The eligibility and enrollment rules for the U

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Retiree Health Care SPD Effective January 1, 2012 Long-Term Disabilities and Retiree Health Care Credits Even if you have a “Year of Service,” you will not accumulate retiree health care credits for any year in which on the last day of the year you are receiving long-term disability benefits under any long-term disability plan sponsored by U.S. Bancorp. If you accumulated retiree health care credits previously, however, you will retain those credits while you receive long-term disability, and the credits will continue to earn interest. Years in which you are receiving long-term disability benefits on December 31 may however count as Years of Service toward the 45/15 or 50/10 age and Years of Service rule to begin accumulating credits. Severance and Retiree Health Care Credits Former employees receiving severance pay will not accumulate any retiree health care credits under the Program during the severance period. U.S. Citizens Working Overseas Do Not Earn Credits You will not be eligible to earn credits for any year in which on the last day of the year you are classified for payroll purposes as a U.S. citizen working overseas. If, however, you accumulate annual credits and then transfer overseas, you will retain any accumulated credits and those credits will continue to earn deemed interest. Years of Service in which you are classified as a U.S. citizen working overseas on December 31 will, however, count toward the 45/15 or 50/10 age and Years of Service rule to begin accumulating credits. Additionally, periods in which you are classified as a U.S. citizen working overseas on December 31 can count toward the age 55 and five Years of Service requirement for participation in the Program. Finally, if you are classified as a U.S. citizen working overseas when you terminate, the eligibility requirement that you be enrolled in a U.S. Bank active employee health care plan at the time of your termination will be waived. All other eligibility requirements must be satisfied. Paying for Retiree Health Care Coverage with Credits If you terminate and are eligible for retiree health coverage, and elect coverage, approximately two-thirds of the annual medical cost for the coverage you will have elected will be offset against your accumulated credits, and you will pay the remaining approximately one-third cost out of pocket. If eligible for the Program, you will receive information about options for paying your out of pocket portion of the cost at the time of your termination. Approximately two-thirds of the medical cost will continue to be deducted from your account until the credits are insufficient to cover two-thirds of the cost. The credit balance will be reviewed January 1 of each year and if the credits will not cover two-thirds of the cost of your premium for the entire year, then the balance will be divided by twelve to determine the amount used to offset your premium payment. If your rate changes during the plan year, the dollar amount used to offset your premium payment will be recalculated. After your health care credit balance is depleted, you can continue to participate in the Program by paying 100% of the cost out of pocket. 122
Retiree Health Care SPD Effective January 1, 2012 If you have elected coverage for dependents (spouse/domestic partner/children or grandchildren), the annual medical cost will include their coverage. Approximately two-thirds of the total elected coverage will be offset against the accumulated credits, to the extent available. If You Die with Accumulated Credits Your credits can be transferred to an eligible spouse or domestic partner, if you either die while employed (after having reached at least age 55 with 5 Years of Service) with accumulated credits or die while participating in the Program with remaining credits. Your spouse/domestic partner can use the credits for two-thirds of the annual cost of retiree health care coverage. This is the only use for the credits; he or she will not receive any cash payment or be able to use the credits for any other purpose. After the credits are depleted by the spouse/domestic partner, he or she can continue to participate in the Program by paying 100% of the cost. Your spouse/domestic partner is the only dependent eligible for transferred credits; no nonspousal dependents receive transferred credits. However, if there are additional eligible dependents (such as a dependent child) receiving coverage at the time of your death, your spouse would continue to receive family coverage and the health care credits would continue to pay two-thirds of the cost until the credits are insufficient to cover two-thirds of the cost. Special payment rules apply in the year when the credits become insufficient to cover two-thirds of the cost. After your health care credit balance is depleted, your spouse/domestic partner and your covered dependents can continue to participate in the Program by paying 100% of the cost. Special Transition Rules Special Transition Retiree Health Care Credit for Past Service The Program included a special one-time transition rule. Any employee who was eligible for credits as of December 31, 2001 (e.g. had a Year of Service in 2001 and was employed on December 31, 2001) received up to a maximum of five years of credits, reflecting past Years of Service. For example, if on January 1, 2002, you were age 55 with 20 Years of Service, and you had a Year of Service in 2001, you received five years of deemed credits. If, as of January 1, 2002, you were age 45 with 18 Years of Service, and you had a Year of Service in 2001, you received one year of deemed credits. This is a special one-time rule. If you received special transition credits, they will count toward your maximum 15 years of credits under the Program. You will not be eligible to receive a transition credit for past service if: • you were classified as a U.S. citizen working overseas as of December 31, 2001; • you were receiving long-term disability benefits as of December 31, 2001; or • you were on severance as of December 31, 2001. Even though Mercantile Employees could not use retiree health care credits until their retirement on or after January 1, 2003, the special one-time transition credit was calculated for those Mercantile Employees who satisfied the requirements as described in this section. In 2003, therefore, Mercantile Employees satisfying the age and Year of Service requirements received up to five years of special transition credits (based on eligible service, if any, through December 31, 2001), interest on any transition credits and potentially an additional credit for 2002 (if they had a Year of Service in 2002 and were employed by U.S. Bank at the end of 2002). If you are a Mercantile Employee and retired in 2002, however, you did not receive any retiree health care 123
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The eligibility and enrollment rules for the U

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