Medical Expense Plan for MANAGEMENT AND OTHER … AND OTHER ELIGIBLE RETIREES Summary Plan Description ... The SPD is provided for educational purposes and is intended to comply with

Medical Expense Plan for MANAGEMENT AND OTHER ELIGIBLE RETIREES Summary Plan Description Effective 1/1/2005

Lucent Technologies Last Updated March 21, 2005

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Disclaimer

This is a summary plan description (SPD) that describes certain welfare benefits offered to eligible retirees under the Lucent Technologies Inc. Retiree Welfare Benefits Plan (“Retiree Medical Plan”). The SPD is provided for educational purposes and is intended to comply with Department of Labor requirements for SPDs. It is based on Plan provisions effective January 1, 2005 and replaces all previous SPDs and other descriptions of benefits provided by the Plan. More detailed information is provided in the official Retiree Medical Plan document, which is the final authority. In all instances, the Retiree Medical Plan document will control and govern the operation of the Retiree Medical Plan. In addition, if there is any conflict between the information in this SPD or Plan documents and the applicable law, the law will govern. The Board of Directors of Lucent Technologies Inc. (or its delegate) reserves the right to modify, suspend, change or terminate the Retiree Medical Plan at any time. Participants should make no assumptions about any possible future changes unless a formal announcement is made by the company.

Questions regarding your benefits should be addressed as indicated in this document (see “Contact Information”). Because of the many detailed provisions of the Retiree Medical Plan, no one is authorized to advise you as to your benefits, except as indicated in this document. Lucent Technologies Inc. cannot be bound by statements made by unauthorized personnel. In the event of a conflict between any verbal information provided to you by an authorized resource and information in the official Retiree Medical Plan document, the Plan document will govern.

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About This Material

Hewitt Associates iii 07544SPD01Ela.DOC/COMM09ms 09/2004

Table of Contents

Your Retiree Medical Plan At-a-Glance................................................................................................1 Eligibility and Enrollment....................................................................................................................17 What Happens to My Retiree Medical Coverage if I….......................................................................25 How Medicare Works With Lucent Coverage.....................................................................................30 A Closer Look at POS..........................................................................................................................34 A Closer Look at Traditional Indemnity..............................................................................................42 What’s Covered/What’s Not Under POS and Traditional Indemnity?................................................47 Precertification Under POS, Traditional Indemnity and Rx Only (Including the Mental Health and Chemical Dependency Program) .........................................................................................................66 Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only.....................................69 Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity ..............75 A Closer Look at Rx Only Coverage ...................................................................................................83 A Closer Look at the HMO/Medicare Advantage HMOs ...................................................................84 A Closer Look at Waiving Coverage...................................................................................................88 Claims and Appeals .............................................................................................................................89 Continuation of Coverage ..................................................................................................................103 Your Legal Rights..............................................................................................................................108 Notice of Privacy Practices for the Lucent Health Plans ...................................................................111 Retiree Medical Plan Administrative Information.............................................................................117 Your Retiree Medical Plan Dictionary...............................................................................................119 Contact Information ...........................................................................................................................135

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For important definitions of certain terms, see “Your Retiree Medical Plan Dictionary.”

Your Retiree Medical Plan At-a-Glance

Finding quality healthcare coverage at an affordable cost is a priority for everyone. And protection against the high expenses that can result from a serious illness or injury is critical to your financial and personal security. That’s why Lucent provides you with access to quality healthcare coverage.

The following is a summary of the key features of the Retiree Medical Plan:

Feature Summary Eligibility You’re an eligible retiree if you’re a former management employee or former non-

represented occupational employee who terminated employment from a participating company and who is: • Eligible to receive a service or disability pension under the Lucent Technologies

Inc. Pension Plan or the Service Based Program of the Lucent Retirement Income Plan; or

• In the Account Balance Program (ABP) and at least 50 years old with 15 years of net credited service.

Note that your eligible dependents generally must be covered under the same coverage option you choose for yourself.

Medical Coverage Options

The Retiree Medical Plan offers different coverage options, including: • Two different kinds of Point of Service (POS):

⎯ POS: With POS, you have the choice each time you need medical care of receiving in-network or out-of-network care. When you receive in-network care, your out-of-pocket costs are generally lower; when you receive out-of-network care, your out-of-pocket costs are usually higher; and

⎯ Catastrophic POS: With Catastrophic POS, you receive the same basic range of services and supplies as under POS, but you pay more out of your own pocket.

• Traditional Indemnity: With Traditional Indemnity, you’re covered for a wide range of medical services and supplies, but are subject to annual deductibles, coinsurance amounts and out-of-pocket maximums. In addition, you can use any provider you choose and the plan will reimburse you the same percentage whether you receive care from a PPO or non-PPO provider. You’ll pay less out of your pocket if you use PPO providers, since they charge lower, negotiated prices for their services.

• Rx Only: If you choose this coverage, you only receive prescription drug

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Your Benefits Resources™ is a trademark of Hewitt Management Company LLC.

Feature Summary benefits and do not receive any other medical benefits. You can only choose this coverage if you’re Medicare-eligible, since Medicare will be your sole coverage for any other medical expenses you incur.

• HMO or Medicare Advantage HMO: With an HMO, services are usually covered only if you receive care from HMO providers. However, there are exceptions to this rule, particularly when you need emergency care. In addition, with an HMO, there are generally low out-of-pocket costs and no bills or claim forms to fill out.

• Waive Coverage: When you waive coverage, you will not have any Lucent medical coverage and you may not elect to re-enroll in medical coverage (unless you have a qualified status change) until the next annual open enrollment.

When to Enroll for Coverage

When you retire, enrollment materials and information about your coverage options will be sent to you at your address of record. You generally do not need to actively enroll if the coverage option you had as an active employee is available to you in retirement, you receive a company subsidy and you wish to remain in that option. You do need to enroll if: • You’re eligible to enroll in the Retiree Medical Plan but do not receive a subsidy

from the company; • You want a different coverage option than you had as an active employee; • You want to waive or need to choose coverage, and you are eligible to receive a

service or disability pension; or • You want to make coverage changes for your Class I dependents, including your

domestic partner dependents. To make any of the above changes, you have to make your enrollment elections by the date stated in your enrollment package.

When Retirement Coverage Begins

Your retirement coverage becomes effective as of the first day of the month following your retirement.

Cost While you may receive a subsidy from the company, it’s likely that you’ll be responsible for some portion of the cost of coverage. Log on to Your Benefits Resources™ at http://resources.hewitt.com/lucent, or call the Lucent Benefits Center (see “Contact Information” for the telephone number).

When You Have Coverage Through Another Employer

Your coverage as an active employee (or the dependent of an active employee) is always primary to (that is, pays benefits before) your coverage as a Lucent retiree (or the dependent of a Lucent retiree).

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Feature Summary When the Retiree Medical Plan Pays Benefits Before Medicare

The Retiree Medial Plan is primary (that is, pays benefits first) for: • Retired employees who are not Medicare-eligible; and

• Dependents who are not Medicare-eligible regardless of the age of the retired employee (except for dependents under age 65 who are Medicare-eligible as described in the next row, “When Medicare Pays Benefits Before the Retiree Medical Plan”).

When Medicare Pays Benefits Before the Retiree Medical Plan

Medicare takes over as the primary benefit plan for: • Retired employees age 65 and older; • Dependents age 65 and older regardless of the age of the retired employee; • A retired employee or dependent regardless of age who has had ESRD (end-

stage renal disease) for 30 months (If under age 65, Medicare benefits apply only to covered expenses associated with end-stage renal disease; your Lucent coverage would be primary for all other covered expenses); and

• A retired employee or dependent regardless of age who is eligible for Medicare due to disability.

At the time you become eligible for Medicare, you will be transferred to Traditional Indemnity, with Medicare as primary, regardless of the coverage you had previously. Traditional Indemnity is administered by UnitedHealthcare. If you have dependents who are not yet Medicare-eligible, they will also be covered under Traditional Indemnity, unless there is a UnitedHealthcare POS in your area. If there is a POS in your area, your dependents will be enrolled in the POS. If you or a covered dependent is eligible for primary coverage under Medicare, the Retiree Medical Plan will reduce its benefits by the amount Medicare would have paid for the same expenses. If you are enrolled in an HMO, you will need to check directly with the HMO about benefit levels for Medicare-eligible individuals. While you will be defaulted to Traditional Indemnity, you may be able to select coverage through a Medicare Advantage HMO if one is available in your area.

For More Information About the Retiree Medical Plan

For information about your Retiree Medical Plan benefits and eligibility, contact the appropriate administrator (see “Contact Information”). To enroll, visit Your Benefits Resources at http://resources.hewitt.com/lucent, or call the Lucent Benefits Center.

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What Coverage Choices Are Available to Me Under the Retiree Medical Plan? Under the Retiree Medical Plan, the options available to you are based on your:

• Geographic location;

• Retirement date; and

• Medicare-eligibility status.

The following charts highlight the options available to you based on the above criteria:

If You’re Not Medicare-Eligible and Live in a POS Area

Retirement Date POS Traditional Indemnity HMO Rx Only

Catastrophic POS

Waive Coverage

Before 3/1/90 Option Assigned to you

Option N/A Option Option

On or After 3/1/90

Assigned to you

Not available


If You’re Not Medicare-Eligible and Live in a Non-POS Area

Retirement Date POS Traditional Indemnity HMO Rx Only

Catastrophic POS

Waive Coverage

Before 3/1/90 Option Assigned to you


On or After 3/1/90

Option Assigned to you


* If your home ZIP code isn’t in a designated POS area, you still may be eligible to elect POS coverage in a nearby network that is available to other Lucent retired employees. Contact the Lucent Benefits Center to find out if there are POS providers in your area.

When Dependent Benefits May Differ While covered dependents must be enrolled in the same option and with the same healthcare company that you choose for yourself, dependent benefits may differ under the following circumstances:

• You are Medicare-eligible (regardless of your age), and you have one or more non-Medicare-eligible dependents; or

• You are not Medicare-eligible, but you have one or more Medicare-eligible dependents (regardless of their ages).

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The following charts highlight how benefits may differ based on the circumstances above and the Retiree Medical Plan coverage option selected:

If You’re Medicare-Eligible

You and Any Medicare-Eligible Dependent(s) Have

Any Non-Medicare-Eligible Dependent(s) Have

Traditional Indemnity* Traditional Indemnity, unless there is a UnitedHealthcare POS in your area**

Medicare Advantage HMO Regular HMO

Rx Only Catastrophic POS

If You’re Not Eligible for Medicare

You and Any Non-Medicare-Eligible Dependent(s) Have

Any Medicare-Eligible Dependent(s) Have

Traditional Indemnity, unless there is a POS in your area**

Traditional Indemnity with Medicare primary

Regular HMO Medicare Advantage HMO

Catastrophic POS Rx Only *Traditional Indemnity is generally the assigned option for Medicare-eligible retirees. Medicare pays first, with Traditional Indemnity paying second, if necessary.

** Non-Medicare-eligible dependents of Medicare-eligible retirees are automatically enrolled in Traditional Indemnity unless there is a UnitedHealthcare POS in the area. If there is a UnitedHealthcare POS in the area, dependents will be enrolled in the POS until they are Medicare-eligible. In this case, your dependents’ Mental Health/Chemical Dependency coverage will be administered by United Behavioral Health (UBH).

What Happens When I (or One of My Dependents) Become Medicare-Eligible? When you or a covered dependent becomes eligible for Medicare (regardless of age), the Retiree Medical Plan will coordinate benefits with Medicare. The Medicare-eligible person will be enrolled in Traditional Indemnity, with Medicare as primary and the Retiree Medical Plan as secondary. Traditional Indemnity is generally administered by UnitedHealthcare. In certain limited circumstances, Aetna may administer this coverage; for example, for the Medicare-eligible dependents of non-Medicare eligible retirees with Aetna POS coverage.

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Your Retiree Medical Choices At-a-Glance The following chart is intended to summarize some of the benefits that will be available through the Retiree Medical Plan as of January 1, 2005. To be covered, the service or supply generally must:

• Be medically necessary for the treatment of illness or injury, or it must be for the preventive-care benefits that are specifically stated as covered;

• Be provided under the order or direction of a physician;

• Be provided by a licensed and accredited healthcare provider practicing within the scope of his or her license in the state where the license applies;

• Be listed as a covered service and satisfy all the required conditions of services as shown in the following chart; and

• Not be specifically listed as excluded by the health plan.

In addition, you may be required to meet certain conditions, as described throughout this SPD. Services and supplies meeting these criteria will be covered up to the allowable amount. Please keep in mind that if you or a covered dependent is eligible for primary coverage under Medicare, the Retiree Medical Plan will reduce its benefits by the amount Medicare would have paid for the same expenses.

Note that all in-network benefits are based on negotiated rates; out-of-network and non-PPO benefits are based on the allowable amount.

POS Catastrophic POS Traditional Indemnity Rx Only HMO

Feature In-Network Out-of-Network In-Network Out-of-Network

Choice of Doctors Select within a network of providers

Select any qualified provider

Select within a network of providers

Select any qualified provider

Select any qualified provider or within a network of PPO providers

Not applicable Select within a network of HMO providers




Annual Deductible Not applicable $500/individual $1,000/two-person$1,500/family

Not applicable Not applicable Ind.: $150 plus 1% of annual pension ($175 min. & $300 max.) Two-person: 2x ind. deductible Family: 3x ind. deductible

Not applicable Generally, not applicable

Annual Out-of-Pocket Maximum

$1,000/individual $2,000/two-person $3,000/family

$3,000/individual $6,000/two-person$9,000/family (excludes deductible)

$7,500/individual (combined in- and out-of- network)

$7,500/individual (combined in- and out-of-network)

$1,500/individual$3,000/two-person $4,500/family

$1,500/individual Generally, not applicable

Lifetime Maximum Benefit

Unlimited Unlimited Unlimited Unlimited Unlimited Not applicable Generally, unlimited

Covered Services

Physician Office Visits

You pay $25 copayment per visit

Plan pays 70% after deductible is satisfied

Plan pays 60% Plan pays 40% Plan pays 80% after deductible is satisfied

Not applicable Varies by HMO; go to Your Benefits Resources (YBR) or contact HMO directly

Maternity • Office visits:

pre/postnatal • In-hospital

delivery services

Plan pays 90% after first office copayment



Not applicable Varies by HMO; go to YBR or contact HMO directly

Outpatient Lab/ X-ray

Plan pays 90% Plan pays 70% after deductible is satisfied



Inpatient Hospitalization

Plan pays 90% Plan pays 70% after you pay $200/admission copayment







Outpatient Surgery




Inpatient Surgery Plan pays 90% Plan pays 70% after you pay $200/admission copayment




Anesthesia Plan pays 90% Plan pays 70% after deductible is satisfied



Emergency Use of Emergency Room

You pay $50 copayment (waived if admitted)

You pay $50 copayment (waived if admitted)



Nonemergency Use of Emergency Room

Plan pays 70% after you pay $50 copayment

Plan pays 70% after you pay $50 copayment



Birthing Center Plan pays 90% Plan pays 70% after deductible is satisfied



Home Healthcare Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 100 visits/year

Plan pays 60% Plan pays 40%; limited to 100 visits/year

Plan pays 80% after deductible is satisfied; limited to 200 visits/year


Private Duty Nursing

Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 100 shifts/year

Plan pays 60% Plan pays 40%; limited to 100 shifts/year

Plan pays 80% after deductible is satisfied; limited to 200 shifts/year


Extended Care Facility

Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 60 days/year

Plan pays 60% Plan pays 40%; limited to 60 days/year

Plan pays 80% after deductible is satisfied; limited to 120 days/year





Hospice Care Plan pays 90%; limited to 210 days/lifetime, combined in- and out-of-network

Plan pays 70% after deductible is satisfied; limited to 210 days/lifetime, combined in- and out-of-network

Plan pays 60%; limited to 210 days/lifetime, combined in- and out-of-network

Plan pays 40%; limited to 210 days/lifetime, combined in- and out-of-network

Plan pays 80% after deductible is satisfied; limited to 210 days/year


Rehabilitation Therapy

You pay $25 copayment/visit

Plan pays 70% after deductible is satisfied; speech therapy limited to 30 visits/year

Plan pays 60% Plan pays 40%; speech therapy limited to 30 visits/year

Plan pays 80% after deductible is satisfied; speech therapy limited to 30 visits/year


Emergency Air Ambulance Used for Emergency

Plan pays 90% Plan pays 90% Plan pays 60% Plan pays 60% Plan pays 80% after deductible is satisfied


Ambulance From Hospital to Hospital (if admitted to first hospital)



Emergency Use of Ambulance



Nonemergency Use of Ambulance

Not covered Not covered Not covered Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly

Chiropractic You pay $25 copayment/visit; limited to 30 visits/year combined with out-of-network

Plan pays 70% after deductible is satisfied; limited to 30 visits/year combined with in-network

Plan pays 60%; limited to 30 visits/year combined with out-of-network

Plan pays 40%; limited to 30 visits/year combined with in-network






Acupuncture Plan pays 90% Plan pays 70% after deductible is satisfied; limited to 30 visits/year

Plan pays 60% Plan pays 40%; limited to 30 visits/year



Durable Medical Equipment




Blood and Blood Derivatives




Second Surgical Opinion




In-Office Surgery Plan pays 90% Plan pays 70% after deductible is satisfied



Radiation Therapy Plan pays 90% Plan pays 70% after deductible is satisfied



Chemotherapy Plan pays 90% Plan pays 70% after deductible is satisfied



Physician Hospital Visits and Consultations




Podiatrist Plan pays 90% Plan pays 70% after deductible is satisfied






Cardiac Rehabilitation (phase three maintenance not covered)




Nutritionist Plan pays 90% Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly

Birth Control (prescription birth control or medication only)

See “Prescription Drug Program” in this table






Varies by HMO; go to YBR or contact HMO directly

Smoking Deterrents (prescription only)








Wigs Up to $300/Plan Year

Up to $300/Plan Year





Preventive Care

Routine Physical Exams

$25 copayment/ visit

Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly

Well-Child Care $25 copayment/ visit


Childhood immunizations

Plan pays 90% Not covered Plan pays 60% Not covered Not covered Not applicable Varies by HMO; go to YBR or contact HMO directly




Well-Woman Care (OB/GYN exam)



Mammogram Screening





Pap Smear in doctor’s office





Digital Rectal Exam and a blood test for PSA for prostate cancer for men age 50 and older




Newborn In-Hospital Care

Plan pays 90% Plan pays 70% after deductible is satisfied; limited to one visit

Plan pays 60% Plan pays 40%; limited to one visit

Plan pays 80% after deductible is satisfied; limited to one visit


Centers of Excellence

Yes Yes Yes Yes Yes No Varies by HMO; go to YBR or contact HMO directly

Cost Monthly Cost See “How Much

Do I Pay for Coverage?” under “Eligibility and Enrollment”

See “How Much Do I Pay for Coverage?” under “Eligibility and Enrollment”









Copayments You pay $25 copayment/visit for office visits and $50 emergency room copayment/visit

You pay $200 hospital copayment/ admission and $50 emergency room copayment/visit

Not applicable You pay $200 hospital copayment/ admission

Not applicable Not applicable Varies by HMO; go to YBR or contact HMO directly

Coinsurance Generally, the Plan pays 90% of the in-network rate

Generally, the Plan pays 70% of the allowable amount

Generally, the Plan pays 60% of the in-network rate

Generally, the Plan pays 40% of the allowable amount

Generally, the Plan pays 80% of the reasonable and customary charge, while you pay the remaining 20%


Whether you are responsible for charges in excess of allowable amounts

No Yes No Yes Yes In-Network: No Out-of-Network: Yes


Lifetime Maximum Benefit

None None None None None None Varies by HMO; go to YBR or contact HMO directly

Who is responsible for precertification?

Your PCP You Your PCP You You Not applicable Varies by HMO; go to YBR or contact HMO directly

Penalty for failure to precertify care

Not applicable 20% reduction in benefits up to $400 maximum/ occurrence

Not applicable 20% reduction in benefits up to $400 maximum/ occurrence

20% reduction in benefits up to $400 maximum/ occurrence


Do you have to file claim forms?

No Yes No Yes Yes In-Network: No Out-of-Network: Yes





Prescription Drug Program

Separate Annual Out-of-Pocket Maximum*

$1,500/individual $1,500/individual $1,500/individual $1,500/individual Not applicable

Retail Copayments (limited to 30-day supply using participating pharmacy)

$10 generic $25 formulary brand $40 nonformulary

Plan pays 70% after you pay separate $100/individual ($300/family) deductible


Plan pays 70% after you pay separate $100/individual ($300/family) deductible

In-Network: • $10 generic • $25 formulary

brand • $40

nonformulary

Out-of-Network: Plan pays 70% after you pay separate $100/individual ($300 family) deductible

In-Network • $10 generic • $25 formulary

brand • $40

nonformulary Out-of-Network: Plan pays 70% after you pay separate $100/individual ($300 family) deductible


Medco By Mail: (limited to 90-day supply)


Not applicable $20 generic $50 formulary brand $80 nonformulary

Not applicable • $20 generic • $50 formulary

brand • $80

nonformulary

• $20 generic • $50 formulary

brand • $80 non-

formulary


*This prescription drug out-of-pocket maximum is separate from any other out-of-pocket maximums that apply to your other healthcare benefits.




Non-Medicare-Eligible Mental Health and Chemical Dependency Program Inpatient $25/day; limited

to 120 days/year (in- and out-of-network combined)

Plans pays 50% after $200/individual deductible is satisfied; $500/admission copayment; limited to 30 days/year (in- and out-of-network combined)

Plan pays 60%; limited to 120 days/year (in- and out-of-network combined) (in- and out-of-network combined)

Plan pays 40% after $200/individual deductible is satisfied; $500/admission copayment; limited to 30 days/year (in- and out-of-network combined)

In-Network: $25/day; limited to 120 days/year (in- and out-of-network combined) Out-of-Network: Plan pays 50% after $200/individual deductible is satisfied; limited to 30 days per year (in- and out-of-network combined)


Alternative Care (may include partial hospitalization, residential treatment, and services of a halfway house or group home)

$25/day; limited to 120 days/year

Not covered Plan pays 60%; limited to 120 days/year

Not covered In-Network: $25/day; limited to 120 days/year Out-of-Network: Not covered


Outpatient $25/visit; limited to 50 visits/year (in- and out-of-network combined)

Plan pays 50% after $200/individual deductible is satisfied; limited to 50 visits/year (in- and out-of-network combined)

Plan pays 60%; limited to 50 visits/year (in- and out-of-network combined)

Plan pays 40% after $200/individual deductible is satisfied; limited to 50 visits/year (in- and out-of-network combined)

In-Network: $25/day; limited to 50 visits/year (in- and out-of-network combined) Out-of-Network: Plan pays 50% after $200/individual





deductible is satisfied; limited to 50 visits/year (in- and out-of-network combined)

Medicare-eligible Mental Health and Chemical Dependency Benefits

Inpatient Your coverage is provided under Traditional Indemnity; the Plan is secondary to Medicare and pays up to a total of 80% of the Medicare-approved amount (including any amounts payable by Medicare). Chemical Dependency benefits are limited to 30 days/confinement and 2 confinements/lifetime.


Ou Outpatient Your coverage is provided under Traditional Indemnity; the Plan is secondary to Medicare and pays up to a total of 50% of the Medicare-approved amount (including any amounts payable by Medicare).


For more information about your POS and Catastrophic POS options, see “A Closer Look at POS.” For additional information about Traditional Indemnity, see “A Closer Look at Traditional Indemnity.” For more information about HMO/Medicare Advantage HMOs, see “A Closer Look at the HMO/Medicare Advantage HMOs.” For specific HMO provisions, log on to Your Benefits Resources, or call your HMO’s Member Services phone line.

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Does Lucent Subsidize Dependent Coverage? Effective January 1, 2004, Lucent no longer subsidizes dependent coverage for retirees who:

• Retired from Lucent on or after March 1, 1990; and

• Had an annual base salary of $65,000 or more at the time they retired.

If you’re affected by this rule, you can still cover your eligible dependents through a separate plan, called the Lucent Technologies Inc. Medical Expense Plan for Eligible Dependents of Retired Employees. To do so, you will have to pay 100 percent of their cost for coverage at group rates. Your monthly contribution for dependent coverage will be deducted from your pension check if your check is large enough to cover it; otherwise, you’ll be billed for your coverage.

Eligibility and Enrollment

Am I Eligible for Coverage? You can participate in the Retiree Medical Plan if you are an eligible retiree — that is, if you’re a former management employee or former non-represented occupational employee who terminated employment from a participating company and is:

• Eligible to receive a service or disability pension under the Lucent Technologies Inc. Pension Plan or the Service Based Program of the Lucent Retirement Income Plan; or

• In the Account Balance Program (ABP) and at least 50 years old with 15 years of net credited service.

Are My Dependents Eligible for Coverage? Your Class I dependents are eligible for coverage. If you retired before March 1, 1990, or if you retired on or after March 1, 1990 and earned an annual base salary of less than $65,000 at the time you retired, eligible Class I dependents include:

• Your spouse (or common-law spouse if recognized in your state of residence);

• Your surviving spouse (or common-law spouse if recognized in your state of residence);

• Your same- or opposite-sex domestic partner and his or her children;

• Your children up to the end of the year in which they reach age 23;

• Children for whom you’re required to provide coverage under a Qualified Medical Child Support Order (QMCSO); and

• Incapacitated children if unmarried and eligible dependents if certified by Claims Administrator (see the definition of “Class I Dependents” in “Your Retiree Medical Plan Dictionary”).

You can also cover your eligible Class II dependents who have been continuously covered prior to January 1, 1996. No new Class II dependents may be enrolled. Class II dependents are defined as:

• Your unmarried dependent children not included as Class I dependents;

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• Your unmarried dependent stepchildren not included as Class I dependents;

• Your unmarried grandchildren, your unmarried brothers and sisters and your parents and grandparents; and

• Your lawful spouse’s parents and grandparents.

Class II dependents must also meet the following requirements:

• They receive less than $12,000 per year in income from all sources (other than your support);

• They live with you or in a nearby household provided by you (note that unmarried dependent stepchildren must live with you throughout the period of coverage); and

• They either:

⎯ Have been continuously re-enrolled during each annual open enrollment since January 1, 1996 and continue to be re-enrolled each year; or

⎯ Were enrolled before June 1, 1986 (grandfathered dependents).

Note: If your Class II dependent was enrolled as of January 1, 1996 under the corresponding plan offered by AT&T, and you are enrolled in a POS option, he or she would be covered under Traditional Indemnity and covered for Other Covered Charges (OCC) Only coverage, which is limited to the following benefits only: extended hospital confinements, nursing services, physician visits, physical therapy, blood, prostheses, rental of durable medical equipment, replacement of durable medical equipment, local professional ambulance services, air ambulance services, mammography, chiropractic care, podiatric care, orthotic care, physiotherapy and hemodialysis/peritoneal dialysis for chronic renal disease. Benefits will be administered by UnitedHealthcare.

What Happens When I (or One of My Dependents) Become Medicare-Eligible? When you or a covered dependent becomes eligible for Medicare (regardless of age), the Retiree Medical Plan will coordinate benefits with Medicare. The Medicare-eligible person will be enrolled in Traditional Indemnity, with Medicare as primary and the Retiree Medical Plan as secondary. Traditional Indemnity is administered by UnitedHealthcare.

What if I Have Eligible Dependents Who Are Also Eligible for Lucent Coverage as an Employee or Retiree? There are many “Lucent families,” consisting of retired employees and their lawful spouses, their domestic partners or their children who have also retired from or have been employed by Lucent. These situations may affect coverage under the medical options.

