedule if the Claims Administrator determines that the
Service is not dentally necessary.
8.09 Predetermination of Dental Benefit Coverage.
(a) Whenever a Participant's dental treatment will incur charges in excess of
$150, payment of the charges will be subject to the following at the
Participant's election:
(1) A Participant may submit the Dentist's Treatment Plan to the Claims
Administrator prior to commencement of the treatment.
(2) The Claims Administrator, or his agent, shall review the Treatment
Plan and may request any additional diagnostic information deemed
necessary to evaluate the prescribed course of treatment.
(3) The Claims Administrator shall provide the Participant an explanation
of the amounts the Plan will pay, along with recommendations for any
alternative treatment. Procedures, including alternate procedures,
will be approved for payment only if the Claims Administrator in its
sole discretion determines they are dentally necessary.
(b) Even if the Claims Administrator recommends an alternative treatment, the
Participant may proceed with the initially prescribed treatment. Payments
from this Plan, however,
78
shall be limited to treatments and procedures which the Claims
Administrator determines are dentally necessary.
(c) If after review of the predetermination report, the Participant's Dentist
and the Claims Administrator agree that medically adequate results can only
be achieved through treatment and procedures in excess of those set out in
the predetermination report, after giving due consideration to services
customarily employed by most Dentists, the Plan may cover the additional
treatment and Services.
8.10 Dentally Necessary.
(a) As used in this Plan, the term "dentally necessary" means a Service
furnished by a Dentist if, but only if, the Claims Administrator determines
in its sole discretion that the Service is required for the diagnosis or
treatment of the Participant's dental condition, Illness or Injury. A
Service shall be deemed "required" if, but only if,
(1) As to a diagnostic procedure, it is indicated by the health status of
the Participant and is as likely to result in information that could
affect the course of treatment as, and no more likely to produce a
negative outcome than, any alternative Service, both as to the
condition, Illness or Injury involved and the Participant's overall
health condition;
(2) As to treatment, it is as likely to produce a significant positive
outcome as, and no more likely to produce a negative outcome than, any
alternative Service, both as to the condition, Illness or Injury
involved and the Participant's overall health condition; and
(3) As to diagnosis and treatment, it is no more costly (taking into
account all health expenses incurred in connection with the Service)
than any alternative Service to meet the tests set forth in this
definition.
(b) To be dentally necessary a Service must be consistent with the
Participant's condition, diagnosis and treatment, in accordance with
standards of good dental practice, not solely for the convenience of the
Participant or the Service provider, and furnished in the least intensive
type of dental care setting required by the Participant's dental condition.
The fact that a Dentist or another provider has furnished, prescribed,
ordered, recommended or approved a Service does not of itself make the
Service dentally necessary. The determination of dental necessity shall be
made by the Claims Administrator based on a review of the dental records
describing the Participant's condition and treatment.
8.11 Exclusions.
(a) The Dental Plan does not cover the following:
(1) Services for cosmetic purposes, including charges for personalization
or characterization of dentures.
79
(2) Treatment by other than a Dentist or a Physician, except for scaling
or cleaning of teeth and topical application of fluoride may be
performed by a licensed dental hygienist if the treatment is rendered
under the supervision and guidance of the Dentist.
(3) Any Services incurred while not covered under the Dental Plan.
(4) Replacement of lost, missing, or stolen prosthetic or orthodontic
devices.
(5) Hospital confinement resulting from a dental condition, subject to
Section 3.04.
(6) Athletic mouthguards, duplicate, temporary, or transitional dentures,
crowns or appliances.
(7) Charges that would not have been made if no Dental Care Plan existed
or charges that the eligible individual is not legally required to
pay.
(8) Services or supplies which are furnished or paid for by the armed
forces.
(9) Expenses to the extent paid or which the covered individual is
entitled to have paid, or Services and supplies secured without cost
in accordance with the laws or regulations of any government.
(10) Services and supplies which are not necessary for treatment of the
Injury or Illness or are not recommended and approved by the attending
Dentist.
(11) Charges for failure to keep a scheduled visit with the Dentist for any
reason.
(12) Replacement of broken prosthetic devices including partial and full
dentures and fixed bridgework which cannot be made serviceable and
which have not satisfied the five (5) year waiting period requirement.
(13) Services for completing claim forms or for providing other records or
reports.
(14) Oral hygiene, dietary instructions or plaque control programs.
(15) Sealants, space maintainers and fluoride treatments after a Dependent
child attains age 21, and Orthodontic Services for a Dependent child
that commence after the child attains age 21.
(16) Services for Illnesses contracted or Injuries sustained as a result of
an insurrection, riot, or war, declared or undeclared, or of any act
of war, or of any act of international armed conflict or conflict
involving armed forces of any international authority, if such war or
act occurs after the patient becomes a Participant in the Plan or
after he was covered under a predecessor insured plan.
(17) Treatment in connection with occupational Injuries or Illnesses
covered by any workers' compensation law.
80
(18) Dental expenses which are eligible for payment under the Medical Plan.
(19) Charges in excess of the charges described in Schedules A and B.
(20) Appliance insertion or restoration when used to increase vertical
dimension, restore occlusion or for purposes of splinting, or for
abutment purposes only.
(21) Experimental or Investigative treatment, equipment, new technology,
drugs, procedures or supplies as defined in Article 1, and drugs not
approved by the U.S. Food & Drug Administration.
(22) Orthodontic Services for any Participant, except Dependent children
whose course of orthodontic treatment commenced prior to age 21.
(23) Dental work to the extent it exceeds another procedure which is
suitable for treating the condition, as determined by the Claims
Administrator or his agent.
(24) Anesthesia except general anesthesia when it is Medically Necessary
and is administered in connection with oral surgery.
(25) Services rendered prior to eligibility for Plan participation. For
treatment in progress when participation commences, benefits will be
determined on the basis of treatment actually rendered while covered
under the Plan.
(26) Services, supplies or treatments that do not meet the standards of
dental practice accepted by the American Dental Association.
(27) Myofunctional therapy.
(28) Replacement of teeth removed before dental coverage began.
(29) Replacement of third molars.
(30) Drugs and their administration.
