Benefits for a healthy life

2016 Benefits Guide The choice is yours

B

Welcome to Your Puget Sound Energy BenefitsPuget Sound Energy is committed to helping you and your family enjoy the best possible health and well-being. That’s why we offer you a comprehensive, highly competitive benefits package, with the flexibility to make the choices that best meet your needs.

In this guide, you’ll learn about your health plan options and other important benefits. Use this information, along with additional resources on PSEWeb, PSE's Health Plan Cost Calculator, and the enrollment site, benedetails.com, to decide on the coverage that’s right for you and your family. Then be sure to enroll within 31 days of becoming eligible for benefits (the first of the month following your date of hire).

Inside this guide

HealthMedical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Prescriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4A closer look at the HSA Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Dental coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Flexible Spending Accounts (FSAs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Health Savings Account (HSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6myWellness at PSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Financial securityLife and AD&D insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Long Term Disability insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Choose and enrollWho’s eligible? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Enrollment checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10How to enroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ContactsProvider phone numbers and websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Legal notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Learn more about your medical plan options The Health section of this guide provides an overview of your medical plan options. You can find detailed information about each plan, including a breakdown of costs, in each plan’s Summary of Benefits and Coverage (SBC). The SBCs summarize important information about your health coverage options in a standard format to help you compare costs and features across plans. The SBCs are available online using the links below. You can also request a paper copy by contacting the HR Employee Information Center at 425-462-3389, option 6.

2016 Group Health Options Plan SBC2016 Regence Engage Plan SBC2016 Regence HSA Plan SBC2016 Regence PPO Plan SBC

2

MedicalPSE offers a choice of medical insurance so you can select the coverage that’s best for you and your family. Your choices for medical coverage are:

1 . Regence

• PPO Plan

• Engage Plan

• Health Savings Account (HSA) Plan

2 . Group Health Options Plan

3 . Opt Out Medical

• Opt Out certification is required when enrolling online

Which plan is right for you?

The best medical plan for you depends on a number of factors. Consider these questions:

• What are your anticipated medical expenses for the coming year?

• Will you have money set aside to pay out of pocket when you need medical care?

• Would you rather pay more out of each paycheck to avoid large expenses if you or a family member needs care for a sickness or injury?

• Would you rather pay less out of each paycheck and pay more if you need care for a sickness or injury?

• Would you like a plan that offers the ability to put tax-free dollars into a Health Savings Account to help you save money on taxes and plan for future expenses?

PSE's Health Plan Cost Calculator lets you compare at a glance your estimated cost for all plans offered, including monthly cost, deductible, and out-of-pocket expenses for low, moderate, and high users of health care services.

You can call the health (or dental) plans directly with your specific questions. See page 12 for contact information.

Health Nothing is more important than your overall health and well-being. That’s why our benefits program offers plans to help keep you and your family healthy and also provide important protection in the event of illness or injury.

PSE Flex Credits and benefit costsPSE provides employees with Flex Credits to offset most of the monthly cost of health care. The cost of each benefits plan and your Flex Credits are displayed when you sign in to the online benefits enrollment site at benedetails.com. Flex Credits vary depending on whether you elect employee-only or family coverage, or opt out of medical coverage altogether. Flex Credits also vary depending on your employee group — non-represented, IBEW-represented or UA-represented.

If the cost of the medical plan you choose is less than the Flex Credits provided, the additional credits are available to reduce your cost for other benefits such as dental, AD&D, supplemental life and flexible spending accounts. Unspent Flex Credits are paid to you as taxable income in your paycheck. If the cost of your benefit elections exceeds the Flex Credits, your share is paid with a pre-tax payroll deduction.

Health care reformPSE benefit plans exceed the coverage requirements of the federal law. We will continue to comply with all the requirements of the Affordable Care Act.

2

3

Compare medical plans

The chart below provides a comparison of key coverage features and costs for each medical plan available to you. Carefully consider your anticipated health care needs for the coming year when evaluating your options.