How Does This Situation Affect Enrollment Rules? One occupational retired or active Lucent employee can’t enroll another occupational or management retired or active occupational or management Lucent employee as a dependent. This means if you’re eligible as a retired Lucent employee, you must enroll as a retired employee. You can’t enroll as a dependent of another retired or active Lucent employee, even if you’re the employee’s lawful spouse or domestic partner. (There may be an exception to this rule; see the

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exception for HMOs in “When Does a Contribution Waiver Apply?” in this section.) However, a retired management or active Lucent employee may enroll another retired management or active management Lucent employee as a dependent.

Each retired or active Lucent employee may choose any of the options available to him or her, regardless of the option the other family member selects. Only one employee or retiree may enroll any given eligible dependent. Either you or your Lucent Technologies Inc. lawful spouse or domestic partner, as an employee or retiree, may cover your dependent children. However, a child may not be covered by both parents at the same time.

How Does This Situation Affect Benefits? Expenses incurred by you and any dependents enrolled with you under your selected option count toward the two-person or family deductible and two-person or family out-of-pocket maximum under that option. The following rules apply for each family member who enrolls separately from you as a Lucent employee or retiree:

• The individual, two-person or family out-of-pocket maximum limit applies separately.

• The two-person or family deductible will apply only if at least one of you is eligible to claim the other as a Class I dependent, and the retired employee is enrolled in Traditional Indemnity. If your lawful spouse, domestic partner or dependent is a retired or occupational Lucent employee, the retiree must be enrolled in Traditional Indemnity.

• If the family deductible does apply, it’s not automatic. You’ll need to submit your explanation of benefits statements to your healthcare company to show you paid more toward the family deductible than required. You’ll also need to submit a claim for reimbursement.

When Does a Contribution Waiver Apply? A contribution waiver applies when:

• Two retired Lucent employees or one retired and one active Lucent employee enroll in the same HMO; and

• At least one of the retired or active employees would qualify as a Class I dependent of the other.

In this case, only one active or retired employee will be required to pay the full employee contribution. The other may be covered at the lesser dependent contribution rate. If this applies for you, one of you must notify Lucent. Lucent reserves the right to verify these situations.

How Do I Enroll? When you retire, enrollment materials and information about your coverage options will be sent to you at your address of record.

You generally do not need to actively enroll if the coverage option you had as an active employee is available to you in retirement and you wish to remain in that option. You do need to enroll if:

• You’re eligible to enroll in the Retiree Medical Plan but do not receive a subsidy;

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• You want a different coverage option than you had as an active employee and received a company subsidy;

• You want to waive or need to choose coverage and are eligible to receive a service or disability pension; or

• You want to make coverage changes for your Class I dependents, including your domestic partner dependents.

To make any of the above changes, you have to make your enrollment elections by the date stated in your enrollment package.

If You Do Not Enroll If you are eligible to receive a service or disability pension, you receive a company subsidy and you do not make any elections by the date shown in your enrollment package, you will be assigned the same coverage option you (and your covered dependents) had as an active employee. If that option is not available to you (or your dependents) in retirement, you will be assigned coverage in an assigned option.

If you are eligible to enroll for coverage but do not receive a subsidiary, and you do not enroll by the date shown in your enrollment package, you will not have coverage after your coverage as an active employee ends.

Annual Open Enrollment Elections made during annual open enrollment take effect on the first day of the next calendar year.

Domestic Partner Benefits As a retired employee, you cannot add any new domestic partner dependents under the Retiree Medical Plan once in retirement. If, however, you had a domestic partner dependent covered under the Lucent Technologies Inc. Medical Expense Plan for Management Employees on the date of your retirement, you may continue coverage for the enrolled domestic partner dependent.

Will I Receive a Confirmation of My Enrollment? You’ll receive a confirmation statement after you enroll or change benefits during annual open enrollment or at any other time during the year. Be sure to review the information carefully and report any discrepancies immediately.

How Do I Pay for Medical Coverage? Your contribution, if any, toward the cost of coverage under the Retiree Medical Plan will be deducted from your monthly pension check. If you do not receive a pension from Lucent, you will submit your payment for coverage to your enrollment administrator. During annual open enrollment, you’ll have access to cost information for all the available options.

How Do Retiree Medical Caps Work? Lucent may subsidize a portion of your annual medical premiums up to a certain percentage, which is typically based on your status, your date of retirement and your years of service. The

You should note that your coverage may be affected if you don’t act during annual open enrollment; for example, if you don’t re-enroll your Class II dependents, they cannot be covered in the future.

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applicable percentage of the retiree medical cap — the maximum amount contributed by the company — is the amount Lucent will contribute annually to the cost of the monthly premiums for your Retiree Medical Plan. The amount provided by Lucent is dependent upon whether you are eligible for Medicare or not and the level of coverage you select (individual, two-person or family). Subject to the terms of the Plan, in 2004 the company will provide the subsidy for which you are eligible based on the following chart:

If You Retired… Then Lucent Provides…

As a non-represented occupational employee with a service or disability pension

100% of the cost for coverage*

Before March 1, 1990 with a service or disability pension 100% of the cost for coverage*

On March 1, 1990 through December 31, 1997 with a service or disability pension

100% of the retiree healthcare cap

On January 1, 1998 through December 31, 2000 with a service or disability pension and are qualified for retirement under the pre-January 1, 1998 pension eligibility requirements

90% of the retiree healthcare cap, regardless of your years of service

After January 1, 1998 and you are not qualified for retirement under pre-1/1/1998 pension eligibility requirements and:

• Your service as of June 30, 2001 is 25 years or more or you retired under the 2001 Voluntary Retirement Program.

• Your service as of June 30, 2001 is 20 years but less than 25.

• Your service as of June 30, 2001 is 15 years but less than 20.

• Your service as of June 30, 2001 is less than 15 years and you retire with at least 15 years of service and after reaching age 50.

• 90% of the retiree healthcare cap

• 75% of the retiree healthcare cap.

• 50% of the retiree healthcare cap.

• 0% of the retiree healthcare cap with an opportunity to purchase retiree health insurance at group rates without proof of insurability.

*You may be required to pay a premium contribution for some HMOs.

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If you are eligible for a percentage of the retiree medical cap, subject to the terms of the plan, the company will provide an amount based on the following chart.

If You’re NOT Medicare-Eligible

If You ARE Medicare-Eligible*

Single Family Single Family Annual retiree medical cap… $3,925.00 $7,850.00 $1,700.00 $3,875.00 Monthly retiree medical cap… $327.08 $654.17 $141.67 $322.92 *Since Medicare becomes your primary coverage after you turn age 65, your retiree healthcare cap subsidy amount reflects that change.

Visit the Your Benefits Resources Web site at http://resources.hewitt.com/lucent, or call the Lucent Benefits Center for your actual contributions.

When Does Coverage Begin? Coverage you elect for yourself and/or your eligible dependents during retirement begins on the first day of the month following your retirement date.

When Can I Change My Coverage? At Annual Open Enrollment You may change your benefit elections only once each year during annual open enrollment, unless you have a qualified status change (see “Qualified Status Changes” in this section for more information). You can always drop coverage at any time, for any reason.

During the Year In general, once you enroll for coverage, your election remains in effect for the entire calendar year — until the next annual open enrollment period. However, under certain circumstances, you may enroll for or change coverage during the year. If you experience a qualified status change or other eligible circumstance, you must make a change within 31 days of the date the change occurs. You can generally switch into — or out of — a Medicare Advantage HMO at any time.

Qualified Status Changes A qualified status change is a specific change in circumstance that affects eligibility for coverage under the Retiree Medical Plan. A change may be made only if it’s on account of and consistent with the qualified status change. Most changes allow you to change coverage level, enroll for coverage or drop coverage. Typically, there are few changes that would allow you to change Retiree Medical Plan options.

Qualified status changes include the following:

Qualified Status Change Description

Marital Status A change in your legal marital status, including marriage, death of your spouse, divorce, legal separation or an annulment.

Number of Family Members Events that change the number of eligible family members, including birth, adoption, placement for adoption or death.

Employment Status A termination or commencement of employment by you, your spouse or child.

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Work Schedule for Your Spouse

A reduction or increase in hours of employment by you, your spouse or child, including a switch between part-time and full-time or the start of or return from an unpaid leave of absence.

Family Member Meets or No Longer Meets the Eligibility Requirements

An event that causes a member of your family to meet or to no longer meet the Retiree Medical Plan’s eligibility requirements for coverage. This may include a child reaching the maximum age for coverage, etc.

Residence A change in your place of residence. The company also generally considers corresponding changes for domestic partner dependents as qualified status changes. However, you may not enroll a new domestic partner dependent in the Retiree Medical Plan unless you were covering that dependent at the time you retired, in which case you may continue his or her coverage or re-enroll this domestic partner.

Other Changes in Circumstance There are other events that permit you to make a change in coverage during the year. The change that you make due to these events must be consistent with the event. These events are:

• The Retiree Medical Plan or your spouse’s, former spouse’s or other individual’s plan receives a judgment, decree or court order — for example, a QMCSO — that requires you or another individual to provide healthcare coverage for a dependent.

• You, your spouse or your dependent becomes eligible for or loses Medicare or Medicaid coverage.

• You had elected No Coverage for you and your family because you had coverage elsewhere (for example, under a spouse’s plan), but later that other coverage ends. That coverage must end due to a loss of eligibility, such as a divorce or termination of employment, or the other employer’s ceasing to make contributions to the plan. You can’t make a change during the year if your “other coverage” is lost due to your own fault, such as failing to make your required contributions.

• COBRA coverage from another employer for you, your spouse or dependent is exhausted. You must continue COBRA coverage for the full duration of the COBRA coverage period. The enrollment period is different from the enrollment period under this Plan.

Special Enrollment Rules due to New Dependent Eligibility The following special enrollment rules also apply. The Health Insurance Portability and Accountability Act (HIPAA) gives you additional flexibility in who can enroll when you experience certain qualified status changes (specifically, marriage, birth, adoption or placement for adoption).

• Nonenrolled retiree: If you’re eligible but have not yet enrolled, you may enroll as of the date of your marriage, or the date of the birth, adoption or placement for adoption of your child.

• Nonenrolled spouse: If you’re already enrolled, you may enroll your spouse at the time of his or her marriage to you. In addition, you may enroll your spouse if you acquire a child through birth, adoption or placement for adoption.

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• New dependents/spouse of a nonenrolled employee: If you’re eligible but not enrolled, you may enroll an individual (spouse or child) who becomes your eligible dependent as a result of marriage, birth, adoption or placement for adoption. However, you (the non-enrolled employee) also must be eligible to enroll and actually enroll at the same time.

What if My Available Coverage Options Change During the Year? If you move into or out of a POS service area or if the service area you’re living in is eliminated, you may need to make a change to your medical coverage option before the next annual open enrollment.

If your coverage option changes during the year, contact the Lucent Benefits Center at 1-888-232-4111 to see how your coverage will be affected.

How Do I Make Changes to My Coverage During the Year? If you experience one of the events described in this section and need to change your coverage during the calendar year, you must visit Your Benefits Resources at http://resources.hewitt.com/lucent, or call the Lucent Benefits Center within 31 days of the date the event occurs. If you don’t, you can’t make a coverage change until the next annual open enrollment, unless you once again meet one of the conditions for a change during the year.

Provided you notify the Plan within the required time frames, any coverage change due to a permissible event takes effect:

• On the date of a newborn dependent’s birth;

• On the date of a dependent’s adoption or placement for adoption; and

• For all other events, on the date of the qualified status change.

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What Happens to My Retiree Medical Coverage if I…

If You… This Is What Happens… or a Covered Dependent Becomes Eligible for Medicare

Medicare, a federal health insurance program that covers people age 65 and older (as well as some disabled people under age 65), provides benefits whether you are still working or retired. The Medicare program has two parts:

• Medicare Part A, or Hospital Insurance, helps pay for care during a hospital stay and for some follow-up care after you leave the hospital.

• Medicare Part B, or Medical Insurance, helps pay for physician fees, outpatient services and many other services and supplies not covered under Medicare Part A.

Generally, when you or a covered dependent reaches age 65, you become eligible for Medicare. To enroll for Medicare, you should contact your Social Security office at least three months before you or your spouse or domestic partner reaches age 65.

You should apply for Medicare Part A as soon as you become eligible and plan on securing Part B when you retire. If you do not enroll in Medicare Part A when you are first eligible, penalties and delays may apply when you later try to enroll for coverage.

You or a covered dependent may also be eligible for Medicare before age 65 due to disability. In this care, it is important to enroll in Medicare as soon as possible.

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If You… This Is What Happens… Experience a Qualified Status Change Between annual open enrollment periods, coverage-type changes are allowed for events such as:

• Marriage;

• Divorce;

• Birth or adoption of a child; or

• Your lawful spouse’s or your domestic partner’s gain or loss of employment.

The type of change you can make (for example, a change in coverage category) depends on the event.

Note that any change in coverage that you request must be on account of and consistent with your qualified status change. For example, if you get divorced, you may drop your spouse from your medical coverage; however, you cannot drop the coverage that you have for yourself.

To make a change, visit Your Benefits Resources, or call the Lucent Benefits Center. Changes must be made within 31 days of the qualified status change, or you will have to wait until the next annual open enrollment period to make the change.

Have a Change in Dependent Status You must update your dependent information whenever you have a change in dependent status (for example, if your dependent no longer meets eligibility requirements; see “Eligibility and Enrollment”). To update dependent information, visit Your Benefits Resources, or contact the Lucent Benefits Center.

Die Coverage for your enrolled Class I dependents, including domestic partner dependents and Class II dependent children, automatically continues for six months after you die, as long as your dependents’ share of the cost continues to be paid. Lucent generally contributes at the same rate it contributed while you were alive toward the cost of this coverage for your Class I dependents who were covered at the time of your death. After six months, your non-Medicare-eligible dependents (other than Class II dependents who are not children) have the option of continuing coverage under COBRA for up to another 30 months (a total of 36 months) if they make the required contributions.

Class II dependents other than Class II dependent children are not eligible to continue coverage under COBRA and are not eligible for any company-paid coverage. Medicare-eligible dependents do not need to enroll for COBRA to continue coverage; they can continue coverage through the Family Security Program (FSP), as described in the next paragraph. For more information about COBRA and the FSP, see “Continuation of Coverage.”

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If You… This Is What Happens… At the end of the COBRA continuation period, your

surviving lawful spouse or domestic partner may choose to continue coverage under Traditional Indemnity if he orshe pays the full cost for this coverage under the FSP. Your spouse or domestic partner also may cover any Class I dependent children who were enrolled immediately before your death as long as they still qualify as eligible Class I dependents.

As long as the required contributions are made under Traditional Indemnity, coverage may continue as follows:

• Spousal or domestic partner dependent coverage may continue indefinitely; and

• Dependent child coverage may continue until the earlier of the date that:

⎯ The spouse’s or domestic partner’s coverage ends; or

⎯ The dependent child ceases to be an eligible dependent under the Retiree Medical Plan.

For more information, see “A Closer Look at Traditional Indemnity.”

Move to a New Address If you move into or out of an area covered by a healthcare company’s network, you may need to make a change to your medical coverage option within 31 days or be assigned coverage. If your coverage option changes during the year, here’s what happens:

• Any amounts you have paid toward your annual deductible under your prior option apply toward satisfying your deductible under your new option during that calendar year. Deductible amounts applied out-of-network under a POS apply to deductible amounts under the Traditional Indemnity option, and vice versa.

• Amounts you have paid that apply toward your out-of-pocket maximum under the Traditional Indemnity option apply toward satisfaction of the out-of-network out-of-pocket maximum under a POS during that calendar year, and vice versa.

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If You… This Is What Happens… • If your healthcare company changes, amounts you

have paid toward satisfying your in-network out-of-pocket maximum under a POS apply toward satisfaction of that limit under a subsequent POS option with a different carrier during that calendar year.

• Amounts you have paid as copayments under a POS or an HMO do not apply toward satisfying either the deductible or coinsurance requirements under the Traditional Indemnity option.

• Amounts you have paid as deductibles or coinsurance under the Traditional Indemnity option do not apply toward satisfying the in-network out-of-pocket maximum under a POS.

• For any benefits with an annual limit, such as home healthcare and chiropractic care, any services incurred under your prior coverage count toward the benefit limits of your new coverage during that calendar year.

• If you are enrolled in a POS and are changing healthcare companies because you moved, any amounts applied to your lifetime maximum hospice care benefit will apply toward that maximum under any POS and any new healthcare company.

• Your Mental Health and Chemical Dependency Program and Prescription Drug Program benefits are unaffected unless you move into or out of an HMO/Medicare Advantage HMO service area.

A move may cause changes in your benefits. Promptly notifying your enrollment administrator of your new address can help ensure that your benefits continue uninterrupted (see “Important Contacts”).

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If You… This Is What Happens… Are Affected By a Qualified Medical Child Support Order (QMCSO)

If the parents of dependent children are divorced or legally separated and there is a court decree or a Qualified Medical Child Support Order (QMCSO) establishing financial responsibility for medical care, Lucent Technologies Inc. will comply with the terms of that order.

Payments under the Medical Plan will be made according to the terms of a QMCSO. If the Plan Administrator determines that a medical child support order qualifies, benefit payments from this Plan may be made according to the qualified order to the child or children named in the order, or to the custodial parent or legal guardian, where appropriate, or to healthcare providers (if benefits have been properly assigned by the child or children or by the custodial parent or legal guardian).

Contact the Domestic Relations Matters Group for more information on how QMCSOs are administered and to receive a copy of Lucent’s QMCSO administrative procedures at no cost.

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How Medicare Works With Lucent Coverage

What Is Medicare? Medicare is a federal health insurance program for people age 65 and older; it also provides coverage for certain younger people with disabilities. The program is divided into two parts:

• Medicare Part A (Hospital Insurance) helps cover your inpatient care in hospitals, critical access hospitals and skilled nursing facilities. It also covers hospice care and some home healthcare.

• Medicare Part B (Medical Insurance) helps cover other medically necessary services and supplies, including doctors’ services, outpatient hospital care and some other medical services that Part A does not cover (for example, certain physical and occupational therapy services and some home healthcare services).

• Medicare Part C, Medicare+Choice, offers plan choices in addition to the original fee-for-service Medicare. These plans must offer the same benefit coverage as Medicare Parts A and B, and may provide additional benefits.

When Medicare-eligible, you and your eligible dependents will have the option to enroll in Medicare (Part A — Hospitalization, and Part B — General Physician Services). Regardless of whether you elect to purchase Medicare Part B, the Claims Administrator will apply Medicare Carve-Out to your claims. Medicare Carve-Out is when the Claims Administrator “carves out” the amount that would have been payable by Medicare (Part A and Part B) and will only consider the balance remaining according to the terms and conditions of the Traditional Indemnity option.

How Do I Enroll for Medicare? For maximum benefits, you should enroll for Medicare Part A and Part B as soon as you or a covered dependent become eligible as outlined above. To enroll, you need to contact your Social Security office.

Contact your local Social Security office for information on the time frame for enrollment. It is generally recommended that individuals under age 65 contact Social Security three months before their 65th birthday, whether retired or actively employed. Keep in mind, however, that Medicare is the secondary payor for Medicare-eligible individuals age 65 and older who are actively employed.

Individuals who are eligible for Medicare due to disability should enroll for Medicare as soon as possible, regardless of age.

If you are eligible for primary coverage under Medicare (regardless of whether you have actually enrolled), the Medical Plan will reduce its benefits as if you were enrolled for Medicare Parts A and B. See “How Do Medicare and Lucent Medical Coverage Work Together?”


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What Happens to My Dependents’ Coverage When I Become Medicare-Eligible? The following chart show the coverage your non-Medicare-eligible dependents will receive, based on your coverage, if you become Medicare-eligible:

If You’re Medicare-Eligible You and Any Medicare-Eligible Dependent(s) Have Any Non-Medicare-Eligible Dependent(s) Have

Traditional Indemnity Traditional Indemnity, unless there is a UnitedHealthcare POS in your area

Medicare Advantage HMO Regular HMO

Rx Only Catastrophic POS If You’re Not Yet Medicare-Eligible, But You Have Dependents Who Are The following chart shows the coverage your Medicare-eligible dependents will receive, based on your coverage, if you are not yet Medicare-eligible:

If You’re Not Eligible for Medicare

You and Any Non-Medicare-Eligible Dependent(s) Have Any Medicare-Eligible Dependent(s) Have POS Traditional Indemnity, with Medicare primaryTraditional Indemnity Traditional Indemnity, with Medicare primaryRegular HMO Medicare Advantage HMO

Catastrophic POS Rx Only How Do Medicare and Lucent Medical Coverage Work Together? As you consider your medical care options, it’s important to keep in mind the following key points about Medicare benefits and Lucent coverage:

• Medicare pays for medical costs first (Medicare is the primary plan). Your Retiree Medical Plan pays after Medicare pays (Lucent is the secondary plan) if the service is covered by the Retiree Medical Plan and the Retiree Medical Plan has a higher coverage level than Medicare.

• When you become eligible for Medicare, you are automatically enrolled in Medicare Part A (inpatient hospital care, skilled nursing facility care, hospice care and some healthcare coverage).

• Although Medicare Part B coverage (doctors’ services, outpatient hospital care and some other medical services not covered under Medicare Part A) is voluntary, you are automatically enrolled unless you decline coverage.

• Even if you choose to decline Medicare Part B coverage, Lucent will still coordinate your benefits as if you were enrolled in Medicare Part B.

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• If you choose to use a provider who does not participate in Medicare, Lucent will still coordinate your benefits as if they do.

• The Retiree Medical Plan won’t duplicate the coverage you receive with Medicare. Medicare often pays a higher percentage of the cost of some services. If you have Medicare Part A and Part B coverage, you may find that most, even all, of your benefits are provided through Medicare, even if you are enrolled in the Retiree Medical Plan. Traditional Indemnity pays 80 percent for many services.

• The Retiree Medical Plan will only pay for covered expenses up to what it would pay if it were your primary plan.

• If you’re Medicare-eligible and have an actively employed spouse or domestic partner in a company other than a participating company in the Retiree Medical Plan and your spouse or domestic partner covers you under their plan, your actively employed spouse or domestic partner’s medical plan is primary, Medicare is secondary and the Traditional Indemnity option is tertiary.

• Whether or not you elect to purchase Medicare Part B, the healthcare company will apply a Medicare carve-out to your claims. A Medicare carve-out is when the healthcare company “carves out” the amount that would have been payable by Medicare (Part A and Part B) and will only consider the balance remaining according to the terms and conditions of the Traditional Indemnity option.

• If Lucent’s coverage level for a specific service is equal to or less than what’s covered by Medicare Part A and Part B, then the Retiree Medical Plan generally does not pay any of the cost of the service. (Note that if you reach the out-of-pocket maximum under the Retiree Medical Plan, then the Retiree Medical Plan would pay up to 100 percent of the allowable amount for all covered services.) More information on Medicare and Lucent’s medical coverage is available on the Your Benefits Resources Web site at http://resources.hewitt.com/lucent. We also recommend visiting the Medicare Web site at http://www.medicare.gov on the Internet for more information on how Medicare works.

An Example: Coordination of Benefits When Medicare Is Primary When Medicare is primary, the Traditional Indemnity option pays second. Therefore, all COB claims with the Retiree Medical Plan are processed at Traditional Indemnity benefit levels. Lucent will only pay up to what it would have paid had it been the primary plan as outlined using the examples in the following chart:

Type of Service Medicare Payment Medical Plan as Secondary Coverage

Office Visit 80% 0% since the Medical Plan would have paid 80% as the primary payor

Surgery 80% Lucent could pay up to 100% of the balance*

* Note: This example assumes annual out-of-pocket maximum has been satisfied.

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In addition, there are times when Class II dependents are ineligible for Medicare, such as when they are not citizens and have not lived in the United States for five or more years. In these circumstances, the healthcare company needs to confirm that they do not have Medicare as a primary payor. If this is determined, the Medical Plan will assume primary coverage for these lass II dependents until they become Medicare-eligible.

When Medicare-eligible, you and your eligible dependents will have the option to enroll in Medicare (Part A: Hospitalization; Part B: Physician Services; and Part C: Medicare Advantage HMOs.).

Whether or not you elect to purchase Medicare Part B, the healthcare company will apply Medicare “carve-out” to your claims. Medicare carve-out is when the healthcare company “carves out” the amount that would have been payable by Medicare (Part A and Part B) and will only consider the balance remaining according to the terms and conditions of Traditional Indemnity.

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For important definitions of certain terms (including allowable amount), see “Your Retiree Medical Plan Dictionary.”

A Closer Look at POS

What Is a POS? In a POS, you have the choice, each time you need medical care, of receiving in-network or out-of-network care. When you receive in-network care, your out-of-pocket costs are generally lower; when you receive out-of-network care, your cost are generally higher.

The company offers two different Point of Service (POS) options — a POS and a Catastrophic POS. Each POS option generally covers the same medical services and supplies but has different annual deductibles, coinsurance, out-of-pocket maximums and employee contributions. With a POS option, you have a choice each time you need medical care — you can receive in-network or out-of-network care. When you receive in-network care, your out-of-pocket costs are lower. When you receive out-of-network care, your out-of-pocket costs are higher, plus you may need to first meet a deductible.

When you choose coverage under a POS, you have access to a Prescription Drug Program through Medco Health Solutions, Inc. (Medco). You also have access to a Mental Health and Chemical Dependency Program through Magellan Behavioral Health. (If you’re Medicare-eligible and you have non-Medicare-eligible dependents, their mental health benefits are provided by United Behavioral Health. Mental health benefits for Medicare-eligible participants are provided under Traditional Indemnity and are secondary to Medicare.) See “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only” and “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity” for more information.

How Do the POS Options Work? Depending on whether you seek in-network or out-of-network care, a POS works differently, as shown in the following chart:

You may select a primary care physician (PCP): general/family practitioner, internist or pediatrician

▼ Whenever you need care, you choose… ▼ ▼

In-network care Out-of-network care ▼ ▼

Go to your PCP or any network provider

Go to any licensed doctor or specialist

▼ ▼ Are treated by your PCP or a network

provider Are treated by a doctor or

specialist ▼ ▼

Do not submit claim form Submit claim form ▼ ▼

Receive in-network benefits for covered services

Receive out-of-network benefits for covered services

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What Benefits Do POS and Catastrophic POS Provide? For a detailed overview of how POS and Catastrophic POS pay benefits, see “Your Retiree Medical Plan At-a-Glance.”

What Is the Role of a PCP? You’re encouraged (although not required) to select a PCP when you enroll. Your PCP can play an important role in helping you navigate the healthcare system. By doing so, you can begin to establish a relationship with a doctor who can then better manage your care. Your PCP can be a general practitioner, family practitioner, an internist or a pediatrician and is responsible for:

• Providing your in-network healthcare;

• Referring you to in-network specialists;

• Arranging in-network hospitalization, testing and other services for you;

• Handling in-network precertification, if needed; and

• Handling claims for in-network care, so there’s little or no paperwork for you.

You can choose the same PCP for all family members, or each covered family member can have a different one. You can change your PCP at any time, for any reason.

What Is a Provider Network? A provider network is made up of physicians, hospitals and supporting providers, such as home healthcare agencies and extended care facilities, that have agreed to accept lower, negotiated fees for services provided to Plan participants. When you use a provider who participates in the network, the Plan pays a higher percentage of a lower, negotiated in-network charge.

How Are Benefits Under the POS Options Determined? Benefits are determined differently depending on which type of POS you are enrolled in and whether care is received in-network or out-of-network, as shown in the following chart. In all cases, POS benefits are provided only for medically necessary services and supplies (as determined by the Retiree Medical Plan) and are paid up to the allowable amount. When you receive out-of-network care, you are responsible for amounts in excess of the allowable amount.

Finding a Network ProviderTo obtain a current listing of network providers, visit your health plan’s Web site, or call their Member Services phone number shown on your ID card.

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In-Network Benefits

POS You generally are charged a flat fee — or copayment — for:

• Office visits provided by your PCP or other in-network provider;

• Emergency room visits;

• Prescriptions filled through participating pharmacies or Medco By Mail under the Prescription Drug Program; and

• Mental health or chemical dependency conditions under the Mental Health and Chemical Dependency Program.