(31) All conditions which would result in exclusion of a Service or item
according to the terms of Article 5, which is incorporated by
reference into this Article 8.
(b) [Reserved].
ARTICLE 9.
Vision Plan
9.01 Vision Care Benefits.
(a) The Plan shall pay the covered expenses of licensed ophthalmologists,
licensed optometrists, and licensed opticians as follows:
81
(1) Eye Examinations: Complete eye examinations, whether or not eyeglasses
are prescribed. Coverage shall be limited to one examination during
any twenty-four consecutive month period. The maximum benefit shall be
$70 per examination.
(2) Lenses: Lenses for eyeglasses ordered by a licensed ophthalmologist or
licensed optometrist and supplied by an optician. Coverage shall be
limited to one set (two lenses) during any twenty-four consecutive
month period. Maximum benefits shall be as follows:
Single Vision prescription $ 60 (per pair)
Bifocal prescription $ 80
Trifocal prescription $110
Aphakic prescription
- Glass $ 30
- Plastic $ 70
- Aspheric $ 90
- Case hardening $ 2
Contact lenses (including fitting, training, and lifetime warranty)
when visual acuity cannot be corrected to 20/70 or better, except by
use of contact lenses. Benefits are $200 per pair ($100 per lens). If
contact lenses are selected for any other reason, total benefits are
limited to $120 per pair (the benefit for single vision lenses and
frames). This contact lens benefit is in lieu of eyeglasses frames and
lenses during any twenty-four (24) consecutive month period.
(3) Frames: Frames for glasses ordered by a licensed ophthalmologist or
licensed optometrist. Coverage shall be limited to one set of frames
during any twenty-four consecutive month period. The maximum benefit
shall be $60 per set of frames.
(b) [Reserved].
9.02 Exclusions.
(a) Benefits are not provided under the Vision Plan for the following Services
or items, or under the following conditions:
(1) Sunglasses, plain or prescription.
(2) Lenses which do not require a prescription.
(3) Services received because of Injury or Illness arising out of
employment that is covered by workers' compensation or similar law.
(4) Eye examinations required by an employer as a condition of employment,
or by a governmental body.
82
(5) Services and supplies for which the Participant is not legally
obligated to pay, or for which no charge would be made absent the
Plan.
(6) Services or supplies not prescribed as necessary by a licensed
ophthalmologist, optometrist or optician.
(7) Services or supplies covered under the Medical Plan. In the case of
Services or supplies provided in conjunction with a covered eye
examination, this exclusion shall not affect payment for a covered eye
examination according to Section 9.01.
(8) Services rendered or supplies delivered while not an eligible
Participant.
(9) Training or educational instruction and materials.
(10) Expenses for preparing medical reports, itemized bills, or benefit
request forms.
(11) Expenses for broken appointments or telephone calls.
(12) Any treatment, equipment, new technology, drug, device, supply,
procedure, facility or Service that is Experimental or
Investigational.
(13) Safety glasses or goggles.
(14) Special procedures such as, but not limited to, orthoptics, vision
training, or subnormal vision aids.
(15) Charges for Services covered under another group health plan or no
fault automobile insurance.
(16) Benefits are not provided under the Vision Plan for the Dependent
child of a Participant on or after the date the child attains age 21,
except for a handicapped Dependent child as described in Section 1.18.
(17) All conditions which would result in exclusion of a Service or item
according to the terms of Article 5, which is incorporated by
reference into this Article 9.
(b) [Reserved].
ARTICLE 10.
Continuation Coverage
10.01 In General. Each Qualified Beneficiary who would lose coverage hereunder
as a result of a Qualifying Event shall be entitled to elect, within the
election period, to obtain and pay premiums for Continuation Coverage
hereunder. Such Continuation Coverage shall consist of coverage which, as
of the time such coverage is being provided, is identical to the coverage
the Qualified Beneficiary had on the day before the Qualifying Event.
Continuation Coverage is subject to all the rights, terms, conditions,
limitations
83
and exclusions which apply to the Plan offered to similarly situated
Participants with respect to whom a Qualifying Event has not occurred. If
coverage under the Plan is modified for any group of similarly situated
Participants, such coverage shall also be modified in the same manner for
all Participants who are Qualified Beneficiaries with respect to such
group.
10.02 Qualifying Event.
(a) For purposes of this Article, the term "Qualifying Event" means, with
respect to any Employee-Participant, any of the following events which, but
for the Continuation Coverage under this Article 10, would result in loss
of coverage for a Qualified Beneficiary:
(1) The Employee-Participant's (or Retired Employee's) death.
(2) The termination (other than by reason of an Employee-Participant's
gross misconduct), or reduction of hours, of the
Employee-Participant's employment. The term "gross misconduct" shall
mean conduct of an Employee-Participant which is (A) a willful
disregard of standards of behavior which the Company has a right to
expect, showing a gross indifference to the Company's interest; or (B)
a series of repeated violations of employment rules proving that the
Employee-Participant has regularly and willfully disregarded his
obligations.
(3) The divorce or legal separation of the Employee-Participant (or
Retired Employee) from the Employee-Participant's (or Retired
Employee's) Spouse.
(4) The Employee-Participant becomes enrolled for Medicare benefits under
Title XVIII of the Social Security Act.
(5) A Dependent child ceases to be a Dependent child under the Plan.
(b) This subsection (b) shall apply if, in connection with termination of
employment which is a Qualifying Event under Section 10.02(a)(2), a former
employee is covered under a severance pay plan which: (1) provides for the
continuation of coverage under a Plan for a term certain beginning on the
date of the Qualifying Event, and (2) provides for coverage that is
identical to the Employee-Participant's coverage on the day before the
Qualifying Event. If this subsection (b) applies, then the period of
coverage under the severance pay plan shall count as Continuation Coverage
under this Article 10, so that coverage under the severance agreement, for
the time it is in effect, shall run concurrently with the Continuation
Coverage. The requirement in this Section 10.02(b) of identical coverage is
subject to all the rights, terms, conditions, limitations and exclusions
which apply to the Plan offered to similarly situated Participants with
respect to whom a Qualifying Event has not occurred, and if coverage under
the Plan is modified for any such group of similarly situated Participants,
such coverage shall also be modified in the same manner for the Participant
with respect to such group to whom this subsection 10.02(b) applies.
