FlexSolutions

FlexSolutions is A&B's flexible benefits program—the program designed to meet employee needs, while ensuring that both you and A&B receive the best benefits value. You enroll in, and help pay for, only those coverages you need, and that helps A&B manage the long-term cost of providing benefits. FlexSolutions also allows A&B to meet the diverse needs of its employees.

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Enrolling In FlexSolutions

You enroll in FlexSolutions when you join A&B and initially become eligible for benefits, and then again each year during Open Enrollment. The elections you make either when you initially enroll or during Open Enrollment remain in effect throughout the Plan Year (January 1 through December 31).

As your needs change, you may make new elections, either...

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Your FlexSolutions Options

Through FlexSolutions, you have a range of health care, disability and life insurance options, plus the opportunity to benefit from two tax-free reimbursement accounts. When you enroll (or re-enroll) in FlexSolutions, you may choose from the options outlined in the table below. Additional details are provided in the applicable sections of this Handbook.

Your FlexSolutions Options
Benefit Plan Options Who Can Be Covered? Is Coverage Required?

Medical Coverage

Plan options vary according to region; see Health Care Benefits for details about the options in your area

You only

You and your child(ren)

You and your spouse/domestic partner

You and your family

Yes —you can only waive coverage by submitting proof of other coverage

Dental Coverage

Three levels of coverage:

50%

65%

80%

You only

You and your child(ren)

You and your spouse/domestic partner

You and your family

Yes —you can only waive coverage by submitting proof of other coverage

Vision Coverage

Vision Service Plan*

You only

You and your child(ren)

You and your spouse/domestic partner

You and your family

You automatically receive vision coverage when you enroll in a medical plan.

Long-Term Disability

Three levels of coverage:

50% (up to $8,000/month)

60% (up to $9,000/month)

70% (up to $10,000/month)

You only

Yes —you must elect at least the 50% level

Employee Life Insurance

Seven levels of coverage, ranging from 50% of your salary (or $50,000) through 5 times your salary)**

You only

Yes —you must elect coverage equal to 50% of your salary or $50,000, whichever is less

Accidental Death & Dismemberment

Seven levels of coverage, ranging from 50% of your salary (or $50,000) through 5 times your salary)**

You and your spouse/domestic partner and children***

No

Dependent Life Insurance

Two levels of coverage for your spouse/domestic partner, one level for your children

Your spouse/ domestic partner

Your children

No

Business Travel Accident Insurance

Coverage equal to three times your salary (up to $500,000)

You only

You automatically receive this coverage

Reimbursement Accounts

Health Care Account

Dependent Care Account

You enroll—reimbursements may be used for expenses incurred on behalf of yourself and/or any IRS-eligible dependent.

No

* When you enroll in a medical plan, you and your dependents automatically receive vision benefits through the Vision Service Plan, unless you enroll in the Kaiser HMO; Kaiser participants are eligible to receive the vision benefits offered by Kaiser.

** Employee Life and AD&D Insurance are limited to $1,000,000 and $500,000, respectively.

*** If you elect AD&D coverage for yourself, your eligible dependents will automatically receive AD&D coverage.
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FS Credits

FS Credits represent money A&B gives to you so that you can "purchase" your FlexSolutions benefits. (The allotment you receive for each Plan Year will be noted on the Enrollment Form you receive during Open Enrollment.) Through FlexSolutions, you decide how you want to spend your FS Credits.

Your FS Credits allotment is based on several factors: the cost of health care coverage in your location, your age, and your salary. That's because these are among the primary factors that determine the cost of your benefits.

How much, if any, you contribute toward the cost of your benefits is based on the decisions you make. When choosing how to spend your FS Credits, you should consider the various factors that affect the cost of your coverage. These include the...

  • Type of medical and dental plan you elect—each FlexSolutions medical and dental plan has a different "price tag" based on the cost of providing that plan;

  • Level of health care coverage you elect—if your children or spouse/domestic partner have coverage elsewhere, you should carefully review whether "dual coverage" would be appropriate; and

  • The amount of life and disability insurance you elect.

The total allotment of FS Credits is set at a level that ensures that both you and your family receive some financial protection at a cost A&B can afford.

You will receive a constant amount of FS Credits each pay period throughout a given Plan Year. If your salary increases during a Plan Year, and you have elected a multiple of your salary for Employee Life, AD&D, or LTD Insurance, your coverage will increase accordingly while your cost (and thus FS Credits) will remain the same for the remainder of the Plan Year.