Any other charges for covered healthcare services are generally paid at 90 percent, and your coinsurance is the remaining 10 percent.

Catastrophic POS Catastrophic POS generally pays 60 percent, and your coinsurance is the remaining 40 percent.

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Out of-Network Benefits*

POS You must first meet the annual individual, two-person or family deductible. Then, the POS generally pays 70 percent, and your coinsurance is the remaining 30 percent.

It is your responsibility to contact Member Services to precertify all Hospitalization (if Medicare pays first for this service, you only need to precertify shortly before your Medicare benefits are exhausted); Skilled nursing and rehabilitation facilities; All home healthcare services; Reconstructive procedures; Hospice; Dental (accident only); Durable medical equipment (such as prosthetic devices) over $1,000; Medical injectables, including intravenous immunoglobulin growth hormone (IVIG), Rebif®, and Blood-clotting factors; Uvulopalatopharyngoplasty (indicated for the treatment of sleep apnea), including laser-assisted procedures; Orthognathic surgery procedures, bone grafts, osteotomies and surgical management of the temporomandibular joint; Elective (nonemergency) transportation by ambulance or medical van, and all transfers via air ambulance; and Services that may be considered investigational or experimental (see “Precertification Under POS and Traditional Indemnity”).

Catastrophic POS A deductible does not apply. The Catastrophic POS typically pays 40 percent of a covered expense and you pay the rest.

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It is your responsibility to contact Member Services to precertify all Hospitalization (if Medicare pays first for this service, you only need to precertify shortly before your Medicare benefits are exhausted); Skilled nursing and rehabilitation facilities; All home healthcare services; Reconstructive procedures; Hospice; Dental (accident only); Durable medical equipment (such as prosthetic devices) over $1,000; Medical injectables, including intravenous immunoglobulin growth hormone (IVIG), Rebif®, and Blood-clotting factors; Uvulopalatopharyngoplasty (indicated for the treatment of sleep apnea), including laser-assisted procedures; Orthognathic surgery procedures, bone grafts, osteotomies and surgical management of the temporomandibular joint; Elective (nonemergency) transportation by ambulance or medical van, and all transfers via air ambulance; and Services that may be considered investigational or experimental (see “Precertification Under POS and Traditional Indemnity”).

*Note: Certain providers who are not in a POS network may still have special fee arrangements with Aetna or UnitedHealthcare. If you receive care from one of these providers, you may be charged a discounted rate for your treatment; however, your POS benefits are still determined based on the same rules as regular out-of-network benefits. Note that while United Healthcare credentials all providers with whom they have a special fee arrangement, these non-PPO providers are not credentialed by Aetna. If you have any questions, contact your healthcare company’s Member Services phone line. Annual Deductible No deductible is required for in-network benefits under the POS or if you are enrolled in the Catastrophic POS. There are, however, individual, two-person and family deductibles for out-of-network care in the POS. (Please note that there are separate deductibles that may apply to prescription drug and mental health/chemical dependency benefits.)

• Individual deductible. This is the amount each covered person pays during a calendar year for covered out-of-network services before the Plan starts paying benefits.

• Two-person deductible. When two participants in the same family have expenses that, added together, equal the two-person deductible, the Plan begins paying benefits, regardless of whether an individual has met his or her individual deductible.

• Family deductible. When three or more participants in the same family have expenses that, added together, equal the family deductible, the Plan begins paying benefits, regardless of whether an individual has met his or her individual deductible.

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The following expenses do not apply to meeting the deductible:

• Charges for noncovered services and supplies;

• Charges above the allowable amount;

• Any penalties you pay for failure to obtain precertificiation; and

• Copayments for in-network or coinsurance for out-of-network services.

Annual Out-of-Pocket Maximum The annual out-of-pocket maximum limits the amount each covered person pays for covered healthcare expenses in one calendar year. There are separate out-of-pocket expense maximums for medical, prescription drugs and mental health and substance abuse benefits. (See “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only” and “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity” for information on provisions applicable to those programs.) The medical annual out-of-pocket maximum varies by the POS selected and whether care is received in-network or out-of-network.

Under POS, there are individual, two-person and family medical out-of-pocket maximums:

• Individual annual out-of-pocket maximum. Once a covered person reaches the annual out-of-pocket maximum, the POS option pays 100 percent of the allowable amount for covered healthcare expenses for that person for the rest of the calendar year.

• Two-person annual out-of-pocket maximum. When two participants in the same family have expenses that, added together, equal the two-person out-of-pocket maximum, the POS option pays 100 percent of the allowable amount for covered healthcare expenses for those persons for the rest of the calendar year.

• Family annual out-of-pocket maximum. When at least three participants in the same family each meet their individual out-of-pocket maximums during the calendar year, the POS option pays 100 percent of the allowable amount for covered healthcare expenses for all covered participants for the rest of that calendar year, regardless of whether an individual has met his or her individual out-of-pocket maximum.

Under the Catastrophic POS there is no two-person or family medical out-of-pocket maximum — each person is required to meet his or her individual out-of-pocket maximum. In addition, the single out-of-pocket maximum covers both in-network and out-of-network expenses combined.

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The following expenses do not apply to meeting the out-of-pocket maximum under either type of POS:

• Charges for non-covered services or supplies;


• Any penalties you pay for failure to obtain precertification; and

• Expenses applied toward any required deductibles.

What if I Need In-Network Care When I’m Away From Home? If you or one of your covered dependents needs care when away from home, the following rules apply: • Emergency care is treated at the in-network benefits level.

• Services will be covered at the in-network level if a network provider is used and the services meet the requirements outlined in the section titled, “What’s Covered/What’s Not Under POS and Traditional Indemnity?”

• Urgent care should be used in lieu of emergency room visits when your in-network provider is not available. Urgent care is covered at the in-network benefits level if you:

⎯ Telephone your PCP and describe the situation; and ⎯ Follow your PCP’s instructions regarding care.

If your PCP advises you to seek treatment, in-network benefits would apply for treatment of the urgent condition. Any follow-up care should be provided or coordinated by your PCP.

Will I Receive an ID Card? You’ll receive a set of two ID cards (that is, one for healthcare and another for prescription drugs) after you enroll in POS. Each ID card contains important information, such as:

• The name of your healthcare company;

• The telephone number for Member Services;

• The telephone number to call for precertification;

• What to do in an emergency; and

• The Member Services number for the Mental Health and Chemical Dependency Program, which may be administered separately. For more information about this program, see “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity.”

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What Is a Center of Excellence? Each healthcare company has arranged with certain facilities to act as centers of excellence that treat special conditions, such as organ transplants. Under POS, if you’re referred to a center of excellence by your PCP or through the precertification process, you’ll receive in-network benefits.

Covered services include medically necessary services certified by the healthcare company as requiring the specialized care generally associated with a center of excellence, such as organ transplants. Treatment at a center of excellence is subject to all conditions of service that apply to any treatment of illness or injury, including the exclusion of an experimental or investigational treatment, drug or device.

Travel and Lodging Benefit If you or a covered dependent is referred to a center of excellence more than 50 miles from your home for nonexperimental transplant surgeries, certain travel and lodging expenses are covered for the patient, and an accompanying family member or individual approved by the healthcare company. To be eligible:

• The patient must be certified for admission to a center of excellence more than 50 miles from his or her residence;

• The patient must be a covered participant under the Retiree Medical Plan; and

• The travel companion must be essential to the patient’s ability to secure the medical care in order for their travel and lodging expenses to be covered.

The following charges are covered under the travel and lodging benefit:

• Subject to the maximums shown below, transportation costs are covered for the patient and transportation and lodging costs are covered for one travel companion or, if the patient, is under age 23, for both parents or guardians.

• Transportation costs are covered for one round trip to and from the hospital location. For airline travel, the generally available coach fare will be reimbursed. Where travel by private automobile is used, mileage will be reimbursed at the per-mile rate in force at that time.

• Reasonable lodging and meal expenses are covered. Lodging must be pre-approved by your healthcare company to be covered. Benefits are limited to a maximum of $50 per day per person (not including the patient), and up to $10,000 per admission for transportation, lodging and meal expenses combined for the patient and companion(s).

What If I Need More Information About My Care? Both of the POS healthcare companies offer round-the-clock support for your healthcare concerns. By calling either of these NurseLines, which are available 24 hours a day, seven days a week, you’ll be able to speak with an experienced registered nurse who can answer healthcare questions, provide you with self-care tips, explain the risks and benefits of treatment options, and help guide you to the most appropriate care. Contact the NurseLine associates with your health plan:

• The Aetna Informed Health Line® (1-800-556-1555); or

• UnitedHealthcare’s Optum® NurseLineSM (1-866-444-3011).

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A Closer Look at Traditional Indemnity

What Is Traditional Indemnity? With Traditional Indemnity, you’re covered for a wide range of medical services and supplies, but are subject to annual deductibles, coinsurance amounts and out-of-pocket maximums. In addition, Traditional Indemnity includes a Preferred Provider Option (PPO) network of participating providers. Traditional Indemnity will reimburse you the same percentage whether you receive care from a PPO or non-PPO provider, but you’ll pay less out of your own pocket if you use PPO providers, since they charge lower, negotiated prices for their services. Traditional Indemnity is generally the assigned option for Medicare-eligible retirees and dependents.

When you choose coverage under Traditional Indemnity, you also have access to a Prescription Drug Program through Medco. You also have access to a Mental Health and Chemical Dependency Program through Magellan Behavioral Health if you are not Medicare-eligible. (If you are Medicare-eligible and you have non-Medicare-eligible dependents, their mental health benefits are provided by United Behavioral Health if you are not Medicare-eligible. Mental health benefits for Medicare-eligible participants are provided under Traditional Indemnity and are secondary to Medicare.) See “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only” and “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity” for more information.

In most cases, UnitedHealthcare administers Traditional Indemnity coverage described in this section. However, if you are the Medicare-eligible dependent of a non-Medicare-eligible retiree enrolled in an Aetna POS, then your Traditional Indemnity coverage will be administered by Aetna, and will be secondary to Medicare. In these cases, the allowable amount used to determine your benefits will be limited to the Medicare approved amount.

How Does Traditional Indemnity Work? You and your covered dependents may go to any physician you choose. Or, you may choose to take advantage of a special feature — a Preferred Provider Organization (PPO) network — if one is available in your area.

What Benefits Does Traditional Indemnity Provide? For a detailed overview of how Traditional Indemnity pays benefits, see “Your Retiree Medical Plan At-a-Glance.”

Advantages of Using a PPO Provider When you receive your medical care from PPO network providers, charges are negotiated, so they’re guaranteed to be within the allowable amount and likely to be lower than what non-PPO providers charge. In addition, PPO providers must meet strict quality guidelines to join and remain in the PPO. To get a directory of PPO providers in your area, contact Member Services at the number printed on your ID card.


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How Are Benefits Paid? Each year, you’re required to pay a portion of your eligible expenses before the Retiree Medical Plan begins to pay benefits. This amount, called an annual deductible, applies to most services. After you satisfy the deductible, the Retiree Medical Plan will reimburse you for a portion of your eligible expenses, and you will pay the rest. The percentage you pay is called your coinsurance.

What Kinds of Expenses Are Not Covered? The Retiree Medical Plan will not cover:

• Expenses listed in this document as “not covered”;

• Benefit reductions due to failure to precertify certain treatments; or

• Charges above the allowable amount.

Do I File a Claim for Benefits? You generally will need to file claim forms for reimbursement. If you use PPO providers, there are no claim forms to complete.

How Are Benefits Under Traditional Indemnity Determined? In all cases, benefits are provided only for medically necessary services and supplies (as determined by the Retiree Medical Plan) and are paid up to the allowable amount. In addition, it is your responsibility to call the Member Services number on your ID card to get precertification for certain kinds of care, as described in “Precertification Under POS and Traditional Indemnity.”

You must first meet the annual individual, two-person or family deductible. Then, Traditional Indemnity typically pays 80 percent, and your coinsurance is the remaining 20 percent. Remember: If you use a PPO provider, your benefit is based on lower, prenegotiated rates.

Annual Deductible The annual deductible is the amount of covered expenses you must pay out-of-pocket before benefits are paid. There are individual, two-person and family deductibles.

• Individual deductible. This is the amount each covered person pays during a calendar year for covered out-of-network services before the Retiree Medical Plan starts paying benefits.

• Two-person deductible. When two participants in the same family have expenses that, added together, equal the two-person deductible, the Retiree Medical Plan begins paying benefits, regardless of whether an individual has met his or her individual deductible.

• Family deductible. When three or more participants in the same family have expenses that, added together, equal the family deductible, the Retiree Medical Plan begins paying benefits, regardless of whether an individual has met his or her individual deductible.

The following expenses do not apply to meeting the deductible:

• Charges for noncovered services and supplies;

Requesting a Claim Form If you need to file a claim for benefits, you should contact your health plan for a claim form. Claim forms also should be available online at your health plan vendor’s Web site.

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• Coinsurance.

Annual Out-of-Pocket Maximum The annual out-of-pocket maximum limits the amount each covered person pays for covered healthcare expenses in one calendar year. There are separate out-of-pocket expense maximums for medical, prescription drugs and, for non-Medicare-eligible participants, mental health and chemical dependency benefits. (See “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only” and “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity” for information on provisions applicable to those programs.)

Under Traditional Indemnity, there are individual, two-person and family medical out-of-pocket maximums:

• Individual annual out-of-pocket maximum. Once a covered person reaches the annual out-of-pocket maximum, Traditional Indemnity pays 100 percent of the allowable amount for covered healthcare expenses for that person for the rest of the calendar year.

• Two-person annual out-of-pocket maximum. When two participants in the same family have expenses that, added together, equal the two-person out-of-pocket maximum, Traditional Indemnity pays 100 percent of the allowable amount for covered healthcare expenses for those persons for the rest of the calendar year.

• Family annual out-of-pocket maximum. When at least three participants in the same family each meet their individual out-of-pocket maximums during the calendar year, Traditional Indemnity pays 100 percent of the allowable amount for covered healthcare expenses for all covered participants for the rest of that calendar year, regardless of whether an individual has met his or her individual out-of-pocket maximum.

The following expenses do not apply to meeting the out-of-pocket maximum:

• Charges for noncovered services or supplies;



• Expenses applied toward any required deductibles.

Will I Receive an ID Card? You’ll receive a set of two ID cards (that is, one for healthcare and another for prescription drugs) after you enroll in Traditional Indemnity. Each ID card contains important information, such as:

• The name of your healthcare company;

• The telephone number for Member Services;

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• The telephone number to call for precertification;

• What to do in an emergency; and

• The Member Services number for the Mental Health and Chemical Dependency Program, which may be administered separately. For more information about this program, see “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity.”

What Is a Center of Excellence? Each healthcare company has arrangements with certain facilities to act as centers of excellence that treat special conditions, such as organ transplants. Under Traditional Indemnity, you must be referred through the precertification process to receive benefits.

Covered services include medically necessary services certified by the healthcare company as requiring the specialized care generally associated with a center of excellence, such as organ transplants. Treatment at a center of excellence is subject to all conditions for service that apply to any treatment of illness or injury, including the exclusion of an experimental or investigational treatment, drug or device.

Travel and Lodging Benefit If you or a covered dependent is referred to a center of excellence more than 50 miles from your home for nonexperimental transplant surgeries, certain travel and lodging expenses are covered for the patient and an accompanying family member or individual approved by the healthcare company. To be eligible:

• The patient must be certified for admission to a center of excellence more than 50 miles from his or her residence;

• The patient must be a covered participant under the Retiree Medical Plan; and

• The travel companion must be essential to the patient’s ability to secure the medical care.

The following charges are covered under the travel and lodging benefit:

• Subject to the maximums shown below, transportation costs are covered for the patient and transportation and lodging costs are covered for one travel companion or, if the patient is under age 23, for both parents or guardians.

• Transportation costs are covered for one round trip to and from the hospital location. For airline travel, the generally available coach fare will be reimbursed. Where travel by private automobile is used, mileage will be reimbursed at the per-mile rate in force at that time.

• Reasonable lodging and meal expenses are covered. Lodging must be pre-approved by your healthcare company to be covered. Benefits are limited to a maximum of $50 per day per person (not including the patient), and up to $10,000 per admission for transportation, lodging and meal expenses combined for the patient and companion(s).

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What if I Have Questions About Healthcare? If your coverage is administered by UnitedHealthcare, they offer round-the-clock support for your healthcare concerns. By calling their NurseLine, you can speak with an experienced registered nurse. You can ask health questions, learn self-care tips or get information that can help you choose appropriate care. You also have access to the audio Health Information Library, which allows you to listen to recorded health and well-being messages on a variety of topics, including aging well, cancer, diabetes and many others.

The NurseLine can be reached 24 hours a day, seven days a week, at 1-866-444-3011. You can also access the NurseLine online at www.myuhc.com. The live Nurse Chat feature connects you with a registered nurse for personal online conversation.

If your coverage is administered by Aetna, call the Aetna Informed Health Line® at 1-800-556-1555 for similar assistance and resources.

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What’s Covered/What’s Not Under POS and Traditional Indemnity?

What Services Are Covered? The chart below lists some of the services and supplies covered by POS and Traditional Indemnity. To be covered, the service or supply must:

• Be medically necessary (as defined under and determined by the Retiree Medical Plan) for the treatment of illness or injury, or it must be for the preventive-care benefits that are specifically stated as covered;

• Be provided under the order or direction of a physician (unless specifically noted otherwise);

• Be provided by a licensed and accredited healthcare provider practicing within the scope of his or her license in the state where the license applies;

• Be listed as a covered service and satisfy all the required conditions of services as shown in the following chart; and

• Not be listed as excluded (see “What Services Are Not Covered?” in this section).

Services and supplies meeting these criteria will be covered up to the allowable amount; in addition, you may be required to meet certain conditions, as described below.

Service Coverage Details Acupuncture Acupuncture is covered when used instead of traditional anesthesia

during surgery or to relieve pain, illness or impaired mobility in the muscles and joints. Coverage is provided only for an acute condition (one that is currently causing pain, illness or decreased mobility and for which improvement can be measured in the short term). Coverage limits: When obtained out-of network, limited to 30 visits per year. (However, use of acupuncture as a surgical anesthetic doesn’t count toward this limit.) Excluded from coverage: Periodic visits for preventive care or to maintain a current state of health.

Ambulance The following ambulance services are covered: • Transportation to the nearest appropriate medical facility in an

emergency (physician’s order is not required).

• Emergency services (including administering to wounds, electrocardiograms, cardiac defibrillation, cardiopulmonary resuscitation (CPR) and administration of oxygen and intravenous (IV)

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Service Coverage Details solutions) delivered by appropriately licensed personnel employed by the ambulance company.

• Transfer from an out-of-network to a network hospital (POS only).

• Transfer to the closest qualified hospital if the first hospital isn’t equipped to handle the patient’s condition.

• Transfer from a hospital to an extended care facility or to the patient’s home if:

⎯ Patient is being discharged into a home healthcare agency’s care;

⎯ Patient’s condition requires a medical professional’s attendance; and

⎯ Extended-care facility or home healthcare was precertified.

Coverage limits: Air-ambulance use is covered only when the participant is in a location that is inaccessible to ground ambulance or the patient’s status and travel conditions indicate that delays resulting from the use of a ground ambulance would create significant and unnecessary risk to the patient. That risk must be clearly diminished with the use of an air ambulance. In addition, all elective (or nonemergency) transportation by ambulance or medical van (or transfer by air ambulance) must be precertified.

Blood and Blood Derivatives

Blood and blood derivatives are covered for treatment or therapy due to an illness or injury. Coverage includes blood, blood plasma and other blood products.

Chiropractic The following chiropractic services are covered: • Neuromuscular treatment and manipulation to relieve pain or restore

mobility by maladjustment of the muscles and ligaments associated with the spinal column.

• Ordering medically necessary X-rays.

The following conditions of service apply: • Coverage is provided only for treatment of musculoskeletal conditions.

That means conditions that are related to the muscles and ligaments. Conditions such as a stiff neck and lower back pain may be covered.

• Coverage is provided only for the treatment of an acute condition — that is, one that is currently causing pain or decreased mobility and for which improvement can be measured in the short term.

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Service Coverage Details • Care must be provided in an office setting.

• A chiropractor may order X-rays. However, any other tests (for example, a magnetic resonance image, or MRI) must be ordered through a physician.

Coverage limits: Coverage is limited to 30 visits in a calendar year for Traditional Indemnity as well as for POS in-network and out-of-network benefits combined. Under the POS option, out-of-network visits will apply to the in-network limit, and in-network visits will apply to the out-of-network limit. Excluded from coverage: Periodic visits for preventive care or to maintain a current state of health are not covered. Conditions such as nausea and dizziness are not covered for treatment with chiropractic services. Services are not covered if provided in your home, or if delivered in a hospital or other facility.

Circumcision Circumcision of a newborn male is covered if performed by a physician or mohel. Under POS, if a mohel performs the circumcision, it is covered out-of-network.

Durable Medical Equipment

The following durable medical equipment is covered when precertified: • Purchase or rental of durable medical equipment supplied by a properly

licensed vendor. Examples include wheelchairs, kidney dialysis equipment, and mechanical equipment for the administration of oxygen.

• Prosthetic devices supplied by a properly licensed vendor. A prosthesis is a device designed to partially compensate for the loss of a body part. Covered prostheses include artificial legs or arms (or parts thereof, such as a foot), eyes and portions of internal bodily organs.

• Orthotics necessary for daily living activities.

• The following conditions of service apply:

⎯ Supplies must be prescribed by a physician. Under POS, for in-network benefits to be available, the equipment must be prescribed by your PCP or a network provider, and you must rent or purchase the equipment from a medical supplier that participates in the network.

⎯ Supplies must be manufactured specifically for medical use; usable only by the patient (and not, for example, by the patient’s lawful spouse); and not for exercise, environmental control (such as air conditioners and humidifiers) or personal comfort.

⎯ Purchase or rental of the original equipment is covered. Total

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Service Coverage Details covered charges for purchase and rental combined will not exceed the purchase price of the item.

⎯ Repair and replacement of orthotics and durable medical equipment are covered when the equipment no longer fits the participant in the manner that is both the most efficient for the participant and the most cost effective for the participating company, as determined by the healthcare company.

⎯ Replacement of prosthetic devices is covered only when made necessary by anatomical change.

Emergency Room You pay the emergency room copayment or coinsurance for services provided in an emergency room during an emergency. This emergency room POS copayment is waived if you are admitted to the hospital for continued care. If you use emergency room services for a nonemergency under POS, your care will be covered at the out-of-network rate.

Extended Care Facility To receive the full amount of benefits available, precertification is required. Covered expenses include: • Room and board in a semiprivate room.

• Prescription drugs administered during the stay.

• Nutritional support.

• Professional physician and nursing services provided by facility staff. The initial consultation between your doctor and another specialist (or a number of different specialists, as medically necessary) is covered, as is one physician’s visit per day in addition to normal postoperative visits by your surgeon(s). Charges for physician visits in excess of one per day are covered if precertified.

• Physician’s visits.

• Services provided on the order of a physician that are normally provided by an extended care facility, including, but not limited to, X-ray and laboratory tests, medical and surgical dressings, radiation therapy and anesthetics and their administration.

The following conditions of service apply: • Confinement must be in lieu of hospitalization. That is, without

confinement to an extended care facility, the patient would otherwise be confined to a hospital.

• Confinement must be on the order of, and under the supervision of, a

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Service Coverage Details physician.

• Confinement must not be mainly for the convenience of the patient’s family.

Coverage limits: Out-of-network POS benefits are limited to 60 days of inpatient care in a year. Any days incurred in-network count toward the maximum available days out-of-network. Traditional Indemnity benefits are limited to 120 days of inpatient care in a year. These limits are combined with the number of days of hospital confinement if preceding confinement and for the same condition in the extended care facility. Days in the hospital count as full days toward this limit. Days in an extended care facility count as one-half day.

Family Planning The following services are covered: • Fertility testing and examination.

• Voluntary sterilization or reversal of voluntary sterilization.

• Birth control devices and medication, excluding those available over the counter. (Birth control obtained through a pharmacy may be covered under the Prescription Drug Program.)

Excluded from coverage: No other family planning services are covered. Home Healthcare To receive the full amount of benefits available, precertification is

required. Covered services may include: • Speech therapy, physical therapy and occupational therapy.

• Services of a registered nurse (RN), licensed nurse practitioner (LNP) or licensed vocational nurse (LVN).

• Services of a home health aide who is not a nurse, but only if nursing services are also being provided during the course of treatment.

• Services of licensed clinical social workers.

• Drugs and medications administered to you by the home healthcare agency. This does not include drugs and medications that may be picked up from a pharmacy and/or delivered to your home. Drugs received by filling a prescription at a pharmacy may be covered under the terms of the Prescription Drug Program (see “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only”).

The following conditions of service apply to covered home healthcare agency expenses: • Generally, you must receive precertification for home healthcare

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Service Coverage Details benefits to be covered.

• Care must be provided in accordance with a physician’s written treatment plan. The treatment plan must be recertified by the attending physician at least every 30 days if care continues.

• Care must be given in the patient’s home and provided in lieu of inpatient care. That means that you are not physically able to go to a provider’s office for treatment, and without home healthcare services you would have to be confined in a hospital or other facility.

• Services must be provided by a person who is employed by the home healthcare agency or who has a subcontracting relationship with the agency.

• Custodial and domestic services are not covered.

Coverage limits: Out-of-network benefits are limited to a maximum of 100 visits in a calendar year. Any visits incurred in-network count toward the maximum available visits out-of-network. Traditional Indemnity benefits are limited to 200 days per year. Each visit by a nurse or therapist, regardless of duration, is one visit. Up to four hours of care provided by a home health aide count as one home healthcare visit.

Hospice The following services are covered: • Room and board when the patient is confined as a hospice inpatient.

• Part-time nursing services for the provision of medical and palliative care. Palliative care is care that is rendered to relieve the symptoms or effects of a disease without curing the disease.

• Services of the hospice’s nonclinical staff, such as home health aides.

• Counseling services provided to the patient and immediate family, when provided by duly licensed psychologists (Ph.D.) or pastoral counselors. These services are part of the overall charge of the hospice; any separate charges made for these services are not covered.

• Bereavement counseling provided to covered dependents, when provided by duly licensed psychologists (Ph.D.) or pastoral counselors on staff or under contract to the hospice. Coverage is for a maximum of 15 sessions, provided within three months of the patient’s death.

• Nutritional counseling and special meals.

• Administration of pain-relief medications.

• Drugs and medications administered to you by the hospice. This does

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Service Coverage Details not include drugs and medications you may obtain from a pharmacy and have delivered to your home. Drugs received by filling a prescription at a pharmacy come under the terms of the Prescription Drug Program

The following conditions of service apply: • Hospice services are covered only when precertified and provided to

terminally ill patients. There must be a written prognosis from a physician that the patient’s life expectancy will not exceed six months.

• Services must be provided by a person who is employed by the hospice or who has a subcontracting relationship with the hospice.

Coverage limits: • Respite care is covered to a maximum of five days during a period of

six months. Respite care is provided by a hospice so that an unpaid caretaker, such as a lawful spouse, may be temporarily relieved of caretaking duties.

• When services are provided in the patient’s home, services of a nurse and home health aide are covered on a part-time basis. Full-time (24-hour) care is not covered.

• Benefits are subject to a maximum of 210 days in a lifetime. In-network POS benefits are provided as authorized by your PCP or in-network specialist. In-network days under the POS count toward the out-of-network limit.

Hospitalization To receive the maximum amount of benefits available, precertification is required. Covered hospital expenses include: • Room and board charges for the appropriate unit for the condition

(acute care, intensive care, isolation care or a rehabilitation unit).

• Services provided on the order of a physician that are normally provided by a hospital (including, but not limited to, X-ray and laboratory tests, medical and surgical dressings, radiation therapy and anesthetics and their administration).