Group Health Options Plan Regence PPO Regence Engage

Regence HSA(non-represented

and IBEW-represented employees only)

In-Network Out-of-Network

Annual Deductible

None $400 per person $300 per person $1,200 per person $1,500 Employee Only coverage

None $1,200 per family $900 per family $2,400 per family $3,000 Employee+Family coverage (Family deductible must be met before plan pays benefits)

Out-of-Pocket Maximum (includes deductible) After reaching the out-of-pocket maximum, any additional covered charges are paid in full by the plan; you pay nothing more for the rest of the calendar year.

Individual $2,000 per person $2,400 per person $1,300 per person $2,200 per person $3,500 Employee Only coverage

Family $4,000 per family $5,200 per family $2,600 per family $4,400 per family $6,850 Employee+Family coverage

Medical Coverage – amount plan pays

Preventive Care 100% 100% 100% 100% 100%

Office visits, outpatient care, inpatient hospital stays, and other professional services

$20 copay usually required per service. After copay, most services are covered in full unless specifically stated otherwise.

After the deductible, plan pays 80%

After the deductible, plan pays 80% in-network and 50% out-of-network

After the deductible, plan pays 80%

After the deductible, plan pays 80% in-network and 50% out-of-network

Service area/ Provider Access

Select from Group Health medical center physicians or contracted physicians statewide; access specialists at Group Health medical centers by self-referring. You can change doctors any time.

Select any licensed provider. You have access to First Choice Health network and First Health network providers for lower out-of-pocket costs. If you use an out-of-network provider, you may be responsible for any billed charges above the allowed amounts.

Select any licensed provider. Category 1 providers (Preferred) are in-network and paid at 80%. Categories 2 & 3 (Participating and Non-Participating) are out-of-network and paid at 50% of the allowed amount. Category 3 Providers (Non-Participating) can bill above the Regence allowed amount.

Select any licensed provider. Category 1 & 2 (Preferred & Participating) providers: You will not be billed for balances beyond any deductible and/or coinsurance. Category 3 (Non-Participating) providers do not have a contract with Regence and can bill above the Regence allowed amount.

Select any licensed provider.Category 1 & 2 (Preferred & Participating) providers: You will not be billed for balances beyond any deductible and/or coinsurance. Category 3 (Non-Participating) providers do not have a contract with Regence and can bill above the Regence allowed amount.

This is only a partial list of the covered benefits. For a more complete side-by-side comparison, check the PSE Medical Plans Comparison Matrix.

Save money with in-network providersGroup Health: If you use a provider who is not a Group Health, First Choice or First Health provider, you may be responsible for any billed charges above the allowed amounts.

Regence: Non-Participating (Category 3) providers can bill above the Regence allowed amount. Preferred or Participating providers (Category 1 & 2) will not bill above the allowed amount. Seeing a Category 1 or 2 provider will reduce your out-of-pocket costs.

4

PrescriptionsWhen you enroll in a PSE medical plan, you automatically receive prescription coverage. Your prescription plan provides the following coverage:

Coverage Group Health Options Plan Regence PPO Regence Engage Regence HSA

In-Network Out-of-Network

Retail Participating Pharmacy (30-day supply)

Value-Based Medication $4 copay N/A $0 copay $0 copay $0 copay*

Formulary Generic $8 copay $13 copay $5 copay $5 copay Deductible + 20%*

Formulary Brand $25 copay $30 copay $25 copay $25 copay Deductible + 20%*

Non-Formulary $50 copay $55 copay $50 copay $50 copay Deductible + 20%*

Mail-Order Pharmacy (90-day supply)

Value-Based Medication $0 copay

Not covered

$0 copay $0 copay $0 copay*

Formulary Generic $9 copay $10 copay $10 copay Deductible + 20%*

Formulary Brand $60 copay $50 copay $50 copay Deductible + 20%*

Non-Formulary $135 copay $100 copay $100 copay Deductible + 20%*

A closer look at the HSA PlanThe Regence HSA Plan is a lower-cost health plan that can help you save money on health care costs while enjoying the benefits of comprehensive coverage.

The HSA Plan works a little differently than other health plans, but the effort you make to understand it could be rewarded with extra money in your pocket. By leading a healthy lifestyle and taking greater ownership of your health care decisions, you could save money on your insurance costs and medical bills.

