COSTCO WHOLESALE CORPORATION
TEXAS INJURY BENEFIT PLAN
(Amended and Restated Effective
April 1, 2012)

SUMMARY PLAN DESCRIPTION

NOTICE TO ENGLISH SPEAKING EMPLOYEES: This booklet contains a summary
in English of your plan rights and benefits under the Costco Wholesale
Corporation Texas Injury Benefit Plan. If you have difficulty understanding any
part of this booklet, or would like a Spanish version of this booklet, contact
Sedgwick CMS at P.O. Box 831830, Richardson, Texas 75083, 1-866-897-0393.
Office hours are from 8:00 a.m. to 5:00 p.m., Monday through Friday.
AVISO A LOS EMPLEADOS QUE NO HABLAN INGLES: Este folleto contiene un
resumen en inglés de los derechos y beneficios de su plan de Costco Wholesale
Corporation Texas Injury Benefit Plan. Si tiene dificultad en entender cualquiera
parte de este folleto o quiere obtener una copiadle folleto en español, contacte a
Sedgwick CMS en P.O. Box 831830, Richardson, Texas 75083, 1-866-897-0393.
Las horas de oficina son de 8:00 a.m. a 5:00 p.m., de lunes a viernes. También
puede obtener una copia de este documento en español de su secretario de la
nómina local.

© Copyright 2012 PartnerSource
Rev. 2/10/12

 Dear Employee:
Although safety is a top priority at Costco Wholesale Corporation, we all understand that workrelated injuries will occur from time to time. When they do, you deserve prompt, professional
medical treatment without any inconvenience, and salary continuation if you need to recover at
home.
In 2007, we developed a program called the Costco Wholesale Corporation Texas Injury Benefit
Plan with those goals in mind. We believe that the Plan has resulted in prompt, efficient, and fair
claims service for our Texas employees who sustain an eligible work-related injury. To ensure
that this Plan continues to provide these substantial benefits and that employee satisfaction
remains high, the Plan has been updated effective April 1, 2012.
As a reminder, you do not pay for any coverage under the Plan. The coverage provided is
funded entirely by the Employer.
We sincerely hope you never need to make a claim for such benefits. However, if you are
injured at work, you can rest assured that this valuable benefit plan is available to protect you
and your family.
Sincerely,

Richard Webb
Vice President, ROM

© Copyright 2012 PartnerSource
Rev. 2/10/12

 TABLE OF CONTENTS
Page
Program Highlights ..................................................................................................................................... 1 
Why did the Company start this Plan? ................................................................................................. 1 
How does the Plan affect me? ............................................................................................................. 1 
Is there a waiting period before my wage replacement benefits will begin? ........................................ 1 
What are some of the requirements of the Plan? ................................................................................. 1 
How are benefit payments handled? .................................................................................................... 1 
What if I am not satisfied with how my benefit claim is handled? ........................................................ 1 
Does this Plan directly affect my health insurance or other benefits? ................................................. 1 
When does this updated Plan take effect? ........................................................................................... 1 
PLAN BENEFITS .......................................................................................................................................... 2 
Case Study ................................................................................................................................................... 2 
How does the Plan work? ..................................................................................................................... 2 
Reporting an Injury ..................................................................................................................................... 3 
What should I do if I am injured on the job? ......................................................................................... 3 
PROGRAM DETAIL ..................................................................................................................................... 4 
INTRODUCTION ........................................................................................................................................... 4 
NOTICE TO EMPLOYEES CONCERNING WORKERS' COMPENSATION IN TEXAS ............................ 4 
ELIGIBILITY ................................................................................................................................................. 4 
HOW THE PLAN WORKS............................................................................................................................ 4 
Medical Determinations and Treatment ............................................................................................... 4 
Procedure In Event Of Injury ................................................................................................................ 5 
Funding ................................................................................................................................................. 6 
COVERED AND NON-COVERED INJURIES .............................................................................................. 6 
Covered Injuries ................................................................................................................................... 6 
Types of Non-Covered Injuries ............................................................................................................. 6 
Non-Covered Injury Circumstances ..................................................................................................... 7 
WAGE REPLACEMENT BENEFITS ............................................................................................................ 8 
When Wage Replacement Benefits Begin ........................................................................................... 8 
When Wage Replacement Benefits Cease .......................................................................................... 8 
Other Benefit Reductions ..................................................................................................................... 9 
DEATH BENEFITS ....................................................................................................................................... 9 
DISMEMBERMENT BENEFITS ................................................................................................................... 9 
MEDICAL BENEFITS ................................................................................................................................. 10 
First and Continuing Treatment .......................................................................................................... 10 
Approved Provider and Pre-Authorization Requirements .................................................................. 10 
Covered Medical Services and Supplies ............................................................................................ 11 
Medical Services and Supplies Requiring Specific Approval in Writing or by Electronic Notice........ 11 
Non-Covered Medical Services and Supplies .................................................................................... 12 
Initial Treatment and Denial................................................................................................................ 13 
Medical Provider Referrals ................................................................................................................. 13 
No Interference with Patient-Provider Relationship ........................................................................... 13 
Second Medical Opinions ................................................................................................................... 13 
When Medical Benefits Cease ........................................................................................................... 13 
REQUESTING BENEFITS.......................................................................................................................... 14 
Notice of Injury .................................................................................................................................... 14 
Providing Required Information .......................................................................................................... 14 
Medical Examination .......................................................................................................................... 14 
CONTINUING BENEFITS........................................................................................................................... 14 
DETAILED CLAIM PROCEDURES ........................................................................................................... 15 
Filing a Claim for Benefits................................................................................................................... 15 
Claims Review Procedures ................................................................................................................ 16 
FINAL COMPROMISE AND SETTLEMENT.............................................................................................. 19 
OFFSET, REIMBURSEMENT, AND RECOVERY OF BENEFIT .............................................................. 19 
Offset For Other Benefits.................................................................................................................... 19 
Coordination Of Benefits .................................................................................................................... 19 
Subrogation and Reimbursement Rights ........................................................................................... 20 
i
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 Page
Notice of Legal Proceedings............................................................................................................... 21 
Assignment of Rights.......................................................................................................................... 21 
Right To Receive And Release Necessary Information ..................................................................... 21 
APPLICABLE LAW .................................................................................................................................... 21 
AMENDMENT OR TERMINATION OF PLAN ........................................................................................... 22 
DEFINITIONS ............................................................................................................................................. 22 
Accident .............................................................................................................................................. 22 
Adverse Benefit Determination ........................................................................................................... 22 
Appeals Committee ............................................................................................................................ 22 
Approved Facility ................................................................................................................................ 22 
Approved Physician ............................................................................................................................ 22 
Beneficiary .......................................................................................................................................... 22 
Claims Administrator .......................................................................................................................... 23 
Course and Scope of Employment..................................................................................................... 23 
Covered Charge ................................................................................................................................. 23 
Cumulative Trauma ............................................................................................................................ 23 
Death Benefits .................................................................................................................................... 24 
Disabled or Disability .......................................................................................................................... 24 
Dismemberment Benefits ................................................................................................................... 24 
Emergency Care................................................................................................................................. 24 
Employer............................................................................................................................................. 24 
Injury ................................................................................................................................................... 24 
Maximum Benefit Limit ....................................................................................................................... 24 
Maximum Rehabilitative Capacity ...................................................................................................... 24 
Medical Benefits ................................................................................................................................. 24 
Medically Necessary........................................................................................................................... 24 
Occupational Disease......................................................................................................................... 25 
Plan..................................................................................................................................................... 25 
Plan Administrator .............................................................................................................................. 25 
Post-Service Claim ............................................................................................................................. 25 
Preexisting Condition.......................................................................................................................... 25 
Pre-Injury Pay ..................................................................................................................................... 25 
Pre-Service Claim............................................................................................................................... 25 
Representative ................................................................................................................................... 25 
Receipt and Safety Pledge ................................................................................................................. 25 
Transitional Duty................................................................................................................................. 26 
Urgent Care Claim .............................................................................................................................. 26 
Wage Replacement Benefits .............................................................................................................. 26 
GENERAL INFORMATION ........................................................................................................................ 26 
Name of Plan ...................................................................................................................................... 26 
Type Of Plan and Administration ........................................................................................................ 26 
Name And Address Of Plan Sponsor ................................................................................................. 26 
Name and Address Of Plan Administrator ......................................................................................... 27 
Name And Address Of Person Designated As Agent For Service Of Legal Process ........................ 27 
Employer And Plan Identification Numbers ........................................................................................ 27 
Plan Year ............................................................................................................................................ 27 
Written Communications .................................................................................................................... 27 
Statement on Benefits Fraud .............................................................................................................. 27 
ERISA RIGHTS STATEMENT.................................................................................................................... 27 
Receive Information About Your Plan and Benefits ........................................................................... 28 
Continue Group Health Plan Coverage .............................................................................................. 28 
Prudent Actions by Plan Fiduciaries................................................................................................... 28 
Enforce Your Rights ........................................................................................................................... 28 
Assistance with Your Questions ......................................................................................................... 28 
APPENDIX A: COBRA CONTINUATION COVERAGE NOTICE 
APPENDIX B: RECEIPT AND SAFETY PLEDGE 

ii
© Copyright 2012 PartnerSource
Rev. 2/10/12

 Program Highlights
Why did the Company start this Plan?
Costco Wholesale Corporation created the Costco Wholesale Corporation Texas Injury Benefit Plan (the "Plan")
because we wanted a better administrative system for helping employees who are hurt at work. Many other
businesses across Texas have adopted similar programs for their employees.
This approach has worked well for the Employer and its employees in the past. With this updated program,
effective April 1, 2012, we believe it can work even better now.

How does the Plan affect me?
If you are injured on the job, the Employer will provide you with many benefits under the Plan, including paying
for your covered medical care and making sure you receive a paycheck if your approved physician requires you
to stay at home to recover. The Employer pays the entire cost of the Plan.

Is there a waiting period before my wage replacement benefits will begin?
No. Instead of the seven-day waiting period that is required by Texas Workers' Compensation, the Plan starts
replacing your wages with a paycheck from the first full day that you miss work.

What are some of the requirements of the Plan?
All accidents and injuries will need to be reported immediately – no later than the end of the Employer’s next
business day after the date of the accident or Injury. You will not get in any trouble for reporting! In fact,
your injury might otherwise get worse, and we want you to receive the medical care you need.
To receive Plan benefits, you may only use physicians, hospitals and clinics that have been approved by the
Plan. These approved physicians and approved facilities have been chosen for their ability to provide
occupational injury medical services. If you are not satisfied with the decision or diagnosis by an approved
physician, you can get a second medical opinion from another physician (as described later in this
booklet).

How are benefit payments handled?
Plan benefit decisions will be made, and any concerns that you have will be addressed, directly by the Employer
and its designated adjusters. If the Plan receives all required information in a timely manner, benefit decisions
can typically be made within 15-30 days from the date of the request.

What if I am not satisfied with how my benefit claim is handled?
You have the opportunity to file an appeal with an Appeals Committee. On appeal, the Appeals Committee will
conduct an independent review of your benefit claim and you can submit additional information supporting
payment of the claim.

Does this Plan directly affect my health insurance or other benefits?
No. This Plan is a separate program from your health insurance and other benefits and applies only when
injuries happen on the job.

When does this updated Plan take effect?
It is effective for all on-the-job injuries involving Texas employees that occur on or after April 1, 2012.

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 PLAN BENEFITS
Maximum Benefit Limit
Maximum amount for all benefits
combined payable to you for an injury

$250,000 per employee
$750,000 per occurrence

Medical Benefits
Pays for care from approved health care
providers if you are injured at work

100% of covered charges
for up to 120 weeks

Wage Replacement Benefits
Pays you weekly income if you
need time at home to recover

Starting on the first full day of disability pays 85%
of your "lost wages" for up to 120 weeks

Death Benefits
Provides payment to eligible beneficiaries
if death occurs on the job

$150,000 (paid 20% down
and remainder over 35 months)

Burial Benefit
Provides reimbursement for burial expenses

Up to $10,000

Dismemberment Benefits
Provides a payment for loss or loss of use
of a member of the body

Up to $150,000, based upon the severity of the injury
(paid 20% down and remainder over 35 months)

Please see the Program Detail section of this booklet for a more complete description of benefits, taxation
issues, applicable exclusions, and limitations and requirements you must satisfy in order to receive benefits.

Case Study
How does the Plan work?
Take a look at the example below to see how the Plan's benefits might work if you have an injury.
Pat, who is a Sales Associate, suffers a back injury. Pat, who earns $500 a week, is not able to return to
work until three weeks after the accident. Pat's total covered medical charges following the accident are
$3,000.
The Bottom Line
In this example, Pat would be eligible to receive $4,275 under the Plan. Pat would receive:

¾ $3,000 in Medical Benefits (100% of all covered medical charges)
¾ $1,275 in Wage Replacement Benefits (85% of lost wages for the three weeks of disability)
Of course, Pat's case is just an example and might not be like your situation at all if you're injured on
the job. You may be entitled to receive more or less benefits than those provided in this example,
depending on the severity of your injury and other factors.
This example simply illustrates what a difference having great benefit protection under the Plan can make
in certain situations.

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 Reporting an Injury
What should I do if I am injured on the job?
The Employer has set up procedures to make sure you receive treatment for your
injuries in an efficient, quick manner. By following these and other Plan rules, your
covered medical bills can be paid and your paycheck can continue even if you need to
stay at home to recover. More detailed information on these procedures is found later
in this booklet.
1.

Report Your Injury Immediately
You must report your injury to your immediate supervisor or manager by the end
of the Employer’s next business day after the date of the injury. Don't wait! Your
injury might get worse and we want to help you.

2.

Fill Out an Incident Report
You must complete a report that provides details of the incident that resulted in
your injury within 24 hours after the Injury is reported. You and the Employer will
then work together to investigate your claim.

3.

Use an Approved Physician or Approved Facility for Medical Treatment
In order to receive injury benefits, you must use physicians, hospitals, clinics and
other health care providers and facilities that have been approved by the Plan.
You must also receive your first medical treatment from an Approved Physician
or Approved Facility within 14 days after the date of your injury.

4.

Submit to a Drug and/or Alcohol Screen
If you are injured on the job, you may be required to submit to a drug and/or
alcohol test, in accordance with the Employer's drug and alcohol testing policy.

5.

Follow the Doctor's Orders
You must follow your Approved Physician's instructions and keep all scheduled
appointments with health care providers.

6.

Welcome Back!
You must keep the Employer informed about your return to work status. We will
look forward to welcoming you back as soon as the treating physician issues a
medical release saying you are able to return to full or Transitional Duty.

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 PROGRAM DETAIL
INTRODUCTION
Costco Wholesale Corporation (the "Company") is committed to providing loss of income protection and helping you pay
medical expenses that might otherwise present a financial burden to you if you are injured on the job. To accomplish
this, the Company has implemented a benefit program called the Costco Wholesale Corporation Texas Injury Benefit
Plan (the "Plan"). The Plan has been adopted for the benefit of the Texas employees of Costco Wholesale
Corporation and any employer of Costco Wholesale Corporation that participates in this Plan (individually and
collectively referred to as the "Employer"). This booklet has been prepared to help you understand your benefits
under the Plan. Please read it carefully.
If any conflict arises between the information contained in this booklet and the provisions of the formal Plan document,
the Plan document will control. Certain terms used in this booklet are capitalized and defined in the DEFINITIONS
section of this booklet.
Except as otherwise provided in this booklet, benefits and other requirements described in this booklet are
effective for all covered Injuries occurring on or after April 1, 2012.
NOTICE TO EMPLOYEES CONCERNING WORKERS' COMPENSATION IN TEXAS
The following notice is being provided as required by Texas law:
COVERAGE: Costco Wholesale Corporation has elected not to obtain workers' compensation insurance
coverage. As an employee of a non-covered employer, you are not eligible to receive workers' compensation
benefits under the Texas Workers' Compensation Act. However, a non-covered employer can and may provide
other benefits to injured employees. You should contact your employer regarding the availability of other
benefits or compensation for a work-related injury or illness. In addition, you may have rights under the
common law of Texas should you suffer an on the job injury or illness. Your employer is required to provide you
with coverage information, in writing, when you are hired or whenever the employer becomes, or ceases to be,
covered by workers' compensation insurance.
SAFETY HOTLINE: The Division has established a 24 hour toll-free telephone number for reporting unsafe
conditions in the workplace that may violate occupational health and safety laws. Employers are prohibited by
law from suspending, terminating, or discriminating against any employee because he or she in good faith
reports an alleged occupational health or safety violation. Contact Workers' Health & Safety at 1-800-452-9595.
This notice applies to all Employers participating in the Plan.
Your Injury Benefit Plan: The Employer DOES PROVIDE to all Texas employees, without cost, the Plan described in
this booklet.
Our Safety Program: Our success largely depends upon you following all of our safety rules and procedures and
immediately notifying your supervisor first of any unsafe working condition, safety violation or on-the-job injury, no
matter how minor. As mentioned above, you will not be suspended, terminated, or discriminated against because you in
good faith report an unsafe working condition, on-the-job injury or potential occupational health or safety violation.
ELIGIBILITY
You automatically become a participant in the Plan if you are an employee of the Employer and your employment with
the Employer is principally located within the State of Texas. You must be a person who is employed in the regular
business of, and receive your pay by means of a salary, wage or commission directly from, the Employer and for whom
the Employer files a Form W-2 with the Internal Revenue Service. This Plan does not cover an independent contractor
or third-party agent.
HOW THE PLAN WORKS
Medical Determinations and Treatment
As explained further below, in order to receive any benefits under this Plan, all medical care must be pre-authorized by
the Claims Administrator and furnished by or under the direction of an Approved Physician or Approved Facility
(acting within the scope of their license), unless provided in connection with Emergency Care as described below.
Any list of Approved Physicians and Approved Facilities will be furnished to you, without charge, as a separate
document. The Company reserves the right to add to, delete from, or otherwise amend any list of Approved Physicians
or Approved Facilities at any time. No Approved Physician or Approved Facility is an agent of the Employer.
Although benefits under this Plan are conditioned on your use of only Approved Physicians and Approved
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Rev. 2/10/12

4

 Facilities, you remain entitled to seek any medical care you deem appropriate from any provider of your choice
at your own expense. In addition, the Plan is not intended to affect your relationship with your health care
providers. The actual medical treatment or rehabilitation of any Injury remains the sole prerogative and
responsibility of you and your attending Approved Physician and other health care providers based on their
independent judgment for the provision of health care.
For purposes of this Plan, all determinations relating to your physical condition and the payment of benefits (for
example, inability to return to work or results of a prior injury) must be made by an Approved Physician. You must follow
fully and completely the advice of, and the course of medical treatment prescribed by, the treating Approved Physician,
and must keep all scheduled appointments to fulfill the prescribed medical treatment plan. The Claims Administrator will
have the right to require you to be examined or reexamined by an Approved Physician as often as they determine to be
reasonably necessary while you are receiving or claiming benefits under the Plan.
Procedure In Event Of Injury

¾ You must notify your immediate supervisor or manager immediately after being injured at work, no matter
how minor the Injury appears to be (including any disease exposure). For an Injury due to an Accident or
for a known exposure to an Occupational Disease, verbal notice must be provided by the end of the
Employer’s next business day after the date of the Injury. For an actual Injury due to Occupational Disease or
Cumulative Trauma, verbal notice must be provided 24 hours after being medically diagnosed with a work-related
Injury, or within 30 days after you should have known of the work-related Injury, whichever is earlier. You must also
submit a written report to your supervisor within 24 hours after the Injury is reported.
•

For purposes of an Injury that involves an Accident, the date of the Injury shall be the date of the
Accident resulting in the Injury. For purposes of an Injury that involves an Occupational Disease or
Cumulative Trauma, the date of the Injury shall be the earlier of (1) the date that the damage, harm or
symptoms of the Occupational Disease or Cumulative Trauma were first known (or should have been known) to
you, or (2) the date that an Approved Physician medically diagnosed you with an Occupational Disease or
Cumulative Trauma.