84
(c) This subsection (c) applies to an Employee-Participant: (i) who receives
written notice from the Company that his/her employment is being terminated
by the Company under the provisions of the "Special Severance Pay Plan - -
B&W/RJR Business Combination" ("SSP"), and (ii) who is eligible for
coverage as a Retired Participant under Section 2.08 for any reason as of
the date of actual employment termination (an "eligible Section 10.02(c)
Employee-Participant"). Continuation Coverage under this subsection (c)
shall be subject to the following:
(1) Notwithstanding any provision of the Plan to the contrary, an eligible
Section 10.02(c) Employee-Participant shall be treated as having
incurred an employment termination resulting in a "loss of coverage"
and a "Qualifying Event" as contemplated by Section 10.02(a) as of
such eligible Section 10.02(c) Employee-Participant's date of actual
employment termination, whereupon he/she shall be eligible for
Continuation Coverage hereunder.
(2) An eligible Section 10.02(c) Employee-Participant who elects
Continuation Coverage under this Article 10 shall be provided the
coverage for which he/she is eligible under Section 2.08 upon
termination of continuation coverage under this Article 10
(irrespective of the reason for such termination) in accordance with
the applicable terms and conditions of Section 2.08.
10.03 Qualified Beneficiary. The term "Qualified Beneficiary" means, with
respect to an Employee-Participant (including a Retired Employee), an
individual who, on the day before the Qualifying Event for such
Employee-Participant, is a Participant on the basis of being (a) the Spouse
of the Employee-Participant, (b) the Dependent child of the
Employee-Participant, or (c) a child who is born to or placed for adoption
with the Participant during the period of Continuation coverage under this
Article 10. In addition, in the case of a Qualifying Event arising from
termination of employment or reduction of hours, the term "Qualified
Beneficiary" shall include the Employee-Participant. No
Employee-Participant, Spouse, or Dependent child may be considered a
Qualified Beneficiary if, on the day before to the Qualifying Event, such
individual was not already a Participant in the Plan, except for any child
born to or placed for adoption with the Employee-Participant during the
period of Continuation Coverage. The term "Qualified Beneficiary" shall
exclude nonresident aliens to the extent permitted by law. A Retired
Participant who has not elected to receive Continuation Coverage shall not
be treated as a Qualified Beneficiary for any purpose under the Plan.
10.04 Newborn and Adopted Children. A child born to or placed for adoption with
the Employee-Participant during a period of Continuation Coverage has the
same open enrollment period rights as other Qualified Beneficiaries with
respect to the same Qualifying Event and is entitled to a 36 month maximum
coverage period if a second Qualifying Event occurs while the child is in a
period of Continuation Coverage resulting from a termination-of-employment
Qualifying Event. The maximum coverage period for such child shall be
measured from the date of the Qualifying Event that gives rise to the
period of Continuation Coverage during which the child is born or adopted
and not from the date of birth or placement for adoption. "Placement, or
being placed, for adoption"
85
means the assumption and retention by the covered employee of a legal
obligation for total or partial support of a child in anticipation of the
adoption of the child. The child's placement for adoption with the
Employee-Participant terminates upon the termination of the legal
obligation for total or partial support. A child who is immediately adopted
by the covered employee without a preceding placement for adoption is
considered to be placed for adoption on the date of the adoption.
10.05 Period of Coverage.
(a) The period of Continuation Coverage shall be measured from the date of the
Qualifying Event and shall end upon the earliest of the following:
(1) In the case of a Qualifying Event which is a termination of employment
or reduction of hours, the date which is 18 months after the date of
such Qualifying Event; provided, however, that if another Qualifying
Event occurs during such 18 month period, then in the case of an
individual who was a Qualified Beneficiary as of the first Qualifying
Event and was covered at the time of such second Qualifying Event, the
termination date shall be no later than 36 months after the date of
the initial Qualifying Event.
(2) In the case of any Qualifying Event which is not a termination of
employment or reduction of hours, the date which is 36 months after
the date of such Qualifying Event.
(3) The date which is 29 months after the date of such Qualifying Event,
but only if (A) the Qualified Beneficiary is determined under Title II
or XVI of the Social Security Act to have been disabled at any time
within the first 60 days of Continuation Coverage under subsection (1)
above, and (B) prior to the date which is 18 months after such
Qualifying Event, the Qualified Beneficiary provides notice of such
disability determination to the Claims Administrator in accordance
with Section 10.09.
(4) The date on which the Company ceases to provide any group health plan
to any Employee.
(5) The date on which the Qualified Beneficiary fails to make timely
payment of the premium required under the Plan with respect to such
Qualified Beneficiary. Payment of any premium (other than payment for
the period preceding election of coverage) shall be considered timely
if made within 30 days after the due date, subject to Section
10.06(b).
(6) The date on which the Qualified Beneficiary first becomes, after the
date of the election, (1) covered under any other group health plan
(as an employee or otherwise), which does not contain any exclusion or
limitation with respect to any preexisting condition of such Qualified
Beneficiary (other than such an exclusion or limitation which does not
apply to (or is satisfied by) such Qualified
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Beneficiary in accordance with applicable law as set forth in Code
Section 4980B(f)(2)(B)(iv)(I)), or (2) enrolled for Medicare benefits
under Title XVIII of the Social Security Act.
(b) [Reserved].
10.06 Premium Requirements.
(a) A Qualified Beneficiary shall be required to pay a premium for each
determination period of Continuation Coverage. The determination period
shall be the Benefit Period. Such premium shall not exceed 102 percent of
the applicable premium for such period of coverage, except that if coverage
is being continued for 29 months under Section 10.05(a)(3), the Plan may
require the Qualified Beneficiary to pay a premium of 150% of the
applicable premium for each month of Continuation Coverage after 18 months.
The Qualified Beneficiary may elect to pay such premium in monthly
installments.