• Services in the emergency room, delivery room, operating room or therapy unit.

• Diagnostic and therapeutic services provided on an outpatient basis, such as preadmission testing or outpatient surgery.

• Diagnostic services provided on an inpatient basis when you’re

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Service Coverage Details hospitalized primarily for treatment (such as surgery).

• Professional physician and nursing services provided by facility staff (including the initial consultation between your doctor and another specialist — multiple specialists, if medically necessary — as well as one in-hospital physician’s visit a day in addition to normal postoperative visits by your surgeon(s); more than one visit a day is covered if medically necessary)

• Drugs and medications administered while in the hospital as an inpatient or outpatient.

The following conditions of service apply: • The hospital admission and services must be ordered by a physician.

You can’t admit yourself to the hospital.

• Room and board charges are covered for a semiprivate room. If a private room is requested, you must pay the difference in cost between a semiprivate room and a private room. However, if the patient’s condition is contagious and a private room is medically necessary for the health of the other patients, eligible expenses for a private room will be covered.

• Room and board charges are not covered if you enter a hospital as an inpatient primarily for diagnostic studies, lab tests or physical therapy.

• Charges for room and board on a Saturday or Sunday won’t be covered if you enter the hospital on a Friday, Saturday or Sunday for a nonemergency condition and surgery isn’t performed on the admission date.

• If you’re admitted for surgery, it must be performed on the admission date (unless an earlier admission was precertified as medically necessary).

Note that under the Newborns’ and Mothers’ Health Protection Act of 1996, you are entitled to minimum hospital coverage of 48 hours following a vaginal birth and 96 hours following a cesarean birth. Care beyond this point must be precertified to be covered. You cannot be required to obtain precertification for this minimum length of stay. Mother and child may leave earlier if the care provider, in consultation with the mother, decides to discharge the patients earlier.

For admissions for treatment of mental health or chemical dependency conditions under the POS, see “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity.”

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Service Coverage Details Mammograms Female participants are covered for routine mammogram testing; in-

network benefits for mammograms are provided. Coverage limits: Traditional Indemnity and out-of-network POS benefits for routine mammograms are limited to one baseline mammogram for females 40 years of age and older. This schedule applies only to mammograms that are for preventive health screening. If a physician orders a mammogram to diagnose specific symptoms or observations, that is considered treatment of illness and is not subject to the schedule of this preventive care benefit.

Maternity Care Maternity benefits cover prenatal care (periodic exams during pregnancy), childbirth, certain routine nursery care for a newborn and postpartum care. The following expenses are covered: • Prenatal visits on a schedule approved by the attending physician.

• Hospitalization for delivery.

• Services of a birthing center in lieu of a hospital. To be covered, a birthing center must: be staffed by certified nurse-midwives; have 24-hour access to consultation by an obstetrician/gynecologist with admitting privileges at a nearby hospital; be accredited by the National Association of Child Bearing Centers or the Joint Commission on the Accreditation of Healthcare Organizations; and be licensed by the state.

• Services of a licensed midwife. A licensed midwife may bill as an independent provider for services provided in the hospital, birthing center or home, or provide services as part of a birthing center’s services.

• Routine nursery care provided to the newborn during the mother’s stay at the hospital. On an in-network basis, such care is provided as authorized or furnished by the PCP or in-network specialist. Out-of-network care includes one pediatric examination by a hospital staff physician. A pediatric examination by an outside physician is considered a covered service as long as the newborn is enrolled within 31 days of the birth. Medical services for newborns beyond routine care are considered treatment of an illness and may be covered services as long as the newborn is enrolled within 31 days of birth.

Mental Health and Chemical Dependency

See “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity” for more information. A provider may treat only those mental health or chemical dependency conditions that he or she is certified or licensed to treat. If outpatient treatment is provided through a facility, the following conditions of service apply: • Services must be provided at a facility that is a general acute-care

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Service Coverage Details hospital, an acute-care psychiatric hospital or an acute-care chemical dependency facility.

• Services must be provided by a professional who meets the requirements of a covered mental health professional.

The following conditions of service apply to covered inpatient care under the Mental Health and Chemical Dependency Program: • Services must be ordered by a physician. You can’t admit yourself to

the hospital.

• Room and board charges are covered for a semiprivate room. If you request a private room, you must pay the difference in cost between a semiprivate room and a private room.

For partial hospitalization, residential treatment or services of a group home or halfway house (alternative care): • Services are covered only if provided in-network. Services received

out-of-network aren’t covered.

• Services must be provided with the prior approval of Magellan or United Behavioral Health and rendered by an in-network provider.

Nutritional Counseling Nutritional counseling is covered under POS if the counseling is coordinated by a PCP or in-network provider. Covered expenses include: • Nutritional education and planning by a certified nutritionist are

covered upon the initial diagnosis or change in severity of a medical condition that can be partially managed through special diets. Diabetes is one example of such a condition.

The following conditions of service apply: • Services are covered under the POS option only when provided in-

network by a licensed nutritionist.

• Services are intended to assist a person in defining and managing a dietary plan in response to a newly recognized medical condition. Services are not intended to be ongoing.

Excluded from coverage: Services obtained out-of-network or under Traditional Indemnity are not covered. Meal preparation is not covered. Services are not covered for general health or wellness, or weight-loss or weight-gain objectives that are not associated with a diagnosed illness.

Organ Donation Under certain circumstances, the costs for a living person to donate an organ are covered if precertified.

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Service Coverage Details Covered expenses may include medical and surgical charges (including hospital charges) for extraction of the donated organ or bone marrow and necessary follow-up care. The following conditions of service apply: • If both the donor and recipient are covered, the recipient’s healthcare

company must have precertified the transplant procedure. Benefits will be provided to both the donor and recipient.

• If the donor is covered and the recipient is not covered, the transplant must be one that the Retiree Medical Plan would precertify if the recipient were covered. If the recipient’s coverage does not provide for donor expenses, the Retiree Medical Plan will provide benefits for the donor for his or her expenses only. No benefits will be provided for the recipient.

• If the donor is not covered and the recipient is covered, the recipient’s healthcare company must precertify the transplant procedure. Additionally, benefits for the donor are available from the Retiree Medical Plan only if the donor has no other coverage of his or her own for the procedure.

Outpatient Medical Facilities

The following expenses are covered: • Services of a medical laboratory in the taking and analysis of fluid or

tissue samples.

• Services of an outpatient surgical center for surgeries that may be safely performed on an outpatient basis.

• Birthing centers for childbirth, including the services of a licensed midwife.

• Services of an urgent care facility for treatment of emergency and urgent medical conditions. An urgent care facility is freestanding and not connected to a hospital. An urgent care facility is designed to respond to urgent medical conditions and perform minor surgical procedures.

• Services of an outpatient rehabilitation facility for rehabilitation services. (for more information, see “Rehabilitation Therapy” in this table).

• Outpatient medical facility services must be ordered by and under the direction of a physician. For example, if you go to a lab to request your own blood test without a physician’s order, the lab fee isn’t covered.

Physician Services The following services are covered: • General medical services (the diagnosis and treatment of illness within

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Service Coverage Details generally accepted parameters of physician practice).

• Obstetrical (maternity) services, including delivery (for more information, see “Maternity Care” in this table).

• Surgery.

• Administration of anesthesia.

• Pathology (laboratory) services.

• Radiology (X-rays), chemotherapy, nuclear medicine, diagnostic ultrasound services and any imaging or scanning techniques.

• Services provided by the physician’s nursing staff.

• Preventive services (generally not covered for out-of-network care under the POS or Traditional Indemnity; for more information see “Preventive Care” in this table).

• Medical supplies, such as casts and dressings provided as part of the physician’s services.

Podiatric Services Covered podiatric services include all medically necessary services within the scope of a Doctor of Podiatric Medicine’s license.

Prescription Drugs See “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only.”

Preventive Care The following may be covered in-network. Generally, preventive care is generally not covered out-of-network or under Traditional Indemnity: • Well-woman care.

• Well-child care.

• Prostate screenings (This is covered under Traditional Indemnity).

• Routine physical examinations.

• Immunizations.

Private Duty Nursing To receive the full amount of benefits available, precertification is required. Covered private duty nursing services include the nursing services of a registered nurse (RN), licensed practical nurse (LPN) or licensed vocational nurse (LVN) delivered to a patient who is confined in the home due to a medical condition. Coverage limits: Out-of-network benefits are limited to 100 shifts in a

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Service Coverage Details calendar year; Traditional Indemnity benefits are limited to 200 visits/year. Any shifts incurred in-network count toward the maximum available shifts out-of-network. Excluded from coverage: Custodial and domestic services are not covered.

Prostate Screenings One prostate screening is covered per calendar year, which includes a digital rectal examination and blood test for Prostate Specific Antigen (PSA) for prostate cancer for men 50 years of age and older.

Rehabilitation Therapy The following expenses are covered: • Physical therapy services that assist in the restoration of normal,

necessary physical movement, after movement has been acutely impaired by illness or injury.

• Speech therapy services that assist in the correction of communication abilities that have been impaired by illness or injury or birth defect.

• Occupational therapy services that assist a person in regaining the ability to perform normal activities of daily living after those abilities have been acutely impaired by illness or injury.

The following conditions of service apply: • Care must be provided under the direct order of a physician who

determines services are needed and prescribes how many treatments are necessary. For example, if you go directly to a physical therapist and request services without seeing a physician first, the services will not be covered.

• The services must be likely to result in clear and reasonable improvement in your condition within three months.

• Generally, rehabilitation services provided in the home are covered only when services are provided as part of a home healthcare agency’s services and the home healthcare has been precertified.

• Generally, rehabilitation services provided during an inpatient stay in a hospital or extended care facility are covered only when the inpatient stay has been precertified.

Coverage limits: Traditional Indemnity and out-of-network POS benefits for speech therapy are limited to a maximum of 30 outpatient visits in a calendar year. Any visits incurred in-network through a POS count toward the maximum available visits out-of-network. The Individual Development Enhancement Act (IDEA) requires that school systems provide this care from age two and one-half years old through age 18. The Retiree Medical Plan will pay benefits for medically necessary services that are covered under the Plan, but are not

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Service Coverage Details otherwise available through a school system. The Retiree Medical Plan will also pay benefits for medically necessary covered services outside this age range.

Restorative Surgery Cosmetic surgery (surgery primarily to improve appearance) is generally not covered under the Retiree Medical Plan. However, certain restorative surgeries in response to a more serious condition may also be for the primary purpose of improving appearance. Under these circumstances, restorative surgery and any necessary related services would be covered, as follows: • Surgery to restore an area seriously injured in an accident.

• Surgery to correct a birth defect that causes a functional disability.

• If a participant is receiving benefits in connection with a mastectomy and elects breast reconstruction in connection with the mastectomy, the following are covered:

⎯ Reconstruction of the breast on which the mastectomy was performed;

⎯ Surgery and reconstruction of the other breast to produce a symmetrical appearance; and

⎯ Prostheses and treatment of physical complications at all stages of mastectomy, including lymphedemas.

The following conditions of service apply to covered restorative surgery expenses: • The treatment must be to correct a condition that represents a serious

malformation.

• Treatment must be for the least expensive medically accepted procedure that will adequately restore the malformation.

Second Surgical Opinion Second surgical opinions aren’t required, but they are covered. The following expenses are covered: • A second physician’s opinion concerning the need for a surgery that

was recommended by your treating physician.

• A third physician’s opinion if the second opinion conflicts with the first recommendation.

The second and, when warranted, third surgical opinions must be rendered by a physician with the appropriate specialty for the recommended procedure.

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Service Coverage Details Second surgical opinions do not replace precertification.

Wigs Under special conditions, the POS and Traditional Indemnity covers the cost of a wig used for temporary hair loss due to disease or treatment of disease such as chemotherapy. Coverage limits: Charges for a wig or wigs are covered up to a maximum of $300 in any calendar year during which the condition is manifested

Mental Health and Chemical Dependency — Outpatient Care Physician Services • Diagnosis and treatment of mental health and chemical dependency

conditions.

• Psychotherapy.

• Prescription of therapeutic drugs, medications or other treatments specifically required by law to be performed or supervised by a medical doctor.

• Chemical dependency counseling.

• Laboratory tests (including charges from independent medical laboratories).

Services by Mental Health and Chemical Dependency Professionals

• Diagnosis and treatment of mental health and chemical dependency conditions.

• Psychological testing.

• Psychotherapy.

• Chemical dependency counseling. Facility Services • Diagnosis of mental health and chemical dependency conditions.


• Psychotherapy.


• Laboratory testing performed by the facility. Mental Health and Chemical Dependency — Inpatient Care (precertification required) Hospital, Acute Psychiatric Facility or Acute Chemical Dependency Facility

• Semiprivate room and board charges in the appropriate unit for the participant’s condition (acute care, intensive care, isolation care or rehabilitation unit).

• Services provided in an emergency room.

• Services and supplies normally provided by a hospital, including any

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Service Coverage Details professional component of those services such as those provided by a psychiatrist, other physician or a mental health professional (may include individual or group therapy for the patient and covered dependents, stress management, occupational therapy and educational and disease management programs integrated with a course of treatment).

• Detoxification services (except for a newborn, whose charges would be covered under your medical option, not the Mental Health and Chemical Dependency Program).

• Laboratory services. Mental Health and Chemical Dependency — Alternative Treatment (in-network only; precertification required) Partial Hospitalization Services (in-network only)

• Residential treatment.

• Services of a halfway house or group home.

• Covered services determined through precertification by Magellan or United Behavioral Health, if applicable (may include treatments such as individual and group therapy).

• Medications administered during the daily visit. Residential Treatment (in-network only)

• Room and board charges.

• Drugs and medications administered to you while an inpatient at the residential treatment facility.

• Services normally provided by a residential treatment facility, including services provided by the professional staff of the facility.

Group Homes and Halfway Houses (in-network only)


• Services normally provided by a group home or halfway house, including services provided by the professional staff of the facility.

What Services Are Not Covered? The following services and supplies are not covered under a POS or Traditional Indemnity. No benefits are paid for excluded expenses under any circumstances.

• Any service or supply not specifically included as a covered service and/or not satisfying the conditions of service requirements.

• Services or supplies that aren’t medically necessary.

• Treatment provided when coverage isn’t in effect (for example, before coverage begins or after it ends).

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• Inpatient care that begins before coverage is effective (even if the stay continues after the coverage-effective date).

• Custodial care (including convalescent homes and rest cures).

• Charges for nontreatment purposes, including court proceedings (for example, provider’s charges to duplicate medical records, write medical assessments or perform an examination ordered as part of a legal suit, insurance physical, a condition of employment or as a component of professional certification).

• Services or supplies ordered or provided by a person or facility that doesn’t qualify as a provider.

• Charges from a provider operating outside the scope of his or her license.

• Services or supplies provided by a person or facility that isn’t properly licensed in accordance with state and local law, unless the type of provider is specifically named as covered under POS, Traditional Indemnity or the Mental Health and Chemical Dependency Program (unless the Mental Health and Chemical Dependency provider has appropriate certification, as determined by Magellan Behavioral Health or United Behavioral Health, if applicable, in a locality where licensure isn’t available).

• Professional services provided by a person living in your home or related to you by blood or marriage (parent, child, spouse or domestic partner dependent).

• Conditions related to current or past military service.

• Charges for experimental or investigative procedures (unless precertified), treatment, drugs or devices.

• Charges above the allowable amount.

• Charges you have no legal obligation to pay.

• Charges that wouldn’t be made if there weren’t any healthcare coverage.

• Work-related illness or injury covered by workers’ compensation and/or the Lucent Technologies Inc. Short Term Disability Plan or the Lucent Technologies Inc. Sickness and Accident Disability Plan.

• Services and supplies that are the responsibility of a local, state or federal government agency to provide or cover.

• Charges another plan is required to pay.

• Charges third parties are required to pay.

• Expenses beyond the stated limits, including:

⎯ Charges above the allowable amount;

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⎯ Charges above the semiprivate room rate; and

⎯ Any penalties for failure to obtain precertification when required (see “Precertification Under POS and Traditional Indemnity”).

• Any care delivered without the approval of a physician, unless otherwise noted.

• Treatment of developmental disorders.

• Predictable complications of noncovered treatment.

• Mental illness and chemical dependency (for coverage information about these conditions, see “Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity”).

• Physical exams for preventive care (this exclusion only applies to out-of-network and Traditional Indemnity care).

• Treatment of refractive vision problems (including eye examinations, eyeglasses and contact lenses; orthoptics; and surgical treatment like radial keratotomy, LASIK and PRK).

• Vocational therapy.

• Speech therapy (unless the speech was impaired by illness, injury or birth defect).

• Routine foot care.

• Fertility assistance and other similar types of procedures, including, but not limited to, in vitro fertilization, artificial insemination, gamete intrafallopian transfer (GIFT) and zygote intrafallopian transfer (ZIFT).

• Treatment of obesity or weight-loss conditions, unless it’s medically necessary treatment of morbid obesity, subject to all other conditions (weight-related conditions that are diagnosed as anorexia nervosa or bulimia are treated under the terms of the Mental Health and Chemical Dependency Program; treatment of medical conditions caused by these psychological conditions, like malnutrition or heart conditions, are covered under POS and Traditional Indemnity).

• Cosmetic surgery or other cosmetic treatment (unless it’s considered to be restorative surgery).

• Growth hormone therapy (unless there is documented evidence of pituitary deficiency and there is adequate response);

• Dental and orthodontic treatment (except for hospital room and board charges if hospitalization is medically necessary to safeguard the patient due to a specific nondental organic impairment).

• Dental care to replace sound, natural teeth (unless the teeth are injured through an accident other than chewing while the individual is covered under POS or Traditional Indemnity; damage isn’t wholly or partially due to existing decay or damage; and the treatment is precertified and begins within three months of the accident).

• Nonsurgical treatment of the joint of the jaw (temporomandibular joint dysfunction, or TMJ).

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• Care provided to a person not covered under POS or Traditional Indemnity who donates an organ to a covered eligible retiree or eligible dependent, if the donor has other coverage.

• Charges for chiropractic care, physical therapy or physical medicine that seeks to treat conditions other than musculoskeletal conditions (that is, conditions related to the nerves, muscles and ligaments, such as lower back pain).

• Drugs and medicines available without a prescription.

• Prescription drugs dispensed through a pharmacy (may be covered under the Prescription Drug Program).

• Personal convenience items (regardless of whether the items are on an outpatient basis, in the home or as part of a hospital stay).

• Orthotics, braces and other supports that are not prescribed by a physician or that are used for extracurricular activities such as athletics (even if they are prescribed by a physician) and are not necessary for daily living activities.

• Hearing aids to compensate for loss of hearing due to age, repeated exposure to loud noise or congenital defect (unless hearing loss is caused by illness or injury while covered under the POS or Traditional Indemnity and hearing-aid benefits are available under the conditions specified).

• Charges for items to assist in general fitness (for example, exercise equipment).

• Charges eligible for payment under a no-fault or state-mandated automobile insurance law or policy.

• Charges to treat caffeine addictions.

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Precertification Under POS, Traditional Indemnity and Rx Only (Including the Mental Health and Chemical Dependency Program)

What Is Precertification? Precertification is the process by which a healthcare company reviews the proposed treatment and advises you and your doctor as to how benefits may be paid. You must request precertification, or precertify, certain care in order to receive the maximum available benefits under the Retiree Medical Plan. For some types of care, you must precertify the care to receive any benefits at all. There are precertification requirements under POS and Traditional Indemnity, as well as the Mental Health and Chemical Dependency Program.

Generally, precertified care is paid at the highest level of coverage. If you don’t follow the precertification procedures when required, and it’s later determined the treatment:

• Is medically necessary, benefits generally are paid at a reduced level or no payment is made; or

• Isn’t medically necessary, no benefits will be paid.

Do I Need to Precertify My Care? Under Traditional Indemnity and the out-of-network portion of a POS, precertification is required for certain services to receive the full amount of benefits available, including:

• Hospitalization (if Medicare pays first for this service, you only need to precertify shortly before your Medicare benefits are exhausted);

• Skilled nursing and rehabilitation facilities;

• All home healthcare services;

• Reconstructive procedures;

• Hospice;

• Dental (accident only);

• Durable medical equipment (such as prosthetic devices)


Do I Need to Precertify My Mental Health and Chemical Dependency Program Care? You, your covered dependent or the provider must call Magellan Behavioral Health or United Behavioral Health to precertify an in-network or out-of-network admission to a hospital, acute psychiatric facility or acute chemical dependency facility. It’s your responsibility to make sure the call is made and to know whether the admission is precertified. Generally, you should call at least five business days before the scheduled date of admission. For a mental health emergency, call before the admission, if possible, or within 24 hours after the admission.

The reimbursement rules with and without precertification described in this section also apply to the Mental Health and Chemical Dependency Program.

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over $1,000;

• Medical injectables, including:

⎯ Intravenous immunoglobulin growth hormone (IVIG)

⎯ Rebif®

⎯ Blood-clotting factors

• Uvulopalatopharyngoplasty (indicated for the treatment of sleep apnea), including laser-assisted procedures;

• Orthognathic surgery procedures, bone grafts, osteotomies and surgical management of the temporomandibular joint;

• Elective (nonemergency) transportation by ambulance or medical van, and all transfers via air ambulance; and

• Services that may be considered investigational or experimental.

You, a family member or a physician must call the number printed on your ID card to precertify care before it’s received in order to be eligible to receive benefits.

If you’re required to precertify care, you should generally call at least seven days before the scheduled date of service or admission. The Claims Administrator will then notify you and your physician of the decision.

The following special rules apply:

• Emergency admissions must be certified within two business days after admission;

• Maternity care beyond 48 hours for a vaginal birth or 96 hours for a birth by cesarean section must be certified; and

• Urgent care must be precertified before treatment is provided or patient is admitted to the hospital.

If you need to precertify care, have the following information available before calling:

• The patient’s name, address, telephone number, age and his or her relationship to you;

• The Social Security number of the retired employee covered under the Retiree Medical Plan;

• All information contained on the patient’s ID card;

• The type of care requiring precertification;

• The name, address and telephone number of the provider currently treating the patient; and

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• The name, address and telephone number of the hospital where the patient will be admitted.

You and your doctor will be advised whether or not the admission is precertified. If it’s precertified, you’ll be advised of the number of days for which it’s certified, and your doctor will get a precertification number. This number verifies that your treatment is precertified and no precertification penalties will apply.

If you don’t obtain precertification, penalties may apply.

Reimbursement Rules With Precertification If you obtain precertification and the Retiree Medical Plan determines that the service or supply is medically necessary, the Plan will pay regular plan benefits up to the number of days for inpatient treatment certified by the Claims Administrator. If the service or supply is determined not to be medically necessary, no benefits will be paid.

Reimbursement Rules Without Precertification If you do not obtain precertification, these penalties apply:

• Benefit payments for medically necessary hospitalization and outpatient surgeries are reduced by 20 percent, up to a $400 maximum per occurrence. After you incur $400 in penalties, benefits for covered expenses revert back to the level of benefits usually available under the POS or Traditional Indemnity, provided the care is found to be medically necessary. If the hospitalization and outpatient surgeries are found to be not medically necessary, no benefits will be paid. You’re responsible for paying 100 percent of all penalties; payments for penalties do not count toward your out-of-pocket maximums or annual deductibles.

• No benefits will be paid beyond the number of days for which care was certified or if precertification isn’t obtained for:

⎯ Admission to an extended care facility;

⎯ Home healthcare; or

⎯ Private duty nursing.

Concurrent Review After Precertification All inpatient admissions (including admissions under the Mental Health and Chemical Dependency Program), extended care facility stays, home healthcare agency services, and private duty nursing are certified for a specific duration of time. Toward the end of the certified period, the healthcare company will follow up to see if your care will be completed as expected. If its determined that treatment will take longer than originally expected, another review will be performed to determine whether an extension will be precertified. If it isn’t certified, no additional benefits will be paid for any treatment received after the duration of time that was originally certified.

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Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only

Am I Eligible for Prescription Drug Program Benefits? If you enroll in POS, Traditional Indemnity or Rx Only, you’re automatically covered under the Prescription Drug Program, which is administered separately from your medical option by Medco.

If you select an HMO for your medical option, you do not receive benefits from the Prescription Drug Program. Instead, you’ll receive the prescription drug benefits available through your HMO. Contact your HMO for specific information about prescription drug benefits.

How Does the Prescription Drug Program Work? The Prescription Drug Program offers you three ways to fill prescriptions:

• At a participating retail pharmacy;

• At a nonparticipating retail pharmacy; or

• Using Medco By Mail and ordering prescriptions online, by mail order, by phone or via fax from your doctor.

Your cost varies depending on how you choose to fill your prescriptions and which medications you purchase.

What Benefits Does the Prescription Drug Program Provide? For a detailed overview of how the Prescription Drug Program pays benefits, see “Your Retiree Medical Plan At-a-Glance.”

Using a Participating Pharmacy When you go to a participating pharmacy, give the pharmacist your Prescription Drug Program ID card. The pharmacist will charge you the appropriate copayment for your covered prescription. That is the only amount you’ll pay. Your copayment at a participating pharmacy is $10 for a generic prescription, $25 for a formulary brand-name prescription and $40 for a nonformulary brand-name prescription for up to a 30-day supply. (For insulin, you’ll be permitted to purchase a 90-day supply at a participating pharmacy, but you’ll have to pay three separate copayments.) To determine whether a drug is generic, formulary brand-name or nonformulary brand-name, log on to Medco’s Web site at www.medco.com or call 1-800-336-5934.

If you do not have your Prescription Drug Program ID card with you at the time of your prescription purchase, be sure to identify yourself as a participant. You or your pharmacist can contact Medco for verification of your eligibility. If you do not use your Prescription Drug Program ID card or cannot otherwise prove your eligibility, you will be responsible for paying the full cost of the prescription upfront and must file a claim form (claim forms are available on the Medco Web site at www.medco.com) for reimbursement. In addition, you may have to pay more


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out of your pocket because benefits may not be based on the lower in-network prescription drug cost, but on the non-discounted price of the prescription and will be reimbursed based on the allowable amount.

How Do I Find a Participating Retail Pharmacy? To find a participating pharmacy near you:

• Visit www.medco.com;

• Call Medco at 1-800-336-5934; or

• Ask your local pharmacy if it’s a participating pharmacy.

Using a Nonparticipating Pharmacy When you use a nonparticipating pharmacy (or if you don’t show your ID card at a participating pharmacy) to fill a prescription for up to a 30-day supply (90 days for insulin), you pay the entire cost at the time of purchase. Then you file a claim with Medco for reimbursement. (Claim forms are available on the Medco Web site at www.medco.com.) After you meet the program’s annual deductible, you’ll be reimbursed 70 percent of the allowable amount for covered medications. The deductible is $100 for yourself and each of your covered dependents, up to a maximum of $300 for your family. This deductible is separate from the medical and Mental Health and Chemical Dependency Program deductibles.

Using Medco By Mail By choosing home delivery for your long-term maintenance medications, you can receive up to a 90-day supply of most medications for less money than you would pay for the same quantity at a participating retail pharmacy. If you take maintenance drugs on an ongoing basis, use Medco By Mail. Your copayment for a prescription filled through the mail-order service is $20 for a generic prescription, $50 for a formulary brand-name prescription and $80 for a nonformulary brand-name prescription. Note, however, that Medco By Mail is only advantageous for prescriptions for over a 60-day supply — your copayment for prescriptions for less than a 60-day supply will be cheaper if you fill these prescriptions at a participating retail pharmacy.

To save money, simply ask your doctor for a 90-day prescription with refills up to one year, as appropriate, instead of a 30-day supply. Standard shipping is always free. In addition, your medications will be delivered right to you, saving you considerable time.

Initial orders To order a prescription over the Internet, log on to www.medco.com complete a one-time registration and follow the online instructions.

To order a prescription by mail or fax:

• Have your doctor call 1-888-EasyRx1 (1-888-327-9791) for instructions on faxing the prescription; or

• Send your original prescription and your copayment to Medco using an order envelope.