•

With respect to an Injury due to Occupational Disease or Cumulative Trauma, if the Employer has purchased an
insurance policy, the purpose of which (in whole or in part) is to pay Plan benefits to a participant or reimburse
the Employer for Plan benefits, then the notice of Injury from Occupational Disease or Cumulative Trauma must
in all events be provided not later than 35 months after the end of the policy period.

¾ You must receive medical care from an Approved Physician or Approved Facility. You may use a nonapproved physician or facility (and still be eligible to receive benefits under this Plan) only if the following
requirements are satisfied:
•

First, the treatment must be for Emergency Care (as described further in the MEDICAL BENEFITS section of
this booklet);

•

Second, you provide notice to the Claims Administrator of such Emergency Care within the later of 24 hours
after your receipt of such care or the next business day; and

•

Third, after receiving primary treatment in Emergency Care, subsequent treatments must be provided by, or at
the direction of, an Approved Physician or Approved Facility.

¾ You must receive your first medical treatment from an Approved Physician or Approved Facility within 14
days after the date of your Injury.
appropriate treatment.

If necessary, the Claims Administrator will assist you in arranging for

¾ You may be required to submit to alcohol and/or drug testing, in accordance with the Employer's drug and
alcohol testing policy, at the time of your initial medical treatment. You must either provide the Employer with
this alcohol and drug testing information or authorize the Employer to gain access to this information.

¾ You must obtain pre-authorization for all medical care from the Plan's Claims Administrator. You do not
have the right to select and have the Plan pay for your choice of a primary care provider or provider of specialty
medical care, even if such provider is an Approved Physician or Approved Facility.

¾ You must also follow the procedures described below in the REQUESTING BENEFITS section and comply
with the requirements of the CONTINUING BENEFITS section of this booklet.

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 Funding
The Employer currently pays the entire cost to provide your coverage under this Plan and pays Plan benefits solely out
of the general assets of the Employer. The Employer has the right, but no obligation, to obtain insurance contracts to
provide funds to the Employer that can be used by the Employer to pay all or any portion of a benefit under the Plan; but
no benefits under the Plan are guaranteed under any contract or policy of insurance and the Employer will be solely
responsible for the payment of claims under this Plan. If the Employer has purchased an insurance policy, the purpose
of which (in whole or in part) is to provide funds to the Employer for Plan benefits or that may be used to reimburse the
Employer for Plan benefits, then:

¾ benefit payments under this Plan shall not be payable or shall immediately cease in the event that benefits
coverage is not available to the Employer or ceases under such policy for any reason; and

¾ no such insurance policy proceeds shall be considered "plan assets" for purposes of ERISA. Policy proceeds shall
constitute a part of the general assets of the Employer. Any such insurance policy shall be owned by, and all
amounts under the policy shall be payable to the Employer, and you shall not have any interest in, or right to, any
amounts payable under the policy (even though certain benefit payment, reporting or other requirements of this Plan
may relate to requirements of such insurance policy).
COVERED AND NON-COVERED INJURIES
Covered Injuries
The Plan pays benefits only on account of an "Injury." An "Injury" means damage or harm to the physical structure of
the body resulting from either:

¾ an "Accident" (which means an event involving factors external to you that -•
•
•
•

¾

was sudden, unforeseen, unplanned, and unexpected;
occurred at a specifically identifiable time and place;
occurred by chance or from unknown causes; and
resulted in physical injury to you);

an "Occupational Disease" (which means a condition marked by a pronounced deviation from your normal healthy
state arising out of your assigned duties in your Course and Scope of Employment. Occupational Disease includes
other diseases or infections that naturally result from the work-related disease. Occupational Disease does not
include ordinary diseases of life to which the general public is exposed outside of your assigned duties in your
Course and Scope of Employment); or

¾ "Cumulative Trauma" (which means damage to the physical structure of your body occurring as a direct result of
rapid, repetitious, physically traumatic activities that occur in the Course and Scope of Employment. The term
“Cumulative Trauma” does not mean fatigue, soreness or general aches and pain that may have been caused,
aggravated, exacerbated or accelerated by your Course and Scope of Employment. No benefits will be payable
with respect to Cumulative Trauma unless you have completed at least 180 days of continuous, active employment
with the Employer and have been regularly engaged in a Course and Scope of Employment with the Employer
involving rapid, repetitious, physically traumatic activities).
Any such damage or harm must occur or arise during, and directly and solely result from, the Course and Scope of
Employment by the Employer (see the DEFINITIONS section of this booklet). In order to be subject to the provisions of
this booklet, the date of the Injury must be on or after April 1, 2012.
All injuries relating to (1) an Accident or related series of Accidents, (2) exposure to an environmental or physical hazard
that causes Occupational Disease, or (3) rapid, repetitious, physically traumatic activities that result in Cumulative
Trauma, will be considered a single Injury.
Types of Non-Covered Injuries
The term "Injury," as used in this booklet, does not include:

¾ Any strain, degeneration, damage or harm to, or disease or condition of, the eye or musculoskeletal structure, or
other body part resulting from:
•
the natural results of aging;
•
osteoarthritis, arthritis, or degenerative process (including, but not limited to, degenerative joint disease,
degenerative disc disease, degenerative spondylosis/spondylolisthesis and spinal stenosis); or
•
other circumstances prescribed by the Claims Administrator which do not directly and solely result from your
Course and Scope of Employment;
¾ Factors to which the general public is exposed;
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6

 ¾ Diagnostic labels which imply generalized musculoskeletal aches and pains in the absence of any demonstrable
¾

¾
¾
¾

¾

¾

primary pathophysiology, such as Fibrositis, Fibromyalgia, Myofascial Pain Syndrome, Myositis, or Chronic Fatigue
Syndrome;
Except to the limited extent provided under the section of this booklet entitled "Medical Services and Supplies
Requiring Specific Approval in Writing or by Electronic Notice," any mental injury, emotional distress, mental trauma
or similar injury to your mental or emotional state, including, without limitation:
•
any physical manifestations resulting from such mental or emotional state; and
•
any mental or emotional damage or harm that arises primarily from a personnel action, including, but not limited
to, a transfer, promotion, demotion or termination of employment or other disciplinary action;
Damage or harm resulting from airborne contaminants not commonly found in the Employer's normal working
environment, including, but not limited to, pollen, fungi, and mold;
Damage or harm resulting from job stress;
Any heart attack, stroke, or aneurysm (an "attack"), unless -•
the attack can be identified as –
¾ occurring at a definite time and place; and
¾ caused by a specific event related to and occurring in the Course and Scope of Employment;
•
the preponderance of the medical evidence regarding the attack indicates that your work rather than the natural
progression of a preexisting heart condition or disease was a substantial contributing factor of the attack; and
•
the attack was not triggered solely by emotional or mental stress factors, unless it was precipitated by a sudden
work-related stimulus;
any Preexisting Condition, except to the limited extent (if any) that an Approved Physician clearly confirms an
identifiable and significant aggravation (incurred in the Course and Scope of Employment) of a Preexisting
Condition. Coverage for such aggravation will be provided only and to the extent that an Approved Physician –
•
confirms that the Preexisting Condition has been previously repaired or rehabilitated, and
•
prescribes services or supplies that are Medically Necessary to treat such aggravation and likely to return the
Participant to pre-Injury status.
In addition, no coverage will be provided if the Preexisting Condition was a major contributing cause of the Injury.
Hernia, unless inguinal and/or umbilical hernia that •
appeared suddenly and immediately following the Injury;
•
did not exist in any degree prior to the Injury; and
•
was accompanied by pain.

Non-Covered Injury Circumstances
Furthermore, no benefits will be payable under the Plan if:
¾
¾

you are not an employee of the Employer or your employment is not principally located in the State of Texas;
the Injury occurred while you were in a state of intoxication or had otherwise lost the normal use of your mental or
physical faculties as a result of the use of a drug or alcohol. For this purpose, you will be considered to have been
in a state of intoxication at the time of the Injury if the drug or alcohol test required by the Employer finds a violation
of the Employer's drug and alcohol testing policy;
¾ the Injury is treatable by medical care that is reasonable and of a form that an ordinary prudent person in the same
or similar circumstances would undergo, and you have not availed yourself of such treatment;
¾ the Injury was caused by your willful intention or attempt to injure yourself or another person, whether you were sane
or insane;
¾ the Injury occurred while you were employed in violation of any law;
¾ your horseplay, scuffling, fighting, or similar inappropriate behavior was a proximate cause of the Injury;
¾ your long-term cell phone use, or second-hand smoke was a proximate cause of the Injury;
¾ the Injury was incurred while you were "on suspension," "laid off" by the Employer, on leave of absence for any
other reason, or otherwise outside of the Course and Scope of Employment;
¾ the Injury arose out of an act of a third person intended to injure you because of personal reasons and not directed
at you as an employee or because of your employment;
¾ the Injury arose out of your participation in an off-duty recreational, social or athletic activity not constituting part of
your work-related duties, except where these activities are expressly required in writing by the Employer (more than
an invitation or request to participate or attend);
¾ the Injury arose out of an act of God, unless your employment exposes you to a greater risk of Injury from an act of
God than ordinarily applies to the general public;
¾ the alleged Injury is feigned or an attempt to defraud the Employer;
¾ the Injury arose out of your participation in:
•
a riot or act of civil disturbance;
•
a war, declared or undeclared;
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7

 •
•
•
•

¾
¾
¾

¾
¾

any act of war or terrorism;
any illegal act;
a felony or an assault, except an assault committed in defense of the Employer's business or property; or
service in the military of any country or any civilian non-combatant unit serving with such forces;
any damage or harm arising out of the use of or caused by -•
asbestos, asbestos fibers or asbestos products; or
•
the hazardous properties of nuclear material or biological contaminants;
the Injury arose out of your participation in the commission, or attempted commission, of any crime;
the Injury occurred while you were traveling or flying in or on (including getting in or out of, or on or off of) any
vehicle used for aerial navigation if you are:
•
flying in any aircraft that is rocket propelled;
•
flying in any aircraft used for aerobatics, racing or an endurance test, crop dusting, seeding, fertilizing, or
spraying, fighting a fire, any exploration or pipe or power line patrol, the pursuit of animals or birds, aerial
photography, banner towing or skywriting or any test or experimental usage;
•
flying when a special permit or waiver from the proper authority has to be issued;
•
riding as a passenger in any aircraft not intended or licensed for the transportation of passengers; or
•
performing, learning to perform or instructing others to perform as a pilot or crew member of any aircraft;
the Injury did not occur during your Course and Scope of Employment; or
the Injury was not timely reported (or requested information was not timely provided) in accordance with the
timeframes specified in the REQUESTING BENEFITS section of this booklet.

WAGE REPLACEMENT BENEFITS
When Wage Replacement Benefits Begin
¾
¾

¾

Total Disability. From the first full day that you become Totally Disabled due to a covered Injury, the Plan shall pay
Wage Replacement Benefits equal to 85% of your Pre-Injury Pay.
Partial Disability. From the first full day you become Partially Disabled, the Plan shall pay Wage Replacement Benefits
equal to 85% of the portion of your Pre-Injury Pay that you are unable to earn (due to the Approved Physician’s
restrictions) while working Transitional Duty.
•
If you have a Partial Disability and are released to Transitional Duty, but (i) the Employer has no Transitional Duty
position available, and (ii) an Approved Physician has not assigned permanent restrictions and released you to any
other gainful employment, then you will be considered to be Totally Disabled and Wage Replacement Benefits shall
be payable in the manner specified above under “Total Disability.”
•
If you have a Partial Disability and have made a good faith effort to comply with the treating Approved Physician’s
instructions and carry out your responsibilities in the Transitional Duty position, but you are either:
¾ again determined by an Approved Physician to be Totally Disabled, or
¾ the Transitional Duty position ceases to be available (for example, the position reaches its maximum duration)
and an Approved Physician has not assigned permanent restrictions and released you to any other gainful
employment;
then you will be considered to be Totally Disabled and Wage Replacement Benefits shall be payable in the manner
specified above under “Total Disability.”
The Employer’s ability to provide a Transitional Duty position while you are under work restrictions determined
by the Approved Physician does not imply or create a permanent Transitional Duty position for the purposes of
the American with Disabilities Act (“ADA”).
Payment Terms and Other Limitations. An Approved Physician must make the determination regarding whether
you are Disabled, except to the extent that such determination is made in conjunction with Emergency Care. Wage
Replacement Benefits are calculated on a weekly basis, and paid on regular paydays. Payments for portions of a week
shall be prorated. Only your normal, scheduled workdays shall be considered in calculating benefits (based upon your
employment status as of the date of Injury). Wage Replacement Benefit payments shall be reduced as described in the
“Offset For Other Benefits” section of this booklet.

When Wage Replacement Benefits Cease
Wage Replacement Benefits will continue until the earliest of:
¾

the expiration of 120 weeks from the date of the Injury. This 120-week maximum period for Wage Replacement Benefits
is calculated continuously from the date of the Injury, regardless of whether or not you qualify as Disabled at all times
during such period or receive Wage Replacement Benefits continuously throughout such period;
¾ the date you are determined by the treating Approved Physician to no longer be Disabled, without regard to whether you
return to regular or Transitional Duty on that date;
¾ the date that the Maximum Benefit Limit is met;
¾ termination of all your employment with the Employer; provided, however, that this paragraph will not apply if termination
© Copyright 2012 PartnerSource
8
Rev. 2/10/12

 of employment is solely due to •
application of a duration limit in the Employer’s leave of absence policy, or
•
elimination of your employment position;
¾ the date you are placed in jail, are deported or detained by or at the request of any government agency or foreign
government, have left the local area for an extended period of time, or are similarly unavailable for work; provided,
however, that this paragraph shall operate to cease Wage Replacement Benefits only for such period of time that you
are unavailable for work; or
¾ as otherwise provided under the CONTINUING BENEFITS section below.
Other Benefit Reductions
Wage Replacement Benefits are generally considered taxable income, and all appropriate amounts will be withheld. In
addition, amounts legally garnished may be withheld.
DEATH BENEFITS
If you die as the direct and sole result of, and within 365 days of, an Injury, then the Plan will pay your Beneficiary a
Death Benefit equal to $150,000; provided, however that this benefit amount shall be reduced to the extent necessary to
avoid exceeding the Plan's Maximum Benefit Limit.
The Death Benefit will be paid to your Beneficiary as follows: (1) 20% will be paid in a lump sum cash payment as soon
as administratively possible following your death; and (2) the remainder will be paid in 35 equal monthly installments
(without interest) commencing on the first day of the month following the initial lump sum payment. Death Benefits will
be in addition to Dismemberment Benefits, Wage Replacement Benefits, and Medical Benefits payable with respect to
any one Injury; provided, however, that no interest in future Dismemberment Benefits survives after your death if your
Beneficiary then becomes entitled to Death Benefits under this Plan. In addition to the Death Benefits set forth above,
the Plan shall reimburse reasonable burial expenses to any person who incurs liability therefore, up to $10,000.
DISMEMBERMENT BENEFITS
If you suffer a loss described in the Schedule of Losses below as the direct and sole result of, and within 365 days of, an
Injury, then the Plan will pay you an amount equal to the applicable percentage from the schedule below times
$150,000; provided, however that this benefit amount shall be reduced to the extent necessary to avoid exceeding the
Plan's Maximum Benefit Limit. For example, if you suffer an Injury resulting in the loss of sight in one of your eyes (as
described below), you would generally be entitled to a Dismemberment Benefit of $75,000 (50% x $150,000).
The Dismemberment Benefit will be paid as follows: (1) 20% will be paid in a lump sum cash payment as soon as
administratively possible following the date of loss; and (2) the remainder will be paid in 35 equal monthly installments
(without interest) commencing on the first day of the month following the initial lump sum payment.
SCHEDULE OF LOSSES
Loss of:

Benefit Amount:

Both Hands
Both Feet
Sight of Both Eyes
One Hand and One Foot
One Hand and Sight of One Eye
One Foot and Sight of One Eye
Speech and Hearing
One Hand
One Foot
Sight of One Eye
Speech
Hearing
Finger or Toe (two joints)
Finger or Toe (one joint)

100%
100%
100%
100%
100%
100%
100%
50%
50%
50%
50%
50%
10%
5%

¾ If you suffer more than one Injury described above from any one Accident, related series of Accidents, Occupational
Disease exposure or Cumulative Trauma exposure, only one of the applicable Dismemberment Benefits listed
above (the largest single amount) will be payable with respect to such Accident or exposure.
¾ Total and permanent loss of use of a member of the body is the same as loss of such member. Prior to payment of
the benefit, loss of use must be certified following the care of an Approved Physician for 12 straight months from the
date the loss of use began. At the end of this time it must be medically determined by an Approved Physician that
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9

 the loss of use is total and not reversible.

¾ Loss of Hand or Foot means the complete and permanent severance through or above the wrist or ankle joint. Loss
of Sight means legally blind. Such loss correctable by surgery or lenses will not result in payment of a
Dismemberment Benefit. Loss of Speech means the total and permanent loss of speech. Loss of Hearing means
the total and permanent loss of hearing in both ears.
¾ The above-described loss of "Finger or Toe (two joints)" must be at or above the joint at the proximal end of the
middle phalanx of the finger or toe; except that for the thumb or great toe, such loss must be at or above the
metacarpophalangeal joint. The above-described loss of "Finger or Toe (one joint)" must be at or above the joint at
the distal end of the middle phalanx of the finger or toe; except that for the thumb or great toe, such loss must be at
or above the joint at the distal end of the proximal phalanx. (If you have any questions regarding a loss of "Finger or
Toe (two joints)" or a loss of "Finger or Toe (one joint)," you should consult an Approved Physician or contact the
Claims Administrator.)
¾ Dismemberment Benefits will be in addition to Wage Replacement Benefits and Medical Benefits; provided,
however, that payment of Dismemberment Benefits will cease in the event of death that results in the payment of
Death Benefits.
MEDICAL BENEFITS
Subject to the medical management and other provisions of this Plan, medical services and supplies that are authorized
by the Claims Administrator (referred to below as "Covered Charges") are covered at 100%, with no co-pays,
deductibles or other out-of-pocket expense to you, provided that all applicable Plan requirements are satisfied. The
service or supply must be Medically Necessary, based on the nature of the Injury, as and when provided, and (1) cure or
relieve the effects naturally resulting from the Injury; (2) promote recovery; or (3) otherwise enhance your ability to return
to or retain employment. Such services and supplies are also subject to the other medical management provisions of
the Plan. Coverage also requires satisfaction of the following requirements:
First and Continuing Treatment

¾ The first Covered Charge must be received from an Approved Physician and incurred within 14 days following the
date of your Injury (unless the Plan Administrator determines that good cause exists); and
¾ No further amount shall be considered a Covered Charge if you do not receive medical treatment from an Approved
Physician or Approved Facility (or scheduled treatment with an Approved Physician or Approved Facility has not
been approved by the Claims Administrator) for a period of more than 60 days. This section, however, shall not
apply to any Covered Charge for testing and any follow up vaccination with respect to an Injury that involves a
potential occupational exposure to a bloodborne pathogen.
Approved Provider and Pre-Authorization Requirements
The cost of a service or supply shall be a Covered Charge only if:

¾ Treatment is (1) furnished by or under the direction of an Approved Physician or Approved Facility, acting
within the scope of the Approved Physician's or Approved Facility's license, and (2) pre-authorized by the
Claims Administrator (except when the Claims Administrator determines that prior approval was impossible
under the circumstances). Such pre-authorization may include authorization for multiple visits to an Approved
Physician or Approved Facility, and must be in writing, or by electronic notice (except as otherwise specified below
or in the Plan's claims procedures); or
¾ Treatment is provided as Emergency Care and (1) the Claims Administrator receives notification of such
Emergency Care within the later of 24 hours of your receipt of such care or the next business day; and (2) after
receiving primary Emergency Care, subsequent treatments are provided by, or at the direction of, an Approved
Physician or Approved Facility in accordance with the paragraph above.
An Emergency Care determination solely relates to consideration of an exception to the Plan's approved
medical provider requirements. "Urgent Care Claims" (as discussed in this booklet's claims procedures)
may not arise to the level of involving Emergency Care. Any decision by you to seek treatment from an
urgent care clinic or hospital emergency room does not necessarily involve Emergency Care. An
Emergency Care determination shall be made by the Claims Administrator or Appeals Committee, in
accordance with the terms of this Plan and subject to the advice and consultation from an Approved
Physician. If you obtain treatment from a non-approved health care provider and the Claims Administrator
or Appeals Committee determines that your situation has not satisfied all of the above requirements, your
claim for benefits will be denied.