HSA advantages

1 . Low-cost, high-deductible coverageYour per-paycheck costs are lower compared to the other Regence health plans, allowing you to keep more of your paycheck each month. You pay for your initial medical costs until you meet your annual deductible, and then you pay a percentage of any further costs until you reach your annual out-of-pocket maximum.

2 . Tax-advantaged savings accountThe HSA Plan offers you a Health Savings Account (HSA) to which you can contribute on a before-tax basis. All withdrawals are tax-free, as long as you use the money to pay for eligible health-related expenses. PSE will also contribute to your account to help cover your out-of-pocket health care costs – $500 for Employee Only coverage and $1,000 for Employee+Family coverage. In addition, all the money in the account is yours and will never be forfeited. You can roll it over at the end of each year and take it with you if you leave the company. You can even use the money during retirement.

3 . Free in-network preventive careAs with all the PSE medical plans, preventive care is fully covered under the HSA Plan — you pay nothing toward your deductible and no copays as long as you receive care from in-network providers. Preventive care includes preventive screenings, well-child and well-woman exams, immunizations, flu shots, and more.

4 . No need to switch doctorsIf you're already in another Regence plan, the HSA Plan uses the same network of doctors and pharmacies as the other plan options.

Higher deductible = more control

Selecting a plan with a higher deductible gives you more control over your money. You spend less each month for coverage and pay for care only if you need it. If your out-of-pocket costs reach your deductible amount, the plans pay for 80% of any additional in-network costs. And, an out-of-pocket maximum protects you from excessive costs in any one year.

Don't pay too much

55% of PSE members had $1,000 or less in claims on an annual basis. They may have paid for too much health insurance coverage!

So think twice before selecting the high-cost PPO – you could save money with a higher deductible plan.

* Under Regence HSA Plan, you pay 100% of pharmacy costs, except for value-based drugs, until the deductible is met.

5

Dental coverageWhen it comes to staying healthy, your teeth and gums play an important role. That’s why we offer dental insurance that helps pay for the cost of routine checkups – and just about any other type of dental work you might need.

DentalCoverage

Delta Dentalnon-represented and

UA-Represented Plans

Delta DentalIBEW-Represented Plans

Willamette Dental Plan

High Option Basic Option High Option Basic Option

Annual Deductible None None None None None

Calendar-Year Maximum $2,500 per person $3,000 per person $2,500 per person $1,500 per person None**

Office Visit Copay N/A N/A N/A N/A $10 per visit

Class I – Diagnostic and Preventive (routine exams, X-rays, fluoride and sealants, etc.)

100% 100%

70%Increases 10% each successive incentive

period benefits are used to a maximum of 100%*

100% 100%

Class II – Restorative (fillings, root canals, crowns, etc.)

90% 50%

70%Increases 10% each successive incentive

period benefits are used to a maximum of 100%*

50%$100 copay for

porcelain-metal crown100% all other services

Class III – Prosthodontics (implants, dentures, bridges, etc.)

50% 50% 50% 50%

$150 copay for complete upper or lower dentures$100 copay for bridge

(per tooth) 100% all other services

Orthodontia N/A N/A N/A N/A $1,800 copay forcomplete orthodontia

* Note: Benefit level decreases 10% each incentive period that no dental benefits are utilized; coverage will not fall below 70% level.

** TMJ treatment has a $1,000 annual maximum/$5,000 lifetime maximum.

Check the Dental Comparison Matrix for a more complete listing of services.

Willamette Dental

The Willamette Dental Plan is a closed network system, so you must see an in-network dentist in order to receive coverage, but your out-of-pocket costs are limited to set, predictable copays. Be sure to check the list of Willamette Dental providers before selecting this plan – they are only available in Washington, Oregon and Idaho. Learn more at www .willamettedental .com/pse.

6

Flexible Spending Accounts (FSAs)FSAs are a great way to save money. They allow you to set aside a certain amount from your paycheck before taxes are taken out. Then, you can withdraw the money tax-free to pay for eligible out-of-pocket health care and dependent care expenses, such as your medical costs before meeting the plan's deductible or day care costs for your child.

PSE offers you two types of FSAs:

Health Care FSA

• Use a convenient BenefitCard to pay for eligible health care expenses, such as plan deductibles, copays, and coinsurance.

