Summary Plan Description Ehr 1-800-UPS-1508 (Available 24 Hours • Toll-Free Phone Access to All Your a Day Except Sundays Beneﬁ Ts and Vendors 1:00 A.M

The

The Flexible Beneﬁ ts Plan Flexible

Member Services Beneﬁ ts Plan

UPSers.com www.UPSers.com • The online link to all your benefi ts and more My Life and Career tab Summary Plan Description eHR 1-800-UPS-1508 (Available 24 hours • Toll-free phone access to all your a day except Sundays benefi ts and vendors 1:00 a.m. to 12:00 noon CT) Benefi ts Service Center 1-800-UPS-1508 (Representatives available • Enroll 8:00 a.m. to 8:00 p.m. CT • Verify eligibility Monday through Friday) • Add or remove dependents • Request benefi ts materials • Inquire about COBRA Aetna www.aetna.com • Medical PPO 1-800-435-7324 • Medical Out-of-Area 1-800-237-0575 • Dental (all options) 1-877-263-0659 • Short-term disability 1-866-825-0186 www.wkabsystem.com • Reimbursement accounts 1-888-238-6226 UnitedHealthcare www.myuhc.com • Medical (all options) 1-877-838-7528 Kaiser Permanente www.kp.org • California 1-800-464-4000 • Oahu 432-5955 • Neighbor Islands 1-800-966-5955 ValueOptions www.achievesolutions.net/ups • Behavioral health 1-800-336-9117 • Employee Assistance Program (EAP) 1-800-336-9117 Medco www.medco.com • Prescription drugs 1-800-346-1327 Vision Service Plan (VSP) www.vsp.com • Vision 1-800-877-7195 Summary MetLife www.metlife.com/mybenefi ts • Long-term disability 1-877-638-4877 The Flexible Benefi ts Plan

OptumHealth Bank www.optumhealthbank.com Plan

• Health Savings Account (HSA) 1-866-234-8913 Description Prudential Insurance Company • Life insurance and AD&D 1-877-877-2955 1-877-889-2070 (conversions only) Quit For Life 1-866-QUIT-4-LIFE • Tobacco cessation program

Flex2010_Cover_wp.indd a 2/19/10 5:50:00 PM Core/MBE Insert

Flexible Benefits Plan

About This Insert This Insert is part of your Flexible Benefits Plan Summary Plan Description (SPD), and details Plan provisions specific to your coverage, effective January 1, 2010, that are not outlined in the SPD. It is part of the Plan document and should be kept with your SPD.

Eligibility You are eligible to participate in The Flexible Benefits Plan if you are a full- or part-time management, specialist, administrative or technical employee of one of the United Parcel Service affiliates (the Company) listed below and your terms of employment are not subject to collective bargaining. Part-time employees must be regularly scheduled to work at least 15 hours per week to be eligible. . United Parcel Service General Services Co. . UPS Fuel Services, Inc. . UPS Capital Trade Protection Services, Inc. . UPS Capital Insurance Agency, Inc. . UPS Customhouse Brokerage, Inc. . UPS Global Innovations, Inc. . UPS Supply Chain Solutions General Services, Inc. . UPS International General Services Co. . UPS Procurement Services Corporation . UPS Worldwide Forwarding, Inc. . United Parcel Service, Inc. (Ohio) . BT Realty Holdings, Inc. . BT Realty Holdings II, Inc. . Trailer Conditioners, Inc. (exempt only) . Mail Boxes Etc., Inc.

You’re not eligible to participate if you are: . a full- or part-time administrative or technical employee of Trailer Conditioners, Inc.; . a temporary employee, intern or co-op; . a UPS employee in Puerto Rico, the Virgin Islands, Canada or any country other than the United States, except for employees of International General Services; or . an employee covered by a collective bargaining agreement.

Medical Opt-Out Credit If you choose not to elect medical coverage, you receive an opt-out credit as taxable income. However, to receive these credits, you must certify that you have medical coverage elsewhere. Without this certification, no credits will be provided in lieu of electing medical coverage. See your enrollment information for credit amounts. Income Protection Plan: Short-Term Disability (STD) Short-term disability coverage is available to all full-time and part-time employees eligible for The Flexible Benefits Plan when coverage begins under the Plan. The Plan pays a percentage of your base pay for any one continuous period of disability, up to the maximum STD benefit period for your job classification, as indicated below.

Administrative or Technical Employees (Hourly Paid) The Plan pays disability benefits for a maximum of 26 weeks, at 100 percent of your base pay for up to 13 weeks and 60 percent of your base pay for any remaining weeks during that same approved disability period.

Aetna Disability and Absence Management (ADAM) will administer your STD benefit payments. You will be billed by the Benefits Service Center for your share of the cost of your Flexible Benefits Plan coverage.

STD benefits are taxed when paid to you. If you are an administrative or technical employee (hourly paid), ADAM will issue all W-2 forms for any benefits received under the STD Plan.

Management or Specialist Employees The Plan pays 100 percent of your base pay for up to 26 weeks. You will continue to receive your check from the Company, with your usual payroll deductions, during the time you are approved for STD benefits. Aetna Disability and Absence Management (ADAM) will administer your STD benefit payments and assign a case manager to work with you.

STD benefits are taxed when paid to you. If you are a management or specialist employee (salaried), the Company will issue all W-2 forms.

This notice details Plan improvements, changes, clarifications, and required notifications effective January 1, 2014, unless otherwise noted below. Items marked with an asterisk (*) do not apply to COBRA participants. You should keep this with your Flexible Benefits Plan Summary Plan Description (SPD) for future reference. The terms of the Plan are not changing and remain in full force and effect, except as specifically described in this Summary.

Working Spouse Eligibility* Benefits and Coverage (SBC) provided by your Effective January 1, 2014, spouses and same-sex employer will indicate whether or not the coverage is domestic partners or civil union partners (as defined minimum essential coverage. You can also contact by the Plan) who are “eligible” for coverage as an your employer for this information. employee (other than as a qualified beneficiary under COBRA) under another employer’s medical plan If your spouse, domestic partner or civil union (e.g., the spouse’s employer’s plan) are not eligible partner is enrolled in The Flexible Benefits Plan and for medical coverage under The Flexible Benefits later becomes eligible for other employer coverage, it Plan to the extent that such coverage constitutes is your responsibility to notify the Plan immediately minimum essential coverage (for purposes of the that your spouse, domestic partner or civil union individual mandate under the Affordable Care Act). partner is no longer eligible for coverage under the For this purpose, a spouse, domestic partner or civil Plan. union partner is considered eligible for other If your spouse, domestic partner or civil union employer coverage if the spouse, domestic partner or partner loses eligibility for other employer coverage, civil union partner satisfies the terms of eligibility to you may request enrollment. See the Life Events participate in the Plan as an employee (other than section of the Plan’s SPD for more detail. COBRA coverage), even if not otherwise permitted to currently enroll. However, if the spouse is subject Tobacco Cessation Incentive Program* to a waiting period, the spouse will not be considered UPS is offering a UPS Tobacco Cessation Incentive to be eligible for other employer coverage during the Program (“Program”) to help improve the health and waiting period. wellness of UPSers and their families. As part of the Program, you pay a lower premium if you have not The spousal exclusion applies without regard to the used tobacco products in the last 12 months or, if you cost of the other medical coverage, or the scope of have, you complete the UPS-sponsored tobacco the medical coverage. However, if the only coverage cessation program, Quit for Life. for which the spouse is eligible is any of the following, the spousal exclusion does not apply: Eligibility  Continuation of coverage under COBRA As an active employee, you and your spouse, domestic partner or civil union partner are eligible for  Dental this Program if eligible for, and enrolled in, the  Vision medical portion of the Plan. Under this Program, you  Health flexible spending account (FSA) pay a lower premium for medical coverage under the  Employee assistance program (EAP) Plan if you “participate” in the Program.  Health savings account (assuming that the spouse, Participation domestic partner or civil union partner is not also You participate in this Program if you satisfy the eligible or enrolled in the employer’s high following conditions: deductible health plan)  You certify your tobacco use status and that of  Any benefit that does not qualify as minimum your spouse, domestic partner or civil union essential coverage for purposes of the individual partner (if applicable) enrolling in the Plan; and mandate (such as fixed indemnity or specified disease policy).  If certified as a tobacco user, you and/or your spouse, domestic partner or civil union partner Minimum essential coverage may not be affordable enroll in and complete the Quit For Life program. and it may not provide minimum value as defined by the Affordable Care Act (ACA). The Summary of

1 The specific terms of the Program are described in directly or through a provider, a fraudulent, the UPS Tobacco Cessation Incentive Program misrepresented or altered claim. Plan coverage may document, available at www.UPSers.com. also be terminated if: Medical Benefits: Opt-Out Credit  You or your dependent allows another party not Effective January 1, 2014, UPS will no longer pay an covered under the Plan to use your coverage or opt-out credit for employees who do not enroll in your dependent’s coverage, medical coverage.  You knowingly enroll an ineligible dependent in the Plan, or Two-Year Rule for Dental and Vision Benefits  You do not remove an ineligible dependent from The two-year rule for dental and vision coverage, coverage. which requires you to maintain your coverage election for two years, will no longer apply beginning Eligibility: Dependents Eligible for Coverage January 1, 2014. You will be able to change your As part of the continued implementation of the ACA, dental and vision coverage election every year during also known as “health care reform,” effective January annual enrollment. You cannot change your dental 1, 2014, eligible children under the age of 26 are and vision coverage during the year unless you eligible for coverage under this Plan, even if the child experience a Life Event. is eligible for medical coverage from his or her own employer-sponsored plan. Vision Benefits The following language is a clarification of current Eligibility: Qualified Medical Child Support Plan administration. Order The Plan will cover up to the Vision Service Plan If you wish to submit a medical child support order (VSP) plan limits for disposable contact lenses in lieu or to request a copy of the Plan’s policies and of glasses. That limit is currently $150 if purchased procedures for determining whether an order is through a VSP in-network provider. “qualified” in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), Spending Accounts the address has been changed to the following: Health Savings Account (HSA) and Limited UPS Benefits Service Center Purpose Spending Account (LPSA) Attention: Qualified Order Team The maximum allowable annual contribution PO Box 1542 employees may make to their HSA will be $3,300 for Lincolnshire IL 60069-1542 individual coverage or $6,550 for family coverage. Minimum Essential Coverage The maximum allowable HSA catch-up contribution The medical plan coverage provided through the Plan for individuals age 55 and older remains at an constitutes minimum essential coverage for purposes additional $1,000 per year. of the individual mandate applicable to you Effective January 1, 2014, prior to making any beginning on January 1, 2014, as required by the contributions to a LPSA, you will be required to ACA. contribute the maximum contribution to the HSA. HIPAA Certificate of Creditable Coverage Health Care Spending Account (HCSA) and As required by the Health Insurance Portability and Approved Leaves of Absence Accountability Act (HIPAA), UPS automatically If you are a non-union employee on an approved sends Certificates of Creditable Coverage in the medical leave (other than a FMLA qualifying leave) following instances: or Workers’ Compensation leave, you are eligible to  When you or a dependent loses health coverage continue your contribution to your HCSA during under the Plan, without regard to whether you are your leave on an after-tax basis. You must elect to eligible for COBRA or not. continue your contribution to your HCSA in order for  When you lose COBRA continuation coverage. any eligible expenses incurred during your leave to be eligible for reimbursement. In addition, you may request a Certificate of Creditable Coverage at any time within 24 months of Filing a Claim losing coverage under the Plan. If you wish to request Claims filed under fraudulent pretenses (including a Certificate of Creditable Coverage, please call the any portion of the expense that is otherwise a covered UPS Benefits Service Center at 1-800-UPS-1508. expense) will not be covered under the Plan. Grandfathered Plan Status In addition, Plan coverage for you or your dependent The medical plan is a ‘‘grandfathered health plan’’ may be terminated if you or your dependent submits, under the ACA. Being a grandfathered health plan

2 means that your Plan may not include certain Women’s Health Rights consumer protections of the ACA that apply to other The Women’s Health and Cancer Rights Act requires plans. However, grandfathered health plans must that we notify you annually that your Plan provides comply with certain other consumer protections in coverage for the following after a covered the ACA; for example, the elimination of lifetime mastectomy: limits on essential health benefits (as defined by the  Reconstruction of the breast on which the ACA). mastectomy was performed Questions regarding which protections apply and  Surgery and reconstruction of the other breast to which do not apply to cause a plan to change from produce a symmetrical appearance grandfathered health plan status can be directed to the  Prostheses, and Plan Administrator at 1-800-UPS-1508. You may  Treatment of physical complications of all stages also contact the Employee Benefits Security of a mastectomy, including lymphedemas. Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa/healthreform. Coverage will be subject to the same annual This website has a table summarizing which deductible and coinsurance provisions and other protections do and do not apply to grandfathered limitations and exclusions applicable under the Plan. health plans.

This notice is intended to fulfill UPS’s legal obligation to notify employees of material changes to The Flexible Benefits Plan. This notice formally amends the coverage available under the Plan. © 2013, United Parcel Service of America, Inc. All Rights Reserved 10/13 214-0018 Summary of Material Modifications The Flexible Benefits Plan September 2012

This notice details Plan improvements, changes, clarifications, and required notifications effective January 1, 2013, unless otherwise noted below. You should keep this with your Flexible Benefits Plan Summary Plan Description for future reference. The terms of the Plan are not changing and remain in full force and effect, except as specifically described in this Summary.

Preventive Medical Care Guidelines The chart below replaces the current one in your Summary Plan Description. As an improvement to the guidelines, routine physicals are covered once every year for participants age 7 up to age 50, instead of every other year.

Guidelines for Children Age Birth up to Age 1 Age 1 up to Age 3 Age 3 up to Age 7 Age 7 up to Age 20 Visits 7 well child 3 well child 1 well child 1 routine physical Frequency Every year Every year Immunizations Per current guidelines Per current guidelines Per current guidelines Per current guidelines Tests  Hemoglobin and  Hemoglobin and  Hemoglobin and  Hemoglobin and Hematocrit Hematocrit Hematocrit Hematocrit  Tuberculin skin  Tuberculin skin  Tuberculin skin  Tuberculin skin test test test test  PKU  Hearing screening Females only N/A N/A N/A  Gyn. exam every year 18 and older  Pap smear  Breast exam Males only N/A N/A N/A  Testicular exam

Guidelines for Adults Age Age 20 up to Age 30 Age 30 up to Age 40 Age 40 up to Age 50 Age 50 and Older Visits 1 routine physical 1 routine physical 1 routine physical 1 routine physical Frequency Every year Every year Every year Every year Immunizations  DPT  DPT  DPT  DPT  MMR  MMR  MMR  MMR Tests  CBC  CBC  CBC  CBC  Occult blood  Occult blood Females only  Gyn. exam every  Gyn. exam every  Gyn. exam every  Gyn. exam every year 18 and older year 18 and older year 18 and older year 18 and older  Pap smear  Pap smear  Pap smear  Pap smear  Breast exam  Breast exam  Breast exam  Breast exam Males only  Testicular exam  Testicular exam  Testicular exam  Testicular exam  PSA  PSA

Dental Benefits continue enrollment in the DMO for 2013. Specific There are changes to the fully insured Dental benefit levels and coverage in the DMO is Maintenance Organization (DMO) option provided determined by Aetna’s Certificate of Coverage. If by Aetna. Current DMO participants will receive a there is a discrepancy between the information separate notice describing these changes and a new contained in the Flexible Benefits Plan Summary DMO Certificate of Coverage from Aetna if they Plan Description (including this SMM) and the Aetna

1 Certificate of Coverage, the Aetna Certificate of Plan participants eligible for LTD coverage under the Coverage controls. Plan will be provided with Aetna’s Certificate of Coverage that describes in more detail the LTD Prescription Drug Benefits benefits insured by Aetna. If you have any questions CVS Caremark will replace Express Scripts/Medco regarding LTD benefits insured by Aetna, how to file as the new prescription drug benefits administrator a claim, or Aetna’s claims review and appeals for The Flexible Benefits Plan. Your prescription procedures, please refer to Aetna’s Certificate of drug benefits under the Plan are not changing. Coverage, or call Aetna at 1-866-825-0186. You If you have questions about your prescription drug should keep the Certificate of Coverage with your benefits, you should call Express Scripts/Medco at Summary Plan Description (SPD) for future 1-800-346-1327 through December 31, 2012. reference. If there is any conflict between the SPD Beginning January 1, 2013, contact CVS Caremark and the Certificate of Coverage or any other directly by phone at 1-855-282-8412, or online at insurance document provided by Aetna, the www.caremark.com. Certificate of Coverage and/or insurance documents control. If you need a copy of the Certificate of Filing a Claim with Caremark Coverage, you can contact Aetna at the number Effective January 1, 2013, prescriptions for above, or you can contact the Benefits Service Center maintenance or long-term medications may be at 1-800-UPS-1508. purchased either from a CVS/pharmacy retail store, or mailed to: New or Recurring Disabilities Arising Prior to January 1, 2013 CVS Caremark MetLife will continue to insure LTD benefits with P.O. Box 94467 respect to new disabilities that arise prior to January Palatine, IL 60094-4467 1, 2013 (including any recurring disabilities The mail order benefit levels apply regardless of associated with a disability that arose prior to January whether the maintenance prescription is filled at a 1, 2013). See your SPD for MetLife’s contact CVS/pharmacy or by mail from CVS Caremark. information. As noted in your SPD, MetLife insures the benefits pursuant to insurance documents First-level appeals for claims administered by CVS provided by MetLife. If there is a conflict between Caremark should be mailed to: those insurance documents and the SPD, the CVS Caremark insurance documents control. Appeals Department MC109 Long-Term Care P.O. Box 52084 In November 2010, MetLife made the decision to Phoenix, AZ 85072-2084 discontinue offering the long-term care insurance (LTC) product to new entrants after December 31, Plan Administration 2012. Effective January 1, 2013, prescription drug benefits are administered by: If you would like to enroll in the MetLife LTC CVS Caremark program before the deadline, you must request your One CVS Drive enrollment application no later than December 3, Woonsocket, RI 02895 2012. Your application must be received—not postmarked—by MetLife no later than January 2, Long-Term Disability 2013. This will allow ample time for you to complete and return your application. New Disabilities Arising on or After January 1, 2013 If you currently have LTC, or choose to purchase it Effective January 1, 2013, Aetna® will become the by the deadlines above, your coverage is guaranteed new long-term disability (LTD) benefit insurance renewable by MetLife as long as you continue carrier for the Plan with respect to new disabilities making premium payments. MetLife will ensure that that arise on or after January 1, 2013. All benefits you continue to receive the same high level of service insured by Aetna will be provided in accordance with that you have come to expect. insurance documents provided by Aetna. Although LTC is subject to rate increases as determined by the insurance carrier for such disabilities is changing Metlife. It is not a UPS-administered health care plan from MetLife to Aetna, the LTD benefits provided by and is only available as a voluntary benefit offering. Aetna are not substantially changing.

2 The long term care benefits are offered pursuant to for behavioral health benefits. All other provisions of insurance documents issued by MetLife. If there is your behavioral health benefits remain unchanged. any conflict between the insurance documents and If you choose to seek treatment outside the the information contained in The Flexible Benefits ValueOptions network, the facility or treatment Plan Summary Plan Description (including this center must meet the following criteria to be eligible SMM), the insurance documents control. for coverage under the Plan: For more information on LTC, contact MetLife at  Possess all valid and applicable state licenses 1-800-GET-MET8, or visit MetLife’s website at  Possess the minimum level of professional liability www.metlife.com/mybenefits. coverage required by law Spending Accounts  Meet acceptable criteria for malpractice claims history for the past five years Health Care Spending Account (HCSA) and  Possess a Drug Enforcement Administration Limited Purpose Spending Accounts (LPSA) (DEA) certification, if applicable As part of the continued implementation of the  Maintain accreditation from one of the following Patient Protection and Affordable Care Act accrediting bodies: (PPACA), also known as “health care reform,”  National Committee for Quality Assurance beginning January 1, 2013, the maximum employee (NCQA) contribution amount that you may elect to make during the Plan year to contribute to the Health Care  The Joint Commission (TJC) Spending Account and the Limited Purpose Spending  The Commission on Accreditation of Account is $2,500. Rehabilitation Facilities (CARF)  Council on Accreditation (COA) If you elect to participate in an HCSA or LPSA, then  American Osteopathic Association (AOA) lose eligibility (for example, you terminate employment) and later become eligible again for this  Healthcare Facilities Accreditation Program Plan or any other UPS-administered plan during the (HFAP) same year, the maximum employee contribution  Accreditation for Ambulatory Health Care amount that you will be able to elect for the (AAAHC) remainder of the year will be reduced by the total  Det Norske Veritas (DNV) contributions you had already made during the same – Community Health Accreditation Program year. For example, if you elected $2,500 for the year (CHAP) beginning January 1, 2013 and you terminate Facilities such as therapeutic boarding schools employment on March 31, 2013 after having and wilderness treatment programs often do not contributed only $208, the $2,500 maximum meet the criteria listed above and cannot be employee contribution you can elect for 2013 will be covered. reduced by the $208 that you already contributed, to $2,292 for the remainder of 2013. For program specific criteria, contact ValueOptions at 1-800-336-9117 to obtain detailed coverage Health Savings Account (HSA) information. The maximum allowable annual contribution employees may make to their HSA will be $3,250 for Medical Benefits individual coverage or $6,450 for family coverage. All services performed or directed by a licensed The maximum allowable HSA catch-up contribution chiropractor are covered at the applicable deductible for individuals age 55 and older remains at an and/or coinsurance level. Chiropractor visits, additional $1,000 per year. including office visits, manipulation(s), physical therapy and/or other related services, are limited to Filing a Medical Claim 40 visits per calendar year. Medical necessity review The following language is a clarification of current is not required. Services are covered for in-network Plan administration. providers only. Services from out-of-network Any reimbursement checks that are not cashed within chiropractic providers will not be covered. 12 months from the date of the check are void, and Critical Illness Insurance (CII) you lose any rights to such reimbursement. As of January 2012, MetLife now offers the Behavioral Health Benefits Guarantee Issue benefit up to a $15,000 benefit, with The following language is a clarification of current no waiting period. The Guarantee Issue benefit is Plan administration of out-of-network facility claims described in more detail in the Certificate issued by

3 MetLife, which you can obtain by calling MetLife at requirement to provide preventive health services 1-800-GET-MET8. without any cost sharing. However, grandfathered health plans must comply with certain other A new wellness screening benefit has been added to consumer protections in PPACA; for example, the the policy. If you undergo one of the specified elimination of lifetime limits on essential health screenings outlined in the Certificate while you are benefits (as defined by PPACA). covered under the policy and after your critical illness insurance has been in effect for 12 months, Questions regarding which protections apply and you will become eligible for a wellness screening which do not apply to cause a plan to change from benefit of up to $75 per covered person each year. In grandfathered health plan status can be directed to the order to receive the wellness screening benefit, you Plan administrator at 1-800-UPS-1508. You may also must submit to MetLife, at your expense, adequate contact the Employee Benefits Security evidence that the screening was performed. Such Administration, U.S. Department of Labor at 1-866- evidence must consist of written documentation 444-3272 or www.dol.gov/ebsa/healthreform. This satisfactory to MetLife that a covered person has website has a table summarizing which protections undergone one of the screenings. do and do not apply to grandfathered health plans. The policy pays only one screening benefit per Women’s Health Rights covered person per calendar year. The Women’s Health and Cancer Rights Act requires that we notify you annually that your Plan provides All benefits are subject to the limitations and coverage for the following after a covered exclusions described in the Certificate. If there is a mastectomy: conflict between this summary and the Certificate, the Certificate controls. If you have any questions,  Reconstruction of the breast on which the contact MetLife at 1-800-GET-MET8. mastectomy was performed  Surgery and reconstruction of the other breast to Grandfathered Plan Status produce a symmetrical appearance The medical plan is a “grandfathered health plan”  Prostheses, and under the Patient Protection and Affordable Care Act  Treatment of physical complications of all stages (PPACA). As permitted by PPACA, a grandfathered of a mastectomy, including lymphedemas. health plan can preserve certain basic health coverage Coverage will be subject to the same annual that was already in effect when that law was enacted. deductible and coinsurance provisions and other Being a grandfathered health plan means that your limitations and exclusions applicable under the Plan. Plan may not include certain consumer protections of PPACA that apply to other plans; for example, the

This notice is intended to fulfill UPS’s legal obligation to notify employees of material changes to The Flexible Benefits Plan. This notice formally amends the coverage available under the Plan. © 2012, United Parcel Service of America, Inc. All Rights Reserved 9/12 213-0018 Summary of Material Modifications The Flexible Benefits Plan September 2011

This notice details Plan improvements, changes, clarifications, and required notifications effective January 1, 2012, unless otherwise noted. You should keep this with your Flexible Benefits Plan Summary Plan Description for future reference.

Summary of Benefits: Medical Benefits The following is a summary of your benefits for a medically necessary visit to an urgent care clinic. The benefits listed below clarify current Plan administration and are subject to additional Plan limits, as described in the specific benefit plan sections of The Flexible Benefits Plan Summary Plan Description. All out-of-network and out- of area medically necessary services are subject to reasonable and customary (R&C) limits.

Traditional Medical Option Healthy Savings Medical Option In-Network Out-of- Out-of-Area In-Network Out-of- Out-of-Area Network Network Hospital Facility Charges Urgent care 85% 65% 85% 80% 60% 80% clinic visit

Income Protection Plan: Short-Term Income Protection Plan: Long-Term Disability Disability The following is a clarification of current Plan LTD Exclusions and Limitations administration for short-term disability (STD) The following provisions of the long-term disability benefits under the Income Protection Plan. (LTD) benefits under the Income Protection Plan are  STD benefits are offset by receipt of any of the no longer in effect. All other LTD exclusions and following: limitations remain unchanged. – Discretionary days (such as sick pay or If your annual base compensation exceeds $245,000 optional holiday pay, if applicable) per year, you may be eligible for additional LTD – Holiday pay benefits under the UPS Coordinating Benefit Plan. – Vacation pay  Employees can elect to receive vacation pay with Health Care Coverage and the Income Protection no offset between weeks 14–26 of STD leave if Plan the sum of STD benefits and vacation pay does The following is a clarification of current Plan not exceed 100 percent of pre-disability weekly administration in the event you become eligible for, earnings. and enroll in, coverage under the Retired Employees’ – Management and Specialist employees can use Health Care Plan following the end of your 12-month one day of vacation per week, between weeks extension of health care coverage. 14–26, with no offset. You remain eligible to continue coverage under the – Administrative and Technical employees can Retired Employees’ Health Care Plan as long as you: use two days of vacation per week, between weeks 14–26, with no offset.  Continue to be eligible and approved for LTD  Discretionary, holiday or vacation days taken benefits by the claims administrator, and during STD leave do not extend the maximum  Are under age 65. 26-week STD period. Quit For Life Tobacco Cessation Program  STD benefits paid by Aetna are computed using The Quit For Life vendor has changed its name from an average daily amount based on your annual Free & Clear® to Alere WellbeingTM. You can contact base compensation. them by calling 1-866-QUIT-4-LIFE (1-866-784-8454) or online at www.quitnow.net/ups.

1 Dental Benefits Privacy Notice Due to a typographical error, the following services Federal privacy rules under the Health Insurance were listed as covered under Preventive Services. Portability and Accountability Act of 1996 (HIPAA) The correct benefit for each service, as currently require health plans and health plan providers to administered by the Plan, is covered under Basic protect the privacy of certain health information, Services: while allowing the flow of information needed to  Scaling and root planing (four separate quadrants provide high-quality health care. UPS has provided every two years) employees covered under a UPS-administered health  Gingivectomy (one per quadrant/site every three care plan with a privacy notice describing the years) permissible uses and disclosures of health plan information.  Osseous surgery (one per quadrant/site every three years) To obtain a copy of that notice, you can:  Occlusal guards (one every three years)  Visit www.upshealthyconnections-  Problem-focused exams (two per year) informedchoices.com and click the Privacy link at You are responsible for the balance billed, including the bottom of each page of the site; applicable deductible or amount that exceeds the  Log on to www.UPSers.com and find your health reasonable and customary charge. care benefits information under the My Life and Career tab; or Women’s Health Rights The Women’s Health and Cancer Rights Act requires  Call the UPS Benefits Service Center toll-free at that we notify you annually that your Plan provides 1-800-UPS-1508. coverage for the following after a covered mastectomy:  Reconstruction of the breast on which the mastectomy was performed  Surgery and reconstruction of the other breast to produce a symmetrical appearance  Prostheses, and  Treatment of physical complications of all stages of a mastectomy, including lymphedemas. Coverage will be subject to the same annual deductible and coinsurance provisions and other limitations and exclusions applicable under the Plan.

This notice is intended to fulfill UPS’s legal obligation to notify employees of material changes to The Flexible Benefits Plan. This notice formally amends the coverage available under the Plan. © 2011, United Parcel Service of America, Inc. All Rights Reserved 9/11 212-0011 Summary of Material Modifications The Flexible Benefits Plan May 2011

This notice details Plan improvements, changes, clarifications, and required notifications effective June 1, 2011, unless otherwise noted. These provisions do not apply to ConnectShip employees, or employees on disability leave prior to June 1, 2011. You should keep this with your Flexible Benefits Plan Summary Plan Description for future reference.

Income Protection Plan: Short-Term Approved benefits will be paid by ADAM on a Disability weekly schedule. If you are a Management The following provisions of the short-term disability employee, you must contact ADAM on the first day (STD) benefits under the Income Protection Plan are of your disability to ensure that there is no effective June 1, 2011. All other provisions of the interruption in receiving your paycheck from ADAM. Income Protection Plan remain unchanged. In any case, your claim must be received (via phone If you qualify for STD benefits, you are paid a or Web) within 60 days of the initial date of your percentage of your base pay for up to 26 weeks. disability in order for you to receive STD benefits. If you are a Management or Specialist employee, you STD benefits are taxed when paid to you. ADAM will receive your paycheck from the Company, will issue W-2 forms for any benefits you receive including your usual payroll deductions, through the under the STD Plan. end of the pay cycle in which your disability leave You will be billed by the Benefits Service Center for begins. your share of the cost of your Flexible Benefits Plan Aetna Disability and Absence Management (ADAM) coverage. If you fail to make timely payments of this will administer your STD payment beginning the first bill, your coverage will be terminated. day of the pay cycle following your last day worked.

This notice is intended to fulfill UPS’s legal obligation to notify employees of material changes to The Flexible Benefits Plan. This notice formally amends the coverage available under the Plan. © 2011, United Parcel Service of America, Inc. All Rights Reserved 5/11 211-0038 Summary of Material Modifications The Flexible Benefits Plan December 2010

This notice details Plan improvements, changes, clarifications, and required notifications effective January 1, 2011, unless otherwise noted. It has been revised from its original December 2010 printing to accurately reflect changes to ConnectShip employees. You should keep this with your Flexible Benefits Plan Summary Plan Description for future reference.

Income Protection Plan: Short-Term Disability weeks of STD. Otherwise, your second absence will be The following provisions of the short-term disability considered a continuation of the first disability period and (STD) benefits under the Income Protection Plan are both periods of absence count toward the 26-week period effective January 1, 2011. All other provisions of the of STD benefits. This provision applies regardless of Income Protection Plan remain unchanged. whether the subsequent disability is due to the same or a STD Coverage different cause. If you qualify for STD benefits, you are paid a percentage Vacation or discretionary days are not counted in of your base pay for up to 26 weeks. determining whether you have returned to work for 30 If you are an Administrative or Technical employee, the consecutive calendar days. calculation used to determine your average, weekly base STD Benefit Offsets pay, as described in your Summary Plan Description If you return to work after the first 13 weeks of STD (SPD) and SPD insert, remains unchanged. benefits, your STD benefit will not be offset by any If you are a Management or Specialist employee, the Plan residual disability/return-to-work amounts that you earn pays 100 percent of your base pay for the first 13 weeks, until your return-to-work earnings exceed 20 percent of and then 80 percent of your base pay for the remaining 13 your pre-disability base pay. weeks of approved STD.* *The provisions in this paragraph do not apply to Dependent Children Under Age 26 ConnectShip employees. The September 2010 SMM explained that an otherwise eligible child is not eligible for coverage under this Plan if STD Exclusions and Limitations the child is eligible for coverage under another employer- Receiving vacation pay does not preclude you from sponsored plan. This provision applies to any coverage receiving STD benefits or extend your disability period. under this Plan, including medical, dental and vision. A If You Have More Than One STD Absence child cannot be added to any coverage under this Plan if If you are on an approved disability on January 1, 2011, the child is eligible for medical coverage from his or her and subsequently return to work (other than as a own employer-sponsored plan. participant in a residual disability/return-to-work program, you are subject to the following return-to-work provisions. HIPAA Certificate of Creditable Coverage A Certificate of Creditable Coverage shows the dates If you are absent and receiving STD benefits and return to coverage begins and ends under a health care plan. It is work for less than 30 consecutive calendar days (other used if you are leaving UPS and obtaining coverage from than as a participant in a residual disability/return-to-work another source that has a pre-existing condition exclusion. program), your second absence will be considered a If you provide your new plan with a Certificate of continuation of the first disability period and both periods Creditable Coverage within 63 days of the date your UPS of absence count toward the 26-week period of STD coverage ends, your new plan cannot enforce any benefits. pre-existing condition exclusions it may otherwise If you are absent and receiving STD benefits and return to contain. work for at least 30 consecutive calendar days (other than UPS automatically sends Certificates of Creditable as a participant in a residual disability/return-to-work Coverage with COBRA notices. If you need a Certificate program), you are eligible for a new 26-week period of of Creditable Coverage in advance of receiving a COBRA STD benefits. You must have returned to work for at least notice, please call the UPS Benefits Service Center at 30 consecutive calendar days to be eligible for a new 26 1-800-UPS-1508.

1 Prescription Drug Benefits Example: You purchase, from a retail pharmacy, a non- The following content clarifies current Plan preferred brand drug priced at $5,000, even though a administration. generic drug is available for $300. The Plan pays $240, which is 80% of the cost of the generic drug. Your Out-of-Pocket Coinsurance coinsurance is 20%, or $60, which is within the per-script A per-script coinsurance minimum and maximum out-of- minimum and maximum amounts for a generic drug from pocket applies to most prescriptions. This is the minimum a retail pharmacy. You must pay $60 plus the difference and maximum coinsurance amount you are required to between the price of the brand and generic drugs, up to pay out-of-pocket for a covered prescription drug: the non-preferred maximum amount, which is $300  If the cost of the drug is less than the minimum, you from a retail pharmacy. Your total cost is $360. pay the full cost of the drug Prior to this change, you would have paid the $60  If the amount of your coinsurance is the same or less coinsurance plus the entire $4,700 difference between the than the minimum, you must pay the minimum amount price of the brand and generic drugs, for a total of $4,760.  If the amount of your coinsurance is greater than the maximum, you pay only the maximum amount

The following content reflects a change in your prescription drug benefits. Brand-to-Generic Difference If you purchase a brand-name drug when a generic is available, you must pay the difference in cost between the brand and generic drug, up to the non-preferred per-script maximum amount, in addition to your coinsurance amount. This difference is not included in the per-script coinsurance maximum out-of-pocket or your annual out- of-pocket maximum.

Summary of Benefits Prescription Drug Benefits The following content reflects a change in your prescription drug benefits.

Traditional Option Healthy Savings Option Retail Pharmacy Medco By Mail Per-Script Min/Max* Per-Script Min/Max* Generics 80% 80% after deductible; $5/$100 $10/$200 deductible waived if preventive care med. Preferred brands** 80% 80% after deductible; $25/$150 $50/300 deductible waived if preventive care med. Non-preferred brands** 50% 50% after deductible; $50/$300 $100/$600 and non-sedating deductible waived if antihistamines preventive care med. *The per-script coinsurance minimum/maximum applies to both the Traditional and Healthy Savings medical options. In the Healthy Savings option, the per-script coinsurance minimum and maximum applies only after the annual deductible has been met or if the drug is considered a preventive care medication. Until the annual deductible for this medical option has been met, you are responsible for the entire cost of the prescription. **If you purchase a brand-name drug when a generic is available, you must pay the difference in cost between the brand and generic drug, up to the non-preferred per-script maximum amount, in addition to your coinsurance amount. This difference is not included in the per- script coinsurance maximum out-of-pocket or your annual out-of-pocket maximum.

This notice is intended to fulfill UPS’s legal obligation to notify employees of material changes to The Flexible Benefits Plan. This notice formally amends the coverage available under the Plan. © 2011, United Parcel Service of America, Inc. All Rights Reserved 05/11 211-0037 Summary of Material Modifications The Flexible Benefits Plan September 2010

This notice details Plan improvements, changes, clarifications, and required notifications effective January 1, 2011, unless otherwise noted. You should keep this with your Flexible Benefits Plan Summary Plan Description for future reference.

Health Care Reform placed with you for adoption, or a child for whom you are In March, President Obama signed into law the Patient the legal guardian (as determined in accordance with Protection and Affordable Care Act (PPACA), also applicable law). known as “health care reform.” Effective January 1, 2011, If you have a “Child” who previously lost coverage under PPACA requires the following changes to your UPS- your Plan, was denied coverage, or was otherwise not administered health care plan. If the PPACA provisions eligible for coverage under your Plan because he or she requiring these Plan changes are ever repealed, the did not satisfy your Plan’s prior definition of dependent changes made solely as a result of PPACA will be child (for example, your child turned age 19 but was not a terminated and the provisions of the Plan modified by full-time student), you will have 30 days, beginning the PPACA will be reinstated effective the date the law is first day of the annual enrollment period, to enroll repealed. yourself (if eligible but not enrolled) and/or your child in Grandfather Plan Status the Plan. If you enroll your child during the 30-day UPS believes this Plan is a “grandfathered health plan” as enrollment period, coverage for your child will be defined under PPACA. A grandfathered health plan is effective on January 1, 2011 (provided that the individual permitted to preserve certain basic health coverage that is a child on January 1, 2011). Notwithstanding anything was already in effect when PPACA was enacted. Being a to the contrary, an otherwise eligible child is not eligible grandfathered health plan means that your Plan may not for coverage under this Plan if the child is eligible for include certain consumer protections included in PPACA coverage under another employer-sponsored plan (other which apply to other plans that are not grandfathered than the parent’s employer-sponsored plan—keep in mind plans. For example, the requirement to provide preventive that the child could be eligible for the parent’s employer- health services without any cost sharing does not apply to sponsored plan as both a dependent and an employee). a grandfathered health plan such as your Plan. However, A covered child who becomes incapacitated while grandfathered health plans are not exempt from all covered under the Plan and before he or she turns age 26 consumer protections included in PPACA. For example, is eligible to continue coverage after turning age 26 as PPACA’s prohibition against lifetime limits on “essential long as you are eligible and as long as the following benefits” does apply to grandfathered health plans. conditions are satisfied: (i) the incapacity exists, (ii) the Questions regarding which protections apply and which child is unmarried, (iii) the child is primarily dependent protections do not apply to a grandfathered health plan on you for support and maintenance, and (iv) appropriate and what might cause a plan to change from certification of disability is provided. You must apply to grandfathered health plan status can be directed to the continue coverage for an incapacitated dependent prior to Plan Administrator identified in the Summary Plan age 26. Description (SPD). You may also contact the Employee The child must have a mental or physical incapacity that Benefits Security Administration, U.S. Department of renders the child unable to care for him- or herself, as Labor, at 1-866-444-3272 or determined by the claims administrator. To apply for www.dol.gov/ebsa/healthreform. This Web site has a table continuation of coverage for an incapacitated dependent, summarizing protections under PPACA, and which do contact your claims administrator. Certification of the and do not apply to grandfathered health plans. incapacitation by the claims administrator must occur Dependent Children Under Age 26 prior to coverage being continued under the Plan. You may now cover a “Child” through the end of the Certification must also occur before coverage is lost under month in which the child turns age 26. A “Child” is the Plan. In addition, periodic medical documentation of defined as your natural child, your adopted child, a child the continuing incapacity is required as determined by the claims administrator.

1 In addition, the following benefits previously provided HCSA or HSA Reimbursement of Over-the-Counter only to children under age 19 are revised as follows: Drugs  Charges for hearing exams and one hearing aid per ear Any expenses incurred on or after January 1, 2011 for every three years for children up to age 26 (must be over-the-counter (OTC) medicines or drugs (with the prescribed by an otolaryngologist). exception of insulin) will be eligible for reimbursement  Benefits are allowed for teeth straightening for your from a Flexible Spending Account such as your health dependent children under 26 years of age. Services care savings account (HCSA), or a Health Savings provided by the end of the month in which your child Account (HSA) only if the medications are prescribed by turns 26 are covered, as long as treatment began before a physician. The terms “medicines or drugs” and the child’s 26th birthday. “prescribed” will be defined in accordance with applicable IRS regulations. Elimination of Lifetime Maximum Benefits Lifetime dollar limits on aggregate benefits will be Mental Health Parity eliminated from your Plan effective January 1, 2011. If Effective January 1, 2011, the administration of your you are an otherwise eligible employee whose coverage behavioral health coverage will be amended per the previously ended upon reaching your lifetime maximum federal regulations set forth in the Mental Health Parity benefit under the Plan, you will have 30 days, beginning and Addiction Equity Act. the first day of the annual enrollment period, to re-enroll Precertification Requirements in the Plan. If you choose to enroll, your coverage is ValueOptions must always precertify the following effective January 1, 2011 (as long as you continue to meet services, regardless of whether an in- or out-of-network the Plan’s eligibility requirements). You may also enroll provider or facility is used. If you fail to have these any dependents whose coverage ended upon reaching services approved in advance, no benefits are payable. their lifetime maximum.  Psychological testing Elimination of Lifetime and Annual Dollar Limits for  Complex medication management “Essential Benefits”  Electroconvulsive therapy (ECT) Effective January 1, 2011, lifetime and annual dollar  Biofeedback limits on essential benefits will be administered in  Hypnotherapy accordance with PPACA. This means the dollar  Aversion therapy maximums on the following “essential benefit” will be eliminated: There is no precertification requirement for in- or out-of- network inpatient or outpatient treatment. However, all  Lifetime limit on outpatient hospice care treatment must be determined, by ValueOptions, to be Elimination of Pre-existing Conditions on Benefits for medically necessary. Children Under Age 19 To ensure you receive the maximum benefits under the Pre-existing condition limits will be eliminated from your Plan, you should always contact ValueOptions at Plan effective January 1, 2011, for children under age 19. 1-800-336-9117 prior to seeking any mental health or The following are considered by PPACA to be the only substance abuse treatment. pre-existing conditions under the Plan. All language in the SPD will otherwise continue to be administered based on Mental health parity legislation does not affect the the terms and intent of the Plan, with only the pre-existing Solutions – Your EAP and Work/Life Benefit program, condition exclusions removed in the following provisions also administered by ValueOptions. You are eligible to for children under age 19: receive six free in-person visits (per issue, per year) with  Cosmetic/plastic surgery needed to correct a a licensed, in-network Employee Assistance Program malformation as a direct result of disease, surgery provider, as well as referrals for legal, financial and performed to treat a disease, or an accidental injury that work/life resources. Refer to your SPD or contact occurred prior to coverage under the Plan is not ValueOptions at 1-800-336-9117 for program details. covered. Health Savings Account (HSA) Penalty Increase  Dentures and bridgework for replacement of teeth If an employee is under age 65 and enrolled in an HSA, extracted before the patient was covered by a UPS any funds withdrawn from that account that are not used dental option are not covered. for qualified health care expenses will be subject to a 20  Orthodontia treatment already in progress prior to percent tax penalty, which is an increase from the current becoming covered under the Plan is not covered. 10 percent penalty.  Replacement of congenitally missing teeth is not Network Carrier Changes covered. The Dental DMO will no longer be offered in Louisiana effective January 1, 2011. Please refer to your annual

2 enrollment materials for the dental options available to covered condition in one of three distinct categories (as you for 2011. Participants currently enrolled in the DMO defined in the group certificate): who do not choose another dental option for 2011 will be  Category 1 incorporates certain cancer-related enrolled in Dental Option 1, which is a Dental PPO conditions: Full Benefit Cancer, Partial Benefit Cancer offered by Aetna and has an 80% coinsurance benefit. and Bone Marrow Transplant. (For some types of Transferring from the Flexible Benefits Plan cancer and a coronary artery bypass graft, you will If you’re a current employee transferring from The receive 25% of the category benefit amount.) Flexible Benefits Plan to another UPS-administered plan  Category 2 incorporates certain heart-related but your effective date is delayed until you reach your conditions: Heart Attack, Heart Transplant, Stroke (in seniority attainment date (SAD), The Flexible Benefits certain states, the covered condition is severe stroke) Plan will provide certain types of coverage during the and Coronary Artery Bypass Graft. waiting period. As a clarification of current Plan  Category 3 incorporates certain other covered administration, this coverage includes any elected tax- conditions: Major Organ Transplant (other than bone advantaged accounts. Your current elections, as well as marrow and heart) and Kidney Failure. applicable payroll deductions, will continue during the Coverage amounts for the Simplified Issue CII benefit waiting period. will be available for the employee, spouse or domestic Hyatt Legal Plan partner, and children in the benefit amount of $10,000 for The Hyatt Legal Plan will offer the following new each category, regardless of whether you currently services: participate in the fully underwritten CII plan.  Adoption and Legitimization (Contested and For more questions about the program, visit the MetLife Uncontested). This service covers all legal services and Web site at www.metlife.com/mybenefits or contact a court work in a state or federal court for an adoption by MetLife CII Customer Service Representative at the legal plan member and spouse. Legitimization of a 1-800-GET MET 8 (1-800-438-6388). child by the legal plan member and spouse, including reformation of a birth certificate, is also covered. This As with any benefit offered under your Plan that is includes international adoptions. insured by an insurance carrier pursuant to an insurance  Security Deposit Assistance. This service covers contract, the terms of the insurance control if there is a counseling the participant as a tenant in recovering a conflict between this summary and the insurance contract security deposit from the participant's residential (including any certificates of coverage provided by the landlord for the participant's primary residence; insurance carrier). reviewing the lease and other relevant documents; and Long-Term Care Insurance preparing a demand letter to the landlord for the return Long-term care insurance rates increased effective of the deposit. It also covers assisting the participant in August 1, 2010. This rate increase applies only to new prosecuting a small claims action; helping prepare applicants. If you enrolled in the long-term care insurance documents; advising on evidence, documentation and under the Plan prior to August 1, 2010, your rates will witnesses; and preparing the participant for the small remain the same. Refer to your rate sheet from MetLife claims trial. This service does not include the legal for more information. plan attorney's attendance or representation at the small claims trial, collection activities after a judgment or any Women’s Health Rights services relating to post-judgment actions. The Women’s Health and Cancer Rights Act requires that we notify you annually that your Plan provides coverage MetLife Critical Illness Plan for the following after a covered mastectomy: As of August 31, 2010, participants in the MetLife Reconstruction of the breast on which the mastectomy Critical Illness Insurance (CII) fully underwritten plan was performed will be transitioned to an enhanced MetLife CII fully underwritten plan. During the UPS annual enrollment for  Surgery and reconstruction of the other breast to 2011 benefits, current participants in the MetLife CII plan produce a symmetrical appearance will be automatically enrolled into the new and enhanced  Prostheses, and fully underwritten CII plan. You will have the option to  Treatment of physical complications of all stages of a keep or cancel your current CII plan by notifying MetLife mastectomy, including lymph edemas. at 1-800-GET-MET8. Coverage will be subject to the same annual deductible Under this new offer, you or your covered dependent can and coinsurance provisions and other limitations and receive a lump-sum benefit payment if you experience a exclusions applicable under the Plan.