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10

 Covered Medical Services and Supplies
Medical Services and Supplies That Can Be Verbally Authorized. Subject to the restrictions and limitations set out
elsewhere in this booklet, Covered Charges that can be verbally authorized will include the cost of the following:

¾ Approved Physician visits - at an Approved Facility (including charges for an emergency room), Approved
¾

¾
¾
¾

Physician's office, or in the case of home health care, at your home, including second opinion services requested by
the Claims Administrator, and charges for a registered nurse;
Medical supplies approved by the treating Approved Physician, including the following:
•
Prescription drugs (generic, unless trade name drugs are requested by an Approved Physician) and over-thecounter drugs such as analgesics prescribed by an Approved Physician;
•
Blood and other fluids (other than allergy, insulin, and similar drugs) injected into the circulatory system (but only
to the extent not available through any refund or allowance by a blood bank or similar organization);
•
Oxygen and its administration;
•
Upon the written advice or prescription of an Approved Physician and only if obtained from an Approved Facility,
rental or purchase of a wheelchair, assisted breathing apparatus, or other mechanical equipment necessary for
the treatment of respiratory paralysis, and similar internal or external durable medical equipment designed
primarily for therapeutic purposes; and
•
Surgical dressings, bandages, splints, casts, crutches, syringes, needles, trusses, and braces dispensed by an
Approved Physician or Approved Facility;
Ambulance services - professional ground ambulance service, or if no other means of transportation can reasonably
suffice to deliver the individual to the closest appropriate Approved Facility, air ambulance, regularly scheduled
railroad, or airlines;
Eyeglasses or contact lenses - one pair per Injury up to $200, inclusive of professional office visit charges, but
excluding routine eye examinations; and
External hearing aid - up to $600, inclusive of professional office visit charges.

Medical Services and Supplies Requiring Specific Approval in Writing or by Electronic Notice. Subject to the
restrictions and limitations set out elsewhere in this Plan, Covered Charges shall also include the cost of the following so
long as the Claims Administrator specifically approves such charges in advance and in writing or by electronic notice:

¾ Admission to an Approved Facility on an inpatient or outpatient basis, including semi-private room and board,
ambulatory day surgery, anesthesia and its administration, and similar services;

¾ Diagnostic testing, including x-ray examinations, laboratory tests, MRI, CAT Scan, nuclear medicine, radiology and
pathology (including interpretive services) and similar testing;

¾ Speech, occupational and physical therapy provided by an Approved Physician or a licensed speech therapist,

¾
¾
¾
¾
¾
¾
¾
¾
¾
¾

licensed occupational therapist or licensed physical therapist; provided, however, that such services shall be subject
to case management approval regarding the number of visits, the types, and amount of services provided during
such visits;
Inpatient rehabilitation services provided in a medical rehabilitation hospital; provided, however, that such services
shall be subject to continued stay review by the Claims Administrator and case management approval regarding the
types and amount of services provided;
Limited or temporary pain management services (for example, epidural steroid injections), but not including pain
management programs;
Surgery that restores a reasonable, normal pre-Injury functioning;
Services of a dentist or licensed oral surgeons - services for treatment and repair of broken teeth, fractures and
dislocations of the jaw, or the replacement of teeth (excluding temporomandibular junction dysfunction services)
when you seek treatment as soon as possible after the Injury;
Home health care (with respect to physical needs only) up to 75 visits per Plan Year and up to eight hours per visit
for the first two weeks of home health care and up to four hours per visit thereafter;
Skilled nursing care, provided that an Approved Physician monitors your progress at least once during each 30-day
period of confinement;
Orthotics, arch supports, corrective shoes, special bras or girdles, corrective appliances, prosthesis, or any similar
item;
Organ and tissue transplant services not otherwise covered by some form of expense payment program, excluding
the donor's transportation costs, organ procurement costs and the donor's surgical expenses;
Charges for telephone consultations with you, your Representative, Approved Physicians or other health care
providers;
Mental health services (to the extent not otherwise covered by the Employer's Employee Assistance Program), but
only when such services are provided for mental or emotional damage or harm resulting from you being the victim

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11

 of, or witness to, a traumatic event occurring during your Course and Scope of Employment. This coverage will
apply solely to Medical Benefits coverage and will not result in any payment of Wage Replacement Benefits or other
benefits under this Plan;
¾ Services rendered primarily for training, testing, evaluation, counseling, or educational purposes; and
¾ Reasonable travel, meal and lodging expenses related to medical treatment that requires travel greater than 20
miles from your residence (one way) as approved by the attending Approved Physician.
Non-Covered Medical Services and Supplies
While the Plan provides benefits for many medical expenses, the following expenses are not covered by the Plan:

¾
¾
¾
¾
¾
¾
¾

¾
¾
¾
¾
¾
¾
¾
¾
¾
¾
¾
¾
¾
¾

¾

Charges incurred prior to your date of participation in the Plan, or prior to your date of Injury;
Charges incurred after your Medical Benefits under this Plan terminate;
Expenses which are not Medically Necessary;
Charges incurred more than 60 days after the date of the last Covered Charge (except as otherwise specified in this
booklet);
Expenses that exceed any fee schedule adopted by the Employer or the usual and customary charge for the same
or similar treatment, services or supplies in your geographic area;
Services or supplies payable by any government or subdivision or agency thereof, or any other applicable third-party
payor;
Services or supplies which are experimental, investigative, or for the purposes of research, including, but not limited
to, services and supplies that have not been approved by the American Medical Association, the Food and Drug
Administration, the appropriate medical specialty society, or the appropriate governmental agency, all phases of
clinical trials, all treatment protocols based upon or similar to those used in clinical trials, or any treatment not
generally accepted by the physician's profession in the United States as safe and effective for diagnosis and
treatment;
Services or supplies performed or provided while you are not covered by the Plan;
Services or supplies for which you are not legally obligated to pay or for which no charge would be made in the
absence of the Plan;
Services for the evaluation or treatment of mental or psychological damage or harm, except to the extent provided
above;
Services or supplies for personal comfort or convenience, such as a private room, television, telephone, radio, guest
trays, and similar items;
Fraudulent claims or claims not filed in good faith;
Canceled appointment charges;
Self-administered services;
Services or supplies to which your condition is persistently nonresponsive;
Acupuncture, behavior modification, pain management programs, hypnosis, biofeedback, other forms of self-care or
self-help training or any related diagnostic testing, or any service or supply ancillary to any of these treatments;
Chiropractic or spinal manipulation services;
Substance abuse services;
Services and supplies provided in or out of a rest home, convalescent facility, nursing home, or other institution that
only assist with activities of daily living such as bathing, dressing, walking, eating, preparing special diets, or the
supervision of taking medications, no matter by whom recommended or furnished;
Charges for the purchase, rental or repair of bedding, or environmental control devices, including, but not limited to,
an air conditioner, humidifier, dehumidifier, or air purifier, and charges for jacuzzis, saunas, vans, or structural
changes to your residence or moving expenses;
Charges for services performed by:
•
a person who normally lives with you;
•
your spouse;
•
a parent of you or your spouse;
•
a child of you or your spouse; or
•
a brother or sister of you or your spouse; and
The cost of any other service or supply not specified above as a Covered Charge.

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12

 Initial Treatment and Denial
Any provision of this Plan to the contrary notwithstanding, the Employer may render first aid, or the Plan may pay for
Emergency Care, pay Wage Replacement Benefits or pay for a medical evaluation or treatment, and the Plan can still
make a subsequent determination that you have not suffered a covered Injury or otherwise deny any or all further
benefits under the provisions of this Plan.
Medical Provider Referrals
If the treating Approved Physician finds it necessary to refer you to another health care provider, the treating Approved
Physician must notify you and the Claims Administrator of his or her desire to make the referral and the objectives of
such referral. The Claims Administrator will provide advance approval or disapproval of all referrals (and may rescind
any such approval at any time) based upon such criteria as the Claims Administrator may establish for determining
whether such referral meets the Plan’s Medically Necessary definition or meets other relevant Plan requirements. It is
your responsibility to determine the status of any such approval or disapproval, and the expense of services or
supplies relating to any disapproved referral will be solely your responsibility.
No Interference with Patient-Provider Relationship
Although benefits under this Plan are conditioned on your use of only Approved Physicians and Approved Facilities, you
remain entitled to seek any medical care that you deem appropriate from any provider of your choice at your own
expense. However, any medical expenses for this medical care will not be payable under this Plan and your use
of a non-approved physician or facility may result in a complete denial or termination of benefits under this
Plan. The Employer, Claims Administrator, Appeals Committee, Plan Administrator and their agents and delegates,
shall not have any responsibility for the actual medical or other health care services provided by any Approved
Physician, Approved Facility or other designated health care service provider. Health care providers are not agents of
the Plan, Employer, Claims Administrator, Appeals Committee or Plan Administrator and such persons are not liable or
responsible for the acts or omissions of any health care provider. The actual medical treatment or rehabilitation of any
Injury remains the sole prerogative and responsibility of the attending Approved Physician and other health care
providers based on their independent judgment for the provision of health care.
Second Medical Opinions
The Plan reserves the right to require a second medical opinion from an Approved Physician selected by the Claims
Administrator for purposes of obtaining an Independent Medical Evaluation (IME) or for any other reason relating to the
payment of Medical Benefits, Wage Replacement Benefits, or any other benefits under this Plan. If you refuse to be
examined by an Approved Physician selected by the Claims Administrator for the second opinion, all benefits under the
Plan will be suspended.
The Claims Administrator will weigh the findings of the treating Approved Physician and the Approved Physician
providing the second opinion and make a benefit determination under the Plan. However, if you disagree with the
diagnosis or treatment recommended by the Approved Physician whose opinion is accepted by the Claims Administrator
("Physician A"), then you may request a second medical opinion. You must notify the Claims Administrator in
advance of receiving any second medical opinion in order for this opinion to be considered by the Plan. If you
provide advance notice to the Claims Administrator, then you shall have the right to a one-time examination at your own
expense by another physician ("Physician B"). This examination by Physician B will be solely for the purpose of
evaluating your condition and making a treatment recommendation.
If the diagnosis and treatment recommended by Physician B is contrary to that of Physician A, then the Claims
Administrator shall designate a peer review physician who will evaluate the medical records and advise the Claims
Administrator, and who may designate another Approved Physician for a further medical examination. If you refuse to
be so examined, all benefits under the Plan will be suspended. The diagnosis and/or recommended treatment of
the peer review physician or this last Approved Physician will be controlling. The fees and related expenses of the peer
review physician and this last Approved Physician will be paid by the Plan (although you will have the option of paying
up to one-half of such fees and expenses).
When Medical Benefits Cease
Medical Benefits will cease upon the earliest of:

¾
¾
¾
¾

the expiration of 120 weeks from the date of the Injury;
reaching the Maximum Benefit Limit;
involuntary termination of your employment with the Employer for gross misconduct;
the date that you do not receive medical treatment from an Approved Physician or Approved Facility (or scheduled
treatment with an Approved Physician or Approved Facility has not been approved by the Claims Administrator) for
a period of more than 60 days; or
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13

Rev. 2/10/12

 ¾ your failure to comply with the requirements specified under the CONTINUING BENEFITS section of this booklet.
REQUESTING BENEFITS
The following is a summary of the procedures for requesting benefits under this Plan. Also see the DETAILED CLAIM
PROCEDURES in the next section of this booklet. You must report every incident or fact that you believe results,
or might reasonably be expected to result, in an Injury in accordance with the following requirements:
Notice of Injury
You (or your Representative) must provide verbal notice of an Injury immediately to your immediate supervisor or
manager. For an Injury due to an Accident, or known exposure to an Occupational Disease, this verbal notice
must be provided by the end of the Employer’s next business day after the date of the Injury. For an actual
Injury due to Occupational Disease or Cumulative Trauma, this verbal notice must be provided by the earlier of
the following: (1) within 24 hours after being medically diagnosed with a work-related Injury, or (2) within 30
days after you should have known of the work-related Injury.
With respect to reporting an Injury due to Occupational Disease or Cumulative Trauma, if the Employer has purchased
an insurance policy as described above, the purpose of which (in whole or in part) is to pay Plan benefits to a participant
or reimburse the Employer for Plan benefits, then the notice of Injury from Occupational Disease or Cumulative Trauma
must in all events be provided not later than 35 months after the end of the policy period.
You must also notify your supervisor (verbally or in writing) of your expected recovery time (1) immediately after
receiving your first medical treatment for an Injury, and (2) after each following appointment with your treating Approved
Physician.
Providing Required Information
You (or your Representative) must complete such Injury report, investigation, and authorization forms, file such written
statements, provide such recorded statements (whether sworn or unsworn), and provide such proof and demonstrations
(relating to the Injury or any prior or subsequent damage or harm you suffered, in or out of the Course and Scope of
Employment), in such manner and within such periods, as the Claims Administrator may require. The written incident
report must be provided within 24 hours after the Injury is reported as required above.
An immediate incident report to your supervisor is essential so that the Claims Administrator can promptly verify the
facts regarding your Injury and pay appropriate benefits. No benefits will be payable under the Plan if:

¾ notice of Injury is not provided as specified above, unless the Plan Administrator determines that good cause exists
for failure to give notice in a timely manner; or

¾ all required information is not provided as specified above, unless the Plan Administrator determines that good
cause exists for failure to provide such information in a timely manner.
Medical Examination
You must submit to medical examinations or evaluations as often as the Claims Administrator determines to be
reasonably necessary.
CONTINUING BENEFITS
Subject to the limitations and other rules and procedures described in this booklet, your benefits under this Plan will
begin or continue as long as you --

¾ submit to any requested drug and/or alcohol testing in accordance with the Employer's drug and alcohol testing
¾
¾
¾

¾

policy, and provide the Employer with this alcohol and/or drug testing information or authorize the Employer to gain
access to this information;
receive prior approval for all medical care (except in the case of Emergency Care, as explained in the MEDICAL
BENEFITS sections of this booklet);
utilize only Approved Physicians and Approved Facilities (except in the case of Emergency Care, as explained in the
MEDICAL BENEFITS sections of this booklet);
submit to examination by an Approved Physician as directed by the Claims Administrator with respect to any
surgical procedure or other diagnosis or treatment opinion rendered by the treating Approved Physician for which
the Claims Administrator considers a second medical opinion advisable in order to determine whether such
procedure, diagnosis or treatment opinion meets the Plan’s Medically Necessary definition or meets other relevant
Plan requirements;
do not reach Maximum Rehabilitative Capacity or are otherwise responsive to treatment. Nonresponsiveness would
include, but not be limited to, nonresponsiveness due to the need for participant behavioral modification recommended

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14

 by the treating Approved Physician;

¾ provide accurate information to, and follow the directions of, a treating Approved Physician. Following the directions
¾
¾
¾
¾
¾
¾
¾
¾

of a treating Approved Physician includes, but is not limited to, any recommended treatment, therapy, course of
action, abstinence or rehabilitation program;
keep and be on time for all scheduled appointments with health care providers. Except in extraordinary
circumstances as determined by the Claims Administrator, a first missed appointment will result in a warning and/or
suspension of benefits and a second missed appointment will result in a termination of benefits;
do not engage in conduct which hinders your recovery;
report in to your supervisor periodically as directed until you are able to return to work, including notice of expected
recovery time after each appointment with the treating Approved Physician;
immediately inform your supervisor that you have been released by an Approved Physician to return to full or
Transitional Duty, and timely report to work in accordance with such work release;
do not apply for or receive benefits with respect to the Injury from any workers' compensation law (regardless of
whether or not any coverage for benefits is actually in force under such law);
are truthful and do not demonstrate bad faith in connection with administration of the Plan, including, but not limited
to, any aspect of the required information supplied as part of the Injury reporting or employment process;
fully cooperate with the Claims Administrator (including, but not limited to, the requirements on providing
information) in connection with the administration of the Plan, including, but not limited to, subrogation or
coordination of benefits procedures; and
comply with the provisions of this summary plan description and the official Plan document.

DETAILED CLAIM PROCEDURES
Filing a Claim for Benefits
A claim for Medical Benefits, Wage Replacement Benefits, or Dismemberment Benefits under the Plan will be initiated
by you (or your Representative) by complying with the injury notice and medical treatment requirements found in the
REQUESTING BENEFITS section and other parts of this booklet. A claim for Death Benefits under the Plan shall be
initiated by a Beneficiary providing notice of entitlement thereto to the Claims Administrator within 90 days after the date
of the participant's death. If, within two years after any amount becomes payable under this Plan to an individual, but
the individual fails to claim such amount and the Claims Administrator has exercised reasonable diligence in attempting
to make such payment, the amount shall be forfeited and shall cease to be a liability of this Plan.