• Contribute from $200 to $2,500 in 2016.

Dependent Care FSA

• Pay for eligible dependent care expenses, such as day care for a child, that are necessary for you and/or your spouse to work, look for work, or attend school full time.

• Contribute from $200 to $5,000 in 2016 or $200 to $2,500 if you are married and filing separately.

Estimate carefully

Keep in mind, FSAs are “use-it-or-lose-it” accounts. You will forfeit any money left in the account at the end of the plan year, so it’s important to carefully estimate your contribution amount.

Health Savings Account (HSA)If you enroll in the HSA Plan, you will automatically be enrolled in an HSA. An HSA is similar to a Health Care FSA, but with some important differences.

How does an HSA work?

• It allows you to pay for eligible medical expenses with tax-free dollars, so you save money. In addition, PSE will contribute money into your account each year.

• Unlike an FSA, the money in your HSA is always yours to keep and can be rolled over from year to year. You can take it with you if you leave the company, and you can even use it for health-related expenses during retirement.

• For 2016, PSE will make the following contributions to your account:†

– $500 for Employee Only coverage. – $1,000 if you cover dependents.

• You can also have money automatically deducted from your paycheck and deposited into your HSA on a pre-tax basis:

– Up to $3,350 (including PSE contribution) annually for Employee Only coverage.

– Up to $6,750 (including PSE contribution) annually if you cover dependents.

– Contribute an additional $1,000 annually as a catch- up contribution if you’re age 55 or older.

• Any interest or earnings on your money build tax-free.*

• Withdraw the money tax-free to pay for health-related expenses. Use a convenient HSA debit card or reimburse yourself for out-of-pocket expenses.*

To be eligible for the HSA, you must enroll in the HSA Plan. The HSA – and PSE's contributions to it – are not available to employees who enroll in another plan or who opt out of medical coverage.† PSE contribution is reduced by half for new HSA enrollees effective

July 1 and later.

* Money in an HSA grows tax-free and can be withdrawn tax-free as long as it is used to pay for qualified health-related expenses If money is used for ineligible expenses, you will pay ordinary income tax on the amount withdrawn. If you withdraw the money before age 65, you will also pay a 20% penalty tax.

HSA eligibility

In order to establish and contribute to the HSA, you:

• Must be enrolled in the HSA Plan.

• Cannot simultaneously participate in the Health Care FSA. This applies to your spouse, even if you're not covering him or her on your plan.

• Cannot be eligible for Medicare.

• Cannot be claimed as a dependent on someone else's tax return.

What’s an eligible expense? Health Care FSA or HSA: plan deductibles, copays, coinsurance, and other eligible medical, dental and vision expenses. To learn more, see IRS Publication 502 at www .irs .gov.

Dependent Care FSA: child day care, home care for dependent elders,and related expenses. To learn more, see IRS Publication 503 at www .irs .gov.

Learn moreFor questions about FSAs, visit tri-ad.com/fsa or call TRI-AD.

For questions about the HSA Plan, visit pse.com/hsaplan or call HealthEquity.

See Contacts page for phone numbers.

7

myWellness at PSEAll benefits-eligible PSE employees and their covered spouses or domestic partners can earn points toward wellness credits in myWellness at PSE. If you earn at least 1,000 points in myWellness at PSE within the first 31 days of benefit eligibility, you will receive wellness credits to begin the same month through 2016 – $30 per month for an individual employee or up to $60 per month per family. If you miss the 31-day deadline, you can still receive wellness credits in 2017 by earning 1,000 points by November 30, 2016.

You will receive a welcome email providing a unique personal link to register at https://mywellnessatpse.limeade.com; contact support@Limeade.com with questions or if you do not receive an email invitation by the end of your second week of employment. Please forward the welcome email to your spouse or domestic partner because we do not have his/her email address.

Employees who have opted out of medical benefits are eligible for wellness credits to use toward other benefits, with any unused amounts received as taxable pay.

Fast ways to earn points

There are dozens of ways for you to earn points in the myWellness at PSE program. Below is a list of just some of the activities that can help you rack up the points quickly.