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Your prescription will be filled and sent to your home within 14 days of the date you mailed the prescription to Medco.

Refills Refills are even easier. You can order a refill online, by mail or by calling the number on your refill sticker. Use your credit card to pay.

Order Forms and Envelopes You can download a Medco By Mail order form and get envelopes on the Medco Web site. A new order envelope will also be included with your medication.

Prescription Drug Annual Out-of-Pocket Maximum If you fill your prescriptions through participating pharmacies or Medco By Mail, your annual out-of-pocket expenses are limited to $1,500 per individual. This out-of-pocket maximum is an addition to the medical and the Mental Health and Chemical Dependency out-of-pocket maximums. When you receive your care from nonparticipating pharmacies, there is no out-of-pocket maximum.

Medications That Require Authorization Certain medications must be authorized for specific conditions before they are eligible for coverage. Medco will work with you, your pharmacist and your physician to secure the necessary confirmation. Examples of drugs subject to authorization are listed below. The list changes from time to time as new drugs are approved, new clinical guidelines for appropriate use are developed or problems are identified. Call Medco at 1-800-336-5934 for more information about medications that require authorization.

• Retin A (when the medication is prescribed for a person age 26 or older);

• Alzheimer’s Disease Therapy (Cognez)®;

• Antiplatelet Therapy (Ticlid)®;

• Betaseron;

• Erythroid/Myeloid stimulants;

• Fertility drugs;

• Growth hormones;

• Imitrex® injectable, tablets and spray;

• Interferons;

• Zomig;

• Amerge;

• Maxalt/Maxalt ML;

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• Aricept; and

• Copaxone.

The following medications require authorization when program limits are exceeded:

• Antifungal therapy;

• Wellbutrin SR;

• Antiemetic agents;

• GI agents; and

• COX-II Inhibitors.

Quantity Limits Prescriptions are limited to a 30-day supply when purchased at a retail pharmacy and to a 90-day supply when purchased through the mail-order service. In addition, erectile dysfunction drugs (including Viagra) are limited to six per 30-day period at retail and 18 per 90-day period through the mail-order service.

Additional Pharmacy Services You’re entitled to the following additional pharmacy services under the Prescription Drug Program:

• Drug Utilization Review. Prescriptions filled through the Program become part of a computerized database that alerts participating pharmacy or mail-service pharmacists to potential drug interactions each time you have a prescription filled

• Toll-Free Prescription Drug Customer Service. Medco maintains a special toll-free customer service number you can call with questions about the Prescription Drug Program, for help locating a participating pharmacy or to get a special order envelope for the mail service or a claim form for a prescription filled at a nonparticipating pharmacy. Just call 1-800-336-5934. Other special services available at this phone number include:

⎯ Emergency pharmacist consultations, 24 hours a day, seven days a week;

⎯ A phone system to help you find participating pharmacies within specific ZIP codes; and

⎯ Large-print or Braille labels on medications filled through the mail-order, upon request.

Special telephone numbers are also available for hearing-impaired participants (1-800-759-1089) and overseas retirees (1-614-421-8292) weekdays from 8:00 a.m. to 12 midnight, Eastern Time, and on Saturdays from 8:00 a.m. to 6:00 p.m., Eastern Time.

• Prescription Formulary. With the Prescription Drug Program, you receive a formulary that lists commonly prescribed, cost-effective medications that your physician may consider prescribing when appropriate. You can help control rising costs and maintain high-quality care by asking

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your physician to prescribe generic or formulary drugs when your doctor determines such drugs are appropriate for your condition. The lower copayments for formulary drugs make them a cost-effective option for you. When you need a prescription, give your doctor a copy of the formulary list, which is available online at www.medco.com on the Medco Web site.

What Prescription Drug Items Are Covered? Generally, the Prescription Drug Program covers the following:

• Drugs provided by a pharmacist and prescribed by a physician (see “What Prescription Drug Items Are Not Covered?” in this section for exceptions).

• Birth control medications or contraceptive devices (including oral contraceptives, implants, or injections).

• Insulin.

• Disposable supplies ordered by a physician for a diabetic patient, including:

⎯ Insulin needles and syringes; and

⎯ Blood- and urine-testing supplies.

• Prescription (not over-the-counter) smoking deterrents (including nicotine products such as gums and patches).

Diabetic testing equipment may be covered under the durable medical equipment benefit of your POS.

What Prescription Drug Items Are Not Covered? • Drugs and medicines provided (or that can be obtained) without a prescription from a

physician.

• Nonfederal legend drugs.

• Injectable medications that can’t be self-administered (unless approved by Medco).

• Ostomy supplies.

• Therapeutic devices (not considered to be drugs, but may be covered under POS, Traditional Indemnity and Rx only).

• Drugs used solely to promote hair growth.

• Immunization agents, vaccines, biologicals, blood or blood plasma (may be covered under your medical option).

• Drugs labeled “caution — limited by federal law to investigational use” or experimental drugs, even if you are charged for those drugs.

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• Medication for which the cost is recoverable under any workers’ compensation or occupational disease law or any state or local governmental agency or any drug or medical service furnished at no cost to the participant.

• Medication provided to a participant while a patient in a licensed hospital, rest home, sanitarium, extended care facility, skilled nursing facility, convalescent hospital, nursing home, home healthcare agency or similar institution that has a facility for dispensing pharmaceuticals on its premises.

• Prescriptions filled in excess of the refill number specified by the physician or any refill dispensed one year after the original prescription.

• Charges for the administration or injection of any drug.

• Nutritional dietary supplements (unless administered intravenously or through a gastrointestinal tube as a medically necessary course of treatment).

• Any drug or medicine not medically necessary to treat the condition.

• Prescriptions filled at a pharmacy that exceed the 30-day limit (90-day limit for insulin) or through the mail that exceed the 90-day limit.

• Drugs used for experimental or investigational treatments or procedures.

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Mental Health and Chemical Dependency Benefits Under POS and Traditional Indemnity

What Is the Mental Health and Chemical Dependency Program? The Mental Health and Chemical Dependency Program is a program administered by Magellan Behavioral Health (Magellan). (If you’re Medicare-eligible and you have non-Medicare-eligible dependents, their mental health benefits are provided by United Behavioral Health. Mental health benefits for Medicare-eligible participants are provided under Traditional Indemnity and are secondary to Medicare.) You can reach Magellan by calling 1-888-314-4017 or by visiting their Web site at www.MagellanHealth.com. This program is separate from the coverage available under POS and Traditional Indemnity, as well as the Prescription Drug Program, so expenses incurred under one program don’t apply under another.

Medical conditions caused by mental health or chemical dependency problems are covered under POS and Traditional Indemnity. Your mental health and chemical dependency provider may ask you to involve your doctor in certain areas.

Am I Eligible for Mental Health and Chemical Dependency Benefits? If you enroll in POS or Traditional Indemnity and are non-Medicare-eligible, you and your covered dependents have access to treatment for mental health and chemical dependency conditions through Magellan or, under limited circumstances, United Behavioral Health.

If you select an HMO for your medical option, the Mental Health and Chemical Dependency Program doesn’t apply to you. Instead, you’ll receive the mental health and chemical dependency benefits available through your HMO. Contact your HMO for specific information about the coverage available for treatment of these conditions.

How Does the Mental Health and Chemical Dependency Program Work? Treatment is provided through a network of clinics, hospitals, physicians and qualified providers with whom the claims administrator has contracted. Generally, network providers are available in most areas. As with POS benefits, you have the flexibility of receiving your care in-network or out-of-network. Coverage for certain benefits may be limited or not available out-of-network. If the type of provider you need isn’t available in your area through the network, the claims administrator will refer you to a local provider, and you’ll receive the in-network level of benefits.

What Benefits Does the Mental Health and Chemical Dependency Program Provide? For a detailed overview of how the Mental Health and Chemical Dependency Program pays benefits, see “Your Retiree Medical Plan At-a-Glance.”

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What Is the Provider Network? Your provider network is made up of healthcare providers who specialize in the treatment of mental illness and chemical dependency. The network includes:

• Psychiatrists (M.D.).

• Licensed psychologists (Ph.D.).

• Master’s-degree-level nurses.

• Master’s-degree-level mental health and chemical dependency professionals, including:

⎯ Clinical social workers (L.C.S.W. or A.C.S.W.);

⎯ Marriage, family and child counselors (M.F.C.C.); and

⎯ Certified alcoholism counselors (C.A.C.) or certified chemical dependency counselors (C.C.D.C.).

In-Network Benefits To receive in-network benefits, you must call the claims administrator and speak with a mental health and chemical dependency program representative. The representative will determine the type of provider you need to see and will offer you a choice of network providers. When you go in-network under the Mental Health and Chemical Dependency Program, a higher level of benefits and services is available. Depending on the type of POS you are in, you will pay either a flat dollar copayment or coinsurance for each visit or day of care.

Out-of-Network Benefits When you go out-of-network, you may use any covered mental health or chemical dependency provider you choose. However, the amount of out-of-network benefits available is significantly lower than those available for in-network care; limitations apply and certain services aren’t covered. Your cost for out-of-network care will be much higher than it would be for in-network care.

You’ll have to pay:

• An annual deductible;

• A coinsurance percentage;

• A copayment for each hospitalization;

• Any benefit reductions due to failure to precertify a hospital admission;

• Any charges for expenses that aren’t covered out-of-network under the Mental Health and Chemical Dependency Program; and

• Any charges above the allowable amount.

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In addition, you will be responsible for obtaining precertification for any hospital admissions and for submitting claim forms.

What if I Need Care When I’m Away From Home? The Mental Health and Chemical Dependency program is available regardless of where you are when you need care. To receive care when you’re away from home, call your Mental Health and Chemical Dependency Program claims administrator at the telephone number printed on the back of your medical ID card and follow their instructions. If you’re temporarily traveling outside of the United States, the claims administrator won’t be able to direct you to a provider. However, emergency care will be reimbursed at the in-network benefit level if you have the care precertified.

What if I Need Emergency Care? Your Mental Health and Chemical Dependency Program claims administrator is accessible by telephone 24 hours a day, seven days a week. They can help you through an emergency and direct you to a provider for immediate assistance. In an emergency, you or your covered dependent should get care immediately by calling the claims administrator or your medical doctor, depending on the situation. For example, a drug overdose is a medical emergency, and the immediate need should be to seek life-saving medical treatment. In this case, your healthcare company and the Mental Health and Chemical Dependency Program will coordinate their responsibilities.

To receive emergency care benefits at the in-network level:

• The situation must qualify as a mental health emergency under the Mental Health and Chemical Dependency Program;

• You must receive treatment in an inpatient setting; and

• You, your doctor or a family member must contact your Mental Health and Chemical Dependency Program claims administrator within two business days after receiving the treatment.

• If these conditions aren’t satisfied, benefits will not be paid.

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What Services Are Covered? The following chart lists some of the services covered by the mental health and chemical dependency program:

Service Coverage Details

Outpatient Care Physician Services • Diagnosis and treatment of mental health and

chemical dependency conditions.

• Psychotherapy.

• Prescription of therapeutic drugs, medications or other treatments specifically required by law to be performed or supervised by a medical doctor.


• Laboratory tests (including charges from independent medical laboratories).

Services by Mental Health and Chemical Dependency Professionals

• Diagnosis and treatment of mental health and chemical dependency conditions.


• Psychotherapy.

• Chemical dependency counseling. Facility Services • Diagnosis of mental health and chemical

dependency conditions.


• Psychotherapy.


• Laboratory testing performed by the facility.

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Service Coverage Details

Inpatient Care Hospital, Acute Psychiatric Facility or Acute Chemical Dependency Facility

• Semiprivate room and board charges in the appropriate unit for the participant’s condition (acute care, intensive care, isolation care or rehabilitation unit).

• Services provided in an emergency room.

• Services and supplies normally provided by a hospital, including any professional component of those services such as those provided by a psychiatrist, other physician or a mental health professional (may include individual or group therapy for the patient and covered dependents, stress management, occupational therapy and educational and disease management programs integrated with a course of treatment).

• Detoxification services (except for a newborn, whose charges would be covered under POS or Traditional Indemnity, not the Mental Health and Chemical Dependency Program).

• Laboratory services. Alternative Treatment (in-network only) Partial Hospitalization Services (in-network only)

• Covered services determined through precertification by your claims administrator (may include treatments such as individual and group therapy).

• Medications administered during the daily visit. Residential Treatment (in-network only) • Room and board charges.

• Drugs and medications administered while an inpatient at the residential treatment facility.

• Services normally provided by a residential treatment facility, including services provided by the professional staff of the facility.

Group Homes and Halfway Houses (in-network only)


• Services normally provided by a group home or halfway house, including services provided by the professional staff of the facility.

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What Services Are Not Covered? • Services not deemed by the plan to be medically necessary.

• Expenses beyond the stated limits, including:

⎯ Charges from out-of-network providers above the allowable amount;

⎯ Room and board charges from an out-of-network hospital above the semiprivate room rate;

⎯ Any charges for failure to obtain precertification for an out-of-network, inpatient admission; and

⎯ Any charges for services furnished by a network provider or facility that were not authorized or precertified by your claims administrator.

• Charges for:

⎯ Missed or cancelled appointments;

⎯ Treatment provided by telephone unless specifically authorized by your claims administrator;

⎯ Inpatient stays primarily for environmental change;

⎯ Alternative treatment facilities accessed or provided out-of-network;

⎯ Treatment of conditions other than a mental disorder or chemical dependency;

⎯ Treatment of developmental disorders such as mental retardation or learning disabilities that cannot be corrected with treatment;

⎯ Treatment of obesity or weight-loss conditions (unless there is a diagnosis of anorexia nervosa or bulimia, in which case treatment of those illnesses is covered);

⎯ Routine physical exams or tests to investigate a potential physiological cause of a mental disorder (may be covered under your medical option);

⎯ Psychotherapy in conjunction with self-actualization therapy;

⎯ Vocational therapy to teach or train a covered individual to resume employment (unless integrated with a covered treatment program provided to a patient in a hospital or alternative treatment facility);

⎯ Aversion treatment of chemical dependency (treatment that administers alcohol with drugs designed to create an adverse reaction and a long-term psychological aversion to alcohol);

⎯ Therapies based on nutrition or dietary supplements such as vitamins; and

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⎯ All drugs and supplies (except prescription drugs administered as part of a covered stay in an inpatient facility; prescription drugs filled on an outpatient basis may be covered under the Prescription Drug Program).

Mental Health and Chemical Dependency Program Benefits When You or a Dependent Becomes Medicare-Eligible or Through an HMO If you are Medicare-eligible and do not choose Medicare Advantage HMO coverage, your mental health and chemical dependency benefits will be provided under Traditional Indemnity and will be administered by UnitedHealthcare, but will be secondary to Medicare. In addition, you generally will not be eligible for Mental Health and Chemical Dependency Program benefits. An exception applies if you are not Medicare-eligible and choose Catastrophic POS; in this case, you would be covered under the Mental Health and Chemical Dependency Program administered by Magellan, while your Medicare-eligible dependents would have Rx Only coverage, which does not include any mental health and chemical dependency benefits.

If you select an HMO/Medicare Advantage HMO for your medical option, the Mental Health and Chemical Dependency Program doesn’t apply for you. Instead, you’ll receive mental health and chemical dependency benefits directly through your HMO/Medicare HMO. Contact your HMO/Medicare HMO for specific information about the coverage available for treatment of these conditions.

Coverage Amounts Mental health and chemical dependency benefits under the Retiree Medical Plan for Medicare-eligible retired employees and their Medicare-eligible dependents are secondary to Medicare and are payable up to Traditional Indemnity benefit levels. In addition, any payments made by Medicare are deducted from the benefits payable under the Mental Health and Chemical Dependency Program. Coinsurance percentages are based on the allowable amount.

The following conditions apply to mental health and chemical dependency benefits for Medicare-eligible retirees and Medicare-eligible dependents:

• The annual deductible does not apply;

• Amounts you pay in coinsurance do not apply toward meeting your annual out-of-pocket maximum; and

• If you reach your annual out-of-pocket maximum through your medical option payments, the 100% payment rate that applies to medical expenses after that point will not apply to these mental health and chemical dependency benefits.

The following charts show the coverage amounts under the Mental Health and Chemical Dependency Program for Medicare-eligible retirees and their Medicare-eligible dependents.

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Treatment of Mental Health Conditions for Medicare-Eligible Retirees and Dependents

Service Deductible ($200/person) Copayment Coinsurance

Amount Above Allowable Amount

Precertifica-tion Penalty

Benefit Limits

Outpatient Care

Not applicable None 50%* You pay, if any

Not applicable

None

Inpatient Hospital Care


20% reduction ($400 maximum per occurrence)

None

* Percentage paid by the Retiree Medical Plan applies to the Medicare-approved amount and is secondary to any benefits payable by Medicare. With coordination of benefits, the Retiree Medical Plan will pay up to the indicated percentage of the Medicare-approved amount (see “How Medicare Works With Lucent Coverage”).

Treatment of Chemical Dependency for Medicare-Eligible Retirees and Dependents

Service Deductible ($200/person)

Copayment Coinsurance Amount Above Allowable Amount

Precertifica-tion Penalty

Benefit Limits

Outpatient Care


Not applicable

30 visits/year

Inpatient Hospital Care


20% reduction ($400 maximum per occurrence)

30 days/con-finement; two confinements per lifetime**

* Percentage paid by the Retiree Medical Plan applies to the Medicare-approved amount and is secondary to any benefits payable by Medicare. With coordination of benefits, the Retiree Medical Plan will pay up to the indicated percentage of the Medicare-approved amount (see “How Medicare Works With Lucent Coverage”).

** Admissions separated by less than 180 days are considered one confinement.

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A Closer Look at Rx Only Coverage

What Is Rx Only Coverage? Rx Only coverage is available to Medicare-eligible retirees and their Medicare-eligible dependents. (If your dependents are not Medicare-eligible, then they will be enrolled in Catastrophic POS.) Since Medicare is the primary coverage for anyone who is Medicare-eligible (see “How Medicare Works With Lucent Coverage”), one of the main benefits from your retiree medical coverage is prescription drugs, which are not currently covered by Medicare. This Rx Only coverage may minimize your costs without drastically affecting your level of coverage. Keep in mind that choosing Rx Only coverage means that you will not have Lucent coverage for any other types of medical expenses, and Medicare will be your only coverage for medical expenses.

When you choose Rx Only coverage, you have access to a Prescription Drug Program administered by Medco. See “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only” for more information.

Are There Special Eligibility Requirements for Rx Only Coverage? You can only choose Rx Only coverage if you’re Medicare-eligible and you retired on or after March 1, 1990. Your Medicare-eligible dependents generally also are eligible for Rx Only coverage, with the exception of Class II dependents, who are not eligible, regardless of their Medicare status.

How Does Rx Only Coverage Work? If you’re Medicare-eligible, you and your covered dependents may choose Rx Only coverage. With this coverage, you receive the benefits described under “Prescription Drug Benefits Under POS, Traditional Indemnity and Rx Only,” but you do not receive any other benefits besides your Medicare coverage.

What Benefits Does Rx Only Coverage Provide? For a detailed overview of how Rx Only coverage pays benefits, see “Your Retiree Medical Plan At-a-Glance.”

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A Closer Look at the HMO/Medicare Advantage HMOs

How Does an HMO/Medicare Advantage HMO Work? An HMO/Medicare Advantage HMO is a managed care plan that focuses on preventive and integrated healthcare delivery. An HMO/Medicare Advantage HMO is a group of doctors, hospitals, healthcare centers, laboratories, pharmacies and other providers that makes available a wide range of healthcare services to its members for a fixed cost.

In most HMOs, you must choose a PCP to coordinate your care. Typically, you choose a PCP or facility from a directory — available free of charge — or by accessing the HMO’s Web site. Your PCP manages your healthcare by serving as your main caregiver and, when necessary, referring you to a specialist. Your PCP also handles the necessary paperwork and approvals for any required hospital admissions. It’s a good idea to have a PCP even if one isn’t required by the HMO you choose. That way you have at least one doctor with full knowledge of your health history.

When you elect HMO/Medicare Advantage HMO coverage, you don’t have to meet deductibles or pay coinsurance; there are fixed copayments for many services. Generally, you must use the providers in the HMO’s network in order for your care to be covered — except for certain emergencies. HMO members may also receive prescription drug benefits, mental health and substance abuse coverage and vision care.

What HMO/Medicare Advantage HMOs Are in My Service Area? Depending on where you live, HMO options may be available to you. HMO options are offered at the company’s discretion. The HMO benefits design, administrators and service areas may change from time to time.

To find out what HMOs are available in your area, go to http://resources.hewitt.com/lucent and visit the Your Benefits Resources Web site.

What Does an HMO Cover? Each HMO is an independent organization with its own contract provisions, benefits and network providers. Log on to the Your Benefits Resources Web site at http://resources.hewitt.com/lucent for general plan design information for each of the HMOs for which you are eligible to enroll. (If you’re already enrolled in an HMO, you can view information about your current HMO.) For more detailed information about HMO provisions, contact the HMO directly.

Prescription Drugs Prescription drug coverage may be provided by the HMO. Refer to the HMO provisions on the Your Benefits Resources Web site, or contact the HMO directly to find out more information about prescription drug coverage.

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Mental Health and Chemical Dependency Coverage The HMO provides coverage for treatment when you use the HMO’s network of providers. Refer to the HMO provisions on the Your Benefits Resources Web site, or contact the HMO directly to obtain information about coverage.

Emergency Coverage Emergency treatment is covered regardless of whether you receive care at a participating or nonparticipating facility. However, you must meet the plan’s definition of an emergency, and, typically, you must notify your PCP within a specific time frame to receive full reimbursement.

Vision Care Coverage Vision care coverage may be provided through the HMO. Refer to the HMO provisions on the Your Benefits Resources Web site, or contact the HMO directly for further information. When you enroll in the HMO, you may also be covered by the Lucent Vision Care Plan, meaning you may have access to more than one vision benefit.

Do I Have to File a Claim? When you receive HMO care, you do not have to file a claim.

What Is a Medicare Advantage HMO? A Medicare Advantage HMO is designed to work like a regular HMO and has many of the same features as an HMO. It must also provide coverage for all the same services covered by Medicare Part A and Part B. In addition, a Medicare Advantage HMO must get special approval by the Centers for Medicare and Medicaid Services (CMS) before its services can be offered to the public.

Medicare Advantage HMOs may provide benefits above and beyond what’s covered by Medicare. This is one of the key reasons that Lucent expanded the number of Medicare Advantage HMOs it offers.

Following are just some of the benefits that may be available through a Medicare Advantage HMO that traditional Medicare does not typically offer, including:

• Prescription drug coverage;

• Vision care, including eyeglass allowance and exams; and

• Hearing care, including hearing-aid allowance and exams.

Typically, benefits provided by the Medicare HMOs available through Lucent are not the same as those provided by the Medicare HMOs you may join on an individual basis through the Centers for Medicare and Medicaid Services (CMS). Contact your Medicare Advantage HMO for information on covered services.

Am I Eligible for a Medicare Advantage HMO? To be eligible for a Medicare Advantage HMO, you or your covered dependent must be:

• Medicare-eligible (generally age 65 and older or disabled);

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• Enrolled in Medicare Parts A and B; and

• A permanent resident of a Medicare Advantage HMO service area.

In addition, you are not eligible to enroll in a Medicare Advantage HMO if you have end-stage renal disease, although if you are enrolled in a Medicare Advantage HMO and develop end-stage renal disease, you may continue to be enrolled. Also, you may not be eligible to enroll in a Medicare HMO if you live away from your permanent home for more than 90 consecutive days (approximately three months) in a year, although some HMOs offer reciprocal arrangements with other HMOs to accommodate such individuals. If this applies to you, check with your enrollment administrator concerning the policy of the Medicare Advantage HMO that interests you.

How Do I Enroll in a Medicare Advantage HMO? To enroll, contact the Lucent Benefits Center and they will send you a Medicare Advantage HMO enrollment form. The form must be completed (including selection of your PCP) and returned per the instructions provided in order for coverage to take effect.

If you choose a Medicare Advantage HMO, it replaces coverage under Medicare Parts A and B, but you will continue to pay the Part B premiums. Keep in mind that when you switch to a Medicare Advantage HMO, any non-Medicare-eligible dependents will have coverage through the regular HMO, since you must enroll your dependents in the same coverage option and with the same healthcare company that you choose for yourself.

Can I Switch Out of My Medicare Advantage HMO? Yes, you can switch to another Medicare Advantage HMO or to Traditional Indemnity throughout the year. You can also switch to coverage under a Medicare Advantage HMO from Traditional Indemnity at any time. To make a change, contact the Lucent Benefits Center. Changes typically take 45 to 60 days, depending on the date the forms are received by the Medicare Advantage HMO Claims Administrator. Until you are notified of the change by the Claims Administrator, you must continue to obtain services from your current healthcare option.

How Does Choosing Traditional Indemnity Compare With Medicare Advantage HMO Coverage? The following chart compares key medical benefits for Medicare (when Medicare is primary and your Lucent coverage is secondary and you are enrolled in Traditional Indemnity) and the Medicare Advantage HMOs available through Lucent. By choosing Medicare Advantage HMO coverage, you will receive some enhanced benefits (for example, preventive care and lower out-of-pocket costs for office visits), but a limited choice of providers, since you’ll only receive benefits when you use network doctors and facilities. Lucent shall have no responsibility for the benefits provided or not provided by the HMO, or claims relating to HMO coverage. Once you have elected to participate in an HMO, that HMO governs your Retiree Medical Plan coverage in lieu of all Retiree Medical Plan provisions that cover the other Retiree Medical Plan options. When you elect to participate in an HMO, such coverage is in lieu of coverage under the Retiree Medical Plan. To request information about Medicare Advantage HMOs available in your area, contact the Lucent Benefits Center.

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Type of Service

Medicare Primary/Lucent Coverage Secondary*

Medicare Advantage HMOs Available Through Lucent

(coverage varies by Medicare Advantage HMO)

Hospitalization 80% less deductible Generally, 100% Skilled Nursing 80% for 120 days less

deductible Generally, 100%

Home Healthcare 80% less deductible (must be authorized by your healthcare company for noncovered Medicare)

Generally, 100%

Hospice Care 80% for 210 days/lifetime Generally, 100% Physician Office Visits 80% less deductible Generally, $5 to $10 Mental Health Outpatient 50% less deductible Generally, ranges from $10

to $25 per visit Physical, Occupational and Speech Therapy

80% less deductible; speech limited to 30 visits/year

Generally, $5 to $10

Preventive Care Not covered Generally, $5 to $10 Routine Vision Care Not covered Varies by Medicare HMO Hearing Aids Not covered Varies by Medicare HMO

Prescription Drugs $10 to $40 Generally, $5 to $15 Precertification Patient precertifies care Generally, PCP precertifies

care Claim Forms Yes Generally, no

*Please note that reimbursement is generally based on the Medicare-approved amount. Where Can I Find More Information About HMO/Medicare Advantage HMOs? If, after reviewing the information on the Your Benefits Resources Web site, you want additional information about your HMO/Medicare Advantage HMOs, contact the HMO directly. It is the HMO’s responsibility to provide you, free of charge, with a detailed benefit document about coverage and procedures. You should carefully read these materials and ask any questions you have before enrolling.

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A Closer Look at Waiving Coverage

What Does It Mean to “Waive Coverage”? You can elect to waive coverage under the Retiree Medical Plan. You can waive coverage as many times as you like, and you can still re-elect coverage (for yourself and those Class I dependents whom you previously covered) again at a later date. Remember: If you do not actively re-enroll Class II dependents during each annual open enrollment, they will permanently lose their coverage.

While you can waive coverage at any time, you can only re-enroll in medical coverage for you and your eligible Class I dependents during annual open enrollment, unless you have a qualified status change or other event recognized by the IRS and the company. If you have a qualified status change, you can only make a change to your coverage that is consistent with the qualified status change.