¾ What is a Claim -- Each (1) medical service or supply for which payment is requested, (2) Wage Replacement
Benefit for a particular payroll period, or (3) claim for Death Benefits or Dismemberment Benefits, will be deemed a
separate "claim" for benefits that is subject to a determination under the Plan. The Plan's payment of a particular
claim (for example, payment for an initial medical evaluation, even on a claim that may have been reported late)
does not waive or otherwise prejudice the Claims Administrator's or Appeals Committee's right to deny another
particular claim or all future claims for benefits under the Plan. Any failure by the Claims Administrator or Appeals
Committee to apply any provisions of this Plan to any particular situation shall not represent a waiver of the Claims
Administrator's or Appeals Committee's authority to apply such provisions thereafter.
¾ Who is a Claimant -- A claimant or a claimant's Representative may file a claim for benefits under the Plan, as well
as an appeal of an Adverse Benefit Determination. References in this DETAILED CLAIMS PROCEDURES section
to "claimant" may include you, a medical provider seeking payment for a service or supply, or a claimant's
authorized Representative, as applicable.
¾ Information to Submit -- Claims must include the information required by the REQUESTING BENEFITS section
above and such other reasonable information requested by the Claims Administrator, such as medical records or a
written statement from an independent service provider evidencing the date, type of services rendered, and the total
cost of such services. In addition, the Claims Administrator may require the claimant to provide a written and
signed statement that provides that the amounts requested for payment under this Plan have not been reimbursed,
or is not reimbursable under any other plan or program. Further, the Claims Administrator may also request that the
claimant file all appropriate claims and requests for payment from any other plan or program maintained by the
claimant prior to making any payments under this Plan. See the OFFSET, REIMBURSEMENT, AND RECOVERY
OF BENEFITS section of this booklet.
¾ Submission of Medical Bills for Payment -- Approved Physicians and Approved Facilities will be requested to
invoice all health care-related charges directly to the Claims Administrator (or the Employer, which will immediately
transmit such invoice to the Claims Administrator). However, in the event that you receive such an invoice or pay
such a charge, you must file all requests for payment or reimbursement of covered charges with the Claims
Administrator within 30 days from the date such expenses are incurred or, if later, the date you receive an invoice
from an Approved Physician, Approved Facility, or other health care provider (in the case of Emergency Care) for
such expenses.
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 ¾ Incomplete Claim Submissions -- If a claim, as originally submitted, is not complete, the Claims Administrator will
notify the claimant in the manner described below, and the claimant will have the responsibility for providing the
missing information. Subject to the applicable provisions of this DETAILED CLAIMS PROCEDURES, if the period of
time for a particular claim is extended due to a claimant's failure to submit information necessary to decide a claim,
the period for making the benefit determination will be suspended from the date on which the notification of the
extension is sent to the claimant until the date on which the Claims Administrator receives the claimant's response
to the request for additional information.
Claims Review Procedures
¾

Notice of Initial Benefit Determination - The Claims Administrator will provide notice to the claimant of its initial
benefit determination as follows:
•

Urgent Care, Pre-Service Medical Claims - In the case of an Urgent Care Claim for Medical Benefits, the
Claims Administrator will notify the claimant of the Plan's initial benefit determination (whether adverse or not) as
soon as possible, taking into account the medical exigencies of the particular claim, but not later than 72 hours
after receipt of the claim. However, if the claimant (1) fails to follow the Plan's procedures for filing an Urgent
Care Claim, or (2) otherwise fails to provide sufficient information to determine whether, or to what extent,
benefits are covered or payable under the Plan on an Urgent Care Claim, then:
¾

¾
¾

•

The Claims Administrator will notify the claimant as soon as possible, but not later than 24 hours after its
receipt of the claim, of the procedure to follow or the specific information necessary to complete the claim.
This notice requirement will only apply to the extent that such failure is a communication by a claimant that
is received by the Claims Administrator, and the communication names a specific claimant, a specific
medical condition or symptom, and a specific treatment, service or product for which approval is requested.
The claimant will then be given a reasonable amount of time, taking into account the circumstances, but not
less than 48 hours, to correct such failure.
The Claims Administrator will then notify the claimant of the Plan's initial benefit determination as soon as
possible, but not later than 48 hours after the earlier of (i) the Claims Administrator's receipt of the specified
information necessary to complete the claim, or (ii) the end of the time period given the claimant to provide
such information.

Concurrent Medical Care Decisions - If the Claims Administrator has approved an ongoing course of medical
treatment to be provided over a period of time or number of treatments:
¾

¾

¾

The Claims Administrator will notify the claimant of any reduction or termination by the Plan of such course
of treatment. Such reduction or termination will be considered an Adverse Benefit Determination and the
Claims Administrator will notify the claimant sufficiently in advance of the reduction or termination to allow
the claimant to appeal and obtain a benefit determination on review before the course of treatment is
actually reduced or terminated.
Any request by a claimant to extend the course of treatment beyond the prescribed period of time or number
of treatments previously approved by the Plan that is an Urgent Care Claim will be decided as soon as
possible, taking into account the medical exigencies of the claim. The Claims Administrator will make an
initial benefit determination, whether adverse or not, within 24 hours after its receipt of the claim, provided
that any such claim is made to the Plan at least 24 hours prior to the expiration of the prescribed period of
time or number of treatments. If such claim is not made to the Plan within such 24-hour period, the request
will be treated as an Urgent Care Claim and be decided within the normal Urgent Care Claim timeframes (in
other words, as soon as possible, taking into account the medical exigencies of the claim, but not later than
72 hours after receipt).
Any request by a claimant to extend the course of treatment beyond the prescribed period of time or number
of treatments previously approved by the Plan that is not an Urgent Care Claim will be treated as a new
benefit claim and decided within the timeframe appropriate to the type of claim (i.e., as a Pre-Service Claim
or a Post-Service Claim).

Notification of any Adverse Benefit Determination concerning a request to extend the course of treatment,
whether involving an Urgent Care Claim or not, will be made in accordance with the provisions of this section of
the booklet.
•

Non-Urgent Care, Pre-Service Medical Claims - In the case of a Pre-Service Claim for Medical Benefits that is
not an Urgent Care Claim, the Claims Administrator will notify the claimant of the Plan's initial benefit
determination (whether adverse or not) within a reasonable period of time appropriate to the medical
circumstances, but not later than 15 days after its receipt of the claim.

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 ¾

¾

•

If the claimant fails to follow the Plan's procedures for filing a non-urgent care, Pre-Service Claim, then the
Claims Administrator will notify the claimant as soon as possible, but not later than 5 days after its receipt of
the claim, of the procedure to follow. This notice requirement will only apply to the extent that such failure is
a communication by a claimant that is received by the Claims Administrator, and the communication names
a specific claimant, a specific medical condition or symptom, and a specific treatment, service or product for
which approval is requested.
The Claims Administrator may extend the 15-day benefit determination period up to an additional 15 days if
it determines that, due to matters beyond the control of the Plan, an initial benefit determination cannot be
made within the first 15-day period, and notifies the claimant of the special circumstances requiring the
extension and the date by which the Plan expects to render a decision. If additional information is
necessary to decide the claim, the extension notice shall specifically describe the required information and
the claimant shall then be given at least 45 days to provide the specified information. However, the Claims
Administrator's timeframe for making a benefit Determination shall be suspended until the date upon which
the claimant responds to the request for additional information.

Post-Service Medical Benefit, Wage Replacement Benefit, Death Benefit, and Dismemberment Benefit
Claims - In the case of a Post-Service Claim for Medical Benefits or a claim for Wage Replacement Benefits,
Death Benefits or Dismemberment Benefits, the Claims Administrator will notify the claimant of an Adverse
Benefit Determination within 30 days after its receipt of the claim. The Claims Administrator may extend this
period up to an additional 15 days if the Claims Administrator determines that an extension is necessary due to
matters beyond the control of the Plan. Notice of such extension must be provided to the claimant prior to the
expiration of the initial 30-day period and state (1) the special circumstances requiring the extension, and (2) the
date by which the Plan expects to render a decision. If the extension relates to a claim for Wage Replacement
Benefits, such notice will also state (1) the standards on which entitlement to benefits is based, and (2)
unresolved issues that prevent a benefit determination on the claim and what additional information is needed to
resolve those issues. If additional information is requested with the extension notice, the claimant will have 45
days from the date of the notice of extension to provide the specified information. However, the Claims
Administrator's timeframe for making a benefit determination shall be suspended until the date upon which the
claimant responds to the request for additional information.

¾ Manner and Content of Adverse Benefit Determinations - If the initial benefit determination is an Adverse Benefit
Determination, the Claims Administrator will provide a written or electronic notice to the claimant that satisfies the
following requirements:
•
•
•
•

•

•

•

•
•

Any electronic notice will satisfy ERISA regulations that specify the standards for electronic disclosure of benefit
plan information;
The notice will be written in a manner calculated to be understood by the claimant;
The notice will set forth the specific reason or reasons for the Adverse Benefit Determination, making reference
to the specific Plan provisions on which the Adverse Benefit Determination is based;
If an internal rule, guideline, protocol or other similar criterion was relied upon in making an Adverse Benefit
Determination on a claim for Medical Benefits or Wage Replacement Benefits, the notice will state that such
rule, guideline, protocol or other similar criterion was relied upon and that a copy thereof will be provided free of
charge to the claimant upon request;
If the Adverse Benefit Determination of a Medical Benefits or Wage Replacement Benefits claim is based upon
medical necessity, an experimental treatment or similar exclusion or limit, the notice will provide either an
explanation of the scientific or clinical judgment for the Adverse Benefit Determination, applying the terms of the
Plan to the claimant's medical circumstances, or a statement that such explanation will be provided free of
charge upon request;
The notice shall include a statement that in the case of an Adverse Benefit Determination on review by the
Appeals Committee, the Plan offers no further voluntary levels of appeal and that the claimant can pursue his or
her right to bring a legal action under ERISA section 502(a);
If the initial Adverse Benefit Determination involves an Urgent Care Claim, the notice will provide a description of
the expedited review process applicable to such claims. Notification of an Adverse Benefit Determination that
involves an Urgent Care Claim may be provided to the claimant orally within the time frames specified above,
provided that the oral notification satisfies the requirements of this subsection and that a written or electronic
notice satisfying the requirements of this subsection is furnished to the claimant not later than 3 days after the
oral notification;
The notice will describe any additional materials or information necessary for the claimant to perfect the claim
and explain why such material or information is necessary; and
The notice will provide a description of the Plan's review procedures (including the time limits applicable to these
review procedures).

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 ¾ Appeal of Adverse Benefit Determinations

-- The claimant may appeal in writing an Adverse Benefit
Determination to the Appeals Committee within the following number of days following his or her receipt of the
Adverse Benefit Determination from the Claims Administrator:
•
•

180 days for a Medical Benefits or Wage Replacement Benefits claim; or
60 days for a Death Benefit or Dismemberment Benefit claim.

If the Adverse Benefit Determination involves an Urgent Care Claim for Medical Benefits, the claimant may request
orally or in writing an expedited review of the Adverse Benefit Determination and all necessary information, including
the Plan's benefit determination on review, will be transmitted between the Plan and the claimant by telephone,
facsimile or other available expeditious method.

¾ Appeals Committee Consideration -- When reviewing the appeal of an Adverse Benefit Determination, the
Appeals Committee will comply with the following requirements:
•

•

•
•

•

The claimant may submit written comments, documents, records, and other information relating to the claim for
benefits, and the Appeals Committee will take all of such information into account when reviewing the claim,
without regard to whether such information was submitted or considered in the initial benefit determination;
The claimant may receive, upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information that is relevant to the claimant's claim for benefits (as determined by
the Appeals Committee);
The Appeals Committee review of an Adverse Benefit Determination on a claim for Medical Benefits or Wage
Replacement Benefits will not give any deference to the claimant's initial Adverse Benefit Determination.
If the appeal request on a Medical Benefits or Wage Replacement Benefits claim is based in whole or in part on
a medical judgment, including determinations with regard to whether a particular treatment, drug or other item is
experimental, investigational or not Medically Necessary or appropriate, the Appeals Committee will consult with
an Approved Physician who has appropriate training and experience in the field of medicine involved in the
medical judgment. This Approved Physician will not be an individual who was consulted in connection with the
initial Adverse Benefit Determination or a subordinate of such individual
Upon request of a claimant, the Appeals Committee will identify the individual names of any medical or
vocational experts whose advice was obtained in connection with an initial Adverse Benefit Determination of a
Medical Benefits or Wage Replacement Benefits claim, without regard to whether the advice of such experts
was relied upon in making the benefit determination.

¾ Timing of Notice of Benefit Determination on Review - The Appeals Committee will provide notice to the
claimant, as described below, of the Plan's benefit determination on review in accordance with the following
timeframes:
•

•

•

Urgent Care, Pre-Service Medical Claims - In the case of a Pre-Service Claim for Medical Benefits that is an
Urgent Care Claim, the Appeals Committee will notify the claimant of the Plan's benefit determination on review
as soon as possible, taking into account the medical exigencies of the claim, but not later than 72 hours after its
receipt of the claimant's appeal request. No extension of time is available for Appeals Committee
determinations on the review of claims for Medical Benefits.
Non-Urgent Care, Pre-Service Medical Claims - In the case of a Pre-Service Claim for Medical Benefits that is
not an Urgent Care Claim, the Appeals Committee will notify the claimant of the Plan's benefit determination on
review within a reasonable period of time appropriate to the medical circumstances, but not later than 30 days
after its receipt of the appeal request. No extension of time is available for Appeals Committee determinations
on the review of claims for Medical Benefits.
Post-Service Medical Benefit, Wage Replacement Benefit, Death Benefit, and Dismemberment Benefit
Claims - In the case of a Post-Service Claim for Medical Benefits or a claim for Wage Replacement Benefits,
Death Benefits or Dismemberment Benefits, the Appeals Committee will notify the claimant of the Plan's benefit
determination on review within 45 days after its receipt of the appeal request. The Appeals Committee may
extend this period up to an additional 45 days on a claim for Wage Replacement Benefits, Death Benefits, or
Dismemberment Benefits if the Appeals Committee determines that an extension is necessary due to matters
beyond the control of the Plan. Written or electronic notification of an extension must be provided to the
claimant prior to the expiration of the initial 45-day period and indicate the special circumstances requiring the
extension and the date by which the Plan expects to render a decision.

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 ¾ Manner and Content of Benefit Determination on Review - The Appeals Committee will provide a claimant with
written or electronic notification of the Plan's benefit determination on review. If the decision on review is an
Adverse Benefit Determination, the notice must satisfy all the requirements set forth in the first six bullets under the
"Manner and Content of Adverse Benefit Determination" section above, and also state that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant's claim for Plan benefits.

¾ Extension of Time Frames Allowed by Law or Agreement - In the event that ERISA rules and regulations permit
additional time for decisions or actions by the Claims Administrator or Appeals Committee, the Claims Administrator
or Appeals Committee may exercise their discretion to utilize (but not exceed) those extended time frames;
provided, however, that this discretion will only be exercised when necessary to provide a full and fair review of a
claimant's right to benefits in accordance with the terms of this Plan (for example, additional time is needed to obtain
an appointment and results of a medical examination). Upon request by the Plan, a claimant may also voluntarily
agree to an extension or further extension of any time period within which the Plan must decide a claim.

¾ Exhaustion of Administrative Remedies: No legal action can be brought by or with respect to you to recover
benefits under the Plan before the foregoing claim procedures have been exhausted. Every ERISA right of action
by you, your Representative, Beneficiary or estate against the Plan, or any Plan fiduciary, must be brought no later
than one (1) year from the date that the foregoing claim procedures have been exhausted (due to claimant inaction,
claimant receipt of a final Adverse Benefit Determination on appeal, or otherwise). Unless contrary to applicable
law, any ERISA right of action or other legal action challenging a Plan decision shall be brought in the United States
District Court for the Northern District of Texas, Dallas Division.
FINAL COMPROMISE AND SETTLEMENT
At the Plan Administrator's option within 120 weeks after the date of Injury, and at any time if the Plan Administrator
elects to extend such 120-week period after the date of Injury, the Plan Administrator may notify you of the Plan's
intention to be released from any further known and unknown benefit and all other injury-related claims by you and pay a
final claim settlement to, or with respect to, you in exchange for your agreement to a release of liability in favor of the
Plan, Plan Administrator, Employer, Claims Administrator, Appeals Committee and other interested parties with respect
to such claims. In that event, the Plan Administrator may appoint an actuary, appraiser, and/or Approved Physician to
investigate, determine, and capitalize such claims, or use such other valuation method as the Plan Administrator may
specify. The payment by the Plan and/or Employer of the value of such claims (as finally determined by the Plan
Administrator) will be made in such manner as the Plan Administrator may determine. No additional claims will be
subsequently accepted with respect to such Injury. Any actuary or appraiser will apply such rules, standards, and
assumptions (present value discount, inflation, and mortality rates, etc.) as the Plan Administrator may determine. You
must cooperate and provide all information, sign such forms and agreements, and submit to all medical examinations as
may be requested by the Plan Administrator to arrive at a valuation and settlement of your claims. No further benefits
will be payable to, or with respect to, you if you fail or refuse to accept the Plan Administrator's claim valuation, sign the
release agreement presented by the Plan Administrator, or otherwise comply with the requirements of this section or
other provisions of the Plan. Prior or subsequent to the Plan Administrator's evaluation and determination of the value of
your claims, the Plan Administrator may determine to not capitalize and satisfy any such claim as described above and
to instead continue eligibility for benefit payments and defer the above valuation and settlement.
OFFSET, REIMBURSEMENT, AND RECOVERY OF BENEFIT
Offset For Other Benefits
Benefit payments under this Plan shall be reduced by:
¾
¾
¾

the amount of any applicable federal or state income, employment, or other taxes that are required by law to be
withheld;
your earnings from any employer after disability begins or amounts legally garnished; and
except as otherwise specified in the Plan’s “Coordination of Benefits” section, any amount paid or available with
respect to your Injury under the following: Social Security Act, the Railroad Retirement Act, workers’ compensation
law, unemployment compensation law, occupational disease law or any other government program or similar law.
The Plan shall deduct from Plan benefits the estimated benefit amounts for which you are likely to be eligible under
such other deductible sources of income, regardless of whether you actually apply for such other deductible source
of income.

Coordination Of Benefits
If you are covered under this Plan and one or more other benefit plans, then (unless otherwise subject to the
“Subrogation and Reimbursement Rights” section) any Medical Benefits and Wage Replacement Benefits payable under
this Plan will be either regular benefits or reduced benefits that, when added to the benefits of the other plan(s), will not
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 exceed 100% of the amount described herein. The purpose of this provision is to prevent duplicate payments under
plans that would exceed 100% of the benefits described in this Plan. In the coordination of benefits, one of the plans will
be designated as the primary plan and the other plans will be designated as secondary. The primary plan will pay its full
benefits first, then the secondary plan(s) will pay, but payments will be coordinated so that the total from all plans will not
be more than the benefits described in this Plan.
¾

¾

¾

¾

For purposes of this section, “other benefit plans” shall mean any health or disability-type benefits provided under (1)
any individual, group, blanket or franchise plan, (2) other prepaid coverage under service plan contracts, or under
group or individual plans, policies or a practice, (3) uninsured arrangements of group or group-type coverage, (4)
labor-management trusteed plans, labor organization plans, employer organization plans, or employee benefit
organization plans, (5) benefits coverage in a group, group-type and individual policy or policies of automobile
coverage (including, but not limited to medical payment coverage, personal injury protection coverage, uninsured
motorists coverage and underinsured motorists coverage, and (6) any other group-type contracts – that is, those
contracts which are not available to the general public and can be obtained and maintained only because of
membership in or connection with a particular organization or group.
Except as otherwise specified in this section, if a person is covered by more than one plan to which this coordination
of benefits provision applies, then the following rules will determine which plan will be primary:
•
With respect to health benefits only, when only one of the plans has a coordination of benefits provision, then
the plan without such a provision will be the primary plan;
•
The plan under which the person is covered other than as a dependent (for example, active employee, former
employee, inactive employee, COBRA participant or retiree) will be the primary plan over a plan which covers
the person as a dependent;
•
The plan under which the person is covered as an active employee will be the primary plan over a plan which
covers the person as former employee, inactive employee, COBRA participant or retiree;
•
If none of these rules establish an order of benefit determination, then the plan that has covered the person for
the longer period of time will be the primary plan.
Any provision herein to the contrary notwithstanding, Medical Benefits payable under this Plan to or with respect to
you if you are in "current employment status" as defined for purposes of Medicare, and are eligible for benefits under
Medicare, shall be primary and shall not be reduced by the amount of benefits payable to or with respect to you
under Medicare, which will be considered the secondary plan. However, Medical Benefits payable under this Plan
to or with respect to you if you are not in "current employment status," as defined for purposes of Medicare, and are
eligible for benefits under Medicare, shall be secondary and reduced by the amount of all benefits payable to or with
respect to you under Medicare, which will be the primary plan. In addition, the fact that you are eligible for or
provided medical assistance under a state plan will not be taken into account in making payments under the Plan.
You must notify the Claims Administrator of such other benefit plans and cooperate with the Claims Administrator in
(1) furnishing copies of other policies, coverages or plans which may be applicable to the Injury, and in (2)
completing and returning to such Claims Administrator any questionnaire or forms inquiring about, or assigning
rights to recover under, other policies, coverages or plans which may cover or be applicable to you.