3 Privacy Notice  Visit www.upshealthyconnections-informedchoices.com Federal privacy rules under the Health Insurance and click the Privacy link at the bottom of each page of Portability and Accountability Act of 1996 (HIPAA) the site; require health plans and health plan providers to protect  Log on to www.UPSers.com and find your health care the privacy of certain health information, while allowing benefits information under the My Life and Career tab; the flow of information needed to provide high-quality or health care. UPS has provided employees covered under a  Call the UPS Benefits Service Center toll-free at UPS-administered health care plan with a privacy notice 1-800-UPS-1508. describing the permissible uses and disclosures of health plan information. To obtain a copy of that notice, you can:

This notice is intended to fulfill UPS’s legal obligation to notify employees of material changes to The Flexible Benefits Plan. This notice formally amends the coverage available under the Plan. © 2010, United Parcel Service of America, Inc. All Rights Reserved 9/10 211-0012 Summary Plan Description

Table of Contents Overview of the Plan ...... 2

Eligibility ...... 6

Enrollment ...... 13

Life Events ...... 16

What If ...... 20

Summary of Beneﬁ ts ...... 26

Medical Beneﬁ ts ...... 32

Behavioral Health Beneﬁ ts ...... 51

Prescription Drug Beneﬁ ts ...... 54

Dental Beneﬁ ts ...... 58

Vision Beneﬁ ts ...... 68

Solutions — Your EAP and Work/Life Beneﬁ t ...... 70

Quit For Life Tobacco Cessation Program ...... 72

Life Insurance and AD&D ...... 73

Tax-Advantaged Reimbursement Accounts ...... 79

Legal Plan ...... 88

Adoption Assistance ...... 90

Personal Lines of Insurance ...... 92

Critical Illness Insurance ...... 93

Long-Term Care Insurance ...... 95

Income Protection Plan ...... 97

Filing a Claim ...... 108

If a Claim Is Denied ...... 115

Continuation of Coverage under COBRA ...... 120

ERISA and Other Important Information ...... 124

Member Services ...... Back Cover

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 1 22/19/10/19/10 5:15:405:15:40 PMPM The Flexible Beneﬁ ts Plan

Overview of the Plan Concern for the security and well-being of Supplemental Benefi ts you and your family is the cornerstone of Employees eligible for The Flexible Benefi ts the UPS benefi ts philosophy. We regard our Plan may also elect and pay for the follow- benefi ts expenditures as an investment in ing types of supplemental coverage: your health and security. • Supplemental life insurance for you* This book describes provisions of The • Supplemental life insurance for your Flexible Benefi ts Plan. The Plan is designed spouse and/or children* to ensure that you receive value for the benefi t • Supplemental AD&D coverage for you dollars spent. The Plan is one of the many and your family* pay and benefi t programs provided by UPS, known collectively as your total rewards. • Personal lines of insurance** • Tax-advantaged reimbursement accounts: The Plan offers you the opportunity to — Health Care Spending Account elect a variety of benefi t choices, allowing (HCSA) you to customize your benefi ts package to — Limited Purpose Spending Account meet your own unique needs. Because your (LPSA) needs will change over time, you can elect — Child/Elder Care Spending Account new benefi ts annually. (C/ECSA) Additional important information about • Critical illness insurance* your coverage is described in your Flexible • Long-term care insurance* Benefi ts Plan Summary Plan Description • Legal assistance* (SPD) insert. Keep your insert with this booklet for reference. In addition, if you enroll in the Healthy Savings medical option and you meet other Basic Benefi ts eligibility requirements described in the These basic benefi ts are automatically Internal Revenue Code, you may establish provided to participants in The Flexible and make contributions to a health sav- Benefi ts Plan: ings account (HSA). If you establish an HSA with OptumHealth Bank, your HSA • Medical and behavioral health contributions may be made with pre- • Prescription drug tax payroll deductions. The HSA is not • Dental sponsored or maintained by UPS — it is a • Vision personal account. Nor is the HSA part of • Basic life insurance for you* The Flexible Benefi ts Plan, even though you • Basic life insurance for your eligible may contribute to your HSA established spouse and children* with OptumHealth Bank with pre-tax pay- • Basic accidental death and dismember- roll deductions. ment (AD&D) insurance for you* *Although these benefi ts are described in this booklet and are part of The Flexible Benefi ts Plan, they are not intended to be nor • Short-term disability should they be construed to be part of the pre-tax cafeteria plan. • Long-term disability income (full-time **Although communicated in this booklet, personal lines of insurance employees only) is not a part of The Flexible Benefi ts Plan. • Employee assistance program (EAP) and work/life benefi t • Adoption assistance program • Tobacco cessation program

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 2 22/19/10/19/10 5:15:445:15:44 PMPM Summary Plan Description

How the Plan Works (with certain exceptions — as described later in this booklet — for dental, vision The key to The Flexible Benefi ts Plan is and long-term disability income). The choice, and that’s important because every- benefi ts you elect at that time will be one has a different lifestyle and different effective for the following calendar year. benefi t needs. That’s why the Plan offers two PPO network options and your choice You can change your benefi t elections of many supplemental benefi ts. Depending during the year only if you experience a on your choices and the benefi t options you “life event,” such as marriage, birth of a select, you may or may not have to make a baby or adoption, or divorce. See the Life contribution for coverage. Events section for more information about life events that qualify for mid-year benefi ts You can change your benefi t choices each changes. year during the annual enrollment period

Coverage Categories (Who is Covered) Type of Coverage Coverage Categories Comments • Medical (including behavioral • You only You select one of these options. health and prescription drug • You plus spouse To opt-out, you must certify you beneﬁ ts) have medical coverage elsewhere • You plus children • Dental • You plus family • Vision • Opt out • Basic life insurance You, your spouse and your Provided for all enrolled dependent children participants at no additional cost to you • Basic AD&D You only Provided at no additional cost to you • Supplemental life insurance Refer to the Prudential® Available at additional cost to you. and AD&D Enrollment Kit for details Refer to the Prudential Enrollment Kit for details • Short-term disability (STD) You only LTD is available to full-time • Long-term disability (LTD) employees only, and you may be required to pay a portion of the cost. STD is provided at no additional cost to you. • EAP and work/life See the related sections of this Some of these beneﬁ ts are • Tobacco cessation booklet for details available at additional cost to you. • Tax-advantaged reimbursement accounts (HCSA, LPSA and C/ECSA) • Legal plan • Critical illness insurance • Long-term care insurance • Adoption assistance • Personal lines of insurance

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 3 22/19/10/19/10 5:15:475:15:47 PMPM The Flexible Beneﬁ ts Plan

Overview of the Plan (cont.) Taxes and Your Benefi ts One of the advantages of the Plan is that it contains an Internal Revenue Code Section 125 cafeteria plan component. This means you can pay your portion, if any, of the cost of many benefi ts with pre-tax payroll deductions. The following table shows which benefi ts are paid for before taxes are withheld (which means they are part of the cafeteria plan), and which are paid after taxes (which means they are not part of the cafeteria plan). Contributions to a health savings account (HSA) established with OptumHealth Bank are paid before taxes but are not part of the cafeteria plan.

Paid for Before Taxes Paid for After Taxes • Contributions for medical (including behavioral • Employee’s supplemental life insurance health and prescription drug), dental and vision • Spouse’s supplemental life insurance coverage • Children’s supplemental life insurance • Tax-advantaged reimbursement accounts (HCSA, • Employee’s supplemental AD&D coverage LPSA and C/ECSA) • Legal assistance • Long-term disability • Critical illness insurance • Personal lines of insurance • Long-term care insurance

Paying for Benefi ts UPS typically makes a contribution toward the cost of your health care and your long- term disability (LTD) premium. UPS’s contributions, if any, for the benefi t options are identifi ed each year in your enrollment materials. You choose the benefi ts coverage that best meets your needs.

Glossary of Benefi t Terms The following terms are used throughout this booklet to explain how your benefi ts work. More specifi c information appears in the related sections, and controls.

Annual deductible The amount you must pay out of pocket for covered services in a calendar year before the Plan begins to pay beneﬁ ts for covered services. In some cases — speciﬁ cally for some preventive care — the deductible is not applied. The amount of the annual deductible varies with the option you select. The annual deductible begins accumulating at zero on January 1 each year — there is no carryover from the previous year.

Annual out-of-pocket The maximum amount you are responsible to pay for covered health care expenses in a calendar maximum year. When your eligible out-of-pocket expenses reach the annual out-of-pocket maximum in a calendar year, the Plan pays 100 percent of most covered charges for the rest of that year. Eligible out-of-pocket expenses accumulated toward the annual out-of-pocket maximum include deductibles (if applicable) and coinsurance amounts. Out-of-pocket expenses not accumulated toward the annual out-of-pocket maximum include any amounts over the reasonable and customary (R&C) limit and expenses not covered by the Plan.

Claims Administrator The company that administers health care beneﬁ ts and is responsible for processing claims for those beneﬁ ts.

Coinsurance The percentage of covered services the Plan or the employee pays after you have met the annual deductible. For example, for an in-network ofﬁ ce visit, the Plan pays 80 percent if you are covered under the Healthy Savings medical option, and you pay 20 percent. In all cases, the coinsurance may be different for in-network and out-of-network services.

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 4 22/19/10/19/10 5:16:175:16:17 PMPM Summary Plan Description

Glossary of Beneﬁ t Terms (cont.)

Emergency An emergency medical condition is deﬁ ned as a medical condition manifesting itself by acute symptoms of sufﬁ cient severity that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in placing the health of the individual (or the unborn child in the case of a pregnant woman) in serious jeopardy.

Investigational Describes a health care service or supply for which the medical use is still under study and not yet or experimental formally recognized throughout the medical profession in the U.S. as safe and effective.

Lifetime maximum benefi ts The total amount of medical, behavioral health, and prescription drug benefi ts payable to an individual over his or her lifetime under the Plan, regardless of whether you choose the Traditional or Healthy Savings medical option. If you switch options, benefi ts provided under the prior option(s) are counted toward your lifetime maximum under the new option. However, once the lifetime maximum benefi t has been paid, up to $1,000 will be restored on January 1 each year thereafter, to provide a total of $1,000 of payable benefi ts to that individual during that year. Also, amounts the Company recovers under the Plan’s right of recovery provisions (except amounts recovered as a result of erroneous payments), are credited toward the lifetime maximum, reduced by the Plan’s expenses incurred to recover the amount.

Medically necessary A criteria established by the claims administrator and includes, but is not limited to, their determination of required or necessary services, supplies and/or standards of care by using currently available clinical information. This information includes clinical outcome studies in the peer-reviewed published medical literature, regulatory status of the technology, evidence-based guidelines of public health and health research agencies, evidence-based guidelines and positions of leading national health professional organizations, views of physicians practicing in clinical areas, and other relevant factors for the diagnosis, care or treatment of a disease, injury or illness (including pregnancy) within generally accepted medical practice.

Network A group of doctors, hospitals and other health care providers who have agreed to provide their services to participants at contracted rates. Here are some related terms: In-network — Describes services provided by doctors, hospitals and other health providers who participate in the Plan’s network. Also describes the level of benefi ts paid by the Plan (as shown in the Summary of Benefi ts section of this booklet) for services provided by in-network providers. Out-of-network — Describes services rendered by health providers who do not participate in the Plan’s network. Also describes the level of benefi ts paid by the Plan (as shown in the Summary of Benefi ts section) when services are rendered by out-of-network providers to participants who live within a network area. Out-of-area — Describes services rendered by providers outside the Plan’s network area. Also describes the level of benefi ts paid by the Plan (as shown in the Summary of Benefi ts section) when services are rendered by out-of-area providers to participants who live outside the network area and have not “opted in” during enrollment to the medical network designated for their home state.

Per-script minimum The minimum and maximum amount you are required to pay out-of-pocket for a covered prescription and maximum drug after the applicable coinsurance, R&C and brand-to-generic difference provisions are applied. If your coinsurance amount is less than the per-script minimum, you must pay the minimum amount; if your coinsurance amount exceeds the per-script maximum, you pay only the maximum amount and the Plan pays the difference.

Preauthorization The process by which a patient is pre-approved for coverage of a speciﬁ c medical, dental or behavioral health procedure or treatment. A claims administrator may require that patients meet certain criteria or that certain conditions be met before coverage is approved. In some cases, your doctor may be required to submit notes and/or lab results documenting your condition and treatment history.

Preventive care Health care provided solely for the purpose of preventing an illness that has not yet been diagnosed, not to treat an illness or injury. The medical carriers carefully follow various guidelines for what is considered preventive care, such as those published by the U.S. Preventive Services Task Force, the American Medical Association, the American Academy of Pediatrics and the IRS.

Prior authorization The process by which a patient is pre-approved for coverage of a speciﬁ c prescription drug. A claims administrator may require that patients meet certain criteria or that certain conditions be met before coverage is approved. In some cases, your doctor may be required to submit notes and/or lab results documenting your condition and treatment history.

Reasonable and customary Refers to charges within the normal range of fees in your geographic area for similar services or (R&C) supplies, as determined by the claims administrator. Generally, when you receive services from out-of-network or out-of-area providers, you are responsible for paying the amount of the charges that exceed R&C limits. Also known as R&C.

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Eligibility Same-Sex Domestic As a union-free employee of UPS, you have Spouses, same-sex domestic partners and/or the option to enroll in coverage for you and civil union partners are not eligible to begin Partners or Civil your eligible dependents in The Flexible coverage until an SSN has been provided as Union Partners Benefi ts Plan. This section defi nes eligibility part of enrollment. Coverage for dependent You may be eligible to elect in the Plan, and indicates when coverage children begins upon enrollment; however, certain benefi ts for either begins and ends. You should refer to your if a child’s SSN is not received by the due your same-sex domestic Flexible Benefi ts Plan Summary Plan Descrip- date indicated on the enrollment form, partner and his or her tion insert to determine whether additional coverage for the child will be terminated dependent children, or civil eligibility requirements apply to you. retroactive to the date coverage began. union partner and his or her dependent children. Dependents Eligible for Coverage If you fail to provide the requested information or proof, coverage may be termi- Complete information It’s important that you know exactly what nated or delayed for you and/or your about eligibility and “dependent” means for each type of cover- dependents, and you may be required to what coverage is age under The Flexible Benefi ts Plan. reimburse the Plan for any expenses for available for same-sex The term “dependent” has the same mean- which benefi ts were paid on behalf of an domestic partners, civil Right ing for medical, dental, vision, life insur- otherwise ineligible dependent. See union partners and their of Recovery Filing a Claim ance and the employee assistance program in the section dependent children is (EAP), as described in this section. of this booklet for more information on contained in separate the Plan’s right to reimbursement. documents. Visit www. The defi nition of “dependent” is differ- UPSers.com for a link to ent for the tax-advantaged reimbursement Eligibility for Medical, Dental, these documents, or call accounts (HCSA, LPSA and C/ECSA). Vision, Life Insurance and EAP 1-800-UPS-1508 and listen Other benefi ts, such as legal assistance, You may enroll your dependents for cover- for the “Health Care,” then critical illness, long-term care insurance, age in The Flexible Benefi ts Plan if the “Coverage Changes and and personal lines of insurance, may also dependent is one of the following. See the Dependents” prompts to defi ne eligible dependents differently. Refer information that follows for additional request either the Same- to those sections of this booklet for appli- clarifi cation about some of the terms used Sex Domestic Partner cable dependent eligibility information. below. brochure or the Same-Sex Civil Union brochure. Proof of Dependent Status • Your legal spouse as defi ned by applicable state law The Plan Administrator may periodically • An unmarried child who is: request proof of dependent status. In addition, you may be required to provide — A natural child; an adopted child (or a certain information deemed necessary by child placed with you for adoption); a the Plan Administrator as a condition of stepchild living with you at least half eligibility for you and/or your dependents. of the time; a stepchild who is a full- For example, you must provide a Social time student away from home, pro- Security number (SSN) to the Benefi ts vided that the stepchild lived with you Service Center for each dependent you at least one half of the time during the wish to enroll in the Plan to satisfy federal year immediately prior to the year the reporting requirements. This allows UPS stepchild became a full-time student to comply with a law requiring health plan away from home; or a child for whom administrators to electronically report data you are the court-appointed custodian for covered plan participants to the Centers or guardian; and for Medicare and Medicaid Services (CMS).

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— Under age 19 and fi nancially depen- Incapacitated Children dent on you, up to age 25 if a full-time A covered incapacitated child is eligible to student and still fi nancially dependent continue dependent coverage as long as the on you, or an incapacitated child capacity exists, when all of the following who satisfi es the additional eligibility criteria have been met: requirements described in this booklet. • The child becomes incapacitated before Spouse age 19 (or before age 25 if a full-time student) If your spouse is your legal spouse under • The child becomes covered by the Plan the common law of the state in which you prior to age 19 (or before age 25 if a reside, you will be required to provide evi- full-time student) dence of the state’s law and evidence that you meet the state requirements. • The child is unmarried and primarily dependent on you for support and main- Placed for Adoption tenance, and For The Flexible Benefi ts Plan, “placed • Appropriate certifi cation of the incapaci- with you for adoption” means that you tation has been provided have become legally obligated to support You must apply to continue coverage for the soon-to-be-adopted child as a result of an incapacitated dependent prior to age 19 beginning the adoption process. (or before age 25 if a full-time student).

Full-Time Student The child must have a mental or physical A student is considered full time if he or incapacity that renders the child unable to she meets the requirements of full-time care for him- or herself, as determined by status for the school he or she attends. You claims administrator. To apply for con- must certify your child’s student status each tinuation of coverage for an incapacitated year during annual enrollment, or he or she dependent, contact your claims administra- will lose coverage for the following year. tor. Certiﬁ cation of the incapacitation by Your child may be eligible to temporarily the claims administrator must occur prior continue his or her coverage under the Plan to coverage being continued under the if he or she ceases to be a full-time student Plan. Certiﬁ cation must also occur before due to medical reasons. See the What If… coverage is lost under the Plan. In addition, section of this SPD for more details. periodic medical documentation of the continuing incapacity is required as determined by the claims administrator.

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Eligibility (cont.) When Spouses or Children Even if you opt out of medical coverage, Are Also UPSers you may elect participation in other types of coverage under The Flexible Benefi ts If you and your spouse or child both work Plan, including dental, vision, life insur- for UPS and are both eligible for The ance*, AD&D coverage, legal assistance, Flexible Benefi ts Plan, the following condi- tax-advantaged reimbursement accounts tions apply: (HCSA, LPSA and C/ECSA) and personal • Each of you may elect employee cover- lines of insurance. age under the medical, dental and vision • If you enroll your spouse or child as your options. Only one spouse may elect cov- dependent in The Flexible Benefi ts Plan, erage for your eligible children. your spouse or child may also continue • Each of you can be covered only once coverage as an employee through the other under The Flexible Benefi ts Plan; you UPS-sponsored or multi-employer health may not be covered as both an employee care plan to which UPS contributes. and a spouse or child of an employee. You may elect coverage for your spouse If you or your spouse or child is covered or child as your dependent, and your under two UPS-sponsored or related plans, spouse or child may elect no coverage. see Maintenance of Benefi ts in the Filing a • You and your spouse or child may Claim section of this booklet for informa- each elect employee life insurance as an tion about how the Plan pays benefi ts in employee*. Only one spouse may elect this situation. life insurance coverage for your eligible * If your spouse or child is eligible as an employee for supplemen- children. tal life insurance through this Plan or another UPS-sponsored plan (for example, the UPS Health and Welfare Package), you are If you are eligible for The Flexible Benefi ts not eligible to cover your spouse or child for supplemental life insurance through The Flexible Benefi ts Plan. Your spouse or child Plan and your spouse or child is covered by must elect employee supplemental life insurance through his or another UPS-sponsored plan (for example, her own employee plan. UPS Health and Welfare Package) or a multi-employer health care plan to which Qualifi ed Medical Child UPS contributes: Support Orders (QMCSO) • You may elect any available family cover- Medical (including behavioral health, age option. prescription drugs, and the health care • You may elect not to enroll in medical tax-advantaged reimbursement accounts), coverage under the Plan if you provide dental and vision coverage will comply certifi cation that you are covered else- with the terms of a Qualifi ed Medical where (for example, under your spouse’s Child Support Order (QMCSO), as long plan). This is known as “opting out.” as the QMCSO does not require the Plan If you are eligible for any health plan to provide coverage it does not otherwise that UPS administers or contributes to provide. and do not elect medical coverage under The Flexible Benefi ts Plan, you will not receive any opt-out credits.

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A medical child support order is a judg- Your tax-advantaged reimbursement ment, decree or order (including an account coverage (HCSA, LPSA and/or approval of settlement agreement) issued C/ECSA) is effective on the date your by a court of competent jurisdiction or an elected benefi ts begin (or would otherwise administrative process established under begin if you made an election). For newly state law that has the force and effect hired employees in Hawaii, New York and of law or a judgment from a state court New Jersey only, statutory short-term dis- directing a plan administrator to cover a ability coverage begins on day one. child by a company’s group health plans. If you’re rehired in the same calendar year Federal law requires that a medical child in which you left UPS, the coverage (except support order must meet certain form for any reimbursement accounts) you had and content requirements in order to be a under The Flexible Benefi ts Plan prior to QMCSO. When an order is received by the leaving UPS will automatically be reinstated, Plan Administrator, each affected partici- effective on your return date. You will also pant and each child covered by the order be given the opportunity to enroll in supple- will be notifi ed of the implementation mental coverage. procedure to determine whether the order is valid. For information about the special rules that govern the effective date of life insurance, If you would like to receive a copy of the AD&D and long-term disability coverage, UPS written procedure for determining see the Life Insurance and AD&D and the whether an order is valid, or if you have Income Protection sections of this booklet. any questions, submit your request or questions to: Transition Coverage Benefi ts Service Center In certain very specifi c conditions, The Attention: Qualifi ed Order Team Flexible Benefi ts Plan may provide you PO Box 1433 and your family with transition coverage Lincolnshire, IL 60069-1433 while you are making your elections for The Flexible Benefi ts Plan or waiting to To inquire about a medical child support become eligible for another UPS-sponsored order already fi led with the Benefi ts Service plan or a plan to which UPS contributes. Center, call the Benefi ts Service Center at Details of this transition coverage are 1-800-UPS-1508. described in this section. When Coverage Begins If you are newly hired, rehired in a new calendar year, or transferred into an eligible position, coverage based on the options you select under The Flexible Benefi ts Plan begins on the fi rst day of the fi rst full pay period following 30 days from the date you are: • Hired or rehired, or • Transferred to an eligible position.

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Eligibility (cont.) Newly Hired Employees If you’re a newly hired full-time employee who previously worked as a contingent worker at UPS, your transition coverage is listed in the table below. All other coverage for newly hired employees will begin on date identiﬁ ed in When Coverage Begins in this section.

Type of Coverage Beneﬁ t Level Coverage Category Medical, behavioral health and Traditional Out-of-Area You plus family prescription drug* Vision Exam only You plus family Life insurance Basic You plus family AD&D Basic You only Short-term disability As described in this booklet You only EAP and work/life beneﬁ t As described in this booklet You plus family Tobacco cessation program As described in this booklet You plus family

* Non-participating pharmacy beneﬁ ts apply. See Non-Participating Pharmacies in the Prescription Drugs section of this booklet.

Current Employees Transferring to The Flexible Benefi ts Plan From a Union-Sponsored Plan If you’re a current UPS unionized employee covered under a union-sponsored health care plan to which UPS contributes and are transferred to a union-free position eligible for The Flexible Benefi ts Plan, you become eligible for full coverage under The Flexible Benefi ts Plan on the fi rst day of the fi rst full pay period following 30 days from the transfer date. The Flexible Benefi ts Plan will provide transition coverage — as listed in the table below — for you and your family until you become eligible for full coverage under The Flexible Benefi ts Plan.

Type of Coverage Beneﬁ t Level Coverage Category Medical, behavioral health Traditional Out-of-Area You plus family and prescription drug* Vision Exam only You plus family Life insurance Basic You plus family AD&D Basic You only Short-term disability As described in this booklet You only EAP and work/life beneﬁ t As described in this booklet You plus family Tobacco cessation program As described in this booklet You plus family

* Non-participating pharmacy beneﬁ ts apply. See Non-Participating Pharmacies in the Prescription Drugs section of this booklet.

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From a UPS-Administered Plan If you are a current unionized employee covered under a UPS-administered health care plan transferring to a union-free position, you become eligible for full coverage under The Flexible Beneﬁ ts Plan effective the date of your transfer.

Current Employees Transferring From The Flexible Benefi ts Plan To a Union-Sponsored Plan If you’re a current employee transferring from The Flexible Benefi ts Plan to a union-sponsored plan contributed to by UPS, The Flexible Benefi ts Plan will provide certain types of coverage (as listed in the table below) to you and your family at no cost to you, during the waiting period, if any, before you gain eligibility under the new plan. Your coverage ends if you terminate employment during the waiting period.

Type of Coverage Beneﬁ t Level Coverage Category Medical, behavioral health Your current election Your current election; applicable payroll and prescription drug deductions are discontinued Dental Your current election Your current election; applicable payroll deductions are discontinued Vision Your current election Your current election; applicable payroll deductions are discontinued Life insurance Basic You plus family AD&D Basic You only Short-term disability As described in this booklet You only Long-term disability As described in this booklet Your current election, applicable payroll deductions are discontinued EAP and work/life beneﬁ t As described in this booklet You plus family

To Another UPS-Administered Plan If you’re a current employee transferring from The Flexible Beneﬁ ts Plan to another UPS-administered plan, your new plan is effective the date of your transfer. However, this effective date may be delayed if your new plan requires you to reach your seniority attainment date (SAD).

If SAD is required, your coverage in the new plan is effective on your SAD and The Flexible Beneﬁ ts Plan will provide certain types of coverage (as listed in the table on the next page) to you and your family during this waiting period.

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Eligibility (cont.)

You are required to notify To Another UPS-Administered Plan (cont.) the Benefi ts Service Center Your coverage ends if you terminate employment during the waiting period. as soon as possible after a dependent ceases to meet Type of Coverage Benefi t Level Coverage Category the eligibility requirements. Medical, behavioral health Your current election Your current election; applicable payroll and prescription drug deductions are discontinued Dental Your current election Your current election; applicable payroll deductions are discontinued Vision Your current election Your current election; applicable payroll deductions are discontinued Life insurance Basic You plus family Life insurance Supplemental Your current elections, with continued applicable payroll deductions AD&D Basic You only AD&D Supplemental Your current elections, with continued applicable payroll deductions Short-term disability As described in this booklet You only Long-term disability As described in this booklet Your current election, applicable payroll deduction are discontinued EAP and work/life benefi t As described in this booklet You plus family Tobacco cessation program As described in this booklet You plus family

When Coverage Ends child’s 19th birthday (or 25th birthday if a full-time student) occurs. If your child For All Participants graduates from or leaves school before the In general, coverage for you and your age limit is reached, coverage continues eligible dependents under The Flexible through December 31 of the year in which Beneﬁ ts Plan continues as long as you he or she graduates or leaves (except as meet the Plan’s eligibility requirements and described in the Life Events section of this make any required contributions. Coverage booklet), or until he or she becomes cov- typically ends on the date that the appli- ered through another plan, if earlier. cable eligibility requirements are no longer satisﬁ ed, except as otherwise noted in this If you lose your coverage, coverage for booklet. Please see the Life Events section your dependent(s) ends on the date your for additional details. coverage ends. If your spouse or child loses eligibility for For Your Spouse or Dependents Only any other reason — for example, if you Eligibility for coverage for your children and your spouse divorce or your child (and eligible stepchildren) ends on December becomes married — coverage ends on the 31 of the calendar year in which each date of the event.

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Enrollment

Eligible union-free employees have an If you call the Benefi ts Service Center to A two-year election rule opportunity to enroll in The Flexible enroll by the deadline indicated on your applies to your dental, Benefi ts Plan at initial eligibility and each enrollment worksheet, you will receive by vision and long-term year during the annual enrollment period, mail a Confi rmation of Enrollment notice disability option choices. usually during the fall. Prior to the initial that lists the elections you made and your See the Dental, Vision and or annual enrollment period, you will covered family members. Be sure to read Income Protection sections receive materials describing your benefi ts your Confi rmation of Enrollment carefully. of this booklet for more and options available to meet the needs If there are any errors on the Confi rmation information. of you and your eligible family members. of Enrollment notice, you have 14 days from During each enrollment period, you will: the date of the notice to call the Benefi ts • Choose from various medical, dental, Service Center at 1-800-UPS-1508 to have and vision coverage options, and them corrected. If you do not contact the Benefi ts Service Center within 14 days, you • Elect supplemental types of coverage must wait until the next annual enrollment offered under the Plan, at your option. period to change your elections or add In addition, you may enroll in certain dependents (except as the result of certain supplemental benefi ts, such as the personal qualifi ed life changes, as specifi ed in the lines of insurance, at times other than your Life Events section of this booklet). initial or annual enrollment period. Refer to each benefi t section in this booklet for If You Don’t Enroll more details. During Initial Enrollment In general, once you enroll, you may not If you do not enroll by the deadline indi- change your enrollment elections until cated on your enrollment worksheet, based the next enrollment period. However, on whether you are a full-time or part-time the Internal Revenue Code allows limited employee, you will receive the default cov- changes during the year when certain erage listed in the table below, for you only. qualifi ed events occur in your life. For However, if the Benefi ts Service Center has more information, see the Life Events any of your dependents on fi le, your depen- section of this booklet. dents will also receive coverage for the certain benefi ts. Once the deadline has passed, For more information about who is eligible you will receive a Default Confi rmation for benefi ts under the Plan and when eligi- of Coverage notice, listing your assigned bility begins, see the Eligibility section of coverage and your covered dependents. this booklet. You have 30 days from the date of the Initial Eligibility Enrollment notice to call the Benefi ts Service Center at 1-800-UPS-1508 to request changes to Prior to the date you initially become eligi- your assigned coverage. If you do not con- ble for the Plan, you will receive enrollment tact the Benefi ts Service Center within 30 materials, including an enrollment work- days, you must wait until the next annual sheet describing your coverage options, enrollment period to change your elections instructions for enrolling and the deadline or add dependents (except as the result of date for enrolling in the Plan. certain qualifi ed life changes, as specifi ed If you enroll online at Your Benefi ts Resources, in the Life Events section of this booklet). a notice confi rming your successful enroll- In addition, you are required to notify ment and indicating your elections will be the Benefi ts Service Center if any of the displayed. Print this page as a confi rmation individuals identifi ed on your Default of your enrollment. You may view online Confi rmation of Coverage are no longer at any time the enrollment elections you eligible for coverage as your dependent have made and make changes up until (as defi ned in this booklet). the enrollment deadline.

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Enrollment (cont.) Full-Time Part-Time Type of Coverage Beneﬁ t Level ✓✓Medical, behavioral health and prescription drug* Healthy Savings option ✓✓Dental None ✓✓Vision* Exam only option ✓✓Life insurance* Basic ✓✓AD&D Basic ✓✓Short-term disability As described in this booklet ✓ Long-term disability Option 3 — 60% of base pay, up to 5 years ✓✓EAP and work/life beneﬁ t* As described in this booklet ✓✓Tobacco cessation program* As described in this booklet

*Your eligible dependents on fi le with the Benefi ts Service Center will also receive coverage for the benefi ts indicated.

Annual Enrollment elections you made and your covered family members. Be sure to read your During the annual enrollment period, Confi rmation of Enrollment carefully. If usually in the fall, you will receive enroll- there are any errors on the Confi rmation ment information with instructions for of Enrollment notice, you have 14 days logging on to Your Benefi ts Resources from the date of the notice to call the www.UPSers.com through a link at to view Benefi ts Service Center at 1-800-UPS-1508 your enrollment options and make elec- to have them corrected. If you do not con- tions during the specifi ed enrollment period. tact the Benefi ts Service Center within 14 days, you must wait until the next annual If you have elected to receive paperless enrollment period to change your elections enrollment materials, you will be notifi ed or add dependents (except as the result of by email when your personalized annual certain qualifi ed life changes, as specifi ed in enrollment information is available on the Life Events section of this booklet). Your Benefi ts Resources. If you have not elected paperless enrollment, your enroll- If You Don’t Enroll ment materials will be mailed to your home. During Annual Enrollment Regardless of whether you are registered If you do not make benefi t elections during for paperless enrollment, you may make your annual enrollment periods by the deadline elections online at Your Benefi ts Resources indicated on your enrollment worksheet, or by calling the Benefi ts Service Center. you’ll receive the same coverage for you and your eligible dependents that you had If you enroll online at Your Benefi ts Resources, in the prior year, except in the following a notice confi rming your successful enroll- situations. ment and indicating your elections will be displayed. Print this page as a confi rmation • If you wish to continue participating to of your enrollment. You may view online a tax-advantaged reimbursement account (HCSA, LPSA and/or C/ECSA) and/or at any time the enrollment elections you making pre-tax contributions to a health have made and make changes up until savings account (HSA), you must elect the enrollment deadline. a contribution amount each year. If you call the Benefi ts Service Center to enroll, you will receive by mail a Confi rmation of Enrollment notice that lists the

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• If your dependent child is a full-time Opting In to the Network student aged 19 or older, you must The Flexible Benefi ts Plan offers a choice certify your student’s full-time status of medical options, as described in the for the coming year (except as noted in Medical Benefi ts section of this booklet. What If…Your Child Takes a Medically If your home address is within the medical Necessary Leave From School in the Preferred Provider Organization (PPO) What If… section of this booklet) in network service area designated for your order to maintain his or her coverage. state as indicated on your enrollment If you do not certify student status, your information, you may enroll in either the child’s coverage will end on December 31 Traditional PPO or the Healthy Savings of the current Plan year. PPO. Employees who live within a Kaiser Health Maintenance Organization (HMO) Your Student Loses Coverage network area in either California or Hawaii If your child’s coverage ended because you have an additional network coverage option. didn’t certify student status, coverage can be reinstated effective the date your child If your home address is outside the PPO returns to school full time (not retroactive network service area designated for your to January 1). You must call the Benefi ts home state, you may choose between the Service Center at 1-800-UPS-1508 within Traditional Out-of-Area or Healthy Savings 60 days of the return-to-school date in order Out-of-Area option. You may also choose to add your dependent to your coverage. to “opt in” to either the Traditional PPO or Healthy Savings PPO — if you fi nd the If coverage ended because your child didn’t providers in the PPO network designated return to school as a full-time student, for your home state are convenient to your child’s coverage can be reinstated if you — to receive in-network benefi ts. he or she returns to school at a later date. You may elect to opt in to the medical You must call the Benefi ts Service Center network by calling the Benefi ts Service at 1-800-UPS-1508 within 60 days of the Center. return-to-school date in order to add your dependent to your coverage. Your child will Once you opt in to a medical network, you be added back to coverage effective the date are required to remain in the network for he or she returned to full-time student status, the rest of that Plan year. You will auto- as long as your child is under age 25 and matically remain in the network from year otherwise meets all eligibility requirements. to year unless you elect during annual enrollment to return to out-of-area coverage. If your child didn’t return to school because he or she took a medically necessary Medical network service areas are subject “school leave,” you must call the Benefi ts to change from time to time. You should refer to your annual enrollment materials Service Center at 1-800-UPS-1508 as soon to learn whether any network changes will as possible after the event occurs but prior apply to your home address. to the date that either: • You child’s coverage ends or • Your student certifi cation documents are due.

For more information, see What If…Your Child Takes a Medically Necessary School Leave in the What If… section.

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If a Dependent Life Events Becomes No The Flexible Benefi ts Plan is regulated by If you are making pre-tax payroll contribu- Longer Eligible the Internal Revenue Code, and changes tions to your health savings account (HSA), for Coverage during the year are restricted. However, the you may change your election up to once a You must notify the Benefi ts IRS realizes that certain life events do occur month, for any reason. You can expect the Service Center immediately that create the need for you to change your change to be effective as soon as adminis- if a family member ceases benefi t choices in the middle of a Plan year. tratively possible, depending on the date the change was requested. See the Medical to be eligible for coverage As a general rule, you will be allowed to as your dependent under Benefi ts section of this booklet for more make coverage changes only if the life event information on Health Savings Accounts. the Plan, even if you can’t results in you, your spouse, or your depen- or don’t want to make any dents gaining or losing coverage eligibility 60-Day Time Limit changes to your coverage. under an employer-sponsored plan. Your Otherwise, you may be change in coverage must be consistent with You must call the Benefi ts Service Center at required to repay the Plan the life event. For example; if you have a 1-800-UPS-1508 within 60 days of the date for any benefi ts paid by the baby, you can change your level of medical of the event to request a change in cover- Plan for that dependent coverage from employee only to employee age. If you don’t call to change coverage between the date he or plus family, but you may not decrease your within the 60-day period, you must wait she is no longer eligible life insurance. until the next annual enrollment period. and the date you notifi ed the Benefi ts Service Center (even if you called within When Changes to Coverage Become Effective 60 days of the event). Benefi t Effective Date of Revised Coverage See Right of Recovery in the Filing a Claim sec- All benefi ts not listed The change is retroactive to the date of the event. tion for more informa- below tion on the Plan’s right to Life insurance For life insurance requiring evidence of insurability (EOI), the requested level of reimbursement. coverage is effective when approved by Prudential. Until then, the highest level of coverage (up to the level requested) not requiring evidence of insurability is effective. In certain circumstances, coverage for you or your dependents could be delayed. See the Life Insurance and AD&D section of this booklet for further details. Tax-advantaged If you change your contribution to the tax-advantaged reimbursement accounts, reimbursement the effective date of an approved change of coverage is the date you notify the accounts (HCSA, Benefi ts Service Center. LPSA or C/ECSA)

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Tax-Advantaged Reimbursement Decreasing Your Annual Contribution Account Changes Your new contribution per pay period is The following rules apply to any mid-year calculated by subtracting the total amount changes you want to make to the amount you have contributed thus far during the you elect to contribute through payroll year from your revised annual contribution deductions to a tax-advantaged reimburse- amount. The difference is then divided by ment account (HCSA, LPSA or C/ECSA) as the number of pay periods remaining in a result of a qualiﬁ ed life event; for example, that calendar year, and the result is sub- due to marriage or birth of a child. tracted from your current per-pay-period contribution. Some life events, however, make you eligible to stop your account contributions For example, suppose you are paid monthly altogether — see the Allowable Mid-Year and decrease your annual contribution from Coverage Changes table in this section. $1,200 to $600 at the end of February. At For more information about reimburse- that time you would have contributed $100 ment accounts and contribution elections, per month for two months, for a total of see the Tax-Advantaged Reimbursement $200. The $200 you’ve already contributed Accounts section of this booklet. is subtracted from your revised annual contribution of $600. The difference of $400 is Increasing Your Annual Contribution divided by the 10 months remaining in the year. So your new contribution becomes Your new contribution per pay period is $40 per monthly paycheck. calculated by dividing the amount of the increase by the number of pay periods You may not decrease your account to remaining in that calendar year. The result an amount that is less than what you have is then added to your current contribution already contributed, or for which you have per pay period. The amount of the increase already been reimbursed. In the example is available to be reimbursed to you for above, you could not decrease your expenses incurred after the effective date account to less than $200, because of the change. you have already contributed $200. For example, if you are paid monthly and increase your annual contribution from $1,200 to $1,500 in mid-September, the additional $300 is prorated over the three remaining monthly pay periods, so that $100 is added to your current contribution per paycheck.

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Life Events (cont.) Allowable Mid-Year Coverage Changes Only the changes listed are allowed.

Medical or Cancer Employee Spouse’s Children’s HCSA Event Insurance Dental Vision AD&D Life* Life* Life* Legal LTD or LPSA C/ECSA Marriage If covered, change If covered, change If covered, change Change Increase Add Add Start No changes Start or Start, stop family status and family status and family status. If family coverage coverage coverage coverage; increase or change coverage option. coverage option. opted out, start status change contribu- contribu- If opted out, start If opted out, start coverage. If now family status tions tions coverage. If now coverage. If now have outside have outside have outside coverage, can opt coverage, can coverage, can out opt out opt out

Divorce; legal If covered, change If covered, change Change family Change Increase Drop No Start or drop No changes Stop or Start, stop separation; family status and family status. If status. Increase family or coverage changes coverage; decrease or change annulment coverage option. opted out, start coverage if lost status decrease change contribu- contribu- If opted out, start coverage if lost under spouse’s plan coverage family status tions tions coverage if lost under spouse’s plan under spouse’s plan

Birth; If covered, increase If covered, increase If covered, increase Increase Increase Add Add or Start No changes Start or Start or adoption or family status and family status and family status. If family coverage coverage increase coverage; increase increase placement coverage option. change coverage opted out, start status coverage change contribu- contribu- for adoption; If opted out, start option. If opted out, coverage family status tions tions child gains coverage start coverage eligibility

Death of If covered, change If covered, change Change family Change Increase Drop No Start or drop No changes Stop or Start, stop spouse family status and family status. If status. Increase family or coverage changes coverage; decrease or change coverage option. opted out, start coverage if lost status decrease change contribu- contribu- If opted out, start coverage if lost under spouse’s plan coverage family status tions tions coverage if lost under spouse’s plan under spouse’s plan

Death of Decrease family Decrease family Decrease family Decrease No No Drop No changes No changes Stop or Stop or child; loss status status status family changes changes coverage decrease decrease of child’s status contribu- contribu- eligibility; tions tions termination of Adoption Proceedings

Dependent No changes No changes No changes No No No No No changes No changes Stop or Stop or loses changes changes changes changes decrease decrease eligibility for contribu- contribu- reimburse- tions tions ment accounts

Gain or loss If covered, change If covered, change Change family Change No No No Start, stop No changes No changes No changes of eligibility family status and family status and status family changes changes changes or change for Medicare coverage option. coverage option. status coverage or Medicaid If opted out, start If opted out, start coverage. If now coverage have outside coverage, can opt out

Loss of If covered, change If covered, change If covered, change No No No No No changes No changes No changes No changes coverage family status and family status and family status and changes changes changes changes under state coverage option. coverage option. coverage option. children’s If opted out, If opted out, start If opted out, start health start coverage coverage coverage insurance program

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Allowable Mid-Year Coverage Changes (cont.) Only the changes listed are allowed.

Medical or Employee Spouse’s Children’s HCSA Event Cancer Insurance Dental Vision AD&D Life* Life* Life* Legal LTD or LPSA C/ECSA Become eligible If covered, If covered, If covered, No No No No No No No changes No changes for qualifying increase family increase family increase family changes changes changes changes changes changes health coverage status and change status and change status and change premium coverage option. coverage option. coverage option. assistance under If opted out, If opted out, If opted out, Medicaid or state start coverage start coverage start coverage children’s health insurance plan

Loss of outside If opted out, start If opted out, start No changes No No No No No No Start or increase No changes medical coverage coverage. Increase coverage if lost changes changes changes changes changes changes contributions if eligibility with family status if elsewhere. health coverage other dependent lost Increase family is lost due to employment coverage status if dependent employment elsewhere and lost coverage change change option elsewhere and change option

Gain in spouse’s If covered, change If covered, change Change family Change No Add or No Start, No Start or increase Start, stop employment or family status. If family status status family changes increase changes stop or changes contributions or change coverage; open now have outside status coverage change (Spouse gains contribu- enrollment period coverage, can opt coverage employment); tions differs from out No changes employee’s (Open Enrollment, Coverage)

Loss of DMO No changes Change to Option No changes No No No No No No No changes No changes access 1 or 2 changes changes changes changes changes changes

Reduction in No changes No changes No changes No Decrease Stop or Stop or Start or No No changes Stop or earnings due changes coverage decrease decrease drop changes decrease to leave of coverage coverage coverage; coverage absence** change family status

Change from No changes No changes No changes No Decrease Stop or Stop or Start or Drop No changes Stop or full-time to changes coverage decrease decrease drop coverage decrease part-time coverage coverage coverage; coverage change family status

Change in child No changes No changes No changes No No No No No No No changes Start, stop, or elder care changes changes changes changes changes changes or change provider or cost contributions (limited to four changes per year)

Court-ordered As dictated by As dictated by As dictated by No No No No No No As dictated by No changes coverage for court order court order court order changes changes changes changes changes changes court order child***

* See the Life Insurance and AD&D section of this booklet for details about coverage maximums and evidence of insurability requirements. ** Except military leave. Personal leaves are administered according to COBRA provisions. *** Must comply with QMCSO. See the Eligibility section for more information.

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What If… …Your Child Takes a Medically …You Leave UPS? Necessary Leave from School? If you leave UPS before taking early or As explained in the Eligibility section of normal retirement, your short-term disabil- this booklet, eligibility for coverage for ity and long-term disability coverage ends your children (and eligible stepchildren) on the date you leave. ends on December 31 of the calendar year For other Plan benefi ts, coverage for you in which your child reaches the depen- and your eligible dependents ends on the dent eligibility age limit, graduates, leaves date shown in the table below. school, or becomes covered through another plan (whichever is earliest). For an employee Coverage ends on paid… the last day of… However, if it is medically necessary for your covered child to take a “school leave,” Weekly The pay period meaning the child stops being a full-time following the pay student solely as a result of a serious illness period during which you became ineligible or injury (as determined by the Plan Admin- istrator), your child may continue to be Monthly or semi- The pay period during covered under the Plan on the same terms monthly which you became and conditions as before the school leave. ineligible This coverage continues until the earlier of either: You and your covered dependents can continue health coverage from The Flexible • 12 months following the year in which Benefi ts Plan under COBRA for a period the school leave began; or of time after your termination date. See • The date coverage would otherwise end the Continuation of Coverage Under under the Plan (for example, the child COBRA section of this booklet for more reaches the dependent eligibility age limit information. or you terminate your employment). You may convert life insurance for yourself In order for coverage to continue, you and your dependents to individual policies. must provide the Benefi ts Service Center You cannot convert AD&D coverage to an a written certifi cation from the child’s individual policy. See If You Leave UPS or physician that the child suffers from a Retire in the Life Insurance and AD&D serious illness or injury and that the school section for more details about continuing leave is medically necessary. Unless pro- life insurance coverage. hibited by Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) rules, …You Retire? the school leave is considered a “qualifying event” for purposes of COBRA, and this If you retire from UPS and are eligible for continuation of coverage will be applied retiree health coverage, your active cover- toward the COBRA continuation coverage age ends on the last day of the month fol- period. See the Continuation of Coverage lowing 30 days from your retirement date. Under COBRA section of this booklet for If you take early or normal retirement more information about COBRA continua- based on the provisions of the UPS tion coverage. Retirement Plan, you and your eligible dependents may be eligible for retired

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employee medical, dental and vision cov- booklet in detail, paying particular atten- erage from the UPS Retired Employees’ tion to the information about conversion Health Care Plan (REHCP) if you meet the and portability. You should also review eligibility rules of that Plan. You’ll receive a the Prudential Enrollment Kit for detailed separate Summary Plan Description of your information about supplemental life insur- retiree health coverage when you retire. ance portability.

You and your eligible dependents can …You Die? continue health coverage from The Flexible Beneﬁ ts Plan under COBRA for a period of If you die while you’re covered by time after your termination or retirement The Flexible Beneﬁ ts Plan as an active date. (See the Continuation of Coverage employee, UPS will continue coverage Under COBRA section of this booklet for under COBRA for your eligible depen- more information.) Also, you may convert dents — at no cost to your dependents — the life insurance policies for you, your through the last day of the 13th calendar spouse and your children to individual month following the date of your death. policies. (See If You Leave UPS or Retire in For example, if your death occurs on the Life Insurance and AD&D section for February 2, dependent coverage continues more details about continuing life insur- through March 31 of the following year. ance coverage). You cannot convert AD&D Your covered dependents are automatically coverage to an individual policy. enrolled for this 13-month coverage period.

