Dear AT&T Active Employees,

You need to be aware of two provisions of the federal government’s Affordable Care Act (ACA):

• Insurance Requirement: Most Americans are required to have health insurance that provides “minimum essential coverage,” as required by law. Those who do not meet the insurance requirement may pay a penalty for those months when they are not enrolled in qualifying health care coverage. Penalties will apply for adults and dependents. Based on guidance from the federal agencies with responsibility for implementing ACA, AT&T employees who enroll in either an AT&T medical program or AT&T CarePlus – A Supplemental Benefit Program (CarePlus) will have “minimum essential coverage.” • Health Insurance Marketplace: Beginning Oct. 1, 2013, the federal and state government- sponsored Health Insurance Marketplace (ACA Marketplace or public exchanges) began taking applications to purchase health insurance. Information about the ACA Marketplace is provided in the attached notice, including information regarding possible federal assistance. The vast majority of AT&T employees are eligible for AT&T medical coverage, receive a Company subsidy, and will not receive any financial assistance from the government if they apply for coverage through the ACA Marketplace. Also, AT&T employees actually enrolled in CarePlus coverage or who are eligible for reimbursement of qualified, out-of-pocket medical expenses from an AT&T health reimbursement arrangement (HRA) may not receive any financial assistance from the government if they apply for coverage through the ACA Marketplace.

The enclosed notice provides important information about the ACA Marketplace. If you have questions after reading the notice, we encourage you to:

• Go to HealthCare.gov or call 800-318-2596 (TTY: 855-889-4325) for information regarding the ACA and the ACA Marketplace. • Refer to your AT&T medical program summary plan description (SPD) for information on your AT&T medical coverage. The SPD is available through the AT&T Benefits Center website at att.com/benefits center. Choose SPD/SMM > SPD-Health and Welfare Summaries and Legal Information > SPD-Health and Welfare Summaries and Legal Information and scroll down to the medical section. • If you are a bargained employee represented by the IBEW 1547 or Alaska Teamster 959 with medical coverage provided through your Union, see the addendum below for further contact information.

Specific details about your benefits, including eligibility rules, are in the summary plan descriptions (SPDs), summaries of material modifications (SMMs) or the plan documents. The plan documents

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NIN: 78-40779 always govern, and they are the final authority on the terms of your benefits. AT&T reserves the right to terminate or amend any and all benefits plans, and your participation in the plan is neither a contract nor a guarantee of future employment.

If You Enroll At the Exchange Provide the Following Employer Address

If you enroll at the public ACA Marketplace Exchange you will be asked to provide an address for your Employer or place of business. The ACA Marketplace Exchange uses this address to contact your employer if you will receive a subsidy. Use this address on your ACA Marketplace Exchange paperwork.

AT&T Services, Inc. PO Box 460650 St. Louis, MO 63146

Do not provide your work location address to the Exchange.

Health Care Marketplace Exchange Notice Addendum

Dear AT&T Active Employees represented by Alaska IBEW 1547 and Alaska Teamsters 959,

Because your medical benefits are administered by a Third Party Trust and not AT&T, if you have any questions regarding your available medical coverage, please direct your questions to the Trust which administers your plan:

Union IBEW 1547 Alaska Teamster 959 Alaska Electrical Health and Welfare Alaska Teamster - Employer Welfare Trust Name Fund Trust Plan For a current SPD, visit the Trust aetf.com 959trusts.com website Phone number 907-276-1246 or 800-478-1246 907-751-9700 or 800-478-4450 Email address [email protected] [email protected]

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New Health Insurance Marketplace Coverage Options and Your Health Coverage

PART A: General Information With implementation of key parts of the health care law in 2014, there is now a new way to buy health insurance: the Health Insurance Marketplace. To assist you as you evaluate options for you and your family, this notice provides some basic information about the new Marketplace and employment-based health coverage offered by your employer.

What is the Health Insurance Marketplace? The Marketplace is designed to help you find health insurance that meets your needs and fits your budget. The Marketplace offers "one-stop shopping" to find and compare private health insurance options. You may also be eligible for a new kind of tax credit that lowers your monthly premium right away. Open enrollment for health insurance coverage through the Marketplace for 2016 began in November 2015 for coverage starting as early as Jan. 1, 2016. For information on future enrollment periods go to HealthCare.gov.