Subrogation and Reimbursement Rights
For purposes of “Subrogation and Reimbursement Rights”, the “Notice of Legal Proceedings,” and “Assignment of
Rights” sections of this Plan, the term “Payee” means you or your Beneficiary or your respective family members, heirs,
estate, or other Representative (in their individual or representative capacity), singularly or collectively as the context
may require to give the Plan the broadest possible rights of recovery.
¾

¾

Right of Subrogation - If a Payee becomes entitled to or directly or indirectly receives Plan benefits for any Injury
caused by the negligence or other act or omission of any person or organization (including, but not limited to, the
Employer), and is (or later becomes) entitled to or otherwise collects any damages or other compensation in
connection with such Injury (including, but not limited to, damages for negligence, survival, wrongful death or other
legal or equitable action), whether by insurance, litigation, settlement or other proceeding, the Payee shall
automatically be required to (i) subrogate his, her or its right to and reimburse the Plan out of said damages or other
compensation to the extent of the Plan benefits paid to, or with respect to, the Payee and (ii) subrogate his, her or
its right to and reimburse the Plan out of said damages or other compensation for all medical management,
investigation, attorneys’ fees, costs of recovery, and other expenses related to the claim for benefits (including any
subrogation proceeding). The subrogation rights of this Plan even apply with respect to a Payee who is (or later
becomes) entitled to or otherwise collects any damages or other compensation in connection with such Injury but
has not and will not receive any Plan benefits if such person’s claim for damages or other compensation is
dependent on whether the participant had or has a valid claim against a third party.
Written Confirmation - Upon request of the Plan, the Payee shall provide the Plan written confirmation of this
subrogation right, including execution of any assignment, lien form or other document requested by the Claims
Administrator to enable the Plan to recover such Plan benefits and related expenses. Any failure of a Payee to give

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 ¾

¾

¾

written confirmation of the Plan’s subrogation rights does not adversely affect its rights of subrogation because the
Plan’s right of subrogation arises automatically once payment under this Plan is made to or on behalf of the Payee.
Right to Reimbursement - If (i) a Payee fails, refuses or neglects to reimburse the Plan or otherwise comply with
the provisions of this section, or (ii) payments are made under the Plan based on fraudulent information or otherwise
in excess of the amount necessary to satisfy the provisions of the Plan, then the Plan shall still have all remedies
and rights of recovery specified herein. The Plan shall also have the right to terminate or suspend benefit payments
and/or recover the reimbursement of all amounts above due to the Plan by withholding, offsetting and recovering
such amounts out of any future Plan benefits or amounts otherwise due from the Plan to or with respect to such
Payee.
Right of Recovery - The Plan shall have the first lien recovery against any benefits paid or to be paid by the Plan.
The Plan shall also have the right to bring a lawsuit and assert a constructive trust or other interest against any and
all persons that have assets to which the Plan can claim rights. The Plan has the right of first recovery from any
judgment, settlement or other payment, regardless of whether the Payee has been "made whole."
Attorney’s Fees and Expenses - The Plan's subrogation rights and first lien rights will not be reduced by attorneys'
fees or expenses incurred by any party in pursuing recovery against a third party and the "common fund" doctrine
shall not apply. Any attorneys' fees and/or expenses incurred by or at the request of the Payee or his, her or its
attorneys in a third party or other action shall be the sole responsibility of such party.

Notice of Legal Proceedings
A Payee (whether or not such person has received or may in the future directly or indirectly receive Plan benefits) shall
provide the Claims Administrator with prior written notice of the involvement of such party in any lawsuit, settlement
discussion or other proceeding (for negligence, wrongful death, survival or other cause of action), one of the principal
purposes of which is recovering, from any person or organization, damages or other compensation in any way related to
any Injury for which Plan benefits have been or may in the future be paid. The Plan shall have the right to intervene for
itself and on behalf of a Payee in any such lawsuit, settlement discussion or other proceeding. If a Payee neglects, fails
or refuses to seek a recovery from any person or organization for any Injury caused by the negligence or other act or
omission of such person or organization, the Plan shall have the right to institute a lawsuit or other proceeding or do any
other act that in the opinion of the Plan Administrator may be necessary or desirable to recover the Plan benefits paid
(and to be paid in the future), plus all medical management, investigation, attorneys’ fees, costs of recovery, and other
expenses incurred by the Plan.
Assignment of Rights
By participating in this Plan, a participant obligates himself or herself, as well as all other Payees (in both their individual
and representative capacities), to the provisions of this Plan, including, without limitation, the “Subrogation and
Reimbursement Rights, “Notice of Legal Proceedings,” and “Assignment of Rights” sections hereof. Upon the request of
the Claims Administrator, a Payee shall assign to the Plan the right to intervene in or institute any lawsuit, settlement
discussion, or other proceeding described in the “Subrogation and Reimbursement Rights, and “Notice of Legal
Proceedings,” sections, and to use the name of such party for such purpose. The Plan shall have the right to select
legal counsel of its own choice and such counsel shall have complete control over the conduct of any such lawsuit,
settlement discussion, or other proceeding without the consent or participation of any such Payee. Whenever the Plan
shall intervene in or institute any lawsuit or other proceeding as permitted by the provisions of this section, the Plan may
pursue same to a final determination and the Plan expressly reserves the right to appeal from any adverse judgment or
decision. The Payee shall give the Plan all reasonable aid in any such lawsuit, settlement discussion, or other
proceeding in effecting settlement, in securing evidence, in obtaining witnesses, or as may otherwise be requested by
the Plan. The Payee shall release the Plan, the Employer, the Plan Administrator, the Claims Administrator, the
Appeals Committee, and their respective directors, officers, agents, consultants, attorneys, and employees from all
claims, causes of action, damages and liabilities of whatever kind or character that may directly or indirectly arise out of
the pursuit or handling by the Plan of any such lawsuit, settlement discussion or other proceeding.
Right To Receive And Release Necessary Information
The Claims Administrator may, without the consent of or notice to any person or organization, release to or obtain from
any person or organization, information needed to implement Plan provisions. When you request benefits, you must
furnish all information requested by the Claims Administrator.
APPLICABLE LAW
This Plan shall be governed and construed in accordance with the provisions of ERISA and, except where superseded
by federal law, the laws of the State of Texas. This Plan is exempt from the group health plan requirements of:

¾ Part 7 of ERISA by operation of one or a combination of the excepted benefits listed in ERISA Section 733(c)(1) and
is therefore exempt from the standards, rules, regulations and other requirements of the Health Insurance Portability
and Accountability Act (“HIPAA”),
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 ¾ The Public Health Service Act by operation of one or a combination of the excepted benefits listed in Title 42 of the
United States Code Section 300gg-91(c)(1) and is therefore exempt from the standards, rules, regulations and other
requirements of the Patient Protection and Affordable Care Act (“PPACA”).
¾ Any other standards, rules, regulations or other requirements that utilize or reference the excepted benefits definition
listed in ERISA Section 733(c)(1)
Notwithstanding the foregoing, the Plan shall comply with the requirements of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) and the uniformed Services Employment and Reemployment Rights
Act of 1994, as amended (“USERRA”), to the extent such laws are applicable or appropriate to the Plan. The Plan
Administrator shall have full power and discretion to make good faith interpretations of the extent to which such
requirements are applicable or appropriate to the Plan.
AMENDMENT OR TERMINATION OF PLAN
The Company presently intends to continue the Plan indefinitely, but the Company reserves the right to amend, modify,
or terminate the Plan at any time; provided, however, that no such amendment or termination will reduce the amount of
any benefit payable to or with respect to you under the Plan in connection with, an Injury occurring prior to the date of
such amendment or termination. Any such amendment or termination will be adopted pursuant to formal written action
of a representative authorized to act on behalf of the Company.
DEFINITIONS
This section defines specific terms used in this booklet. These definitions should not be interpreted to extend coverage
unless specifically provided for in the other sections of this booklet and the Plan document.
Accident
An event that -¾
¾
¾
¾

was sudden, unforeseen, unplanned, and unexpected;
occurred at a specifically identifiable time and place;
occurred by chance or from unknown causes; and
results in physical injury to you.

Adverse Benefit Determination
A denial, reduction or termination of, or a failure to provide or make payment (in whole or in part) for, a Plan benefit. For
example, this includes denial, reduction or termination of benefits based upon (1) your ineligibility to participate in the
Plan, (2) application of any utilization review, (3) a medical service being considered experimental, investigational or not
medical necessary, or (4) you no longer being Disabled.
Appeals Committee
The individual or individuals appointed by the Plan Administrator to make determinations on appeal of benefit claims
under this Plan on behalf of the Employer.
Approved Facility
A hospital, other medical care facility or other medical service or supply provider either expressly approved by the
Company, included on an approved list of facilities adopted by the Company or otherwise approved in writing by the
Company upon the request of a Plan participant.
Approved Physician
A person duly licensed under applicable state law as a Medical Doctor or Doctor of Osteopathy and either expressly
approved by the Company, included in an approved list of physicians adopted by the Company, or otherwise approved
in writing by the Company upon the request of a Plan participant.
Beneficiary
The person or persons determined in the following priority:
¾
¾
¾

If there is an Eligible Spouse, all Death Benefits shall be paid to the Eligible Spouse.
If there is no Eligible Spouse, Death Benefits shall be paid in equal shares to the Eligible Children. If an Eligible
Child has predeceased the participant, Death Benefits that would have been paid to that child if he or she had
survived the participant shall be paid in equal shares per stirpes to the children of such deceased child.
If the participant is not survived by an Eligible Spouse or Eligible Child, any Death Benefits shall be paid to a
surviving dependent (as determined in accordance with the support criteria set forth in section 152 of the Internal
Revenue Code and such other rules as the Claims Administrator may prescribe) of the participant who is a parent,

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 ¾
¾

sibling, or grandparent of the deceased participant. If more than one of those dependents survives the participant,
any Death Benefits shall be divided among them in equal shares.
If the participant is not survived by an Eligible Spouse, Eligible Child, or dependent who is a parent, sibling, or
grandparent, Death Benefits shall be paid to the Participant’s estate.
For purposes of this Section:
•
"Eligible Spouse" means the surviving spouse of the deceased participant, recognized by a marriage certificate
issued under the laws of the State of Texas or similar government authority, or by a Texas court decree of
common law marriage (obtained at such person's sole initiative and expense).
•
"Eligible Child" means a surviving child of the deceased participant, whether by blood, marriage, or legal
adoption, if the child is:
¾ under 18 years of age;
¾ enrolled as a full-time student in an accredited educational institution and is less than 25 years of age; or
¾ because of a physical or mental handicap, a dependent (as determined in accordance with the support
criteria set forth in section 152 of the Internal Revenue Code and such other rules as the Claims
Administrator may prescribe) of the deceased Participant at the time of the participant's death.

Claims Administrator
The individual, individuals or entity appointed by the Plan Administrator to make initial determinations of benefit claims
under this Plan on behalf of the Employer.
Course and Scope of Employment
An activity of any kind or character for which you were hired and that has to do with, and originates in, the work,
business, trade or profession of the Employer, and that is performed by you in the furtherance of the affairs or business
of the Employer. The term includes activities conducted on the premises of the Employer or at other locations
designated by the Employer. This term does not include:

¾ transportation to and from your place of employment, unless:
•

the transportation is furnished as part of your employment arrangement (for example, an Employer car) or is
paid for by the Employer (for example, mileage expense reimbursement). This exception does not include
commuting to or from your usual place of employment;
•
the means of the transportation are under the control of the Employer; or
•
you are directed in your employment to proceed from one place to another place. Commuting to the place
where you begin Employer business and commuting away from the place where you cease Employer business
will not be covered if such transportation is not paid for by the Employer or otherwise under Employer control.
¾ travel by you in furtherance of the affairs or business of the Employer if such travel is also in furtherance of personal
or private affairs by you, unless:
•
the travel to the place where the Injury occurred would have been made even had there been no personal or
private affairs by you to be furthered by the travel; and
•
the travel would not have been made had there been no affairs or business of the Employer to be furthered by
the travel.
¾ any injury occurring before you clock in or otherwise begin work for the Employer, or after you clock out or otherwise
cease work for the Employer, unless the Injury occurs in a parking lot, common area or other area owned by the
Employer (or for which the Employer is responsible for maintenance).
¾ any injury occurring while you are on a work break, unless (1) the injury occurs while you are on a work break inside
the Employer's facility (for purposes other than eating or smoking), (2) such work break was authorized by your
supervisor (or was otherwise permitted consistent with your job description), and (3) you are scheduled to return to
work that same day following such work break, and (4) you have not clocked out or otherwise ceased work for the
Employer.
Covered Charge
Medical services and supplies that are approved by the Claims Administrator, as described in the MEDICAL BENEFITS
section of this booklet.
Cumulative Trauma
Damage to the physical structure of your body occurring as a direct result of rapid, repetitious, physically traumatic
activities that occur in the Course and Scope of Employment. The term “Cumulative Trauma” does not mean fatigue,
soreness or general aches and pain that may have been caused, aggravated, exacerbated or accelerated by your
Course and Scope of Employment. No benefits will be payable with respect to Cumulative Trauma unless you have
completed at least 180 days of continuous, active employment with the Employer and have been regularly engaged in
the Course and Scope of Employment with the Employer involving rapid, repetitious, physically traumatic activities
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 Death Benefits
Any benefit payable under the DEATH BENEFITS section of this booklet.
Disabled or Disability
A Total Disability or a Partial Disability:
¾

¾

A “Total Disability” means a medically demonstrable anatomical or physiological abnormality caused by an Injury, and
commencing within six months from the date of Injury, which •
causes you to be unable to perform the normal duties for which you were employed;
•
causes you to be under the regular care of an Approved Physician; and
•
causes you to be unable to engage in Transitional Duty or any other occupation for wage or profit.
A “Partial Disability” means a medically demonstrable anatomical or physiological abnormality caused by an Injury that
results in you being –
•
unable to fully perform the normal duties for which you were employed;
•
under the regular care of an Approved Physician;
•
released to Transitional Duty by such Approved Physician; and
•
working for the Employer in a Transitional Duty position approved by the Employer.

Dismemberment Benefits
Any benefit payable under the DISMEMBERMENT BENEFITS section of this booklet.
Emergency Care
A service or supply provided with respect to a medical condition manifesting itself by a sudden and unexpected onset of
acute symptoms of sufficient severity that in the absence of immediate medical attention could reasonably be expected
to (1) result in death, disfigurement, or permanent disability, or (2) result in substantial impairment of any bodily organ,
part, or function.
Employer
Costco Wholesale Corporation and any other related trade or business that participates in the Plan in accordance with
the terms of the official Plan document.
Injury
Damage or harm to the physical structure of the body resulting from either (1) an Accident, (2) an Occupational Disease,
or (3) Cumulative Trauma, and as further described in the COVERED AND NON-COVERED INJURIES section of this
booklet.
Maximum Benefit Limit
The maximum amount of all benefits payable to you under the Plan with respect to an Injury. Payments made for each
form of benefit will be counted towards the Maximum Benefit Limit amount. The Maximum Benefit Limit for this Plan is
$250,000; provided, however, that the aggregate amount of the Maximum Benefit Limits with respect to claims of all
participants arising out of a single Accident, or related series of Accidents, or Occupational Disease or Cumulative
Trauma exposure, will not exceed $750,000.
Maximum Rehabilitative Capacity
The earliest date after which, based upon reasonable medical probability, further material recovery from or lasting
improvement to an injury can no longer reasonably be anticipated.
Medical Benefits
Any benefit payable under the MEDICAL BENEFITS section of this booklet.
Medically Necessary
Services, procedures or supplies, which are:
¾
¾
¾

required, recognized, and professionally accepted nationally by physicians as the usual, customary and effective
means of diagnosing or treating the condition;
the most economical supplies or levels of service that are appropriate and available for your safe and effective
treatment; and
not primarily for the convenience of you, your family, a physician, or a facility.

Even though a physician may have prescribed a particular treatment, such treatment may not be considered Medically
Necessary within this definition or may otherwise be excluded from coverage under the terms of this Plan.
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 Occupational Disease
A condition marked by a pronounced deviation from your normal healthy state arising out of your assigned duties in your
Course and Scope of Employment. Occupational Disease includes other diseases or infections that naturally result from
the work-related disease. Occupational Disease does not include ordinary diseases of life to which the general public is
exposed outside of your assigned duties in your Course and Scope of Employment.
Plan
Costco Wholesale Corporation Texas Injury Benefit Plan
Plan Administrator
The Benefits Committee is the plan administrator of the Plan for purposes of ERISA.
Subject to the Plan claim procedures, the Plan Administrator has sole, exclusive and final discretionary authority to
interpret and implement the provisions of the Plan documents, booklets, rules, regulations or policies with respect to
benefit determinations, including, but not limited to, making all factual and legal determinations, correcting any defect,
reconciling any inconsistency and supplying any omission, and making all determinations that may impact a claim for
Plan benefits. Any failure by the Plan Administrator to apply any provisions of this Plan to any particular situation shall
not represent a waiver of the Plan Administrator’s authority to apply such provisions thereafter. Every interpretation,
choice, determination, or other exercise of authority by the Plan Administrator will be binding upon all affected parties,
without restriction, however, on the right of the Plan Administrator to reconsider and redetermine such action. The Plan
Administrator’s exercise of discretion and determinations in all matters shall be entitled to the highest deference
permitted by law. There shall be no de novo review by any arbitrator or court of any decision rendered by the Plan
Administrator and any review of such decision shall be limited to determining whether the decision was so arbitrary and
capricious as to be an abuse of discretion. The Plan Administrator may adopt any rules and procedures it considers
necessary or appropriate for the administration of the Plan. The Plan Administrator may deny a claim for or suspend the
payment of Plan benefits otherwise payable to you if you do not comply with any provision of the Plan or the rules and
procedures adopted by the Plan Administrator.
Post-Service Claim
Any claim for a Medical Benefit that is not a Pre-Service Claim.
Preexisting Condition
Any Plan participant illness, injury, disease, impairment, or other physical or mental condition, whether or not workrelated, which originated or existed prior to the day of Injury.
Pre-Injury Pay

¾ For a salaried participant, regular bi-weekly salary from the Employer at the time of the Injury; and
¾ For an hourly participant, the average earnings from the Employer for the 26 consecutive weeks immediately
preceding the date of Injury; provided, however, that if such a participant has been employed for less than 26
consecutive weeks, or if his or her earnings as of such date cannot be reasonably determined by the Employer,
such 26-week average will be based upon the earnings received over such period by a similar employee of the
Employer.
"Pre-Injury Pay" will include pay for overtime, bonuses, premium pay and participant contributions (through salary
reduction or otherwise) to a 401(k) arrangement, cafeteria plan, or other pre-tax salary deferral employee benefit plan.
"Pre-Injury Pay" will not include any benefits (including, but not limited to, Employer contributions to any employee
benefit plans or matching contributions to a retirement plan) or other extraordinary remuneration.
Pre-Service Claim
Any claim for Medical Benefits with respect to which this Plan requires Claims Administrator approval in advance of
obtaining medical care.
Representative
A person that a participant authorizes in writing to act on his/her behalf. The Plan will also recognize a legally valid power of
attorney or a court or administrative agency order giving a person authority to take an act on a participant’s behalf. In the
case of an Urgent Care Claim, a physician with knowledge of the participant’s condition may act as the participant’s
Representative.
Receipt and Safety Pledge
The form attached to the back of this SPD booklet.
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 Transitional Duty
A temporary accommodation that allows you to perform your regular job, or an alternate, temporary job that complies
with your work restrictions and the Employer's needs.
Urgent Care Claim
Any claim for medical care or treatment with respect to which the application of the time periods for making non-urgent
Pre-Service Claim determinations (generally, 15 days after the Claims Administrator's receipt of the claim):