You choose whether to elect COBRA When this UPS-paid coverage ends, your coverage from The Flexible Benefi ts Plan dependents may extend health care cover- or participate in the REHCP (assuming you age in keeping with COBRA provisions for meet that plan’s eligibility requirements). up to an additional 23 months, for a total You can elect COBRA coverage under The of 36 months of coverage from the date of Flexible Benefi ts Plan and then participate your death. The full cost of extended cov- in the REHCP when COBRA coverage erage beyond the initial 13-month period ends. After the end of your 60-day election will be billed to your dependents accord- period under COBRA, you cannot elect ing to the COBRA provisions of this Plan. coverage from the REHCP and then switch See the Continuation of Coverage Under to COBRA coverage under The Flexible COBRA section of this booklet for more Benefi ts Plan. information. Life insurance for your spouse and children may be converted to individ- Life Insurance During Retirement ual policies. Your life insurance can be contin- Your dependents are eligible for this ued through an individual policy with 13-month extension of coverage only if you Prudential at the current level of coverage and your dependents were covered by The at the time you retire, without evidence Flexible Benefi ts Plan at the time of your of insurability (EOI). You are not allowed death. For example, if you are on military to increase your life insurance coverage at leave, or if you opted out of medical cover- that time. age for yourself or your dependents, your dependents would not be eligible. It’s a good idea to review the Life Insurance and AD&D section of this

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What If… (cont.) …You’re Laid Off? be continued during your leave for up to the approved FMLA time period. You’ll If you’re laid off from your UPS posi- need to continue to pay your share, if any, tion (and are recorded as such in the UPS of the costs of the coverage. eligibility system), your Flexible Benefi ts Plan coverage is continued until the last If your leave extends beyond 20 days, day of the month following the month in you may be billed and must make full and which your layoff begins. You continue timely payments or your coverage will be to pay your share, if any, of the cost of terminated. If you are billed, you must pay your coverage. You can elect to continue the billed amount; it will not be deducted your medical, dental, vision, HCSA and from your paycheck when you return LPSA coverage through COBRA. See the to work. If you elected not to continue Continuation of Coverage Under COBRA coverage during your FMLA time period, section for more information. You may your coverage will be reinstated when you also choose to convert life insurance for return to work, and you will experience a yourself, your spouse and your children gap in your coverage. to individual policies. If your leave does not extend beyond 20 …You Have Jury Duty? days, deductions and credits will be applied to your fi rst paycheck upon returning to If you have jury duty, your Flexible Benefi ts work. Plan participation continues. You make contributions as if you were at work. If you notify UPS in writing that you want to extend your leave beyond the appli- …You Become Disabled? cable approved FMLA time period, your You and your dependents continue to approved extension of leave is considered have medical protection if you are on an a personal leave. Your coverage from the approved disability leave. See the Income Plan can continue under COBRA, provided Protection section of this booklet for a full you make an election and you pay the full description of your short-term and long- cost of coverage. See Personal Leave in this term disability benefi ts, including health section for more information. care coverage. Special rules apply to HCSA and LPSA See Payroll Deductions and Opt-Out contributions during your FMLA leave. Credits and Reimbursement Accounts See Special HCSA/LPSA Rules for FMLA under Other Types of Leave in this section. Leaves Only in this section. Both topics apply to an approved disability leave. Military Leave Except for military leaves of less than …You Take an Approved Leave 31 days (or as otherwise required by of Absence? federal law), your health care benefi ts cease and therefore deductions and/or FMLA Leave credits also cease. However, you may be If you’re on an approved leave of absence eligible to continue health coverage for as provided by the Family and Medical you and your covered dependents up to Leave Act of 1993 (FMLA) or UPS policy, 24 months from either the date the leave full medical, dental, vision, life insurance, began or the date that you fail to return AD&D and employee long-term disability to work — whichever is earlier — as coverage for you and your dependents can required under USERRA. The USERRA

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continuation period will run concurrently Regardless of whether you elect to continue with the COBRA period described in the your coverage, UPS-provided basic life and Continuation of Coverage Under COBRA AD&D insurance and short-term disability section of this booklet. are continued up to 12 months or until the date you terminate employment, whichever Although supplemental coverage (such as is earlier. long-term disability, legal plan, and supplemental life and AD&D insurance) is not If You Don’t Make Timely Payments subject to COBRA, you may also elect to While on a Personal Leave continue any or all of your supplemental If you are responsible for some or all of coverage during your leave. If you choose the cost of your health plan coverage while not to continue your supplemental life on leave and elect to continue coverage, insurance, you must provide evidence of you must make full and timely payments. insurability (EOI) in order to begin cover- If you fail to do so, your coverage will age again when you return to work. be terminated according to the following Regardless of whether you elect to continue guidelines. your coverage, UPS-provided basic life and • Any amounts received by the COBRA AD&D insurance and short-term disability administrator will be applied fi rst to your are continued up to 12 months, or until the COBRA coverage. date you terminate employment; whichever • If the amount is insuffi cient to pay for is earlier. your COBRA coverage, all COBRA and supplemental coverage will be Personal Leave terminated. You may continue coverage for you and • If the amount is suffi cient to pay for your your covered dependents if you are on a COBRA coverage, but insuffi cient to pay personal leave of absence. You are respon- for your supplemental coverage, your sible for paying the full cost of coverage — supplemental coverage will be terminated. not just your cost share — during a personal leave. Medical (including behavioral health, If your supplemental life insurance cover- prescription drug, the HCSA and LPSA), age is dropped due to non-payment, you dental and vision coverage are continued must provide evidence of insurability (EOI) through COBRA, according to the COBRA to begin coverage again upon return provisions described in the Continuation to work. of Coverage Under COBRA section of this Upon return from your leave, your cover- booklet. age other than reimbursements accounts Although supplemental coverage (such as will be reinstated. long-term disability, legal and supplemental life and AD&D insurance) is not subject Payroll Deductions and Opt-Out Credits to COBRA, you may also elect to continue As long as you are receiving a paycheck any or all of your supplemental coverage from UPS, deductions or credits will con- during your leave. If you choose not to tinue to be applied to your paycheck while continue your supplemental life insurance, you are on leave. However, if you are not you must provide evidence of insurability receiving a paycheck and your leave is 20 (EOI) in order to begin coverage again days or less, deductions or credits will be when you return to work. applied to your fi rst paycheck when you return to work.

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What If… (cont.) Special HCSA/LPSA If your leave extends beyond 20 days to your HCSA or LPSA stop. You can (or 31 days for a military leave), you may choose to continue contributions on an Rules for FMLA be billed. If you fail to make timely pay- after-tax basis; if you do, any eligible Leaves Only ment of this bill, your coverage will be expenses incurred during your leave will To reinstate your full annual terminated. be eligible for reimbursement. To continue HCSA or LPSA contribu- your contributions during your leave, you tion upon return from your If your supplemental life insurance is termi- must call the Benefi ts Service Center within FMLA leave: You may also nated for non-payment, you must provide 60 days of the start of your leave. choose, upon return from evidence of insurability (EOI) to begin cov- your FMLA leave, to reinstate erage again upon return to work (except in If you do not call the Benefi ts Service your full annual HCSA or LPSA the case of a military leave). Center to continue your contributions contribution amount and during your leave, your HCSA or LPSA “catch up” on contributions When You Return to Work contributions will stop during your leave. you missed while on leave. Only expenses incurred prior to your leave You must call the Benefi ts Upon your return to work, your full Service Center within 30 medical, dental, vision and LTD cover- and after your return to work will be days of your return to work to age is reinstated if your coverage was eligible. Upon your return to work, your activate this option. The total terminated during your leave. If your contribution amount per pay period will be amount of contributions that supplemental life insurance coverage was reinstated automatically, and your annual you do not make while on a dropped due to non-payment, you must contribution amount will be reduced by FMLA leave will be divided by provide evidence of insurability (EOI) the amount not contributed during your the number of remaining pay to begin coverage again upon return leave. For example, suppose you are paid periods during the Plan year to work. monthly and your annual contribution and added to your regular amount is $1,200. If you are on leave for contribution amount per pay Reimbursement Accounts three months and miss three payroll period. Expenses incurred contributions of $100 each, your revised during your FMLA leave are Child/Elder Care annual contribution amount will be not eligible for reimbursement Spending Account (C/ECSA) from your HCSA or LPSA. reduced by $300, to $900. Your C/ECSA contributions will stop To maintain your full during your leave. Upon return to work, If you are a Management or Specialist annual HCSA or LPSA your contribution amount per pay period employee on an approved medical leave contribution and to be will be reinstated automatically, unless you or Workers’ Compensation leave, your eligible for reimburse- notify the Benefi ts Service Center, within contributions continue to be deducted from ment for expenses incurred 60 days upon your return to work, to your paychecks; and any eligible expenses during your leave: You may revoke your election. If you experienced a incurred during your leave will be eligible elect at the time you begin for reimbursement. your FMLA leave to catch qualifi ed life event, you may change certain up on pre-tax HCSA or LPSA elections (see the Life Events section of this Special rules apply to HCSA or LPSA con- payroll contributions when booklet.) Only eligible expenses incurred tributions if you are on a FMLA leave. you return. The total amount prior to your date of leave and after your See Special HCSA/LPSA Rules for FMLA of contributions that you do return to work (unless you revoke your Leaves in this section. not make while on a FMLA election) will be eligible for reimbursement. leave will be divided by the Health Savings Account (HSA) number of remaining pay Health Care Spending Account (HCSA) or Your HSA contributions will stop during periods during the Plan year Limited Purpose Spending Account (LPSA) and added to your regular your leave. Your per-pay-period HSA con- If you are an Administrative or Technical contribution amount per pay tributions will resume upon your return. period. Eligible expenses employee, during a leave your contributions incurred during your FMLA may be reimbursed through your HCSA or LPSA, if funds are available.

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…You Change Your Home Address? It’s easy to update your It’s important to keep your personal information current in the UPS eligibility system. personal information by This includes your home address, phone number and contact information. Moving to clicking the Edit Your your new address may have an impact on your medical and/or dental coverage, as shown Proﬁ le link on any page in the table below. See the Medical and Dental sections of this booklet for more informa- at www.UPSers.com. Or, tion about networks, including health maintenance organizations (HMOs) and dental contact your local Human maintenance organizations (DMOs). Resources representative to update your information. If you move during the Plan year, you are not allowed to change your coverage category (whom you choose to cover) until the next annual enrollment.

If you previously lived… And you move… Then… Within a medical Within the same There will be no changes to your coverage. or dental network network Within a medical Into a different network You’ll receive a notifi cation from the Benefi ts Service or dental network Center indicating your new coverage as of the date your address was changed. Outside any medical Into a medical or You’ll receive a notifi cation from the Benefi ts Service or dental network area dental network area Center indicating your coverage in your new network as of the date your address was changed. Within a medical Outside any medical You’ll receive a notifi cation from the Benefi ts Service or dental network or dental network area Center indicating your new coverage as of the date your address was changed. You may call the Benefi t Service Center to “opt in” to a nearby network if you fi nd it convenient. Within a Kaiser HMO Outside a Kaiser HMO You’ll receive a notifi cation from the Benefi ts Service network in California network area Center indicating your new coverage as of the date or Hawaii your address was changed. Outside of a Kaiser Into a Kaiser HMO You will receive a notifi cation from the Benefi ts Service HMO network network in California Center, offering you the opportunity to select the Kaiser or Hawaii HMO option. If you do not select the Kaiser HMO option, you must keep your current medical option. Outside a DMO network Into a DMO network You will receive a notifi cation from the Benefi ts Service Center, offering you the opportunity to select the DMO option. If you do not select the DMO, you must keep your current dental option. Inside a DMO network Outside a DMO network You will receive a notifi cation from the Benefi ts Service Center, asking you to select a new dental option.

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Summary of Benefi ts The tables on these pages represent a summary of the actual benefi ts described in this booklet. All benefi ts are subject to additional Plan limits, as described in the specifi c benefi t plan sections of this booklet. If this summary confl icts with the specifi c benefi t plan sections of this booklet, the specifi c benefi t plan sections control.

Medical Benefi ts Your medical benefi ts are administered by either Aetna or UnitedHealthcare, depending on the state where you live. Refer to your enrollment worksheet for the name of your medical claims administrator, or call the Benefi ts Service Center at 1-800-UPS-1508. To contact your medical claims administrator, see Member Services on the back cover of this booklet.

The annual deductibles and annual out-of-pocket maximums work very differently for participants in the Traditional medical option and the Healthy Savings medical option. Please see pages 34 to 35 in the Medical Beneﬁ ts section of this booklet for complete information.

Traditional Medical Option Healthy Savings Medical Option In-Network Out-of-Network* Out-of-Area* In-Network Out-of-Network* Out-of-Area* Medical Basic Provisions Annual deductible $250 individual $500 individual $250 individual $1,500 individual $3,000 individual $1,500 individual $500 family $1,000 family $500 family $3,000 family $6,000 family $3,000 family Annual out-of-pocket $2,000 individual $4,000 individual $2,000 individual $3,000 individual $6,000 individual $3,000 individual maximum $4,000 family $8,000 family $4,000 family $6,000 family $12,000 family $6,000 family Lifetime maximum $2,000,000 Preventive Medical Care — See the Medical Section for Important Information Routine physical 100% Not covered 100% 100% Not covered 100% exams — begin at birth Routine OB/GYN exam 100% Not covered 100% 100% Not covered 100% Routine mammogram 100% Not covered 100% 100% Not covered 100% Routine immunizations 100% Not covered 100% 100% Not covered 100% Preventive tests 100% Not covered 100% 100% Not covered 100% Physician Charges — Non-Preventive Care Ofﬁ ce visit 85% 65% 85% 80% 60% 80% Allergy testing and 85% 65% 85% 80% 60% 80% treatment Inpatient surgery 85% 65% 85% 80% 60% 80% Outpatient surgery 85% 65% 85% 80% 60% 80% Hospital Facility Charges Inpatient services 85% 65% 85% 80% 60% 80% Outpatient services 85% 65% 85% 80% 60% 80% Emergency room, 85% 85% 85% 80% 80% 80% emergency Emergency room, 85% 65% 85% 80% 60% 80% non-emergency Maternity Physician charges 85% 65% 85% 80% 60% 80%

*All out-of-network and out-of-area medically necessary services are subject to reasonable and customary (R&C) limits.

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Medical Beneﬁ ts (cont.)

Traditional Medical Option Healthy Savings Medical Option In-Network Out-of-Network* Out-of-Area* In-Network Out-of-Network* Out-of-Area* Other Covered Charges Diagnostic x-ray and 85% 65% 85% 80% 60% 80% lab (includes preadmission testing) Hospice care — 85% 65%; limit 30 days 85%; limit 30 days 80% 60%; limit 30 days 80%; limit 30 days inpatient Hospice care — 85% 65%; limit $5,000 85%; limit $5,000 80% 60%; limit $5,000 80%; limit $5,000 outpatient Skilled nursing facility 85% 65%; limit 60 days/ 85%; limit 60 days/ 80% 60%; limit 60 days/ 80%; limit 60 days/ year year year year Outpatient private duty 85%; limit 560 hours/ 65%; limit 560 hours/ 85%; limit 560 hours/ 80%; limit 560 hours/ 60%; limit 560 hours/ 80%; limit 560 hours/ nursing year year year year year year Home health care — 85% 65%; limit 120 visits/ 85%; limit 120 visits/ 80% 60%; limit 120 visits/ 80%; limit 120 visits/ limit 4 hrs./visit year year year year Ambulance, 85% 85% 85% 80% 80% 80% emergency Ambulance, 85% 65% 85% 80% 60% 80% non-emergency — if medically necessary Durable medical 85% 65% 85% 80% 60% 80% equipment Chiropractor — limit 85% 65% 85% 80% 60% 80% 60 visits/year Podiatrist — limit 60 85% 65% 85% 80% 60% 80% visits/year Rehabilitation 85% 65%; limit 60 visits/ 85%; limit 90 visits/ 80% 60%; limit 60 visits/ 80%; limit 90 visits/ year combined in- and year combined in- and year combined in- and year combined in- and outpatient, combined outpatient, combined outpatient, combined outpatient, combined physical, occupational physical, occupational physical, occupational physical, occupational and speech and speech and speech and speech

*All out-of-network and out-of-area medically necessary services are subject to reasonable and customary (R&C) limits.

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Summary of Benefi ts (cont.) Behavioral Health Benefi ts Your behavioral health benefi ts are administered by ValueOptions. All treatment must be determined by ValueOptions to be medically necessary. For contact information, see Member Services on the back cover of this booklet.

Traditional Medical Option Healthy Savings Medical Option In-Network Out-of-Network Out-of-Area* In-Network Out-of-Network Out-of-Area* Mental health – inpatient 85% 65% N/A 80% 60% N/A Mental health – outpatient 85% 65% N/A 80% 60% N/A Substance abuse treatment 85% 65% N/A 80% 60% N/A

*ValueOptions network providers are available in all areas.

Prescription Drug Beneﬁ ts Your prescription drug beneﬁ ts are administered by Medco. For contact information, see Member Services on the back cover of this booklet.

Retail Pharmacy Per-Script Medco By Mail Per-Script Traditional Option Healthy Savings Option Min/Max* Min/Max* Generics 80% 80% after deductible; deductible $5/$100 $10/$200 waived if preventive care med.

Preferred brands** 80% 80% after deductible; deductible $25/$150 $50/$300 waived if preventive care med.

Non-preferred brands** and 50% 50% after deductible; deductible $50/$300 $100/$600 non-sedating antihistamines waived if preventive care med.

* The per-script minimum/maximum applies to both the Traditional and Healthy Savings medical options. In the Healthy Savings option, the per-script minimum and maximum applies only after the annual deductible has been met or if the drug is considered a preventive care medication. Until the annual deductible for this medical option has been met, you are responsible for the entire cost of the prescription. ** If you purchase a brand-name drug when a generic is available, you must also pay the difference between the brand and generic drug costs. This difference is not included in the per-script or annual out-of-pocket maximum.

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Dental Beneﬁ ts Your dental beneﬁ ts are administered by Aetna. For contact information, see Member Services on the back cover of this booklet.

Dental Option 1 Dental PPO Dental Option 2 Dental PPO Dental Option 3 DMO In-Network* Out-of-Network** In-Network* Out-of-Network** In-Network***

Annual Deductible* $50/$100 $50/$100 $50/$100 $50/$100 None

The option will pay

Preventive 100% 100% 100% 100% 100%

Basic 80% 60% 50% 50% 100%

Major 80% 60% 50% 50% 80%

Orthodontia 50% 50% 50% 50% 50%

Maximum beneﬁ ts

Annual maximum per individual $2,500 $1,500 $1,000 $1,000 No limit (excluding orthodontia)

Combined lifetime maximum for $2,000 $2,000 $2,000 $2,000 Orthodontia — no limit, orthodontia and TMJ treatment for TMJ — $2,000 each dependent child under age 19

Lifetime maximum for TMJ treatment $2,000 $2,000 $2,000 $2,000 $2,000 for adults (age 19 and over)

* Preventive and orthodontic services are not subject to the Option 1 and 2 deductibles. If you receive dental services from both in- and out-of-network dental providers, the annual maximum benefi ts cross-apply. This means you are not eligible to receive both in-network and out-of-network annual maximum benefi ts. ** Out-of-network services are subject to reasonable and customary (R&C) limits. *** If you enroll in Dental Option 3, you must choose a personal dentist from the DMO network. Very limited benefi ts are available for services provided by a dental provider who is not your DMO personal dentist.

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Summary of Benefi ts (cont.) Vision Benefi ts Your vision benefi ts are administered by Vision Service Plan (VSP). For contact information, see Member Services on the back cover of this booklet.

Vision Exam Only Vision Frames and Lenses VSP Provider Non-VSP Provider** VSP Provider Non-VSP Provider**

Eye exam 100%* Up to $70 100%* Up to $70

Single-vision lenses N/A N/A 100%* Up to $30

Bifocal lenses N/A N/A 100%* Up to $40

Trifocal lenses N/A N/A 100%* Up to $50

Frames N/A N/A 100%* Up to $45

Standard daily-wear contact lenses in lieu of glasses N/A N/A Up to $100 Up to $60

* Up to VSP plan limits. ** Services provided by a non-VSP vision provider are subject to reasonable and customary (R&C) limits.

Additional Basic Benefi ts UPS provides these types of coverage to employees eligible for The Flexible Benefi ts Plan. See the related section in this booklet for more information about each of these benefi ts. For contact information, see Member Services on the back cover of this booklet.

Your Security

Income protection — Short-term disability (STD) The Plan pays a portion of your base pay, to a maximum number of weeks. Refer to your SPD insert for details

Income protection — Long-term disability (LTD) The Plan beneﬁ t pays a percentage of your monthly salary, for a period of time you elect: • Option 1 — 50% of monthly base pay • Option 2 — 60% of monthly base pay • Option 3 — 60% of monthly base pay to a maximum of 5 years UPS makes a contribution toward the cost of your LTD coverage. You are responsible for the cost of coverage that exceeds UPS’s contribution.

Basic employee life insurance The Plan provides 12 times your monthly salary*. You can purchase additional coverage at a discounted group rate

Basic spouse’s life insurance The Plan provides $2,000 of coverage for your spouse. You can purchase additional coverage at a discounted rate

Basic children’s life insurance The Plan provides $2,000 of coverage for your children. You can purchase additional coverage at a discounted rate

Basic employee AD&D insurance The Plan provides 12 times your monthly salary* for basic accidental death and dismemberment coverage for employees. You can purchase additional coverage at a discounted group rate

Valuable Extras

Solutions — Your EAP and Work/Life Beneﬁ t Provides practical solutions, information, advice and support for a wide range of work/life issues

Quit For Life® tobacco cessation program Provides assistance to help you stop using tobacco products (requires enrollment)

Adoption assistance UPS pays $3,500 (or $5,000 for special needs children) for qualiﬁ ed adoption expenses

*Monthly salary for purposes of this beneﬁ t refers to your base pay, excluding bonuses or other incentive compensation.

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Supplemental Benefi ts These types of optional coverage are available to employees eligible for The Flexible Benefi ts Plan. See the related section in this booklet for more information about each of these benefi ts. For contact information, see Member Services on the back cover of this booklet.

Your Security Employee supplemental life coverage Up to a maximum of $1 million of coverage, in $1,000 increments Employee supplemental AD&D coverage Up to a maximum of $1 million of coverage, in $1,000 increments Family supplemental AD&D coverage The benefi t amount is determined by your covered dependents on fi le with the Benefi ts Service Center. See the Life Insurance and AD&D section for details Spouse’s life insurance Up to a maximum of $500,000, in $1,000 increments Children’s life insurance Up to a maximum of $30,000, in $1,000 increments Personal lines of insurance Low group rates for auto and home insurance, and a choice of vendors Critical illness insurance Pays a lump-sum benefi t payment if you or your covered dependent experiences one of six covered medical conditions Long-term care insurance Coverage to help pay for services required by those who need long-term care, which is the type of care that might be necessary for someone with an ongoing illness or disability Financial Benefi ts Reimbursement accounts Pre-tax payroll deductions fund tax-advantaged reimbursement accounts and/or a health savings account that reimburse you for qualifi ed health care and/or child/elder care Legal plan Assistance for a range of commonly needed legal services

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Medical Benefi ts Choice is a central part of the medical care Member Services provided through The Flexible Benefi ts Member Services is your link to additional Plan. For your medical coverage, you may information regarding your medical care. enroll in either the Traditional option or You can call a Member Services representa- the Healthy Savings option. Additional tive to: choices are indicated on your enrollment worksheet, and are based on whether your • Obtain information about a network home address is within the service area of physician’s credentials the medical PPO network designated for • Ask questions about your medical ben- your state. efi ts or a medical service* • Replace a medical ID card If you live… You can choose… Your medical ID card will include a toll- Within a medical • Traditional PPO free number for Member Services. Or, Preferred Provider • Healthy Savings PPO you can call the Benefi ts Service Center Organization (PPO) at 1-800-UPS-1508 to be transferred to network area only Member Services. Within a Health • Kaiser HMO Maintenance * If the information provided by Member Services confl icts with • Traditional PPO the information in this booklet, the terms of this booklet control. Organization (HMO) (or Out-of-Area) network area (California • Healthy Savings PPO or Hawaii only) (or Out-of-Area) Guide to PPO (In-Network and Out-of-Network) Benefi ts Within both a PPO and • Traditional PPO an HMO network area • Healthy Savings PPO What is a Preferred Provider (California or Hawaii • Kaiser HMO Organization (PPO)? only) If you participate in a PPO option, you Outside any network • Traditional Out-of-Area and your family can enjoy the benefi ts of area • Healthy Savings Out- network-based care. In a PPO network, you of-Area can choose to see providers participating You may also choose in the network. You can also choose to use to “opt in” to either out-of-network providers, but your cover- the Traditional PPO or age will be different. The choice is yours Healthy Savings PPO, each time you seek care. if you fi nd the PPO network providers are convenient to you.

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If a Network Provider is Not Available When Services Amounts applied toward When Services are are Provided In the rare instance that you are required to your in-network annual Provided In-Network Out-of-Network see a specialist or use a facility that is not deductible and out-of-pocket Coverage is provided at You pay a higher in the PPO network, you or your physician maximums don’t count a higher level for most percentage of charges can request the claims administrator’s toward your out-of-network eligible charges approval in advance. If approved, you will deductibles and out-of- receive in-network benefi ts for the charges pocket maximums, and vice Preventive medical care Preventive medical care incurred with the out-of-network provider(s). versa. So you’ll save money is covered is not covered Except for emergencies, the claims admin- two ways when you use Your providers handle You are responsible for istrator must approve the use of out-of- only in-network providers — preauthorization for all preauthorization for all network providers and facilities in advance, because fees are discounted hospitalizations hospitalizations or out-of-network benefi ts will apply. and because you’ll reach In-network care is You are responsible your deductible and out-of- provided at a negotiated for charges above If You Live Outside pocket maximum sooner. rate and is not subject reasonable and the PPO Network Area to reasonable and customary limits customary limits If your home address is outside the PPO network and there are network providers You don’t have to fi le You may be required in your state that you fi nd convenient, you claim forms to fi le claim forms may “opt in” to the network and receive in-network benefi ts. See the Enrollment Primary care physicians, as well as other section of this booklet for information providers in the network — like hospitals, about when and how to opt into a medical labs and x-ray facilities — are selected by network. the claims administrator based on reputa- tion in the community, geographic location, effi ciency in providing medical service, the Medical Options quality of those services, and willingness to The medical options available under The adhere to the claims administrator’s guide- Flexible Benefi ts Plan are described below. lines and to provide appropriate, afford- Review the Glossary of Benefi t Terms in the able care. Overview of the Plan section for defi nitions of terms. See the Summary of Benefi ts section Using a Primary Care Physician for the annual deductible and out-of-pocket In a PPO medical option, you don’t have maximum amounts, as well as the in-network to designate a primary care physician. and out-of-network benefi t levels for covered However, you should consider using a expenses. primary doctor on a regular basis, for yourself and your family, who will have If you receive eligible out-of-network care, a full knowledge of your health history. only the amounts within the reasonable Your primary doctor can work with you and customary (R&C) limits are considered in coordinating your care and fi nding the covered expenses. So the deductible, the right specialists, if necessary. out-of-pocket maximum and the Plan’s coinsurance are all based on the R&C amount. All amounts in excess of the R&C limits are not covered by the Plan (even if the expense would otherwise be eligible) and do not apply toward any applicable deductible or out-of-pocket maximum.

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Medical Benefi ts (cont.) Traditional Medical Option — PPO or Out-of-Area Before the Annual In the Traditional medical option, covered expenses not considered preventive Deductible is Met care are applied to the annual deductible and annual out-of-pocket maximum. You pay out-of-pocket for these expenses until the annual deductible has been met. The annual deductible calculation includes eligible medical and behavioral health expenses. Medical expenses considered preventive care are paid at 100 percent, and are not applied to the deductible or annual out-of-pocket maximum. When the Annual In the Traditional medical option, both single and family deductibles apply to Deductible is Met your coverage. This means that, when expenses incurred by one of your covered family members satisfy the single deductible, he or she begins receiving benefi ts at the coinsurance level for the remainder of the year. If expenses incurred by two or more covered members of your family together satisfy the family deductible, all members of your family begin receiving benefi ts at the coinsurance level for the remainder of that calendar year, even if they haven’t met the single deductible. If you receive services from both in- and out-of-network providers, the in- and out-of-network deductibles do not cross-apply. This means that the amount of a claim that is applied toward meeting your in-network annual deductible does not also apply toward meeting your out-of-network annual deductible, and vice versa. When the Annual In the Traditional medical option, both single and family out-of-pocket maximums Out-of-Pocket apply to your coverage. This means that, when covered out-of-pocket expenses Maximum is Met incurred by one of your family members reach the single out-of-pocket maximum, all covered medical expenses he or she incurs for the remainder of the year are paid at 100 percent, within the limits of the Plan. The annual out-of-pocket maximum calculation includes eligible medical and behavioral health expenses. If the family out-of-pocket maximum is reached by two or more covered members of the family, covered medical and behavioral health expenses incurred through the end of that calendar year by all family members are paid at 100 percent, within the limits of the Plan. If you receive services from both in- and out-of-network providers, the in- and out-of-network out-of-pocket maximums do not cross-apply. This means that the amount of a claim that is applied toward meeting your in-network annual out-of-pocket maximum does not also apply toward meeting your out-of-network annual out-of-pocket maximum, and vice versa. Health Care Employees who enroll in the Traditional medical option can elect to contribute Spending Account to a Health Care Spending Account (HCSA) with pre-tax dollars to pay for out-of-pocket medical, dental and vision expenses. See the Tax-Advantaged Reimbursement Accounts section of this booklet for more information.

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Healthy Savings Medical Option — PPO or Out-of-Area The Healthy Savings medical option is specifi cally Before the Annual In the Healthy Savings medical option, covered expenses not considered preventive Deductible is Met care are applied to both the annual deductible and annual out-of-pocket maximum. designed to work with an You pay out-of-pocket for these expenses until the annual deductible has been met. HSA to help maximize your The annual deductible calculation includes eligible medical, behavioral health and tax savings. You must be prescription drug expenses. covered by a qualifi ed health Expenses considered preventive medical care are paid at 100 percent, and are not plan in order to con tribute to applied to the deductible or annual out-of-pocket maximum. The deductible is also an HSA. All design features waived for prescription drugs considered preventive care medications; however, the of the Healthy Savings applicable coinsurance benefi t is applied. option, such as the annual When the Annual In the Healthy Savings medical option, either the single or family deductible applies deductible and out-of-pocket Deductible is Met to your coverage: maximums, comply with all • If you elect coverage for only yourself, the single deductible applies to you. Internal Revenue Service • If you elect coverage for yourself and at least one other person, the single rules regarding high- deductible does not apply to your coverage. Instead, the family deductible deductible health plans. must be met before any member of your family begins receiving benefi ts at the coinsurance level for the remainder of that calendar year. If you receive services from both in- and out-of-network providers, the in- and out- of-network deductibles do not cross-apply. This means that the amount of a claim that is applied toward meeting your in-network annual deductible does not also apply toward meeting your out-of-network annual deductible, and vice versa. When the Annual In the Healthy Savings medical option, either the single or family annual out-of- Out-of-Pocket pocket maximum applies to your coverage: Maximum is Met • If you elect coverage for only yourself, the single out-of-pocket maximum applies to you. • If you elect coverage for yourself and at least one other person, the single out-of- pocket maximum does not apply to your coverage. Instead, the family out-of- pocket maximum must be met before covered expenses incurred by any member of your family for the remainder of the year are paid at 100 percent, within the limits of the Plan. The annual out-of-pocket maximum calculation includes eligible medical, behavioral health and prescription drug expenses. If you receive services from both in- and out-of-network providers, the in- and out-of-network out-of-pocket maximums do not cross-apply. This means that the amount of a claim that is applied toward meeting your in-network annual out-of- pocket maximum does not also apply toward meeting your out-of-network annual out-of-pocket maximum, and vice versa. Health Care Participants in the Healthy Savings medical option have two opportunities to pay Accounts for out-of-pocket health care expenses with one or both of these tax-advantaged accounts: • Limited Purpose Spending Account (LPSA) — reimbursement for eligible dental and vision expenses only (see the Tax-Advantaged Reimbursement Accounts section) • Health savings account (HSA) that you establish with an approved fi nancial institution – helps pay for medical, dental, vision and prescription drug expenses (see What is an HSA? in this section)

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Medical Benefi ts (cont.) What is an HSA? If you open an HSA with OptumHealth A health savings account (HSA) is an indi- Bank and elect to contribute to your HSA vidually owned account that can help you on a pre-tax basis through payroll deduc- save on taxes while paying for health care tions, it is your responsibility to ensure expenses. You can establish and contribute that any after-tax contributions you make, to an HSA with OptumHealth Bank, the combined with your pre-tax contributions, HSA vendor with whom UPS has part- do not exceed the applicable annual nered, or with another qualifying fi nancial maximum. institution of your choice. You can make While an HSA gives you more control of after-tax contributions toward your HSA how you spend your health care dollars, and then take the deduction from your it requires careful planning and an under- annual income tax return. If your HSA standing of complex rules. An HSA may is with OptumHealth Bank, you can also require you to make more fi nancial and have pre-tax payroll deductions automati- budgeting decisions. Each time you incur cally deposited into your HSA account. an eligible expense, you’ll decide whether You may also choose to invest certain to pay that expense out of your pocket amounts of your HSA account funds. Any or use funds from your health savings investment earnings are not taxed as long account. as they are used for qualifi ed medical expenses. The amount you can contribute The HSA is not maintained or sponsored depends on whether you elect single or by UPS and is not subject to ERISA. family coverage, and the maximum amount is subject to annual Internal Revenue If you elect to contribute to an HSA at Service (IRS) guidelines. OptumHealth Bank via payroll deductions, up to once a month you may change You can use your HSA to pay for eligible the amount you elect to contribute by medical, dental, vision and prescription calling the Benefi ts Service Center at drug expenses. If you don’t use all the 1-800-UPS-1508. The effective date of money in your HSA during the year, your your change depends on your payroll balance carries over to the next year and frequency and the timing of data fi le trans- can be another way to save for future fers. Your request will be processed as soon medical expenses. as reasonably possible, but it could take up to a month or longer before the new You can contribute to an HSA as long amount is deducted from your paychecks. as you are an “eligible individual,” as defi ned by the IRS. If you become eligible Health Maintenance Organization for Medicare, you are not automatically (HMO) Option disqualifi ed from contributing to an HSA. However, if you elect to enroll in Medicare, For employees who live in California or you are no longer an eligible individual and Hawaii only, The Flexible Benefi ts Plan may no longer contribute to your HSA. provides a Kaiser Permanente HMO option in addition to the other medical options. There are no age limitations on when you If you live in one of these HMO areas, you must spend your account balance. If you will receive benefi t information describing retire or leave UPS, you take the account this additional option. and the funds with you.

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An HMO provides coverage only within its • Behavioral health and substance abuse own network. There is usually no out-of- care. Refer to the Kaiser HMO materials network benefi t. In return, the HMO can for details about how mental health and be an easier, less complicated system to substance abuse care are covered. use. Here are some highlights of the HMO • Prescription drugs. Your HMO admin- option. Note that medical, behavioral isters the prescription drug program. health and prescription drug benefi ts are Check your HMO materials for cover- provided by the Kaiser HMO, not by the age details. other claims administrators described in • No claim forms. The HMO processes this booklet. Refer to your HMO materials most paperwork for you and pays the for complete details. doctors and specialists who treat you. • Your care is coordinated. When you • Seeking care outside the HMO. Because select the HMO option, you agree to only care received through the HMO is receive care only from doctors affi liated covered, special rules apply when you with the HMO or to whom the HMO must seek care outside the HMO — for refers you. You may fi nd it necessary to example, when you have an emergency change doctors when you join the HMO or are traveling. Refer to the HMO litera- if your doctor is not part of the network. ture or call Member Services for more But you receive higher benefi ts and may information. pay lower out-of-pocket expenses for most HMO network care. • If your dependent(s) don’t live with you. Except for an emergency, HMO cover- • It’s all handled for you. Your primary age is usually available only if you or care physician (PCP) provides for your your dependents receive care through the health care, orders tests, prescribes network. If your eligible dependents live medicine and refers you to specialists. outside the HMO network area (such as If you require hospitalization, your PCP away at college), coverage is usually only arranges for admission and coordinates available if those individuals come to the your hospital care. network area for care. If emergency care • Network referrals. HMO network doc- is provided out of the network area, the tors have referral systems and integrated HMO usually limits follow-up care ben- relationships with other providers, who efi ts outside the network area. Refer to work together for your benefi t. your HMO materials for details, or call • One-stop shopping. HMOs provide Kaiser Member Services for more infor- primary and specialty care as well as mation. Make sure you know the rules pharmacy, lab and diagnostic services before selecting the HMO option. in one facility. Centralized and online medical records are available from all network facilities. • 24-hour care. An HMO doctor is “on call” around the clock, seven days a week. You’re always covered for emergencies and urgent care no matter where you travel.

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Medical Benefi ts (cont.) If you are enrolled in an What is Covered by accident, sometimes it can happen. Your HMO option (for California Your Medical Benefi ts medical claims administrator may offer a case management program for certain and Hawaii residents only), Listed in alphabetical order below are your coverage could be medical conditions, to help you and your the types of medical services and supplies dependents with: different. Refer to your covered by The Flexible Benefi ts Plan. • Understanding treatment plans and HMO materials for details The amount of covered charges the Plan alternatives about your coverage, will pay depends on the medical option you or contact your HMO selected, as well as whether you seek care • Monitoring claims payments Member Services. from an in-network or out-of-network pro- • Evaluating alternative treatment facilities vider. In all cases, in order for benefi ts to and options be paid by the Plan, the care must be determined by the claims administrator to be: Call Member Services to discuss whether case management is appropriate for your • Medically necessary situation. Early identifi cation allows the • Neither investigational nor experimental patient, family, physician, social worker • Within the standards for the reasonable and/or case manager to work together and customary amount, and to arrange appropriate care in a timely • Not excluded by the Plan manner.

This list may not be all-inclusive. If you’re Chiropractic Treatment unsure whether a medical expense is generally covered* by the Plan, contact your All medically necessary services performed claims administrator’s Member Services. or directed by a licensed chiropractor are * Whether or not a covered service or treatment is paid by the covered at the applicable coinsurance level. Plan is based on the applicable facts and circumstances, and Chiropractor visits (consisting of an offi ce the applicable medical documentation supporting your claim. visit, manipulation, physical therapy and/ or other related services) are limited to up Allergy Treatment to 60 visits per calendar year, regardless of Allergy testing and treatments (including whether you see an in-network or out-of- injections) are covered at the applicable network chiropractor. coinsurance level. Contraceptives Ambulance (Ground or Air) Prescription contraceptive devices, implants Use of an ambulance is covered when and injections are covered at the applicable related to an emergency, or to a non- coinsurance level. emergency when determined by the claims administrator to be medically necessary. Expenses Not Covered Your out-of-pocket costs may be higher Over-the-counter contraceptive devices. when you use an ambulance for a non- emergency. If you use an ambulance when Emergency Treatment not medically necessary, no benefi ts are In an emergency, seek medical care as quickly provided. See the Summary of Benefi ts as possible at the nearest appropriate facility. section for more information. For a defi nition of an emergency, see the Glossary of Benefi t Terms in the Overview Case Management of the Plan section. While none of us likes to think about a complicated, long-term illness or serious

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Emergency Rooms • Physical, occupational or speech therapy Emergency rooms should be used only for • Drugs and most medical supplies pre- true emergencies. (See Glossary of Benefi t scribed by a physician Terms in the Overview of the Plan section.) • Laboratory services Your benefi t will depend on whether the condition is an emergency medical condi- Expenses Not Covered tion as determined by the claims adminis- • Services or supplies not included in the trator. Once you are discharged from the home health care plan outlined by your emergency room or admitted to the hospi- physician tal from the emergency room, emergency • Services of a person who ordinarily lives coverage ends and benefi ts are covered as in your home or who is a member of non-emergency treatment. your family or your spouse’s family If you receive medically necessary care for • Custodial care a non-emergency at an emergency facility, • Transportation your out-of-pocket costs may be higher. See the Summary of Benefi ts section for Hospice Care more information. Hospice care provides terminally ill patients and their families with an alternative to Home Health Care hospital care while assuring them of a spe- Charges made by a home health agency cialized program tailored to each individual. for a covered family member in your home Terminally ill patients require specialized in accordance with a home health care care, both medical and psychological, plan are covered by this benefi t. For these that may not be readily available from the expenses to be eligible, the home health regular hospital staff. For purposes of this care plan must be outlined by your physi- program, a terminally ill patient has a medi- cian. It may be necessary for this treat- cal prognosis of six months or less to live. ment plan to be submitted to the claims administrator for review prior to or during Covered Expenses — Inpatient treatment. Charges for room and board made by a hospice facility, hospital, convalescent Home health care benefi ts are calculated facility or physician are allowable when on a per-visit basis. Each visit of up to furnished on a full-time inpatient basis for four hours by a nurse, therapist or aide is pain control and other acute and chronic considered one visit. There are no limits on symptom management. the number of home health care visits when the service is provided in-network. Up to There are no limits to the number of 120 home health care visits per calendar days of inpatient hospice care if provided year are covered by the Plan for services in-network. Up to 30 days of inpatient incurred with out-of-network providers hospice care are covered by the Plan for or by participants in an out-of-area medi- services incurred with out-of-network pro- cal option, as indicated in the Summary viders or by participants in an out-of-area of Benefi ts section. medical option. Any in-network days will be counted toward your out-of-network Covered Expenses limit, as indicated in the Summary of • Part-time or intermittent home health Benefi ts section. aide services, consisting primarily of caring for the patient in conjunction with skilled nursing care

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Medical Benefi ts (cont.) Covered Expenses — Outpatient — Financial or legal counseling, includ- The following services and supplies are ing estate planning or the drafting allowable when furnished to a person of a will receiving outpatient hospice care coordinated — Homemaker or caregiver services by the hospice program administrator: that are not solely related to care of the person (such as sitter or compan- • Part-time intermittent nursing care by an ion services for the patient or other RN or LPN for up to eight hours in any members of the family, transportation, one day house-cleaning and maintenance of • Medical social services under the direc- the house) tion of a physician, including assess- — Respite care ment of the person’s social, emotional and medical needs, and of the home and Hospitalization family situation • Identifi cation of community resources Inpatient Services needed to meet his or her assessed needs, • Semiprivate room and board and related including assisting the person to obtain services and supplies the resources needed to meet his or her • The use of operating, recovery and treat- assessed needs ment rooms and their equipment • Psychological and dietary counseling • The use of intensive care and cardiac care • Consultation or case management ser- units vices by a physician or nurse • Dressings, splints and plaster casts • Physical therapy • Inpatient laboratory and x-rays • Part-time or intermittent home health • Physical therapy aide services for up to eight hours in any • Electrocardiograms one day. These consist mainly of caring for the person • Oxygen and anesthesia and their administration There are no limits to the number of days • The cost and administration of blood and of outpatient hospice care if provided blood plasma in-network. Up to $5,000 in expenses for • Intravenous injections and solutions outpatient hospice care provided by an out-of-network provider or by participants • X-ray and radium therapy in an out-of-area medical option. If you • Prescribed drugs use both in-network and out-of network providers, any in-network visits will be Inpatient Alternatives counted toward your out-of-network limit. Rather than a stay as a hospital inpatient, an alternative course of medical care may Expenses Not Covered be more appropriate, cost-effective and • Any charge for daily room and board in comfortable. Expenses may be covered a private room in excess of the facility’s for a skilled nursing facility, private duty semiprivate room rate nursing (outpatient), home health care and • Charges made for the following services: hospice care. The individual alternatives and benefi ts available for each are listed — Bereavement counseling separately in this section. — Funeral arrangements — Pastoral counseling

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Outpatient Services Expenses Not Covered The Flexible Benefi ts Plan covers outpatient The following procedures are not covered hospital services provided on an outpatient by the Plan because they do not correct basis or by a licensed free-standing emer- the underlying medical causes of infertility: gency care center, surgical center or birth- • Intrafallopian transfer ing center: • Sperm banking/semen specimen storage • Preadmission testing within seven days of • Drugs for sexual dysfunction a scheduled admission for non-emergency surgery • Reversal of voluntary sterilization • Chemotherapy infusion • Procedures, services (including lab and x-ray) or supplies intended to induce • Kidney dialysis performed either in the pregnancy rather than treat an underlying hospital or your home medical cause; such as: • Hospital charges connected with outpa- — Artifi cially assisted insemination tient surgery (including related counseling) • Hospital emergency room care of an acci- — In vitro fertilization dental injury or for emergency treatment — Embryo transfer procedures of a life-threatening sudden and serious — Surrogate parenting illness Maternity Services Expenses Not Covered Maternity services are covered, just as • Additional expenses for a private room any other condition requiring medical in a hospital, unless medically necessary treatment. • Hospital care for diagnostic purposes, unless the covered person’s condition Covered services include: or type of test requires hospitalization • Normal delivery or delivery by cesarean section Infertility Treatment • Prenatal and postnatal care The Flexible Benefi ts Plan covers charges • Initial sonogram per pregnancy for the diagnosis of the cause of infertility • Additional sonograms only if medically and/or medical treatment to correct that necessary cause. Both men and women are covered for infertility treatment. • Amniocentesis if medically necessary • Treatment by an obstetrician for compli- Because of the variety of treatment cations during pregnancy and delivery approaches to infertility, you or your • Services in connection with a miscar- doctor may want to contact your claims riage or abortion (including a voluntary administrator before treatment begins to abortion) determine whether a particular treatment will be covered. • Surgery related to an extrauterine or ectopic pregnancy See the Prescription Drug Benefi ts section • Lamaze or other child-birth preparation for details on how infertility medications classes (upon completion of the class) are covered. • Services of a registered midwife when delivery is performed in a hospital, licensed free-standing emergency care center or birthing center

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Medical Benefi ts (cont.) Length of Hospital Stay • Medical supplies and dressings prescribed Group health plans and health insurance by a physician, including splints, trusses, issuers generally may not, under federal braces, catheters, oxygen and equipment law, restrict benefi ts for any hospital length for its administration, blood and blood of stay in connection with childbirth for products, electronic pacemaker and the mother or newborn child to less than colostomy bags and colostomy-related 48 hours following a vaginal delivery, or supplies and PKU supplements less than 96 hours following a cesarean section. However, federal law generally does Expenses Not Covered not prohibit the mother’s or newborn’s • Hearing aid repairs attending provider, after consulting with • Expenses related to the purchase of the mother, from discharging the mother or orthopedic shoes or related corrective her newborn earlier than 48 hours (or 96 devices and appliances, except where the hours as applicable). In any case, plans and shoes or devices are permanently fastened issuers may not, under federal law, require to an orthopedic brace and are medically that a provider obtain authorization from necessary or used in the place of surgery the plan or the issuer for prescribing a • Personal hygiene or convenience items, length of stay not in excess of 48 hours such as air conditioners, humidifi ers and (or 96 hours). physical fi tness equipment Medical Supplies and Equipment • Items to accommodate your home, offi ce or vehicle as a result of an injury or ill- Coverage includes the medical supplies ness, such as wheelchair lifts, hand rails, listed below. Call your claims adminis- or stair risers trator’s Member Services to determine whether a medical supply not listed is Podiatrist Treatment covered. All medically necessary services performed • Rental or purchase of durable medical or directed by a licensed podiatrist are equipment required for therapeutic use covered at the applicable coinsurance and prescribed by a physician. Durable level. Podiatrist visits are limited to up to medical and surgical equipment is equip- 60 visits per calendar year, regardless of ment made to withstand prolonged use, whether you see an in-network or out-of- made for and mainly used in the treat- network podiatrist. ment of a disease or injury, suited for use in the home, not normally of use to Preventive Care persons who do not have a disease or injury, not for use in altering air quality The Plan pays for services for preventive or temperature and not for exercise or medical care provided on an outpatient training. In determining the maximum basis. Preventive care services are provided amount that will be paid for durable solely for the purpose of preventing an ill- medical equipment, the claims adminis- ness that has not yet been diagnosed, not to trator will consider the appropriateness treat an existing illness or injury. In deter- of the equipment based on your medi- mining how frequently certain preventive cal needs and suitable alternatives. To care services are covered for your age and determine whether rental or purchase is gender, the medical claims administrators appropriate, call Member Services at the carefully follow various guidelines for what number on your medical ID card is considered preventive care, such as those published by the U.S. Preventive Services • The purchase of artifi cial limbs or other Task Force, the American Medical prosthetic appliances

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Association, the American Academy of as they are used. For example, a two-hour Call the toll-free number on Pediatrics and the IRS safe harbor guidelines. visit will be counted as two hours, rather your medical ID card before than an eight-hour shift. Call the toll-free making arrangements for If testing is done for a medical diagnosis or number on your medical identifi cation card private duty nursing. to monitor or prevent complications from before you make any arrangements for an existing condition, it is not considered outpatient private duty nursing. preventive care. Also, if you are diagnosed with a condition during your preventive To be covered, outpatient private duty care visit that results in non-preventive nursing services must: care being rendered, charges associated • Be medically necessary for treatment with your non-preventive care will not be of a disease or injury considered preventive care and applicable • Require the medical training and tech- benefi ts will be applied. nical skills of a registered nurse (RN), For a summary of covered preventive licensed practical nurse (LPN) or licensed care services, see Preventive Medical vocational nurse (LVN), and Care Guidelines in this section. This list • Be ordered by the attending physician is intended as a general guideline for as necessary treatment your physician. It is not a complete list of preventive services covered by the Plan, as It’s important to understand that, while some preventive services are only admin- skilled nursing care may be necessary istered in certain situations. If you’re not initially, alternate caregivers may be sure whether a specifi c service will be cov- encouraged to learn the skills necessary ered as preventive care, you or your doctor for ongoing medical care. Once alternate should contact your medical claims admin- caregivers have demonstrated their pro- istrator, before services are rendered, at fi ciency in a particular procedure, skilled the toll-free number that appears on your nursing coverage for that procedure medical ID card, or call 1-800-UPS-1508 may cease. to be connected to Member Services. Expenses Not Covered Preventive care is only covered when per- • Private duty nursing in a hospital. The formed by an in-network physician or if hospital provides a staff of registered you are in the out-of-area medical option. nurses for care given during hospitaliza- There is no coverage for preventive care tion; this service is included in the room services provided by an out-of-network and board charges provider. • Custodial care, even if given by an RN, LPN or LVN. Custodial care includes For benefi t levels, see Medical in the such things as meal preparation, bath- Summary of Benefi ts section. ing the patient, acting as a companion and other services that may be necessary Private Duty Nursing (Outpatient) for the normal activities of daily living, Benefi ts are payable for medically skilled, but that do not require the medical private duty nursing at your home if your training and technical skills of a nurse. doctor prescribes it. Benefi ts cover the Daily nursing notes will be reviewed to home services of registered nurses, licensed determine the portion of the nursing care practical nurses and licensed vocational expenses that qualifi es for benefi ts nurses, up to a maximum of 560 hours per • Services provided by a nurse who lives calendar year (the equivalent of 70 eight- with you hour shifts). The 560 hours are counted

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Medical Beneﬁ ts (cont.)