Employee Assistance Program (EAP) This program helps employees with everything from counseling services to financial advising. Services are confidential and most offerings are free. Behavioral health services are available to help with mental health and substance abuse issues with no charge for up to three sessions. The EAP is a free employee resource, providing referrals and online tools for you and your household family members. Find out more at liveandworkwell .com (access code 5271), or call 1-800-358-8515 to speak with an EAP professional.

Healthy Activity Point Value

Registering for an account (first-timers only) 400

Learn About Your Health and Well-Being

Take the well-being assessment 500

Know Your Numbers – blood pressure, cholesterol, weight, etc.

200

Get Preventive Care

Primary Care Provider check-up 100

Age/gender-appropriate screenings 100

Dental and vision check-ups 100 each

Take Action

Be tobacco-free 100

Quit for Life Tobacco Cessation Program 200

Participate in six sessions with a lifestyle coach 300

Eat healthy 10 points per week

Get moderate exercise 10 points per week

How to get startedThe best way to get started is to log in and take the confidential well-being assessment. The assessment will recommend activities for you based on your answers to the questions.

1 . Visit mywellnessatPSE.limeade.com 2 . Click “Get Started”3 . Follow the instructions for creating an account

Family wellness credits

Covered spouses/domestic partners can also earn $30 per month in wellness credits if they earn 1,000 points within 31 days of your date of hire. Employees who cover themselves and children on PSE-sponsored health insurance can receive $60 per month in family wellness credits when they earn 1,000 points in myWellness at PSE within the first 31 days of benefit eligibility.

Safety equipment discounts and resources

The safety of our employees is a top priority. PSE partners with select vendors to make personal protective equipment affordable and accessible. Eligible employees may purchase qualifying work boots from any vendor and PSE contributes up to $75 toward the cost. Red Wing provides a 17 percent discount for employees using their PSE ID.

PSE also contributes up to $300 toward the cost of qualifying prescription safety glasses. SafeVision provides discounted pricing, but eligible employees may purchase qualifying eyewear from any vendor. Hearing resources, including clinics and test schedules, are also available for employees exposed to higher-than-average noise levels. For more information on the full range of PSE safety resources, go to pseweb/organizations/corpsafety.

8

Financial securityLife, accidental death and dismemberment (AD&D), and disability insurance ensure important financial protection for your family. PSE provides some coverage at no cost to you and also offers you the option to add supplemental protection.

Basic life insurance PSE covers 100 percent of the cost of Basic Life insurance for all employees.* The life insurance plan pays a benefit to your beneficiary for the coverage amount if you die while you are insured. MetLife is the insurance carrier for life and AD&D plans.

Supplemental life and AD&D insurance If you want added protection you can purchase supplemental life insurance and/or AD&D insurance.**

Employee-paid

• Employee supplemental life‡ of one, two, three or four times your annual base pay, up to the plan limits.

• AD&D coverage of $50,000 up to $250,000 available as Employee Only or Employee + Family coverage.

* Federal tax law requires PSE to report the cost of company-paid life insurance in excess of $50,000 as imputed income.

** AD&D benefits are paid in addition to any life insurance if you die in an accident or become seriously injured or physically disabled.

‡ You may have to complete an evidence of insurability (EOI) medical questionnaire to determine whether you are insurable for supplemental life insurance amounts. If required, one will be provided to you.

What is AD&D insurance? Should you lose your life, sight, hearing, speech, or use of your limb(s) in an accident, AD&D provides additional benefits to help keep your family financially secure. AD&D benefits are paid as a percentage of your coverage amount — from 25% to 100 percent — depending on the type of loss.

Check your beneficiaries You can review and update your beneficiaries at any time during the year. However, now is a good time to check your designations to make sure they reflect your current situation and wishes. Life and accidental death & dismemberment insurance beneficiaries can be updated on the benefits enrollment site. Beneficiaries for the 401(k) can be updated with T. Rowe Price; the Retirement Plan can be updated with Milliman.

8

No evidence of insurability

As a new hire, now is your only time to elect up to four times your salary in supplemental life insurance coverage with no evidence of insurability (EOI). Enroll for at least one times your salary now, and you may increase by one times your salary at Open Enrollment each year without EOI.