¾ could seriously jeopardize your life or health or your ability to regain maximum function; or
¾ in the opinion of a physician with knowledge of the claimant's medical condition, would subject you to severe pain
that cannot be adequately managed without the care or treatment that is the subject of the claim.
The determination of whether a claim is an Urgent Care Claim as described above shall be made by the Claims
Administrator applying the judgment of a prudent layperson who possesses an average knowledge of health and
medicine. However, if a physician with knowledge of the claimant's medical condition determines that a claim is an
Urgent Care Claim and clearly communicates such determination to the Claims Administrator, the Plan shall treat the
claim as an Urgent Care Claim for purposes of this Plan.
The characterization of a claim as an Urgent Care Claim solely impacts the timeframes and other procedures for
processing benefit claims and in no way changes this Plan's approved medical provider requirements, preauthorization requirements, or other medical management requirements. These requirements generally provide
that (1) except in the case of Emergency Care, no amount shall be considered a Covered Charge under the Plan
unless treatment is pre-authorized by the Claims Administrator and furnished by or under the direction of an
Approved Physician or Approved Facility, and (2) all determinations relating to your physical condition (upon
which the payment of benefits is based) must be made by an Approved Physician. Urgent Care Claims may not
arise to the level of involving Emergency Care. Your decision to seek treatment from an urgent care clinic or
hospital emergency room does not necessarily result in an Urgent Care Claim or involve Emergency Care. See
the MEDICAL BENEFITS and DETAILED CLAIM PROCEDURES sections of this booklet for more information.
Wage Replacement Benefits
Any benefit payable under the WAGE REPLACEMENT BENEFITS section of this booklet.
GENERAL INFORMATION
Name of Plan
Costco Wholesale Corporation Texas Injury Benefit Plan
Type Of Plan and Administration
The Plan is a welfare benefit plan providing wage replacement, death, dismemberment and medical benefits (including
certain dental and vision benefits) due to an Injury. The Plan is administered by the Benefits Committee as Plan
Administrator.
Name And Address Of Plan Sponsor
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington 98027
The Company has delegated to its Benefits Committee certain Plan sponsor functions, including but not limited to the
power to (1) design, establish, amend or terminate the Plan in any manner, at any time, regardless of the health status
of any Plan Participant or Beneficiary, (2) execute the Plan and any trust agreement or amendments to the Plan, (3)
design, establish, amend or terminate any network of Approved Physicians or Approved Facilities, (4) design, establish,
amend or terminate any fee schedule for the payment of Covered Charges under the Plan, and (5) engage and
terminate the service of a medical director and other agents and professional service providers as it may deem
advisable to assist it with the performance of such duties.
The Benefits Committee may perform such functions or it may, in turn, delegate its performance to specific Benefit
Committee members, a subcommittee, or other officers or employees of the Company. The Benefits Committee may
exercise such Plan sponsor functions without specific written authorization of the Company. In performing such
functions, the Benefits Committee or its designee acts in a settlor capacity, not in a fiduciary capacity.

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 Name and Address Of Plan Administrator
Costco Benefits Committee
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington 98027
Telephone: (425) 313-8100
The Plan Administrator has delegated to the Claims Administrator non-fiduciary, ministerial authority to make initial
determinations of benefit claims and control the administration of benefit claims. The Plan Administrator has also
delegated to the Appeals Committee fiduciary, discretionary authority to decide appeals of claims for benefits under the
Plan.
Where the Plan Administrator designates another entity as a claim fiduciary, that entity is delegated all of the Plan
Administrator’s discretionary authority and control to decide appeals of claims for benefits under the Plan and to interpret
all Plan and trust documents, booklets, policies, rules or regulations. The claim fiduciary’s determinations in such cases
are final and binding, entitled to the highest deference permitted by law, and cannot be appealed to the Plan
Administrator. Except as otherwise provided under ERISA, neither the Company, the directors, officers, partners,
managers, or supervisors of the Company, the Plan Administrator, the Claims Administrator or the Appeals Committee
nor any person designated to carry out fiduciary responsibilities pursuant to this Plan shall be liable for any act, or failure
to act, which is made in good faith pursuant to the provisions of the Plan.
Included within the discretion of the Plan Administrator is the authority to engage and terminate the services of agents
and professional service providers as it may deem advisable to assist it with the performance of its duties.
Name And Address Of Person Designated As Agent For Service Of Legal Process
Rich Olin, General Counsel
Costco Wholesale Corporation
999 Lake Drive
Issaquah, Washington 98027
Service of legal process may also be made upon the Plan Administrator.
Employer And Plan Identification Numbers
The employer identification number assigned by the Internal Revenue Service to Costco Wholesale Corporation is 911223280. The plan number of the Plan is 513.
Plan Year
The Plan operates and keeps its records on the basis of the 12-month period ending each August 31.
Written Communications
Written communications to a Claims Administrator, the Appeals Committee, the Benefits Committee or their agents or
representatives must be received before the expiration of any time period expressed in this Plan document or related
documents. The records of the Plan representatives identified in this WRITTEN COMMUNICATIONS section shall
determine whether a communication has been received and the date of such receipt, unless you can provide a United
States Postal service return receipt. The common law “mailbox rule” does not apply to determine receipt by these
parties (under the mailbox rule, when a document is placed in the mail, it is considered received by the addressee on
the date of mailing).
Statement on Benefits Fraud
Under federal law, it is a crime to (1) attempt to defraud the Plan, (2) knowingly deceive the Plan, Claims Administrator
or Appeals Committee, or (3) provide information (including filing a claim) that intentionally contains any false,
incomplete or misleading information. The punishment for violations of this law is a fine of up to $10,000.00,
imprisonment for as long as five years, or both. Willfully engaging in such activities will result in denial of your or your
beneficiary’s claim, disciplinary action on the part of the Company which may include termination of employment, and
criminal prosecution to the full extent of the law.
ERISA RIGHTS STATEMENT
As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income
Security Act of 1974 ("ERISA"). ERISA provides that all Plan participants shall be entitled to:

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 Receive Information About Your Plan and Benefits

¾ Examine, without charge, at the Plan Administrator's office and at other specified locations (such as work sites) all
documents governing the Plan, including insurance contracts (if any), and copies 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.
¾ Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan,
including insurance contracts (if any), and copies of the latest annual report (Form 5500 Series) and updated
summary plan description. The Plan Administrator may make a reasonable charge for the copies.
Continue Group Health Plan Coverage
Continue group health coverage for yourself if there is a loss of coverage under the Plan as a result of a qualifying
event. You may have to pay for such coverage. Review this summary plan description and the documents governing
the Plan on the rules governing your COBRA continuation coverage rights.
Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the
operation of the Plan. The people who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently
and in the interest of you and other Plan participants and beneficiaries. No one, including the Employer, or any other
person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or
exercising your rights under ERISA.
Enforce Your Rights
If your claim for a welfare benefit is denied or ignored, 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.
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 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 materials, unless the materials were not sent because of reasons beyond the control of the
Plan 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.
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
brought a claim against 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 any questions about your Plan, you should contact the Plan Administrator. 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, U.S. Department
of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits
Security Administration, U.S. 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.
April 1, 2012

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 APPENDIX A: COBRA CONTINUATION COVERAGE NOTICE
The federal law requirements of “COBRA” continuation coverage (as amended from time to time) apply to group health
benefits provided under the Plan. This notice is intended to inform you in summary fashion of your rights and
obligations.
Please note that group health benefits provided under the Plan are limited to treatment of injuries which are
sustained during the course and scope of your employment with the Employer. Therefore, continuation of
group health coverage would not be practical if you experienced a termination of employment with the
Employer for whatever reason.
In addition, if you have a covered injury during your employment with the Employer, the Plan would continue
to provide you with health benefits for that injury following your termination of employment (subject to the
terms and limits in the Plan) unless your employment is terminated based upon gross misconduct. Therefore,
termination of employment in this situation is not a “qualifying event” under COBRA because it does not
result in a loss of coverage under the Plan.
Finally, the Plan does not provide coverage for dependents. Therefore, any continuation coverage provided
under COBRA with respect to dependents would not be applicable to this Plan.
COBRA continuation coverage can become available to you when you would otherwise lose your group health
coverage under the Plan because of a life event known as a “qualifying event”. Specific qualifying events are
described later in this notice. After a qualifying event, COBRA continuation coverage must be offered to each person
who is a “qualified beneficiary”. You could become a qualified beneficiary if coverage under the Plan is lost because of
the qualifying event. Under the Plan, qualified beneficiaries who elect COBRA continuation coverage must pay for
such coverage.
As a Plan participant, you would become a qualified beneficiary if you lost your group health coverage under the Plan
because of the following “qualifying event”: termination of your employment with the Employer (other than for gross
misconduct). The Employer is required to notify the Plan Administrator of your termination of employment.
The following information applies only in the situation where there is a qualifying event. The Plan Administrator
will, within 14 days of being notified of a qualifying event, advise you of the right to elect continuation coverage under
the Plan. You must elect continuation coverage under the Plan within 60 days of the later of the following:
•

The date you would lose Plan coverage because of the qualifying event; or

•

The date you are advised by the Plan Administrator of the right to continue Plan coverage based on
COBRA rules.

If you do not elect continuation coverage within this election period, then the right to COBRA continuation coverage will
be lost.
Payment of continuation coverage. You will be required to pay for the cost of continuation coverage in an amount
equal to the cost of Plan coverage, plus 2 percent. The contributions must be paid by a check made payable to the
Employer.
Contribution amounts and benefits for continuation coverage are subject to change. You will be notified of any changes
in contribution amounts or benefits available under the Plan.
If you elect continuation coverage after the qualifying event, then you will have 45 days from the date of the election to
make the required initial contribution. That initial contribution must cover the entire period from the date of the
qualifying event to the date of your payment. There is no grace period for the initial contribution. Each other
contribution payment is due within 30 days after the first day of each month of continuation coverage.
You will not be billed for any contribution payments for continuation coverage. You must make the payments directly to
the Plan Administrator. If any contribution payment for continuation coverage is postmarked after the date the payment
is due, continuation coverage under the Plan will terminate and will not be reinstated.
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 Duration of continuation coverage. If you elect to continue Plan coverage, the maximum continuation period
following a qualifying event involving termination of employment is 18 months.
The 18-month period may be extended to 29 months (an additional 11 months) if the Social Security Administration
(“SSA”) determines that you were disabled at any time during the first 60 days on continuation coverage.
To be eligible for the disability extension, the disabled person must remain disabled and must notify the Plan
Administrator:
•

Within 60 days after receiving the disability determination from Social Security, and

•

Before the original 18-month period to continue Plan coverage ends.

A qualified beneficiary who is entitled to a disability extension may be required to pay up to 150 percent of the cost of
his or her COBRA continuation coverage. If the increased cost is required, it will apply to each qualified beneficiary
who is entitled to the disability extension. The disabled person must promptly notify the Plan Administrator of any SSA
finding that he or she is not longer disabled.
Termination of continuation coverage. The right to continue Plan coverage will end before the maximum period on
the earliest of the following:
•

The date the Company ceases to provide any nonsubscriber health plan coverage for all employees;

•

The date you fail to make the required contribution when due;

•

The date after you first become, after your COBRA election:
Covered under another employer’s nonsubscriber health plan, or
Entitled to Medicare.

¾
¾

If you elected to extend continuation coverage for up to 29 months due to a finding of disability by the SSA, the first of
the month that begins more than 30 days after the date of the final determination by the SSA that the person is not
longer disabled. You must inform the Claims Administrator within 30 days of the date of any final determination by the
SSA that the person is no longer disabled.
Notice of address change. Please keep the Claims Administrator informed of any address changes or changes in
personal circumstances (such as a change in your marital status) so that we can provide you with any necessary
information concerning your rights to continuation coverage.
General information about continuation coverage. Continuation coverage is provided subject to eligibility under the
law. The Plan Administrator reserves the right to terminate continuation coverage retroactively if you are determined to
be ineligible for continuation coverage.
This notice is only a summary under the law of your rights to continuation coverage. The Company intends to provide
continuation coverage only to the extent required by law and will administer continuation coverage according to those
requirements. If you have any specific questions, please contact the Plan’s Claims Administrator c/o Costco Wholesale
Employee Benefits Department, 999 Lake Drive, Issaquah, Washington 98027, or by telephone at (425) 313-8100.
For more information about your rights under ERISA, including COBRA, the Health Insurance Portability and
Accountability Act (HIPAA), and other laws affecting group health plans, contact the nearest Regional or District Office
of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) in your area or visit the EBSA
website at www.dol.gov/ebsa. (Addresses and phone numbers of Regional District EBSA offices are available through
EBSA’s website.)

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 Este folleto y forma contiene información importante sobre sus derechos. Si tiene dificultad
entendiendo esté folleto ó forma por favor comuníquese con el Sedgwick CMS en P.O. Box
831830, Richardson, Texas 75083, 1-866-897-0393.
APPENDIX B
RECEIPT AND SAFETY PLEDGE
RECEIPT OF MATERIALS. By my signature below, I acknowledge that I have received and read
(or had the opportunity to read) the Summary Plan Description (the "SPD") for the Costco
Wholesale Corporation Texas Injury Benefit Plan, updated effective April 1, 2012.
INJURY NOTICE AND MEDICAL PROVIDERS. I understand and agree that if I am injured on the
job, I must notify my immediate supervisor or manager by the end of the Employer’s next business
day after the date of the Injury and receive any medical care from a Plan-approved physician within
14 days of my injury in order to receive benefits under the Plan.
SAFETY PLEDGE. I agree to familiarize myself with the safety program for the Employer and to
perform my job according to the general and departmental safety rules of the Employer. I will also
use any personal protective equipment that is provided to me. I also agree to immediately report
to my supervisor any accident that involves another employee, a customer, a vendor, or me. I will
also immediately report any unsafe act, condition or equipment. I will also cooperate with any
accident investigations, and actively participate in any Employer safety training programs.

X ____________________________________
Employee’s Signature

___________________________________
Date

______________________________________
Print Employee's Name

___________________________________
EEID#

______________________________________
Parent or Legal Guardian Signature
(if Employee under age 18)

___________________________________
Date

______________________________________
Print Parent or Legal Guardian Name

____________________________________
Employee’s Work Location or Department

X _____________________________________
For the Employer

____________________________________
Date

Amended and Restated Effective: April 1, 2012

© Copyright 2012 PartnerSource
Rev. 2/10/12

 Este folleto y forma contiene información importante sobre sus derechos. Si tiene dificultad
entendiendo esté folleto ó forma por favor comuníquese con el Sedgwick CMS en P.O. Box
831830, Richardson, Texas 75083, 1-866-897-0393.
Sign and Turn In
RECEIPT AND SAFETY PLEDGE
RECEIPT OF MATERIALS. By my signature below, I acknowledge that I have received and read
(or had the opportunity to read) the Summary Plan Description (the "SPD") for the Costco
Wholesale Corporation Texas Injury Benefit Plan, updated effective April 1, 2012.
INJURY NOTICE AND MEDICAL PROVIDERS. I understand and agree that if I am injured on the
job, I must notify my immediate supervisor or manager by the end of the Employer’s next business
day after the date of the Injury and receive any medical care from a Plan-approved physician within
14 days of my injury in order to receive benefits under the Plan.
SAFETY PLEDGE. I agree to familiarize myself with the safety program for the Employer and to
perform my job according to the general and departmental safety rules of the Employer. I will also
use any personal protective equipment that is provided to me. I also agree to immediately report
to my supervisor any accident that involves another employee, a customer, a vendor, or me. I will
also immediately report any unsafe act, condition or equipment. I will also cooperate with any
accident investigations, and actively participate in any Employer safety training programs.

X ______________________________________
Employee’s Signature

___________________________________
Date

_______________________________________
Print Employee's Name

____________________________________
EEID#

_______________________________________
Parent or Legal Guardian Signature
(if Employee under age 18)

___________________________________
Date

_______________________________________
Print Parent or Legal Guardian Name

____________________________________
Employee’s Work Location or Department

X ______________________________________
For the Employer

____________________________________
Date

Amended and Restated Effective: April 1, 2012

© Copyright 2012 PartnerSource
Rev. 2/10/12

Texas Injury Benefit Plan Summary Plan Description (SPD)

Original: Employee File

 COSTCO WHOLESALE CORPORATION
DISPUTE RESOLUTION PROGRAM FOR
TEXAS OCCUPATIONAL INJURIES
Amended and Restated Effective:
April 1, 2012

NOTICE TO ENGLISH SPEAKING EMPLOYEES: This booklet contains
a summary in English of your rights and responsibilities under the
Costco Wholesale Corporation Dispute Resolution Program for Texas
Occupational Injuries. If you have difficulty understanding any part of
this booklet, or would like a Spanish version of this booklet, contact
Sedgwick CMS at P.O. Box 831830, Richardson, Texas 75083, 1-866897-0393. Office hours are from 8:00 a.m. to 5:00 p.m., Monday
through Friday.
AVISO A LOS EMPLEADOS QUE NO HABLAN INGLES: Este folleto
contiene un resumen en inglés de los derechos y responsabilidades de
su programa bajo el Costco Wholesale Corporation Dispute Resolution
Program for Texas Occupational Injuries. Si tiene dificultad en
entender cualquiera parte de este folleto, o quiere obtener una
copiadle folleto en espanol, contacte a Sedgwick CMS a P.O. Box
831830, Richardson, Texas 75083, 1-866-897-0393. Las horas de
oficina son de 8:00 a.m. a 5:00 p.m., de lunes a viernes.