If you are enrolled in the Professional Services Rehabilitation Therapy (Short-Term) HMO option (California or Coverage under the Plan is provided for Charges made by a physician or a licensed Hawaii only), your cover- the following professional services: or certifi ed physical or occupational thera- age may be different. Refer • Doctor’s and osteopath’s services pist for furnishing short-term rehabilitation to your HMO materials for services for the treatment of acute condi- • Second surgical opinions details, or call your HMO tions are covered. Short-term rehabilitation Member Services. • Chiropractor’s services (limited to 60 therapy is physical therapy or occupational visits per calendar year) therapy for the improvement of a body • Podiatrist’s services (limited to 60 visits function that has been lost or impaired due per calendar year) to injury or illness. • Services by a registered graduate nurse, licensed practical nurse or licensed voca- Expenses Not Covered tional nurse • Services and supplies received while • Examinations and other services for the you or your dependent are confi ned in treatment of an illness or injury, including a hospital or other facility for medical radiation therapy and chemotherapy care (these may be covered by other Plan provisions) • Medical consultations when requested by the physician in charge of the patient • Services not performed by or under the direct supervision of a physician • Diagnostic examinations, x-rays and laboratory tests, including their reading • Services not provided in accordance with and interpretation a specifi c treatment plan that: • Charges for hearing exams and an initial — Details the treatment to be given and hearing aid per ear per lifetime age 19 or the frequency and duration of the older; or one hearing aid per ear every treatment, and three years for children up to age 19 — Provides for ongoing reviews and is when prescribed by an otolaryngologist renewed only if therapy is still necessary • Ambulance service to the nearest appro- • Services or supplies covered to any extent priate facility to treat a patient’s medical by any other part of The Flexible Benefi ts condition Plan, or any other group plan sponsored by UPS • Hemodialysis There is no limit to the number of medi- Reconstructive Surgery Following cally necessary visits for rehabilitation a Mastectomy care provided in-network. If you choose out-of-network care, you are limited to 60 The following services are covered. Benefi ts visits (combined rehabilitation and speech are paid as for any other covered service: therapy) per calendar year. If you par- • Reconstruction of the breast on which ticipate in an out-of-area option, you are the mastectomy has been performed limited to 90 combined visits per calendar • Surgery and reconstruction of the year. Any in-network visits will be counted other breast to produce a symmetrical toward your out-of-network limit. appearance In any case, you must show improvement • Prostheses, and within 60 calendar days from the beginning • Physical complications of all stages of of treatment for coverage to continue. mastectomy, including lymphedemas, in a manner determined in consultation with the attending physician and the patient

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Skilled Nursing Facility rehabilitation and speech therapy) per Skilled nursing facilities provide intermedi- calendar year. If you participate in an ate care following a hospital stay, when a out-of-area option, you are limited to patient may continue to require 24-hour 90 combined visits per calendar year. Any nursing care for a limited period, but not at in-network days will be counted toward the level of care provided by a hospital. In your out-of-network limit. these circumstances, benefi ts for a skilled In any case, you must show improvement nursing facility (or convalescent care facil- within 60 calendar days from the beginning ity) will be paid by the Plan. of treatment for coverage to continue. There is no limit to the number of days Expenses Not Covered of skilled nursing facility care if provided in-network. Up to 60 days per calendar Besides the exclusions noted in What is year are covered when you choose an Not Covered by Your Medical Benefi ts in out-of-network skilled nursing facility or this section, the following conditions and participate in an out-of-area option. Any services are not covered by the Plan. in-network days will be counted toward • Certain speech problems, such as stutter- your out-of-network limit. ing in children, may be covered by Public Law 94-142, The Education for All Speech Therapy Handicapped Children Act of 1975. Benefi ts are paid for speech therapy only This law provides public schools with when needed to restore speech lost as a language and speech services for all result of an illness or injury. For example, children between the ages of three and 21, children who have not fully developed their including help in identifying and diagnos- speech skills (in other words, as a result of ing speech and language disorders as well developmental delays) are not eligible for as rehabilitative and preventive treatment. these restorative services. However, some- As a result, these types of speech prob- one who loses speech capacity as a result lems are not covered of an accident could receive benefi ts under • Certain speech problems in children that this provision. are classifi ed as developmental delays • Services rendered for the treatment of Speech problems can be unique, varying delays in speech development, unless to in severity from individual to individual, restore speech lost as a result from injury and frequently diagnoses can be subjective. or illness To help determine whether the condition is covered by the Plan and what benefi ts • Speech problems caused by learning may be payable, you and/or your provider disabilities or articulation disorders should consider submitting detailed infor- (although any underlying psychological mation to the claims administrator for reason for the condition may be covered review before incurring expenses. as a mental or nervous disorder) • Services or supplies that a school system To be eligible for benefi ts, treatment of is required by law to provide a speech problem must be prescribed, controlled and directed by a doctor and • Services of a speech therapist who lives approved by the claims administrator. in your home • Special education, including lessons in There is no limit to the number of medi- sign language, to teach a covered person cally necessary visits provided in-network. whose ability to speak has been lost or If you choose out-of-network care, impaired to function without that ability you are limited to 60 visits (combined

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Medical Benefi ts (cont.) Surgical Services • Services or supplies related to any eye Covered surgical services under the Plan surgery mainly to correct refractive errors include pre-operative and post-operative (for example, radial keratotomy) unless care within the 14-day period after surgery. vision acuity cannot be corrected to These include services by a: 20/50 with corrective lenses • Surgeon Total Parenteral Nutrition • Anesthesiologist and Enteral Nutrition • Assistant surgeon when medically neces- Total parenteral nutrition (TPN) is required sary or when required by the hospital’s for patients with certain medical condi- established policy tions that impair gastrointestinal function to a degree incompatible with life or with Coordinating with Dental Coverage optimal recovery from interventional pro- If you need dental surgery that requires cedures, such as major surgery or cancer hospitalization, the dentist’s charges are chemotherapy. These patients cannot be covered by the dental component of maintained through oral feeding and must The Flexible Benefi ts Plan. Other eligible rely on parenteral nutritional therapy for charges are covered by the medical com- prolonged periods of time. ponent of the Plan. Please contact your medical claims administrator for more Enteral nutrition (EN) is considered information. necessary for a patient with a functioning gastrointestinal tract who: Expenses Not Covered • Experiences dysfunction of surrounding • Plastic surgery, reconstructive surgery or structures that are necessary to permit other services and supplies that improve, food to reach the gastrointestinal tract, alter or enhance appearance, whether and or not for psychological or emotional • Cannot maintain weight or strength reasons. However, benefi ts are paid if commensurate with his or her general cosmetic/plastic surgery is needed to: condition. — Improve the function of a body part that is not a tooth or structure that Examples of these conditions are head and supports the teeth neck cancer with reconstructive surgery, — Correct a severe birth defect, including and central nervous system disease lead- cleft lip or palate or webbed fi ngers or ing to interference with the neuromuscular toes, provided the surgery is necessary mechanisms of ingestion. to improve the functionality of the In order to qualify for this coverage, the body part, or patient must: — Correct a malformation as a direct result of disease, surgery performed to • Require at least 75 percent of their total treat a disease (including reconstruc- sustenance from EN or TPN, and tive surgery following a mastectomy), • Have a long-term need for EN or TPN, or an accidental injury and • Have a condition involving the GI tract which prevents adequate oral intake

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Covered Expenses While you are not required to, you are • Cost of nutrients/solutions, except baby encouraged to consider using a facility in food and other regular grocery items, your claims administrator’s national trans- including those that can be blended and plant network. If you do, transportation used in enteral feeding systems costs as outlined below will be covered. • Cost of the infusion pump and heparin Covered Expenses lock • Expenses for lodging and transportation • Supplies and equipment necessary for determined by your claims administrator proper functioning and effective use to be reasonable and necessary incurred of a TPN or EN system by the covered recipient and a compan- • Home visits by a physician or nurse ion who travels the same day(s) as the in conjunction with TPN or EN recipient to and from the transplant center for pre-transplant evaluation, transplant Expenses Not Covered surgery and necessary post-transplant ser- • EN for patients with a normally func- vices performed at the transplant center tioning GI tract whose need for enteral • If the covered recipient is a minor, trans- nutrition is due to a lack of appetite or portation and lodging expenses for two cognitive problems companions who travel with the minor, • Standard infant formulas and formula as described above and food products modiﬁ ed to be low • A daily maximum of $200 and an over- protein for people with inherited diseases all lifetime maximum of $15,000 for of amino acid and organic acid metabo- all transportation and lodging expenses lism (except PKU) incurred for covered services per transplant • Baby food and other regular grocery items, including those that can be blended Expenses Not Covered and used in enteral feeding systems • Services rendered by a member of the recipient’s, companion’s or donor’s imme- Transplants diate family The Flexible Beneﬁ ts Plan provides the • Purchase or shipment of home furnish- same coverage for services and procedures ings or personal belongings related to transplants as for any other medical procedure.

Claims administrators develop nationwide transplant networks to coordinate available resources for transplant procedures. National transplant networks are created using a rigorous credentialing methodology. Facilities participating in the transplant networks have been evaluated for their surgical and medical capabilities as well as their clinical outcomes (how well they performed).

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Medical Beneﬁ ts (cont.) The Preventive Medical Preventive Medical Care Guidelines Care Guidelines are not a This list is intended as a set of general guidelines for your physician. It is not a complete complete list of preventive list of preventive medical care services covered by the Plan, as some preventive services care services covered by are only administered in high-risk situations. If you’re not sure whether a speciﬁ c service the Plan. For more infor- will be covered as preventive care, you or your doctor should contact your medical claims mation, call the Member administrator at the toll-free number that appears on your medical ID card, or call Services number listed on 1-800-UPS-1508 to be connected to Member Services. your medical ID card. Guidelines for Children

Age Birth up to Age 1 Age 1 up to Age 3 Age 3 up to Age 7 Age 7 up to Age 20 Visits 7 well child 3 well child 1 well child 1 routine physical

Frequency Every year Every year Every year Every other year

Immunizations Per current guidelines Per current guidelines Per current guidelines Per current guidelines

Tests • Urinalysis • Urinalysis • Urinalysis • Urinalysis • Hemoglobin • Hemoglobin • Hemoglobin • Hemoglobin and Hematocrit and Hematocrit and Hematocrit and Hematocrit • Tuberculin skin test • Tuberculin skin test • Tuberculin skin test • Tuberculin skin test • PKU • Hearing screening

Females only N/A N/A N/A • Gyn. exam every year 18 and older • Pap smear • Breast exam

Males only N/A N/A N/A • Testicular exam

Guidelines for Adults

Age Age 20 up to Age 30 Age 30 up to Age 40 Age 40 Up to Age 50 Age 50 and Older Visits 1 routine physical 1 routine physical 1 routine physical 1 routine physical

Frequency Every 24 months Every 24 months Every 24 months Every year

Immunizations • DPT • DPT • DPT • DPT • MMR • MMR • MMR • MMR

Tests • Urinalysis • Urinalysis • Urinalysis • Urinalysis • 12-lead EKG • 12-lead EKG • 12-lead EKG • 12-lead EKG • Chest x-ray • Chest x-ray • Chest x-ray • Chest x-ray • SMA 18/22 • SMA 18/22 • SMA 18/22 • SMA 18/22 • CBC • CBC • CBC • CBC • Lipid profi le • Lipid profi le • Lipid profi le • Lipid profi le • Occult blood • Occult blood • Exercise stress

Females only • Gyn. exam every year • Gyn. exam every year • Gyn. exam every year • Gyn. exam every year 18 and older 18 and older 18 and older 18 and older • Pap smear • Pap smear • Pap smear • Pap smear • Breast exam • Breast exam • Breast exam • Breast exam

Males only • Testicular exam • Testicular exam • Testicular exam • Testicular exam • PSA • PSA

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What is Not Covered by • Charges for a doctor’s travel Your Medical Benefi ts • Services and supplies you are not legally In addition to the items specifi cally listed obligated to pay for above as excluded, the following additional • Administrative or offi ce fees, such as items are not covered. copying and mailing expenses and state • Services or treatment not specifi cally and local taxes listed as covered • Claims received by the claims administra- • Custodial care, rest centers, nursing tor more than 12 months past the date homes or assisted living centers of service • Dietary supplements, including any • Charges that exceed reasonable and supplement for newborn infants, except customary limits, as determined by the as described in Total Parenteral Nutrition claims administrator and Enteral Nutrition in this section and • Services provided before coverage PKU supplements becomes effective or after coverage ends • Services or supplies for or related to • Services or supplies that are not deter- sex change surgery or any treatment mined by your claims administrator to of gender identity disorders be medically necessary; even if prescribed, • Acupuncture therapy, except when acu- recommended or approved by the attend- puncture is performed by a physician as ing physician or dentist a form of anesthesia in connection with • Services or supplies the claims adminis- surgery that is covered by the medical trator determines to be unnecessary for option you select the diagnosis, care or treatment of the • Weight reduction programs, unless pre- condition involved approved by the claims administrator • Charges made only because coverage • Services, treatment, educational testing exists or training related to learning disabilities • Care, treatment, services or supplies not or developmental delays prescribed, recommended and approved • Care furnished mainly to provide sur- by the attending physician roundings free from exposure to condi- • Services or supplies not provided in tions that can worsen a person’s disease keeping with medical or professional or injury standards and practice • Expenses listed as not covered in other • Treatments or procedures and related subheadings in this section materials that are investigational or • Services of a physician who is still a resi- experimental in nature, as determined dent or intern, when services are billed by the claims administrator in that capacity • Occupational conditions, ailments or • Charges for a missed or broken injuries for which coverage is provided appointment by Workers’ Compensation or by a similar law

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Medical Benefi ts (cont.) • Services and supplies provided by a Maintenance of Benefi ts and personal injury protection or compulsory Coordination with Medicare medical payments provision of any motor vehicle insurance contract required by If you or your covered dependent(s) are federal or state law, whether or not the also covered under another group health participant properly asserts his or her care plan and/or Medicare, there are rules rights under the motor vehicle insurance that determine whether the Plan pays contract benefi ts fi rst, or whether the other payer is primary. See Maintenance of Benefi ts and • Treatment of a condition caused by war Coordination with Medicare in the Filing (declared or undeclared) or any act of a Claim section of this booklet for more war information. • Treatment of a condition caused by com- mitting an unlawful act of aggression, Right of Recovery Provision including a misdemeanor or a felony In some situations, you or your covered • Services or supplies for which benefi ts are dependents may be entitled to certain pay- provided by any government law, except ments from another source following an as otherwise required by law injury or illness, or you may receive Plan • Services or supplies that are provided payments in error. See Right of Recovery by reason of past or present service Provision in the Filing a Claim section in the armed forces of any government for details. How to File a Medical Claim See the Filing a Claim section of this booklet.

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Behavioral Health Benefi ts When you or a covered family member Member Services The behavioral health needs help with a mental health or sub- ValueOptions’ Member Services is your program complements, stance abuse problem, you can turn to a link to your behavioral health benefi ts. but does not replace, special UPS behavioral health program. You can call a Member Services represen- Solutions — Your EAP and The program provides confi dential behav- tative to: Work/Life Benefi t program. ioral health counseling, treatment and • Discuss your situation in complete referrals through a network of trained confi dence professionals. This coverage is included in your medical benefi ts and is subject to • Obtain a referral to a network provider all medical annual deductibles and out- for emergency or non-emergency care of-pocket maximums, as well as lifetime • Verify that a non-network provider meets maximums. state licensing requirements • Ask questions about your behavioral Your behavioral health coverage is admin- health benefi ts or a related service istered by ValueOptions. You don’t need a referral from your medical doctor to You can contact ValueOptions toll- take advantage of the program’s services. free 24 hours a day, 365 days a year, at Furthermore, the ValueOptions network is 1-800-336-9117. Their number is also nationwide, so you can get the advice and printed on the back of your medical care you need from a network provider, no ID card. matter where you live. To view a summary of your behavioral health benefi ts, see the Guide to In-Network Benefi ts Summary of Benefi ts section. Through your behavioral health benefi t, you The Plan provides benefi ts for behavioral and your family have access to the nation- health treatment that is medically neces- wide ValueOptions Network of behavioral sary. Medically necessary means care that, health treatment professionals, programs as determined by ValueOptions: and facilities, including the following. • Is appropriate and necessary to evalu- • Psychiatrists (MD and DO) ate or treat a disease, condition or ill- • Licensed clinical psychologists (doctoral ness as defi ned by standard diagnostic level) nomenclatures (the American Psychiatric • Licensed masters-level clinical social Association’s Diagnostic and Statistical workers (for example, licensed MSW) Manual IV as revised or updated in the • Masters-prepared psychiatric registered future) nurses (for example, MA, MS, MSN) • Can reasonably be expected to improve • Masters-level psychologists an individual’s condition or level of • Licensed Professional Counselors functioning • Licensed Marriage and Family Therapists • Is in keeping with national standards of • Treatment clinics mental health professional practice as defi ned by standard clinical references • Hospitals and valid empirical experience for effi - The providers in the network must meet cacy of therapies, and strict membership requirements and have • Is provided at the most appropriate and up-to-date credentials. They are regularly cost-effective level of care reviewed by ValueOptions to make sure they continually meet network membership standards.

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Behavioral Health Benefi ts (cont.) Confi dentiality All professionals in the network must be Covered outpatient treatment includes, licensed at the highest level for their disci- but is not limited to: Information regarding pline in the state in which they are practic- • Individual, group, or family therapy behavioral health benefi ts ing and have at least three years of clinical • Medication management for you or an eligible experience in providing direct patient care. dependent’s mental health There are both male and female therapists, You must obtain preauthorization from and/or substance abuse some of whom are multilingual. ValueOptions for the following services, benefi ts will be kept con- or no benefi ts are payable: fi dential, except with your When you fi rst call ValueOptions, you’ll written consent or where talk with a masters-level clinician who • All outpatient treatment beyond the fi rst disclosure is required by will discuss your situation confi dentially ten visits, per provider, per lifetime law or as otherwise set with you. You may then be referred to an • All inpatient treatment (including but not forth in the health plan appropriate provider for a more complete limited to partial hospitalization, inten- privacy policies. evaluation and development of a treatment sive outpatient treatment and residential plan. After a treatment plan is developed, treatment) ValueOptions will monitor the care to • All substance abuse treatment ensure the treatment you receive is appro- • Psychological testing priate and medically necessary. • Complex medication management If You Use • Electroconvulsive therapy (ECT) Out-of-Network Providers • Biofeedback If you choose to seek treatment outside • Hypnotherapy the ValueOptions network, the provider • Aversion therapy must hold the highest level of licensure or certifi cation offered by the state in which What is Not Covered by Your they are practicing. Because licensing Behavioral Health Benefi ts requirements vary from state to state, it is The following behavioral health services best to call ValueOptions before you start and treatments are not covered by the Plan: treatment to verify that you are seeing an appropriate provider. • Court-ordered treatment, unless assessed and certifi ed by ValueOptions to be What is Covered by Your in keeping with medically necessary Behavioral Health Benefi ts standards • Services and treatment for the purpose You receive maximum benefi ts when you of maintaining employment or insur- call ValueOptions for a referral. You can ance, unless assessed and certifi ed by receive treatment through ValueOptions as ValueOptions to be in keeping with medi- a continuation of treatment started as part cally necessary standards of the EAP or calling ValueOptions directly for emergency or non-emergency care. • Services and treatments that are: — Educational or vocational in nature If you seek emergency treatment, you must — Required by law to be provided by a contact ValueOptions within 48 hours. school system for a child (such as evaluation for attention defi cit disorder) No preauthorization from ValueOptions is — For personal growth and development required for the fi rst 10 visits of outpatient — For adjudication of marital, child sup- treatment per provider, per lifetime. port and custody cases

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• Services and treatment that are experi- In addition to this list, certain medical mental, investigational, mainly for services or supplies are not covered (for research or not in keeping with national a general list of what’s not covered, see standards of practice as determined by What is Not Covered by Your Medical Plan ValueOptions; for example, treatment in the Medical Benefi ts section). To deter- of sexual addiction, codependency or mine whether a specifi c mental health or any other behavior that does not have substance abuse treatment will be covered, a psychiatric diagnosis call ValueOptions at 1-800-336-9117. • Regressive therapy, megavitamin therapy, nutritionally based therapies for chemical Maintenance of Benefi ts and dependency treatment, and non-abstinence- Coordination with Medicare based chemical dependency treatment If you or your covered dependent(s) are (with the exception of medically necessary also covered under another group health ® methadone maintenance or Suboxone care plan and/or Medicare, there are rules treatments) that determine whether the Plan pays • Custodial care, including, but not lim- benefi ts fi rst, or whether the other payer is ited to, treatment not expected to reduce primary. See Maintenance of Benefi ts and the disability to the extent necessary to Coordination with Medicare in the Filing enable the patient to function outside a Claim section for more information. a protected, monitored or controlled environment ValueOptions requires verifi cation of other • Services and treatment for: coverage once per year prior to paying any claims. — Mental retardation (except initial diagnosis) — Autism spectrum disorders (except Right of Recovery Provision initial diagnosis) that may be covered In some situations, you or your covered by the medical plan dependents may be entitled to certain pay- — Pervasive developmental disorders ments from another source following an — Chronic organic brain syndrome injury or illness, or you may receive Plan Right of Recovery — Learning disabilities payments in error. See Provision in the Filing a Claim section • Treatment for: for details on the Plan’s right of recovery — Transsexualism provisions. — Smoking cessation (see the Quit For Life section in this booklet for infor- How to File a Claim mation about a separate benefi t pro- Filing a Claim vided by The Flexible Benefi ts Plan) See the section of this booklet. — Obesity and/or weight reduction — Stammering or stuttering — Chronic pain except for psycho- therapy, biofeedback or hypnotherapy provided in connection with a psychiatric disorder • Expenses listed as not covered in this section

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Prescription Drug Benefi ts Prescription Prescription drug coverage is included in See the Summary of Benefi ts section of this your medical benefi ts under The Flexible booklet for the coverage provided for each Formulary Benefi ts Plan. Benefi ts for participants in level of drug. To help contain the increas- the medical PPO and out-of-area options ing cost of prescription drug are administered by Medco Health How Benefi ts Are Paid coverage and continue the Solutions. The program gives you and your Generally, the highest benefi t under the UPS commitment to quality family two ways to save money on pre- Plan is paid for generic drugs, followed care, your prescription drug scription medications: by brand-name drugs included on the benefi t includes a formu- • You may have your prescriptions fi lled at preferred brand drug list, also called a lary, also called a preferred pharmacies that participate in the Medco formulary. The lowest level of benefi ts is brand list. A formulary is retail pharmacy program paid for brand-name drugs that are not simply a list of commonly included on the preferred brand drug list. prescribed medications • You must order maintenance medications through the Medco By Mail program If your non-preferred brand drug requires that have been selected prior authorization but none is obtained, • You receive benefi ts for specialty medica- by Medco because of their no benefi t is paid. You or your pharma- tions when you purchase them through combination of effective- cist can call Medco’s Member Services Accredo, Medco’s specialty pharmacy ness and cost. at 1-800-346-1327 to fi nd out whether The preferred brand list When you enroll in medical benefi ts a specifi c brand drug is considered non- preferred and whether prior authorization operates in conjunction under the Plan, you receive a Medco is required. with the Medco By Mail ID card in addition to your medical ID program. In addition, all card. Call Medco’s Member Services at A per-script minimum and maximum out- participating retail pharma- 1-800-346-1327 to request any additional of-pocket expense applies to most prescrip- cies in the Medco prescrip- ID cards. tions. This is the minimum and maximum tion program will be aware amount you are required to pay out-of- of drugs currently on the Three Levels of Coverage pocket for a covered prescription drug formulary. Your doctor and Benefi ts for prescription drugs are paid after the applicable coinsurance benefi t non-participating pharma- at three levels, providing UPSers and their is applied: cies should call Medco families high-quality medications that are • If the cost of the drug is less than the toll-free at 1-800-346-1327 effective and affordable. minimum, you pay the full cost of the to learn which drugs are • Generic drugs are proven safe and must drug formulary drugs. meet the same U.S. Food and Drug • If the amount of your coinsurance is less You should always encour- Administration (FDA) standards for than the minimum, you must pay the age your physician to brand-name drugs. They have the same minimum amount prescribe formulary drugs active ingredients as their brand versions, • If your coinsurance exceeds the maxi- whenever a brand-name but are usually available at a lower cost mum, you pay only the maximum drug is necessary, because • Preferred brands are listed on the Medco amount the cost of formulary drugs prescription formulary. When a generic is is lower and, as with all not available, a preferred brand will cost In all cases, if you purchase a brand-name drug when a generic is available, you must FDA-approved prescription less than a drug not on the formulary also pay the difference in cost between the drugs, their effectiveness • Non-preferred brands and non-sedating brand and generic drug. This difference is has been established. antihistamines are not on the formulary not included in the per-script maximum or and are available at a higher cost. Prior annual out-of-pocket maximum. authorization is required for most non- preferred brands Additional provisions apply to how your prescription drug benefi ts are paid, depending on the medical option you selected.

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Under the Traditional Medical Option pharmacy benefi t depends on your medical Preventive Care option and whether you obtain a brand or If you’re enrolled in the Traditional PPO Medications or Traditional Out-of-Area medical option, generic drug. See the Summary of Benefi ts Preventive care medications your prescription drugs are never applied section for details. are drugs designed to pre- toward your annual deductible — they are Your retail pharmacy benefi ts cover up to a vent a medical condition, simply paid at the benefi t levels shown in 31-day supply of medication with each pre- not to treat an existing one. the Summary of Benefi ts section of this scription. If you need more than a 31-day Examples of preventive drugs booklet. Additionally, your out-of-pocket supply, you may be required to order your include those used to prevent prescription drug expenses are not applied medication through the Medco By Mail high blood pressure or high to your medical option’s annual out-of- program. cholesterol. To ensure that pocket maximum. participants in the Healthy Prescription drugs considered maintenance Savings option remain Prescription drug expenses paid by the Plan (long-term) medications must be purchased eligible for a Health Savings are accumulated toward your Plan lifetime through Medco By Mail home delivery Account, a determination maximum. service. If you purchase a maintenance as to whether a drug is drug at a retail pharmacy, the Plan pays the “preventive” will be deter- Under the Healthy Savings retail pharmacy benefi t the fi rst three times. mined, in part, according Medical Option After that, you are required to use Medco to applicable IRS guidelines. If you’re enrolled in the Healthy Savings By Mail or you will be responsible for the PPO or Healthy Savings Out-of-Area medi- entire cost of the drug. cal option, your prescription drug benefi ts are paid as follows: Non-Participating Pharmacy • Preventive care medication — You are You must pay the full amount of each not required to meet the deductible prescription and then submit a completed before benefi ts are paid at the coinsur- claim form for reimbursement if you: ance level • Use a non-participating pharmacy, • Not a preventive care medication — Your • Fail to present your prescription drug benefi ts are applied to the medical plan card at a participating pharmacy, or annual deductible, annual out-of-pocket • Have transition coverage. maximum, and lifetime maximum Your cost will equal the difference between Participating Retail Pharmacies the full retail cost and the discounted Medco maintains an extensive network amount, plus your coinsurance. Go online of participating pharmacies nationwide, at www.medco.com or call Medco’s including many major pharmacy chains Member Services at 1-800-346-1327 for a and independent pharmacies. To fi nd a par- claim form. Claims must be received within ticipating pharmacy near you, fi nd a link 12 months of the date the prescription is to Medco from www.UPSers.com, or call fi lled. Any reimbursement checks that are Member Services at 1-800-346-1327. not cashed within 12 months from the date of the check are void and you lose any To receive your Plan benefi t, present your rights to such reimbursement. See the Filing Medco ID card to the pharmacist along a Claim section for more information. with your doctor’s prescription. You don’t have to fi le any claim forms. Your retail

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Prescription Drug Benefi ts (cont.) About Medco By Mail 24 hours a day, seven days a week. Log on to www.medco.com. Generic Drugs The Medco By Mail program gives you and your family a convenient, money-saving It’s a good idea to ask way to purchase maintenance medications, Prior Authorization Program your physician to pre- which are drugs prescribed for long-term Medco retail pharmacies and Medco By scribe generic medications or ongoing conditions such as high blood Mail have a prior authorization program whenever possible. The pressure, allergies or diabetes. You are that evaluates the necessity of using certain generic name of a drug required to purchase maintenance medica- drugs in certain situations. Your pharma- is its chemical name (for tions through Medco By Mail. cist will advise you if your prescription example, penicillin). The requires prior authorization. Then, you brand name is the trade When you use the Medco By Mail program: or your physician must call Medco at name under which the drug • You can order up to a 90-day supply of 1-800-346-1327 to request prior authoriza- is advertised and sold. By most medications tion for coverage of these drugs. The list law, generic and brand- • You don’t have to fi le a claim form or of drugs requiring prior authorization may name drugs are required to change from time to time. Contact Medco wait for reimbursement meet the same standards for more information. for safety, purity, strength • Ordering is easy. This is what you do: and effectiveness. — Ask your physician to prescribe up to Specialty Drug Program a 90-day supply, plus refi lls, of your medication. Certain specialty drugs must be obtained through Medco’s specialty care pharmacy, — Complete the patient questionnaire Accredo Health Group. Specialty drugs are included with your Medco information those high-cost medications that: kit. You can go to www.medco.com or call Medco’s Member Services at • May require specialized patient training 1-800-346-1327 for a questionnaire. and coordination of care prior to and during therapy — Mail the questionnaire in the special mail service order envelope (included • May require unique patient compliance with the questionnaire), along with and safety monitoring your original prescription. Or, you can • Have unique requirements for handling, ask your physician to fax the prescrip- shipping and storage, and/or tion to Medco at 1-800-837-0959 (You • Have a potential for signifi cant waste cannot fax the prescription yourself to Medco.) You may qualify for the specialty drug pro- • Your medication is delivered to your gram if your condition (such as rheumatoid arthritis, auto-immune diseases or multiple home by UPS within 14 days from the sclerosis) requires your doctor to prescribe day Medco receives your prescription. certain drugs (such as IVIG, Procit, Enbrel • Prescriptions are fi lled by registered or Remicade) that meet the above criteria. pharmacists who compare your prescription to your personal medical profi le to Prior to prescribing a specialty drug, your safeguard you against adverse reactions. medical provider must contact Accredo Health Group at 1-800-501-7260. Refi ll Prescriptions Online Specialty medications not purchased from Accredo Health Group will not be covered You may also order Medco By Mail under this plan. prescription refi lls over the Internet by visiting Medco’s Web site anytime,

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What is Covered by Your nursing home or similar institution that Prescription Drug Beneﬁ ts has a facility for dispensing pharmaceuti- cals on its premises • Drugs approved by the FDA • Growth hormones without prior authori- • State-restricted drugs zation (see Prior Authorization Program • Insulin — by prescription only in this section) • Insulin needles, syringes, test strips and • Expenses listed as not covered in this over-the-counter diabetic supplies — by section prescription only • Medication for which the cost is recover- • Compounded medications able by Workers’ Compensation, occu- • Smoking deterrents (with a lifetime limit pational disease law, any state or govern- of one 90-day supply) ment agency, or medication furnished • Oral contraceptives by any other drug or medical service • Drugs that are determined by Medco for which no charge is made to the to be medically necessary participant

What is Not Covered by Your Maintenance of Benefi ts and Prescription Drug Benefi ts Coordination with Medicare • Any prescription refi lled more than the If you or your covered dependent(s) are number of times specifi ed by the prescrib- also covered under Medicare, there are ing physician or any refi ll dispensed after rules that determine whether the Plan one year from the physician’s original order pays benefi ts, or whether Medicare is primary. See Coordination with Medicare • Over-the-counter medications, other than in the Filing a Claim section for more diabetic supplies information. • Contraceptive devices • Therapeutic devices or appliances The maintenance of benefi ts provision of The Flexible Benefi ts Plan does not apply • Drugs used for cosmetic purposes to your prescription drug benefi ts. • Drugs for sexual dysfunction • Dietary supplements, including any Right of Recovery Provision supplement for newborn infants In some situations, you or your covered • Infertility drugs used or intended for the dependents may be entitled to certain pay- purpose of becoming pregnant, or assist- ments from another source following an ing in inducing pregnancy or the process injury or illness, or you may receive Plan of becoming pregnant payments in error. See Right of Recovery • Drugs labeled “Caution: limited by Provision in the Filing a Claim section federal law to investigational use,” or for details on the Plan’s right of recovery experimental drugs, even when a charge provisions. is made to the individual • Drugs not approved by the FDA How to File a Claim • Medication taken by or administered to See the Filing a Claim section. a person, in whole or in part, while he or she is a patient in a licensed hospital,

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Dental Benefi ts The Flexible Benefi ts Plan offers you a Flexible Benefi ts Plan and for employees choice of three dental options, all adminis- making a mid-year change following a tered by Aetna®. The dental options cover qualifying life event. the same services, but the benefi t payable by the Plan differs from one option to Member Services another. You can also choose no dental Member Services is your link to the dental coverage. PPO and DMO. You can reach Member Services by calling 1-877-263-0659 to: Two-Year Rule • Ask questions about your benefi ts The dental plan has a two-year rule. • Obtain information about a network For the dental plan, this means that: provider or service • Once you choose a dental option, you • Seek help in fi ling claims, or must keep dental coverage at the same coverage category (meaning whom you • Change your DMO personal dentist choose to cover — you only, you plus You may also be connected to Aetna spouse, you plus children, or you plus Dental by calling 1-800-UPS-1508 and family) for two years. However, you may following the prompts. Many services are change your dental option (for example, also available online at www.aetna.com. from Dental Option 1 to Option 3) during the next annual enrollment period Guide to Dental Networks • If you elect no coverage for dental, there will be a two-year waiting period before Options 1 and 2 are dental Preferred you can be covered by any dental option Provider Organization (PPO) plans, offering a network of participating dentists who • If you do not make any elections during have agreed to provide services at negoti- your initial enrollment period (and there- ated rates. If you enroll in a dental PPO fore have no dental coverage), you may option, you and your family can enjoy the elect dental coverage at the fi rst annual benefi ts of network-based care. You can enrollment following your initial enroll- also choose to use out-of-network provid- ment period ers but your out-of-pocket expenses may be The two-year period begins: higher. The choice is yours each time you seek care. • On your coverage effective date, or • On January 1 following your fi rst annual Option 3 is Aetna’s Dental Maintenance enrollment period if you failed to elect Organization (DMO®), which is also a dental coverage during either your network of dental providers. DMO benefi ts initial enrollment or your fi rst annual are provided through an insurance contract enrollment with Aetna. If you enroll in the DMO, you will be provided a Certifi cate of Coverage. During any two-year period, you may be If there is any confl ict between the certifi - allowed to change your coverage category cate or this description and the insurance if you experience a qualifying life event. contract, the contract will apply. See the Life Events section of this booklet for more information. Network areas are subject to change. Your enrollment information will indicate For purposes of calculating the two-year whether you live within the dental PPO period, a partial year counts as a full year and/or DMO network areas. for employees newly eligible for The

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If You Live Outside the Network Area you see a participating dentist. If you need Finding a Provider If you live outside the dental PPO network specialty care, the dental PPO includes a national listing of specialty dentists. You To fi nd a dentist participat- area, you receive benefi ts at the same coin- ing in your network, surance level as in-network coverage, but you may also select a non-participating specialist, although your out-of-pocket expenses call Aetna Dental at do not receive the negotiated rates, even if 1-877-263-0659 or call you happen to see a network provider. may be higher. To view a summary of dental benefi ts under Options 1 and 2 and the 1-800-UPS-1508 and If you fi nd that network providers are DMO, see the Summary of Benefi ts section. follow the prompts. You convenient to you, you may “opt in” to the may also go online at network and receive negotiated network Once you’ve enrolled in Option 1 or 2, to www.aetna.com. rates. Call the Benefi ts Service Center at receive in-network benefi ts be sure to show 1-800-UPS-1508 for more information your dental ID card when you visit the about opting in to a dental PPO. dentist’s offi ce. If you choose a dentist who does not If You Don’t Use participate in the dental PPO network, an Aetna Dental Provider reasonable and customary limits (R&C) If you select Dental Option 1 or 2 (dental will apply. See Glossary of Benefi t Terms PPO) and choose to use dental providers in the Overview of the Plan section of this outside the network, your out-of-pocket booklet for more information. expenses may be higher. In addition, you are responsible for paying any charges that Dental Annual Deductible exceed the R&C limits of the Plan. The dental annual deductible is separate from the annual deductible that applies to If you are enrolled in Dental Option 3 your medical, behavioral health and pre- (DMO), you receive no benefi ts under the scription drug benefi ts. The dental deduct- Plan if you choose to seek care from ible is the amount you pay for covered a dental provider who does not participate basic and major restorative services before in the DMO network. Options 1 and 2 pay benefi ts. The deductible does not apply to preventive services or Coordinating with orthodontia. You must meet a new deduct- Medical Coverage ible every calendar year. In all cases, if you’re hospitalized for dental The individual deductible applies separately care, the dentist’s charges are covered by to each covered family member. However, the dental component of The Flexible if two or more family members’ expenses Benefi ts Plan. Other eligible charges are combine to reach the family deductible, covered by the medical component of the then the deductible for each family member Plan (see the Medical Benefi ts section of this is considered to be met, even if no single booklet). member reached the individual deductible.

Dental Options 1 and 2 — If you receive services from both in- and Aetna Dental PPO out-of-network providers, the in- and out- A central feature of Options 1 and 2 is of-network annual deductibles cross-apply. access to the dental PPO, a national network This means that the amount of a claim that of preferred dental care providers who is applied toward meeting your in-network have agreed to a schedule of negotiated, annual deductible also applies toward discount rates. This means your out-of- meeting your out-of-network annual pocket costs will generally be less when deductible, and vice versa.

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Dental Benefi ts (cont.) Preauthorization Annual Maximum Benefi ts Preauthorization of Benefi ts Recommended The dental annual maximum benefi t works It is recommended that you seek preautho- very differently compared to the annual rization from Aetna for dental implants Dental implants should be maximum out-of-pocket that applies to to determine in advance what benefi ts, if preauthorized in advance your medical, behavioral health and pre- any, will be paid. No preauthorization is by Aetna to ensure that scription drug benefi ts. required for any covered services under benefi ts will be paid. the dental plan; however, you may be The portion of your claims paid by the requested to provide documents necessary Plan each year (not what you pay) includ- for review of a claim. ing for preventive services, under Option 1 or 2 of the dental plan is applied toward What is Covered Under the individual dental annual maximum. Dental Options 1 and 2 See the Summary of Benefi ts section of this booklet for the annual maximum benefi t The dental PPO options cover four types for the each dental option. of necessary dental care: • Preventive services If you are enrolled in Option 1 and receive • Basic services services from both in- and out-of-network providers, the in- and out-of-network • Major restorative services annual maximums cross-apply. This means • Orthodontia for children that the amount of a claim that is applied toward meeting your in-network annual In addition, benefi ts are payable for: maximum also applies toward meeting • Temporomandibular joint (TMJ) therapy your out-of-network annual maximum, • Accidental injury treatment and vice versa. This section describes the types of services Predetermination of Benefi ts and supplies covered by Dental Options 1 and 2. The exact amount paid for ser- Options 1 and 2 have a provision that vices and supplies depends on the dental allows you to fi nd out, in advance, what option you select, whether or not you go benefi ts would be paid for dental services to a participating dentist and whether it you are considering. If you anticipate that is necessary dental care, as determined by charges for a course of dental treatment Aetna. See the Summary of Benefi ts section will be more than $300, you or your dental to view the benefi ts payable for covered provider should submit an itemization of expenses, both in- and out-of-network. the proposed treatment (including recent pretreatment x-rays) to Aetna before work Preventive Services is begun — unless it’s an emergency. An Aetna dental consultant will review the Covered preventive services are: proposed treatment, and Aetna will inform • Oral exams (twice a year*) you and your dentist of the amount of • Prophylaxis — any type (twice a year*) covered charges. • Topical fl uoride applications for children, While predetermination isn’t required, this until the end of the year in which the provision lets you know — before treat- child turns 15 (twice a year) ment begins — what benefi ts you’re eligible • Scaling and root planing — (four to receive and gives you the opportunity separate quadrants every two years) to discuss possible treatment options with * If additional examinations and scaling are necessary each year, your dentist. your dentist should submit a letter to Aetna explaining the request. Aetna will respond directly to your dentist. No more than four examinations will be covered per calendar year.

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• Gingivectomy (one per quadrant/site — Alveolar or gingival reconstructions every three years) ■ Alveolectomy (edentulous) per • Osseous surgery (one per quadrant/site quadrant every three years) ■ Alveolectomy (in addition to • Occlusal guards (one every three years) removal of teeth) per quadrant ■ Alveoplasty with ridge extension, • Problem focused exams (two per year) per arch • X-rays: ■ Removal of exostosis — Full-mouth or panoramic (once every ■ Excision of hyperplastic tissue, three years) per arch — Bitewing (one set per year) ■ Excision of pericoronal gingiva — Vertical bitewings (one set every three — Odontogenic cysts and neoplasms years) ■ Incision and drainage of abscess • Sealants for children, until the end of the ■ Removal of odontogenic cyst or year in which the child turns 14: tumor — One application per tooth per — Other surgical procedures 36-month period ■ Sialolithotomy — removal of sali- — Permanent fi rst and second molars only vary calculus ■ Closure of salivary fi stula Basic Services ■ Dilation of salivary duct ■ Transplantation of tooth or tooth Covered basic services are: bud • Visits and exams ■ Removal of foreign body from bone — Professional visit after hours (independent procedure) — Special consultation by a specialist ■ Maxillary sinusotomy for removal — Emergency palliative treatment of tooth fragment or foreign body ■ Closure of oral fi stula of maxillary • X-ray and pathology sinus — Single fi lms (up to 13) ■ Sequestrectomy for osteomyelitis or — Intra-oral, occlusal view, maxillary bone abscess, superfi cial or mandibular ■ Condylectomy of temporomandibu- — Upper or lower jaw, extra-oral lar joint — Biopsy and examination of oral tissue ■ Meniscectomy of temporomandibu- — Study models lar joint — Microscopic examination ■ Radical resection of mandible with bone graft • Oral surgery — includes local anesthetics ■ Crown exposure to aid eruption and routine postoperative care ■ Removal of foreign body from soft — Extractions tissue ■ Uncomplicated ■ Frenectomy ■ Surgical removal of erupted tooth ■ Suture of soft tissue injury ■ Postoperative visit (sutures and com- ■ Injection of sclerosing agent into plications) after multiple extractions temporomandibular joint and impaction ■ Treatment of trigeminal neuralgia — Impacted teeth by injection into second and third ■ Removal of tooth divisions

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Dental Beneﬁ ts (cont.)