Can I Save Money on my Health Insurance Premiums in the Marketplace? You may qualify to save money and lower your monthly premium, but only if your employer does not offer coverage, or offers coverage that doesn't meet certain standards. The savings on your premium that you're eligible for depends on your household income.

Does Employer Health Coverage Affect Eligibility for Premium Savings through the Marketplace? Yes. If you have an offer of health coverage from your employer that meets certain standards, you will not be eligible for a tax credit through the Marketplace and may wish to enroll in your employer's health plan. However, you may be eligible for a tax credit that lowers your monthly premium, or a reduction in certain cost-sharing if your employer does not offer coverage to you at all or does not offer coverage that meets certain standards. If the cost of a plan from your employer that would cover you (and not any other members of your family) is more than 9.5 percent of your household income for the year, or if the coverage your employer provides does not meet the "minimum value standard” set by the Affordable Care Act, you may be eligible for a tax credit.1

Note: If you purchase a health plan through the Marketplace instead of accepting health coverage offered by your employer, then you may lose the employer contribution (if any) to the employer- offered coverage. Also, this employer contribution – as well as your employee contribution to employer-offered coverage – is often excluded from income for Federal and State income tax purposes. Your payments for coverage through the Marketplace are made on an after-tax basis.

1An employer-sponsored health plan meets the "minimum value standard" if the plan's share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs (Section 36B(c)(2)(C)(ii) of the Internal Revenue Code of 1986). Because CarePlus provides coverage only for the expenses specifically identified and not the range of expenses covered by a typical medical plan, such as your base medical coverage offered by AT&T, CarePlus is not considered to meet the “minimum value standard.”

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How Can I Get More Information? For more information about your coverage offered by your employer, please check your summary plan description or contact the AT&T Benefits Center at att.com/benefitscenter or by calling 877-722-0020 to obtain a copy of your summary plan description.

The Marketplace can help you evaluate your coverage options, including your eligibility for coverage through the Marketplace and its cost. Please visit HealthCare.gov for more information, including an online application for health insurance coverage and contact information for a Health Insurance Marketplace in your area.

PART B: Information About Health Coverage Offered by Your Employer This section contains information about any health coverage offered by your employer. If you decide to complete an application for coverage in the Marketplace, you will be asked to provide this information. This information is numbered to correspond to the Marketplace application.

3. Employer name 4. Employer Identification Number (EIN) Affiliates of AT&T Inc. See Appendix A for a list of AT&T Inc. Affiliates and associated EINs 5. Employer address 6. Employer phone number Affiliates of AT&T Inc. 210-351-3333 P.O. Box 132160 Dallas, TX 75313-2160 7. City Dallas 8. State Texas 9. ZIP code 75202 10. Who can we contact about employee health coverage at this job? AT&T Benefits Center 4 Overlook Point P.O. Box 1474 Lincolnshire, IL 60069-1474 or the employee can go online at att.com/benefits center

11. Phone number (if different from above) 877-722-0020 12. Email address Not Applicable

If you decide to shop for coverage in the Marketplace, Healthcare.gov will guide you through the process. Here’s the employer’s information you’ll enter when you visit Healthcare.gov to find out if you can get a tax credit to lower your monthly premiums.

Additional AT&T Provided Information:

13. Is the employee currently eligible for coverage offered by this employer, or will the employee be eligible in the next three months?

Most employees are currently eligible for coverage offered by AT&T, or will be eligible in the next three months.

Medical coverage offered by AT&T provides minimum essential coverage for you and your eligible dependents. If you enroll in AT&T medical coverage, you will not have to pay a penalty.

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14. Does the employer offer a health plan that meets the minimum value standard1 ?

Medical coverage offered by AT&T also meets the minimum value standard1 .

15. For the lowest-cost plan that meets the minimum value standard1 offered only to the employee (does not include family plans): How much would the employee have to pay in premiums?

