VERIZON CORPORATE SERVICES GROUP INC.

The Verizon Management Pension Plan is a Defined Benefit Plan. This plan, depending on the Verizon Management Pension Plan SPD guidelines, can be paid out as a lump sum using the Verizon Management Pension Plan PBGC rates. If Verizon Management Pension Plan PBGC rates apply, please visit this page for more information.

The applicable PBGC rates for August, as applied to Verizon Lump Sum payments is:

2.00%

Verizon Management Pension Plan is a Defined Benefit Plan. This plan type provides a monthly retirement benefit, and, in some cases, a lump sum using the Verizon Management Pension Plan PBGC rates that are adjusted for early retirement using age penalties. These penalties are applied to Verizon employees upon reaching a specific age. For more information, call 908-559-3342 or watch these Verizon Pension Videos. At the time of retirement, benefits from Verizon are calculated using a formula based on Verizon compensation information and Verizon years of credited service. Upon reaching 'normal retirement age', benefits are paid to the contributor for the remainder of their lifetime. Benefits that are accumulated under this plan type are often referred to as 'accrued benefits'. In this plan type, the Verizon Management Pension Plan Alternate Payee may be given a lump sum cash payment from the Plan. They also are able to receive a monthly benefit payable for either the lifetime of the Contributor (a 'shared payment') or the Alternate Payee (a 'separate interest') as an alternative to the Verizon lump sum.

A lump sum cash payment from the Plan is typically not granted to the Alternate Payee under this kind of arrangement. Instead, the award to the Alternate Payee is usually issued as a monthly benefit payable to the Alternate Payee (a "separate interest") or the Participant (a "shared payment"). We advise you to contact your administrator by mail at Verizon Management Pension Plan, BASKING RIDGE, new jersey 07920, or by phone at 210-351-3333, as there are numerous alternative Verizon Management Pension Plan pension formulae.

Features of the Verizon Management Pension Plan may include:

You may have benefits accrued under this Plan (potentially pay-related)
You may have benefits accrued under this Plan (potentially "flat dollar", which includes dollars per year of service)
It's also possible that you have a "Cash Balance" or comparable plan, in which case benefit calculations are made using the "cash balance" formula. For the purposes of this analysis, a "cash balance" formula is a benefit formula found in any defined benefit plan, including personal account plans, pension equity plans, life cycle plans, cash account plans, etc.; instead of, or in addition to, expressing the accrued benefit as a life annuity beginning at normal retirement age, the "cash balance" formula defines benefits for each employee using terms more familiar to defined contribution plans, like "single sum distribution amount" (10 percent of final average pay times years of service, or the amount of the employee's hypothetical account balance).

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The Verizon Management Pension Plan is available for managers and associates who have become fully vested employees as of October 28, 2012.

For Managers: You must accrue 75 points (years of age + years of service) - age penalties (3% per year until age 55). If you have accrued at least 30 years of service, then NO age penalties will apply, and you will receive your full benefit unadjusted for early retirement.

The Manager formula for calculating your annual benefit under the Cash Balance plan is as follows:

Opening Balance + Pay Credits + Interest Credits

= Balance of CB Pension

For Associates: You must accrue 15 years of service and at least 76 Points (years of age + years of service) - age penalties (3% per year until age 55).

The Associate formula for calculating your annual benefit is as follows:

(Pension Band x Years of Service) - Applicable Age Penalties X 12

Annual Pension Benefit

VERIZON CORPORATE SERVICES GROUP INC. Healthcare Basics

VERIZON CORPORATE SERVICES GROUP INC. and Miscellaneous Employer-Sponsored Health Insurance

VERIZON CORPORATE SERVICES GROUP INC. and employer-sponsored health insurance is a health policy selected and purchased by your employer or VERIZON CORPORATE SERVICES GROUP INC. and offered to eligible employees and their dependents. These are also called group plans or VERIZON CORPORATE SERVICES GROUP INC. group health insurance. Depending on where you work your employer, if not VERIZON CORPORATE SERVICES GROUP INC., will typically share the cost of your premium with you. If you work for VERIZON CORPORATE SERVICES GROUP INC. you could reach out by calling the VERIZON CORPORATE SERVICES GROUP INC. plan administrator at 908-559-3342 or inquiring via mail at VERIZON CORPORATE SERVICES GROUP INC. ONE VERIZON WAY, BASKING RIDGE new jersey 908-559-3342.

Advantages of an employer plan:

Your employer often splits the cost of premiums with you.
Your employer does all of the work choosing the plan options.
Premium contributions from your employer are not subject to federal taxes, and your contributions can be made pre-tax, which lowers your taxable income.

Miscellaneous Employer and VERIZON CORPORATE SERVICES GROUP INC.

Health Insurance Plan Types and Definitions

It has been reported that just over 200 million Americans have health insurance coverage from commercial or private market health insurance. Over the past 30 years, the financial and legal structure of such insurance has varied. No one "model" has dictated the market, although there are strong trends -- from the original "indemnity" or fee-for-service approach of 25 years ago, to HMOs (Health Maintenance Organizations) in the 1990's, to "Preferred Provider Organizations" (PPOs) in the past ten years.

The specific terms and structures can be confusing to employers, VERIZON CORPORATE SERVICES GROUP INC. enrollees, and even policymakers. The summary definitions below were compiled and promulgated by the United States Department of Labor. NCSL has added notations in selected cases, with source footnotes.