• Anesthetics ■ Silicate cement fi lling — General, only when provided in ■ Plastic fi lling conjunction with an eligible surgical ■ Composite fi lling — the alternate procedure benefi t of an amalgam fi lling will be given when placed on posterior teeth • Periodontics — Pins — Emergency treatment (periodontal ■ Pin (retention) when part of the abscess, acute periodontitis, etc.) restoration used instead of gold or — Subgingival curettage or root planing crown restoration and scaling, per quadrant (not pro- — Crowns phylaxis), limited to four quadrants ■ Stainless steel (when tooth cannot be per year restored with a fi lling material) — Correction of occlusion related to ■ Crown build-up — will be reviewed periodontal surgery, per quadrant by a dental consultant for necessity — Gingivectomy (including post-surgical — Full and partial denture repairs visits) per quadrant ■ Broken dentures, no teeth involved — Gingivectomy, treatment per tooth ■ Partial denture repairs (metal) (fewer than fi ve teeth) ■ Replacing missing or broken teeth — Osseous or muco-gingival surgery except congenitally missing teeth (including post-surgical visits) — Adding teeth to partial denture to — Crown lengthening — reviewed on a replace extracted natural teeth per claim basis. Predeterminations are ■ Teeth and clasps suggested. — Recementation ■ Inlay • Endodontics ■ Crown — Pulp capping ■ Bridge — Therapeutic pulpotomy (in addition — Repairs — crowns and bridges to restoration) — Vital pulpotomy • Space maintainers — includes all adjust- — Root canals (devitalized teeth ments within six months after installation only), including necessary X-rays — Fixed space maintainer (band type) and cultures but excluding fi nal — Removable acrylic with round wire restoration rest only ■ Canal therapy (traditional or — Removable inhibiting appliance to Sargenti method) correct thumbsucking ■ Single rooted — Fixed or cemented inhibiting appli- ■ Bi-rooted ance to correct thumbsucking ■ Tri-rooted ■ Apicoectomy (separate procedure) Major Services Covered major services are: • Basic restorative — excludes inlays, crowns (other than stainless steel and • Major restorative — gold restorations, bridges). Multiple restorations in one inlays, onlays and crowns are covered surface will be considered as a single only as treatment for decay or traumatic restoration. injury and only when teeth cannot be — Restorations (involving one, two restored with a fi lling material or when or three or more surfaces) the tooth is an abutment to a fi xed bridge ■ Amalgam fi lling or partial denture. Only restorations

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needed for severe attrition, abrasion ■ Additional clasps or erosion are covered. ■ Stress breakers — Inlays and onlays ■ Stayplate, base — additional clasps ■ One or more surfaces ■ Offi ce reline, cold cure, acrylic — Crowns ■ Laboratory reline ■ Acrylic ■ Special tissue conditioning, per ■ Acrylic with gold denture ■ Acrylic with non-precious metal ■ Denture duplication (jump case), ■ Porcelain per denture ■ Porcelain with gold ■ Adjustment to denture more than ■ Porcelain with non-precious metal six months after installation ■ Non-precious metal (full cast) • Other services ■ Gold (full cast) — Precision attachments (eligible with ■ Gold (¾ cast) dentures if they are functionally ■ Gold dowel pin necessary) • Prosthondontics — Implants (Pre-approval is recom- — Bridge abutments (see inlays and mended in advance. The teeth must crowns) be extracted or become missing while — Pontics covered under the Plan) ■ Cast gold (sanitary) ■ Cast non-precious metal Alternate Benefi t Provision ■ Slotted facing In some circumstances, an alternate ser- ■ Slotted pontic vice or supply may be suitable to treat or ■ Porcelain fused to gold restore a dental condition, other than the ■ Porcelain fused to non-precious service or supply recommended by your metal dentist. In this case, the Plan will pay only ■ Plastic processed to gold for the alternate service or supply. If you ■ Plastic processed to non-precious choose the recommended course of treat- metal ment, you will be responsible for the differ- — Removable bridge (unilateral) ence between the recommended course and ■ One piece casting, chrome cobalt the alternate benefi t. alloy clasp attachment (all types), including pontics For example, your dentist may recommend a composite (white) fi lling for a posterior — Dentures and partials (Fees for den- tooth. A suitable alternate treatment is an tures, partial dentures and relining amalgam fi lling. The Plan will pay only include adjustments within six months for the amalgam fi lling. If you wish to after installation. Specialized tech- have the composite fi lling, you will pay the niques and characterizations are not difference between the composite and the eligible.) amalgam fi lling. ■ Complete upper denture ■ Complete lower denture While predetermination is not required, ■ Partial acrylic upper or lower with you may wish to submit your course of chrome cobalt alloy clasps, base, all treatment in advance so you know what teeth and two clasps amount your dental option will pay. Some ■ Partial lower or upper with chrome dental services or supplies (such as dental cobalt alloy lingual or palatal bar implants) may not have an alternate benefi t and acrylic saddles, base, all teeth provision. See Predetermination of Benefi ts and two clasps in this section for more information.

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Dental Beneﬁ ts (cont.)

If you are new to The Orthodontia for Children Temporomandibular Joint (TMJ) Therapy Flexible Benefi ts Plan’s Dental Options 1 and 2 allow benefi ts for Treatment for temporomandibular joint dental coverage and your teeth straightening for your dependent dysfunction is covered for adults and child is involved in a course children under 19 years of age. Services dependent children. This coverage is only of orthodontic treatment provided by December 31 of the year in for TMJ appliance therapy (bite splints), when your coverage which your child turns 19 are covered, adjustments and diagnostic materials becomes effective, your as long as the treatment began before the (including impressions). See the Summary Flexible Benefi ts Plan child’s 19th birthday. of Benefi ts section of this booklet to view dental option will not the benefi ts payable under the dental pay benefi ts toward Before treatment begins, the orthodontist option you choose. that treatment. should submit a total treatment plan to Aetna for approval, so that you and the Separate lifetime maximum benefi ts apply to: orthodontist will know what treatment • TMJ therapy for adults will be covered and the benefi ts payable. • TMJ therapy combined with orthodontia Orthodontia benefi ts are not subject to the for children dental annual deductible. See the Summary of Benefi ts section for more information Accidental Injury Treatment and Repair about orthodontia benefi ts. A lifetime Under Options 1 and 2, coverage for treat- maximum benefi t applies to TMJ therapy ment and repair of sound teeth and gums combined with orthodontia for children. damaged by an accidental injury will be covered as a regular dental expense, except Orthodontic benefi t payments begin when that — for this treatment and repair of an active appliance is installed in your accidental injuries only — the deductible child’s mouth. The fi rst orthodontic benefi t and the annual maximum will be waived payment is equal to 50 percent of the mem- for 36 months from the date of the injury. ber’s down payment, plus 50 percent of the Under certain circumstances, this waiver fee for the diagnostic records. Thereafter, may be extended for dependent children. payments are made automatically each month, on or after the same day of the Additionally, orthodontic treatment month in which the bands are placed. required for repair will be covered for up However, quarterly certifi cation is required to 36 months from the date of the injury, to verify that treatment is continuing. with the lifetime orthodontic maximum waived during this treatment period. Orthodontia expenses covered by Options 1 and 2 include: This benefi t includes all eligible partici- • Initial consultation pants of the Plan, regardless of age. The treatment must be medically necessary to • Moldings and impressions restore the teeth to their condition prior to • Installation of braces the accident. Cosmetic treatment beyond • Regular visits restoration is not covered under this benefi t.

All other dental care will continue to be subject to the annual deductible and annual maximum during these treatment periods.

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What is Not Covered Under • Replacement of congenitally missing teeth Dental Options 1 and 2 • Education programs, such as plaque con- In addition to services not specifi cally trol or oral hygiene instruction listed in Covered Expenses above, the • A charge for a replacement or modifi - following expenses are not covered cation of a partial or fully removable by the dental options: denture, a removable bridge or fi xed • Remineralization (Calcium Hydroxide, bridgework, or for adding teeth to any temporary restoration) as a separate proof these, or for a replacement or modifi - cedure only cation of an inlay, onlay, crown or cast processed restoration, within fi ve years • Occlusal adjustment (unless following after installation periodontal surgery) or retainers if charged separately from orthodontic treatment • Localized delivery of antimicrobial agents; such as Actisite®, Atridox®, • Claims received more than 12 months Arestin® and PerioChip® past the date of service • Local anesthesia or nitrous oxide, • IV sedation, except in certain circum- as a separate charge stances; call Aetna at 1-800-UPS-1508 • Any prescription drug • Appliances, restoration or procedures needed to alter vertical dimensions or • Full mouth debridement restore occlusion or for the purpose of • Guided tissue regeneration splinting or correcting non-severe attri- • Desensitization treatment tion or abrasion • Precision attachments except as noted • Dentures and bridgework when they are under Major Services in this section for the replacement of teeth that were • Infection control extracted before the patient was covered by a UPS-administered dental plan • Behavior management • Orthodontic treatment begun before cov- • Canal preparation, if submitted as ered by a UPS-administered dental plan a separate charge • Root canal therapy, if the pulp chamber • Rubber dam was opened before the patient was cov- • Services not required for the treatment of ered by a UPS dental option a specifi c condition or to maintain good • Relines and adjustments of dentures and dental hygiene, as determined by Aetna partial dentures within six months after • Services not reasonably necessary or installation customarily performed, as determined in • Cosmetic dental services and supplies, keeping with guidelines adopted by Aetna including personalization or characteriza- • Services not furnished by a licensed tion of dentures dentist, except services provided by a • Prosthetic devices and appliances, includ- licensed hygienist under the direction of ing bridges and crowns, and expenses a dentist or X-rays ordered by a dentist for fi tting or modifying them, if installed • Services covered by the medical options or delivered more than 30 days after the • Charges for a missed or broken patient’s coverage ends appointment • Replacement of lost, stolen or broken • Charges for the dentist’s travel appliances

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Dental Beneﬁ ts (cont.)

The DMO is available only • Services which you would not be required personal dentist at any time by calling in selected locations — you to pay in the absence of dental coverage Aetna Dental at 1-877-263-0659. Aetna must determine whether a • Treatment of a work-related injury must submit the change to your new DMO personal dentist before you visit him or DMO dentist is available in • Services furnished by or for the United her. Before making an appointment with your area prior to enroll- States government or for any other gov- your new DMO personal dentist, call your ing. Call Aetna Dental at ernment, including a service that may be new dentist to confi rm that the change has 1-877-263-0659 or call covered under a government plan 1-800-UPS-1508 and con- become effective. nect to Aetna’s Member How to File a Claim Under When you select a new DMO personal Services. You may also go Option 1 or 2 (Dental PPO) dentist, you will receive a new DMO ID online at www.aetna.com. See the Filing a Claim section. card. Be sure to show your dental ID card when you visit your DMO personal den- Dental Option 3 — Aetna Dental tist’s offi ce. Maintenance Organization (DMO) Specialty Treatment When you select Dental Option 3, dental If you need specialty care, your DMO benefi ts are paid if services are provided by personal dentist will refer you to a DMO participating Aetna DMO dentists. There dentist in your area who specializes in the is no annual dental deductible. There are services you need. If you don’t obtain a generally no claim forms to complete. In referral, the specialist’s services will not be addition, you may have higher benefi t covered by the DMO, even if the specialist levels and lower out-of-pocket expenses is a DMO participant. than through Option 1 or 2. Please refer to your DMO Certifi cate of Coverage for Emergency Coverage specifi c benefi t levels in your area. If you have a dental emergency, call If you enroll in Option 3, you must choose your DMO personal dentist. Your DMO a personal dentist from the DMO net- personal dentist should respond to you work. In order to receive the highest level within 24 hours to schedule needed treat- of dental benefi ts, you must use the DMO ment or refer you to the appropriate net- personal dentist you’ve selected. Option 3 work specialist. If you cannot reach your provides very limited benefi ts for services DMO personal dentist, you must call provided by a dentist who is not your 1-800-843-3661 to reach Aetna’s DMO DMO personal dentist. Member Services (or call 1-800-UPS-1508 and follow the prompts) to obtain a refer- Once enrolled, you and your dependents ral to another DMO dentist. If you do not will receive DMO ID cards with your seek DMO approval for emergency treat- DMO personal dentist’s name and phone ment, it will not be covered. number printed on the front. If you need emergency dental care while Selecting a DMO Personal Dentist away from home, call your DMO personal You may choose a different DMO personal dentist. If you are unable to reach your dentist for each member of your family. DMO personal dentist, call Aetna’s DMO Aetna can assist you in selecting a DMO Member Services for treatment options and personal dentist who best meets your coverage levels. If you do not seek DMO needs. You may change your DMO approval for emergency treatment while away from home, it will not be covered.

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If Your Dentist Leaves the Network How to File a Claim Under Coordinating with If your DMO personal dentist leaves the Option 3 (DMO) HMO Coverage DMO network: If you select Option 3 and receive services If you participate in a • You will receive written notifi cation. from a DMO provider, you generally do Kaiser HMO (in California If another DMO personal dentist(s) is not have to fi le claim forms. You pay your or Hawaii only), additional in your area, you will be assigned to a portion of the bill at the time you receive coordination issues may new DMO personal dentist. However, the dental services. exist for dental surgery. you have the option of selecting another Call your HMO in advance DMO personal dentist by contacting Maintenance of Benefi ts and of any dental surgery Aetna’s DMO Member Services. Coordination With Medicare outside your dentist’s offi ce • If there are no other DMO dentists If you or your covered dependent(s) are to ensure appropriate participating in your area, you may also covered under another group health coverage. switch coverage to Option 1 or 2 by care plan and/or Medicare, there are rules calling the Benefi ts Service Center at that determine whether the Plan pays 1-800-UPS-1508. (See the Life Events benefi ts fi rst, or whether the other payer is section of this booklet.) If you choose primary. See Maintenance of Benefi ts and to switch, you must select a new option Coordination with Medicare in the Filing within 60 days following the date of the a Claim section for more information. notifi cation. Right of Recovery Provision What is Covered Under Dental Option 3 (DMO) In some situations, you or your covered dependents may be entitled to certain pay- In general, the DMO covers preventive, ments from another source following an basic, major and orthodontia services if the injury or illness, or you may receive Plan services are determined to be necessary by payments in error. See Right of Recovery your DMO personal dentist and approved Provision in the Filing a Claim section by Aetna. Specifi c coverage levels vary for details. depending on where you live.

You will receive a Certifi cate of Coverage for the area in which you live after enrolling in the DMO. Your Certifi cate of Coverage contains detailed information on what is covered and what is not. You can also obtain the applicable Certifi cate of Coverage for your area by calling Aetna’s DMO Member Services.

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Vision Benefi ts The Flexible Benefi ts Plan provides ben- necessary authorization and information efi ts for an annual eye exam (Vision Exam about your eligibility and coverage under Only) at no additional cost to you and your the vision plan. eligible dependents enrolled in medical coverage under the Plan. In addition, you have If You Don’t Use a VSP Provider the option to select coverage for frames and If you choose to use a provider outside the lenses or contact lenses (Vision Lenses and VSP network, you can receive reimburse- Frames). Your vision benefi ts are adminis- ment for eligible care services up to the tered by Vision Service Plan (VSP). limits of the vision plan. To be reimbursed, VSP has a network of doctor locations you must submit an out-of-network claim www.vsp.com across the country that provide profes- form, available from or by sional eye care, including eye examinations calling Member Services. and the necessary corrective lenses. For You can use a non-VSP provider for an eye routine vision care, you have the choice examination, and then use a VSP provider of using a VSP network provider or any for frames and lenses or contacts — if that provider you choose. However, you will VSP provider agrees to fi ll the prescription receive higher benefi ts if you use a VSP without an exam. provider.

All benefi ts are subject to vision plan limits. Two-Year Rule See the Summary of Benefi ts section in this The vision plan has a two-year rule. This booklet for the coverage level and plan means that, if you select the Vision Lenses limits for each vision benefi t. and Frames option, you must keep your Vision Lenses and Frames coverage at If you experience a medical problem with the same coverage category (meaning your eyes, you should consult your pri- whom you choose to cover — you only, mary care physician. Non-routine vision you plus spouse, you plus children or you coverage is provided through your medi- plus family) — for two years. However, if cal claims administrator. See the Medical you choose the Vision Exam option, you Benefi ts section for information about can change your selection during the next covered medical services. annual enrollment period

How Your Vision Benefi ts Work What is Covered To access in-network vision care benefi ts, by Your Vision Benefi ts contact your VSP participating doctor to See the Summary of Benefi ts section of make an appointment. If you need help this booklet for your benefi t, based on the locating a VSP participating doctor, contact vision option you choose and whether you VSP’s Member Services at 1-800-877-7195 use a VSP provider or non-VSP provider. or online at www.vsp.com. • Annual eye exam (Vision Exam Only) When making an appointment, be sure to • Annual eye exam plus your choice each indicate that the patient is eligible for VSP year (Vision Exam, Lenses and Frames) benefi ts through UPS. You’ll be asked to of either: provide your VSP identifi cation number — Lenses and frames, or (your Social Security number or Employee — Disposable contact lenses (if the entire ID). The VSP provider will obtain the benefi t is used at one time)

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Available at an Additional Cost What is Not Covered Vision benefi ts are designed to cover your by Your Vision Benefi ts corrective vision needs and not cosmetic • Visual analysis that does not include materials. If you purchase any of the fol- a complete eye refraction lowing, you are responsible for additional • Orthoptics or vision training charges (at reduced prices if you use a VSP provider): • Subnormal vision aids • Frames costing more than the vision plan • Aniseikonic lenses limits • Duplicate or spare glasses • Contact lenses costing more than the • Two pairs of glasses instead of bifocals vision plan limits • Replacement of lost or broken lenses • No-line, blended bifocal lenses or frames (unless you have not already • Coated lenses received a pair of lenses or frames that year) You are also eligible for the following • Eye exams, glasses or contacts provided discounts from your VSP provider, if by any other vision care plan purchased within 12 months of your • Vision care services, materials or proce- eye examination: dures covered by other provisions of the • 20 percent discount on additional pairs Plan. For example, vision therapy after of glasses cataract surgery is covered by the medical • 30 percent discount on additional pairs benefi ts of glasses if purchased the same day • Services or materials provided as a result as the initial pair of Workers’ Compensation or similar • 15 percent discount on contact lens pro- legislation or provided through a govern- fessional services (fi tting, evaluation and ment agency or program follow-up) Right of Recovery Provision Laser Vision Correction Surgery In some situations, you or your covered Discounts dependents may be entitled to certain pay- As a VSP member, laser vision correction ments from another source following an surgery is available at discounted prices injury or illness, or you may receive Plan through VSP’s Laser VisionCareSM network payments in error. See Right of Recovery of doctors. Visit www.vsp.com to learn Provision in the Filing a Claim section for more about laser vision correction and details. participating doctors. Or, call VSP Member Services at 800-877-7195. How to File a Claim Lasik surgery is not covered by the vision See the Filing a Claim section in this component of The Flexible Benefi ts Plan. booklet.

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Solutions — Your EAP and Work/Life Benefi t To help you balance your responsibilities at 365 days a year — to trained professionals work and in your personal life, Solutions who will discuss your question, problem offers free, confi dential assistance with or concern. Depending on your situation, many of the work-life challenges you the Solutions counselor may refer you to face each day. The Employee Assistance a licensed network EAP provider in your Program, administered by ValueOptions, community for up to six in-person visits, provides practical solutions, information, link you to available resources in your advice and support for a wide range of community, or offer you support over the work-life issues, including but not limited telephone. Additionally, if the counselor to anxiety, depression, child or senior care, determines the situation requires it, the relationship or marital issues, alcohol or participant may be referred for additional substance abuse, fi nding colleges, bereave- assistance to the group behavioral health ment, fi nancial or legal concerns and plan. Any information about your call or parenting challenges. treatment is confi dential and may only be disclosed as permitted or required by law. Eligibility All regular active union-free employees, Legal and Financial Assistance employees on an approved leave of absence, Solutions also provides access to a national and their eligible dependents are covered network of independent attorneys who under Solutions — Your EAP and Work/ have experience in a variety of legal areas, Life Benefi t. including bankruptcy, estate planning, taxes, family law, consumer and fi nancial You do not have to enroll for this program; matters and traffi c violations. For fi nancial it is provided to you and your eligible concerns, Solutions provides telephonic dependents at no cost. EAP coverage begins information and advisory services utilizing when you become eligible for coverage independent professionals with experi- under The Flexible Benefi ts Plan. Refer ence in fi nancial matters, such as fi nancial to the Eligibility section of this book for planners, certifi ed public accountants and details regarding eligible dependents and insurance specialists. If legal representation when coverage begins. is needed, Solutions will provide a referral to a local network attorney, who has How the EAP Works agreed to provide an initial one-half (½) Solutions can help you handle problems hour, face-to-face consultation at no charge that affect your physical and mental well- and has agreed to provide additional legal being, as well as your relationships. Solutions services at a 25 percent reduction of their offers confi dential access — 24 hours a day, customary fees. You are responsible for all

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 7070 22/19/10/19/10 5:22:195:22:19 PMPM Summary Plan Description

fees beyond the free initial consultation. Additional Work/Life Services The attorneys and fi nancial professionals Work/life services include consultations will assist you with most situations, but with work/life specialists who research and some restrictions do apply. These restric- provide referrals and educational materials tions include but are not limited to: that may include articles, checklists, book- • Employment issues — no advice will be lets, and pamphlets, written by specialists offered on disputes between employee and renowned experts and organizations. and employers Work/life specialists can provide assis- • Corporate law — questions pertaining to tance with child and adult care providers, corporate law, including those generated schools, colleges, adoption services, com- from employee or spousal-owned busi- munity resources and other daily living nesses, will not be answered resources. • Second opinions — advice will not be given on how another attorney is han- Contacting the Employee dling a legal situation or rendering a Assistance Program subsequent opinion in case law You can contact Solutions on their Web • Third-party callers — participants cannot site at www.achievesolutions.net/ups or by seek advice to help with someone else’s phone at 1-800-336-9117. Please have the legal problems employee’s name, phone number and birth • Investments — fi nancial professionals date available when contacting Solutions — will not provide advice regarding specifi c Your EAP and Work/Life Benefi t. investment vehicles such as stocks, bonds or mutual funds. They can, however, provide advice on investment strategies

UPS provides no warranties or represen- tations regarding the quality of services provided by each individual attorney or ﬁ nancial professional.

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Quit For Life Tobacco Cessation Program Eligibility • A Quit Guide sent to your home following program registration Quit For Life® is available to all employees who otherwise satisfy the eligibility • Unlimited, easy, toll-free access to Quit requirements for The Flexible Benefi ts Plan, Coaches® for twelve months from the including such employees on an approved time of enrollment leave of absence. Individuals who otherwise • Access to Web Coach, an interactive satisfy the requirements to be a “depen- Web site that helps you stay on track dent” age 18 or older are also eligible for between calls this program. See the Eligibility section for * Prescription medication is not covered under this program. See more information about eligibility for The the Prescription Drug Benefi ts section for information about Flexible Benefi ts Plan. prescription drug coverage under the Medical plan. Assistance and support provided by Free & Clear, the program’s administra- Enrollment tor, should not be a substitute for your doctor’s advice. You must enroll in the Quit For Life program in order to participate and receive the Two Lifetime Quit Cycles tobacco cessation benefi ts of the program. The Quit For Life program provides two To enroll, access the Web site at the follow- lifetime quit attempt cycles per individual. ing URL: www.freeclear.com/ups or call For example: If, at the time of your fi fth 1-866-QUIT-4-LIFE. outbound intervention call you have not been successful in your attempt to quit, you Program Benefi ts will be offered an opportunity during the call to reenroll in the Quit For Life pro- Program benefi ts are provided at no addi- gram. If you choose not to re-enroll at that tional cost to participants who enroll in time, you will be called again six months Quit For Life, and include: after your initial enrollment date and • Up to fi ve outbound counseling and inter- invited to re-enroll. This allows the Quit vention calls to you Coaches to build on your success and keep • In-depth assessment to evaluate readiness the positive momentum going; remember- to quit tobacco use ing that behavior change is a process, and • Assistance and support with over-the- each time you attempt to quit you are counter Nicotine Replacement Therapy getting closer toward the ultimate goal (NRT) in the form of patch or gum only. of being tobacco free. If you decide that NRT is right for you, this program provides an eight-week When Benefi ts Begin supply of NRT via direct mail order. If you or your eligible dependents are There is no cost to you for the NRT already covered by the Medical plan, your • This program provides assistance and benefi ts in Quit For Life begin the date you support with NRT throughout the pro- or your dependent enrolls in the program. gram cycle If your Medical plan coverage has not • Assistance and support regarding pre- begun, your benefi ts under the Quit For scription medications such as bupropion Life program begin the date coverage under and Chantix* the Medical plan begins or the date you enroll, whichever is later.

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Life Insurance and AD&D

Life insurance is primarily a benefi t for You may also contact Prudential for Basic and supplemental life your family or anyone who depends on you additional information by calling and accidental death and for support. Its purpose is to help pro- 1-877-877-2955. dismemberment (AD&D) vide your benefi ciary with some measure insurance are available to of fi nancial security in the event of your When Is Coverage Effective? eligible covered same-sex death. Accidental death and dismember- Coverage based on your initial enrollment domestic partners and/or ment (AD&D) insurance provides fi nancial elections begins at the same time your their dependent children, protection if you’re seriously injured or die other elected Flexible Benefi ts Plan cover- in the same coverage in an accident. age begins. For annual enrollment elec- amounts and at the same rates as other covered The Flexible Benefi ts Plan provides group tions, your coverage begins on January 1 dependents. term life insurance benefi ts through the fol- of the following calendar year. All election lowing programs: changes related to status changes (“life events”) are retroactive to the date of the • Employee life insurance event. • Spouse’s life insurance • Children’s life insurance The following exceptions apply to the effective date of coverage: • Employee accidental death and dismemberment insurance • If you’re ill or injured and absent from work on the date your coverage should • Family accidental death and dismember- start, coverage starts on the fi rst day ment insurance after you return to work for at least one full day (considered “active at work”). Prudential Enrollment Kit You are considered “absent from work” and Contract-Certifi cate for these purposes even if you perform Life insurance and AD&D benefi ts are pro- limited work from home while you are ill vided through an insurance contract with or injured. Your dependents’ coverage is Prudential Insurance Company of America. also delayed until your coverage starts. The benefi ts are described in this booklet • If you increase your coverage for any for your convenience; however, for com- reason and are ill or injured and absent plete details you should also read: from work on the date the increased • The Prudential Supplemental Term Life coverage should start, the incremental brochure, commonly known as the amount of the increased coverage will not Prudential Enrollment Kit, provided with be effective until after you return to work this Summary Plan Description, and for at least one full day. If the increased • The Prudential Insurance Group coverage never becomes effective because Contract-Certifi cate, available by con- you do not return to work, you will tacting Prudential at 1-877-877-2955 continue to be covered at the lower level of coverage that was in effect prior to the If there is any confl ict between the requested increase. Prudential Insurance Group Contract- • If evidence of insurability is required, Certifi cate and this description or the any amounts requiring approval will be Prudential Enrollment Kit, the Contract- delayed until the date approval is granted Certifi cate provisions apply. The terms of by Prudential. See Evidence of Insurability the Prudential Enrollment Kit brochure are (Good Health) in this section. incorporated in and become part of this Summary Plan Description.

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Life Insurance and AD&D (cont.) • If your dependent has had treatment for • If you do not name a benefi ciary, or if the disease or injury within the 90-day period benefi ciary(ies) you name are not living at preceding the date coverage should start, your death, 100 percent payment will be coverage will not be effective until the made to the following survivor(s) in the dependent has been free from treatment order shown below: for 90 days, or until evidence of good — Your spouse health has been approved by Prudential; — Your child(ren) whichever is earlier. This does not apply — Your parent(s) to newborns. However, stillborn deliver- — Your sibling(s) ies are not covered. — Your estate • If your dependent is ill or injured and confi ned at home, in a hospital or other For example; if you didn’t designate a facility providing health care on the day benefi ciary, your spouse would receive the coverage should start, his or her life full benefi t, if he or she was living at your insurance coverage begins 31 days after death. And, if your spouse was not living at the end of the confi nement, or with satis- your death, your child(ren) would receive factory evidence of the dependent’s good the full benefi t. health if earlier than 31 days. Basic Life Insurance Benefi ciaries UPS pays the full cost of basic life insur- To name a benefi ciary for your life insurance. The benefi t amount of basic life ance and AD&D benefi ts, or to change insurance is: your current benefi ciary at any time, call • For you: 12 times your monthly salary 1-800-UPS-1508 to request a benefi ciary • For your spouse: $2,000 designation form. Or, you can change • For your children: $2,000 your benefi ciary designation online at Your Benefi ts Resources via a link from Your employee coverage amount is auto- www.UPSers.com on the My Life and matically updated with any changes to Career tab. Your designation is not effec- your monthly salary. Basic life insurance tive until the Benefi ts Service Center receives is group term life coverage. It can be con- either your online benefi ciary designation verted to an individual policy if you leave or change or benefi ciary designation form. retire from UPS (see If You Retire or Leave The following benefi ciary guidelines apply: UPS in this section). If you are unsure • You are automatically the benefi ciary for of your basic coverage amount, contact your spouse’s and children’s life insurance Prudential by calling 1-877-877-2955. and AD&D coverage. • AD&D benefi ts other than for your death Imputed Income are payable directly to you. The value (as defi ned by the Internal • You may name anyone you choose as Revenue Service) of your basic employee benefi ciary for your life insurance benefi ts life insurance coverage over $50,000 is and AD&D benefi ts for your death. If taxable and is reported to the federal gov- you name more than one benefi ciary, and ernment on your W-2 form. This value is do not indicate the percentage of your called “imputed income.” benefi ts you want paid to each individual, For example, if you had $55,000 in basic benefi ts will be divided equally between employee life insurance, you would be or among your benefi ciaries. taxed on the value of $5,000 of insurance.

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Supplemental Life Insurance Dependent Supplemental If you want more insurance for yourself Life Insurance than your basic coverage, you can purchase At your option, you may purchase depen- supplemental term life insurance in $1,000 dent life insurance for your eligible spouse increments up to a maximum of $1 million. and/or eligible children. Refer to the For details about this coverage, refer to the Prudential Enrollment Kit for premium Prudential Enrollment Kit. rates and complete details about coverage for your spouse and children. If you enroll in supplemental life insurance for yourself within 45 days of your initial If your spouse or child is eligible as an eligibility date, you can receive up to the employee for supplemental life insurance lesser of 48 times your monthly earnings through The Flexible Beneﬁ ts Plan or or $500,000 of coverage without having to another UPS-sponsored plan that offers provide evidence of insurability. Any cover- supplemental life insurance, you may not age amount over $500,000, or an amount cover your spouse or child for dependent elected more than 45 days after your initial life insurance through The Flexible Beneﬁ ts eligibility date, will require evidence of Plan — your spouse or child should elect insurability to be approved by Prudential. employee supplemental life insurance through his or her own employee plan. Evidence of Insurability (EOI) For life insurance that requires evidence Spouse’s Life Insurance of insurability, Prudential will ask you You may purchase supplemental term life to complete a form showing evidence of insurance for your spouse in $1,000 incre- insurability (good health) before approving ments up to a maximum of $500,000. This you for coverage. Your coverage will not coverage includes all the same features be effective until the insurance is approved as the employee supplemental term life by Prudential and you meet the “active coverage. at work” requirements. In the meantime, coverage and payroll deductions will be If your spouse enrolls within 45 days of set at the highest requested level available his or her initial eligibility date, he or she without evidence of insurability. Once can receive up to $25,000 of coverage approved, the coverage level and payroll without providing evidence of insurability. deduction are increased retroactive to the Any amount over $25,000, or any amount date of approval. elected more than 45 days after the date your spouse becomes eligible for coverage, Premium Rates will require evidence of insurability to be Your annual premium rate, as shown in approved by Prudential. the Prudential Enrollment Kit, is based on your age and smoking status. The premium Children’s Life Insurance rate for your spouse is based upon his or You may purchase children’s term life her age and smoking status. This rate per coverage in increments of $1,000 up to a $1,000 of coverage is multiplied by the maximum of $30,000. The cost per $1,000 amount of coverage you elect. of coverage is the same regardless of how many children are covered.

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Life Insurance and AD&D (cont.)

Monthly Salary Accidental Death and If Your Covered If you are a salaried Dismemberment (AD&D) Family Includes Your Benefi t employee, monthly salary Coverage You Plus… Amount Is… means your base pay, Accidental death and dismemberment Spouse only 70% of your coverage excluding bonuses, over- coverage pays a benefi t for certain injuries amount time or other incentive resulting from a covered accident. If the Children only 50% of your coverage compensation. If you are covered individual dies, the benefi ciary amount for each child paid weekly, monthly receives the full amount. If the covered (maximum $50,000 salary means: individual is injured, he or she receives all per child) • Full-time: Your hourly rate or a portion of the benefi t, depending on Spouse and children • 60% of your multiplied by 40 hours, the nature of the injury. More information coverage amount multiplied by 52 weeks, about standard and additional benefi ts, for your spouse divided by 12 months. additional family benefi ts, and benefi t • 25% of your • Part-time: Your hourly rate exclusions appears later in this section. coverage amount for multiplied by 20 hours, A Schedule of Losses is included in your each child (maximum multiplied by 52 weeks, Prudential Enrollment Kit. $50,000 per child) divided by 12 months. Basic AD&D Coverage For example, if you elect $100,000 of • Part-time Supervisor or AD&D for you plus family and your UPS pays the full cost of basic employee Specialist: Your hourly rate spouse dies in a covered accident, you AD&D coverage, which is 12 times your multiplied by 27.5 hours, would receive: multiplied by 52 weeks, monthly salary. Your coverage amount is divided by 12 months. automatically updated with any changes • $ 70,000 if your family consists of only to your monthly salary. If you are unsure you and your spouse about your basic AD&D coverage amount, • $60,000 if your family consists of you, call 1-877-877-2955. your spouse and your children

Supplemental AD&D Coverage In determining how to pay a benefi t (spouse only, children only or spouse and You may purchase supplemental AD&D children), Prudential relies on the UPS coverage in $1,000 increments up to a Benefi ts Service Center’s record of your maximum of $1,000,000. Evidence of eligible dependents on fi le at the time of insurability is not required for AD&D cov- the covered accident. Each covered family erage. You may elect AD&D coverage for member is an “insured.” you only, or you plus family. What is Covered by Your AD&D Benefi ts Family AD&D Coverage Under family AD&D coverage, the benefi t Standard AD&D Benefi ts amount for your family is determined by Benefi ts are paid at certain percentages of the amount of family coverage you elect your coverage amount for specifi c acci- and your eligible dependents under The dental losses. Not more than 100 percent Flexible Benefi ts Plan, as shown in the of the coverage amount for the standard table below. AD&D benefi t is payable for all losses due to the same accident. The loss must be incurred within 90 days of the accident (paralysis within 365 days of the accident). Standard benefi ts apply to basic and supplemental coverage for you only and you plus family.

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Additional AD&D Benefi ts • Any infection, unless pyogenic and occur- If you are injured or die as a result of a ring at the same time as the accident, cut covered accident, the Plan pays the fol- or wound; or bacterial infection unless lowing benefi ts in addition to the standard it results from accidental ingestion of a AD&D benefi ts. These additional benefi ts contaminated substance apply to basic and supplemental coverage • War or any act of war, declared or for you only and you plus family. un declared, including resistance to • Seat Belt Benefi t armed aggression • Air Bag Benefi t • An accident occurring while serving on full-time active duty for more than • Rehabilitation Benefi t 30 days in any armed forces (does not • Continuation of Medical Funding Benefi t include Reserves or National Guard • Brain Damage Benefi t active duty for training) • Emergency Medical Evacuation/Return • Commission of, or attempt to commit, of Remains Service a felony • Home Modifi cation Benefi t • Legal intoxication • Use of narcotics (unless administered Additional Family AD&D Benefi ts or consumed on a doctor’s advice) If you elect supplemental family AD&D coverage and are injured or die as a result If You Retire or Lose Coverage of a covered accident, the Plan pays the following benefi ts in addition to the amounts Portability of noted in the standard and the additional Supplemental Life Insurance AD&D benefi ts. If you retire or your supplemental life • Spouse Tuition Reimbursement Benefi t insurance coverage is terminated for any • Child Tuition Reimbursement Benefi t reason (except failure to make timely payments while on leave), the portability • Day Care Expense Benefi t option lets you continue supplemental term • Common Accident Benefi t life insurance. If you choose to continue your coverage under the portability option, What is Not Covered by your spouse may also continue his or her Your AD&D Benefi ts supplemental coverage under the portabil- Basic and supplemental AD&D benefi ts do ity provision. Your spouse may also elect not cover a loss if it results from any of the to continue coverage individually if cover- following: age under the Plan is lost due to divorce • Suicide or attempted suicide, while sane or death of the employee. or insane You will be billed directly by Prudential • Intentionally self-infl icted injuries, or any for your premiums. Since you are no longer attempt to infl ict such injuries while sane a UPS employee, your group rates will no or insane longer be the same as rates available to • Sickness, whether the loss results directly active UPSers, but will be based on a group or indirectly from the sickness made up of many Prudential customers. • Medical or surgical treatment of sick- You can keep up to the current amount ness, whether the loss results directly of your insurance without providing any or indirectly from the treatment evidence of insurability. Refer to the

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Life Insurance and AD&D (cont.) Prudential Enrollment Kit for additional When Basic and Supplemental information regarding supplemental life AD&D Coverage Ends portability. Your basic and supplemental AD&D Upon retirement or loss of coverage, you coverage ends when you leave UPS or retire will receive portability information directly and your coverage otherwise ends under from Prudential. For more information the Plan; it may not be ported or converted. regarding portability, call 1-877-877-2955 to speak to a Prudential Group Life Services Living Benefi t Option representative. The living benefi t option provides you a portion of your life insurance benefi t before If you choose the portability option and your death if you are terminally ill with a are later rehired or transferred to a UPS life expectancy of less than 12 months. The position that allows you to elect supple- coverage is a combination of your basic mental coverage under the Flexible Benefi ts and supplemental benefi t, up to a maxi- Plan or another UPS-sponsored plan, you mum of $300,000. Additional information must surrender the ported coverage to is in your Prudential Enrollment Kit. If you receive supplemental coverage as an active have any questions or would like a claim employee. form, call Prudential at 1-877-877-2955. Conversion of Basic and/or Permanent and Total Disability Supplemental Life Insurance (PTD) for Part-Time Employees Another option if you retire or your life insurance coverage is terminated is to con- If you are a part-time employee not eligible vert your basic and/or supplemental cover- for long-term disability (LTD) coverage age to an individual life policy, without and you become permanently and totally providing evidence of insurability. You disabled while a participant in The Flexible should call the Prudential Group Conversion Benefi ts Plan, you may be eligible to have Offi ce at 1-877-889-2070 to obtain a your basic employee life insurance paid Conversion Kit. Your completed conversion to you as a lump-sum benefi t. In order to application must be returned within 31 qualify for this benefi t, you must be perma- days of your last day of coverage in order nently and totally disabled from engaging to convert your coverage. Your spouse in any occupation which could be con- and/or dependent children may convert sidered reasonable — taking into account their coverage: your age, education and prior work experience — as determined by Prudential. If • When you are eligible to convert yours, you have questions or would like a claim as stated above form, call Prudential at 1-877-877-2955 • If your spouse loses coverage due to a and request the lump sum Total Disability divorce, legal separation or your death, Benefi t option. and/or • If your child loses coverage because How to File a Claim of your divorce, legal separation, your See the Filing a Claim section of this booklet. death, or having reached the limiting age

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Tax-Advantaged Reimbursement Accounts Tax-advantaged reimbursement accounts married — can work or attend school. allow you to set aside pre-tax dollars from This account is available regardless each paycheck to help pay for eligible out- of the medical option you’re enrolled in. of-pocket expenses. Health care expenses can include deduct- There are three types of reimbursement ibles, coinsurance, and out-of-network or accounts provided by The Flexible Beneﬁ ts out-of-area charges that exceed reasonable Plan: and customary limits. • Health Care Spending Account (HCSA) All of these accounts are strictly regulated for out-of-pocket medical, dental and by the IRS, which speciﬁ es the kinds of vision expenses not reimbursed by the expenses that may be reimbursed or paid Plan. Individuals who enroll in the by each type of account. Refer to the table Healthy Savings medical option are not below for a general description of the reim- eligible for this option bursement accounts available to you, based • Limited Purpose Spending Account on your medical option. Additional infor- (LPSA) for out-of-pocket dental and mation about each account appears later vision expenses. Individuals who enroll in this section. You are encouraged to also in the Traditional medical option are not read the Internal Revenue Code sections eligible for this option 503, 502, 152, and 213(d) or consult your • Child/Elder Care Spending Account personal tax advisor for complete informa- (C/ECSA) for expenses related to the tion about eligibility, use and limitations care of your qualifying dependents so of the reimbursement accounts. that you — and your spouse, if you’re

Annual Contribution/ Account Description Reimbursement Use With Health • Used for out-of-pocket medical, dental $50 to $3,500 Traditional medical option Care and vision expenses Spending • Eligible for streamlined claims submission Account and direct deposit for both Aetna and (HCSA) UnitedHealthcare members • Unused balance is forfeited after grace period • Administered by Aetna Limited • Used only for out-of-pocket dental $50 to $3,500 Healthy Savings medical Purpose and vision expenses option Spending • Unused balance is forfeited after grace period (Participants in this medical Account • Allows tax savings for Healthy Savings option may also be eligible (LPSA) medical option participants to contribute to a health savings account (HSA). See • Administered by Aetna the Medical Beneﬁ ts sec tion for more details regarding HSAs Child/ • Used for out-of-pocket child and elder care $50 to $5,000 Traditional or Healthy Elder Care expenses (See Section 129 of Savings medical option Spending • Eligible for direct deposit the Internal Revenue Account Code) • Unused balance is forfeited at end of year (C/ECSA) • Administered by Aetna

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Tax-Advantaged Reimbursement Accounts (cont.) Reimbursement Account • You must submit a claim form to be Tax Advantages reimbursed for dental and vision expenses from your LPSA and/or child and elder You don’t pay federal or Social Security care expenses from your C/ECSA (FICA) taxes — and in most locations, state or local income taxes — on the por- In all situations, you must provide docu- tion of your pay that you contribute to a mentation that substantiates the: tax-advantaged reimbursement account. • Date the expense was incurred, Certain states and localities include tax- advantaged reimbursement account • Amount, and deposits as taxable income. Consult your • Nature of the expense. tax professional to fi nd out whether such For all types of tax-advantaged reimburse- accounts are taxed in your area. ment accounts, you may choose to have If you’re a highly compensated employee your reimbursement (if approved) depos- (as defi ned by the IRS), the maximum ited automatically into your bank account amount you can contribute to the tax- (see Streamlined Claims Submission and advantaged reimbursement accounts may Direct Deposit in this section). be limited. You’ll be notifi ed if these limits Any reimbursement checks that are not apply to you and your maximum contribu- cashed within 12 months from the date of tion may be reduced. the check are void and you lose any rights How the Tax-Advantaged to such reimbursement. Reimbursement Accounts Work You may need to fi le a Form 2441 with If you choose during annual enrollment your federal tax return and consult your to contribute to an HCSA or LPSA, and/ tax professional with any questions. or a C/ECSA, you begin by estimating the amount of eligible expenses you will incur “Use It or Lose It” Rule in the coming year. Based on your estimate, It’s important that you carefully estimate you decide how much to contribute to each your expenses before you enroll in the account. Then you enroll in each account HCSA, LPSA or C/ECSA because the independently of the other. Internal Revenue Service (IRS) requires that you forfeit any account balance not used Your elections to contribute to one or to pay eligible expenses incurred during more of these accounts are in effect during the year or — with the HCSA and LPSA — the entire calendar year. The amount you during the grace period. This is often called choose to contribute to your account is the “use it or lose it” rule. In addition, deducted, before taxes, from your regular you cannot: pay in equal amounts throughout the year. • Receive a refund of any unused balances Once you have incurred eligible expenses: • Transfer your funds from one account to • Your claims for reimbursement of medi- the other cal and prescription drug expenses from • Carry funds over from one year to the your HCSA may be automatically pro- next (except during the HCSA and LPSA cessed if you choose (see Streamlined grace period) Claims Submission and Direct Deposit in • Stop making contributions until the fol- this section). Or, you may submit a claim lowing January 1 unless an eligible life form for reimbursement if you prefer event occurs

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Any forfeited amounts in the tax-advantaged In addition, a child to whom IRC Section reimbursement accounts are used by the Plan 152(e) applies — which is generally a child to offset administrative costs of the Plan or of divorced or separated parents — is as otherwise permitted under applicable law. treated as a dependent of both parents for purposes of the HCSA, regardless of who Health Care Spending Account actually claims the child as a dependent on (HCSA) and Limited Purpose his or her federal income tax return. Spending Account (LPSA) You may want to consult your tax advisor The following information applies gener- with any questions about tax dependency ally to both the HCSA and the LPSA. and qualifi cation for eligible health care • You can be reimbursed for health care expense reimbursement for a same-sex expenses incurred by you and your eligible domestic partner and/or their dependent dependents if the expenses have not been children. reimbursed by any other arrangement (for example, from your spouse’s fl exible Grace Period spending account), and you will not seek Any unused HCSA or LPSA funds may reimbursement for such expenses. be used to reimburse eligible expenses • Eligible expenses must be incurred during incurred during the “grace period” that the year for which you make your HCSA follows the end of the plan year in which or LPSA contributions, or during the grace you allocated HCSA or LPSA funds. The period (see below). “Incurred” means the grace period begins on the fi rst day of the date the service is provided, not when next Plan year and ends two months and you’re billed or when you pay for it. fi fteen days later. For example, if the Plan year ends December 31, 2009, the grace • You cannot take a deduction on your period begins January 1, 2010 and ends federal income tax return for any health March 15, 2010. care expenses for which you have been reimbursed through your HCSA. The following rules apply to the grace period: • To take advantage of the grace period, Eligible Dependents you must be either a participant in the For the HCSA or LPSA, a “dependent” HCSA or LPSA on the last day of the Plan for whom you may claim eligible health year to which the grace period relates, or care expenses is any individual who satis- a qualifi ed benefi ciary who is receiving fi es the requirements of Internal Revenue COBRA coverage under the HCSA on Code Section 105(b). This is your opposite the last day of the Plan year to which sex spouse (as defi ned in accordance with the grace period relates. state law) and any individual whom you • Eligible expenses incurred during a grace can claim as a dependent under Internal period and approved for reimbursement Revenue Code Section 152 on your federal are paid fi rst from available amounts that income tax return, or anyone for whom were remaining at the end of the plan you could otherwise claim as a dependent year to which the grace period relates, on your federal income tax return except and then from any amounts that are for the fact that he or she is married, has available to reimburse expenses incurred income in excess of the applicable exemption during the current plan year. amount or is a dependent of a dependent.

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Tax-Advantaged Reimbursement Accounts (cont.) • Claims are paid in the order in which Reimbursement checks that are not cashed they are received. This may impact the within 12 months from the date of the potential reimbursement of eligible expenses check are void and you lose any rights to incurred during the plan year to which the such reimbursement. grace period relates, if those expenses have Eligible Expenses* not yet been submitted for reimbursement. • Health plan deductibles, coinsurance and • Previous claims are not reprocessed or copayments, including those from other re-characterized so as to change the order employers’ plans; receipts for reimburse- in which they were received. ment of copayments or coinsurance — For example, suppose $200 remains in state the expense is a copayment or your HCSA at the end of the 2009 Plan coinsurance year and you elected to contribute $2,400 • Fees for doctors, dentists and hospital to your HCSA for the 2010 plan year. If services not covered by a medical, dental or you submit for reimbursement an eligible vision option, such as adult orthodontia medical expense of $500 that was incurred on January 15, 2010, $200 of your claim • Charges that exceed reasonable and is paid out of the unused HCSA balance customary amounts (see the Medical from the 2009 Plan year, and the remain- or Dental section of this booklet for ing $300 is paid out of your HCSA an explanation of the term “reasonable balance for 2010. and customary”) • You may not use HCSA or LPSA amounts • Equipment and materials required for to reimburse eligible child or elder care using contact lenses, such as saline solu- expenses. tion and enzyme cleaners • The grace period does not apply to any • Over-the-counter medications, equipment other reimbursement account. and supplies when used for “medical care”** and not for general well-being HCSA and LPSA Reimbursements • Reconstructive cosmetic surgery (surgery that is medically necessary to correct a Your reimbursements from the HCSA deformity from a hereditary abnormality, will equal the lesser of: a personal injury resulting from an acci- • The actual amount of your claim, or dent or trauma, or a disﬁ guring disease) • The total amount you’ve elected to • Infertility treatment contribute to the account for the year, • Capital expenses to install special equip- less any reimbursement you’ve already ment or make home improvements if the received. main purpose is medical care (such as If you submit claims for less than $50, installing entrance and exit ramps) Aetna will hold them until they total $50 * Based on applicable guidance relating to Internal Revenue before making a payment (except at the Code Section 213(d). end of the year, when you can submit smaller ** You are responsible for providing all documentation deemed claims in order to clear the funds in your necessary by the claims administrator to support the fact account). HCSA reimbursement checks are that an expense is for “medical care.” sent twice monthly.