9

Long Term Disability insurance The loss of income due to illness or disability can cause serious financial hardship for your family. PSE provides you with Long Term Disability (LTD) insurance that pays up to 65 percent of your base monthly pay up to $10,000 per month of salary or $6,500 maximum benefit if you become disabled from a covered injury, illness or pregnancy to help you continue paying your bills and meeting your financial obligations during this time.

Company-paid

PSE covers 100 percent of the cost of your LTD premium. Should you become disabled, you have the option of receiving the LTD monthly payment as taxable or nontaxable income. When you enroll online, this payroll designation will be available to you. You may only change this option, which becomes effective January 1, at annual Open Enrollment.

Your premium election for LTD may be made with pre-tax or post-tax dollars: You decide.

• Pre-tax premium election: You are not taxed on the value of the LTD premium paid by PSE. If you have an approved disability in the future, your monthly benefit payments are reduced by applicable federal income taxes.

• Post-tax premium election: You are taxed now on the value of the LTD premium paid by PSE. If you have an approved disability in the future, your monthly benefit payments are not reduced because you already paid federal income taxes. (You will see Imputed HC Cost on your paychecks.)

10

Choose and enroll After you’ve carefully considered your benefit options and your anticipated needs for the coming year, it’s time to make your benefit selections. Then, follow the instructions to enroll yourself and any eligible dependents you want to cover.

Who’s eligible? • Active regular employees working a minimum

of 20 hours per week as: – IBEW-represented employees – Non-represented employees – UA-represented employees

• Qualified dependents of eligible employees: – Legal spouse — opposite or same sex – Natural, adopted, foster and/or stepchildren

under age 26 – Natural, adopted, foster and/or stepchildren

age 26 or older who are permanently and totally disabled

– Domestic partners of eligible employees, and their natural, adopted, foster and/or stepchildren under age 26

Enrolling dependents

It’s your responsibility to comply with PSE eligibility rules and IRS tax regulations when enrolling dependents in medical and dental plans. Make sure you log on and confirm your dependents.

Note: Spouses who both work at PSE may not double-cover each other or their dependents. An individual can only be covered once under the PSE plans.

Other employees

PSE temporary employees, seasonal employees and casual employees are not eligible for benefits while in these categories.

Job change to a regular employee category working a minimum of 20 hours per week would qualify for eligibility.

Enrollment checklist• Review your benefit plan choices and costs.

• Make your enrollment decisions for the year, including your medical, dental, AD&D, life insurance and flexible spending accounts.

• Decide who you want to be covered under your plan. (They must be eligible for enrollment.)

• Choose to have your premium payment election for LTD taxable or nontaxable.

• Elect:1. Opt Out Medical.2. Opt Out Dental.3. Flexible spending accounts.4. Health savings account contributions.

Provide Social Security Numbers for Covered DependentsUnder the Affordable Care Act, the federal government requires employers to collect Social Security or tax identification numbers for all individuals covered under employer-sponsored coverage. Be sure to provide this information in benedetails.com.

11

How to enroll Follow these five easy steps to complete your benefits enrollment:

1 . Review your 2016 Benefits Guide and other resources . Your Benefits Guide provides the information you need to understand the coverage options and costs for you and your family. The medical and dental plan comparisons provide additional detail.

2 . Calculate your coverage and costs . Understand how your decisions affect your paycheck and household budget. The Health Plan Cost Calculator on the enrollment site and PSEWeb makes it easy to evaluate plan benefits before you complete the enrollment process. Here you can calculate your total out-of-pocket cost based on your family’s expected health care needs.

3 . Understand how Flex Credits affect your costs . The cost of each benefits plan and your Flex Credits are displayed when you sign in to the online benefits enrollment site at benedetails.com. Review this information carefully to make the most cost-effective choice for you and your family.

4 . Complete your benefits enrollment within 31 days . If you do not elect coverage within the first 31 days of becoming eligible, you will be automatically enrolled in default benefits and unable to make changes until the next annual Open Enrollment period. Default benefits are:

• Regence Engage - employee only

• Basic Dental - employee only

• Basic Life - employer paid

• Long-Term Disability (LTD) - employer paid, pre-tax option

5 . Carefully read the Benefits Confirmation Statement . After you enroll, you will receive a Benefits Confirmation Statement in the mail. This is your last chance to correct any errors.