The Federal Health Reform Law: The Affordable Care Act of 2010 (ACA) has numerous provisions that changed the structure and extent of health insurance coverage at VERIZON CORPORATE SERVICES GROUP INC. and other employer sponsored plans

According to the Act, the Secretary [of Health and Human Services] is responsible for defining the fundamental health benefits for a number of different health plans. The Act also directs the Secretary to guarantee that the range of benefits offered under the Act is equivalent to that of a standard employment plan. According to the Act, the Secretary of Labor must survey employers offering employer-sponsored insurance to ascertain the benefits that are normally provided by employers. The Secretary of Health and Human Services must be informed of the survey's findings. Contact the plan administrator at 908-559-3342 or send letter to VERIZON CORPORATE SERVICES GROUP INC. ONE VERIZON WAY, BASKING RIDGE, New Jersey to learn more about how the Affordable Care Act impacts the company.

Basic Types of Health Insurance at Corporate Employers

Various companies and different type of plans. To get the details contact your company and if you work for VERIZON CORPORATE SERVICES GROUP INC., read the Healthcare SPD call VERIZON CORPORATE SERVICES GROUP INC. at 908-559-3342 or mail them at ONE VERIZON WAY, BASKING RIDGE new jersey 908-559-3342. Lets discuss the basics

Indemnity plan - A type of medical plan that reimburses the patient and/or provider as expenses are incurred.

Conventional indemnity plan - An indemnity plan that allows the participant the choice of any provider without effect on reimbursement. These plans reimburse the patient and/or provider as expenses are incurred.

Preferred Provider Organization (PPO) plan - An indemnity plan in which members receive coverage via a network of pre-selected healthcare providers (doctor offices and hospitals, for example). Enrollees who choose to travel outside the network will pay more because they will have to pay higher deductibles, higher coinsurance rates, or non-discounted provider charges.

Exclusive Provider Organization (EPO) plan - A more stringent kind of preferred provider organization plan wherein employees can only obtain coverage from hospitals and physicians in the designated network; non-network providers are not covered unless an emergency arises.

Health Maintenance Organization (HMO) - A health care system that, typically in exchange for a set, prepaid charge, takes on the financial risks involved in offering HMO members comprehensive medical services (insurance and service risk) as well as the responsibility for health care delivery in a certain geographic area. The HMO's participating providers may share financial risk.

Group Model HMO - An HMO that arranges for care for its members to be provided by a single multispecialty medical group. The group practice has the option of working only with the HMO or offering its services to patients who are not members of the HMO. The medical group divides the agreed-upon, per-capita payment from the HMO among its doctors, typically on a salaried basis. There are three different types of HMOs: Individual Practice Association (IPA) HMO, Network Model HMO, and Staff Model HMO.

Point-of-Service (POS) plan - An "HMO/PPO" hybrid, a POS plan is also known as a "open-ended" HMO when provided by an HMO. For in-network services, POS plans are comparable to HMOs. Reimbursement for services rendered outside of the network is typically handled similarly to traditional indemnity plans (i.e., reimbursement to providers according to a schedule of fees or normal, customary, and reasonable costs).

Physician-hospital Organization (PHO) - Partnerships between hospitals and doctors to increase market share, strengthen their negotiating position, and save overhead. These companies offer their services directly to employers or to managed care groups.

Medigap Supplemental Plans - Roughly 10 million Medicare beneficiaries purchase Medigap policies from private insurance companies, at a cost that ranges from approximately $1,000 to $5,000 per year, depending on the options available in the plan and the state of purchase. Studies have shown that Medigap policy holders use more medical services than those enrolled in traditional Medicare alone, primarily because the most popular Medigap plans provide "first-dollar" coverage. This means that Medigap actually pays the Medicare deductibles, copayments, and other expenses that beneficiaries are typically required to pay as a means of spreading the cost burden and reining in unnecessary use of services. [Medigap from Health Affairs, 9/11]

VERIZON CORPORATE SERVICES GROUP INC. Plans and Healthcare Benefits

HRA Benefit

Verizon has several of these plans included in their employee benefits plan; although Verizon does not cover all of your healthcare costs, achieving more than 3 months of credited service as a full-time employee makes you eligible for Verizon to share some of these costs and reduce your financial burden. One of the ways Verizon provides these benefits is through an HRA, or Health Reimbursement Account. This is similar to an indemnity account; Verizon will allocate a credit of $850 to full-time employees in order to provide for unexpected medical expenses. This is a one-time credit, and can not be used for non-medical expenses.

Verizon established the HRA for “each eligible full-time employee and each eligible part-time employee working 17 hours or more per week, who has at least three months of net credited service and who is eligible for medical coverage under the Plan” [106].

Plan Benefits

Verizon’s two most popular healthcare benefit plans are as follows:

- Managed Care Network (MCN) option

You can seek both in-network and out-of-network care while using the MCN option. You will be eligible for the maximum benefits when you obtain care through the network. You will still receive benefits even if you obtain medically required covered services outside of the network, but your level of coverage will be lower and your out-of-pocket expenses will be higher. When you use in-network providers, there is no yearly deductible. Additionally, there is no copay and complete in-network coverage for preventative care treatments.

- MEP Preferred Provider Organization (MEP-PPO) option:

You will be eligible for the maximum benefits when you receive treatment within your network. You will still receive benefits even if you obtain medically required covered services outside of the network, but your level of coverage will be lower and your out-of-pocket expenses will be higher. Additionally, the plan's provisions completely cover preventative care services.