Please note that Lucent reserves the right to change the Retiree Medical Plan at any time. In the unlikely event that we change our policy regarding waiving and re-enrolling for coverage at some point in the future, you will be notified of the change at least two years before the change would become effective. All eligible retirees — including those who have opted out of the Plan — will be notified of the pending change at the time it’s announced and each year preceding its effective date, so you will have ample opportunity to re-enroll for coverage if you choose.

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Claims and Appeals

When Do I Use These Claim and Appeal Procedures? The claim and appeal procedures described here are the general rules for POS and Traditional Indemnity. When you use a PPO provider under Traditional Indemnity, the in-network rules described here apply. When you use an out-of-network provider under Traditional Indemnity, the out-of-network rules described here apply.

HMO rules may vary; however, when you receive HMO care, you generally do not have to file a claim. When you go out-of-network, expenses are not usually covered unless you are receiving emergency care.

How Do I File a Claim for Benefits? In-Network (Participating Provider) If you receive services from network providers, they submit claim forms for you and benefits are paid directly to them. You will receive an Explanation of Benefits (EOB) showing charges and benefits paid.

Out-of-Network (Nonparticipating) Provider If you receive services from out-of-network providers, they will generally request payment in full at the time of service. To receive reimbursement for the medical services or supplies of an out-of-network provider, you must submit a claim form to the Claims Administrator; both you and your provider must complete a section of the form and submit a copy of the provider’s invoice. The Claims Administrator will pay benefits for covered services or supplies directly to you and will send you an EOB.

You should submit claims within 90 days of service. In no case are benefits payable for claims submitted later than 12 months from the date of service. If a claim for benefits is denied, you may appeal the decision (see “How Do I File An Appeal of a Denied Claim Under POS or Traditional Indemnity?” in this section).

Coordination of Benefits (COB) If you or your eligible dependents are covered by more than one medical plan (for example, Traditional Indemnity and your spouse’s plan), it’s important to know about the coordination of benefits provision. This feature is designed to prevent duplicate payments for the same expenses. In other words, you generally can’t be reimbursed twice for an expense that’s covered by both plans. For information about coordination of benefits, see “How Does COB Work?” in this section.

Requesting a Claim Form If you need to file a claim for benefits, you should contact your health plan for a claim form. In many cases, claim forms are also available online at your health plan’s Web site.

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What Is Participant Advocacy? Participant Advocacy is a service that can help you resolve issues with your health plan or provider. After you’ve made at least one attempt to resolve an issue yourself, this service will put you in touch with a team of Advocates who can help you with unresolved health plan access or claims issues. An Advocate will research your issue and work with your health plan to resolve it on your behalf.

This totally confidential service is available as of July 1, 2004 to participants enrolled for coverage under any Lucent medical, prescription drug, mental health or dental plan.

How Does Participant Advocacy Work? To reach an Advocate, just call the Lucent Benefits Center at 1-888-232-4111 and follow the voice recognition prompts to speak with a Lucent Customer Service Associate.

As mentioned above, before you request assistance, you must make at least one attempt to resolve the issue directly with your health plan. (This attempt does not have to be in writing.) If you contact the Lucent Benefits Center before talking to your health plan, your issue will not be passed on to an Advocate. Instead, you will be directed to contact your health plan. When you call the Lucent Benefits Center, tell the representative: • The type of issue and a description of what is

unresolved; • The name of your healthcare provider; • The date of service; • The amount of the claim in question; • The health plan’s response to your initial call; and, • On rare occasions, it also may be necessary to

provide detailed diagnostic information.

The Lucent Customer Service Associate will pass your issue on to Participant Advocacy, which will begin any necessary research. An Advocate will contact you within two business days to follow up. If your issue is deemed urgent (for instance, you’re calling from a provider’s office or from the pharmacy), you may be connected to an Advocate immediately.

How Do I File an Appeal of a Denied Claim Under POS or Traditional Indemnity? Claim Denial Procedures There are two general types of claims you may make under the Retiree Medical Plan. If they’re denied, you may appeal that denial as described in this section:

1. You may make a claim related to enrollment or eligibility for coverage. For instance, you may feel an error was made during annual open enrollment that resulted in your being assigned incorrect coverage. For example, you may have been assigned No Coverage or POS or Traditional Indemnity coverage when you wanted to be covered under an HMO. In these situations, you should file a claim with the Lucent Benefits Center. For this type of claim, the initial claim is commonly referred to as an “appeal.” Your appeal will be reviewed, and you will be notified of the company’s decision.

2. On the other hand, you may want to appeal the denial of a claim for benefits under your medical option — for example, if your claim for a certain kind of out-of-network treatment was denied because it was not deemed “medically necessary.” If that initial claim for benefits is denied, you should refer to this section for the steps that you or your authorized representative is required to take to file an ERISA claim or appeal. You should note that Lucent has delegated the appeals process described in this section to the applicable Claims Administrators.

A benefit claim is a claim for a particular benefit or coverage under a plan. This is typically your initial request for benefits or coverage.

Benefit claims and appeals are divided into

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four categories:

Postservice A claim for reimbursement of services already received. This is the most common type of claim.

Preservice A claim for a benefit prior to obtaining services under a plan.

Concurrent care A claim for ongoing treatment over a period of time or a number of treatments. For example, if treatments have been authorized over a number of months but are later reduced or authorization is terminated, your claim would be a concurrent care claim.

Urgent care A claim for care or treatment that, if the longer time frames for nonurgent care were applied, the delay could: (1) seriously jeopardize the health of the claimant or his or her ability to regain maximum function; or (2) in the opinion of a physician with knowledge of the claimant’s medical condition, would subject the claimant to severe pain that could not be managed without the care or treatment that is the subject of the claim.

Claim Filing Procedures If you don’t follow the procedures described in the following chart, the response time frames indicated will not begin until you properly direct your claim. Therefore, you may experience a delay in receiving a benefits determination.

Special RulesGeneral Procedure Postservice Preservice Concurrent

Care Urgent Care

Step 1:

How to File a Claim To file a benefit claim, you (or your authorized representative) should write to the Claims Administrator. You must include:

• A description of the benefits for which you’re applying;

• The reason(s) for the request; and • Relevant documentation.

See “Contact Information” for contact information.

To file an urgent care claim, you should call the Claims Administrator. In addition, you must state that you are filing an urgent care claim.

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Special Rules

General Procedure Postservice Preservice Concurrent Care

Urgent Care

When You Will Be Notified of the Claim Decision You’ll be notified of the decision within (see columns to the right) of the Claims Administrator’s receipt of your claim.

30 days This period may be extended for 15 days. You will be notified within the initial 30-day period.

15 days This period may be extended for an additional 15 days. You will be notified within the initial 15-day period.

A time period sufficiently in advance of the reduction or termination of coverage to allow you to appeal and obtain a response to that appeal before your coverage is reduced or terminated.

For concurrent care that is urgent, within 24 hours (provided that you submitted a claim at least 24 hours in advance of reduction or termination of coverage); otherwise, within 72 hours.

72 hours

Failure to Provide Sufficient Information Procedure If you fail to provide sufficient information, the claim may be decided based on the information provided. However, the Claims Administrator may notify you within (see columns to the right) that additional information is needed.

30 days 15 days Decision will be based on information provided, unless the concurrent care claim involves urgent care; see urgent care time frame.

24 hours

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Care Urgent Care

You will have (see columns to the right) to provide the additional information. Otherwise, the claim will be decided based on the information originally provided.

45 days 45 days 48 hours

If you provide additional information, you will be notified of the decision by the Claims Administrator within (see columns to the right).

The remainder of the 30-day period (or 45-day period, if extended by the Claims Administrator).

The remainder of the 15-day period (or 30-day period, if extended by the Claims Administrator).

48 hours

How You Will Be Notified of the Claim Decision If your claim is approved, your Claims Administrator generally will notify you in writing.

If your claim is denied, in whole or in part, your Claims Administrator will notify you in writing, except for urgent care. Your denial notice will contain:

• The specific reason(s) for the denial; • The Plan provisions on which the

denial was based; • Any additional material or information

you may need to submit to complete the claim;

• Any internal procedures or clinical information on which the denial was based; and

• The Plan’s appeal procedures.

If your claim is denied, the Claims Administrator will notify you by telephone. Within three days of this oral denial, you will receive a written denial notice, as explained under the general procedure. The denial notice also will explain the expedited review process.

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Special Rules


Urgent Care

Step 2: About Appeals and the Claims Fiduciary Before you can bring any action at law or in equity to recover Plan benefits, you must exhaust this process. Specifically, you must file an appeal or appeals, as explained in this Step 2, and the appeal(s) must be finally decided by the claims fiduciary. Lucent has delegated its authority to finally determine claims (other than claims for eligibility) to the Health Plans for benefit claims. The claims fiduciary is authorized to finally determine appeals and interpret the terms of the Plan in its sole discretion. All decisions by the claims fiduciary are final and binding on all parties.

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Special Rules


Urgent Care

How to File an Appeal If your claim is denied and you want to appeal it, you must file your appeal within (see columns to the right) from the date you receive notice of your denied claim. You may request access to all documents relating to your appeal. If you have an appeal, write to the contact identified by the Claims Administrator in your claim denial notice. You should include: • A copy of your claim denial notice; • The reason(s) for the appeal; and • Relevant documentation. The individual/committee (and any medical expert) reviewing your appeal will be independent from the individual/committee who reviewed your claim. In addition, if your appeal involves a medical judgment, the Claims Administrator will consult with a healthcare professional who has appropriate relevant experience. You are entitled to learn the identity of such an expert, upon request.

180 days Within a reasonable period of time, considering the time period scheduled for reduction or termination of benefits.

180 days You may orally file your appeal with the contact identified by the Claims Administrator. At the time your claim is denied, the Claims Administrator will give you instructions about how to file your appeal. You must identify that you are appealing an urgent care claim.

When You Will Be Notified of the Appeal Decision You will be notified of the decision within (see columns to the right) of the Claims Administrator’s receipt of your appeal.

Benefit appeals: 30 days


Benefit appeals: Before a reduction or termination of benefits would occur.


How You Will be Notified of the Appeal Decision If your appeal is approved, the Claims Administrator will notify you in writing. If you do not receive notification from the Claims Administrator within the time frames indicated in this chart, you may consider your appeal denied.

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Special Rules


Urgent Care

Step 3: How to Proceed, if Necessary If you had an urgent benefit appeal that was denied by the Claims Administrator, the Claims Administrator offers one level of appeal. The Claims Administrator will not review your matter again, unless new facts are presented. You have a right to bring a civil action. In addition, you may qualify for an independent medical review. If so, upon request, the Claims Administrator will provide one in conjunction with this second and final appeal.

If you had a nonurgent benefit appeal that was denied by the Claims Administrator, the Claims Administrator offers two levels of appeal. You may appeal to the Claims Administrator a second time. You must submit your second appeal within 180 days from the date that you received the denial of your first appeal. In addition, you may qualify for an independent medical review. If so, upon request, the Claims Administrator will provide one in conjunction with this second and final appeal.

For Nonurgent Appeals, When You Will Be Notified of the Second and Final Appeal Decision You will receive a response within (see columns to the right) of the Claims Administrator’s receipt of your second and final appeal.

30 days 15 days Before a reduction or termination of benefits would occur. If the concurrent claim involves urgent care, not applicable.

Not applicable

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Care Urgent Care

Independent Third-Party Review Process An independent third-party appeal review process is available to eligible retirees and their dependents enrolled in Retiree Medical Plan options other than the HMO option. The process applies to certain claims for services that have been denied by the POS, Catastrophic POS, Prescription Drug and/or Mental Health and Chemical Dependency Program service providers. Claims are reviewed by Island Peer Review Organization (IPRO), the third-party review administrator. If your claim is eligible for the independent review process, you (or your covered dependent) will be notified by the appropriate Claims Administrator.

Claims eligible for third-party review must meet all of the following: • The claim must be for services

rendered on or after January 1, 2000; • The claimant must have exhausted all

administrative appeals or processes available through the Claims Administrator under the terms of the Retiree Medical Plan;

• The claim must relate to an extreme illness or injury;

• The appeal must have been denied either due to a lack of medical necessity or because the claim relates to an experimental or investigational treatment, as defined in the Retiree Medical Plan; and

• The claim must otherwise be payable under the terms of the Retiree Medical Plan.

If this appeal is denied, the Claims Administrator will not review your matter again, unless new facts are presented. You have a right to bring a civil action.

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Coordination With Medicare The COB described here does not apply if you’re covered by Medicare. See “How Medicare Works With Lucent Coverage” for more information.

How Does COB Work? The Retiree Medical Plan has a COB provision. This feature is designed to prevent duplicate benefit payments when you or your eligible dependents participate in more than one group plan.

When Would the COB Provision Apply? The COB provision applies when you or your eligible dependents have medical coverage other than that provided under the Retiree Medical Plan, such as:

• A group-sponsored insurance or prepayment plan; or

• A government-sponsored plan.

When Would the COB Provision Not Apply? The COB provision described in this section does not apply:

• When Medicare is primary (see “How Medicare Works With Lucent Coverage”).

• To benefits under any personal policy (except no-fault or other state-mandated automobile insurance).

• To two related people, both of whom are employees or retirees of a participating company, due to the following two rules:

⎯ One person cannot receive Retiree Medical Plan benefits as both an employee or retiree of a participating company and as an eligible dependent of such an employee or retiree; and

⎯ One person cannot receive Retiree Medical Plan benefits as an eligible dependent of more than one employee or retiree of a participating company.

Which Plan Pays Benefits First? Under the COB provision, the Claims Administrator determines that one plan is primary and determines its benefits first. Any other plan is secondary. To claim benefits, submit your claim to the primary plan first. After that plan determines its benefits, submit a claim to the secondary plan(s) along with a copy of the Explanation of Benefits (EOB) statement you received from the primary plan. The secondary plan(s) will then determine whether any additional benefits are payable.

• If the Retiree Medical Plan through Lucent is the primary plan, it pays its benefits without regard to the secondary plan.

• If the Retiree Medical Plan through Lucent is secondary, the Retiree Medical Plan coordinates benefits with the primary plan(s). Here’s how this works. The Claims Administrator first calculates what the Retiree Medical Plan would have paid if it were the primary plan. Then, the Claims Administrator reviews the Explanation of Benefits (EOB) statement you received from the primary plan to determine what the primary plan paid. The Retiree Medical Plan then pays the difference, up to the allowable amount the Retiree Medical Plan would have paid if it were the primary plan. Therefore, among the primary and secondary plans, you can receive up to

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100 percent (but not more than 100 percent) of the allowable amount under the highest-paying plan.

How Does the Claims Administrator Determine Which Plan Is Primary? The Claims Administrator determines which plan is primary and which plan(s) is secondary under the following rules:

• If you are actively employed by a company other than Lucent, and you are eligible for coverage with your new employer, that plan is primary, and the Retiree Medical Plan is secondary.

• If the other plan(s) does not have a COB feature, that plan(s) is considered primary, and the Retiree Medical Plan is considered secondary.

• If both plans have a COB provision, the plan covering a person as an employee or the dependent of an employee is primary, and the plan covering the person as a retiree or the dependent of a retiree is secondary.

• If you are retired from another company, in addition to being retired from Lucent, the company that owed you a benefit first pays before the company that owed you a benefit second, regardless of your eligibility for Medicare.

• For dependent children, determination of the primary and secondary plan(s) follows these rules in this sequence:

⎯ The Retiree Medical Plan uses the “birthday rule.” The plan covering the parent whose birthday (month and day) comes first in the year is the primary plan for the children, and the plan covering the other parent is the secondary plan for the children. If both parents have the same birthday, the plan that has covered one parent longer is the primary plan for the children, while the plan that has covered the other parent shorter is the secondary;

⎯ The “male-female” rule. For plans that don’t use the birthday rule, the father’s group insurance is the primary plan for the children and the mother’s group insurance is the secondary plan for the children; or

⎯ If one parent’s plan includes the male-female rule and one parent’s plan includes the birthday rule, the male-female rule applies to the extent permitted by law.

• If the parents of dependent children are divorced or legally separated, the Claims Administrator will determine whether there is a court decree or a Qualified Medical Child Support Order (QMCSO) establishing financial responsibility for medical expenses.

⎯ If there is such a decree or QMCSO, the plan covering the parent who has that responsibility will be the primary plan;

⎯ If there is no such decree or QMCSO, the plan that covers the parent with custody will be the primary plan; the other parent’s plan will be secondary;

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⎯ If there is no such decree or QMCSO and the parent with custody remarries, that parent’s plan remains primary, the stepparent’s plan is secondary and the noncustodial parent’s plan is third; or

⎯ If payment responsibilities are still unresolved, the plan that has covered the patient for the longest time is the primary plan.

When both parents have coverage through a participating company, either parent (but not both) may choose to cover the child(ren). Claims for the child(ren) are submitted to the plan of the parent covering the child(ren). The other parent’s plan is not secondary because it does not cover the child(ren). So expenses that are not paid by the primary plan cannot be submitted to the Retiree Medical Plan by the second parent.

If You Are Disabled or Have ESRD If you or a dependent is disabled or has ESRD (end-stage renal disease), then Lucent is primary only for the first 30 months; thereafter, Medicare is primary. The same rule applies to your covered Class I and Class II dependents who become Medicare-eligible.

For Medicare-eligible retirees or dependents who have had ESRD for more than 30 months, the following provides Medicare COB information:

• Regardless of which medical option you are enrolled in, you will be transferred to Traditional Indemnity, with Medicare as the primary payor. Traditional Indemnity is administered by UnitedHealthcare.

• If you have dependents who are not yet Medicare-eligible, they will also be covered under Traditional Indemnity, unless there is a UnitedHealthcare POS in your area. If there is a POS in your area, your dependents will be enrolled in the POS.

• When Medicare is the primary plan, benefits under Traditional Indemnity become secondary, and the total amount from Traditional Indemnity and Medicare cannot exceed the Traditional Indemnity benefit level.

• If you’re enrolled in the HMO option, see your HMO for details.

COB When Medicare Is Primary The Retiree Medical Plan is designed to provide a certain level of benefits. When the Retiree Medical Plan coordinates benefits with another plan or program, including Medicare, this does not increase the benefits payable from the Retiree Medical Plan. All Medicare COB claims with the Retiree Medical Plan are processed at Traditional Indemnity benefit levels. Lucent will only pay up to what it would have paid had it been the primary plan. See “How Medicare Works with Lucent Coverage” for more information.

Obligation to Refund If all or some of the expenses under the Retiree Medical Plan are not paid in accordance with the terms of the Retiree Medical Plan (improper payments), or if all or some of the payments made exceed the benefits payable under the Retiree Medical Plan (excess payments), then those improper or excess payments must be refunded to the Retiree Medical Plan.

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If the refund is due from another person or organization, you or your covered dependents must assist the Retiree Medical Plan in obtaining the refund when requested.

You or your covered dependents are still responsible for any improper or excess payments made to you or your covered dependents or to providers under the Retiree Medical Plan.

Failure by you or your covered dependents, or by any other person or organization that was improperly or excessively paid, to promptly refund the full amount may reduce the amount of any future benefits that are payable to or on behalf of you or your covered dependents under the Retiree Medical Plan.

Right of Recovery and Subrogation The Retiree Medical Plan provides covered benefits to you and your covered dependents that are not provided by any third party. So, benefits provided under the Retiree Medical Plan as a result of any illness or injury that gives rise to a claim by you or your covered dependents against a third party (as the result of or attributable to the negligent or wrongful acts or omission of such third party) are excluded and are not covered under the Retiree Medical Plan. If such benefits have been paid by the Retiree Medical Plan:

• The Retiree Medical Plan shall be entitled to all of your and your covered dependents’ rights of recovery against such third party to the extent of the reasonable value of the benefits provided under the Retiree Medical Plan.

• You and your covered dependents agree to reimburse the Retiree Medical Plan for the reasonable value of all benefits received under the Retiree Medical Plan out of any actual recoveries you, your lawful spouse or covered Class I dependents, including domestic partner dependents, received from any third party (other than the participant’s family members).

• The Retiree Medical Plan’s subrogation and reimbursement rights apply to any recoveries that may be received or actually are received by you or your covered dependents, including, but not limited to, the following:

⎯ Any payments as a result of a settlement, judgment or otherwise, made by or on behalf of a third party or his or her insurance company or made under an uninsured or underinsured motorist coverage;

⎯ Any payments under workers’ compensation, no-fault or other state-mandated motor vehicle insurance; and

⎯ Any payments made as a result of coverage under any automobile, school or homeowners’ insurance policy.

You and your covered dependents are required to fully cooperate and perform all actions necessary to secure the Retiree Medical Plan’s right of recovery and subrogation, including granting a lien on any monies recovered from a third party; refraining from taking any action or negotiating any agreement with any third party that may prejudice the Retiree Medical Plan’s rights; and refraining from assigning any rights to recover medical expenses from any tort-feasor or other person or entity to any other party. You or your covered dependents shall not incur any expenses on behalf of the Retiree Medical Plan in pursuit of the Retiree Medical Plan’s rights. No

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court costs or attorneys’ fees may be deducted from the Retiree Medical Plan’s recovery without the advance express written consent of the Retiree Medical Plan.

In the event you or your covered dependents fail or refuse to honor these terms, the Retiree Medical Plan will be entitled to recover any costs incurred in enforcing these terms and conditions.

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Important Information on Ineligible Dependents It is your responsibility to notify the Lucent Benefits Center when your dependent is no longer eligible for coverage. (For example, if you get divorced, you must actively remove your spouse from coverage.) You must contact the Lucent Benefits Center when this occurs.

However, certain dependents will be automatically dropped from coverage. For example, a dependent child who reaches the age 23 coverage limit will be dropped from coverage even if you don’t notify the company.

Continuation of Coverage

When Does Coverage End? Your Coverage Your coverage under the Retiree Medical Plan ends on the last day of the month in which any of the following events occur:

• You fail to make any required contributions;

• You waive coverage;

• The company you retired from ceases to be a participating company; or

• The Retiree Medical Plan is terminated.

When your coverage ends, you may be able to continue coverage. For more information, see “Can I Continue Coverage When My Coverage Ends?” in this section.

Dependent Coverage Generally, dependent coverage under the Retiree Medical Plan ends on the:

• Last day of the year in which a dependent reaches age 23;

• Date your retiree coverage ends; or

• Last day of the month in which your covered dependent is no longer an eligible dependent.

You must notify the company by visiting Your Benefits Resources at http://resouces.hewitt.com/lucent, or by calling the Lucent Benefits Center when your dependent no longer qualifies as an eligible dependent. Information about continuing coverage will be sent to your dependent.

Can I Continue Coverage When My Coverage Ends? Depending on the circumstances under which your medical coverage ends, you may be able to continue coverage for you and your eligible covered dependents as required by federal law; see “Can I Continue Medical Coverage Through COBRA?” in this section.


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Extending Coverage During Hospitalization If you or a covered dependent is hospitalized when coverage ends, coverage for that individual’s current hospital stay only may continue for a limited period of time. For a medical condition, coverage may continue for the duration of the hospital stay, up to a maximum of 120 days. If treatment is for a mental health or chemical dependency condition, benefits may continue while the individual is hospitalized, up to the applicable inpatient maximum. Benefits stop on the earlier of the date the individual is released from the hospital or the date the maximum is reached.

What Is a Certificate of Creditable Coverage? When your coverage ends, a Certificate of Creditable Coverage will be provided in accordance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

You must present your certificate to your new employer or health insurer if you or your dependents have a pre-existing condition that would limit coverage under your new employer’s or health insurer’s plan. If you or a dependent family member has a pre-existing condition, you should present the certificate to your new employer or health insurer at the time you are enrolling for health benefits under the new employer’s or health insurer’s plan. The certificate is evidence of creditable coverage and will reduce the amount of time that you are subject to a pre-existing condition exclusion.

The company will provide you with a certificate, free of charge, when you lose coverage under the Plan, when you become entitled to elect coverage under COBRA, when your COBRA coverage ends, if you request it before losing coverage, or if you request it up to 24 months after losing coverage. A spouse receives his or her own certificate. Dependent children are certified on your certificate. A certificate identifies the name(s) of you and your dependents who had coverage and the beginning date and ending date of coverage for each person.

A pre-existing condition is a condition for which advice, diagnosis, care or treatment was recommended or received within the last six months, or less, from the date you enroll in a new plan. If you or a dependent has a pre-existing condition, HIPAA limits the period without coverage for that pre-existing condition to no more than 12 months (or 18 months for late enrollees). Generally, if you or your dependents have been covered by any health plan for the previous 12 months, you or your dependents will be covered under the new employer’s plan without regard to pre-existing conditions. If you had a break in coverage of more than 63 days, you or your dependents may be subject to the full pre-existing condition exclusion period. Check with your new employer or health insurer to verify the length of your pre-existing condition exclusion period.

Can I Continue Medical Coverage Through COBRA? A federal law known as the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers to offer certain participants and their covered dependents the opportunity to continue their group health coverage at their own expense for a limited period of time if they lose coverage due to a qualified event. (Please note that Adult Class II dependents generally are not eligible for COBRA continuation coverage, except as a dependent of a participant whose qualifying event is a leave of absence.)

Coverage may be extended for up to 18 months, 29 months or 36 months, depending on the qualified status change. If you or your covered dependents are eligible for any other continuing healthcare coverage, that coverage also counts toward your COBRA continuation period.

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Please note: It is your responsibility to notify the Lucent Benefits Center (see “Contact Information”) of a qualified event other than your termination of employment (such as your divorce or the marriage of a dependent) that makes you or a dependent eligible for COBRA coverage. You must notify the Lucent Benefits Center within 60 days of the event or the date on your notice of COBRA rights to be eligible for COBRA coverage.

In These Events… You Can Receive COBRA Coverage

• Termination of your employment for any reason other than gross misconduct; or

• A reduction in your work hours.

You and/or your covered dependents (or a dependent newly acquired by birth or adoption during the COBRA coverage period) may continue coverage for up to 18 months

• Disability of you or a covered dependent as defined under the Social Security Act prior to or within 60 days of the qualified event.

The disabled person and covered dependents (or a dependent newly acquired by birth or adoption during the COBRA coverage period) may extend continued coverage from 18 months to 29 months.

To be eligible for the additional period of coverage, you must send a copy of the determination notice to the Lucent Benefits Center before the end of the initial 18-month period and within 60 days of the later of: the date of the notice, or the date employment ends or hours are reduced. You must also notify the Lucent Benefits Center within 30 days after Social Security determines that the person is no longer disabled.

Note that newly acquired dependents can continue coverage only until the end of your continued coverage.

• Your divorce or legal separation;

• Your death while covered under the Retiree Medical Plan; or

• Your Class I dependents’ and Class II dependent children’s loss of eligibility under the Retiree Medical Plan (see “Am I Eligible for Coverage?” and “Are My Dependents Eligible for Coverage?” under “Eligibility and Enrollment”).

Your covered dependents may continue coverage for up to 36 months.

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In These Events… You Can Receive COBRA Coverage

• You become entitled to Medicare while you are an active employee and you later experience a qualified event (for example, termination of employment or reduction in work hours).

You and your covered dependents may be eligible for continued healthcare coverage when the qualified event occurs. In this case, you may continue coverage for up to 18 months following the qualified event. Your spouse or domestic partner and covered dependents may continue coverage for the longer of:

• 18 months from the qualified event; or

• 36 months from the date of your Medicare entitlement. • You become entitled to

Medicare after you elect to continue healthcare coverage under COBRA.

• Your continued coverage will end on the date of your Medicare entitlement. However, your covered dependents may be eligible for up to 36 months of continued coverage from the date of the original qualified event.

How Is COBRA Coverage Affected by Multiple Qualified Events? If your spouse, domestic partner or children experience more than one qualified event, they may be eligible for an additional period of continued coverage, not to exceed a total of 36 months from the initial qualified status change.