(b) If Continuation Coverage is elected after the Qualifying Event has
occurred, the Qualified Beneficiary shall be permitted for a period of 45
days after the date of his election to pay the premium for Continuation
Coverage during the period preceding his election. If the Qualified
Beneficiary fails to pay such premium within such 45 day period, the
Qualified Beneficiary's Continuation Coverage shall be cancelled effective
as of the date of his Qualifying Event and he shall not be entitled to any
Continuation Coverage under this Article 10.
(c) The Plan Administrator shall cause an actuary to determine the applicable
premium for each determination period of Continuation Coverage, either on
the basis of a reasonable estimate of the cost of providing such coverage
for similarly situated beneficiaries, or, on the basis of actual past cost
for similarly situated beneficiaries, in a manner which complies with the
Code and ERISA.
10.07 Insurability and Conversion Option. The availability of Continuation
Coverage shall not be conditioned upon, or discriminate on the basis of a
lack of evidence of insurability. In addition, where a Qualified
Beneficiary's Continuation Coverage ends upon expiration of the applicable
period under Section 10.05, the Plan shall, during the 180-day period
ending upon such expiration date, provide to such Qualified Beneficiary the
option of enrollment under a conversion health plan otherwise generally
available under Article 2 of the Plan.
10.08 Qualified Beneficiary's Election.
(a) Each Qualified Beneficiary who would otherwise lose coverage under the Plan
because of a Qualifying Event shall be entitled to make an independent
election, within the election period, to have Continuation Coverage under
the Plan. Continuation Coverage which may be elected hereunder shall be
limited to such medical benefit options as were in effect at the time of
the Qualifying Event.
(b) The election period shall be the period which:
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(1) begins no later than the date on which coverage terminates by reason
of a Qualifying Event;
(2) is 60 days in duration; and
(3) ends no earlier than 60 days after the later of:
(A) the date on which coverage would normally terminate; or
(B) the date of the notice given by the Plan Administrator to a
Qualified Beneficiary with respect to a Qualifying Event.
(c) Except as otherwise specified in an election, any election of Continuation
Coverage by a Qualified Beneficiary who is either an Employee-Participant
or the Spouse of an Employee-Participant shall be deemed to include an
election of Continuation Coverage on behalf of any other Qualified
Beneficiary who otherwise would lose coverage by reason of the Qualifying
Event. A Qualified Beneficiary who waives Continuation Coverage may revoke
such waiver at any time before the end of his election period, provided
that no benefits shall be payable for charges incurred during the period
commencing on the date that the Qualified Beneficiary's coverage under the
Plan terminated and ending on the date the Qualified Beneficiary revokes
such waiver.
10.09 Notices.
(a) Company Notice to Plan Administrator. The Company shall notify the Plan
Administrator of a Qualifying Event by reason of death, termination of
employment, reduction of hours, or entitlement to Medicare benefits, within
30 days of the date of the Qualifying Event.
(b) Participant Notice to Plan Administrator. The Qualified Beneficiary shall
notify the Plan Administrator of a Qualifying Event by reason of divorce,
legal separation, or a Dependent child ceasing to be a Dependent under the
terms of the Plan, within 60 days after the date of the Qualifying Event.
Each Qualified Beneficiary who is determined under Title II or XVI of the
Social Act to have been disabled at any time during the first 60 days of
Continuation Coverage shall notify the COBRA Administrator of such
determination within 60 days after the date of the determination and shall
notify the plan Administrator within 30 days after the date of any final
determination under such titles that the Qualified Beneficiary is no longer
disabled. If notice is not given within the 60 day period, any right to
elect Continuation Coverage shall be lost.
(c) Plan Administrator Notice to Qualified Beneficiary. In the case of a
Qualifying Event by reason of death, termination of employment, reduction
of hours, or entitlement to Medicare benefits, the Plan Administrator shall
notify each Qualified Beneficiary with respect to such event of such
beneficiary's right to elect Continuation Coverage. In the case of a
Qualifying Event by reason of divorce, legal separation, or a Dependent
child ceasing to be a Dependent under the terms of the Plan, where the
Participant notifies the COBRA Administrator, the COBRA Administrator shall
notify each Qualified
88
Beneficiary with respect to such event of the right to elect Continuation
Coverage. Notice to Qualified Beneficiaries shall be given within fourteen
(14) days after the date the COBRA Administrator is notified of a
Qualifying Event by reason of termination of employment, reduction of
hours, divorce, or legal separation, provided that the COBRA Administrator
receives notice within the time prescribed by applicable law or regulation.
(d) Construction. Sections 10.01 - 10.09 are intended to comply with the
continuation coverage requirements of Code Section 4980B, and shall be
administered and construed in a manner consistent with such requirements.
ARTICLE 11.
Coordination of Benefits and Subrogation
11.01 Coordination of Benefits.
(a) Benefits under the Plan shall be coordinated with all other health care
coverage and shall be limited in all cases to a maximum of 100% of the
Covered Charges to the Participant for Covered Services. Benefits shall be
coordinated in the same manner with payments made or available under
"no-fault" statutes to the maximum extent permitted by federal law and
state law, to the extent not preempted by federal law.
(b) This provision shall be applicable to all benefits available under the
Plan, except that no coordination of benefits provisions shall apply to the
Prescription Drug Plan.
(c) Benefits shall be paid first from any plan that does not have a
coordination of benefits provision.
11.02 "Primary-Secondary" Payment Rule.
(a) In processing a claim where two or more health plans exist, the
"primary-secondary" payment rule determines the provision of payment. It is
applied in the following manner:
(1) The benefits of a health plan (which may include, without limitation,
the Plan) which covers the patient as other than a dependent will be
payable before the benefits of a health plan which covers the patient
as a dependent.
(2) A Dependent child who is potentially subject to coverage under the
health plans of both parents (where parents are neither separated nor
divorced) shall be covered by the health plan of the parent whose
birthday occurs earliest within the calendar year (the "birthday
rule"). Such plan (which may include, without limitation, the Plan)
shall be considered the primary plan for such a Dependent child. If
both parents have the same birthday, the plan covering the parent for
the longest period of time shall be considered the primary plan with
regard to a Dependent child. If the other plan does not follow the
birthday rule, the other plan's coordination of benefits rule shall
apply.
89
(3) The Plan will accept secondary responsibility on claims in which:
(A) another health care plan is primarily responsible because the
patient is covered thereunder; or
(B) another health care plan is primarily responsible because of the
application of the rule stated in Section 11.02(a)(2), above.