Each year during Open Enrollment you will receive information about the benefit options available through FlexSolutions, the price tags associated with each option, and the amount of FS Credits you will have to purchase your FlexSolutions benefits for the next Plan Year.

Pre-Tax Coverages

In accordance with IRS regulations, you can use FS Credits and pre-tax payroll deductions to purchase certain coverages on a pre-tax basis. These coverages include...

  • Medical/Vision and Dental coverage,

  • LTD coverage,

  • Employee Life and AD&D Insurance, and

  • Health Care and Dependent Care Reimbursement Account contributions.

Please note: You may elect to pay for any or all of these benefits on an after-tax basis. However, you must make such a request through your local Human Resources representative

If, after making your pre-tax elections, you...

  • Spend all of your FS Credits, you will need to make pre-tax contributions to pay for your elections; however, your taxable income, and the taxes you pay, will be reduced accordingly.

  • Do not spend all of your FS Credits, the remaining FS Credits will be added to your pay as taxable income.

Generally, the pre-tax dollars you contribute for health care coverage are not subject to Federal taxes (income tax, FICA, etc.) or, in most cases, state or local taxes. However, in some states, a portion of your contribution will be subject to state and/or local taxes. You will be notified if this applies to you.

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After-Tax Coverages

The IRS requires you to pay for Dependent Life Insurance with after-tax payroll deductions.

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Covering Non-Tax Dependents

Due to Internal Revenue Code (IRC) restrictions, the contribution A&B makes toward the cost of benefits for individuals who are not eligible for tax-free coverage—such as domestic partners, domestic partner children, if eligible under the Plan, and certain children over age 23 who are otherwise eligible for FlexSolutions benefits—generally will be treated as taxable income to you. Also, any contribution you make toward the cost of such coverage must be paid for on an after-tax basis. However, these rules will not apply if your domestic partner, partner’s child or your child qualifies for tax-free coverage under the IRC and you certify their tax status by submitting a completed A&B Domestic Partner Tax Dependency Certificate Form.

If you can claim a federal tax exemption for your domestic partner or your child, he or she is eligible for tax-free coverage.

However, your partner may be eligible for tax free coverage in certain other situations. For more information about eligibility for tax-free coverage, refer to IRS Publications 17 and 501, available at www.irs.gov, or consult your tax advisor.

Note that the value of the benefits for domestic partners who meet certain state definitions is excluded from applicable state and/or local income and payroll taxes. If that is the case, any imputed income amounts will not be included in the employee’s income for such state and/or local tax purposes. For example, in California, legally married same-sex spouses (and their children) married between June 17, 2008, and November 4, 2008 are eligible for tax-free coverage for California tax purposes. For more information, contact your local Human Resources Representative.

Core and Default Coverages

While FlexSolutions is designed to allow you to make decisions that best meet your needs, A&B also wants to ensure that its employees have a minimum level of protection. That's why FlexSolutions features a "core" level of benefits. A&B also has provisions that will apply if you do not enroll by the enrollment deadline—either when you become newly eligible or during the annual FlexSolutions Open Enrollment. These "core" and "default" coverages are explained below.

Core Coverages

"Core" coverage includes...

  • Medical/Vision coverage (the specific "core" medical plan is determined by the location in which you work)

  • The Option 1 Dental Plan ;

  • LTD coverage equal to 50% of your monthly base salary, up to a maximum benefit of $8,000 per month;

  • Employee Life Insurance coverage equal to 50% of your base salary or $50,000, whichever is less; and

  • BTA Insurance coverage equal to three times your base salary, up to a maximum benefit of $500,000.

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You may decline Medical/Vision and/or Dental coverage if you can provide proof of other group coverage, such as coverage you may have through your spouse's/domestic partner's employer's plan. For information about your special medical enrollment rights if you previously declined medical coverage through FlexSolutions, as well as special enrollment rights that apply for your dependents, see Your Special Enrollment Rights.

Default Coverage

If you do not enroll each year by the date requested, you will...

  • Automatically receive core coverage for yourself only,

  • Forfeit any remaining FS Credits,

  • Not be able to enroll any dependents, and

  • Not be able to change your election until the next Open Enrollment period unless you have a qualifying change in status as explained in Changing Your FlexSolutions Elections During the Year.