REVISED 4/1/2012

 TABLE OF CONTENTS
Page
PROGRAM HIGHLIGHTS
Why did the Company start this Program? ..............................................................................1
Who is covered by this Program? ...............................................................................................1
What are the Program steps? .....................................................................................................1
Is this process mandatory? ..........................................................................................................2
What kinds of disputes are covered under the Program? .......................................................3
What are the advantages of the Program? ................................................................................3
PROGRAM DETAIL
You and The Company Working It Out ............................................................................................. 4
You Are Automatically Covered By The Program ........................................................................... 4
A Better Way To Solve Concerns ......................................................................................................... 5
What Claims Are Covered By This Program?................................................................................... 5
What Claims Are Not Covered By This Program? ........................................................................... 6
INTERNAL PROCEDURE
Step 1: Formal Company Review ............................................................................................ 6
The Benefits of Formal Company Review.............................................................................. 7
EXTERNAL PROCEDURES
Step 2: Mediation ....................................................................................................................... 7
The Benefits of Mediation....................................................................................................... 10
Step 3: Final and Binding Arbitration ................................................................................. 10
The Benefits of Arbitration .................................................................................................... 16
Information About the American Arbitration Association ............................................... 16

REVISED 4/1/2012

 Page
Other Details To Know ........................................................................................................................ 17
Governing Law ..................................................................................................................................... 17

DISPUTE RESOLUTION PROGRAM RECEIPT AND ACKNOWLEDGEMENT

REVISED 4/1/2012

 COSTCO WHOLESALE CORPORATION
DISPUTE RESOLUTION PROGRAM FOR
TEXAS OCCUPATIONAL INJURIES
PROGRAM HIGHLIGHTS
Why did the Company start this Program?
We are committed to you and Costco Wholesale Corporation (the “Company”) working together to
maintain good relationships. But we know that sometimes these relationships can break down and
result in misunderstandings or disagreements between us. Most work-related injury problems can
be resolved through the Costco Wholesale Corporation Texas Injury Benefit Plan (the “Plan”). But
if you need additional help resolving a problem with a work-related injury, we’ve expanded on
these standards by developing a three-step process called the Costco Wholesale Corporation
Dispute Resolution Program for Texas Occupational Injuries (the “Program”). We believe that this
Program is a faster and better way to solve work-related injury problems. This approach has
worked for the Company and its employees in the past. With this updated Program, effective April
1, 2012, we believe it can work even better now.
Who is covered by this Program?
This Program applies to all Texas employees of Costco Wholesale Corporation and its subsidiaries,
affiliated employers, successors and assigns (the “Company”).
What are the Program steps?
This Program has three steps:
One Internal Step - that takes place inside the Company, and
Two External Steps - that require assistance from a neutral third party from outside the Company.
Your concern may be resolved in one Step, or require all three Steps. Each Step must be followed in
sequence so that we have every opportunity to work together toward an agreeable resolution of the
issue. Here is some more detail on each step:
INTERNAL PROCEDURE:
Step 1: Formal Company Review
Many times, problems arise because of simple misunderstandings. If you have a problem with a
work-related injury, getting a third party involved in the process to hear both sides of the issue can
sometimes be helpful. If you feel like your work-related injury problem hasn’t been resolved
adequately, you can request in writing that Corporate Risk Management formally look into the
problem.

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1

 To request a formal review, simply complete and sign a Dispute Processing Form and return a copy
of the form to the Corporate Risk Management representative identified on the form. Corporate
Risk Management will investigate the situation, listen to all sides of the issue and then meet with
you in order to discuss your available options and offer potential solutions.
EXTERNAL PROCEDURES:
Step 2: Mediation
If your work-related injury problem involves legally protected rights and you haven’t
resolved the problem through the Program’s Internal Procedure, you can request mediation
by contacting Corporate Risk Management and completing another Dispute Processing
Form. You must also submit a copy of your signed and completed Dispute Processing Form
to the American Arbitration Association (“AAA”) so that the AAA can then work with the
Company and you to select a professional mediator to help with the problem.
The mediator will listen to both sides of the story, ask questions and help both parties focus on
the strengths and weaknesses of their side of the story. The mediator will not make a final and
binding decision – he or she provides experience in resolving similar types of disputes, provides
an outsider’s point of view and guides you and the Company towards reaching an acceptable
solution.
Step 3: Final and Binding Arbitration
If you have a work-related injury problem that involves a legally protected right that could
not be settled through Steps 1 or 2 of the Program, you may request arbitration. Arbitration
is a process in which both you and the Company agree to have an impartial outside person
make a final decision that you and the Company must follow. The outside person – called
an arbitrator – acts like a judge and jury in the arbitration process. He or she listens
carefully to the information each party presents, makes a decision on the problem and
decides what damages, attorneys’ fees or other awards are appropriate (if any). The goal of
arbitration is to resolve problems quickly, fairly, and finally. To request arbitration, simply
complete another Dispute Processing Form and return it to both Corporate Risk
Management and the AAA. You and the Company will need to choose an arbitrator from a
list of arbitrators that will be provided by the AAA.
Arbitration offers essentially the same protections as a court of law. You keep your legal
right to seek damages. It is only the process that changes – from a lengthy, expensive trial
to a quick resolution with a fair, experienced arbitrator. And the arbitrator, just like a judge
or jury, has the authority to make a legally binding decision and award you anything you
might seek through a court of law.
Is the process mandatory?
Yes. The updated Program is a mandatory condition of your employment, which you accept
and agree to by becoming employed or continuing your employment with the Company at
any time on or after April 1, 2012.

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2

 What kinds of disputes are covered under the Program?
The Program covers most disputes that involve work-related injuries. The Program does not cover
disputes directly related to a claim for benefits you may have under the Costco Wholesale
Corporation Texas Injury Benefit Plan. Disputes involving a claim for Plan benefits are handled
through the Plan’s appeal process and other remedies that are explained in your Summary Plan
Description booklet for that Plan. A more complete list of disputes covered under this Program is
provided within this Program booklet.
What are the advantages of the Program?
Fast Decisions
When a problem is taken to court, it often takes years to conclude. During that time, your time,
money and energy that could be better used is tied up with paying expensive legal fees and court
costs, having delays and wading through endless paperwork. But with arbitration, hearings can
often be scheduled within a month or so of your request and decisions can be reached in just a few
months.
Fair Decisions
Courts hear all types of cases ranging from car accidents to divorces. Judges and juries do not
specialize in solving work-related problems. But arbitrators do. More importantly, the arbitrator is
objective and does not have any relationship with the Company.
Better Relationships
By talking things out in an open and honest manner, many times the relationship is improved while
solving the problem. When each party hears the other point of view, understanding increases and so
does the likelihood of reaching an agreement.

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3

 PROGRAM DETAIL
You and The Company Working It Out
We value you and the unique talents you bring to work every day. We understand, however, that
problems can occur even in the best workplaces.
Many issues or disagreements involving work-related injuries can be resolved through the Plan.
However, if you need to get some help from the Company or otherwise have a problem that still needs
to be resolved, we want to be sure that everyone knows exactly what process to follow. We want to
address any work-related injury dispute immediately, in a way that is fair, fast and responsive.
Our Dispute Resolution Program for Texas Occupational Injuries (which we will call the “Program” in
this booklet) helps us resolve differences together in a timely and objective manner. At the same time,
the Program provides a process that protects your legal rights.
You Are Automatically Covered By The Program

The procedures set forth in this booklet are mandatory procedures that have been updated
effective April 1, 2012, and apply to all persons whose principal place of employment with the
Company is in Texas on or after that date.
You and the Company must use this updated Program as the only way to address work-related
injury disputes that are covered under this updated Program and that arise on or after April 1,
2012. This updated Program is a mandatory condition of your employment, which you accept
and agree to by receiving a copy of this Program booklet and/or becoming employed or
continuing your employment with the Company at any time on or after April 1, 2012. Neither
you nor the Company will be entitled to a bench or jury trial on any claim covered by this
Program.
For Texas employees that were hired by the Company before April 1, 2012, any changes in this updated
Program from the prior Program booklet shall be effective on the later of (1) April 1, 2012, or (2) the
fifteenth (15th) calendar day following the date that the Company provide notice to you on this updated
Program. For Texas employees that are hired by the Company on or after April 1, 2012, any changes
included in this updated Program from the prior Program booklet shall be effective on April 1, 2012.
Neither your signature nor any other written agreement to this Program is necessary in order for
this Program to apply to the covered claims listed below. Adequate consideration for this Program
is also represented by, among other things, your eligibility for Company benefits and the fact that this
Program is mutually binding on both the Company and you. Any actual payment of Company benefits
to or with respect to you will serve as further consideration for and represent your further agreement to
the requirements of this Program.
A Better Way To Solve Concerns
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4

 We are committed to building strong, working relationships. We do that in many ways, including our
Open Door Policy, the Plan and this Dispute Resolution Program. This Program has three steps: Step 1
is an Internal Procedure (in other words, it takes place inside the Company) and Steps 2 and 3 are
External Procedures (that take place outside the Company):
Internal Procedure
Step 1: Formal Company Review
External Procedures
Step 2: Mediation
Step 3: Final and Binding Arbitration
Your concern may be resolved in one Step, or require all three Steps. Each Step must be followed in
sequence so that we have every opportunity to work together toward an agreeable resolution of
the issue.
What Claims Are Covered By This Program?
Instead of courtroom litigation, you and the Company must use this Program to resolve covered workrelated injury problems. This includes all claims listed below that you have now or in the future against
the Company and/or its officers, members, managers, directors, owners, current or former employees,
representatives, agents, or affiliated companies, successors or assigns (even if such claim relates to
matters occurring before the effective date of this updated Program, if you have not filed a legal action
in any court or with any governmental agency prior to such date).
These covered claims include claims that are brought by you or your representatives, parents,
guardians, executors, assigns, beneficiaries, spouse, children or heirs (“Representatives”). This
Program will be the sole and exclusive remedy for resolving any such claim or dispute and is equally
binding upon the Company and you.
Claims covered by this Program include:
•

Any legal or equitable claim by or with respect to you for any form of physical or psychological
damage, harm or death which relates to an accident, occupational disease, or cumulative trauma.
These claims include, but are not limited to, claims of negligence, gross negligence,
discrimination, claims for intentional acts, assault, battery, negligent hiring, negligent training,
negligent supervision, negligent retention, emotional distress, retaliatory discharge, or violation
of any other non-criminal federal, state or other governmental common law, statute, regulation
or ordinance in connection with a work-related injury, regardless of whether the common law
doctrine was recognized or whether the statute, regulation or ordinance was enacted before or
after the effective date of this Program.

•

Any survival, wrongful death or similar claim brought your Representatives.
Any legal or equitable claim or dispute relating to enforcement or interpretation of this Program
document or the Program Receipt and Acknowledgment form.

•

The determination of whether a claim is covered by this Program.

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5

 What Claims Are Not Covered By This Program?
This Program does not cover:
•

Any legal or equitable claim under ERISA for benefits, fiduciary breach or other problem
solely related to benefits payable under the Costco Wholesale Corporation Texas Injury
Benefit Plan or any other Company employee benefit plan.

•

Any criminal act or complaint, including but not limited to, restitution by an employee for a
criminal act for which he or she has been found guilty, or has pled guilty or no contest, or if the
criminal proceedings have been resolved by a deferred adjudication.

•

Any claim filed with an administrative agency in accordance with applicable law.

•

Any other claim that is not listed above as a covered claim.

INTERNAL PROCEDURE
STEP 1: FORMAL COMPANY REVIEW
Formalize Your Concern and Take It to Corporate Risk Management
Sometimes it just helps to get another person at a higher level involved in the process, to listen
to both sides of an issue objectively, and to offer some fresh ideas. If you feel that your workrelated injury problem hasn’t been resolved adequately, you can first request that Corporate
Risk Management get involved formally. To do this, simply complete a "Dispute Processing
Form." This form asks you to identify your specific problem and serves as a formal written
request for Corporate Risk Management to get involved. Corporate Risk Management will
investigate the situation, listen to all sides of the issue, and determine possible options for
resolving any conflict. Here is the process to follow under Step 1 of the Program:
Complete A "Dispute Processing Form"
These forms are available from your manager or from Corporate Risk Management. You will
need to mark the box "Request for Formal Review," then describe the facts relating to your
concerns and how you believe these concerns should be resolved. Hand-deliver or send the
completed form by certified mail, with return receipt requested, to the Program’s contact person
at Corporate Risk Management. The contact person and address are listed on the form. Keep a
copy of the form for your records.
Investigation
Once Corporate Risk Management receives your request, a Company representative will be
designated to investigate the situation by reviewing any relevant documents, talking with you
and interviewing any other appropriate people. Your concern will be investigated as promptly,
thoroughly, and confidentially as possible.

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 Talk With Corporate Risk Management
Corporate Risk Management will talk with you and any other person involved as promptly as
possible in order to offer potential solutions, guide the discussion and try to help resolve the
problem. Corporate Risk Management will help open the lines of communication so that you
can get your concern resolved as easily as possible.
Hopefully, an acceptable solution can be found. But if not, Corporate Risk Management can
review any other available options with you.
The Benefits of Formal Company Review
Fast Answers
When your first step is to make the Company aware of your problem or dispute, you open up
communication lines, which often results in a simple, quick solution to the problem.
Better Relationships
By talking things out in an open and honest manner, many times the relationship is improved
while solving the problem. When each party hears the other point of view, understanding
increases and so does the likelihood of reaching an agreement.
Confidentiality
If appropriate, Corporate Risk Management’s designated representative can offer confidential
advice. He or she can offer suggestions as well as direction on the best approach for getting the
answers you need.
EXTERNAL PROCEDURES
External Procedures (that take place outside the Company) include "Mediation" and "Final and Binding
Arbitration." These are Steps 2 and 3 of the Program.
BOTH YOU AND THE COMPANY ARE REQUIRED TO FOLLOW THESE EXTERNAL
PROCEDURES FOR ALL COVERED CLAIMS. YOU CANNOT PURSUE A LAWSUIT IN
COURT AGAINST THE COMPANY AND THE COMPANY CANNOT PURSUE A
LAWSUIT IN COURT AGAINST YOU ON THE BASIS OF ANY OF THESE COVERED
CLAIMS.
Here's how the External Procedures work:
STEP 2: MEDIATION
Get an Outside, Neutral Party Involved
Even with the best of intentions, an outside perspective is sometimes needed to solve a problem
and reach an agreement. That's what this Step is all about. In Step 2, a professional mediator
listens objectively to both sides of the story, asks questions, and then offers creative solutions to
help you and the other party reach an agreement.

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7

 If you tried Step 1 but the problem is still not resolved, you can request mediation. Here's what
to do:
Complete A "Dispute Processing Form"
These forms are available from your manager or from Corporate Risk Management.
•

Mark the box "Request for Mediation," then describe the facts related to your claims,
the basis for your claims, and how you believe your claims should be resolved.

•

Send two copies of the form and your mediation filing fee by certified mail, return
receipt requested to:
American Arbitration Association
Attention: Regional Claims Administrator
1355 Noel Road, Two Galleria Tower, Suite 1750
Dallas, Texas 75240-6620

•

Send one copy to the Company by certified mail, return receipt requested to:
Costco Wholesale Corporation
Attention: Director of Workers’ Compensation
999 Lake Drive
Issaquah, Washington 98027

•

Keep a fourth copy of the form for your records.

If the Company wishes to pursue mediation, it will give you written notice at the last address
recorded in your personnel file. The party requesting mediation must identify and describe the
nature of all claims asserted and the facts on which the claims are based. The AAA makes sure
the mediation process is neutral and follows specific guidelines.
Filing and Mediation Fees
The AAA charges a fee for filing a request for mediation. In addition to this filing fee, a fee
must be paid to the mediator for his or her services. If you request mediation, you must pay a
nonrefundable filing fee equal to the standard employee mediation filing specified under
then-current AAA Employment Arbitration Rules and Mediation Procedures (the “AAA
Rules”). This filing fee is specified on the Program’s Dispute Processing Form and must
be paid at the time you file this form (or if you challenge this Program, when mediation is
compelled by court order). The Company will pay any remaining AAA filing fees as well as
all other fees and expenses charged by the mediator or the AAA for this process. However, you
may elect to pay up to one-half of these fees and expenses if you so desire. All fee payments are
processed through the AAA, and the mediator generally has no knowledge with regard to which
party pays the fees and expenses.
You are also responsible for paying:
•

Your attorney fees, if you choose to have legal representation.

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8

 •

Any costs for witnesses you call (other than Company employee witnesses as described
below).

•

Any costs to produce evidence you request.

•

Any other costs you have that are related to the mediation process (except as specified in
this Program).

Choosing a Mediator
Once the AAA receives a request for mediation and all administrative fees are paid, it sends
both you and the Company a list of neutral mediator candidates who have been pre-screened by
the AAA for potential conflicts of interest. Unless you and the Company otherwise agree in
writing, you must select a mediator from the list of mediator candidates provided by the AAA.
You and the Company must strike names on the list, rank the remaining names in order of
preference and return the list to the AAA within the timeframe specified by the AAA Rules. If
a party does not return the list within this timeframe, the AAA will consider all names on the list
as being acceptable to that party. The AAA will then designate the mediator in accordance with
the persons who have been approved on both lists and the parties’ designated order of mutual
preference. If this process does not yield a mediator, the AAA will designate the mediator.
Lost Wages and Travel Expenses
If the mediation occurs on a day that you would otherwise be scheduled to work for the
Company, the Company will pay your regular wages or salary for that day. Of course, you
should know the date of the mediation far enough in advance in order to make any necessary
changes in your work schedule. If another current Company employee's presence is needed at
the mediation, the Company will also cover that employee's regular wages or salary for missed
work. The mediator will resolve any disagreement between you and the Company over
scheduled workdays or the need for any particular fellow employee to attend the mediation.
Finally, the Company will pay any of your reasonable travel expenses in accordance with the
Company's travel policy.
Meet With The Mediator
The AAA will work with you and the Company to find a time and place that is convenient for
all parties to meet, as a group or individually, with the mediator. The mediator will listen to
both sides of the story, ask questions and help the parties focus on the strengths and weaknesses
of their positions. All mediations will follow the then-current AAA Employment Arbitration
Rules and Mediation Procedures (the “AAA Rules”), except to the extent this Program states
otherwise.
Resolve the Problem
In mediation, it is up to you and the Company to reach an agreement. The mediator does not
make a decision for you. The purpose of the mediator is to open the lines of communication
and offer possible solutions to help you and the Company reach an agreement.

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9

 The Benefits of Mediation
Another Perspective
By involving an outside third party (the mediator), you expand on thinking power. This means
more options, more solutions and more new ideas. In addition, the mediator often specializes in
solving employment problems and provides a level of experience in this area that you and the
Company would not otherwise have.
Objective Advice
The mediator is neutral. He or she is not on the Company's side or on the employee's side. The
mediator's job is to listen to both sides and help the two parties reach agreement by opening up
the lines of communication. The mediator is not a decision-maker.
A Win-Win Solution
Because the mediator does not decide in favor of one party over another, but rather helps by
bringing the two sides together to find common ground, mediation often results in a win-win
solution.
STEP 3: FINAL AND BINDING ARBITRATION
Get a Skilled Decision-Maker Involved
Sometimes a problem needs a final and binding decision from a person outside the
Company....a person who knows the issues and has the experience and expertise to make wise,
fair judgments. That's what happens in Step 3. If you have a covered work-related injury
problem that has not been resolved through the earlier Steps of the Program, you can
request arbitration -- a process where both you and the Company have an impartial,
outside party make a final decision that is legally binding on you and the Company.
Arbitration is a process in which a skilled arbitrator (similar to a judge) hears both sides of the
situation and then makes a final and binding decision. Decisions by the arbitrator are required
to be made according to the same principles of law that control decisions by courts. Arbitrators
can award the same damages or remedies as a court of law.
Here's how the process works:
Request Arbitration in a Timely Manner
The party requesting arbitration must make a written request for arbitration (as described below)
within the applicable statute of limitations for the claims involved (this is the period of time the
law would otherwise allow for filing a lawsuit on that type of claim). The date that the injury or
other act complained of occurred will be counted for purposes of determining this applicable
statute of limitations period. As a general rule, arbitration can only be requested if you and the
Company have first made sincere efforts to resolve your dispute through Steps 1 and 2 of the
Program.
BUT IF FOR ANY REASON THE ABOVE TIME LIMIT FOR
REQUESTING ARBITRATION IS GOING TO EXPIRE BEFORE COMPLETING
THOSE FIRST TWO STEPS OF THIS DISPUTE RESOLUTION PROGRAM, YOU
SHOULD PROCEED WITH MAKING YOUR REQUEST FOR ARBITRATION. IF A
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10

 REQUEST FOR ARBITRATION IS NOT MADE WITHIN THE APPLICABLE
STATUTE OF LIMITATIONS, THE CLAIM WILL BE VOID AND DEEMED
WAIVED.
The filing of a lawsuit will not toll or otherwise suspend the running of the applicable
statute of limitations to request arbitration of a claim, nor will the doctrine of equitable
tolling apply to extend the limitations period for the party to request arbitration.
Complete A "Dispute Processing Form"
These forms are available from your manager or from Corporate Risk Management.
•

Mark the box "Request for Arbitration," then describe the facts related to your claims,
the basis for your claims, and how you believe your claims should be resolved.