(b) Notwithstanding the foregoing, the following rules apply to the coverage of
Dependent-Participant children in the event that the Employee-Participant
(or Retired Employee) is divorced or legally separated from his or her
Spouse:
(1) If there is a court decree which establishes financial responsibility
for medical, dental or other health care expenses for the
Dependent-Participant child, the plan covering the parent who has that
responsibility will be primary and the plan covering the other parent
will be secondary. If the court decree provides that the parents share
joint responsibility, without assigning primary responsibility for
healthcare, the birthday rule shall apply.
(2) If there is no such court decree, and the parent with custody of the
Dependent-Participant child has not remarried, the plan covering the
parent who has custody of the Dependent-Participant child will be
primary, and the plan covering the other parent will be secondary.
(3) If there is no such court decree, and the parent with custody of the
Dependent-Participant child has remarried, the order of priority is:
(A) the plan covering the parent who has custody;
(B) the plan covering the Spouse of the parent who has custody (that
is, the stepparent of the Dependent-Participant child): and
(C) the plan covering the parent without custody.
(c) If a Participant is covered under more than one plan through two jobs,
benefits of the plan that covers the Participant as an employee who is
neither retired nor laid off, or as the Dependent of such employee, shall
be determined before the benefits of the plan which covers the Participant
as a retired or laid off employee, or as the dependent of such employee. If
the other plan does not contain a coordination provision with respect to
retired or laid off employees, resulting in each plan paying benefits after
the other, then the preceding sentence shall not apply.
(d) If the rules set forth above do not apply or cannot be determined, then the
plan that covered the person for the longest period of time shall pay
first.
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11.03 Medicare Eligibility.
(a) With respect to a Participant who is eligible for Medicare coverage, the
Plan shall provide primary coverage only to the extent required by law.
With respect to any Retired Participant who is eligible for Medicare by
virtue of his retirement or disability, the Plan shall not be primary, and
shall in all cases offset the amount of its normal benefit payment by all
amounts paid or payable by Medicare for the same covered claim. If a
Participant would be eligible for Medicare benefits, except for his failure
to enroll or apply for such benefits, the provisions of the Plan shall be
applied as if the Participant did apply or enroll and did receive Medicare
Parts A and B benefits with respect to the care, treatment or Services
covered by the Plan.
(b) Any benefits payable under both the Plan and Medicare shall be made
pursuant to federal legislation, regulations and applicable guidelines,
subject to all applicable federal court decisions.
11.04 Other Insurance or Health Plans. Notwithstanding Section 11.02, or any
other provision of this Plan, if benefits covered under this Plan are also
provided in whole or in part by any insurance or health plan, whether or
not insured, which does not contain provisions for coordination of
benefits, payment will be made under this Plan only for those benefits not
covered by such insurance or health plan.
11.05 Amounts Reduced Due to Application of Rules. In any case where the Plan
has secondary responsibility, and its payment is reduced in consideration
of the primary plan's benefits, a record shall be kept of such reduction.
The amount of reduction shall then be used to increase Plan payments on the
affected Participant's claims in the same Benefit Period to the extent
there are covered expenses that would not otherwise be fully paid by the
Plan and any other plan providing coverage. This provision is inapplicable
with respect to benefit reductions caused by Medicare payments to or for
Retired Participants.
11.06 Third-Party Liability.
(a) Benefits shall be modified when a third person, other than the person for
whom a claim is made, is considered responsible or liable for payment due
to an Illness or Injury. To the extent payment is made for such Illness or
Injury, or may be made in the future, by or for that responsible third
person (as a settlement, judgment or in any other way), charges arising
from that Illness or Injury are not covered under the Plan.
(b) When a claim is received, Plan benefits which would be payable except for
the above modification will be paid, subject to Section 11.07, if payment
by or for the responsible third person has not yet been made.
11.07 Subrogation and Reimbursement.
(a) If the Plan pays, or is obligated to pay, any amount to or on behalf of a
Participant, the Plan shall be subrogated as provided in this Section 11.07
to all the Participant's rights of
91
recovery with respect to the Illness or Injury for which the payment of
benefits is made by the Plan. The right of recovery referred to in the
preceding sentence shall include the right to make a claim, sue and recover
against any person or entity from the first dollars of any funds which are
paid or payable as a result of a personal injury claim or any reimbursement
of medical expenses. If requested in writing by the Plan, the Participant
shall take, through any representative designed by the Plan or the
Employer, such action as may be necessary or appropriate to recover such
payment from any person or entity, said action to be taken in the name of
the Participant. In the event of a recovery or settlement, the Plan shall
be reimbursed in full on a first priority basis out of such recovery or
settlement for expenses, costs, and attorneys' fees incurred by it in
connection therewith.
(b) If the Plan pays, or is obligated to pay, any amount to or on behalf of a
Participant for an Illness or Injury, the Plan shall be entitled to, and
shall have a first priority and lien on, the proceeds of any recovery, by
judgment, settlement or otherwise, with respect to the Illness or Injury,
and if paid to the Participant, the Participant shall immediately pay any
such proceeds to the Plan Administrator. If the Participant fails to pay
such proceeds, or does not cause such proceeds be paid, to the Plan
Administrator, the Plan Administrator may, in addition to any other remedy
to which it may be entitled, recover the proceeds directly or by offset
against claims for benefits under the Plan made with respect to the
affected Participant or to Dependent(s) of such Participant.
(c) The Plan shall have the right of subrogation and reimbursement set forth in
this Section 11.07 regardless of whether the Participant is made whole and
regardless of whether the recovery, or any part thereof, is designated as
payment for medical expenses, pain and suffering, loss of income or any
other specified or unspecified damages or reason, and without regard to
whether recovery is designated as including or excluding the Plan's medical
expenses. Any recovery by a Participant, an attorney or other third party
shall be deemed to be for the benefit of the Plan and shall be held in
constructive trust for the Plan until the Plan is reimbursed in full for
all amounts paid by the Plan. The subrogation and reimbursement rights of
the Plan described in this Section 11.07 include all rights against, and
include all rights with respect to, proceeds from or held by, any attorney,
third party, insurance carrier or payor of medical benefits, including an
uninsured or under-insured motorist carrier, a no-fault carrier and a
school insurance carrier, even if such coverage was purchased by the
Participant, and without regard to whether the proceeds have been paid or
are payable.