To access the PSE Benefits Portal:1. Visit benedetails .com

2. Enter portal 85453.

12

Questions about Contact Phone number Website

Medical Group Health Options

1-888-901-4636Group numbers:UA and Non-Rep – 0618000IBEW – 6170700

ghc .org/pse

Regence1-866-240-9580Group number: 10000780

regence .com

Dental

Delta Dental of Washington1-800-554-1907 Group number: 174

deltadentalwa .com

Willamette Dental

1-855-4Dental (1-855-433-6825) Group number: WA471Plan ID: PSE

willamettedental .com/pse

Life and AD&D MetLife 1-800-638-6420 mybenefits .metlife .com

Long Term Disability MetLife1-877-8OFFWORK(1-877-863-3967)

Flexible Spending Accounts (FSAs)

TRI-AD1-888-844-13725 am to 6 pm Monday-FridayFax: 1-866-233-4741

tri-ad .com/fsa

Health Savings Account (HSA)

HealthEquity 1-866-346-5800 healthequity .com

myWellness at PSE Limeade 1-888-830-9830 mywellnessatpse .limeade .com

Employee Assistance Program

Optum 1-800-358-8515liveandworkwell .com (access code: 5271)

All other benefits topics Benefits Service Call Center1-800-531-1328 6 am to 5 pm Monday-Friday

benedetails .comEnter 85453 for 2016

Who Can Access What Resources Where

Employees and Dependents

• 2016 Benefits Guide, with links to:- Medical and Dental Comparison Matrices- Summaries of Benefits and Coverage for

each medical plan• HSA Plan Overview Page• Health Plan Cost Calculator

pse .com/pseemployees/openenrollment

Employees

All of the above plus:• Benefits Books for medical, dental, life, AD&D,

LTD and long term care plans• Access to Employee Assistance Program• Information on employee “perks” like

commuter/transit, myWellness at PSE, tuition reimbursement and employee clubs

PSEWeb/EmployeeTools/HR/Benefits and PSEWeb/EmployeeTools/HR/Accommodations & Leaves (for LTD and EAP information)

Employees• Access to online enrollment • Flex Credits and monthly costs for benefits

benedetails .comEnter portal 85453 for 2016

PSE Benefits Resources Online

ContactsPlease contact the appropriate provider listed below to learn more about a specific benefit plan. The Benefits Service Call Center can provide help with eligibility, enrollment and general benefits questions.

13 13

Legal noticesCOBRA | Non-Discrimination Testing for the Cafeteria Plan | Women’s Health and Cancer Rights Act | Medicare Drug Plan Notice of Creditable Coverage | PSE Prescription Drug Benefit | HIPAA Notice of Privacy Practices

COBRAThe Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) gives eligible employees and their dependents the right to temporarily continue coverage under PSE’s health plans (at their expense) when coverage is lost due to specific qualifying events (such as termination of employment, reduction in hours, divorce, death, or loss of dependent child status). To be eligible for COBRA continuation coverage, you must have health care coverage on the day before a qualifying event occurs and you must be an eligible employee or the employee’s spouse or dependent child.

If you would like more information regarding COBRA, contact your Plan Administrator.

Non-Discrimination Testing for the Cafeteria PlanUnder IRS regulations, the Plan Administrator is required to perform non-discrimination tests on an annual basis to ensure that the Cafeteria Plan does not discriminate in favor of either highly compensated or key employees. If the Cafeteria Plan is found to be discriminatory, the benefits provided to such employees under the Cafeteria Plan are generally includible in gross income. Therefore, if the Cafeteria Plan fails any of the non-discrimination tests run after annual enrollment at any time during a plan year, contributions for highly compensated or key employees under the Cafeteria Plan may be limited to prevent the Cafeteria Plan from ultimately being found to be discriminatory at the end of the plan year. If this occurs, affected employees will be notified of the required election change. For more information, click on the FSA link on the benefits enrollment website, or contact the Plan Administrator.