It is therefore to your advantage to enroll in FlexSolutions by the date requested to ensure you receive the coverages you need.

A&B reserves the right to modify the FlexSolutions package in any manner, and such modification may require you to make all new elections for the new Plan Year.

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Changing Your FlexSolutions Elections During the Year

The benefits and coverage levels you choose either when you initially enroll as a new hire or during the annual Open Enrollment (including any benefits to which you were defaulted) will remain in effect throughout the Plan Year (January 1 through December 31).

The only time you can change a benefit election during a Plan Year is when you have a qualifying “change in status” under the Internal Revenue Code, as described below:

Changes in Status

  • Legal marital status. An event that changes your legal marital status, including marriage, divorce, death of a spouse, legal separation or annulment.

  • Domestic Partner status. An event that changes the status of your domestic partnership, including establishment or termination of a domestic partnership or death of your domestic partner.

  • Number of dependents. An event that changes your number of dependent children, including birth*, death, adoption and placement for adoption.

  • Employment status. An event that changes your, your spouse’s or your dependent child’s employment status, resulting in a gain or loss of eligibility for coverage. Examples include:

    • Beginning or terminating employment

    • Starting or returning from an unpaid leave of absence

    • Changing from part-time to full-time employment or vice versa

    • A change in worksite

  • Residence. A change in your, your spouse’s or your dependent child’s place of residence.

  • Dependent status. An event that causes your dependent children to become eligible or ineligible for coverage because of age, student status or similar circumstances.

* Expenses incurred on behalf of an employee's newborn child will be covered during the first 31 days of the child's life as long as you notify your local Human Resources representative and add the child to your health care coverage within 31 days of birth. Similar requirements apply to the adoption of a child.

If you have a change in status and want to make a change to your FlexSolutions elections, you must notify your local Human Resources Representative, generally within 31 days of the event, or you will have to wait until the next Open Enrollment period.

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Consistency Rule

Any mid-year change to your benefit elections must be “due to and consistent with” your change in status. To satisfy the “consistency rule,” your change in status and corresponding change in election must have an effect on eligibility and must correspond with the change in status. For example, if your dependent loses eligibility for coverage under the terms of a medical program, you may cancel medical coverage only for that dependent. For the Dependent Care Reimbursement Account, your change in status must affect the amount of dependent care expenses eligible for reimbursement (for example, your child reaches age 13, and dependent care expenses are no longer eligible for reimbursement). Additional information about making changes to benefits are included under Qualifying Status Changes.

The options available to you as a result of a status change are based on IRS regulations and the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Your local Human Resources representative can review with you the allowable changes. You may also want to refer to What Happens to Your Benefits... for details.

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Other Events Permitting Election Changes

  • Coverage and Cost Changes. In some instances, you can make mid-year changes due to events that significantly affect your cost or coverage (except for the Health Care FSA).

  • Special Enrollment Events. If you and your eligible dependents gain eligibility for certain medical plan coverage, lose medical coverage, acquire newly eligible dependents during the year, or reach your lifetime maximum under a plan, you may enroll or disenroll in an A&B medical plan. See Notice of Special Enrollment Rights for Medical Coverage for more information.

  • Medicare or Medicaid Entitlement. You may change an election for medical coverage mid-year if you, your spouse or your dependent child becomes entitled to or lose coverage for Medicare or Medicaid.

  • Judgment, Decree, or Order. You may change your election(s) health coverage mid-year and make a new election for your child, including a foster child, if required under a qualified medical child support order (QMCSO).

Notice of Special Enrollment Rights for Medical Coverage

If you decline enrollment in an A&B medical plan for you or your dependents (including your spouse) because of other health insurance coverage, you or your dependents may be able to enroll in an A&B medical plan without waiting for the next open enrollment period if you:

  • Lose other coverage. You must request enrollment within 31 days after the loss of other coverage.

  • Gain a new dependent as a result of marriage, birth, adoption, or placement for adoption. You must request enrollment within 31 days after the marriage, birth, adoption, or placement for adoption.

  • Lose Medicaid or Children's Health Insurance Program (CHIP) coverage because you are no longer eligible. You must request enrollment within 60 days after the loss of such coverage.

In addition, you may enroll in an A&B medical plan if you become eligible for a state premium assistance program under Medicaid or CHIP. You must request enrollment within 60 days after you gain such coverage.

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