(d) By participating in the Plan, each Participant agrees to cooperate fully
with the Plan and to execute and deliver agreements, liens and other
documents and do whatever else the Plan deems necessary to enable and
assist the Plan in exercising its rights under this Section 11.07, but the
Plan's rights under this Section 11.07 shall be effective regardless of
whether the Participant actually signs any agreements, liens or other
documents. By participating in the Plan, each Participant also agrees (1)
that he or she will not make or maintain any make whole, common trust fund
or apportionment action or claim in contravention of the subrogation and
reimbursement provisions of this Section 11.07, (2) that the Plan has a
right to pursue subrogation and reimbursement claims under ERISA,
92
and (3) that he or she will not oppose any proceeding by the Plan to obtain
reimbursement on procedural grounds. The Participant shall not do anything
to impair the Plan's rights. If the Plan Administrator determines that any
Plan recovery rights under Section 11.07 have been impaired by any action
of the Participant or by the Participant's failure to comply with the
Participant's obligations under Section 11.07, the Plan Administrator may,
in addition to any other remedy to which it may be entitled, determine the
amount by which the Plan's recovery rights have been impaired and recover
such amount directly or by offset against claims for benefits under the
Plan made with respect to the affected Participant or to Dependent(s) of
such Participant.
(e) This Section 11.07 entitles the Plan to subrogation and reimbursement equal
to the entire amount paid by the Plan for the Illness or Injury to which
the subrogation or reimbursement relates, including related expenses, costs
and attorneys' fees, which shall be from the first dollars payable to or
received by the Participant from any settlement, judgment or other payment,
without reduction for attorneys' fees or for any other reason. The common
fund and apportionment doctrines shall not apply to any amounts received.
Any attorneys' fees shall be the responsibility solely of the Participant,
and the Plan shall not pay any attorneys' fees or costs associated with a
Participant's claim or lawsuit without the Plan Administrator's prior
written authorization.
(f) The intention of this Section 11.07 is to give the Plan the first right of
subrogation and reimbursement in full with respect to the first dollars
paid or payable, even though the Participant is not made whole. All
references to a Participant in this Section 11.07 shall include Dependents
of the Participant. Each Participant agrees that as a condition to
receiving benefits under the Plan, the Participant shall comply with the
requirements of this Section 11.07.
11.08 Excess Payments. Any payment made by the Plan to any person or entity in
excess of the amount which the Plan was obligated to pay to such person or
entity shall be recoverable by the Plan from the payee or the covered
individual in respect of whom the payment was made, or their successors or
assigns, and all payments made by the Plan to any person or entity are
expressly conditioned upon the Plan's right to recover excessive or
erroneous payments. Recovery of excessive or erroneous payments may be
obtained from a Participant either directly or by offset against claims for
benefits under the Plan made with respect to the affected Participant or to
Dependent(s) of such Participant. A Participant shall provide the Plan
Administrator with such information and documents as may reasonably be
required in order to give effect to the provisions of this paragraph.
ARTICLE 12.
General Provisions
12.01 Rights and Benefits Not Assignable. The rights of a Participant under the
Plan and the benefits to which he is entitled are personal to the
Participant and are not assignable. The Participant may authorize the Plan
to make payment of benefits, otherwise payable under the Plan to the
Participant, directly to the provider of the Service, and Participants
using a
93
Network Provider are deemed to have authorized direct payments. The Plan in
its discretion may make payment directly to a Service provider, but is not
obligated to do so. If the Plan chooses to make direct payment, such
payment shall not operate as an assignment of any right or option under the
Plan.
12.02 Care Rendered Outside the U.S. Benefits equivalent to those in the United
States shall be provided for care rendered outside of the United States.
Individuals receiving such care, whether they are Participants in the
active employ of the Company or are Retired Participants, shall be subject
to the policies developed by the Company to provide benefits hereunder on
their behalf, which policies shall be administered uniformly with respect
to affected individuals who are similarly situated.
12.03 Filing Deadlines. The Plan shall not pay any benefit for claims filed
more than two years from the date the Service was performed. By
participating in the Plan, each Participant agrees that no legal or
equitable action may commence against the Plan or any fiduciary of the Plan
more than 90 days after exhaustion of the Participant's rights under the
Plan's claims procedure (Section 13.06(a)(4)). All levels of the Plan's
claims procedure must be exhausted before a Participant can bring an action
at law or equity against the Plan or a fiduciary of the Plan.
12.04 Forfeiture of Unclaimed Benefits.
(a) If the Plan Administrator is unable to locate any person to whom a payment
is due under the Plan, or a benefit payment check is not presented for
payment, such benefit payment shall be forfeited at the earlier of:
(1) the day preceding the date such payment would otherwise escheat
pursuant to any applicable escheat law; or
(2) the later of:
(A) expiration of the time period for submission of the benefit claim
pursuant to Section 12.03, or
(B) six months after issuance of any benefit payment check.
(b) Forfeited payments shall be returned to the source of the payment (e.g., if
benefits are paid from company general assets, the forfeited payment shall
be returned to the Company; if benefits are paid from trust funds, the
forfeited payment shall be returned to the trust from which the payment was
made).
12.05 Family and Medical Leave Act. Notwithstanding any Plan provision to the
contrary, the Plan shall comply with the FMLA and any applicable state (to
the extent not preempted by ERISA) family and medical leave laws. If the
Company determines that a Participant will not return to work from an
unpaid FMLA leave, the Company may recover its payments or credits to the
maximum extent permitted under the FMLA.
94
12.06 Independent Agents. The Plan does not furnish any medical or health
Services, supplies or facilities, and the Plan does not recommend any
Physician or Hospital. Certain Physicians and Hospitals have been
designated to participate in the Network in an attempt to reduce health
care costs, and Physicians and Hospitals may be added to and deleted from
the Network in the discretion of the Plan or an organization designated by
the Plan. All Physicians and Hospitals are independent agents with respect
to the Plan. The Plan is not liable for any act or omission of any
Physician or Hospital. Participants are responsible for determining a
Hospital's or Physician's Network status prior to receiving services.