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Ineligible Expenses* reimbursable. See a list of eligible expenses • Health insurance premiums at www.irs.gov or www.aetna.com. • Athletic club expenses to keep physically fi t, even if suggested by doctor Child/Elder Care • Cosmetic surgery of a non-reconstructive Spending Account (C/ECSA) nature You can be reimbursed through a C/ECSA for eligible dependent care expenses that • Transportation costs of a disabled person are incurred for the custodial care of an to and from work eligible dependent or for related household • Medical/dental expenses of a former services, and to enable you (and your spouse, spouse if applicable) to be gainfully employed • Qualifi ed long-term care services or look for work. • Other expenses not considered “medical Generally, you may contribute up to $5,000 care” per year to your C/ECSA. The amount * Based on applicable guidance relating to Internal Revenue Code Section 213(d). will be taken in equal amounts from each paycheck you receive during the year. If HCSA Only you choose to participate, your minimum contribution amount is $50 annually. If The following information applies only you’re married and you and your spouse to the HCSA. fi le separate tax returns, the maximum • You are eligible for the HCSA only if you each of you can set aside for child/elder enroll in the Traditional medical option. care reimbursement is $2,500. If you enroll in the Healthy Savings medical option, you are not eligible. Whether an expense enables you (and your • Only expenses considered “medical care” spouse, if applicable) to work or look for as defi ned in Internal Revenue Code work should be determined on a daily Section 213(d) (except for long-term care basis. Normally, you should not include services and health insurance premiums) expenses incurred on days when you (and are reimbursable through your HCSA. your spouse, if applicable) are not working or looking for work. However, you are not • Any receipts submitted to the HCSA for required to exclude expenses for a “tempo- reimbursement of coinsurance or copay- rary absence.” A temporary absence of two ments must clearly state that the expense weeks or less is considered a temporary is a coinsurance or copayment; or it will be absence. If you’re a part-time employee returned to you for additional information. who is required by the day care provider to pay for a full week or month, you don’t LPSA Only have to allocate days during that period The following information applies only that you didn’t work. to the LPSA. All eligible child care or elder care expenses • You are eligible for the LPSA only if you must be incurred during the year for which enroll in the Healthy Savings medical you make your account contributions. An option. If you enroll in the Traditional expense is considered incurred when the medical option, you are not eligible. service is provided, not when you are billed • Only dental or vision plan deductibles, or when you pay for it. copayments and coinsurance, including those from other employers’ plans, are

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 8383 22/19/10/19/10 5:23:385:23:38 PMPM The Flexible Beneﬁ ts Plan

Tax-Advantaged Reimbursement Accounts (cont.) To receive reimbursements from the Eligible Expenses* C/ECSA, you must provide written receipts • Amounts paid to a care provider showing the caregiver’s name and taxpayer (whether inside or outside your home), ID number or Social Security number. except as noted below However, if the provider is a charitable organization — such as the YMCA, a • FICA and other taxes you pay on behalf church or similar organization — it is not of the care/service provider necessary to provide the organization’s • Nursery schools, day camps and day care taxpayer ID number. and elder care centers that meet state or local regulations, provide care for more Eligible Dependents than six non-residents and receive fees for services provided (per IRS rulings, You may receive reimbursements for pre-kindergarten is an eligible expense) eligible expenses incurred to care for your * Based on Internal Revenue Service Publication 503, “Child “qualifying dependents.” A qualifying and Dependent Care Expenses.” dependent is any of the following: • Your “qualifying child” (as deﬁ ned by Ineligible Expenses** Internal Revenue Code Section 152) • Dependent care provided by a spouse, who is under age 13. Generally speaking, parent of the child, child under age 19, a “qualifying child” is a child (including or by anyone you claim as a dependent a brother, sister, step sibling) of the on your federal income tax return employee, or a descendant of such child (for example, a niece, nephew or grand- • Dependent care that isn’t necessary to child), who lives with you for more than enable you (and your spouse, if appli- half the year and does not provide over cable) to be gainfully employed half of his or her support • Dependent care provided if your spouse • Your spouse or “dependent” who is phys- does not work ically or mentally unable to care for him- • Any expense you plan to take as a credit or herself. A “dependent” means any on your income tax return individual whom you can claim under • Transportation to and from a dependent Internal Revenue Code Section 152 as care location, except those charged by the a dependent on your federal income tax day care provider to pick up and/or take return, or anyone for whom you could the child to and from the day care center otherwise claim as a dependent on your • Care provided in a full-time residential federal income tax return except for the institution fact that he or she is married, has income • Late payment fees in excess of the applicable exemption amount or is a dependent of a dependent. • Expenses for a provider’s food, clothing In addition, a child to whom Internal and entertainment Revenue Code Section 152(e) applies, which • Expenses to care for dependents that is generally a child of divorced or separated do not live with you at least eight hours parents, is considered a dependent only per day of the custodial parent, regardless of who • Expenses for overnight camp are not actually claims the child as a dependent eligible day care expenses ** Based on Internal Revenue Service Publication 503, “Child and Dependent Care Expenses.”

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• Overnight care expenses (unless the par- Tax Credit vs. Child/Elder Care Refer to IRS Publication ents work nights) Spending Account 503 for a complete discus- • Any portion of overnight camp, even if For every dollar of reimbursement you sion of the tax credit. To the daytime portion is broken out from receive through the C/ECSA, your depen- order a copy, visit the IRS the total camp fee on your receipt. To dent care tax credit is reduced by a dollar. Web site at www.irs.gov, receive reimbursement for the daytime So if you elect to participate in the C/ECSA, or call 1-800-829-3676. expense of any overnight camp, your you are making a decision not to take the receipt must include only the expenses federal dependent care tax credit for those for the daytime portion. Otherwise, your expenses. claim will be denied with no opportunity to resubmit it In most cases, the C/ECSA will offer you • Expenses that are primarily for educa- the greater tax savings. However, it is tion, food and/or clothing are not consid- important to note that in some cases, your ered to be for custodial care. Therefore, tax savings may be greater if you use the tuition expenses for kindergarten (or its dependent care tax credit rather than the equivalent) and above do not qualify as C/ECSA for part or all of your dependent custodial care. However, day camps are care expenses. considered to be for custodial care even The following table compares the C/ECSA if they also provide educational activities and the federal income tax credit. You may such as soccer and computer skills want to consult your personal tax advisor • Summer school and summer tutoring pro- to see which method makes the most sense grams are considered to be “education” and for you. therefore do not qualify as custodial care Using the Federal C/ECSA Reimbursements Using the C/ECSA Income Tax Credit Reimbursements from the C/ECSA will Minimum annual No minimum annual equal the lesser of: contribution is $50 expenses for using the tax credit • The actual amount of your claim Maximum annual Maximum annual • The amount of your account balance contribution is $5,000 expense applicable at the time the reimbursement is made ($2,500 each if married toward tax credit ﬁ ling separately) is $3,000 for one If you submit claims for less than $50, qualifying child; Aetna will hold them until they total $50 $6,000 for two or more before making a payment (except at the qualifying children end of the year, when you can submit smaller claims in order to clear the funds Contributions are A percentage of excluded from taxable expense is applied as in your account). C/ECSA reimbursement income credit against taxes checks are sent weekly. owed Reimbursement checks that are not cashed Contributions are free Tax credit doesn’t affect within 12 months from the date of the from Social Security Social Security taxes check are void and you lose any rights to taxes such reimbursement. You must decide You determine tax contribution amount credit at the end of the before expenses are year after all expenses incurred and you forfeit are incurred; there’s no the unused amount risk of forfeiture

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Tax-Advantaged Reimbursement Accounts (cont.) Streamlined Claims Submission Direct Deposit of HCSA, LPSA and and Direct Deposit C/ECSA Reimbursements Streamlined Claims Submission Direct deposit allows your tax-advantaged reimbursement account reimbursements Processing Under HCSA to be directly deposited into your bank Streamlined claims submission allows any account, saving days in transit. Direct unpaid amounts from medical expenses deposit applies to your HCSA, LPSA and to be forwarded automatically to your C/ECSA reimbursements. HCSA and LPSA HCSA by your medical or dental plan reimbursements are paid on days 15 and claims administrator once your medical 30 of each month (or the fi rst business day or dental claim has been processed. In thereafter). C/ECSA reimbursements are addition, any unpaid amounts from pre- paid weekly on Fridays. Reimbursements scription drug expenses fi led with Medco are usually available in your account are forwarded automatically to Aetna within three to fi ve business days. (the UPS tax-advantaged reimbursement accounts vendor) for processing under How to Enroll in Streamlined Claims your HCSA. Unpaid amounts are reviewed Submission and Direct Deposit and reimbursed until you reach your annual Enroll online at Your Benefi ts Resources contribution election. This eliminates the through a link on www.UPSers.com. need to keep receipts or complete claim Or, call the Benefi ts Service Center at forms for reimbursement. Depending on 1-800-UPS-1508 to request an enroll- the date of your claim, data transfer dates, ment form, which includes instructions and HCSA reimbursement schedules, the for returning the completed form. streamlined claims submission process can take up to 35 days. To participate in direct deposit, your bank must be part of the Automated Clearing What Cannot be Streamlined House (ACH) System — call your bank The following types of claims cannot be to verify participation. Setting up Direct streamlined and must be submitted with Deposit can take up to 35 days. a claim form: If you have an HCSA, by enrolling in either • Claims from claims administrators other direct deposit or streamlined claims submis- than Aetna, UnitedHealthcare and Medco. sion, you automatically are enrolled in both. • Claims for reimbursement from your LPSA or C/ECSA. You do not need to sign up for this feature each year. Once enrolled, streamlined claim submission and direct deposit continue each year. To update your bank information in the future, fi nd a link to Your Benefi ts Resources at www.UPSers.com, or call the Benefi ts Service Center at 1-800-UPS-1508 to request a new enrollment form.

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Impact on Other Benefi ts For End-of-Year Claims Log on to Aetna’s While your tax-advantaged reimbursement Claims for expenses incurred during the Web site at www.aetna. account contributions reduce your taxable prior year must be received by the end com any time to view your income, UPS-sponsored benefi t amounts, of the run-out period, which is May 31 account information. like life insurance and disability, are based following the end of the Plan Year. After on your earnings before reimbursement that date, any amount left in your account account contributions have been withheld. will be forfeited. This money will be used to offset future costs of administering the Be aware that, if you pay less Social accounts, and then according to applicable Security (FICA) taxes because of your rules and regulations. participation in tax-advantaged spending accounts, then your Social Security benefi ts If You Retire or Leave UPS at retirement, death or disability may also be lower. You will pay less FICA tax if When you terminate employment from your pay is at or below the wage base for UPS for any reason, claims for expenses Social Security taxes. However, whether that were incurred prior to your coverage your Social Security benefi ts will actually termination date must be received within be lower depends on a number of factors, 90 days from the coverage termination such as your current age, your earnings date. before participation in the accounts and You may elect, through COBRA, to con- future pay level. tinue your HCSA or LPSA on an after-tax basis through the end of that calendar year Run-Out Period (and through the grace period, if appli- For the HCSA and LPSA Grace Period cable). If you do so, claims for expenses that were incurred prior to the termination Expenses incurred during a grace period of your HCSA or LPSA COBRA coverage (HCSA or LPSA only) must be submit- must be received by the earlier of: ted before the end of the run-out period described below. This is the same run-out • 90 days from the termination of your period for expenses incurred during the HCSA COBRA coverage, or Plan Year to which the grace period relates. Any unused amounts from the end of a • The end of the standard claim fi ling Plan Year to which the grace period relates period (May 31). that are not used to reimburse eligible expenses incurred either during the Plan How to File a Claim year to which the grace period relates or See the Filing a Claim section. during the grace period will be forfeited if not submitted for reimbursement before the end of the run-out period.

If you take a leave of absence or have a status change, refer to the Life Events section for information about the impact to your spending accounts.

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Legal Plan The Hyatt Legal Plan helps protect you from • Hyatt Legal Plans attorneys — If you need the fi nancial expenses that may arise if you an attorney, you can choose one from need legal services. This supplemental plan Hyatt’s national network of attorneys offers a range of commonly needed legal throughout the United States who have services as well as access to a legal hotline agreed to provide covered services to Hyatt and individual consultation administered Legal Plan participants. If you use a Hyatt by Hyatt Legal Plans, a MetLife® company. Legal Plans network attorney, you will receive benefi ts for most covered matters You and your covered family members will have access to the Hyatt Legal Plans • Non-Participating Attorneys — You can network, a nationwide network of plan also receive legal counsel from an attor- attorneys. You will receive full coverage ney who does not participate in the Hyatt for covered services from a Hyatt network Legal Plans attorney network. When you attorney. You may also use any attorney of use a non-participating attorney, you are your choice; Hyatt will provide a fee reim- reimbursed for covered legal services up bursement schedule that shows the maxi- to a scheduled maximum amount. You’ll mum amount payable for specifi c services be responsible to pay the difference, if under the plan. any, between the plan’s payment and the non-network attorney’s charge for services The legal benefi ts are provided according to an insurance contract issued to UPS by As a participant in the Hyatt Legal Plan, Hyatt Legal Plans. If there is any confl ict there’s no limit on how often you can use the between the summary of benefi ts provided plan. No matter how many times you utilize in this booklet and the benefi ts described the plan, if you use a Hyatt network attor- in the contract or on the Hyatt Legal Plans ney, your payroll deduction stays the same. Web site, the description in the contract and/or on the Web site controls. Legal Services Covered and Excluded Eligibility Listed below are examples of legal services The supplemental Hyatt Legal Plan is a that are provided according to the contract voluntary benefi t available to individuals with Hyatt Legal Plans. If you’re thinking and their dependents who are eligible for about enrolling, visit their Web site at The Flexible Benefi ts Plan. www.legalplans.com. Enter password 5530010 for the single plan or 5540010 Enrollment for the family plan to access Hyatt Legal Plans’ legal plan resource center. Or, call You may enroll in the supplemental Hyatt Hyatt Legal Plans at 1-800-821-6400. Legal Plan benefi t at initial enrollment, during annual enrollment periods, or fol- Covered Legal Services lowing a recognized life status change. Examples of covered services include*: How the Legal Benefi ts Work • Wills and estate planning If you enroll for legal coverage, you have • Consumer protection matters, including access to legal services from three sources: small claims assistance • Telephone Service — You have access • Real estate matters, including sale or to advice, consultation and direction purchase of your home and property regarding personal legal matters that are tax assessment not specifi cally excluded under the plan. • Debt matters, including personal bank- There’s no cost for this service ruptcy, tax audits, and identity theft defense

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• Defense of civil lawsuits The Client Services Representative can also • Document preparation, including deeds, help you: mortgages and notes • Understand coverage • Family law, including premarital agree- • Offer information about using an out-of- ments, protection from domestic violence, network attorney and uncontested adoption • Answer any other questions • Traffi c matters/criminal, including juve- nile court defense, restoration of driving Cost of Coverage privileges, and traffi c ticket defense (does To determine how much the coverage not include DUI) will cost, call Hyatt Legal Plans at • Immigration assistance 1-800-821-6400. Excluded Legal Services Paying for Coverage Examples of excluded services include Payment for legal plan coverage is made services related to: through after-tax payroll deductions. • Employment-related matters, including UPS or statutory benefi ts Benefi t Termination • Matters involving the employer, MetLife Generally, your coverage under this ben- and affi liates, and plan attorneys efi t ends when you retire or leave UPS for • Matters in which there is a confl ict of any other reason. However, you have the interest between the employee and spouse option to continue coverage through an or dependents, in which case services are individual policy. See Portability below. excluded for the spouse and dependents • Appeals and class actions Portability • Farm and business matters, including rental You are eligible to convert your Hyatt issues when the participant is the landlord Legal Plan coverage to an individual policy • Patent, trademark and copyright matters upon leaving UPS. If you choose to con- • Costs or fi nes tinue legal coverage, you will be billed • Frivolous or unethical matters directly for the cost. Contact Hyatt • Matters for which an attorney-client Legal Plans’ Client Service center at relationship exists prior to the participant 1-800-821-6400 for more information. becoming eligible for plan benefi ts How to File a Claim How to Use the Plan If you choose to receive services from one Once you are enrolled, log on to from Hyatt’s national network of attor- www.legalplans.com or call Hyatt Legal neys, all covered services are paid in full — Plans’ Client Service center at 1-800-821-6400 there is no need to submit a claim form. Monday through Thursday from 8 a.m. to If you use a non-network attorney, you will 7 p.m. (Eastern Time). A Client Service be reimbursed for covered services accord- Representative will confi rm that you are ing to a set fee schedule. You are respon- eligible to use the plan, and will give you sible to pay the difference, if any, between the address and telephone number of the the plan’s payment and the non-network attorney(s) located most conveniently to you, attorney’s charge for services. To request as well as a case number. Once you have this a claim form, contact Hyatt Legal Plans’ information, you may contact the attorney Client Service center at 1-800-821-6400 yourself to schedule an appointment. or go online at www.legalplans.com.

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Adoption Assistance To help UPS employees realize the dream For the Adoption Assistance Program, of having a family, UPS offers eligible documentation is required from the state employees fi nancial assistance through its in which the child is adopted certifying that Adoption Assistance Program. You are eli- the child qualifi es for a special needs adop- gible for this benefi t as part of the compre- tion in that state. Check with the applicable hensive basic coverage under The Flexible state social services division for information Benefi ts Plan. on that state’s defi nition of special needs. International adoptions cannot be consid- Eligibility ered for the special needs benefi t. Employees are eligible for this benefi t as part of the basic coverage under The What is Covered by Your Flexible Benefi ts Plan. You do not need Adoption Assistance Benefi t to enroll separately in the Adoption The Adoption Assistance Program covers Assistance Program benefi t. There is no the following adoption-related expenses: cost to you to take advantage of this • Legal/court fees program. • Adoption agency fees (public or private, Benefi t Amount foreign or domestic) • Medical expenses (when not covered by UPS will reimburse 100 percent of eligible another source), including the following: costs, up to $3,500 per child, associated with the adoption of a child less than age — Newborn expenses 18 as long as the child is not related by — Maternity expenses for the birth marriage or blood. If both parents are UPS mother employees, expenses are reimbursed only — Charges for temporary foster care one time per child, up to $3,500. before placement — State-required home study program Children with Special Needs and other required adoptive parental counseling If you adopt a child with a special need, — Expenses to transport the child to the the program will reimburse an additional home $1,500 in eligible expenses. A child with special needs often has a physical or emo- Call the UPS Benefi ts Service Center tional disability. at 1-800-UPS-1508 to request a UPS Adoption Assistance Program claim form.

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What is Not Covered by Your Adoption Assistance and Taxes Adoption Assistance Beneﬁ t Adoption assistance expenses are not The following expenses are not covered subject to federal income tax withholding by the UPS Adoption Assistance Program: but are subject to withholding of FICA taxes. Additionally, state or local income • Expenses incurred prior to the effective tax withholding may also be required if date of this plan or your eligibility for the state or municipality does not treat the this plan reimbursement as nontaxable. • Any costs when an adopting parent is related to (by blood or marriage) or a Certain amounts of your reimbursement stepparent of the child being adopted may be subject to income tax if your income is over a certain level, as deﬁ ned • Adoptions that are not legally recognized by the federal government. You may want • Personal items for the parents or child to consult a tax advisor. (food, clothing, etc.) • Charges associated with legal Taxable amounts are not grossed up to guardianship offset the tax liability. • Expenses related to the adoption of Employees may be eligible for a tax credit a person 18 years of age or older for expenses not reimbursed by UPS. • Donations or contributions Employees with unreimbursed adoption expenses should consult their tax advisor • Any costs when an adopting parent is to determine the availability of tax credits. the domestic partner of the parent of the child being adopted How to File a Claim • Consultant fee See the Filing a Claim section. • Any costs for or expenses of a surrogate mother (woman who is acting solely as a host of a fertilized egg)

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Personal Lines of Insurance Personal lines of insurance is a supplemen- Keep in mind that the rates quoted by tal group auto and home benefi t program MetLife Auto & Home or Liberty Mutual that provides you with access to insurance may not be the lowest in your area. You coverage for your personal insurance needs. are encouraged to shop around and com- Policies available include: pare prices and services before making • Auto a selection. • Landlord’s rental dwelling • Condo Paying for Coverage • Mobile home Payment for auto and/or homeowners • Renter’s insurance can be made via direct billing or through payroll deductions. Both Liberty • Recreational vehicle Mutual and MetLife Auto & Home offer • Boat an additional discount when payment is • Personal excess liability (“umbrella”) made via payroll deductions. The program gives you access to special group rates and policy discounts*. Addi- How to Purchase Insurance tional program benefi ts include 24-hour Call 1-800-UPS-1508 to be connected to claim reporting and coverage that you can Liberty Mutual or MetLife Auto & Home. take with you if you retire or leave UPS If you elect to purchase a policy, the paper- for any other reason. work is handled by the insurance carrier, You have a choice of insurance carriers for including notifi cation of the appropriate your personal lines of insurance. You may payroll deductions. All personal lines of choose to purchase one or more policies insurance deductions are taken on an after- from either of these carriers: tax basis. • Liberty Mutual® Benefi t Termination • MetLife Auto & Home® Your coverage under the auto and/or Although the personal lines of insurance homeowners insurance benefi t continues are described in this booklet, they are not until you notify the insurance carrier to offered as part of The Flexible Benefi ts Plan. discontinue coverage, or according to the * Group discounts, other discounts and credits may be available specifi c terms of the insurance policy. where state laws and regulations allow and may vary by state. To the extent permitted by law, applicants are individually underwritten and not all applicants may qualify. Portability If you retire or leave UPS for any other Enrollment reason, the portability option lets you continue your auto and/or homeowners You may enroll in the supplemental per- insurance through an individual policy; sonal lines of insurance benefi t at any time unless you notify your carrier to discon- of the year by calling 1-800-UPS-1508 to tinue coverage. You will be billed directly connect to either MetLife Auto & Home for the cost of your coverage. or Liberty Mutual.

Cost of Coverage How to File a Claim To ﬁ le a claim on your insurance policy, To obtain a quote for coverage, call contact the insurance carrier directly at the 1-800-UPS-1508 to be connected to either number provided on your policy, or call Liberty Mutual or MetLife Auto & Home. 1-800-UPS-1508 to be connected to Liberty Rates are subject to change. Mutual or MetLife Auto & Home.

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 9292 22/19/10/19/10 5:24:265:24:26 PMPM Summary Plan Description

Critical Illness Insurance Critical illness insurance (CII), which is Enrollment in sured by Metropolitan Life Insurance You may enroll in the supplemental critical Company (MetLife), is designed to give illness insurance benefi t at initial enrollment employees the peace of mind needed to or during annual enrollment periods. concentrate on recovery instead of fi nances. It provides a lump-sum benefi t payment if you or your covered dependent experiences Examples of Benefi t Uses a fi rst occurrence of the following medical You can use the CII benefi t for expenses conditions, as they are defi ned in the group associated with medical treatments or any insurance certifi cate: other living expenses you might have — you may use the payment as you see fi t. • Cancer Examples of expenses include: • Heart attack • Medical copays and deductibles • Stroke • Out-of-network treatments • Kidney failure • Prescription drug copays • Major organ transplant • Child care bills • Coronary artery bypass graft • Mortgage and rent payments The CII benefi t is available to active • Car payments employees in The Flexible Benefi ts Plan • Utility payments and other household bills and their eligible dependents.

CII benefi ts are provided through an insur- Benefi t Amounts ance contract with MetLife. If there is any Coverage is available in the following confl ict between the MetLife group contract- amounts. certifi cate and this description, the contract- Coverage For Amount of Coverage certifi cate provisions apply. You can obtain a copy of the contract-certifi cate by calling Employee Up to $100,000 in increments MetLife directly at 1-800-GET-MET8 or by of $10,000 connecting to MetLife at 1-800-UPS-1508. Spouse Up to $100,000 in increments of $10,000* Eligibility Child(ren) $5,000 Employees who are actively at work * A spouse’s coverage cannot exceed the employee’s maximum (working at least 15 hours per week and benefi t amount. regardless of age), along with their eligible dependents, may apply for coverage under the CII benefi t. In order for an eligible spouse or child to have coverage: • The employee must also have CII coverage, and • The eligible spouse or child must have medical coverage (although coverage may be through any medical plan, not just one offered by UPS)

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 9393 22/19/10/19/10 5:24:295:24:29 PMPM The Flexible Beneﬁ ts Plan

Critical Illness Insurance (cont.) Cost of Coverage Continuation of Coverage To determine how much the coverage will If you leave UPS upon retirement or for cost, visit www.metlife.com/mybeneﬁ ts. any other reason, the continuation of cov- Rates are subject to change and will erage option lets you continue your critical increase when a covered person enters illness insurance. You will be billed directly a new age band. for the cost of your coverage.

Paying for Coverage How to File a Claim Payment for CII coverage is made through For information about fi ling a claim or for payroll deductions. any other questions, call 1-800-GET-MET8 (1-800-438-6388) to speak with a customer Benefi t Termination service representative, or you can register www.metlife.com/ Your coverage under this benefi t continues on their Web site at mybenefi ts until you notify MetLife in writing to dis- . continue coverage. See Continuation of Coverage below for more information.

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 9494 22/19/10/19/10 5:24:325:24:32 PMPM Summary Plan Description

Long-Term Care Insurance Long-term care insurance, which is insured • Your children and stepchildren over age 18 by Metropolitan Life Insurance Company • Your parents (MetLife), protects you and your family • Your parents-in-law from the high cost associated with long- term care. It’s the type of care you need • Your grandparents when you’ve had an accident or illness • Your grandparents-in-law and are unable to care for yourself over an extended period of time. It provides You are guaranteed coverage in the long- assistance with daily activities like eating, term care insurance plan if you enroll bathing and dressing. Most health care within 90 days of your date of hire, as long plans, including those offered by UPS, are as you are actively at work (not absent due not designed to cover long-term care and to illness, disability or leave) on the effec- do not cover custodial care at all. tive date of your coverage. Otherwise, you must provide a statement of health and be Long-term care insurance benefi ts are pro- approved for coverage. Your eligible family vided through an insurance contract with members must provide a statement of MetLife. If there is any confl ict between health and be approved for coverage. the MetLife group contract-certifi cate and There are no age limits. this description, the contract-certifi cate provisions apply. You can obtain a copy of Enrollment the contract-certifi cate by calling MetLife You may apply for the long-term care directly at 1-800-GET-MET8. insurance plan at any time during the year. Call MetLife at 1-800-GET-MET8 Monday Coverage Options through Friday, 8:00 a.m. to 11:00 p.m. You have several options when electing Eastern Time. You will be sent an enroll- long-term care insurance. First, decide how ment packet and application. much coverage you want — $100, $200 or $300 per day. Then decide how long If you enroll in long-term care insurance, you want your coverage to last — three you will be provided with a certifi cate of years or fi ve years. insurance. If there is any confl ict between the certifi cate and this description, the cer- Non-Forfeiture Option tifi cate will apply. Plan features may vary by state. If you purchase this option and stop paying premiums, you keep a reduced level of Cost of Coverage benefi t (a percentage of your total lifetime benefi t). The amount will be based on the To determine how much the coverage will premiums you have paid after three years cost, visit www.metlife.com/mybenefi ts. and will last at least 30 days. Rates are subject to change.

Eligibility Paying for Coverage Individuals eligible for The Flexible Beneﬁ ts Payment for long-term care insurance Plan may elect long-term care insurance at coverage is made through after-tax payroll any time. Coverage is available for: deductions. • You • Your spouse

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 9595 22/19/10/19/10 5:24:355:24:35 PMPM The Flexible Beneﬁ ts Plan

Long-Term Care Insurance (cont.) Covered Services • Hospital care except for services in a distinct section licensed as a nursing home You will be eligible to receive benefi ts when or hospice facility you provide proof satisfactory to MetLife, and you have been certifi ed by a licensed • Expenses reimbursable by Medicare health care practitioner, that you are including deductible, coinsurance and chronically ill. Chronically ill means that you copayment amounts except where are unable to perform two of six “activities Medicare is the secondary payor of daily living” (also known as ADLs) — • Charges for which you are not legally eating, dressing, bathing, continence, trans- liable or which would not have been ferring (for example, from bed to chair), made if you were not a covered person or toileting; and are certifi ed by a licensed • Services by a member of your immediate health care practitioner to require assistance family for at least 90 days. You will also be eligible if you require substantial supervision to These exclusions may not apply in all states protect yourself due to a severe cognitive and may vary depending on the state in impairment, such as Alzheimer’s disease. which you live. The certifi cate of insurance Once you are approved for benefi ts, examples you receive once you are insured will out- of benefi ts provided by the plan include: line exactly the exclusions for your state. If you move to another state, the state guide- • Planning services, including an initial care lines where the certifi cate of insurance was advisory visit originally delivered to you will apply. • Facility services, including nursing home care, assisted living or Alzheimer’s facility Benefi t Termination care, and hospice care Your coverage under this benefi t continues • Home/community care services, including until you notify MetLife in writing or by home care, adult day care, and at-home phone at 1-800-GET-MET8 to discontinue hospice care coverage. See Portability below for more information. What the Plan Does Not Cover This Plan does not provide benefi ts for: Portability • Losses due to war or an act of war, par- If you leave UPS upon retirement or for any ticipation in a felony, riot, or insurrection other reason, the portability option lets you • Service in the armed forces or auxiliary continue your long-term care insurance; units unless you notify MetLife in writing or by • Care or treatment outside the U.S. or its phone at 1-800-GET-MET8 to discontinue territories coverage. You will be billed directly for the cost of your coverage. • Treatment for alcoholism or drug addiction (chemical dependency) unless such drug addiction results from a doctor’s care How to File a Claim Contact MetLife at 1-800-GET-MET8 for • Illness or injury that is intentionally information about fi ling a claim. self-infl icted • Treatment in a government facility unless required by law

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 9696 22/19/10/19/10 5:24:385:24:38 PMPM Summary Plan Description

Income Protection Plan A total disability following an accident or STD Coverage illness is something that most people don’t If you qualify for benefi ts, the STD plan pays like to think about. However, should such a percentage of your base pay. For the exact a tragedy occur, the Income Protection Plan percentage and details on how your benefi t helps you bridge the fi nancial gap caused as is calculated, refer to your SPD insert. a result of lost income. All employees covered by The Flexible Benefi ts Plan are provided The maximum STD benefi t is limited to with coverage in the event of a disability. 26 weeks in any rolling 18-month period for disabilities related to the same cause, There are two components to the income as determined by the claims administrator. protection plan: short-term disability and The number of weeks of STD you have long-term disability. Each of these is described available is determined by looking back in detail in this section. 18 months from the date you start your leave and reducing the maximum 26-week Short-Term Disability period by the number of weeks of STD you Short-term disability (STD) protects your have taken during that 18-month period income if you have an absence caused by for disabilities related to the same cause. an illness or accidental injury, as deter- A second disability related to an entirely mined by Aetna Disability and Absence different cause starts a new rolling Management (ADAM). An absence for 18-month period for that disability. maternity is treated like an absence for illness. STD benefi ts are paid at the same interval that you are paid as an active employee; Eligibility for STD Coverage for example, benefi ts are paid weekly if you are a weekly-paid employee. Short-term disability coverage is available to active full-time and part-time employees If you are an Administrative or Technical who are eligible for coverage under The employee, your STD payment is based Flexible Benefi ts Plan. on your average, weekly base pay, which is calculated by averaging the paid hours When You Become Covered for STD (maximum of 40 per week) each week STD coverage is effective the date you become during the last quarter in which you eligible for coverage under the Plan. worked the complete quarter, and multiplying that average by your hourly rate. When Your Coverage for STD Ends A complete quarter is a quarter in which you have paid hours in each week of the Your eligibility for STD coverage under the quarter. Plan automatically ends when one of the following occurs, whichever is earliest: If you did not work the complete quarter, • Your employment with UPS terminates the Plan will look back a maximum of four (see Your Employment Status in this quarters for the most recently worked com- section for additional information) plete quarter. If there is no complete quar- • Your eligibility for coverage under ter in the last four, the Plan uses the quarter The Flexible Benefi ts Plan ends with the most hours worked. The number of hours (maximum of 40 per week) and • You retire, or the number of weeks you worked in that • You enter full-time military service quarter (not the total number of weeks in the quarter) are used to calculate your average weekly base pay.

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Income Protection Plan (cont.) If you are a Management or Specialist STD Exclusions and Limitations employee, your STD benefi t payment is No STD benefi ts are payable from this based on your monthly base pay. Base Plan for any disability that results from: pay is your regular weekly, semi-monthly or monthly pay, excluding any overtime, • Intentionally self-infl icted injuries bonuses or incentives. • Participation in a felony • War, or act of war (whether such is Qualifi cations for declared or not), insurrection, rebel- Receiving STD Benefi ts lion, or participation in a riot or civil For STD purposes, you are considered dis- commotion abled if the claims administrator, ADAM, • Serving on active duty in any armed determines that you are unable to perform forces of any government the material and substantial duties of your • Any vague or indefi nable condition that regular occupation because of an illness or cannot be described by a standard medi- injury. In some cases, STD benefi ts will be cal nomenclature diagnosis reduced if you refuse to participate in the residual disability return-to-work program. No STD benefi ts are payable for days when you receive: Your date of disability (as determined by • Discretionary days (such as sick pay the claims administrator) must occur while or optional holiday pay, if applicable) you are covered under The Flexible Benefi ts • Holiday pay Plan and prior to your termination date. • Vacation pay The fact that UPS has approved a leave of absence, made an accommodation (in When STD Benefi ts Begin keeping with Americans With Disabilities For Administrative and Technical employ- Act rules) or does not allow you to return ees, benefi ts begin on the fi rst work day of to work in another position as a result of an absence due to an injury and the fourth an injury or illness does not mean that you work day of an absence due to an illness. are “disabled” as defi ned by the Income The period of time prior to when your Protection Plan. benefi ts begin is considered your “waiting Qualifi cation for STD benefi ts is subject period.” Any unused discretionary days to you (or your physician at your request) up to three will be used fi rst before STD providing objective clinical medical infor- benefi ts are paid for an illness. mation to ADAM that supports your For Management or Specialist employees, disability. You may also need medical benefi ts begin on the fi rst work day of an approval prior to returning to work. absence due to an injury or an illness. See State-Mandated Benefi ts in this section for more information regarding the interac- Residual Disability/Return to Work tion of Plan benefi ts and state-mandated Program While Receiving STD Benefi ts disability benefi ts. The Plan will pay a residual benefi t if you return to work, at UPS or another employer, while recovering from a disability. You will be considered residually disabled if you

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 9898 22/19/10/19/10 5:24:455:24:45 PMPM Summary Plan Description

perform any work for wage or profi t while benefi ts by the amount of the state plan disabled as defi ned by the Plan. The benefi t benefi ts so that the combined amount paid you receive from STD will be calculated as by the UPS Plan and the state plan would follows: your STD benefi t minus 75 percent be no more than the amount the UPS Plan of any earnings you receive while you are would pay if there were no other coverage. disabled. The claims administrator will automatically offset your UPS benefi ts unless you Your residual earnings from all sources, provide documentation that you are not combined with your STD payment, may not receiving state disability benefi ts. exceed 100 percent of your pre-disability base pay and any earnings (including earn- Hawaii, New Jersey and New York have ings from other employers). Your STD pay- state-mandated benefi ts. In these states, the ment will be reduced by any amounts amount paid to you will be the greater of in excess of your pre-disability earnings. either the state-mandated benefi t or your STD benefi t, but not both. If ADAM and UPS determine that you can return to work for UPS under a residual If you work in California, Hawaii, New disability program, and you fail to do so, Jersey, New York or Rhode Island and you your STD benefi t payment will be offset by do not satisfy the income protection plan’s the amount you would have received as a defi nition of disability (see Qualifi cations residual disability benefi t. for Receiving STD Benefi ts in this section), you may still qualify for the applicable For purposes of this return-to-work pro- state’s mandated benefi t. Depending on the gram, you may be asked to return in any state, state-mandated benefi ts may be paid position for which you are reasonably under the income protection plan or by a qualifi ed based on your education, training state-administered program. In addition, the or experience. fact that you are entitled to state-mandated If you return to work under a residual dis- benefi ts in California, Hawaii, New Jersey, ability program, that time at work counts New York or Rhode Island does not mean as part of your overall disability period. that you are “disabled” as defi ned by the This means that your time at work under a income protection plan. residual disability program will not extend If the Plan determines that you do not sat- your disability period maximum. isfy its defi nition of disability, but you are deemed disabled under the applicable state Health Care Coverage and STD standard in: For information about continuation of • California or Rhode Island: You will not your health care coverage when you are receive benefi ts from the Plan. on an approved disability, see Health Care • Hawaii, New Jersey or New York: You Coverage and the Income Protection Plan will receive only the state-mandated in this section. benefi t from the Plan. In addition, there may be other remedies available to you State-Mandated Benefi ts through the applicable state’s department California and Rhode Island have state- of labor or other agency. You will be administered disability benefi ts. In these notifi ed of your additional rights under states, the UPS Plan offsets your STD state law in your claim denial letter.

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Income Protection Plan (cont.) STD Benefi t Offsets that represents disability benefi ts will be Your STD benefi t will be reduced in full offset over the period for which the sum by other earnings (subject to the residual is given. If no period is given, the sum will disability provisions) or disability income be prorated as an offset over the 26-week you may receive, or be eligible to receive, STD period. including: As an example, if you receive a $100,000 • Any residual disability/return-to-work settlement (that represents disability amounts that you may be eligible to earn benefi ts) and your STD benefi t is $1,000 • Any Workers’ Compensation payment per month after all other offsets have been • Any amount you receive from another taken, you would receive no disability ben- group insurance plan (individual insur- efi t from The Flexible Benefi ts Plan for 100 ance plans are not offset) months, until the full $100,000 had been offset. At that time, your disability benefi t • Any no-fault or third-party benefi t would begin again (to the extent you were or settlement still eligible). This example assumes quali- • Any disability benefi ts received from the fi cation for LTD coverage after the STD Veterans Administration benefi t period ends. • Any primary benefi ts received under the Social Security Act If ADAM is unable to determine the exact amount of the award that represents dis- • Any incorrectly paid STD or LTD benefi ts ability benefi ts, 50 percent of the award • State-mandated benefi ts as described in will be considered disability benefi ts. This this booklet includes retroactive awards. Prorated offsets will begin when the lump sum payment It is a requirement of the Plan that you is made. apply for the Social Security disability insurance benefi t as well as any state-pro- In the event that you receive STD benefi ts vided disability benefi ts to which you may for an illness or injury that is later deter- be entitled. You are also required to appeal mined to be an occupational illness or any denials. If you do not apply, or appeal injury, you will be required to reimburse denials, the claims administrator, ADAM, the Plan for any STD benefi ts you have will estimate the Social Security amount received to date for that condition. and/or state-provided disability benefi t that you could have received and offset your Additionally, if your remaining STD benefi t benefi t by that amount. period is not suffi cient to repay amounts that would not have been paid to you (for Additionally, it is a requirement of the Plan example, if your Workers’ Compensation that you apply for Workers’ Compensation claim had been determined earlier): if your disability is work-related. • Either your Workers’ Compensation Should you receive a lump sum payment benefi ts will be reduced by the amount (for example, from Social Security, or a owed to the Income Protection Plan (to no-fault or third-party settlement related the extent allowed by law), or to your injury or illness), the portion of • You will be required to reimburse the that total payment (less any attorney fees) Plan for excess STD benefi t payments

100

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Taxes and Your STD Benefi t • You fail to comply with an independent Important Note medical examination, functional capacity STD benefi ts are taxed when paid to you. About LTD Coverage See your SPD Insert for further details evaluation or other evaluation as may You’re responsible for any about receiving a W-2 form. be required by the claims administrator • You begin receiving benefi ts from the LTD costs based on your UPS Retirement Plan option. If you fail to enroll When STD Benefi ts End for LTD coverage, you will You should contact your manager to keep • You have been paid the maximum be assigned Option 3 and him or her informed of your return-to- disability period of 26 weeks for STD will be responsible for any work status. If you qualify for long-term benefi ts costs associated with disability benefi ts, ADAM will automati- If you can’t return to work when your the coverage. cally refer your case to MetLife for LTD benefi ts end, and you are a part-time coverage, or you may call MetLife at employee not eligible to apply for LTD, 1-877-638-4877 to discuss your qualifi ca- you may be eligible for Permanent and tions for LTD benefi ts. Total Disability coverage. See Permanent Certain conditions, as listed below, could and Total Disability (PTD) for Part-Time cause your STD benefi ts to be terminated: Employees in the Life Insurance and AD&D section of this booklet. • You cease to have a “disability” that qualifi es you for benefi ts under the Plan, as determined by the claims administrator Long-Term Disability • Terminate employment due to a pre- Long-term disability (LTD) coverage pro- disability scheduled termination date (for vides protection from disabilities caused example, because of resignation, a facility by an occupational or non-occupational closing, or a reduction in workforce) illness or injury that last longer than the 26-week STD benefi t period, as determined • You fail to provide objective clinical by Metropolitan Life Insurance Company medical documentation requested by the (MetLife), the LTD claims administrator. claims administrator. ADAM can request additional medical documentation of an • MetLife is the insurer for all long-term ongoing disability as often as it deems disability claims that have been approved reasonably necessary as of December 21, 2009. • You fail to comply with a reasonable • For all other long-term disability claims course of medical treatment and care that are not covered in accordance with necessary and appropriate to treat and/ the insurance contract mentioned below, or resolve the condition for which you’re UPS continues to temporarily fund the receiving disability benefi ts, including, long-term disability claims (“self funded but not limited to, receiving treatment claims”) and MetLife is the claims admin- from a health care or mental health istrator and the claims fi duciary. (See the professional who does not have appropri- If a Claim is Denied section of this book- ate training and experience in the fi eld let for more information about claims of medicine related to your particular fi duciaries.) You will receive notice when disability MetLife takes fi nancial responsibility for these claims.

101

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Income Protection Plan (cont.) • MetLife insures long-term disability ben- never becomes effective because you do efi ts for all qualifying disabilities arising not return to work, you will continue to on or after January 1, 2010, in accor- be covered at the option level that was in dance with an insurance policy issued effect prior to the requested increase. by MetLife to UPS. If there is a confl ict between that policy (and the associated When Your Coverage for LTD Ends insurance documentation) and this sum- Eligibility for LTD coverage under the Plan mary, that policy (and any the associated will automatically end for any disability insurance documentation) controls. that occurs after the earliest of these events: You can request a copy of that policy by • Your employment with UPS is terminated contacting MetLife at 1-877-638-4877. (see Your Employment Status in this Eligibility for LTD Coverage section for additional information) • You retire LTD coverage is a benefi t generally available only to full-time employees who are • You cease to be an eligible employee eligible for medical coverage under The • You enter full-time military service Flexible Benefi ts Plan. • You die, or • You cease making contributions for the Permanent and Total Disability (PTD) benefi t for Part-Time Employees If you are a part-time employee and not If your participation in LTD coverage ends, eligible for LTD coverage and you become you may enroll only during the annual permanently and totally disabled while a enrollment period, assuming you meet all participant in The Flexible Benefi ts Plan, eligibility requirements under The Flexible you may be eligible to receive a lump sum Benefi ts Plan. benefi t from your basic employee life insurance. See the Life Insurance and AD&D LTD Coverage Options section for more information. If you qualify for benefi ts, the LTD plan pays a percentage of your monthly base When You Become Covered for LTD pay, depending on the coverage option LTD coverage is generally effective on the you elect during an enrollment period. date your other Plan coverage is effective. Depending on the option you choose, you However, it could be delayed under certain may be responsible for a portion of the cost circumstances. of LTD coverage. Your cost share, if any, will be deducted from each paycheck you If you increase your coverage for any receive. reason and are ill or injured and absent from work on the date the increased For hourly paid employees, your monthly coverage would otherwise start, the newly base pay is calculated by multiplying your elected coverage will not be effective until average weekly straight-time pay by 52 after you return to work for at least one weeks, then dividing by 12 months, exclud- full day. You are considered “absent from ing any overtime, bonuses or incentives. work” for these purposes even if you perform limited work from home while you are ill or injured. If the increased coverage

102

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If you are a salary paid employee, base of vesting service for your age, even if you pay is your regular weekly, semi-monthly are offered a No Coverage option. You can or monthly pay, excluding any overtime, determine your years of vesting service at bonuses or incentives. Planning Your Financial Future. Find the link at www.UPSers.com. Your base pay as of July 31 of the previous year (or as of your hire date, if later) Two-Year Rule for LTD Coverage Election is used to calculate your share, if any, of the cost of LTD coverage. Your cost share There is a two year lock-in period for the and coverage level will not change during LTD election you make. This means that the calendar year, even if your base pay you must keep your election for two years changes. You have three LTD options from before you can change your election. For which to choose. newly eligible employees, a partial year • Option 1 — 50 percent of monthly counts as a full year. base pay • Option 2 — 60 percent of monthly Qualifi cations for base pay Receiving LTD Benefi ts • Option 3 — 60 percent of monthly LTD benefi ts, if approved by MetLife, are base pay to a maximum of 5 years payable to eligible full-time employees who are determined by the claims administra- It’s important to note that with Option 3, tor to be disabled and who have exhausted benefi t payments cease at the end of fi ve their STD benefi ts. You are considered to years, even if you are still disabled. have “exhausted” your STD benefi ts when If you are a newly eligible employee who you are no longer eligible to receive STD does not make an election, you will be benefi ts because you have received the assigned Option 3, which provides 60 per- maximum STD benefi t allowed under the cent of monthly base pay to a maximum Plan. If your STD benefi ts are denied for of fi ve years. You’re responsible for any any reason prior to receiving the maximum LTD costs. benefi t, you have not “exhausted” your STD benefi ts and you are not eligible for You may use vacation pay accrued prior LTD benefi ts. to your disability to bring your benefi t up to 100 percent. For the fi rst 24 months of disability under LTD, you are considered disabled if MetLife No LTD Coverage Option determines that you are unable to perform If you meet certain age and years of service the material and substantial duties of your requirements, you will have a No Coverage regular occupation due to an illness or option. Before electing the No Coverage accidental injury. option, you must verify that you are (or After 24 months of payments, you will be will be as of January 1 in the case of annual considered disabled if MetLife determines enrollment) at least age 55 with 10 years of UPS Retirement Plan vesting service or age that you are unable to perform the material 65 with fi ve years of UPS Retirement Plan duties of any gainful occupation for which vesting service. It is your responsibility to you are reasonably qualifi ed based on your ensure that you have the adequate years education, training or experience; except for psychiatric benefi ts, which end at 24 months.