For employers with wellness programs, the premium the employee would pay is the premium that the employee would pay if the employee received the maximum discount for any tobacco cessation programs and didn’t receive any other discounts based on wellness programs.

If you are currently enrolled in AT&T medical coverage, the company generally pays a portion of the costs of this coverage and your coverage also will meet the ACA’s affordability standard.** This means that if you are an active employee eligible for AT&T medical coverage, you generally will not be eligible for a premium reduction for coverage purchased through the Marketplace. In addition, based on guidance received from the agencies that implement ACA, you also will not be eligible for premium reduction assistance for coverage purchased through the Marketplace for any month in which you are enrolled in AT&T CarePlus – A Supplemental Benefit Program (CarePlus) or who are eligible for reimbursement of qualified, out-of-pocket medical expenses from an AT&T health reimbursement arrangement (HRA).

If you are not eligible for medical coverage through AT&T or AT&T does not pay a portion of the cost of your coverage, you and your family may be able to obtain health coverage through the Marketplace with a new kind of tax credit that lowers your monthly premiums and with assistance for out-of-pocket costs. This premium reduction assistance is provided by the federal government only if you purchase coverage through the Marketplace. AT&T will not pay any portion of those costs.

** Even if your employer intends your coverage to be affordable, you may still be eligible for premium discount through the Marketplace. The Marketplace will use your household income, along with other factors, to determine whether you may be eligible for a premium discount. If, for example, your wages vary from week to week (perhaps you are an hourly employee or you work on a commission basis), if you are newly employed mid-year, or if you have other income losses, you may still qualify for a premium discount.

16. What change will the employer make for the new plan year?

AT&T intends to continue to offer healthcare coverage to its employees, but reserves the right to terminate or amend such any and all of its employee benefit plans or programs. Refer to your summary plan description book or enrollment materials to determine the coverage options available to you, the premium you will have to pay and the frequency of payment.

You can visit Healthcare.gov for coverage options and to find out if you are eligible for a premium reduction for coverage purchased through the Marketplace.

1An employer-sponsored health plan meets the "minimum value standard" if the plan's share of the total allowed benefit costs covered by the plan is no less than 60 percent of such costs (Section 36B(c)(2)(C)(ii) of the Internal Revenue Code of 1986).

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Because CarePlus provides coverage only for the expenses specifically identified and not the range of expenses covered by a typical medical plan, such as your base medical coverage offered by AT&T, CarePlus is not considered to meet the “minimum value standard.”

Appendix A Participating Company Name Fed Tax ID Alascom, Inc. 92-0037455 AT&T Billing Southeast, LLC 58-2393916 AT&T Corp. 13-4924710 AT&T Customer Services, Inc. (effective Aug. 6, 95-4738537 2017) AT&T Digital Life, Inc. 13-4017198 AT&T Global Communication Services, Inc. 22-3409329 AT&T Government Solutions, Inc. 95-2131929 AT&T Management Services, L.P. 43-1552061 AT&T Mexico, LLC 51-0368547 AT&T Mobility Puerto Rico Inc. 13-3120943 AT&T Mobility Services LLC 37-1417265 AT&T of the Virgin Islands, Inc. 13-6178508 AT&T of Puerto Rico, Inc. 66-0177929 AT&T Services, Inc. 74-2782655 AT&T Support Services Company Inc. 22-3425715 AT&T Technical Services Company, Inc. 22-3425717 AT&T World Personnel Services, Inc. 22-3409320 BellSouth Telecommunications, LLC 58-0436120 Cricket Wireless LLC 80-0818212 Illinois Bell Telephone Company 36-1253600 DIRECTV, LLC 95-4511940 DIRECTV Enterprises, LLC 95-4511942 Indiana Bell Telephone Company, Incorporated 35-0407820 Michigan Bell Telephone Company 38-0823930 Nevada Bell Telephone Company 94-0315445 Pacific Bell Telephone Company 94-0745535 SBC Global Services, Inc. 36-3264367 Southwestern Bell Telephone Company 43-0529710 Teleport Communications America, LLC 13-3734156 The Ohio Bell Telephone Company 34-0436390 Wisconsin Bell, Inc. 39-0716650

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