12.07 Military Service. Notwithstanding any provision of this Plan to the
contrary, the Plan shall provide coverage for Participants with respect to
service in the uniformed services in accordance with chapter 43 of title 38
of the United States Code, as amended. The term "service in the uniformed
services" shall have the meaning set forth in 38 USC Section 4301(13).
12.08 Privacy Standards. The purpose of this Section 12.08 is to comply with
the Health Insurance Portability and Accountability Act of 1996 and the
rules and regulations adopted thereunder (HIPAA). The use and disclosure of
protected health information (PHI) by the Company shall be consistent with
this Section 12.08. The Plan Administrator shall adopt, and may amend from
time to time, a Privacy Policy to ensure the privacy of PHI in accordance
with HIPAA (the "Privacy Policy"). Any terms that are defined in HIPAA or
in the Privacy Policy shall have the same meanings when used in this Plan.
This Section 12.08 shall be effective beginning April 14, 2003.
(a) Disclosure of Summary and Enrollment Health Information. The Plan may
disclose summary health information to the Company if the Company requests
the information for the purpose of (1) obtaining premium bids from health
plans for providing health insurance coverage under the Plan, or (2)
modifying, amending or terminating the Plan. The Plan may disclose to the
Company information on whether an Employee is or is not participating in
the Plan. The Plan may disclose de-identified health information to the
Company, but the Plan may not disclose the key or other mechanism by which
the information could be re-identified, except under circumstances that
would permit disclosure of the underlying information.
(b) Disclosure of PHI. The Plan may disclose PHI to the Company only upon
receipt of a certification by the Company that the Plan has been amended to
incorporate the provisions of 45 CFR Section 164.504(f)(2)(ii), and that
the Company agrees to the conditions of disclosure set forth below. By its
adoption of this Plan, the Company agrees that with respect to any PHI
(other than enrollment/disenrollment information and summary health
information, which are not subject to these restrictions) disclosed to it
by the Plan (or a health insurance issuer or HMO on behalf of the Plan) the
Company shall:
(1) Not use or further disclose the PHI other than as permitted or
required by the Plan and the Privacy Policy, or as required by law.
95
(2) Ensure that any agents, including a subcontractor, to whom it provides
PHI received from the Plan agree to the same restrictions and
conditions that apply to Company with respect to such PHI.
(3) Not use or disclose the PHI for employment-related actions and
decisions or in connection with any other benefit or employee benefit
plan of the Company.
(4) Report to the Plan any use or disclosure of PHI that is inconsistent
with the uses or disclosures permitted under Section 12.08(b)(1), if
and when the Company becomes aware of such inconsistent use or
disclosure.
(5) Make PHI available to individuals in accordance with 45 CFR Section
164.524 and consistent with the Plan's HIPAA Privacy Policy.
(6) Make PHI available to individuals for amendment and incorporate into
PHI any such amendments in accordance with 45 CFR Section 164.526 and
consistent with the Plan's HIPAA Privacy Policy.
(7) Make available the information required to provide an accounting of
disclosures in accordance with 45 CFR Section 164.528 and consistent
with the Plan's HIPAA Privacy Policy.
(8) Make the Company's internal practices, books, and records relating to
the use and disclosure of PHI received from the Plan available to the
Secretary of Health and Human Services for purposes of determining the
Plan's compliance with HIPAA's privacy requirements.
(9) If feasible, return or destroy all PHI that the Company received from
the Plan, and any copies, that the Company maintains in any form, when
the Company no longer needs such PHI for the purpose for which
disclosure was made, except that if such return or destruction is not
feasible, the Company will limit further uses and disclosures of the
PHI to those purposes that make the return or destruction of the PHI
infeasible.
(10) Ensure that the adequate separation between the Plan and the Company
(i.e., the "firewall"), required in 45 CFR Section 504(f)(2)(iii) is
established.
(c) Adequate Separation. The Privacy Policy shall designate the employees or
classes of employees or other persons under the Company's control who shall
have access to PHI (the "Privacy Group"), and the portion of the Privacy
Policy that designates the Privacy Group is incorporated into this Plan by
reference. No other persons shall have access to PHI. The Privacy Group
shall only have access to and use PHI to the extent necessary to perform
the Plan administrative functions that the Company performs for the Plan.
Instances of noncompliance with this Section 12.08 by any member of the
Privacy Group shall be resolved by applying the disciplinary measures
described in the Plan's HIPAA Privacy Policy.
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ARTICLE 13.
Plan Administration
13.01 Named Fiduciary.
(a) The Named Fiduciaries under the Plan shall be:
(1) the Vice President of Human Resources of the Company, who shall be the
Plan Administrator and shall have authority to control and manage the
operation and administration of the Plan, except with respect to those
matters which under the Plan or the Trust Agreement are the
responsibility, or subject to the authority, of the Benefit Finance
Committee, and
(2) the Benefit Finance Committee (the "Committee"), as appointed by the
Board of Directors of the Company, which shall be the Named Fiduciary
with respect to the financial management of the Plan and the control
or management of the assets of the Plan, except with respect to those
matters which under the Plan or the Trust Agreement are the
responsibility, or subject to the authority, of the Plan
Administrator.
(b) [Reserved].
13.02 Allocation of Fiduciary and Other Responsibilities.
(a) Each Named Fiduciary shall have the right:
(1) to allocate responsibilities (fiduciary or otherwise) among it and the
other Named Fiduciary, and
(2) to designate other individuals to carry out its responsibilities
(fiduciary or otherwise) under the Plan.
(b) [Reserved].
13.03 Quorum and Voting; Procedures.
(a) A majority of the members of the Committee at the time in office shall
constitute a quorum for the transaction of business. The Committee shall
select from among its members a Chairman, and shall appoint (from its
members or otherwise) a Secretary.
(b) The Committee may act by vote or written consent of the majority of its
members then in office and may establish its own procedures. The Committee
may authorize any one or more of its members or the Secretary of the
Committee to sign and deliver any instrument, certificate or other paper or
document on its behalf.