103

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Income Protection Plan (cont.) Gainful occupation means any occupation When Your LTD Benefi ts Begin for which you are reasonably qualifi ed In general, once approved by MetLife, your based on education, training or expertise at LTD benefi ts begin when your STD benefi ts which you could earn at least 60 percent of have been exhausted. your pre-disability base pay. Residual Disability/Return to Work LTD Exclusions and Limitations Program While Receiving LTD Benefi ts No LTD benefi ts are payable from this Plan During the fi rst 24 months of LTD, for any disability that results from: the Plan will pay a residual benefi t if • Intentionally self-infl icted injuries, while you return to work, at UPS or another sane or insane employer, while recovering from a dis- • Participation in a felony ability. You will be considered residually • War, or act of war (whether such is disabled if you perform any work for wage declared or not), insurrection, rebel- or profi t while disabled. The benefi t you lion, or participation in a riot or civil receive from LTD will be calculated as commotion follows: • Any vague or indefi nable condition that • Your LTD benefi t minus cannot be described by a standard medi- • 75 percent of any earnings you receive cal nomenclature diagnosis while you are disabled • Any disability that begins prior to LTD Your residual earnings from all sources, coverage under the Plan combined with your LTD payment, may not • Psychiatric or nervous conditions, exceed 100 percent of your pre-disability substance abuse and/or alcoholism earnings (including earnings from other (non-physical), except during the fi rst employers). Your LTD payment will be 24 months of LTD. After 24 months, reduced by any amounts in excess of your if you are confi ned in an accredited pre-disability earnings. hospital due to a non-physical condition on the day that benefi ts would otherwise During the fi rst 24 months of disability end, LTD coverage will only be continued under LTD, if MetLife and UPS determine if and for as long as you remain confi ned that you can return to work for UPS under in such hospital for the treatment of a a residual disability program, and you fail psychiatric/nervous condition. to do so, your LTD benefi t payment will be offset by the amount you would have Additionally, the Internal Revenue Code received as a residual disability benefi t. For limits the compensation that can be used purposes of this return-to-work program, in computing long-term disability benefi ts. you may be asked to return in any position The calculation of long-term disability for which you are reasonably qualifi ed benefi ts under the Income Protection Plan based on your education, training or expe- will be limited to annual base compensa- rience. If you return to work under a resid- tion levels not exceeding $245,000, as ual disability program, that time at work indexed for infl ation. If your annual base counts as part of your overall disability compensation exceeds $245,000 per year, period. This means that your time at work you may be eligible for additional LTD under a residual disability program will not benefi ts under the UPS Coordinating extend your disability period maximum. Benefi t Plan.

104

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LTD Benefi t Offsets Taxes and Your LTD Benefi t Your LTD benefi t will be reduced in full LTD benefi ts are taxed when paid to by other disability income or earnings you. The claims administrator, MetLife, you may receive, or be eligible to receive, will create all W-2 forms for any benefi ts including: received under the LTD Plan. • Any amount received from a compulsory state disability plan Health Care Coverage and LTD • Any Workers’ Compensation payment For more information about continuation of your health care coverage while on an • Any residual disability/return-to-work approved disability, see Health Care amounts that you may be eligible to earn Coverage and the Income Protection Plan • Any amount you receive from another in this section. group insurance plan (individual insurance plans are not offset) When Your LTD Benefi ts End • Any no-fault or third-party benefi t or LTD benefi ts will be terminated when an settlement eligible employee reaches age 65, if the date • Any disability benefi ts received from the of disability is prior to age 62. If disabled Veterans Administration on or after age 62, LTD benefi ts terminate • Any primary benefi ts received under the in accordance with the following schedule: Social Security Act If you were Your benefi ts • Any incorrectly paid STD or LTD benefi ts disabled at: continue: Age 61 or younger To end of the month It is a requirement of the Plan that you you reach age 65 apply for the Social Security disability insurance benefi t as well as any state-provided Age 62 For 42 months disability benefi ts to which you may be Age 63 For 36 months entitled. You are also required to appeal Age 64 For 30 months any denials. If you do not apply, or appeal denials, the claims administrator, MetLife, Age 65 For 24 months will estimate the Social Security amount Age 66 For 21 months and/or state-provided disability benefi t that Age 67 For 18 months you could have received and offset your benefi t by that amount. Age 68 For 15 months Age 69 or older For 12 months Should you receive a lump sum payment (for example, from a no-fault or third-party In addition to the above schedule, there settlement or Social Security), your LTD are certain conditions, as listed below, benefi t from the Plan will be reduced in full that could cause your LTD benefi ts to be until the amount of the lump sum payment terminated: that represents disability benefi ts has been completely offset. If MetLife is unable to • You cease to have a disability as defi ned determine the exact amount of the award by the Plan and as determined by MetLife that represents disability benefi ts, 50 percent • You terminate employment due to a pre- of the award will be considered disability disability scheduled termination date (for benefi ts. This includes retroactive awards. example, because of resignation, a facility Prorated offsets will begin when the lump closing or a reduction in workforce) sum payment is made.

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Income Protection Plan (cont.) • You fail to provide objective medical are receiving a paycheck from UPS). At the documentation requested by MetLife latest, coverage will end on the last day of • You fail to comply with a reasonable the twelfth (12th) full month of continuous course of medical treatment and care disability, as long as you continue to pay necessary and appropriate to treat and/ your share of the cost. or resolve the condition for which You cannot change your elections for life you’re receiving disability benefi ts which or AD&D insurance while you are absent includes, but is not limited to, your due to disability. receiving treatment from a health care or mental health professional who does not When your 12-month extension of health have appropriate training and experience care coverage ends, you and your depen- in the fi eld of medicine related to your dents may elect COBRA continuation for particular disability 18 months, for a total of 30 months of • You fail to comply with an independent continued coverage. (See the Continuation medical examination, functional capacity of Coverage Under COBRA section for evaluation or other evaluation as may be more information.) Or, if you are eligible required by MetLife and approved for LTD benefi ts, you may • You fail to apply, reapply and appeal begin health care and basic life insurance any denials of Social Security disability coverage for you and your dependents and insurance benefi ts as well as any state- basic AD&D coverage for you under the provided disability benefi ts to which you Retired Employees’ Health Care Plan. You may be entitled, until all such applica- will receive a Summary Plan Description tions and appeals are exhausted for your LTD health care, life insurance and AD&D coverage when you are • You begin receiving benefi ts from the approved for LTD. UPS Retirement Plan • You fail to comply with a residual UPS pays for coverage in the Retired disability/return to work plan approved Employees’ Health Care Plan for the fi rst by MetLife and UPS 18 months in the Plan. Thereafter you • You elected LTD Option 3 and have are required to pay the cost of coverage. reached the end of the fi ve-year benefi t Any credits you have accrued through the period (even if you are still disabled) UPS Retirement Plan at the time of your disability are used to offset your cost. Health Care Coverage and Credits accrue only while you are an active the Income Protection Plan employee. See your UPS Retirement Plan SPD for information about credits. You and your covered dependents will continue to receive Flexible Benefi ts Plan If you become eligible for Medicare ben- coverage for up to 12 months following efi ts as a result of a disability, there are the date of your disability, as long as you rules that determine whether The Flexible continue to be approved for benefi ts by Benefi ts Plan pays benefi ts fi rst, or whether the claims administrator. You continue to Medicare is primary. See Coordination be responsible for your share, if any, of With Medicare in the Filing a Claim the cost of coverage either through billing section. statements or payroll deductions (if you

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The Flexible Benefi ts Plan does not cover determine whether you are eligible for an any expenses related to an occupational accommodation under applicable law and, disability. You must submit claims directly if so, whether a reasonable accommoda- related to your occupational disabilities to tion is available (refer to the UPS Equal the Workers’ Compensation Administrator. Opportunity Statement, available at www.UPSers.com). Your Employment Status If an accommodation request is being Except as limited below, if you are absent processed at the 12-month date, an admin- from your regular occupation for 12 months, istrative termination will not occur, and you will be administratively separated from health care coverage under The Flexible employment, regardless of your status on Benefi ts Plan will continue, until a decision STD or LTD. has been made regarding the accommo- You must return to your regular occupa- dation request. Once the 12-month date tion or any position provided as a reason- has passed, you will be administratively able accommodation under the Americans separated if you fail to participate in the With Disabilities Act (ADA) (or state interactive process or at such time as UPS equivalent) for at least 30 calendar days has determined that no reasonable accom- before a new 12-month period will begin. modation is available or that providing Time spent performing modifi ed work an accommodation would be an undue under the Residual Disability Program is burden. not provided as a reasonable accommodation under the ADA (or state equivalent); Right of Recovery Provision thus such time is considered an absence In some situations, you or your covered and does not extend this 12-month period. dependents may be entitled to certain pay- For example, if your disability begins July ments from another source following an 15, 2009, you will be administratively injury or illness, or you may receive Plan separated July 14, 2010. payments in error. See Right of Recovery Provision in the Filing a Claim section If your disability should end after your for details on the Plan’s right of recovery separation and you are able to return to provisions. work, you will be considered for employment based on your experience and skills, How to File a Claim as would any other applicant. See the Filing a Claim section. Reasonable Accommodation Assessment If, during your 12-month absence, you have requested an accommodation (or UPS has enough information to already know that an accommodation may be necessary) under the ADA (or state equivalent), you will be referred to a Human Resources representative responsible for ADA (or state equivalent) compliance to

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Filing a Claim This section reviews what you need to Behavioral Health do to fi le claims for the different benefi t If your provider does not fi le a claim for options in The Flexible Benefi ts Plan. If you, send your invoice to: you have any questions about fi ling claims, please call the appropriate carrier. ValueOptions PO Box 1347 Medical Latham, NY 12110-8847 When to File a Claim If you have a question about a claim, you may call 1-800-UPS-1508. If you participate in the Traditional PPO or Healthy Savings PPO medical option Claims must be received within 12 months and receive care through network providers, after the date the service or treatment you generally won’t have to worry about is given or no benefi ts will be paid. Any fi ling medical claims. On your fi rst visit to reimbursement checks that are not cashed your network provider, you’ll sign a form within 12 months from the date of the to assign benefi ts. For subsequent visits, check are void and you lose any rights your network provider will take care of to such reimbursement. claims for you. Prescription Drugs You will be responsible for fi ling your own claims if you use providers not participat- The procedure for fi ling prescription drug ing in the network, although some out-of- claims depends on whether you fi ll your network providers will fi le claims on your prescription at a Medco retail pharmacy behalf. or through the Medco By Mail program.

You should fi le medical claims as soon as Claims must be received within 12 months possible after the date you are billed. If from the date the service or treatment is your medical claim is not received within given, or no benefi ts will be paid. Any 12 months after the date the service or reimbursement checks that are not cashed treatment was provided, no benefi ts will within 12 months from the date of the be paid. check are void and you lose any rights to such reimbursement. Completing a Medical Claim Form At a Participating Pharmacy If you are required to fi le your own claims, the claim form must be completed by you If you fi ll your prescription at a participat- and the provider of services. Complete the ing Medco retail pharmacy, you do not have form in full. You can either attach itemized to fi le a claim form. You simply present bills or have your doctor complete the your Medco ID card and pay your share physician’s section of the form. of the cost at the pharmacy. Send the completed form to your claims At a Non-Participating Pharmacy administrator at one of the addresses If you use a non-participating pharmacy, shown below: fail to present your Medco ID card or Aetna have transition coverage, you must pay PO Box 14079 the full amount of your prescription and Lexington, KY 40512-4079 then submit a completed claim form for reimbursement. Claim forms are available UnitedHealthcare PO Box 740800 Atlanta, GA 30374-0800

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at www.medco.com or by calling Medco Vision at 1-800-346-1327. Mail the completed If you use a VSP provider, your provider form to: will fi le all necessary claim forms. Medco Health Solutions of Dallas PO Box 650322 If you use a non-VSP provider, you must Dallas, TX 75265-0322 pay the full amount of the charges and then submit a completed claim form for Medco By Mail Program reimbursement. Claim forms are available at www.vsp.com or by calling VSP You don’t fi le claim forms if you fi ll your at 1-800-877-7195. Mail the completed maintenance drug prescriptions through the form to: Medco by Mail program. To order drugs through the program, send your prescrip- Vision Service Plan tion with your coinsurance (if payment is 3333 Quality Drive necessary), a Medco mail order form and Rancho Cordova, CA 95670 your patient questionnaire (if you’re a fi rst- Claims must be received within 12 months time user) to the address on the order form. after the date the service or treatment Mail order forms and patient question- is given or no benefi ts will be paid. Any naires are available at www.medco.com. reimbursement checks that are not cashed Your prescription will be immediately fi lled within 12 months from the date of the and sent to you. You will not be charged check are void and you lose any rights to for shipping costs. such reimbursement.

Dental Tax-Advantaged If you seek care from an Aetna Dental Reimbursement Accounts PPO participating provider, the provider Streamlined claims submission and/or will submit your claim to Aetna. If you use direct deposit may be available for con- a non-participating dentist, you may be venient reimbursement of your eligible required to submit your itemized statement HCSA, LPSA and C/ECSA expenses. See with a claim form. You may obtain a claim the Tax-Advantaged Reimbursement form by calling 1-800-UPS-1508. Send the Accounts section of this book for complete completed claim form to: information, including how to enroll. Aetna If you choose not to participate in stream- PO Box 14094 lined claims submission and direct deposit, Lexington, KY 40512-4094 or have expenses that cannot be stream- Claims must be received within 12 months lined, claim forms for the HCSA, LPSA after the date the service or treatment and C/ECSA tax-advantaged reimbursement is given or no beneﬁ ts will be paid. Any accounts are available at www.aetna.com reimbursement checks that are not cashed or by calling Aetna Member Services. within 12 months from the date of the Complete and return the form together check are void and you lose any rights to with the required substantiation to the such reimbursement. address below, or fax to 1-888-238-3539 (1-800-AET-FLEX). Aetna FSA PO Box 4000 Richmond, KY 40476-4000

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Filing a Claim (cont.) Life Insurance and AD&D The representative will send you a release form that allows ADAM to obtain infor- Contact Prudential Life Insurance Company mation about your condition. Your claim at 1-877-877-2955 for information about will then be assigned to a case manager, fi ling life insurance and AD&D claims. who will assist you in gathering the Claims must be received by Prudential required documentation from your doctor. within 12 months of the date of the death If you do not return the release and reim- or accident, or no benefi ts will be paid. bursement forms in the time specifi ed, you Any reimbursement checks that are not may not be eligible for benefi ts. It is your cashed within 12 months from the date responsibility to obtain and submit clinical of the check are void and you lose any medical information to ADAM that sup- rights to such reimbursement. ports your disability.

Short-Term Disability If you are an Administrative or Technical If you become unable to work because of employee, contact ADAM at the end of an injury or illness, you may fi le a claim your applicable waiting period. online from a link at www.UPSers.com, or If you are a Management or Specialist go directly to www.wkabsystem.com. Enter employee, contact ADAM at the end of UPS as the Company Identifi er and your two weeks. If you do not call at the end employee ID as the User ID. When you fi rst of two weeks, your regular UPS paycheck access this site, you’ll need to click New may be interrupted, since ADAM must User Registration and choose a password notify UPS to continue your pay. that you will enter each time you visit the site. Or, call 1-800-UPS-1508 to reach a In any case, claims must be received (via representative from Aetna Disability and phone or Web) within 60 days of the initial Absence Management (ADAM), the STD date of disability in order to receive STD claims administrator. The ADAM represen- benefi ts. tative will: • If your claim is approved, you will • Ask you for information: receive an approval letter providing you — Name and address of UPS, date of a number to call if you have questions hire and supervisor’s name and phone about your coverage, and indicating your number expected return-to-work date. ADAM — Your name, phone number, home will notify UPS of your anticipated address and Employee ID or Social return-to-work date and your claim Security number approval. You should receive your fi rst — The date of your injury or illness and weekly payment within two weeks (if the fi rst day you were absent from you are an Administrative or Technical work employee) from the date your claim is — Your doctor’s name, address and approved. phone number, the date you were fi rst • If your claim is denied, you’ll receive a treated for this condition, and your letter providing specifi c reasons for the next appointment denial, with specifi c instructions for how • Verify how you became disabled to appeal the denial. (See the If a Claim • Explain the STD claim process, including is Denied section for more information.) the need to obtain medical information ADAM will notify UPS that your claim from your doctor has been denied. You should contact your manager to schedule your return to work.

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Long-Term Disability Right of Recovery Provision If you have been receiving STD benefi ts and This section describes the Plan’s right to qualify for LTD, your case manager will seek reimbursement of expenses that are automatically refer your case to MetLife, paid by the Plan on behalf of you or your the LTD claims administrator, for deter- covered dependents (referred to in this mination of LTD eligibility. If you do not section as a “covered individual”) if those have a case manager, contact MetLife at expenses are related to the acts of a third 1-877-638-4877 or online at www.metlife. party (for example, if you are involved in com/mybenefi ts to fi le your claim. an automobile accident). The Plan may seek reimbursement of these expenses from Remember that, while STD benefi ts any recovery you may receive from the are paid weekly, LTD benefi ts are paid third party or another source, including monthly, near the end of each month. from any insurance proceeds, settlement amounts or amounts recovered in a law- Adoption Assistance suit. The terms of the Plan’s reimbursement Eligible expenses are reimbursed after rights are described below. legal custody is obtained from a court of law. Follow these steps to fi le for If a covered individual incurs expenses reimbursement: covered by the Plan as a result of the act of a third party (person or entity) you may • Contact the Benefi ts Service Center at receive benefi ts pursuant to the terms of the 1-800-UPS-1508 to request an Adoption Plan. However, the covered individual shall Assistance Reimbursement form be required to refund to the Plan all ben- • Complete the form and attach all item- efi ts paid if the covered individual receives ized bills and legal documentation (must any recovery from any other party (such as be translated into English if an interna- proceeds from a settlement, judgment, law- tional adoption) suit or otherwise as a result of the act). The • Send the form and documentation to: covered individual may be required to: Adoption Assistance Program 1. Execute an agreement provided by UPS United Parcel Service (“the Company”) or the claims admin- 55 Glenlake Parkway, NE istrator acknowledging the Plan’s right Atlanta, GA 30328 of recovery, agreeing to repay any claims paid by the Plan, pledging amounts Once reimbursement is approved, you will recovered by the covered individual from receive a check from your local Human the third party as security for repayment Resources representative with applicable of any claims paid by the Plan, and to taxes deducted. Allow three weeks for pro- the extent provided below, assigning the cessing your reimbursement request. covered individual’s cause of action or other right of recovery to the Plan. If the Claims must be received within 12 months covered individual fails to execute such after the date of legal custody or no benefi ts an agreement, by fi ling claims (assign- will be paid. Any reimbursement checks ing benefi ts or having claims fi led on that are not cashed within 12 months from your behalf) related to such act of a the date of the check are void and you lose third party, the covered individual shall any rights to such reimbursement. be deemed to agree to the terms of this reimbursement provision; 2. Provide such information as UPS or claims administrator may request;

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Filing a Claim (cont.) 3. Notify UPS and/or the claims administra- or subrogation, a portion of the covered tor in writing by copy of the complaint individual’s claim equal to the amounts the or other pleading of the commencement Plan has paid on the covered individual’s of any action by the covered individual behalf. The Plan may thereafter commence to recover damages from a third party; proceedings directly against any respon- 4. Agree to notify UPS and/or the claims sible third party. The Plan shall not be administrator of any recovery. deemed to waive its rights to commence action against a third party if it fails to act The Plan’s right to recover the benefi ts it after the expiration of one year, nor shall has paid is subject to reduction for attor- the Plan’s failure to act be deemed a waiver ney’s fees and other expenses of recovery. or discharge of the lien described above. The reduction is limited to the lesser of actual attorney fees and other expenses or The covered individual shall cooperate one-third of the Plan’s lien. The Plan’s right fully with the Plan in asserting claims to recover benefi ts shall apply to the entire against a responsible third party and such proceeds of any recovery by the covered cooperation shall include, where requested, individual. This includes any recovery by the fi ling of suit by the covered individual judgment, settlement, arbitration award against a responsible third party and the or otherwise. The Plan’s right to recover giving of testimony in any action fi led by shall not be limited by application of any the Plan. If a covered individual fails or statutory or common law “make whole” refuses to cooperate in connection with the doctrine (in other words, the Plan has a assertion of claims against a responsible right of fi rst reimbursement out of any third party, the Plan Administrator may recovery, even if the covered individual deny payment of claims and treat prior is not fully compensated), or the charac- claims paid as overpayments recoverable terization of the nature or purpose of the by offset against future Plan benefi ts or amounts recovered or by the identity of the by other action of the Plan Administrator. party from which recovery is obtained. In addition, the Plan has a right to recover The Plan shall have a lien against the proceeds benefi ts that were paid in error (for example, of any recovery by the covered individual income protection plan benefi ts paid to a and against future benefi ts due under the person who does not qualify for benefi ts) Plan in the amount of any claims paid. The or benefi ts that were obtained through lien shall attach as soon as any person or fraudulence, as determined by the Plan entity agrees to pay any money to or on Administrator. Benefi ts may be recovered behalf of any covered individual that could by either direct payment to the Plan by you be subject to the Plan’s right of recovery if or a benefi ciary (through voluntary pay- and when received by the covered individ- ments or legal action) or by an offset of ual. If the covered individual fails to repay future benefi ts equal to the amount of the the Plan from the proceeds of any recovery, overpayment. the Plan Administrator may satisfy the lien by deducting the amount from future Maintenance of Benefi ts claims otherwise payable under the Plan. This provision applies to medical (excluding prescription drugs), behavioral health, If the covered individual fails to take action dental and vision benefi ts only. against a responsible third party to recover damages within one year or within 30 days The Flexible Benefi ts Plan has a maintenance after the Plan requests, the Plan shall be of benefi ts provision. Under this provision, deemed to have acquired, by assignment benefi ts from the Plan option you select, when added to the benefi ts paid by another

112

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group plan for the same services, will not C. In the event there is no court decree exceed the amounts that would have been and the parent who has custody has paid by the UPS option you select if you had remarried, the order of priority is: been covered only by the Plan. If a person 1. The plan covering the parent who is covered by two plans, one of the plans has custody is primary. is considered primary and the other is con- 2. The plan covering the spouse of the sidered secondary. When a claim is made, parent who has custody is primary. the primary plan pays benefi ts fi rst. 3. The plan covering the parent without custody is primary. Determining Which Plan is Primary A plan without a maintenance of benefi ts When a determination cannot be made, the or coordination of benefi ts provision is plan covering the eligible dependent longer always the primary plan. If all plans have is considered primary. one of these provisions, the primary plan If the Plan is secondary in accordance with will be determined in this order: these provisions, but the primary plan 1. The plan covering the person as an attempts to reduce its responsibility under employee rather than the plan covering the primary plan solely because you or the person as a dependent (or a qualifi ed your family is covered under another plan, benefi ciary under COBRA) is primary. the Plan will only pay benefi ts under this Plan, in accordance with the maintenance 2. The plan covering the person as a depen- provisions of this Plan, as though the pri- dent rather than the plan covering the mary plan paid benefi ts without regard to person as a qualifi ed benefi ciary under other coverage you may have. COBRA is primary. The Plan Administrator has sole discretion 3. If a person is covered as an employee by to determine the amount that the primary two plans, the plan covering the person plan would have paid, taking into account the longest is the primary plan. the other plan’s governing documents.

4. If a part-time employee is also covered Any other situation will be handled in as a result of full-time employment, the accordance with guidelines established for plan offering coverage as a result of full- coordination of beneﬁ ts by the National time employment is primary. Association of Insurance Commissioners.

5. If a child is covered by both parents’ Maintenance of Benefi ts Example plans, the plan of the parent whose To show how maintenance of benefi ts birthday falls fi rst in the calendar year works, consider this example. is considered the primary plan. • Your spouse is covered by another plan 6. In the case of divorce or separation: (let’s call it “Plan A”) that is primary and A. The plan covering the child as a also covered by The Flexible Benefi ts Plan dependent of the parent legally (let’s call it the “Flex Plan”), which is declared fi nancially responsible secondary. by court decree is primary. • Your spouse has covered expenses of $100. B. The plan covering the parent who • Plan A would pay benefi ts of $75 and the has custody of the child (if there is Flex Plan would pay benefi ts of $90. no court decree) is primary.

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Filing a Claim (cont.) Since the other plan is primary: and certain disabled employees) will • Your spouse will receive $75 from Plan have Medicare as their primary coverage. A fi rst. Individuals with end stage renal disease (ESRD) may be subject to a coordination • The Flex Plan will pay an additional $15 period during which The Flexible Benefi ts to make the total reimbursement $90, or Plan is primary, after which Medicare the amount that would have been paid becomes primary. by the Flex Plan if there were no other coverage. If you are an active employee covered by • However, if Plan A had paid $95 and The Flexible Benefi ts Plan, this Plan is pri- the Flex Plan would have paid only $90, mary for you and any covered dependents Plan A would not pay any additional who are eligible for Medicare (for example, amount because the benefi t paid by Plan due to a disability or being age 65 or older). A exceeds the Flex Plan’s benefi t amount. If you are disabled (as determined by the When calculating what you have to pay, STD or LTD claims administrator) and not remember that a health care provider may actively at work, the Plan is primary for be a participant in one plan’s network but you and/or any covered dependents who not the other. This affects the amount of are eligible for Medicare during the period benefi ts payable from the plan in which an that you are considered to be in “current out-of-network benefi t is paid. So if your employment status” by Medicare second- spouse’s plan is primary, and she has an ary rules (which is usually no longer than offi ce visit to a doctor who participates in the fi rst six months that you are receiving her medical plan network but not in your disability benefi ts from the Plan). Plan’s network, for purposes of the maintenance of benefi ts provision, that visit will Coordination of End Stage Renal be considered an out-of-network expense Disease (ESRD) Coverage by the Plan. In the event a covered individual is eligible for Medicare due to end stage renal disease Coordination with Medicare (ESRD)* and is covered by The Flexible Medicare benefi ts will be primary to the Benefi ts Plan, the Plan is primary during extent permitted under applicable law. the coordination period (currently the fi rst In the event that Medicare is the primary 30 months of ESRD). During the time the payor, the Plan is secondary and assumes Plan pays benefi ts fi rst, you should submit that you are enrolled in Medicare Parts A, a claim for any remaining expenses not B, and D. covered by the Plan to Medicare.

As a general rule, if you or your covered After the coordination period, Medicare dependent becomes eligible for Medicare is primary. During the time Medicare pays benefi ts, there are rules that determine benefi ts fi rst, you should fi rst submit claims whether the Plan pays benefi ts fi rst, or to Medicare for payment. whether Medicare is primary. Apart from the above, the Plan will coor- Coordination of Flexible Benefi ts Plan dinate with Medicare as permitted under applicable law. Medicare-covered individuals who are also covered under The Flexible Benefi ts * Incidentally, you should apply for Social Security disability income benefi ts as soon as possible to make sure you have Plan based on criteria other than current no gaps in income protection. employment status (for example, participants continuing coverage under COBRA

114

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If a Claim Is Denied If your claim for benefi ts under the Plan is Denial of Non-Insured denied, you may have it reviewed in accor- Benefi t Claims dance with the following claims review procedures. The procedures will vary depend- If the benefi t is not provided through an ing on the type of benefi t claim it is. insurance contract and it is not a long-term disability claim, if your claim is denied you Denial of Insured or may choose to fi le an appeal with the claims administrator. Contact your claims admin- Third-Party Benefi t Claims istrator’s Member Services (see Member Certain benefi ts offered under the Plan are Services on the back page of this booklet) provided through an insurance contract for the mailing address to use when fi ling issued to UPS (“the Company”) by an appeals. insurance carrier. In this case, the insurance carrier is the applicable claims fi duciary with If your fi rst-level appeal is denied, you respect to claims for benefi ts provided under may choose to fi le a second-level appeal the insurance contract. This means that the with the UPS Claims Review Committee insurance carrier — not the UPS Claims (“the Committee”). The decision of the Review Committee (“the Committee”) — Committee is fi nal. has the discretionary authority to determine Non-insured benefi ts of The Flexible benefi ts that are insured by the insurance Benefi ts Plan are listed below. carrier. • Medical In addition, MetLife is the claims fi duciary • Behavioral health with respect to claims for long-term dis- • Prescription drugs ability benefi ts. • Vision If your claim for an insured or third-party • Health Care Spending Account (HCSA) benefi t is denied under the Plan, you should • Limited Purpose Spending Account (LPSA) refer to the applicable policy or Certifi cate of Coverage provided by the carrier, or • Child/Elder Care Spending Account contact the insurance carrier for more (C/ECSA) information on the applicable claims • Dental Option 1 or Option 2 procedures. • Short-term disability For each of the benefi ts listed below, you • Adoption Assistance should fi le any appeals with the insurance The claims review procedures that follow carrier (not with the Committee). Contact in this section will apply to all non-insured your insurance carrier for more informa- benefi t claims. tion about fi ling appeals. • Aetna Dental DMO Group Health Benefi t Plans • Kaiser Permanente HMO • Prudential Life insurance and AD&D The Plan has established special claims • Legal plan (Hyatt) review procedures for medical, behavioral • Personal lines of insurance (Liberty health, prescription drugs, dental, vision, Mutual, MetLife) HCSA and LPSA benefi ts (called “group • Critical illness (MetLife) health benefi t plans”). The claims review • Long-term care (MetLife) procedures vary depending on the type of • EAP (ValueOptions) claim you have. • Long-term disability (MetLife) • Quit For Life (Free & Clear)

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If a Claim Is Denied (cont.) Types of Group Health Benefi t Plan Claims Appeals Procedures for Group There are three types of claims: Pre-Service, Health Benefi t Plan Claims Concurrent Care and Post-Service Claims. Generally, the steps below describe your Also, certain pre-service or concurrent care appeal procedures, regardless of the type claims may involve “urgent care.” of claim. A claim is not deemed “fi led” Pre-Service Claim. A claim for health care for purposes of these claims review proce- where prior approval for any part of the dures until it is fi led in accordance with the care is a condition to receiving the care. Filing a Claim section of this SPD and it For example, the Plan requires that you is received by the claims administrator or, obtain preauthorization for most hospital where applicable, the UPS Claims Review admissions. Committee.

Concurrent Care Claim. A previously The following provides additional detail approved claim for an ongoing course about how your claims appeals are proof treatment to be provided for a period cessed for all benefi ts that are not insured: of time or for a number of treatments. • Each level of appeal will be independent from the previous level (in other words, Post-Service Claim. A claim for: the same person(s) or subordinates of • Care that has already been received the same person(s) involved in a prior • Any claim for which the Plan does not level of appeal will not be involved in require preauthorization the appeal) • Health Care Spending Account (HCSA) • On each level of appeal, the claims and Limited Purpose Spending Account reviewer will review relevant informa- (LPSA) tion that you submit even if it is new information. In addition, you have a Urgent Care Claims. A Pre-Service or right to request documents or other Concurrent Care Claim becomes an Urgent records relevant (as defi ned by ERISA) Care Claim when the normal time frame to your claim for making a determination would: • If a claim involves medical judgment, • Seriously jeopardize the life of the claim- then the claims administrator and the ant (in the view of a prudent lay person Claims Review Committee will consult, acting on behalf of the Plan who pos- during the fi rst and second level appeal, sesses an average knowledge of health with a health care professional who has and medicine, or a physician with knowl- expertise in the specifi c area involving edge of the claimant’s medical condition), medical judgment or • You cannot fi le suit in federal court • Subject the claimant to severe pain that until you have exhausted these appeals cannot be adequately managed without procedures treatment (in the view of a physician with Step 1: Notice of denial is received from knowledge of the claimant’s condition) claims administrator. If your claim (or preauthorization request) is denied, you will receive written notice from the claims administrator that your claim is denied

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(in the case of urgent claims, notice may e. If the denial is based on a medical be oral). The time frame in which you necessity, experimental treatment or a will receive this notice is described in the similar Plan exclusion or limit, either an Claims and Appeals Procedures Table and explanation of the scientifi c or clinical will vary depending on the type of claim. judgment for the determination, or a In addition, the claims administrator may statement that such explanation will be request an extension of time in which to provided free of charge upon request; and review your claim for reasons beyond f. If the claim was an Urgent Care Claim, the claims administrator’s control. If the a description of the expedited appeal reason for the extension is that you need process. The notice may be provided to provide additional information, you will to you orally; however, a written or be given a certain amount of time in which electronic notifi cation will be sent to to obtain the requested information (it you not later than three days after the will vary depending on the type of claim). oral notifi cation. The time period during which the claims administrator must make a decision will Step 3: If you disagree with the decision, be suspended until the earlier of the date fi le a fi rst level appeal with the claims that you provide the information or the administrator. If you do not agree with the end of the applicable information decision of the claims administrator and gathering period. you wish to appeal, you must fi le a written appeal with the claims administrator Step 2: Review your notice of denial care- within 180 days of receipt of the claims fully. Once you have received your notice administrator’s letter (or oral notice if an from the claims administrator, review it urgent care claim) referenced in Step 1. If carefully. The notice will contain: the claim involves urgent care, your appeal a. The reason(s) for the denial and the Plan may be made orally. In addition, you should provisions on which the denial is based; submit all information referenced in Step b. A description of any additional informa- 2 with your appeal. You should gather any tion necessary for you to perfect your additional information that is identifi ed claim, why the information is necessary, in the notice as necessary to perfect your and your time limit for submitting the claim and any other information that you information; believe will support your claim. c. A description of the Plan’s appeal pro- Step 4: You receive a notice of the fi rst level cedures and the time limits applicable to appeal from the claims administrator. If the such procedures, including a statement claim is again denied, you will be notifi ed of your right to bring a civil action fol- by the claims administrator within the time lowing a denial of your fi nal appeal; period described in the Claims and Appeals d. A statement indicating whether an inter- Procedures Table, depending on the type nal rule, guideline or protocol was relied of claim. upon in making the denial and that a copy of that rule, guideline or protocol Step 5: Review your fi rst level appeal notice will be provided free of charge upon carefully. You should take the same action request; you take in Step 2 described above. The notice will contain the same type of information that is provided in the fi rst notice of denial provided by the claims administrator (see Step 2).

117

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If a Claim Is Denied (cont.) Step 6: If you still disagree with the claims For C/ECSA or Adoption administrator’s decision, fi le a second level Assistance Claims appeal with the Committee. If you still do The same steps described above for group not agree with the claims administrator’s health benefi t plan claims apply to Child/ decision and you wish to appeal, you must Elder Care Spending Account (C/ECSA) fi le a written second (and fi nal) level appeal or adoption assistance benefi ts, within the to the Committee within 60 days after time periods described in the Claims and receiving the fi rst level appeal denial notice Appeals Procedures Table in this section. from the claims administrator. You should gather any additional information that is The claims administrator for the adoption identifi ed in the notice as necessary to per- assistance program is UPS; for this reason, fect your claim and any other information the UPS Claims Review Committee reviews that you believe will support your claim. both fi rst level and second level appeals, The appeal should be sent to: following strict guidelines established by UPS Claims Review Committee ERISA. 55 Glenlake Parkway, NE Atlanta, GA 30328 Limitation on Legal Action Step 7: Review your second level appeal Any legal action to receive Plan benefi ts notice carefully. If the Committee denies must be fi led the earlier of: your second level appeal, you will receive • Six months from the date a determination notice within the time period described in is made under the Plan or should have the Claims and Appeals Procedures Table, been made in accordance with the Plan’s depending on the type of claim. The notice claims review procedures, or will contain the same type of information • Three years from the date the service or that was referenced in Step 2 above, includ- treatment was provided or the date the ing your right to bring a civil action follow- claim arose, whichever is earlier. Your ing a denial of your fi nal appeal. failure to fi le suit within this time limit results in the loss/waiver of your right Appeals Procedures for Other to fi le suit. Types of Non-Insured Claims Claims and Appeals For Short-Term Disability Claims Procedures Table The same steps described above for group The table on the following page shows the health benefi t plan claims apply to short- time limit for you to submit appeals, and term disability (STD) claims fi led under the for the claims administrator or UPS Claims Income Protection Plan, including claims Review Committee to respond to your related to a failure to meet timely fi ling appeal. This table is intended to be used in requirements. However, the time periods conjunction with the remainder of informa- for making a decision for disability claims tion in this section. are different. Refer to the Claims and Appeals Procedures Table in this section for details.

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Claims and Appeals Procedures Initial Claims 1st Level Appeal 2nd Level Appeal Extension period* You’ll be notifi ed allowed for circum- If additional infor- You’ll be notifi ed You’ll be notifi ed of determination stances beyond mation is needed, of determination of determination as soon as possible claims administra- you must provide You must fi le your as soon as possible You must fi le your as soon as possible Type of Claim but no later than… tor’s control… within… appeal within… but no later than... appeal within… but no later than…

Group Health Beneﬁ t Plans

Pre-Service 15 days from receipt One extension of 15 45 days of date of 180 days of claim 15 days from receipt 60 days of 1st level 15 days from receipt of claim days extension notice denial of appeal appeal denial of appeal

Pre-Service involving 72 hours (24 hours None 48 hours (claims 180 days of claim 72 hours from N/A N/A Urgent Care if additional administrator must denial receipt of appeal information is notify you of needed from you) determination within 48 hours of receipt of your information)

Concurrent: To end Notifi cation to end N/A N/A (Denial letter will 15 days from receipt (Denial letter will 15 days from receipt or reduce treatment or reduce will allow specify fi ling limit) of appeal specify fi ling limit) of appeal prematurely time to fi nalize appeal before end of treatment

Concurrent: To deny Treated as any other Treated as any other Treated as any other Treated as any other Treated as any other Treated as any other Treated as any other your request to pre-service or pre-service or pre-service or pre-service or pre-service or pre-service or pre-service or extend treatment post-service claim post-service claim post-service claim post-service claim post-service claim post-service claim post-service claim

Concurrent: Involving 24 hours, if claim None N/A 180 days of claim 72 hours from N/A N/A Urgent Care submitted at least denial receipt of appeal 24 hours before the scheduled end date of treatment. Otherwise, treated as Pre-Service Urgent Care

Post-Service 30 days from receipt One extension of 15 45 days of date of 180 days of claim 30 days from receipt 60 days of 1st level 30 days from receipt of claim days extension notice denial of appeal appeal denial of appeal

Other Non-Insured Beneﬁ ts

C/ECSA and 30 days from receipt One extension of 15 45 days of date of 180 days of claim 30 days from receipt 60 days of 1st level 30 days from receipt Adoption Assistance of claim days extension notice denial of appeal appeal denial of appeal

Short-Term Disability 45 days from receipt Two extensions of 45 days of date of 180 days of claim 45 days from receipt 60 days of 1st level 45 days from receipt (STD) of claim 30 days each extension notice denial of appeal (with one appeal denial of appeal (with one 45-day extension 45-day extension for reasons beyond for reasons beyond the Plan’s control); the Plan’s control) you must submit requested documentation within 45 days

*The extension period is measured from the end of the original determination due date.

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Continuation of Coverage under COBRA Notifying In certain circumstances, health care you’ll be given more information that coverage for you and your dependents refl ects your situation at the time. the COBRA (if Qualifi ed Benefi ciaries) can continue Administrator beyond the date it would otherwise end. How COBRA Works This continuation of coverage is required If you are required to notify Eligibility for COBRA is triggered by a by the Consolidated Omnibus Budget the COBRA administrator, “qualifying event.” The following table as indicated within this Reconciliation Act of 1985 (COBRA). describes the types of qualifying events and section and elsewhere in A “qualifi ed benefi ciary” is an employee, the maximum length of coverage available the SPD, you must call the spouse and/or dependent child who has for each event. The maximum coverage Benefi ts Service Center at health coverage under this Plan imme- period is measured from the date of the 1-800-UPS-1508. diately preceding a qualifying event. A qualifying event, except as otherwise stated child born to or adopted by (or placed for in this booklet. adoption with) a covered employee during a continuation period is also a qualifi ed If you decide to continue coverage, you benefi ciary, provided the child is added to must pay the full cost of that coverage, coverage within 60 days of the birth, adop- plus a two percent administrative cost. The tion or placement for adoption. Qualifi ed monthly premium amount will be provided benefi ciaries have independent COBRA to you once a qualifying event occurs. election rights and can elect to continue The initial premium must be paid within group health plan coverage for themselves even if you (the covered employee) choose 45 days of your enrollment date (there is to decline coverage. no grace period). Subsequent premiums are due on the fi rst of each month. Failure to The information included here is a general make subsequent payments within 30 days overview of COBRA provisions. If you of the due date will cause your coverage to become eligible for continued coverage terminate retroactive to the end of the last (that is, if you have a qualifying event), month for which full payment was received.

CContinuationontinuation ooff CCoverageoverage Your dependent Your dependent Qualifying Events You spouse child You terminate UPS employment before retiring 18 months 18 months 18 months Your work hours are reduced* 18 months 18 months 18 months You retire 18 months 18 months 18 months You become divorced or legally separated N/A 36 months N/A Your child ceases to be a qualiﬁ ed dependent N/A N/A 36 months You die** N/A 36 months 36 months

*And, as a result, you’re ineligible for health care coverage. Your 18 months of COBRA coverage follows the 12-month extension of coverage while on STD or LTD. ** The 13-month UPS-paid extension period is included as part of the 36-month maximum coverage period (see What If…You Die in the Life Events section).

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Continued coverage will usually be avail- must notify the Benefi ts Service Center able for either 18 or 36 months. If you are at 1-800-UPS-1508 within 30 days of on approved military leave that lasts longer this determination. COBRA coverage than 30 days, your coverage may last up to may then continue up to the fi rst day of 24 months or until the date that you fail to the month that starts more than 30 days return to work (as required by USERRA — after the Social Security Administration’s see What If…You Take an Approved Leave decision; or the date coverage would other- of Absence/Military Leave in the Life Events wise end, if earlier. section). A qualifi ed benefi ciary (other than a If you (or a qualifi ed benefi ciary) are dis- covered employee) may extend an 18- or abled at the time (or within 60 days from the 29-month continuation period up to a total time) you terminate employment or have a of 36 months if they experience one of the reduction in hours, you may extend COBRA following qualifying events during the 18- coverage for an additional 11 months, for a or 29- month COBRA period. The COBRA total of 29 months. This coverage is avail- Administrator must be notifi ed within 60 able at 150 percent of the applicable pre- days of the date of the event. mium. To be eligible for this extension, you • Divorce or legal separation (or the qualifi ed benefi ciary) must: • Child ceasing to be a dependent child • Receive a determination of disability • Covered employee becomes entitled from the Social Security Administration to Medicare (SSA), and • Death of the covered employee • Notify the Benefi ts Service Center of the determination within the earlier of the These may result in an extension of cov- 60-day notice period or the 18-month erage only if you provide notice and the period.* The 60-day notice period ends event would otherwise cause a loss of 60 days after the latest of: coverage under the Plan for active employ- — The qualifying event ees and their dependents. For example, — The date coverage is lost as a result Medicare entitlement will not result in the of the qualifying event, or loss of active coverage under the Plan. — The date of determination by the If a covered employee becomes entitled Social Security Administration. to Medicare while an active employee *In addition, the notice must be provided before the end of the and then loses coverage as a result of 18-month COBRA period without regard to the 60-day notice termination or a reduction in work hours period. If you receive the Social Security Administration determi- within 18 months of becoming entitled nation with only two weeks left in your 18-month COBRA period, you have only two weeks to provide the notice. to Medicare, a qualifi ed benefi ciary other than the covered employee is eligible for If during the 11-month extension you’re 36 months of continued coverage (counted no longer considered disabled by the from the date that the covered employee Social Security Administration, you became entitled to Medicare).

121

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Continuation of Coverage under COBRA (cont.) The 60-Day Notice However, your continued coverage will end 60 days of the qualifying event (or the date sooner if any of the following occurs: you would otherwise lose coverage as a If you do not notify the • The premium for continued coverage result of the qualifying event), or continued Benefi ts Service Center is not paid coverage will not be available. The chart at 1-800-UPS-1508 within below shows when UPS will automatically • You become entitled to Medicare after 60 days of a divorce, send COBRA enrollment materials and electing COBRA coverage (not applicable legal separation or loss of when you or your dependent must notify to an employee on military leave) dependent status (not due to the Benefi ts Service Center. age), you (or the qualifi ed • You become covered by another health benefi ciary) forfeit your care plan after electing COBRA coverage Enrollment in COBRA right to COBRA coverage. (not applicable to an employee on military leave, and except where the person is As with active employees, there are two subject to a pre-existing condition) types of enrollment: initial enrollment when you fi rst become eligible, and annual • UPS terminates all group health care enrollment. plans, or • Your coverage would be terminated as Initial Enrollment an active employee for any other reason. When you become eligible for COBRA, you and your covered eligible dependents COBRA Notifi cation Deadline may each independently choose to con- In most cases, you’ll be notifi ed when you tinue medical, dental and vision coverage become entitled to continue health care for up to the entire coverage period. You coverage. However, for other events, you or may choose to continue the Health Care your dependent should notify the Benefi ts Spending Account (HCSA) or Limited Service Center immediately. You must Purpose Spending Account (LPSA) on notify the Benefi ts Service Center within an after-tax basis until the end of that

Event Responsible for Notifi cation • Termination Benefi ts Service Center will automatically send • Retirement your COBRA enrollment materials to the employee’s address on fi le. • Layoff • Death of employee • Transfer to ineligible position • Personal leave of absence • Reaching 12 months on leave of absence • Loss of dependent status due to age • Divorce You or the qualifi ed benefi ciary should call the • Legal separation Benefi ts Service Center at 1-800-UPS-1508 immediately. If you do not notify the Benefi ts Service Center • Loss of dependent status not due to age within the 60 days, you (or the qualifi ed benefi ciary) forfeit any right to COBRA coverage.

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calendar year. You must make your election and the former spouse notifi es the COBRA within 60 days of the date of your enroll- Administrator within 60 days of the ment notice, or the date coverage is lost if divorce or legal separation. later. The COBRA Administrator During initial COBRA enrollment, you may not make changes to your medical, The Benefi ts Service Center is the COBRA dental or vision options (for example, administrator and will handle all COBRA changing from Dental Option 1 to Dental enrollment and billing. The Benefi ts Service Option 2) except to stop coverage (for Center can be reached at 1-800-UPS-1508. example, electing not to have dental coverage but to keep medical and vision). You Your Right to Obtain may, however, decrease your coverage cat- Individual Coverage egory (meaning you only, you plus spouse, A federal law, Health Insurance Portability you plus children or you plus family). and Accountability Act (HIPAA), requires A change in status at the time of your all health insurance carriers offering cover- qualifying event may allow you to change age in the individual market to accept any certain coverage during initial COBRA eligible individuals who apply for coverage, enrollment (See the Life Events section for without imposing a pre-existing condi- more information). tion exclusion. To take advantage of this HIPAA right you must complete your 18-, Annual Enrollment 29- or 36-month COBRA coverage period under The Flexible Benefi ts Plan and apply At each annual enrollment, you can make for coverage with an individual carrier new choices by calling the Benefi ts Service before you have a 63-day lapse in cover- Center at 1-800-UPS-1508. age. Since this coverage is not sponsored by UPS, you should contact your state’s Life Events department or commission of insurance or During a COBRA continuation period, see your independent insurance specialist to coverage may be modifi ed based on Plan secure coverage. rules if you experience a change in status. See the Life Events section for details on allowable changes in status.