For example, suppose you lose eligibility due to a termination of employment on December 31, 2004, and you and your dependents are eligible to continue coverage for 18 months (until June 30, 2006). If your child ceases to be an eligible dependent (a second qualified status change) on December 31, 2005, he or she is then eligible to extend coverage, up to a maximum of 36 months from the date of the original qualified event. In this case, your child may continue coverage through December 31, 2007, which is 36 months from December 31, 2004, the date of your termination of employment (the original qualified event).

To be eligible for extended coverage after a second qualified event, you must notify the Lucent Benefits Center within 60 days of the date of the second qualified event.

Can I Cover a Newborn or Newly Adopted Dependent? If you have a baby, adopt a child or a child is placed with you for adoption, the child will be a “qualified beneficiary” with independent election rights and multiple qualified event rights.

If one of your covered dependents has a baby, adopts a child or a child is placed with that dependent for adoption during the COBRA continuation period, that child will be eligible for medical coverage under COBRA. The child of your covered dependent will not, however, be considered a qualified beneficiary with independent election rights and multiple qualified event rights.

A parent or legal guardian can make COBRA elections on behalf of a minor child.

How Much Does COBRA Coverage Cost? You (or your dependent) pay the full cost for COBRA continuation coverage, plus an administrative fee. If coverage is available for 18 or 36 months, a 2 percent administrative fee

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may apply. If the COBRA period is extended to 29 months because you or a covered dependent is disabled under the Social Security Act, a 2 percent administrative fee may apply for the first 18 months, and a 50 percent administrative fee may apply for you and all covered dependents for the next 11 months (from the 19th month through the 29th month).

How Do I Elect COBRA Coverage? Complete details about COBRA continuation coverage, including information about election and cost, is automatically sent to your home address of record if you no longer qualify as an eligible retiree. If your covered dependent loses coverage due to a qualified event, information isn’t sent automatically. If your covered dependent wants to continue coverage under COBRA, you or your dependent must notify the Lucent Benefits Center at 1-888-232-4111 within 60 days of the date the event occurs.

Can My Dependents Continue Coverage Through the Family Security Program (FSP)? Your surviving spouse or domestic partner who has exhausted COBRA continuation coverage or who is ineligible for COBRA due to Medicare eligibility has the option to join the FSP. At the end of the COBRA continuation period, your surviving spouse or domestic partner may choose to continue coverage under Traditional Indemnity if he or she pays the full cost for this coverage.

Your Medicare-eligible surviving spouse or domestic partner may also enroll in a Medicare Advantage HMO, if one is available in his or her ZIP code area. Your surviving spouse or domestic partner also may cover any Class I dependent children who were enrolled immediately before your death, as long as they still qualify as eligible Class I dependents.

As long as your surviving spouse or domestic partner makes the required contributions under Traditional Indemnity, coverage may continue as follows:

• Surviving spouse/domestic partner coverage may continue indefinitely; and

• Dependent child coverage may continue until the earlier of the date:

⎯ Your surviving spouse’s or domestic partner’s coverage ends; or

⎯ The dependent child ceases to be an eligible dependent under the Retiree Medical Plan.

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Your Legal Rights

What Are My Rights Under ERISA? It’s our policy to provide meaningful benefits — above and beyond your paycheck.

Some of these additional benefits are provided through the Retiree Medical Plan. The company isn’t required to provide this Retiree Medical Plan. Because it does, however, you’re entitled to certain rights and protection under the Employee Retirement Income Security Act of 1974, as amended (ERISA). These rights are described in this section.

ERISA provides that all Plan participants are entitled to:

• Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all Plan documents and, if applicable, insurance contracts, and a copy of the latest annual report (Form 5500 Series) filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

• Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts and copies of the latest annual report (Form 5500 Series) and updated SPD. The administrator may make a reasonable charge for the copies.

• Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.

• Continue group health coverage if there is a loss of coverage under the Plan as a result of a qualified status change.

• Obtain a Certificate of Creditable Coverage.

In addition to establishing rights for Plan participants, ERISA imposes certain duties on the people responsible for the operation of a plan. The people who operate your Plan, called “fiduciaries,” have a duty to do so prudently and in the interest of all participants and beneficiaries.

No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to keep you from obtaining a welfare benefit or exercising your ERISA rights.

If your claim for a welfare benefit is denied, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge and to appeal any denial, all within certain time schedules.

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Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the material, unless the materials were not sent because of reasons beyond the control of the administrator.

If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or federal court. In addition, if you disagree with the Plan’s decision or lack thereof concerning the qualified status of a medical child support order, you may file suit in federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance With Your Questions If you have questions about the ERISA-covered Plans, you should contact the Lucent Benefits Center.

If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, United States Department of Labor, listed in your telephone directory, or write to:

Division of Technical Assistance and Inquiries Employee Benefits Security Administration United States Department of Labor 200 Constitution Avenue N.W. Washington, D.C. 20210

You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at 1-800-998-7542.

Is Coverage Guaranteed for Reconstructive Surgery After Mastectomy? The Women’s Health and Cancer Rights Act of 1998 requires health plans that provide coverage for mastectomies to offer certain breast reconstruction benefits in connection with a mastectomy. If you are receiving Plan benefits for a mastectomy and you elect breast reconstruction in connection with a mastectomy, coverage is available in a manner determined in consultation with you and your physician for:

• Reconstruction of the breast on which the mastectomy was performed;

• Surgery and reconstruction of the other breast to produce a symmetrical appearance; and

• Prostheses; and

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• Treatment for physical complications for all stages of mastectomy, including lymphedemas.

This coverage is subject to all the terms of the Plan. This includes any deductibles, coinsurance or copayments you're required to pay under POS or Traditional Indemnity.

Are There Minimum Hospital Stays for Maternity? A Federal law, The Newborns’ and Mothers’ Health Protection Act of 1996 (NMHPA), requires health plans that offer maternity coverage to provide minimum hospital stays related to childbirth, except as otherwise agreed between the mother and her physician. Under this law, plans may not restrict benefits for any hospital stay in connection with childbirth for the mother or newborn child to fewer than 48 hours following a normal delivery or fewer than 96 hours following a cesarean section. If the stay extends beyond these durations, notification is required.

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Notice of Privacy Practices for the Lucent Health Plans

Our Legal Duty The Lucent Health Plans are strongly committed to protecting your privacy and are required by applicable federal and state law to maintain the privacy of your health information.

Under the law, these Plans are a separate legal entity distinct from Lucent Technologies Inc. (the “Plan Sponsor”/ “Employer”). The covered Plans are as follows and are referred to herein as the “Health Plans” or “we”:

• Lucent Technologies Inc. Medical Expense Plan for Management Employees

• Lucent Technologies Inc. Medical Expense Plan for Occupational Employees

• Lucent Technologies Inc. Medical Expense Plan for Retired Employees

• Lucent Technologies Inc. Dental Expense Plan for Active Employees

• Lucent Technologies Inc. Dental Expense Plan for Retired Employees

• Lucent Technologies Inc. Vision Care Plan

• Lucent Technologies Inc. Healthcare Reimbursement Account Plan

• Lucent Technologies Inc. Flexible Benefits Plan

We are required under the Health Insurance Portability and Accountability Act (HIPAA) to give you this information about our privacy practices, our legal duties and your rights concerning your health information. This section explains our privacy practices and describes how we may use and disclose your health information that specifically identifies you or could be used to identify you (your “health information”). This Privacy Notice also provides you with important information about your privacy rights and how you may exercise those rights. Please note that others involved in your healthcare (for example, other health plans, physicians, dentists and pharmacies) may send you separate notices describing their privacy practices.

We must follow the privacy practices that are described in this section while our privacy notice is in effect. The notice took effect April 14, 2003, and will remain in effect until we replace it.

We reserve the right to change our privacy practices and the terms of this notice at any time, provided such changes are permitted by applicable law. We reserve the right to make changes in our privacy practices outlined in this section and to make the new privacy practices effective for all health information that we maintain, including health information we created or received prior to making the change. If we need to make a significant change to our privacy practices, we will

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send a new notice to our Health Plan participants at the time of the change by mail, e-mail or other means permitted by law.

You may request a copy of our notice at any time. For more information about our privacy practices, or for additional copies of this notice, please contact us using the information listed in “Questions and Complaints” in this section.

Uses and Disclosures of Health Information We use and disclose health information about you for treatment, payment and healthcare operations. Your authorization is not required for these permitted uses. For example:

• Treatment: We may use or disclose your health information to physicians, dentists, pharmacies, hospitals, or other healthcare providers in order to provide treatment to you. For example, we may use your health information in providing Medco By Mail services and may send certain information to doctors for patient safety or other treatment-related reasons.

• Payment: We may use or disclose your health information to pay claims from physicians, hospitals and other providers for services delivered to you that are covered by the Health Plans, to determine your eligibility for benefits, to coordinate benefits, to examine medical necessity, to obtain premiums, to issue explanations of benefits to the person who is enrolled in the Health Plans and the like. We may disclose your health information to a healthcare provider or entity subject to the federal Privacy Rules so they can obtain payment or engage in these payment activities.

• Healthcare operations: We may use and disclose your health information in connection with our healthcare operations. Healthcare operations include:

⎯ Rating our risk and determining our premiums for your Health Plan;

⎯ Quality assessment and improvement activities;

⎯ Reviewing the competence or qualifications of healthcare professionals, evaluating practitioner and provider performance, conducting training programs, accreditation, certification, licensing or credentialing activities;

⎯ Medical review, legal services and auditing, including fraud and abuse detection and compliance;

⎯ Business planning and development; and

⎯ Business management and general administrative activities relating to privacy, customer service, resolution of internal grievances and creating de-identified health information or a limited data set.

We may disclose your health information to another entity that has a relationship with you and is subject to the federal Privacy Rules. They may use this data only for their healthcare operations relating to quality assessment and improvement activities, reviewing the competence or qualifications of healthcare professionals, or detecting or preventing healthcare fraud and abuse.

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• Health-related services: We may use your health information to contact you with information about health-related benefits and services or about treatment alternatives that may be of interest to you. We may disclose your health information to a business associate to assist us in these activities, provided we receive satisfactory assurance that the associate will appropriately safeguard your protected health information.

• On your authorization: Unless you give us a written authorization, we cannot use or disclose your health information for any reason except those described in this notice. You may give us written authorization to use your health information or to disclose it to anyone for any purpose. If you give us an authorization, you may revoke it in writing at any time. Your revocation will not affect any use or disclosures permitted by your authorization while it was in effect.

• The Plan participant: We are permitted to disclose your health information to you, the Plan participant. For example, we may inform you of the status of a claim payment. In addition, we may contact you to provide information about treatment alternatives or other health-related benefits and services that may be of interest to you.

• Family members and others involved in your care: We may disclose your health information to a family member or others involved in your care to the extent necessary to help with your healthcare or with payment for your healthcare. This is done for the convenience of you and your family, so that the people close to you may continue to be involved in your care. For example, if your spouse calls a customer service representative, we may provide your spouse with information about the status of your claim payment, but only if he or she is able to tell us certain information about you. We may also use or disclose your name, location and general condition or death to notify, or assist in the notification of (including identifying or locating), a person involved in your care.

Before we disclose your health information to a family member or other representative, we will provide you with an opportunity to object to such uses or disclosures. If you are not present, or in the event of your incapacity or an emergency, we will disclose your health information based on our professional judgment of whether the disclosure would be in your best interest.

If for any reason you do not want us to disclose your health information to your family members or other representatives, you have the right to request a restriction as provided in “Individual Rights” in this section.

• Plan Sponsor: We may disclose your health information and the health information of others enrolled in your Group Health Plan to the Plan Sponsor so that it can perform Plan administration functions. Your Group Health Plan documents describe the limited uses and disclosures that the Plan Sponsor may make of your health information in providing Plan administration. However, we generally provide your Plan Sponsor with only summary or de-identified data that cannot be linked to you because certain elements have been removed, such as your name and Social Security number.

• Disaster relief: We may use or disclose your health information to a public or private entity authorized by law or by its charter to assist in disaster relief efforts.

• Public interest or welfare: We may use or disclose your health information as authorized by law for the following purposes deemed to be in the public interest or benefit:

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⎯ As required by law, including to the Department of Health and Human Services, so it may investigate complaints and review our compliance with federal privacy laws;

⎯ For public health activities, including disease and vital-statistic reporting, child abuse reporting and FDA oversight, and to employers regarding work-related illness or injury;

⎯ To report adult abuse, neglect or domestic violence;

⎯ To health oversight agencies;

⎯ In response to court and administrative orders and other lawful processes;

⎯ To law enforcement officials pursuant to subpoenas and other lawful processes, concerning crime victims, suspicious deaths, crimes on our premises, reporting crimes in emergencies and for purposes of identifying or locating a suspect or other person;

⎯ To coroners, medical examiners and funeral directors;

⎯ To organ procurement organizations;

⎯ To avert a serious threat to health or safety;

⎯ In connection with certain research activities;

⎯ To the military and to federal officials for lawful intelligence, counterintelligence and national security activities;

⎯ To correctional institutions regarding inmates; and

⎯ As authorized by state workers’ compensation laws.

Individual Rights • Access: You have the right to look at or get copies of your health information, with limited

exceptions. You may request that we provide copies in a format other than photocopies. We will use the format you request unless we cannot practicably do so. You must make a request in writing to obtain access to your health information and may be charged a reasonable, cost-based fee to cover the expense of providing copies. In most cases, you should contact the appropriate Health Plan Claims Administrator to request access. If you are unsure of the appropriate Claims Administrator or have a general request that covers more than one Plan, you should use the contact information listed in “Questions and Complaints” in this section.

• Disclosure accounting: You have the right to receive a list of instances in which we or our business associates disclosed your health information for purposes other than treatment, payment, healthcare operations, as authorized by you and for certain other activities, since April 14, 2003. We will provide you with the date on which we made the disclosure, the name of the person or entity to whom we disclosed your health information, a description of the health information we disclosed, the reason for the disclosure and certain other information. You must make a request in writing to obtain an accounting of disclosures. If you request this accounting more than once in a 12-month period, we may charge you a reasonable, cost-based fee for

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responding to these additional requests. In most cases, you should contact the appropriate Health Plan Claims Administrator to request an accounting of disclosures. If you are unsure of the appropriate Claims Administrator or have a general request that covers more than one Plan, you should use the contact information listed in “Questions and Complaints” in this section.

• Restriction: You have the right to request that we place additional restrictions on our use or disclosure of your health information. We are not required to agree to these additional restrictions, but if we do, we will abide by our agreement (except in an emergency). Any agreement to additional restrictions must be in writing, signed by a person authorized to make such an agreement on our behalf. We will not be bound unless our agreement is so memorialized in writing. In most cases, you should contact the appropriate Health Plan Claims Administrator to request a restriction. If you are unsure of the appropriate Claims Administrator or have a general request that covers more than one Plan, you should use the contact information listed in “Questions and Complaints” in this section.

• Confidential communication: You have the right to request that we communicate with you about your health information by alternative means or to alternative locations. You must make your request in writing, and you must state that the information could endanger you if it is not communicated in confidence as you request. In most cases, you should contact the appropriate Health Plan Claims Administrator to request confidential communications. If you are unsure of the appropriate Claims Administrator or have a general request that covers more than one Plan, you should use the contact information listed at the end of this notice. We must accommodate your request if it is reasonable, specifies the alternative means or location and continues to permit us to collect premiums and pay claims under the Group Health Plan, including issuance of Explanations of Benefits (EOBs) to the subscriber of the Group Health Plan. An Explanation of Benefits (EOB) issued to the subscriber for healthcare that you received might contain sufficient information to reveal that you obtained healthcare for which we paid, even though you requested that we communicate with you about that healthcare in confidence.

• Amendment: You have the right to request that we amend your health information. Your request must be in writing, and it must explain why the information should be amended. In most cases, you should contact the appropriate Health Plan Claims Administrator to request an amendment. If you are unsure of the appropriate Claims Administrator or have a general request that covers more than one Plan, you should use the contact information listed in “Questions and Complaints” in this section. We may deny your request if we did not create the information you want amended and the originator remains available or for certain other reasons. If we deny your request, we will provide you a written explanation. You may respond with a statement of disagreement to be appended to the information you want amended. If we accept your request to amend the information, we will make reasonable efforts to inform others, including people you name, of the amendment and to include the changes in any future disclosures of that information.

• Electronic Notice: You may find a copy of this Privacy Notice on our Web site. If you receive this notice via our Web site or by electronic mail (e-mail), you are entitled to receive this notice in written form. Please contact us using the information listed in “Questions and Complaints” in this section to obtain this notice in written form.

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Questions and Complaints If you want more information about our privacy practices or have questions or concerns, please contact us using the information listed below.

If you are concerned that we may have violated your privacy rights, or you disagree with a decision we made about access to your health information or in response to a request you made to amend or restrict the use or disclosure of your health information or to have us communicate with you by alternative means or at alternative locations, you may notify us using the contact information listed below. You also may submit a written complaint to the U.S. Department of Health and Human Services. We will provide you with the address to file your complaint with the U.S. Department of Health and Human Services upon request.

We support your right to the privacy of your health information. We will not retaliate in any way if you choose to file a complaint with us or with the U.S. Department of Health and Human Services.

To Exercise Your Rights As stated above, in most cases, you should contact your Health Plan Claims Administrator to review or obtain copies of your health information and to exercise your rights regarding your health information described above, since your Health Plan Claims Administrator maintains your health information on our behalf. If you are unsure of the appropriate Health Plan Claims Administrator, have a general request that covers more than one Plan or have other questions relating to our privacy practices or your privacy rights, our contact information is:

Senior Manager, Benefits Operations Room 3A237 600 Mountain Avenue Murray Hill, NJ 07974-0636 908-582-4727

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Retiree Medical Plan Administrative Information

Plan Name Effective November 1, 2002, the Lucent Technologies Inc.

Medical Expense Plan for Retired Employees, the Lucent Technologies Inc. Dental Plan for Retired Employees and the Lucent Technologies Inc. Life Insurance Plan for Retired Employees were consolidated into a single retiree welfare plan named the Lucent Technologies Inc. Retiree Welfare Benefits Plan.

Plan Sponsor The Plan Sponsor is Lucent Technologies Inc. Plan Administrator The Plan Administrator is:

Lucent Technologies Inc. Room 3A226 600 Mountain Ave. Murray Hill, NJ 07974

Type of Administration Benefits under the Retiree Medical Plan are administered by the applicable healthcare company. These include: Aetna (POS and Traditional Indemnity), UnitedHealthcare (POS and Traditional Indemnity), CIGNA HealthCare (POS), Hewitt Associates (COBRA administration), Medco (Prescription Drug Program), Magellan Behavioral Health (Mental Health and Chemical Dependency Program) and United Behavioral Health (Mental Health and Chemical Dependency Program).

Enrollment and eligibility under the Retiree Medical Plan are administered by the Lucent Benefits Center.

Agent for Service of Legal Process Legal actions regarding a claim should be sent to the applicable Claims Administrator. All other legal actions should be sent to the Plan Administrator or the applicable healthcare company.

Plan Records and Plan Year The Retiree Medical Plan and all its records are maintained on a calendar-year basis, beginning on January 1 and ending on December 31 of each year.

Type of Plan The Retiree Medical Plan is considered a welfare plan under the Employee Retirement Income Security Act of 1974, as amended (ERISA).

Plan Number The Plan Number is 504. Employer Identification Number The Employer Identification Number is 22-3408857.

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Retiree Medical Plan Documents Govern This summary plan description is designed to describe the Retiree Medical Plan in easy-to-understand terms. It is shorter and less technical than the legal Retiree Medical Plan document. However, it is the Retiree Medical Plan document that determines your rights and the rights of your covered dependents under the Retiree Medical Plan. In all instances, the Retiree Medical Plan documents will govern.

Retiree Medical Plan May Be Amended or Terminated The company expects to continue the Retiree Medical Plan indefinitely, but reserves the right to amend or terminate the Retiree Medical Plan at any time by resolution of the Board of Directors or its properly authorized designee.

Retiree Medical Plan Administrator and Claims Administrator The Plan Administrator and the Claims Administrator have the full discretionary authority and power to control and manage all aspects of the Retiree Medical Plan, to determine eligibility for Retiree Medical Plan benefits, to interpret and construe the terms and provisions of the Retiree Medical Plan, to determine questions of fact and law, to direct disbursements, and to adopt rules for the administration of the Retiree Medical Plan as they may deem appropriate in accordance with the terms of the Retiree Medical Plan and all applicable laws.

Retiree Medical Plan Sponsor The Plan Sponsor may allocate or delegate its responsibilities for the administration of the Retiree Medical Plan to others and employ others to carry out or render advice with respect to its responsibilities under the Retiree Medical Plan, including discretionary authority to interpret and construe the terms of the Retiree Medical Plan, to direct disbursements and to determine eligibility for Retiree Medical Plan benefits.

Retiree Medical Plan Funding and Payment of Benefits With certain limited exceptions, Lucent Technologies Inc. pays the administrative costs associated with providing benefits under the Retiree Medical Plan. The funding for this Retiree Medical Plan is paid into the Lucent Technologies Inc. Postretirement Welfare Benefits Trust for Non-Represented Employees and managed by the Plan Trustee.

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Your Retiree Medical Plan Dictionary

Certain words and phrases have a specific meaning under the Retiree Medical Plan. This section explains those terms so you can better understand your benefits.

Acupuncturist: This is a provider who carries all recognized certifications applying to the practice of acupuncture and who is licensed to practice acupuncture according to state laws.

Allowable amount: This is the portion of a provider’s charge that is eligible for reimbursement either in full or in part. Any amount by which the provider’s charge exceeds the allowable amount is not reimbursable under the Retiree Medical Plan.

Under POS or Traditional Indemnity or the Mental Health and Chemical Dependency Program, an in-network or PPO provider’s charge always equals the allowable amount, so that no charges above the allowable amount are payable by the participant. Note that some out-of-network providers may have negotiated discounted rates with the healthcare company responsible for paying claims. In these limited cases, their charges also equal the allowable amount.

When most out-of-network providers are used under Traditional Indemnity (non-PPO providers), or POS, the allowable amount for medically necessary services is generally based on reasonable and customary charges. Claims are paid based on the schedule in effect on the date on which a service was provided, or based on the schedule in effect on the date the claim payment is made, in accordance with the practice of the healthcare company responsible for paying the claim. For claims incurred on or after January 1, 1996, each healthcare company uses the same industry-accepted pricing schedule to ensure that out-of-network reimbursement is consistent with what 8 out of 10 providers in a given area would charge.

The participant is responsible for the portion of the expense that is above the reasonable and customary charge. Amounts in excess of reasonable and customary do not apply toward the annual deductible or the out-of-pocket maximum as described in the Retiree Medical Plan. Any POS or Traditional Indemnity references to the reasonable and customary charge refer to the out-of-network or out-of-area amount or percentage of the amount that is payable.

Under the Mental Health and Chemical Dependency Program network benefits, the allowable amount for services from Master’s-degree-level counselors will be 75 percent of what 8 out of 10 providers in a given area would charge.

Under the Prescription Drug Program, the allowable amount for prescription drugs dispensed by a nonparticipating retail pharmacy is calculated as the ingredient cost less retail discount (that could have been obtained at a participating pharmacy) plus professional fees minus applicable copayment.

Alternative care or alternative treatment: This is a type of care only available in-network under the Mental Health and Chemical Dependency Program and is more intensive than

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outpatient treatment and less intensive than hospitalization. Alternative treatment includes the following types of care: partial hospitalization, residential treatment and care from a halfway house or group home.

Ambulance: This is a vehicle licensed according to state laws, operated for the exclusive purpose of transporting patients with acute medical conditions and equipped to provide paramedic and stabilizing medical services.

Annual open enrollment: This is the period of time each year when participants can change their coverage options. Annual open enrollment generally takes place in the fall. Elections made during annual open enrollment are effective on the first day of the following calendar year unless you have a qualified status change.

Assigned option: This is the medical enrollment option that you will be automatically assigned to if you are eligible and do not enroll in one of the available options. Some retiree classifications do not have an assigned option. These retirees must enroll to be covered by the Retiree Medical Plan.

Birthing center: This is a facility for prenatal, delivery and postpartum care that is staffed by certified nurse-midwives; has 24-hour access to consultation by an obstetrician/gynecologist with admitting privileges at a nearby hospital; is accredited by the National Association of Child Bearing Centers or the Joint Commission on the Accreditation of Healthcare Organizations; and is licensed by the state.

Brand-name drug: This is a drug that has been patented and is produced by only one manufacturer.

Catastrophic POS: This is a medical option that is designed to be financially affordable. This option provides coverage that is intended to protect you from serious catastrophic health expenses. You pay the percentage of covered expenses that applies (see “A Closer Look at POS”).

Center of excellence: This is a facility that is designated by the healthcare company as a preferred facility to handle selected services of a highly specialized nature, such as organ transplants.

Chemical dependency: This is both alcoholism and drug dependency as classified by the International Classification of Diseases of the U.S. Department of Health and Human Services.

Children: The biological and/or legally adopted children of you or your spouse or your same- or opposite-sex domestic partner dependent. These include those children who are in the formal legal adoption process, stepchildren living with you and children living with you for whom you, your lawful spouse or your domestic partner dependent is the legal guardian (excluding “wards of the state“ or “foster children”). See the definitions for “Class I dependents” and “Class II dependents” and “domestic partner dependent.”

Chiropractor: This is a Doctor of Chiropractic (D.C.) who is licensed to provide services in the state where the service is rendered.

Claims Administrator: This is each of the healthcare companies authorized by Lucent Technologies Inc. to administer the Retiree Medical Plan.

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Class I dependents: These include your lawful spouse, domestic partner dependent and each unmarried child through December 31 of the year in which the child reaches age 23.

To be eligible, a child must be:

• Your own child and/or your legally adopted child, including any child in the process of adoption, regardless of residence;

• A stepchild living with you; or

• A child living with you for whom you, your lawful spouse or your domestic partner dependent is the legal guardian. This does not include “wards of the state” or “foster children.”

Class I dependents also include each unmarried child of any age who is determined to be eligible by the applicable medical Claims Administrator and who is:

• Incapable of self-support;

• Physically or mentally handicapped; and

• Fully dependent on you for support.

To cover Class I dependents beyond age 23, they must be certified for coverage by your applicable Medical Claims Administrator. You must complete an application form, available from your applicable Medical Claims Administrator, and submit it to the address listed on the form for approval. No coverage beyond age 23 is available for a child who is incapacitated for a short time due to illness or injury (for example, a broken leg).

Class II dependents: These are the following relatives who meet the following eligibility requirements:

• Your unmarried dependent children not included as Class I dependents;

• Your unmarried dependent stepchildren not included as Class I dependents;

• Your unmarried grandchildren, your unmarried brothers and sisters and your parents and grandparents; and

• Your lawful spouse’s or domestic partner’s parents and grandparents.

To be eligible for coverage as Class II dependents under the Retiree Medical Plan, those relatives must continue to meet the following requirements:

• They receive less than $12,000 per year in income from all sources (other than the employee’s support);

• They live with you or in a nearby household provided by you (note that unmarried dependent stepchildren must live with the employee throughout the period of coverage); and

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• They either:

⎯ Have been continuously re-enrolled during each annual open enrollment since January 1, 1996 and continue to be re-enrolled each year; or

⎯ Were enrolled before June 1, 1986 (grandfathered dependents).

No new Class II dependents may be enrolled. Only Class II dependents who still meet the eligibility requirements and who are currently enrolled are eligible to continue coverage.

COBRA: This is an acronym for the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. This refers to federal legislation that governs the offer of temporary continued medical coverage to participants who otherwise would lose coverage due to certain reasons, such as a loss of employment.

Coinsurance: This is the cost-sharing method by which the Retiree Medical Plan pays a percentage of the provider’s covered charge (for example, 80 percent) and you pay a percentage (for example, 20 percent). Your coinsurance is your share of the cost.