•

Send two copies of the form and your arbitration filing fee by certified mail, return
receipt requested to:
American Arbitration Association
Attention: Regional Claims Administrator
1355 Noel Road, Two Galleria Tower, Suite 1750
Dallas, Texas 75240-6620

•

Send one copy to the Company by certified mail, return receipt requested to:
Costco Wholesale Corporation
Attention: Director of Workers’ Compensation
999 Lake Drive
Issaquah, Washington 98027

•

Keep a fourth copy of the form for your records.

If the Company wishes to pursue arbitration, it will give you written notice at the last address
recorded in your personnel file. The party requesting arbitration must identify and describe the
nature of all claims asserted and the facts on which the claims are based. The responding party
shall have the ability to file special exceptions with the arbitrator on the basis that the written
notice does not satisfy the requirements of this Program. If after expiration of the applicable
statute of limitation (1) a court has ordered the parties to arbitrate, and (2) the court or arbitrator
for whatever reason has determined that the claim is not void and deemed waived, then the
party that is compelled to arbitrate must initiate a claim for arbitration with the AAA and serve
the other party with written notice of the claim (in the manner described above) within 30 days
of such order. Otherwise, the party’s claim shall be void and deemed waived.
Filing and Arbitration Fees
To use the arbitration process, certain administrative fees must be paid: a filing fee and the
arbitrator's fee. The filing fee is charged by the AAA for coordinating the arbitration process.
The arbitrator's fee is the payment for his or her services. If you request arbitration, you
must pay a nonrefundable arbitration filing fee equal to the standard employee
arbitration filing fee specified under then-current AAA Rules. The filing fee is specified

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11

 on the Program’s Dispute Processing Form and must be paid at the time you file this form
(or, if this Program is challenged by you, when arbitration is compelled by court order).
The Company will pay any remaining AAA filing fees, as well as all other fees and expenses
charged by the arbitrator or the AAA for this process. However, you may elect to pay up to
one-half of these fees and expenses if you so desire. All fee payments are processed through the
AAA, and the arbitrator generally has no knowledge with regard to which party pays the fees
and expenses.
If the arbitrator finds completely in your favor, the Company will reimburse you for your
portion of the filing fee. If the Company initiates the arbitration (other than through a motion in
court to compel arbitration), you pay no filing fees.
You are also responsible for paying:
•

Your attorney fees, if you choose to have legal representation (as described below).

•

Any costs for witnesses you call (other than Company employee witnesses as described
below).

•

Any costs to produce evidence you request, including, but not limited to, deposition
costs or discovery requests.

•

Your costs for any stenographic recording and/or transcript (as described below).

A Few Exceptions
In certain arbitration cases, attorney fees and other expenses may be assessed against you or the
Company. Here are some guidelines to keep in mind:
1.

The arbitrator may award to you or the Company reasonable attorney fees and costs as
may be authorized by applicable law. For example, the arbitrator may assess attorney
fees against you or the Company if either party makes a claim that is frivolous or is
factually or legally groundless. The arbitrator may also award to you or the Company
reasonable attorney fees and costs pursuant to a written agreement that provides for the
payment of attorney fees.

2.

If, during the arbitration process, you or the Company attempt to use a method other
than arbitration to resolve a covered claim (for example, filing a lawsuit), the Company
will be entitled to a dismissal of such action and the arbitrator may require you to pay
reasonable attorney fees or other expenses the Company incurs in resolving the situation
and obtaining dismissal of your actions. Likewise, the Company can be required to pay
reasonable attorney fees if the Company fails to use arbitration.

Choosing An Arbitrator
Once the AAA receives a request for arbitration and all administrative fees are paid, it sends
both you and the Company a list of neutral arbitrator candidates who have been pre-screened by
the AAA for potential conflicts of interest. Unless otherwise agreed to in writing by you and
the Company, the arbitrator (1) shall be an attorney licensed to practice in the State of
Texas with experience in personal injury litigation, and (2) shall be selected from the

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 panel of arbitrators located in Dallas County, Texas. Any disclosures that are mandated by
applicable law regarding the arbitrator candidates will be made at this time, and the AAA will
also provide both you and the Company with a brief description of the background and
experience of each arbitrator candidate. Either you or the Company may challenge an arbitrator
candidate for cause, and the AAA will rule on such challenges. If a challenge for cause is
upheld, a replacement name will be given to you and the Company.
Following any challenges for cause, you may strike one name from the final list and then rank
the other arbitrator candidates in order of preference. The Company will do likewise. If you
and the Company strike different candidates and only one name remains on the list, the
remaining arbitrator candidate will become the arbitrator. If there is more than one candidate
remaining after the strikes, the candidate with the highest total ranking will become the
arbitrator. If this process does not yield an arbitrator, the AAA will designate the arbitrator. If a
party to the arbitration fails to return the final list to the AAA within the timeframe specified by
the AAA Rules, the AAA will consider all names on the list as being acceptable to that party. If
the arbitrator selected through this process becomes unable to serve for any reason, the
parties shall again go through the same selection process.
Arbitrator Authority
The arbitrator, and not any federal, state, or local court or agency, will have the exclusive
authority to resolve all disputes about the interpretation, applicability, enforceability or
formation of this Program or the AAA Rules, including, but not limited to (1) any claim that all
or any part of this Program is void or voidable, and (2) any disputes relating to the duties of the
arbitrator and the conduct of the arbitration hearing.
The arbitrator must appropriately apply the substantive law of Texas (other than the Texas
General Arbitration Act) or federal law, or both, depending upon the claims asserted. The
arbitrator will have the authority to consider and grant motions consistent with the Texas Rules
of Civil Procedure (or Federal Rules of Civil Procedure, if applicable); however, the arbitrator is
not authorized to modify the powers granted to him or her under this Program. The arbitrator
shall also not commingle the standards for state law determinations and remedies (for
example, negligence claims and special damage awards) with the standard for federal law
determinations and remedies that may or may not be subject to this arbitration
requirement (for example, ERISA claims for eligibility or benefits, as well as ERISA
damage awards, are not subject to arbitration).
Lost Wages and Travel Expenses
If the arbitration occurs on a day that you would otherwise be scheduled to work for the
Company, the Company will pay your regular wages or salary for that day. Of course, you
should know the date of the arbitration hearing far enough in advance in order to make any
necessary changes in your work schedule. If another current Company employee's presence is
needed at the arbitration, the Company will also cover that employee's regular wages or salary
for missed work. The arbitrator will resolve any disagreement between you and the Company
over scheduled workdays or the need for any particular fellow employee to attend the
arbitration. Finally, the Company will pay any of your reasonable travel expenses in
accordance with the Company travel policy.

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 Preliminary Hearing Procedures
Like mediation, the AAA makes sure the arbitration process is neutral and follows specific
guidelines. The arbitrator can help resolve any procedural problems through the AAA prior to
the actual arbitration hearing. Here is how this can be done:
Preliminary Hearing
A preliminary hearing may be scheduled by the AAA, upon request by you, the Company or the
AAA. At that hearing, the arbitrator (with input from you and the Company) may narrow the
issues, establish a discovery schedule, arrange an acceptable procedure for any motion
proceedings and arrange for the earliest and most efficient hearing possible of the dispute. The
arbitrator can entertain and grant a motion to dismiss or motion for summary judgment
at any time, if he or she considers such action appropriate.
Discovery
Discovery will be at the discretion of the arbitrator and allowed only upon a showing of good
cause, utilizing the following guidelines:
1.

Only one deposition of a witness will be allowed as a matter of right for you and the
Company. In addition, only one set of written interrogatories and one document
request, each limited to 20 inquiries, will be allowed. If expert witnesses are going to
testify at the hearing, their names and addresses and the subjects of their testimony must
be disclosed at least 30 days before the hearing.

2.

The arbitrator will have discretion to order any further pre-hearing exchange of
information, including, but not limited to, document production, information requests,
depositions, subpoenas, and summaries of expected testimony, and can issue such
protective orders as he or she deems necessary or appropriate to protect the privacy or
other constitutional or statutory rights of the parties and/or witnesses.

A Hearing Is Held
The arbitration hearing is an opportunity for you and the Company to present testimony and
documentation about the dispute. The AAA will work with you, the Company, and the
arbitrator to find a time and place that is convenient for all parties to meet. The arbitrator uses
the information presented at the hearing to make a final and binding decision. If you
request arbitration, you usually present your information first, unless the arbitrator decides to let
the Company present first. The burden of proof for any claim brought to arbitration by either
party will be the same burden of proof that exists in a court. No written submissions, arguments
or testimony during the arbitration proceedings may be used as the basis of a defamation claim.
Arbitration Procedures
The arbitrator conducts the hearing so that all evidence and arguments are presented fully and
efficiently. All arbitrations (prior, during, and after the hearing) must follow the then-current
AAA Rules, except to the extent this Program states otherwise. Procedures not mentioned here
or in the AAA Rules will be resolved by you and the Company, or by the arbitrator if you and
the Company cannot agree.

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14

 The final decision and the arbitration award, if any, shall be made consistent with remedies
available under Texas statute and case law.
Hiring An Attorney or Bringing a Non-Attorney Representative
Both you and the Company may have an attorney (or other representative) during the prearbitration procedures and the arbitration hearing. If you elect to not have an attorney represent
you at the arbitration hearing, the Company will also participate in the hearing without an
attorney.
Recording the Hearing
The hearing will not be recorded by a stenographer (or other means) unless a stenographer is
requested by you or the Company. If a stenographer is requested, the party making the request
incurs the cost. If both parties request a stenographer, the cost will be shared equally.
Failure to Attend
If you or the Company fail to attend a scheduled arbitration hearing without good cause (as
determined by the arbitrator), any claim brought by the party failing to attend will be dismissed
and cannot be pursued further.
A Decision Is Made
Based on the evidence presented at the hearing, the arbitrator will make a final and binding
decision. All issues that may be dispositive with respect to a claim will be ruled on by the
arbitrator. The decision will be rendered in writing and include a very brief summary of
all findings of fact and law necessary to support the arbitrator's decision. The arbitrator
can award to the winning party the same recovery that the party would be entitled to in a court
of law (and such award will also be subject to the same limitations used by courts of law, such
as statutory limitations on punitive damages). The arbitrator's decision must comply with
applicable local, state or federal law. The arbitrator is authorized only to rule on the claims
set forth in the Dispute Processing Form, any counterclaim(s), and the answer(s) made to such
claims and counterclaims. The arbitrator is not authorized to make any award merely on the
basis of what he or she determines to be fair or just. The arbitrator's decision will not be used as
a precedent for any subsequent cases.
Unless you and the Company agree otherwise, the arbitrator will make a final and
binding decision within 30 days after the hearing is closed. Judgment on any award by the
arbitrator may be entered in any court having jurisdiction over the claim and shall have the same
legally binding effect as if the judgment had been rendered in such court.
Confidentiality
The arbitrator's decision is confidential. Neither you nor the Company may publicly disclose
the terms of any award unless:
•

Agreed to in writing by the other party,

•

Subpoenaed by a court to testify,

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15

 •

Required by law as communication to the Internal Revenue Service, or

•

Necessary to enforce or collect on the arbitration decision or award in a filing with a
court of competent jurisdiction.

Federal Arbitration Act
The Company is engaged in interstate commerce (for example, purchasing and selling goods
and services across state lines, traveling on interstate roadways) and your employment involves
such commerce. To the maximum extent possible, the Federal Arbitration Act will govern the
interpretation and enforcement of the arbitration proceedings. An arbitrator's decision can be
challenged in a state or federal court of law only on such bases as are available under the
Federal Arbitration Act. Unless contrary to applicable law, any lawsuits seeking to enforce or
vacate an arbitration award shall be brought in the United States District Court for the Northern
District of Texas, Dallas Division.
The Benefits of Arbitration
Protected Rights
Arbitration offers the same fundamental protections as a court of law. You keep your legal
right to seek damages for such things as discrimination, sexual harassment, slander and
wrongful termination. It is only the process that changes, from a lengthy, expensive trial to an
efficient resolution with an experienced arbitrator. And the arbitrator, just like a judge or jury,
may award you anything you might seek through a court of law.
Fast Decisions
When a problem is taken to court, it may take years before a final verdict is reached. But with
arbitration, a decision can typically be made within a couple of months.
Fair Decisions
Courts hear all types of cases ranging from car accidents to divorces. Judges and juries do not
specialize in solving employment problems. But quite a few arbitrators do. Plus, the arbitrator
is objective. He or she does not have any ties to the Company.
Better Relationships
Because arbitration is less formal than litigation and emphasizes a straightforward, open
exchange of information, it is much more likely to preserve the working relationship.
Courtroom litigation, on the other hand, often draws clear battle lines and closes the lines of
communication.
Information About The American Arbitration Association
AAA is the organization that will designate the mediator and administer the mediation process
(unless you and the Company agree otherwise in writing). The AAA was founded to assist
individuals and communities in solving problems outside the courtroom. It is an organization dedicated
to providing quality, objective service in settling disputes through mediation and arbitration. The AAA
has no connection with the Company. It is a completely independent firm that administers more than

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16

 13,000 claims a year across the United States. The AAA is considered a leading resource in
administering fair, cost-effective resolution of work-related disputes.
The AAA can call upon over 100 professionals to serve as employment dispute arbitrators. These
individuals come from a variety of industries and educational backgrounds, and have no relationship to
the Company or its representatives. The arbitrator selected cannot have any personal or financial
interest in the dispute. Before accepting an appointment, the arbitrator must disclose to the AAA any
information that may prevent a prompt meeting or hearing, or create an appearance of bias. If any such
information is presented to the AAA, the AAA will communicate that information to you and the
Company. Depending on the way you and the Company respond, the AAA may disqualify that
individual.
Other Details To Know
Employment Separation/Benefit Eligibility
If your employment with the Company is voluntarily or involuntarily terminated, the Program
still applies to you for any covered dispute. This Program will also still apply to you even if
you refuse benefits under the Plan, you return Plan benefit payments, you become ineligible for
benefits or benefits cease under the Plan in accordance with its terms.
Not An Employment Agreement
The Program does not create or imply any contractual or other right of employment. Nor does
this Program in any way alter the "at-will" status of your employment. The Company or you
may terminate the employment relationship at any time for any or no reason. Any agreement
changing the at-will relationship must be in writing and signed by both the employee and an
officer of the Company.
This Booklet
This booklet is a complete explanation of the Program (including the current Dispute Processing
Form whose terms are incorporated by reference in this booklet). It takes the place of any other
verbal or written understanding. No party should rely upon any statements, oral or written, on
the subject of arbitration or the effect, enforceability or meaning of any provision of this
Program, except as specifically stated in this Program booklet. If any part of this Program is
found by a court to be void or unenforceable, the remaining parts of the Program will remain in
full force and effect. The Company reserves the right to change or terminate this Program at
any time with at least 14 days advance written notice to employees. However, no such change
to or termination of this Program will affect claims that have been raised in a "Dispute
Processing Form" that is filed prior to the effective date of the change or termination.
Governing Law
This Program shall be governed by the laws of the State of Texas, except to the extent preempted by
federal law or as otherwise specified in this Program document. To the extent possible, jurisdiction and
venue for all disputes subject to this Program, including disputes concerning the Program itself, shall be
in Dallas County, Texas (unless otherwise agreed to in writing by you and the Company).

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17

 Employee Copy

Este folleto y forma contiene información importante sobre sus derechos. Si tiene dificultad entendiendo
esté folleto ó forma, o quiere obtener una copia del folleto or forma en español, contacte a Sedgwick
CMS a 1-866-897-0393.

DISPUTE RESOLUTION PROGRAM
RECEIPT AND ACKNOWLEDGMENT
RECEIPT OF MATERIALS. I have received my copy of the written document for the Costco
Wholesale Corporation Dispute Resolution Program for Texas Occupational Injuries (the “Program”),
updated effective April 1, 2012. I acknowledge that this is a mandatory company policy requiring that
covered claims or disputes relating to an on-the-job injury (that cannot be otherwise be resolved between
the Company and me) are subject to this Program, including but not limited to submitting such claims to
an arbitrator, rather than a judge and jury in court.
COMPANY POLICY. I understand that this Program applies to all Texas employees of Costco
Wholesale Corporation, its subsidiaries, affiliated employers, successors and assigns (the “Company”). I
understand that by receiving this Program document and/or by becoming employed (or continuing my
employment) with the Company at any time on or after April 1, 2012, I am agreeing to comply with this
updated Program. I understand that the Company is also accepting and agreeing to comply with these
arbitration requirements as updated effective April 1, 2012. All covered claims brought by my spouse,
parents, children, beneficiaries, representatives, executors, administrators, guardians, heirs or assigns
are also subject to this Program, and any decision of an arbitrator will be final and binding on such
persons and the Company. I understand that the arbitrator, and not a judge or jury, has the exclusive
authority to resolve any dispute about the enforceability of the arbitration process.

X_______________________________________
Employee's Signature

______________________________
Date

________________________________________
Print Employee's Name

_______________________________
EEID#

________________________________________
Parent or Guardian Signature (if applicable)

_______________________________
Employee Work Location

X_______________________________________
For the Company

______________________________
Date

Amended and Restated Effective: April 1, 2012

©Copyright 2012 PartnerSource

18

 Sign and Turn In

Este folleto y forma contiene información importante sobre sus derechos. Si tiene dificultad entendiendo
esté folleto ó forma, o quiere obtener una copia del folleto or forma en español, contacte a Sedgwick
CMS a 1-866-897-0393.

DISPUTE RESOLUTION PROGRAM
RECEIPT AND ACKNOWLEDGMENT
RECEIPT OF MATERIALS. I have received my copy of the written document for the Costco
Wholesale Corporation Dispute Resolution Program for Texas Occupational Injuries (the “Program”),
updated effective April 1, 2012. I acknowledge that this is a mandatory company policy requiring that
covered claims or disputes relating to an on-the-job injury (that cannot be otherwise be resolved between
the Company and me) are subject to this Program, including but not limited to submitting such claims to
an arbitrator, rather than a judge and jury in court.
COMPANY POLICY. I understand that this Program applies to all Texas employees of Costco
Wholesale Corporation, its subsidiaries, affiliated employers, successors and assigns (the “Company”). I
understand that by receiving this Program document and/or by becoming employed (or continuing my
employment) with the Company at any time on or after April 1, 2012, I am agreeing to comply with this
updated Program. I understand that the Company is also accepting and agreeing to comply with these
arbitration requirements as updated effective April 1, 2012. All covered claims brought by my spouse,
parents, children, beneficiaries, representatives, executors, administrators, guardians, heirs or assigns
are also subject to this Program, and any decision of an arbitrator will be final and binding on such
persons and the Company. I understand that the arbitrator, and not a judge or jury, has the exclusive
authority to resolve any dispute about the enforceability of the arbitration process.

X_______________________________________
Employee's Signature

______________________________
Date

________________________________________
Print Employee's Name

_______________________________
EEID#

________________________________________
Parent or Guardian Signature (if applicable)

_______________________________
Employee Work Location

X_______________________________________
For the Company

______________________________
Date

Amended and Restated Effective: April 1, 2012

© Copyright 2012 PartnerSource

Texas Injury Benefit Plan Dispute Resolution Program

Original: Employee File