If a spouse is dropped from coverage during annual enrollment and later becomes divorced or legally separated from the covered employee, the spouse may be entitled to COBRA continuation coverage if the termination of coverage is deemed by the Plan Administrator to be “in anticipa- tion of” the divorce or legal separation

123

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ERISA and Other Important Information Plan Administration All benefi ts described in this book — both for you and your family — are paid for by The information contained in this book, you and UPS, and are made available to including the schedule of benefi ts, is a you as part of the Total Rewards Program summary of the applicable administra- you receive or received for your work with tive and legal documents relating to The UPS. Kaiser HMOs, Aetna DMOs, LTD, Flexible Benefi ts Plan. For insured benefi ts, life insurance, accidental death and dis- in the event there is any difference between memberment insurance, personal lines of this book and the applicable contracts or insurance, the legal plan, critical illness certifi cates, the insurance documents will insurance and long-term care benefi ts are govern. provided to Flexible Benefi ts Plan partici- United Parcel Service, as Plan Administrator, pants by means of insurance contracts, for shall have the exclusive right and discretion which you and/or UPS pay the premiums. to interpret the terms and conditions of the STD benefi ts for exempt employees are Plan, and to decide all matters arising in paid from Company assets. With regard its administration and operation, including to the Plan’s other benefi ts, UPS has estab- questions of fact and issues pertaining to lished a special trust, called a voluntary eligibility for, and the amount of, benefi ts employee benefi ciary association (VEBA) to be paid by the Plan. Any such interpreta- trust, to serve as the funding vehicle. All tion or decision shall, subject to the claims contributions to the trust are made from procedure described herein, be conclusive the general assets of UPS and its affi liated and binding on all interested persons, Companies. Depending on the coverage you and shall, consistent with the Plan’s terms elect, you may be required to pay a portion and conditions, be applied in a uniform of the cost of providing those benefi ts. manner to all similarly situated participants Your coinsurance and/or deductible amounts and their covered dependents. The Plan under the Plan may be determined before Administrator may delegate certain discre- application of any allowances, incentives tionary authority to one or more persons, and/or other adjustments to which the Plan entities, and/or committees. The Plan may be entitled. All allowances, incentives Administrator has designated claims fi du- and/or other adjustments are retained by ciary authority and discretion to the UPS the Plan to be used as permitted under Claims Review Committee and MetLife (as applicable law. noted in the Filing a Claim section of this booklet). The Plan Administrator is United Parcel Service, which is authorized to delegate its Your participation in The Flexible Benefi ts administrative duties to one or more indi- Plan does not guarantee your continued viduals or committees within UPS, or to employment with UPS. If you quit, are dis- one or more outside administrative service charged or laid off, the Plan does not give providers. Presently, certain administra- you a right to any benefi t or interest in the tive services with regard to the processing Plan except as specifi cally provided in the of claims and the payment of benefi ts are Plan document. provided under contract as follows.

124

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Medical coverage is administered by the Aetna following: 151 Farmington Avenue Hartford, CT 06156 Kaiser Permanente 1950 Franklin Oakland, CA 94604 UnitedHealthcare (Uniprise) 9900 Bren Road East Minnetonka, MN 55343 Behavioral health and Employee Assistance ValueOptions Program is administered by: 1199 S. Beltline Road, Suite 100 Coppell, TX 75019 Quit For Life tobacco cessation program is Free & Clear®, Inc. administered by: 999 Third Avenue, Suite 2100 Seattle, WA 98104 Prescription drug coverage is administered by: Medco Health Solutions 100 Parsons Pond Drive Fair Lawn, NJ 07410 Dental coverage is administered by: Aetna 151 Farmington Avenue Hartford, CT 06156 Vision coverage is administered by: Vision Service Plan 3333 Quality Drive Rancho Cordova, CA 95670 Legal coverage is administered by: Hyatt Legal Plans 1111 Superior Avenue Cleveland, OH 44114 Personal Lines (auto and home insurance) Liberty Mutual coverage is administered by: 175 Berkeley Street Boston, MA 02117 Metropolitan Property and Casualty Insurance Company c/o MetLife Voluntary Beneﬁ ts Group Sales 10 South LaSalle Street, Suite 3350 Chicago, IL 60603 Short-term disability is administered by: Aetna Disability Absence Management 1601 SW 80th Terrace Plantation, FL 33324 Long-term disability is administered by: Metropolitan Life Insurance Company (MetLife) 200 Park Avenue New York, NY 10166 Health Care Spending Account, Limited Purpose Aetna Spending Account and Child/Elder Care 151 Farmington Avenue Spending Accounts are administered by: Hartford, CT 06156

125

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ERISA and Other Important Information (cont.)

Health Savings Account is administered by: OptumHealth Bank PO Box 271629 Salt Lake City, UT 84127-1629 Life and AD&D Insurance are administered by: Prudential Life Insurance Company 751 Broad Street Newark, NJ 07102 Long-Term Care and Critical Illness MetLife — Long-Term Care Group is administered by: PO Box 927 Westport, CT 06881-0937 Adoption Assistance is administered by: UPS Adoption Assistance Program United Parcel Service of America, Inc. 55 Glenlake Parkway, NE Atlanta, GA 30328

General Information Name of Plan: The Flexible Benefi ts Plan Plan Number: 501 Plan Year: January 1 through December 31 Employer and Plan Sponsor: United Parcel Service of America, Inc. 55 Glenlake Parkway, NE Atlanta, GA 30328 404-828-6044 VEBA Trustee: Boston Safe Deposit and Trust Company 135 Santilli Highway Everett, MA 02149 Employer Identifi cation Number (EIN): 95-1732075 Plan Administrator: The Flexible Benefi ts Plan United Parcel Service of America, Inc. 55 Glenlake Parkway, NE Atlanta, GA 30328

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Your ERISA Rights You may be eligible for a reduction or elimination of exclusionary periods of The Flexible Benefi ts Plan is an employee coverage for pre-existing conditions welfare benefi t plan covered by the under your group health plan, if you Employee Retirement Income Security Act move to another plan and you have of 1974 (ERISA). As a participant in the creditable coverage from this Plan. The Plan, you have certain rights and protec- Flexible Benefi ts Plan does not contain tion under ERISA. any exclusionary periods of coverage for ERISA provides that, as a Plan participant, pre-existing conditions. You will be pro- you are entitled to: vided a certifi cate of creditable coverage, • Receive information about your Plan free of charge, from The Flexible Benefi ts and benefi ts. You may examine, with- Plan when: out charge, at the Plan Administrator’s — You lose coverage under the Plan offi ce and at other specifi ed locations — You become entitled to elect COBRA such as work sites, all documents gov- continuation coverage erning the plan, including insurance — Your COBRA continuation coverage contracts and a copy of the latest annual ceases report (Form 5500 series) fi led by the — You request it before losing coverage, Plan with the U.S. Department of Labor or and available at the Public Disclosure — You request it up to 24 months after Room of the Pension and Welfare Benefi t losing coverage. Administration. Without evidence of creditable coverage, you may be subject to a pre-existing condi- You may obtain, upon written request to tion exclusion for 12 months (18 months the Plan Administrator, copies of all doc- for late enrollees) after your enrollment uments governing the operation of the date in your coverage in another plan. Plan, including insurance contracts and copies of the latest annual report (Form • Prudent actions by Plan fi duciaries. 5500 series) and updated summary plan In addition to creating rights for plan description. The Plan Administrator may participants, ERISA imposes duties upon charge a reasonable amount for the copies. the people who are responsible for the operation of the employee benefi t plan. You may receive a summary of the The people who operate your Plan, called Plan’s annual fi nancial report. The Plan “fi duciaries” of the Plan, have a duty Administrator is required by law to fur- to do so prudently and in the interest of nish each participant with a copy of this the Plan participants and benefi ciaries. summary annual report. No one, including your employer or any • Continue group health plan coverage. other person, may fi re you or otherwise You may continue health care coverage discriminate against you in any way to for yourself, spouse and/or dependents if prevent you from obtaining a welfare there is a loss of coverage under the plan benefi t from the Plan, or from exercising as a result of a qualifying event. You or your rights under ERISA. your dependents will have to pay for such coverage. You should review this summary plan description for information concerning your COBRA continuation coverage rights.

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ERISA and Other Important Information (cont.) • Enforce your rights. If your claim for a or if you need assistance obtaining docu- welfare benefi t under an ERISA-covered ments from the Plan Administrator, you plan is denied in whole or in part, you should contact the nearest offi ce of the must receive a written explanation of the U.S. Department of Labor, Pension and reason for the denial. You have the right Welfare Benefi ts Administration listed to have the Plan review and reconsider in your telephone directory, or: your claim. Under ERISA, there are steps Division of Technical Assistance you can take to enforce the above rights. and Inquiries For example, if you request materials Employee Benefi ts Security from the Plan and do not receive them Administration within 30 days, you may fi le suit in a U.S. Department of Labor federal court. In such a case, the court 200 Constitution Ave., NW may require the Plan Administrator to Washington, D.C. 20210 provide the materials and pay you up to $110 a day until you receive the materi- You may also obtain certain publications als, unless the materials were not sent about your rights and responsibilities because of reasons beyond the control under ERISA by calling the publications of the Administrator. If you have a claim hotline of the Employee Benefi ts Security for benefi ts which is denied or ignored in Administration. whole or in part, you may fi le suit in a state or federal court. In addition, if you Plan Amendment or Termination disagree with the Plan’s decision or lack UPS has established this Plan with the thereof concerning the qualifi ed status expectation that it will be continued indefi - of a domestic relations order or a medi- nitely. Nevertheless, UPS reserves the right cal child support order, you may fi le suit to amend or terminate the Plan at any time. in federal court. If it should happen that The right to amend or terminate each Plan Plan fi duciaries misuse the Plan’s money, applies to all coverage hereunder, including or if you are discriminated against for coverage for active, retired and disabled asserting your rights, you may seek assis- employees. No amendment or termination tance from the U.S. Department of Labor, of either Plan will reduce or eliminate ben- or you may fi le suit in a federal court. efi ts for claims incurred prior to the effec- The court will decide who should pay tive date of the amendment or termination. court costs and legal fees. If you are successful, the court may order the person About This Booklet you have sued to pay these costs and fees. If you lose, the court may order you to This booklet as updated by any future sum- pay these costs and fees; for example, if it mary of material modifi cation, constitutes fi nds your claim is frivolous. your Summary Plan Description (SPD) for The Flexible Benefi ts Plan. In addition, this • Assistance with your questions. If you SPD, as the offi cial Plan document, governs have any questions about the Plan, you the Plan. UPS reserves the right to amend should contact the Plan Administrator. If or terminate the Plan or any portion of the you have any questions about this state- Plan at any time. ment or about your rights under ERISA,

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Notes

129

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Notes

130

FFlexiblelexible Benefits_wp.inddBenefits_wp.indd 130130 22/19/10/19/10 5:40:045:40:04 PMPM The

The Flexible Beneﬁ ts Plan Flexible

Member Services Beneﬁ ts Plan

OptumHealth Bank www.optumhealthbank.com Plan

Flex2010_Cover_wp.indd a 2/19/10 5:50:00 PM Enrollment Kit You Have a Lot to Protect

UPS The Flexible Benefits Plan

Supplemental Term Life Insurance with Accidental Death & Dismemberment Insurance

Supplemental Dependent Term Life Insurance with Accidental Death & Dismemberment Insurance

The Prudential Insurance Company of America IFS-A129730 0189499-00004-00 What’s Inside

Why you may need more insurance...... 4

Why you should buy it at work...... 6

How much you may need...... 7

Plus, plan details and rate sheets

2 Dear Valued Employee:

The Prudential Insurance Company of America (Prudential) knows how important it is to have enough life insurance coverage to protect your family from the unexpected. That’s why United Parcel Service (UPS) selected Prudential—a name you know and trust—to be the provider of two valuable financial protection plans available to you and your dependents:

Supplemental Term Life Insurance with Accidental Death & Dismemberment Insurance Supplemental Dependent Term Life Insurance with Accidental Death & Dismemberment Insurance Both coverages provide extra security at competitive group rates. A leading insurance carrier for 137 years, Prudential has financial strength ratings with A.M. Best, Moody’s, Standard & Poor’s, and Fitch.* We have the resources and stability to honor long-term commitments—which means we’ll be there when you need us. Please take a few minutes to read through this booklet. It contains a general description of your Supplemental Term Life and Dependent Term Life plans and specific information about your coverage options and rates. Plus, there’s information on the advantages of getting insurance at work, how much coverage you can get, and what it will cost. There’s even a worksheet to help you figure out how much life insurance coverage you may need. Please carefully review all of the information, so you can make an informed decision about participating in the program. If you have any questions, please call Prudential at 877-877-2955. Sincerely, The Prudential Insurance Company of America

Think about this: If you participate in any sport, you wear the proper protective gear, not because you anticipate injury but to protect yourself—just in case. The same logic applies to purchasing life and accidental death & dismemberment insurance. No one anticipates an untimely death or a serious accident, but owning the right insurance helps protect your income, your family, and your future—just in case.

*For up-to-date information about our ratings, please visit www.investor.prudential.com.

3 “Why do I need life insurance?” Life is full of pleasant surprises and, at the same time, life holds uncertainties. It’s easier to plan for happy events you know will occur, and more difficult to plan for the unexpected—such as a death. If you were no longer there to help support your family (immediate family, siblings, and parents), how would they be able to… n Pay off loans—credit cards, mortgage, and auto? n M aintain their standard of living—utilities, food, clothing, and personal expenses? n Provide for your children’s future—tuition and weddings? n Pay your final expenses—medical care, burial, estate settlement, and inheritance taxes? A sufficient amount of life insurance can help your family financially recover from your loss during a stressful time.

“I already have life insurance—why do I need more?” Because, like many people, your life insurance amount may be inadequate. People who die prematurely without enough life insurance coverage create a financial burden for their surviving family. Approximately 45% of widows and 37% of widowers who responded to a recent survey said that their spouse, same-sex domestic partner, or civil union partner did not have adequate life insurance. The survey also revealed that one to two years after the death of a spouse, same-sex domestic partner, or civil union partner, almost half of the respondents were just getting by financially.* You may be underinsured if your salary has increased since you last purchased insurance. Plus, when you consider new family responsibilities and inflation, the life insurance coverage you have now may not offer enough protection for your family.

*“The Need and Value of Life Insurance,” LIMRA, August 2004.

4 “Why do I need accident insurance?” You might be surprised to learn that, in the United States: n A disabling injury occurs in the home every four seconds.* n A disabling injury is caused by a motor vehicle crash every 14 seconds.* n Accidents are the fifth leading cause of death.* n A fatal injury occurs every five minutes.† While no one can prevent every accident, you can help protect yourself and your family from the financial drain of accidental injuries and death with extra coverage provided by Accidental Death & Dismemberment (AD&D) Insurance. AD&D Insurance ensures coverage to help: n Support your family (immediate family, siblings, and parents) with a lump sum payment following a covered accident. n Transition your spouse, same-sex domestic partner, or civil union partner into the workplace by covering the cost of job training programs, if you die. n Provide child day care, if you die. n Pay for college tuition for your children, if you die. n Pay you a benefit for loss of a limb resulting from a covered accident.

Peace of Mind from Prudential Prudential’s resources, financial strength, and stability allow us to honor long-term commitments, which means that we’ll be here when you and your family need us. We’ve been a top insurance provider for 137 years and have received positive insurance claims paying ratings from A.M. Best (A+), Moody’s (A2), Standard & Poor’s (AA-), and Fitch (A+).‡

Plus, we have the advanced technology and caring professionals to provide your beneficiaries with the kind of customer support they want and deserve. Our Customer Service Representatives are well-trained, knowledgeable professionals who can quickly answer your family’s questions.

By choosing Prudential, you give yourself peace of mind, knowing you are providing for your loved ones.

‡ As of February 2012. A.M. Best ratings range from A++ (Superior) to F (In Liquidation); Standard & Poor’s ratings range from AAA (Extremely Strong) to R (Has Experienced Regulatory Action); Moody’s ratings range from Aaa (Exceptional) to C (Lowest Rated); Fitch ratings range from AAA (Exceptionally Strong) to D (Distressed).

This policy provides ACCIDENT insurance only. It does NOT provide basic hospital, basic medical, or major medical insurance as defined by the New York State Insurance Department. IMPORTANT NOTICE—THIS POLICY DOES NOT PROVIDE COVERAGE FOR SICKNESS. *“Death: Leading Causes 2004,” Centers for Disease Control and Prevention, April 2006. †“Report on Injuries in America, 2003,” National Safety Council, 2005 Edition. 5 “What are the advantages of buying insurance at work?” n It’s easy. There are no confusing quotes to sort through. And with automatic payroll deductions, you never have to worry about late payments. n It’s guaranteed. If you enroll in the Supplemental Term Life plan when first hired, you may get a certain amount of coverage without having to answer any health questions or having a medical exam. n It’s economical. The cost of group insurance may be lower than insurance you could find on your own. n It’s flexible. You choose the level of coverage that’s right for you.

Customize coverage to fit your needs.

6 “How much life insurance is enough?” The right amount of insurance can help your family. It helps replace your income for a number of years to maintain their standard of living and pay for major financial obligations, such as a home mortgage and college tuition. The Consumer Federation of America (CFA, 1997) recommends six to eight times your income for a married couple with children. While rules of thumb may be helpful, they do not take each individual’s personal situation into consideration. This worksheet provides a simple method to estimate the amount of life insurance you may need.

Income Needs

1. Your annual income. (What your family would need if you die today.) 1. $ Enter a number that’s between 60% and 70% of your total income.

2. Annual replacement income. (Available to your family after you die.) 2. $ Enter a number that includes Social Security benefits, if applicable.

3. Total annual income to be replaced. Subtract line 2 from line 1. 3. $

4. Funds needed to provide income for______years. Choose the number of years your family 4. $ needs your replacement income. Multiply line 3 by the appropriate factor below.*

10 yrs x 8.1 15 yrs x 11.1 20 yrs x 13.6 25 yrs x 15.6 30 yrs x 17.3 35 yrs x 18.7 40 yrs x 20.0

Expenses

5. Burial expenses. (The average cost of an adult funeral is about $10,000.) 5. $

6. Mortgage and other major debts. Include mortgage, credit card debt, car loan, home equity loans, etc. 6. $

7. College costs. (Current cost of a four-year education: public—$62,264; private—$127,664.)† 7. $ Multiply the college costs by the appropriate factor, based on the number of years between now and when your child begins college.

5 yrs x .82 10 yrs x .68 15 yrs x .56 20 yrs x .46

Child 1: $______Child 3: $______Child 2: $______Child 4: $______

8. Total capital required. Add lines 4, 5, 6, and 7. 8. $

Assets

9. Savings and investments. Include bank accounts, CDs, stocks, bonds, mutual funds, 9. $ real estate/rental property, etc.

1 0. retirement savings. Include 401(k), Keogh, pension, and profit-sharing plans. 10. $

1 1. Present amount of life insurance. Include group insurance and personal insurance purchased 11. $ on your own.

1 2. Total of all assets. Add lines 9, 10, and 11. 12. $

1 3. Estimated amount of life insurance needed. Subtract line 12 from line 8. 13. $ 7 *Inflation is assumed to be 4%. The rate of return on investments is assumed to be 8%. †The College Board, Trends in College Pricing 2005. Costs include tuition, room, board, books and supplies, transportation, and other expenses. This brochure is intended to be a summary of your benefits and does not include all plan provisions, exclusions, and limitations. A Booklet-Certificate, with complete plan information, including limitations and exclusions, will be provided. You may request a Booklet-Certificate by calling the UPS Benefits Service Center at 1-800-UPS-1508. If there is a discrepancy between this document and the Booklet-Certificate issued by Prudential, the terms of the Booklet-Certificate will govern. Contract provisions may vary by state. This policy provides ACCIDENT insurance only. It does NOT provide basic hospital, basic medical, or major medical insurance as defined by the New York State Insurance Department. IMPORTANT NOTICE—THIS POLICY DOES NOT PROVIDE COVERAGE FOR SICKNESS. Supplemental Term Life, Supplemental Dependent Term Life, Supplemental Accidental Death & Dismemberment Insurance, and Supplemental Dependent Accidental Death & Dismemberment coverages are issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102. 800-524-0542. Contract Series: 83500. © 2012 Prudential Financial, Inc. and its related entities. Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

8 ATTENTION:

Here are your detachable plan details and rate sheets.

The Prudential Insurance Company of America IFS-A129730 Ed. 0712 9 10 your plan details You Have a Lot to Protect

UPS The Flexible Benefits Plan

Supplemental Term Life Insurance

Supplemental Dependent Term Life Insurance

Supplemental Accidental Death & Dismemberment (AD&D) Insurance

Issued by The Prudential Insurance Company of America

The Prudential Insurance Company of America IFS-A129730 Ed. 0712 Employee—Supplemental Term Life UPS offers you the opportunity to enroll in a group Supplemental Term Life Insurance plan issued by The Prudential Insurance Company of America (Prudential). You pay the cost of this optional coverage.

Eligibility to Participate You are eligible for coverage if you’re a full- or part-time, non-union manager, supervisor, specialist, administrative, or technical employee of the company or one of its participating affiliates (except as noted in the Summary Plan Description) and your terms of employment are not subject to collective bargaining.

Coverage Amounts You may enroll for increments of $1,000, up to a maximum of $1,000,000.

Guaranteed Coverage Certain coverage is available without providing evidence of good health satisfactory to Prudential. If you enroll during your initial eligibility period, your guaranteed coverage amount equals the lesser of $500,000 or 48 times your monthly earnings.

Medical Evidence Requirements If you enroll after your initial eligibility period, you must provide evidence of good health satisfactory to Prudential for all coverage amounts.

Life Event Changes If you have a change in family status such as marriage or birth (adoption), you may increase your coverage with proof of good health satisfactory to Prudential. You must notify the UPS Benefits Service Center at 1-800-UPS-1508 within 60 days of the life event.

Accelerated Benefit Option* If you provide proof satisfactory to Prudential that you are terminally ill with a life expectancy of 12 months or less, you may elect to receive up to 50% of your Supplemental Term Life benefit (subject to a $10,000 minimum and a $300,000 combined Basic and Supplemental Term Life maximum or to state-regulated maximums if less) while still living. The death benefit payable will be reduced by any benefits paid under the Accelerated Benefit Option. This benefit is available once in your lifetime and is payable in a lump sum, generally income tax free (under IRC Section 101(g)).

Portability† When you leave the company, you have the opportunity to continue your group life insurance at group rates under the portability provision. Portability coverage will begin on the first day of the pay period following the date of notification of termination from UPS. Portable rates will be 120% of the rate schedule you had as an employee of UPS. You will be billed directly and charged a $3 administration fee by Prudential on a quarterly basis. If UPS’ participation in the master contract terminates, your portability coverage will continue. You will be moved to the Prudential standard port rate structure after one year and your rates will increase. At age 70 or more, your amount of insurance is limited. It is the greater of $10,000 and 50% of the amount for which you would then be insured if there were no limitation. At age 75 or more, your amount of insurance is further limited. It is the greater of $10,000 and 25% of the amount for which you would then be insured if there were no limitation. If you use the portability provision and are later rehired or transferred to a UPS position that allows you to elect supplemental coverage under another UPS-sponsored plan, you must surrender the ported policy in order to elect coverage under the UPS-sponsored plan as an active employee.

Termination of Coverage† Your Supplemental Term Life coverage will end when your Flexible Benefits Plan coverage ends. You have the opportunity to continue your coverage by either electing to continue your group term life coverage under the portability provision or converting to a Prudential individual life insurance policy. Additional information will be sent to you upon termination or retirement.

*Important Notice: The acceleration of life insurance benefits offered under this certificate is intended to qualify for favorable tax treatment under the Internal Revenue Code of 1986-IRC Section 101(g). If the acceleration of life insurance benefits qualifies for such favorable tax treatment, the benefits will be excludable from your income and not subject to federal taxation. Tax laws relating to the acceleration of life income benefits are complex. You are advised to consult with a qualified tax advisor about circumstances under which you could receive acceleration of life insurance benefits excludable from income under federal law. New York Residents: Receipt of accelerated death benefits may affect eligibility for public assistance programs and may be taxable. †Minnesota Residents: Please see the Minnesota Insert for information on continuation and conversion. 12 Family—Supplemental Dependent Term Life UPS offers you the opportunity to enroll your dependents in a group Supplemental Dependent Term Life Insurance plan issued by The Prudential Insurance Company of America (Prudential). You pay the cost of this optional coverage. Employee Supplemental Term Life Insurance coverage is not required in order for the dependent spouse, same-sex domestic partner, or civil union partner and/or dependent child(ren) to have Supplemental Term Life Insurance coverage.

Spouse, Same-Sex Domestic Partner, or Civil Union Partner

Eligibility to Participate If your spouse, same-sex domestic partner, civil union partner or child is eligible as an employee for Supplemental Dependent Term Life Insurance through the Flexible Benefits Plan or another UPS-sponsored plan that offers supplemental life insurance (for example, The Health and Welfare Package Select or UPS Health and Welfare Package), you are not eligible to cover your spouse, same-sex domestic partner, civil union partner or child for Supplemental Dependent Term Life Insurance through the Flexible Benefits Plan. Your spouse, same-sex domestic partner, civil union partner or child must elect employee supplemental life insurance through his or her own employee plan. If your spouse, same-sex domestic partner, civil union partner or child is confined for medical care or treatment at home or elsewhere, coverage will not begin until the confinement ceases. Please refer to the Flexible Benefits Plan Summary Plan Description for additional information regarding eligibility and when coverage begins.

Coverage Amounts You may enroll your spouse, same-sex domestic partner, or civil union partner for coverage in amounts of $1,000, up to a maximum of $500,000.

Guaranteed Coverage If your spouse, same-sex domestic partner, or civil union partner enrolls within 45 days of your date of eligibility, his/her guaranteed coverage amount is up to $25,000.

Medical Evidence Requirements If your spouse, same-sex domestic partner, or civil union partner is enrolled within your initial eligibility period or within 60 days of marriage, same-sex domestic partnership, or civil union, he/she must provide evidence of good health satisfactory to Prudential for coverage amounts greater than $25,000. If your spouse, same-sex domestic partner, or civil union partner is enrolled after your initial eligibility period, he/ she must provide evidence of good health satisfactory to Prudential for all coverage amounts.

Portability* If your employment ends, and you elect to continue your coverage under the portability provision, you may also continue your Supplemental Dependent Term Life coverage for your spouse, same-sex domestic partner, or civil union partner under the portability provision. The cost of this coverage will be 120% of the rate schedule your spouse, same-sex domestic partner, or civil union partner had when you were an employee of UPS and will be guaranteed for a period of one year from the time he/she continued coverage. In the event of your death, divorce or dissolution of domestic partnership or civil union, your spouse, same-sex domestic partner, or civil union partner may continue his/her Supplemental Term Life coverage. He/she will be billed directly and charged a $3 administration fee by Prudential on a quarterly basis. If UPS’ participation in the master contract terminates, his/her portability coverage will continue. You will be moved to the Prudential standard port rate structure after one year and your rates will increase.

Termination of Coverage* Your spouse’s, same-sex domestic partner’s, or civil union partner’s Supplemental Dependent Term Life coverage will end when your Flexible Benefits Plan coverage ends. You will have the opportunity to continue coverage for your spouse, same-sex domestic partner, or civil union partner by either electing to continue group term life coverage under the portability provision or converting to a Prudential individual life insurance policy. Additional information will be sent to you upon your termination or retirement.

Children

Eligibility to Participate† You may cover a “Child” through the end of the month in which the child turns age 26. A “Child” is defined as your natural child, your adopted child, a child placed with you for adoption or a child for whom you are the legal guardian (as determined in accordance with applicable law). A covered child who becomes incapacitated while covered under the Plan and before he or she turns age 26 is eligible to continue coverage after turning age 26 as long as you are eligible and as long as the following conditions are satisfied: (i) the incapacity exists, (ii) the child is unmarried, (iii) the child is primarily dependent on you for support and maintenance and (iv) appropriate certification of disability is provided to the medical claims administrator. You must apply to continue coverage for an incapacitated dependent prior to age 26 or loss of coverage under the Plan. In addition, periodic medical documentation of the continuing incapacity is required as determined by the medical claims administrator.

*Minnesota Residents: Please see the Minnesota Insert for information on continuation and conversion. 13 †Dependent Child Eligibility: If a dependent child is confined for medical care or treatment at home or elsewhere, the coverage will begin when confinement ceases. Confinement does not apply to an adopted child or child placed prior to adoption. Family—Supplemental Dependent Term Life (continued)

Coverage Amounts You may enroll your dependent children for increments of $1,000, up to a maximum of $30,000. Children Dependent Term Life coverage has one premium rate that covers all eligible children.

Termination of Coverage* Your dependent children’s Supplemental Dependent Term Life coverage will end when The Flexible Benefits Plan coverage ends. You have the opportunity to continue coverage for your children if you elect to continue your coverage under the portability provision or convert to a Prudential individual life policy. Child-only portable coverage is not permissible. Additional information will be sent to you upon your termination or retirement.

*Minnesota Residents: Please see the Minnesota Insert for information on continuation and conversion.

14 Employee and Dependent—Supplemental Accidental Death & Dismemberment (Supplemental AD&D) UPS offers you the opportunity to enroll in a group Supplemental AD&D Insurance plan (also known as Personal Accident Insurance), issued by The Prudential Insurance Company of America (Prudential). Supplemental AD&D provides a benefit for loss of life and certain injuries resulting from a covered accident. Loss of life benefits are paid in addition to Supplemental Term Life. You pay the cost of this optional coverage.

Eligibility to Participate You are eligible for coverage if you’re a full- or part-time, non-union manager, supervisor, specialist, administrative or technical employee of the company or one of its participating affiliates (except as noted in the Summary Plan Description) and your terms of employment are not subject to collective bargaining. Your spouse, same-sex domestic partner, or civil union partner and dependent children are eligible if you are enrolled in Supplemental AD&D.

Employee Coverage Amounts You may enroll for coverage in increments of $1,000, up to a maximum of $1,000,000.

Coverage Options If you elect employee coverage only, you will receive the Standard Benefits and the Additional Benefits listed below. If you elect this option, your dependents (family) will not be covered. If you elect employee and dependents (family) coverage, you will receive the Standard Benefits, Additional Benefits, and Additional Family Benefits and Services listed below and on the following pages. You may not elect dependent (family) coverage only.

Family Coverage Amounts With Supplemental AD&D, the benefit amounts for your family are predetermined by the dependent class you choose to cover and are a function of the employee’s coverage amount. Covered Dependent Class Benefit Amount Employee and Spouse, Same-Sex Domestic 70% of the employee coverage amount Partner, or Civil Union Partner only Employee and Child(ren) only 50% of the employee coverage amount for each child (maximum $50,000) Employee, Spouse, Same-Sex Domestic 60% of the employee coverage amount for the spouse, Partner, or Civil Union Partner same-sex domestic partner, or civil union partner, and Child(ren) 25% of the employee coverage amount for each child (maximum $50,000)

Standard Benefits Benefits are paid at certain percentages of your coverage amount for specific accidental losses as indicated below. Not more than 100% of your coverage amount is payable for all losses due to the same accident. The loss must be incurred within 90 days of the accident (paralysis within 365 days of the accident).

Accidental Losses Benefits Life 100% Sight in both eyes 100% Both hands or both feet 100% One hand and one foot 100% One hand or one foot and sight in one eye 100% Quadriplegia 100% Speech and hearing in both ears 100% Paraplegia 75% Hemiplegia 75% One hand or one foot 75% Sight in one eye 75% Speech 75% Hearing in both ears 75% Thumb and index finger on the same hand 50% Uniplegia 50%

Loss Due to Exposure Loss due to exposure to the elements or disappearance is considered an accidental loss. The plan pays 100% and Disappearance of your coverage amount if you or your covered dependent’s body is not found within a year of a certain disappearance because you or your covered dependent will be presumed to have died.

15 Employee and Dependent—Supplemental AD&D (continued)

Loss Due to Coma The plan pays 1% of your coverage amount for each month you, or your covered dependent, remain in a coma that results from a covered accident. The coma must be total, continuous, permanent, begin within three days of the accident, and last for six months. This benefit is payable for up to 100 months while you remain in a coma.

Permanent and Total The plan pays a benefit of 100% of the coverage amount if you or your covered dependent are under Disability Benefit age 70 and sustain a permanent and total disability within 100 days after a covered accident.

Brain Damage Benefit The plan pays 100% of the coverage amount if you or your covered dependent sustain brain damage within 60 days of a covered accident. You must be hospitalized for at least seven days within the first 60 days following the covered accident and brain damage must continue for 12 consecutive months and must be non- reversible after that time.

Additional Benefits These benefits are paid in addition to the Standard and Additional Benefits only if you elect family coverage.

Seat Belt Benefit The plan pays an additional benefit of 10% of the coverage amount, up to $25,000, if an accidental death occurs while you or your covered dependent are wearing a seat belt in the prescribed manner.

Air Bag Benefit The plan pays an additional benefit of 10% of the coverage amount, up to $25,000, if an accidental death occurs while you or your covered dependent are riding in an automobile seat equipped with an air bag system, and you or your covered dependent are wearing a seat belt in the prescribed manner.

Rehabilitation Benefit The plan pays 20% of the coverage amount, to a maximum of $10,000, for necessary expenses incurred within two years of the accident, if you or your covered dependent suffer a loss as the result of a covered accident and require training to return to work or to become independent.

Continuation of Medical The plan pays three annual installments, up to 5% of the coverage amount (maximum $10,000), to continue Funding Benefit medical coverage for the family if you or your covered dependent die as the result of a covered accident. This benefit is to begin after the 13-month extension of health care benefit coverage provided by The Flexible Benefits Plan. If the beneficiary does not provide proof that the payment was used for the purchase of medical coverage, the beneficiary will receive only one payment of 5% or $10,000, whichever is less.

Home Modification Benefit The plan pays up to $2,000 for required home site changes made within one year of the accident, if you or your covered dependent suffer a loss as the result of a covered accident.

Emergency Medical Evacuation/ The plan pays for emergency medical evacuation for you or your covered dependent to a suitable medical Return of Remains Service facility upon orders from an attending physician, or the preparation and transportation of your or your covered dependent’s body for cremation or burial if your (or your covered dependent’s) death occurs outside a 150-mile radius of your home. The amount is the lesser of the actual covered expenses or $2,500.

16 Employee and Dependent—Supplemental AD&D (continued)

Additional Family Benefits These benefits are paid in addition to the Standard and Additional Benefits only if you elect family coverage.

Spouse/Same-Sex Domestic Partner/ The plan pays a tuition reimbursement benefit for a professional or trade program to prepare your spouse, Civil Union Partner Tuition same-sex domestic partner, or civil union partner for work if you die in a covered accident. This benefit is the Reimbursement Benefit actual tuition incurred to a maximum of $15,000. Expenses must be incurred within 30 months of your death.

Child Tuition Reimbursement Benefit The plan pays a tuition reimbursement benefit for a dependent child if you or your spouse, same-sex domestic partner, or civil union partner die in a covered accident. The annual benefit is the lesser of the actual tuition, excluding room and board, 10% of your coverage amount, or $80,000. It is payable for up to four years for a dependent child less than age 23, provided the child was a full-time student enrolled in an institution of higher learning, or is in high school or becomes enrolled within 365 days of your death. This benefit is paid to your spouse, same-sex domestic partner, or civil union partner or the child’s legal guardian if the child is under age by state law. If no child qualifies for this benefit, the plan pays 1% of your coverage amount to a maximum of $2,000 to your beneficiary.

Day Care Expense Benefit The plan pays a day care reimbursement benefit for a dependent child if you or your spouse, same-sex domestic partner, or civil union partner die in a covered accident. The annual benefit is the lesser of the actual day care cost, 5% of your coverage amount, or $7,500. This benefit is payable for up to four consecutive years for a dependent child, until that child reaches age seven, provided the child is enrolled in a licensed or certified day care center on the date of death, or within 90 days of that date. This benefit is paid to you or your spouse, same-sex domestic partner, or civil union partner or the child’s legal guardian. If no child qualifies for this benefit, the plan pays $2,000 to your beneficiary.

Common Accident Benefit The plan pays a benefit for the death of your spouse, same-sex domestic partner, or civil union partner if you and your spouse, same-sex domestic partner, or civil union partner both die within 90 days as a result of the same accident. This benefit is the difference between your coverage amount and your spouse’s, same-sex domestic partner’s, or civil union partner’s coverage amount.

Termination of Coverage Your Supplemental AD&D coverage will end when your Flexible Benefits Plan coverage ends.

Exclusions A loss is not covered if it results from any of these: n Suicide, attempted suicide, while sane or insane; n Intentionally self-inflicted injuries or any attempt to inflict such injuries, while sane or insane; n Sickness, whether the loss results directly or indirectly from the sickness; n Medical or surgical treatment of sickness, whether loss results directly or indirectly from treatment; n Any infection (unless pyogenic resulting from an accident or a bacterial infection that results from accidental ingestion of a contaminated substance); n War, or any act of war, declared or undeclared, and includes resistance to armed aggression; n Accident that occurs while serving on full-time active duty for more than 30 days in any armed forces (does not include Reserves or National Guard; active duty for training); or n Commission of, or attempt to commit, a felony; n Legal intoxication; or n Use of narcotics (unless administered or consumed on a doctor’s advice).

Important Notice for This policy provides ACCIDENT insurance only. It does NOT provide basic hospital, basic medical, New York Residents or major medical insurance as defined by the New York State Insurance Department. IMPORTANT NOTICE—THIS POLICY DOES NOT PROVIDE COVERAGE FOR SICKNESS.

This brochure is intended to be a summary of your benefits and does not include all plan provisions, exclusions, and limitations. A Booklet-Certificate, with complete plan information, including limitations and exclusions, will be provided. You may request a Booklet-Certificate by calling the UPS Benefits Service Center at 1-800-UPS-1508. If there is a discrepancy between this document and the Booklet-Certificate issued by Prudential, the terms of the Booklet-Certificate will govern. Contract provisions may vary by state. Supplemental Term Life, Supplemental Dependent Term Life, Supplemental Accidental Death & Dismemberment, and Supplemental Dependent Accidental Death & Dismemberment Insurance coverages are issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102. 800-524-0542. Contract Series: 83500. © 2012 Prudential Financial, Inc. and its related entities. 17 Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. Rate Sheet The Flexible Benefits Plan Effective Date: January 1, 2014

Supplemental Term Life— Employee and Spouse, Same-Sex Domestic Partner, or Civil Union Partner Annual Cost of Insurance (rates per $1,000 of coverage) Age Annual Annual (As of January 1 of coverage year) Non-Smoker Rates Smoker Rates Under 30 $0.42 $0.61 30–34 $0.42 $0.61 35–39 $0.48 $0.70 40–44 $0.70 $1.10 45–49 $1.24 $1.93 50–54 $2.15 $3.02 55–59 $3.46 $4.97 60–64 $5.78 $8.33 65–69 $10.06 $14.39 70–74 $18.86 $27.05 75–79 $29.88 $42.88 80–84 $42.06 $60.37 85–89 $60.52 $86.80 90–94 $87.70 $125.83 95+ $103.43 $146.48 “How much does Supplemental Dependent Term Life— Employee and Spouse/Same-Sex Domestic Partner/Civil Union Partner cost?” Step 1 Enter the amount of coverage you wish to purchase (increments of $1,000, not to exceed $1,000,000 $ for yourself; not to exceed $500,000 for your spouse, same-sex domestic partner, or civil union partner). Step 2 Divide the coverage amount by $1,000. $ Step 3 Multiply the amount in Step 2 by the cost of coverage that you’ll find in the chart above. $ Step 4 If you are paid biweekly, divide the total annual cost, in Step 3, by 26 to get your biweekly cost. $ TOTAL COST $

Supplemental Dependent Term Life—Children (Premium covers all eligible children) Coverage Annual Cost of Insurance Child(ren) $0.74 “How much does Supplemental Dependent Term Life—Children cost?” Step 1 Enter the amount of coverage you wish to purchase (increments of $1,000, not to exceed $30,000). $ Step 2 Divide the coverage amount by $1,000. $ Step 3 Multiply the amount in Step 2 by .74. $ Step 4 If you are paid biweekly, divide the total annual cost, in Step 3, by 26 to get your biweekly cost. $

All coverages are optional, and the entire cost of coverage is employee paid. TOTAL COST $ Rates may change as the insured enters a higher age category, also rates may change if plan experience requires a change for all insureds. Cost of insurance rates for all coverages will be deducted from your paycheck. Please note that a summary of plan provisions, exclusions, and limitations is listed on the plan details portion of this kit. All provisions that apply to this coverage are governed by the Booklet-Certificate. 18 Rate Sheet The Flexible Benefits Plan Effective Date: January 1, 2014

Supplemental Accidental Death & Dismemberment Annual Cost of Insurance (rates per $1,000 of coverage, regardless of age or smoker/non-smoker status) Insured Annual Rates Employee $0.25 Employee and Dependents $0.42

“How much does Supplemental Accidental Death & Dismemberment coverage cost?” Step 1 Enter the amount of coverage you wish to purchase (coverage is available in increments of $1,000, $ not to exceed $1,000,000) Step 2 Divide the coverage amount by $1,000. $ Step 3 Multiply the amount in Step 2 by .25 if you are purchasing coverage for yourself only. $ Multiply the amount in Step 2 by .42 if you are purchasing coverage for yourself and your dependents. Step 4 If you are paid biweekly, divide the total annual cost, in Step 3, by 26 to get your biweekly cost. $ TOTAL COST $

All coverages are optional, and the entire cost of coverage is employee paid. Rates may change as the insured enters a higher age category, also rates may change if plan experience requires a change for all insureds. Cost of insurance rates for all coverages will be deducted from your paycheck. Please note that a summary of plan provisions, exclusions, and limitations are listed on the plan details portion of this kit. All provisions that apply to this coverage are governed by the Booklet-Certificate. Supplemental Term Life, Supplemental Dependent Term Life, Supplemental Accidental Death & Dismemberment Insurance, and Supplemental Dependent Accidental Death & Dismemberment coverages are issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102. 800-524-0542. Contract Series: 83500. © 2012 Prudential Financial, Inc. and its related entities. Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. 19 The Flexible Benefits Plan Important Notice for Minnesota Residents

The Prudential Insurance Company of America For Minnesota residents, there are different provisions that apply about your right to continue or convert coverage after your insurance ends. This notice replaces the descriptions of portability and termination of coverage in the “Help Protect the Most Important People in Your Life” brochure and “Your Plan Details” contained in this kit.

Employee—Supplemental Term Life Continuation of Coverage You have the right to continue your Supplemental Employee Term Life coverage under the Group Contract at your expense if your Flexible Benefits Plan coverage ends because (1) your employment ends, or (2) you are laid off, or (3) your work hours are reduced. Proof of good health is not required. Your contributions for this continued coverage will be at the same rate as for other similarly situated employees of UPS. Coverage may be continued until you fail to make a payment for continued coverage or until UPS’ contract with The Prudential Insurance Company of America terminates. If your continued coverage ends because the UPS contract ends, you may convert all or part of your insurance to an individual life insurance contract (see below).

Conversion Your Supplemental Term Life Insurance coverage will end when (1) your employment ends or you transfer out of a covered class, or (2) all term life insurance of the Group Contract for your class ends by amendment or otherwise. You have an opportunity to continue your Supplemental Term Life coverage by converting to an individual life insurance contract. The individual contract will be one of the type The Prudential Insurance Company of America normally issues at the age and amount applied for (but not term insurance or a contract with disability or supplementary benefits). Proof of good health is not required. Additional information will be sent to you upon termination or retirement.

Family—Supplemental Dependent Term Life Spouse, Same-Sex Domestic Partner, or Civil Union Partner Continuation of Coverage You have the right to continue your spouse’s, same-sex domestic partner’s, or civil union partner’s Supplemental Dependent Term Life coverage under the Group Contract at your expense if your Flexible Benefits Plan coverage ends because (1) your employment ends, or (2) you are laid off, or (3) your work hours are reduced. Proof of good health is not required. Your contributions for this continued coverage will be at the same rate as for other similarly situated employees of UPS. Coverage may be continued until you fail to make a payment for continued coverage or until UPS’ contract with The Prudential Insurance Company of America terminates. In the event of your death, divorce or dissolution of domestic partnership or civil union, your spouse, same-sex domestic partner, or civil union partner may continue his/her Supplemental Dependent Term Life coverage. Your spouse, same-sex domestic partner, or civil union partner will be billed directly. If UPS’ contract with The Prudential Insurance Company of America terminates, your spouse’s, same-sex domestic partner’s, or civil union partner’s continued coverage will end.

20 If continued coverage for your spouse, same-sex domestic partner, or civil union partner ends because the UPS contract ends, you may convert all or part of your spouse’s, same-sex domestic partner’s, or civil union partner’s insurance to an individual life insurance contract (see below).

Conversion Your spouse’s, same-sex domestic partner’s, or civil union partner’s Supplemental Dependent Term Life Insurance coverage will end when (1) your employment ends or you transfer out of a covered class, or (2) all Term Life Insurance of the Group Contract for your class ends by amendment or otherwise. You have an opportunity to continue your spouse’s, same-sex domestic partner’s, or civil union partner’s Supplemental Dependent Term Life coverage by converting your spouse’s, same-sex domestic partner’s, or civil union partner’s coverage to an individual life insurance contract. Your spouse, same-sex domestic partner, or civil union partner may elect to convert (rather than continue) her/his Supplemental Dependent Term Life coverage to an individual life insurance contract in the event of death or divorce. The individual contract will be one of the type The Prudential Insurance Company of America normally issues at the age and amount applied for (but not term insurance or a contract with disability or supplementary benefits). Proof of good health is not required. Additional information will be sent to you upon termination or retirement.

Children Continuation of Coverage You have the right to continue your children’s Supplemental Dependent Term Life coverage under the Group Contract at your expense if your Flexible Benefits Plan coverage ends because (1) your employment ends, or (2) you are laid off, or (3) your work hours are reduced. Proof of good health is not required. Your contributions for this continued coverage will be at the same rate as for other similarly situated employees of UPS. Coverage may be continued until you fail to make a payment for continued coverage or until UPS’ contract with The Prudential Insurance Company of America terminates. If continued coverage for your children ends because the UPS contract ends, you may convert all or part of each of your children’s insurance to an individual life insurance contract (see below).

Conversion Your children’s Supplemental Dependent Term Life Insurance coverage will end when (1) your employment ends or you transfer out of a covered class, or (2) all Term Life Insurance of the Group Contract for your class ends by amendment or otherwise, or (3) your child ceases to be a qualified dependent. You have an opportunity to continue your children’s Supplemental Dependent Term Life coverage by converting each of your children’s coverage to an individual life insurance contract. Each individual contract will be one of the type The Prudential Insurance Company of America normally issues at the age and amount applied for (but not term insurance or a contract with disability or supplementary benefits). Proof of good health is not required. Additional information will be sent to you upon termination or retirement.

This brochure is intended to be a summary of your benefits and does not include all plan provisions, exclusions, and limitations. A Booklet-Certificate, with complete plan information, including limitations and exclusions, will be provided. You may request a Booklet-Certificate by calling the UPS Benefits Service Center at 1-800-UPS-1508. If there is a discrepancy between this document and the Booklet-Certificate issued by Prudential, the terms of the Booklet-Certificate will govern. Contract provisions may vary by state. This policy provides ACCIDENT insurance only. It does NOT provide basic hospital, basic medical, or major medical insurance as defined by the New York State Insurance Department. IMPORTANT NOTICE—THIS POLICY DOES NOT PROVIDE COVERAGE FOR SICKNESS. Supplemental Term Life, Supplemental Dependent Term Life, Supplemental Accidental Death & Dismemberment, and Supplemental Dependent Accidental Death & Dismemberment Insurance coverages are issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ 07102. 800-524-0542. Contract Series: 83500. © 2012 Prudential Financial, Inc. and its related entities. Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

21 NOTES

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