Contract rate: This is the specified amount an in-network or PPO provider contractually agrees to accept as a healthcare company’s payment in full. This rate is often lower than the provider’s usual charge for the service.

Copayment: This is a flat dollar amount (such as $25) that the participant pays for a certain medical service (such as an office visit or supply) as his or her share of the cost.

Covered: This means eligible under the terms of the Retiree Medical Plan. “Covered” is often used to modify other terms. Covered expense means medical costs that satisfy all of the rules to be considered for payment under the Retiree Medical Plan. A covered person is one who has benefits available under the Retiree Medical Plan. A covered provider is one who is (or which is) eligible to provide services and receive payment under the Retiree Medical Plan.

Covered dependent: This is a Class I dependent, including a domestic partner dependent, who is covered as the dependent of an employee. Other people (such as siblings, parents and grandparents) may be covered as Class II dependents if they are currently enrolled and if they continue to meet the eligibility criteria.

Custodial care: This is treatment or services, generally prescribed by a medical professional, that could be rendered safely and reasonably by a person not medically skilled. Custodial care is treatment or services that do not directly treat illness or injury but that are designed mainly to help the patient with daily living activities, or are provided primarily for the convenience or comfort of the patient.

These activities include, but are not limited to:

• Personal care, such as help in walking; getting in and out of bed; bathing; eating by spoon, tube or gastrostomy; exercising; dressing;

• Homemaking, such as preparing meals or special diets;

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• Moving the patient;

• Acting as a companion or sitter;

• Supervising medication that can usually be self-administered; and

• Treatment or services that any person may be able to perform with minimal instruction, including, but not limited to, recording temperature, pulse and respiration, or administration and monitoring of feeding systems. Custodial care is a type of care provided to a patient whose need for medical care has stabilized and whose current medical condition is not expected to significantly and objectively improve.

Deductible: This is the amount of eligible expenses you may be required to pay under POS or Traditional Indemnity, the Mental Health and Chemical Dependency Program or the Prescription

Drug Program (for out-of-network care) for each year before benefits for covered expenses can begin. Whether a deductible applies, and the amount of the deductible, depends upon the Retiree Medical Plan option you choose, the type of service or supply you receive, and whether care is received in-network or out-of-network. There is usually no deductible under an HMO.

Domestic partner benefits: You are not permitted to enroll a domestic partner dependent under the Retiree Medical Plan. If, however, you had covered domestic partner dependents as an active employee on the date of your retirement, you are permitted to continue the coverage for those domestic partner dependents. If coverage for a domestic partner dependent is terminated, you may not thereafter enroll a new domestic partner dependent.

Domestic partner dependent: This is someone who:

• Is a member of the same or opposite sex as the employee;

• Complies with any state or local registration process for domestic partners, if applicable; and

• Satisfies each of the specific criteria identified below and completes a notarized affidavit attesting that the employee and the domestic partner:

⎯ Reside in the same household as members of the household;

⎯ Are each 18 years of age or older;

⎯ Have mental capacity sufficient to enter into a valid contract;

⎯ Are unrelated to each other by blood and are not legally married to another individual,

⎯ Consider themselves to have a close and committed personal relationship and have no other such relationship with any other person;

⎯ Are responsible for each other’s welfare and financial obligations; and

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⎯ Provide such other information as may be necessary for the company to determine whether the domestic partner or the children of a domestic partner are the employee’s dependents under Section 152 of the Internal Revenue Code.

Domestic partner dependents also include the eligible children of your domestic partner.

Please note that states regulate the HMO options, and that some states do not offer domestic partner dependent coverage or have special requirements about the time you must have been with your partner, coverage of your partner’s children and COBRA continuation coverage. If you are considering domestic partner dependent coverage under an HMO option, please check with the HMO for any such requirements.

Effective date: This is the date upon which coverage under the Retiree Medical Plan starts or takes effect.

Elective care: This is care that can be postponed for ten days or more without undue risk to the patient.

Eligible dependents: The Retiree Medical Plan recognizes two dependent classes — Class I dependents, including domestic partner dependents, and Class II dependents. You may enroll your eligible Class I dependents under the Retiree Medical Plan. However, no new Class II dependents may be enrolled. Only Class II dependents who still meet the eligibility requirements and who are currently enrolled are eligible to continue coverage. Effective January 1, 2005, dependents of the following retirees are no longer eligible for coverage under the Retiree Medical Plan:

• Retired from Lucent on or after March 1, 1990; and

• Had an annual base salary of $65,000 or more at the time they retired.

If you’re affected by this rule, you can still cover your eligible dependents under a separate plan, called the Lucent Technologies Inc. Medical Expense Plan for Eligible Dependents of Retired Employees. To do so, you will have to pay 100 percent of their cost for coverage at group rates.

Eligible retiree: This is a former management employee or former non-represented occupational retiree who terminated from a participating company and who is:

• Eligible to receive a service or disability pension under the Lucent Technologies Inc. Pension Plan or the Service Based Program of the Lucent Retirement Income Plan; or

• In the Account Balance Program (ABP) and is at least 50 years old with 15 years of net credited service.

Emergency: This is a life-threatening medical condition suddenly and unexpectedly manifesting itself by acute symptoms of sufficient severity that the absence of immediate medical attention could result in permanently placing the patient’s health in jeopardy; causing serious and/or permanent impairment of a bodily part or function; causing serious and/or permanent dysfunction of any body organ or part; or causing severe pain. See the definition of “mental health emergency.”

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The following examples are generally emergencies:

• Apparent poisoning;

• Convulsions;

• Excessive uncontrolled bleeding;

• Severe chest pain;

• Severe or multiple injuries, including fractures;

• Shortness of breath or difficulty breathing; or

• Sudden loss of consciousness.

The following examples are generally not considered to be emergencies:

• Childbirth (Childbirth is not normally considered an emergency. However, an unexpected complication, such as premature birth, would be considered an emergency);

• Colds, sore throat, cough;

• Diarrhea;

• Earaches;

• Minor cuts;

• Moderate fever;

• Rashes;

• Sprains; or

• Vomiting.

Experimental or investigative treatment, drug or device: This is medical, surgical and psychiatric procedures, treatments, devices, drugs and drug treatments not approved by government agencies such as the Food and Drug Administration (FDA), and not accepted as standard, tested and accepted effective practice by the medical community at large at the time the service is rendered, as determined by the healthcare company.

Extended care facility: This is an institution other than a hospital that is licensed according to state laws to provide inpatient medical services and that is accredited by the Joint Commission on the Accreditation of Healthcare Organizations or approved by Medicare. An extended care facility provides direct medical treatment, and must have a professional nursing staff and operate under the supervision of a physician. An extended care facility is not primarily a place for rest, for the aged, for custodial care, or for the treatment of mental illness or chemical dependency. The

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term extended care facility encompasses facilities that go by names such as skilled nursing facilities, convalescent facilities, intermediate care facilities, sub-acute care facilities and rehabilitation centers — provided they meet all the conditions given here.

Formulary: A formulary is the list of drugs the Retiree Medical Plan recommends for most prescriptions. Formulary lists are based on proved treatment effectiveness, cost compared with other medications and other factors.

Pharmacy plans select specific drugs in major therapeutic classes for inclusion on their formularies. If your physician writes a prescription for a formulary drug, your copayment will be less than if the prescription calls for a nonformulary drug. If you’re uncertain about whether a particular drug is on the formulary, check with Medco (see “Contact Information”).

Generic drug: This is a drug that does not bear the trademark of the original manufacturer. It is chemically identical to and generally costs less than a brand-name drug.

Group homes and halfway houses: These are settings for care that are covered under the in-network benefits of the Mental Health and Chemical Dependency Program. Group homes and halfway houses are residences that provide a structured living environment, deliver treatment from mental health and chemical dependency professionals, and afford the patient opportunities to transition into daily life activities for the purpose of recovery from mental health conditions or chemical dependency. Adult patients typically leave the group home or halfway house during the day to engage in outside activities, such as work or school, and return at night.

Halfway houses: See the definition of “group homes and halfway houses.”

Healthcare company: This is any company authorized by Lucent to provide services under the Retiree Medical Plan, including Aetna, UnitedHealthcare, Medco, Magellan Behavioral Health (Magellan) and United Behavioral Health.

Health Insurance Portability and Accountability Act of 1996 (HIPAA): HIPAA is the acronym for the Health Insurance Portability and Accountability Act of 1996. HIPAA regulates the transmission, maintenance, security and privacy of electronic health information transmitted by healthcare providers, payors and others. It also protects health insurance coverage for workers and their families when they change or lose their jobs.

HMO/Medicare Advantage HMO (Health Maintenance Organization): This is a network of hospitals, doctors and other medical providers who provide services through an HMO/Medicare Advantage HMO plan. When you follow your HMO’s rules of care, you usually pay no deductibles and file no claim forms. Once you elect to participate in an HMO, that HMO governs your coverage in lieu of all plan provisions that cover the other coverage options. See “A Closer Look at the HMO/Medicare Advantage HMOs” for additional information.

Home healthcare agency: This is an organization licensed according to state laws to provide skilled nursing and certain other health services on a visiting basis in the patient’s home. The agency must be accredited by the Joint Commission on the Accreditation of Healthcare Organizations or be Medicare-approved in order to be covered under the Retiree Medical Plan.

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Hospice: This is an organization licensed according to state laws to provide care to terminally ill patients. A hospice may be either an agency that performs its services in the patient’s home or a facility into which the patient is admitted. Precertification is required for admission to a hospice.

Hospital: This is a facility providing inpatient and outpatient care for the diagnosis and treatment of acute illness and injury. Under the Mental Health and Chemical Dependency Program, hospital means an acute general hospital with a psychiatric and/or chemical dependency unit, an acute psychiatric facility or an acute chemical dependency facility. The facility must be licensed according to state law and be staffed by physicians (and qualified mental health or chemical dependency professionals under the Mental Health and Chemical Dependency Program) and maintain 24-hour nursing services. A hospital is not primarily a place for rest or custodial care, a nursing home, convalescent home, home for the aged or similar institution, nor does it include confinement in a residential treatment facility under the Mental Health and Chemical Dependency Program.

In-network: This is the benefit choice where you access the services of contracted network providers according to the rules of the option or program you are enrolled under. For the POS options, this means going to your PCP or specialist who participates in the network. For the Traditional Indemnity option, this means going to a doctor or specialist who participates in the PPO network. For the Mental Health and Chemical Dependency Program, it means going through Magellan, or, if applicable, United Behavioral Health. For the Prescription Drug Program, it means using a participating retail pharmacy or Medco By Mail.

Inpatient: This is a patient who is confined in a hospital or other healthcare facility as a registered bed patient for at least 18 hours (out of 24) and incurs room and board charges. Inpatient care refers to the care rendered to an inpatient. An inpatient facility is a facility that provides such care.

Lawful spouse: A person of the opposite sex who is recognized as the lawful husband or wife of an active employee under the federal Defense of Marriage Act.

Lucent Benefits Center: The Lucent Benefits Center is the resource to call to enroll, to make changes in your coverage or to ask questions about your Retiree Medical Plan options (see “Contact Information”).

Magellan Behavioral Health (Magellan): This is the company that administers the Mental Health and Chemical Dependency Program.

Medically necessary: The determination of what is medically necessary is made by the applicable healthcare company. Care is considered medically necessary if:

• It is accepted by the healthcare profession in the U.S. as appropriate and effective for the condition being treated;

• It is based upon recognized standards of the healthcare specialty involved;

• It represents the most appropriate level of care: the frequency of services, the duration of services, and the site of services, depending on the seriousness of the condition being treated (such as in the hospital or in the physician’s office); and

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• It is not experimental or investigational.

Medicare-approved amount: According to Medicare, this is the fee Medicare sets as reasonable for a covered medical service; that is, the amount a doctor or supplier is paid by you and Medicare for a service or supply. It may be less than the actual amount charged by a doctor or supplier.

Mental health and chemical dependency professionals: This is a psychiatrist (M.D.), a licensed psychologist (Ph.D.) or one of the following Master’s-degree-level providers: a clinical social worker; a marriage, family and/or child counselor; a licensed professional counselor; a certified alcoholism counselor; a certified chemical dependency counselor; or a registered nurse with a specialty in psychiatric and mental health nursing. The provider must carry all recognized certifications appropriate to his or her specialty and, where state law requires, be licensed in the state in which he or she practices. The particular certification may differ in various areas of the country.

Conditions of service:

• The provider may treat only those conditions, either mental health or chemical dependency, appropriate to his or her certification and licensing status.

Covered services:

• Diagnosis and treatment of mental health or chemical dependency conditions;

• Psychological testing;

• Psychotherapy; and


Mental Health and Chemical Dependency Program: This is the program that provides benefits for treatment of mental health and chemical dependency conditions. For individuals who are not Medicare-eligible and are covered under POS or Traditional Indemnity, the Mental Health and Chemical Dependency Program is administered by Magellan and is separate from the coverage available under your medical option and the Prescription Drug Program. If you are Medicare-eligible and you have non-Medicare-eligible dependents, their mental health benefits are provided by United Behavioral Health. Mental health benefits for Medicare-eligible participants are provided under Traditional Indemnity and are secondary to Medicare.

Mental health emergency: This is a mental health condition that appears or increases suddenly and is accompanied by severe symptoms. Without immediate treatment, a mental health emergency condition would result in: the person harming him- or herself, or others; severe diminishment of or long-term damage to the state of the person’s mental health; or permanent physical impairment of bodily parts or functions as a consequence of the mental health emergency.

Mental illness: For the purpose of determining benefits under the Retiree Medical Plan, mental illness means a condition that meets either of the following two conditions: it is classified as a mental illness in the latest edition of the International Classification of Diseases of the U.S.

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Department of Health and Human Services; or it is a condition generally accepted by healthcare professionals in the U.S. as one that requires psychiatric treatment and will respond to such treatment.

Morbid obesity: This is obesity that has become a direct and immediate threat to a person’s life.

Network: This is the group of providers in a given area who participate with the healthcare company. Network providers offer services at a prenegotiated rate to members enrolled with that healthcare company.

Nonformulary drug: This is a drug not on the list of drugs the Retiree Medical Plan recommends for most prescriptions.

Occupational therapy: This is treatment to increase a patient’s use of fine motor skills to enable him or her to apply them to the tasks required in daily living, after those skills have been impaired by illness or injury.

Out-of-network: This is the benefit choice where you access services without following the rules of the program for accessing contracted (network) providers. For POS or Traditional Indemnity, this means obtaining services from an out-of-network provider. For the Mental Health and Chemical Dependency Program, this means obtaining services without a referral or authorization from Magellan, or, if applicable, United Behavioral Health. For the Prescription Drug Program, this means using a pharmacy not identified as a participating pharmacy or failing to identify yourself as a participant in the Prescription Drug Program.

Out-of-pocket maximum: This is the limit on the amount you spend for covered medical expenses in copayments or coinsurance. Some charges do not count toward this maximum.

Outpatient: This is a patient who is treated in a hospital or other healthcare facility for less than 18 hours, and who does not incur a room and board charge. Outpatient care refers to the care rendered to an outpatient. An outpatient facility is one that provides such care.

Outpatient medical facilities: These are any medical diagnosis or treatment facilities that don’t offer overnight care, has a staff of medical professionals (including nurses), is operated under the direction of a physician and is licensed according to state law. Covered facilities include medical laboratories, outpatient surgical centers, birthing centers, urgent care facilities and outpatient rehabilitation facilities. It does not include a physician’s office.

PCP: See the definition of “primary care physician.”

Partial hospitalization: This is a type of care covered under the in-network benefits of the Mental Health and Chemical Dependency Program. Partial hospitalization means outpatient care delivered on a daily basis in a hospital or other facility. The facility must have both physicians and nurses on staff and be authorized to administer medications. Partial hospitalization is typically a less intense level of care than inpatient care, but more intense than intensive outpatient care.

Participating company/companies: This is a company or companies that participate in the Retiree Medical Plan. These are:

• AG Communication Services

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• Ascend Communications Inc.

• Chromatis Networks Inc.

• Excel Switching Corporation

• Lucent Asset Management Corporation

• Lucent Technologies Inc.

• Lucent Technologies Construction Services Inc.

• Lucent Technologies Integrated Solutions Inc.

• Lucent Technologies Fiber Guardian Corp.

• Lucent Technologies Guardian I Corp.

• Lucent Technologies GRL Corp.

• Lucent Technologies Management Services Inc.

• Lucent Technologies Optical Networking Guardian Corp.

• Lucent Technologies Sentinel I Inc.

• Lucent Technologies Wireless Guardian Corp.

• Lucent Technologies World Services Inc.

• Nassau Metals Corporation

• Nexabit Networks Inc.

• SpecTran Corporation

• SpecTran Communications Fiber Technology

• SpecTran Specialty Optics company

• SpringTide Networks, Inc.

Participating pharmacy: This is a pharmacy that participates in the Medco retail pharmacy network.

Pension Service Center (PSC): This is the contact for Pension Plan information and transactions (see “Contact Information”).

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Physical therapy: This is treatment to increase the patient’s use of large-muscle motor skills, such as those needed for walking, after those skills have been impaired by illness or injury.

Physician: This is a doctor of medicine (M.D.) or a doctor of osteopathy (D.O.) who is licensed to practice medicine or osteopathy in the state where the care is provided and is covered under the Retiree Medical Plan. Under the Mental Health and Chemical Dependency Program, care should be sought from a provider who is a psychiatrist or another provider who is certified in the treatment of mental health and/or chemical dependency.

Point of Service (POS): These are medical options that provide a higher level of coverage when you use in-network providers or facilities. However, you may go out-of-network and use any healthcare provider you wish. Your cost usually is higher for out-of-network care.

Precertification: This is the process by which a healthcare company or precertification company reviews requested treatment in advance and advises you as to how benefits would be paid. In most instances, precertified care is paid at full Retiree Medical Plan benefits and medically necessary care that is not precertified is paid at a reduced level, or not covered at all. The need for precertification applies only to certain procedures.

Preferred medications: These are medications on the Prescription Drug Program’s formulary list, which is the list of drugs the Retiree Medical Plan recommends for most prescriptions. Formulary lists are based on proven treatment effectiveness, cost compared with other medications and other factors.

Preferred Provider Organization (PPO): This is a network of providers under Traditional Indemnity offered in many areas of the country. When you are covered under Traditional Indemnity and you elect to receive medical care from providers in the PPO network, charges are generally lower and guaranteed to be within the allowable amount.

Prenegotiated rate: This is a rate for medical services to which an in-network provider under POS or a PPO provider under Traditional Indemnity has contractually agreed. In-network and PPO providers agree to accept the prenegotiated rate as payment in full. This rate is usually less than their normal charge for that service.

Primary care physician (PCP): This is a network physician under the HMO or the POS options who:

• Qualifies as a participating provider in general practice, internal medicine, family practice or pediatrics; and

• Has been selected by you as authorized by your healthcare company to coordinate your primary healthcare and authorize all your other in-network care.

Private duty nursing: These are nursing services provided in the home by a private duty nurse who holds a valid, recognized nursing certificate and is licensed according to state law in the state where services are received.

Protected Health Information (PHI): Under HIPAA, Protected Health Information, or “PHI,” means individually identifiable health information. Identifiable refers not only to data that’s

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explicitly linked to a particular individual, but also includes data items that reasonably could be expected to allow individual identification.

Provider: This is a provider of healthcare services or supplies. A provider may be a person, such as a physician, physical therapist, or chiropractor; an organization, such as a home healthcare agency; or a facility, such as a hospital.

Qualified Medical Child Support Order (QMCSO): This is a judgment, decree or order issued by a court that requires Retiree Medical Plan coverage for a participant’s child and that has been determined by the Plan Administrator or its delegate to be qualified under the Internal Revenue Code of 1986. Lucent Technologies Inc. has a policy to comply with the requirements of a QMCSO. Contact the Domestic Relations Matters Group (see “Contact Information”) for more information on how QMCSOs are administered and to receive a copy of the QMCSO administrative procedures at no cost.

Qualified status change: As permitted under federal regulations, qualified status changes include the following:

Qualified Status Change Description

Marital Status A change in your legal marital status, including marriage, death of your spouse, divorce, legal separation or an annulment.

Number of Family Members Events that change the number of eligible family members, including birth, adoption, placement for adoption, or death.

Work Schedule for Spouse A reduction or increase in hours of employment by you, your spouse or a child, including a switch between part-time and full-time or the start of or return from an unpaid leave of absence.

Family Member Meets or No Longer Meets the Eligibility Requirements

An event that causes a member of your family to meet or to no longer meet the Plan’s eligibility requirements for coverage. This may include a child reaching the maximum age for coverage, etc.

Residence A change in your place of residence or your worksite.

The company also generally considers corresponding changes for domestic partner dependents as qualified status changes. However, you may not enroll a new domestic partner dependent in the Retiree Medical Plan unless you were covering that dependent at the time you retired, in which case you may continue his or her coverage or re-enroll him or her at a later date after retirement.

The Internal Revenue Service (IRS) states you can change your level of coverage during the year if you have a qualified status change. (You may also be eligible to change your Retiree Medical Plan option if you move outside the area where your current option is available.) Qualified status changes must be reported within 31 days of the event.

Reasonable and customary charge: This is the fee determined by the Claims Administrator on the basis of:

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• The fees usually charged most patients for a similar service; and

• The range of fees charged by providers with similar training and experience for the same or similar services within the geographic region.

For the Prescription Drug Program, the allowable amount is consistent with the cost of prescriptions obtained from participating pharmacies.

Rehabilitation therapy: These are services provided by a physical therapist, speech therapist or occupational therapist. Rehabilitation services may be provided in a hospital, extended care facility or through a home healthcare agency. However, the need for rehabilitation can’t be the primary reason for hospital confinement. Rehabilitation therapists may work independently or be on the staff of a hospital, extended care facility or home healthcare agency.

Residential treatment: This is a type of care covered under the in-network benefits of the Mental Health and Chemical Dependency Program. Residential treatment means 24-hour-a-day inpatient care in a facility that provides sub-acute care (sub-acute care is less intense than the treatment typically offered by a hospital). The facility must provide regular treatment activities under the supervision of licensed and certified mental health professionals, with both physician/psychiatrist and nursing services available on either a staff or contracted basis. A residential treatment facility is not solely or principally an alternate residence or a place of rest. On the contrary, measurable improvement, the reasonable likelihood of future improvement and active family or guardian participation in the treatment are important criteria for authorization of continued treatment.

Skilled nursing facility: This is a facility that provides continuous skilled nursing care on an inpatient basis. It must be licensed in accordance with state and local law and be accredited by the Joint Commission on the Accreditation of Healthcare Organizations or approved by Medicare. A skilled nursing facility is not primarily a place for rest, for the aged, for custodial care or for the treatment of mental illness or chemical dependency.

Speech therapy: These are therapy services that assist in the restoration of communication abilities that have been acutely impaired by illness, injury or birth defect.

Traditional Indemnity: This is a Retiree Medical Plan option. With Traditional Indemnity, you’re covered for a wide range of medical services and supplies, but are subject to annual deductibles, coinsurance amounts and out-of-pocket maximums. In addition, Traditional Indemnity includes a Preferred Provider Option (PPO) network of participating providers. Traditional Indemnity will reimburse you the same percentage whether you receive care from a PPO or non-PPO provider, but you’ll pay less out of your own pocket if you use PPO providers, since they charge lower, negotiated prices for their services. Traditional Indemnity is generally the assigned option for Medicare-eligible retirees and dependents (see “A Closer Look at Traditional Indemnity”).

Urgent: This is a medical condition that manifests itself by acute symptoms of sufficient severity that postponing treatment for more than 48 hours would:

• Place the patient’s life in jeopardy;

• Cause serious, permanent impairment of a bodily part or function; or

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• Cause severe pain.

Care that is needed to treat such a condition is called urgent care. Care rendered after the urgent situation has passed is not urgent care.

An urgent care facility is freestanding and not connected to a hospital. An urgent care facility is designed to respond to urgent medical conditions and perform minor surgical procedures.

Your Benefits Resources™: This is the Web site resource where you can access your benefit options and costs, compare your medical options, search an online provider directory, learn more about the company’s health and insurance benefits, enroll for your benefits and review or change your dependent information on file (see “Contract Information”).

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Contact Information

This list of contacts and resources includes information about whom to contact depending on your specific need:

Contact/Service Provided Address/Telephone Number Aetna POS Option POS Provider Network: Aetna Choice POS II (Open Access)

1-800-872-7136 8 a.m. to 6 p.m., local time TDD: 1-800-325-2298 www.aetna.com

Aetna Informed Health® Line 1-800-556-1555 24 hours a day, seven days a week

UnitedHealthcare POS Option POS Provider Network: UnitedHealthcare Choice Plus POS

1-800-577-8539 7:30 a.m. to 5:30 p.m., local time TDD: 1-800-545-6751 www.myuhc.com

UnitedHealthcare Optum® NurseLineSM 1-866-444-3011 24 hours a day, seven days a week www.myuhc.com

UnitedHealthcare Traditional Indemnity Option

1-800-577-8567 8 a.m. to 6 p.m., local time TDD: 1-800-545-6751 www.myuhc.com P.O. Box 740802 Atlanta, GA 30374-0802

United Behavioral Health Mental Health and Chemical Dependency Program

1-866-414-1962 www.liveandworkwell.com

HMO/Medicare Advantage HMO Option Call the Lucent Benefits Center or the specific HMO

Lucent Benefits Center: 1-888-232-4111 9 a.m. to 5 p.m., Eastern Time TDD: 1-800-310-7900

Medco Prescription Drug Program 1-800-336-5934 8 a.m. to 12 midnight, Eastern Time (Mon.-Fri.) 8 a.m. to 6 p.m., Eastern Time (Sat.) TDD: 1-800-759-1089 To fax a new prescription, have your doctor call 1-888-EasyRx1 (1-888-327-9791) for instructions. www.medco.com

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Contact/Service Provided Address/Telephone Number Magellan (Magellan Behavioral Health) Mental Health and Chemical Dependency Program

1-888-314-4017 8 a.m. to 6 p.m., local time (call at any time in emergencies) TDD: 1-800-695-5526 www.MagellanHealth.com

CIGNA HealthCare POS Option

1-800-986-9650 8 a.m. to 6 p.m., local time TDD: 1-800-266-1288

Lucent Payroll Office Handles contribution problems and address changes.

1-888-LUCENTHR (1-888-582-3684)

Domestic Relations Matters Group Contact for matters relating to a Qualified Medical Child Support Order (QMCSO).

Lucent Technologies QDRO Administration P.O. Box 56887 Jacksonville, FL 32241-6887

Lucent Benefits Center Contact when you have a COBRA qualified status change.

Lucent Benefits Center 2300 Discovery Drive P.O. Box 785029 Orlando, FL 32878-5029 1-888-232-4111

Plan Administrator Contact for all legal actions, except for legal actions regarding a claim for benefits. Legal actions regarding a claim for benefits should be directed to the individual Health Plan Administrators (see the contact information in this table).

Lucent Technologies Inc Room 3A226 600 Mountain Ave. Murray Hill, NJ 07974

Your Benefits Resources

Visit the Web site:

To access your benefit options and costs;

To compare medical options;

To search an online provider directory;

To learn more about your health and insurance benefits;

To review or change your dependent information on file; or

When qualified status changes occur.

http://resources.hewitt.com/lucent

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Contact/Service Provided Address/Telephone Number Pension Service Center (PSC) The Pension Service Center (PSC) is the official center for all pension and pension-related services for eligible retirees.

Log on to the Web site at http://lucentpension.csplans.com; or

Call the Lucent Pension Service Center toll-free at 1-866-429-5764. (For the hearing impaired, the TDD number is 1-866-429-5765).

Web site and automated phone system are available Monday through Saturday, from 6 a.m. to 2 a.m., Eastern Time, and on Sunday, from 6 a.m. to midnight, Eastern Time. If you need assistance, customer service specialists are available Monday through Friday, from 8 a.m. to 8 p.m., Eastern Time.