97
13.04 Service in Multiple Capacities. Any person or group of persons may serve
in more than one fiduciary capacity with respect to the Plan.
13.05 Powers and Authority. Each Named Fiduciary shall have all powers
necessary or helpful for the carrying out of its responsibilities, and the
decisions or actions of such Named Fiduciary in good faith in respect of
any matter hereunder shall be conclusive and binding upon all parties
concerned.
13.06 Powers of Plan Administrator.
(a) Without limiting the generality of the foregoing, the Plan Administrator
shall have the discretionary authority and power:
(1) to make rules and regulations for the administration of the Plan which
are not inconsistent with the terms and provisions of the Plan;
(2) to construe all terms, provisions, conditions and limitations of the
Plan;
(3) to determine all questions, including eligibility to participate,
arising out of or in connection with the Plan or its administration in
any and all cases in which the Plan Administrator deems such a
determination advisable;
(4) to establish and maintain reasonable procedures in accordance with
applicable laws and regulations for the filing of benefit claims,
notification of benefit determinations, and appeal of adverse benefit
determinations (The Named Fiduciary's power and authority under the
claims procedure shall be discretionary, including the right to deny
any claim due to failure to comply, in either time or manner, with the
claims procedure. The claims procedure shall apply to all denials of
requests for Plan benefits and to any other construction or
determination under this Section 13.06, including any determination of
Medical Necessity, any determination pursuant to a Pre-Admission or
Continued Stay Review, and any other predetermination,
precertification or preapproval required under the Plan. The Plan's
claims procedure shall consist of this Section 13.06(a) and the
procedures set forth in the Summary Plan Description.); and
(5) to designate a Claims Administrator. The Plan Administrator may
designate one or more Claims Administrators with respect to the
various benefits under this Health Care Plan. The designation of a
Claims Administrator shall constitute an express grant to the Claims
Administrator of discretionary authority to determine eligibility for
Plan benefits, based on information provided by the Company,
Participants and Providers, including determinations of Medical
Necessity, determinations pursuant to Pre-Admission and Continued Stay
Reviews, and other predeterminations, precertifications and
preapprovals required under the Plan. Any decision of the Claims
Administrator shall be final and binding upon all persons claiming any
benefit under or dealing with the Plan, subject to the claims
procedure described in Section 13.06(a)(4).
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(b) [Reserved].
13.07 Powers of Benefit Finance Committee.
(a) Without limiting the generality of the foregoing, the Benefit Finance
Committee shall have discretionary authority and power:
(1) to establish and carry out, or cause to be established and carried out
by those persons (including without limitation, any investment manager
or trustee) to whom responsibility or authority therefor has been
allocated or delegated in accordance with this Plan or the Trust
Agreement, funding and investment policies and methods consistent with
the objectives of the Plan and the requirements of ERISA. For such
purposes, such Committee shall, at a meeting duly called for the
purpose, establish funding and investment policies and methods which
satisfy the requirements of said Act, and shall meet at least annually
to review such policies and methods. All actions taken with respect to
such policies and methods and the reasons therefor shall be recorded
in the minutes of the meetings of such Committee.
(2) To appoint a trustee or trustees to hold the assets of the Plan who
shall have authority and discretion to manage and control the assets
of the Plan upon acceptance of such appointment, except to the extent
that: (A) the authority to manage, acquire or dispose of assets of the
Plan is delegated to one or more investment managers pursuant to
paragraph (3) below, or (B) such Committee appoints itself (or any
member thereof) to direct the trustee or trustees with respect to the
management or control of assets of the Plan.
(3) To appoint an investment manager or managers, as defined in ERISA, to
manage (including the power to acquire, invest and dispose of) any
assets of the Plan.
(b) [Reserved].
13.08 Advisors. Each Named Fiduciary, and any fiduciary designated by them
pursuant to Section 13.02 above to whom such power is granted, may employ
one or more persons to render advice with regard to any responsibility such
fiduciary has under the Plan. The Named Fiduciary shall have no authority,
discretion or responsibility with respect to those matters which under any
applicable trust agreement, insurance contract or similar agreement are the
responsibility or subject to the authority of the trustee, insurance
company or any named fiduciary under such trust agreement.
13.09 Powers not Exclusive. The foregoing list of powers is not intended to be
either complete or exclusive, and each Named Fiduciary shall, in addition,
have such powers as it may determine to be necessary for the performance of
its duties under the Plan and the Trust Agreement.
13.10 Limitation of Liability; Indemnity. Except to the extent otherwise
provided by law, if any duty or responsibility of a Named Fiduciary has
been allocated or delegated to any other
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person in accordance with any provision of this Plan or of the Trust
Agreement then such Named Fiduciary shall not be liable for any act or
omission of such person in carrying out such duty or responsibility. The
Company shall indemnify and save each person who is a member of the
Committee and each employee or director of the Company or an affiliate who
is a "fiduciary" under the Plan harmless against any and all loss,
liability, claim, damage, cost and expense which may arise by reason of, or
be based upon, any matter connected with or related to the Plan or the
administration of the Plan (including, but not limited to, any and all
expenses whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or in settlement
of any such claim whatsoever) to the fullest extent permitted under
applicable law except when same is judicially determined to be due to the
gross negligence or willful misconduct of such member, employee or
director.
ARTICLE 14.
Amendment and Termination
14.01 Amendment and Termination. Except as provided in Section 2.08(e), the
Company, through its Board of Directors (directly or though its delegate):
(1) reserves the right at any time and from time to time to amend the Plan
in whole or in part, (2) assumes no obligation to continue this Plan in
effect, and (3) reserves the right at any time to terminate the Plan in
whole or in part with respect to any or all Participants.
ARTICLE 15.
Funding
15.01 Trust Agreement and Other Funding. Company contributions may be made from
time to time to a Trust intended to qualify under Code Section 501(c)(9) in
such amounts as deemed appropriate by the Company. The Company may also
make payment of the benefits provided for by the Plan from its general
assets. Any Participant contributions shall be held in Trust to the extent
required by ERISA. It is intended that Company contributions to a Trust
meet the requirements of any governmental regulations and policies.
* * * * *
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