Women’s Health and Cancer Rights ActHealth plans that provide mastectomy benefits are required to provide certain related benefits under the Women’s Health and Cancer Rights Act of 1998 (“WHCRA”). If you have had, or are going to have a mastectomy, you may be entitled to these benefits. For individuals receiving mastectomy-related benefits, coverage will be provided in a manner determined in consultation with the attending physician and the patient, for:

• All stages of reconstruction of the breast on which the mastectomy was performed;

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

• Prostheses;

and

• Treatment of physical complications of the mastectomy, including lymphedema.

These benefits will be provided subject to the same annual deductible and coinsurance provisions applicable to other medical and surgical benefits provided under PSE’s health plans.

If you would like more information on WHCRA benefits, contact your Plan Administrator.

1414

Medicare notice of creditable coverage for employees and dependentsThe government offers prescription drug coverage to those eligible for Medicare. The purpose of this notice is to help you decide whether you want to enroll in a Medicare drug plan. This notice has information about your current prescription drug coverage with Puget Sound Energy and the government-sponsored Medicare prescription drug coverage. Please read this notice carefully and keep it handy.

Medicare prescription drug coverage is available to everyone with Medicare. You can get this coverage if you join a Medicare Prescription Drug Plan or join a Medicare Advantage Plan (like an HMO or PPO) that offers prescription drug coverage. All Medicare drug plans offer at least a standard level of coverage set by Medicare. Some Medicare drug plans may also offer more coverage for a higher monthly premium.

PSE coverage is creditable coveragePuget Sound Energy conducted an actuarial review of our PSE Medical Plan coverage for comparison to the standard Medicare prescription drug coverage. We are pleased to let you know the prescription drug coverage you have now — under either the Group Health or the Regence BlueShield plan sponsored by PSE — is creditable coverage; meaning on average for all plan participants, it is expected to pay out at least as much as the standard Medicare prescription drug coverage. Because you currently have prescription drug coverage that is expected to pay out at least as much as the standard Medicare drug plan coverage, you can choose to join a Medicare drug plan later without paying a higher premium (as long as you do not have a lapse in coverage, as explained below).

When you can enroll in a Medicare drug planYou can join a Medicare drug plan when you first become eligible for Medicare and each year thereafter from October 15 through December 7. If you lose creditable prescription drug coverage through no fault of your own, you may be eligible for a 2-month special enrollment period to join a Medicare drug plan. Contact Medicare for details.

What happens if you enroll in a Medicare drug planIf you decide to join a Medicare drug plan, your current PSE coverage will not be affected. You may be covered by both programs: a Medicare drug plan and your PSE-sponsored prescription drug coverage. PSE coverage is coordinated with Medicare and PSE coverage is primary; the Medicare drug plan pays only for medications it covers if not paid by your PSE plan. Your cost for PSE’s medical plan will not decrease if you enroll in a Medicare drug plan. Contact Medicare for details.

Do you need both? Be sure to compare your current coverage, including costs and which drugs are covered, with the Medicare prescription drug plans in your area. While you can be covered under PSE’s prescription drug program as well as a Medicare drug plan, remember there’s a cost for both and you don’t want to pay for something unnecessarily. Explore all of your options. There is a summary of your prescription benefit, along with contact information, at the end of this notice.

You may drop your PSE medical and prescription drug coverage if you are covered under another group policy. You will be able to re-enroll in PSE coverage during the next annual open enrollment or during a mid-year change consistent with the qualifying events that are allowed by IRS guidelines, PSE plan documents and vendor contracts. PSE cannot guarantee that the other company-sponsored prescription drug coverage will be creditable.

When you would pay a higher premium for a Medicare drug planIf you go 63 days or longer without creditable prescription drug coverage immediately before you enroll in a Medicare drug plan, your monthly Medicare drug plan premium will go up at least 1 percent of the Medicare base beneficiary premium per month for every month you did not have that coverage. For example, if you go 19 months without coverage, your premium may consistently be at least 19 percent higher than the Medicare base beneficiary premium. You may have to pay this higher premium as long as you have Medicare coverage. In addition, you may have to wait until the next October to enroll.

15 15

Requesting an individual notice Although you should keep this notice, you may request another at any time. Also, you will receive this non-personalized notice each year before open enrollment or if the PSE-sponsored prescription drug coverage changes.

Remember: If you decide to enroll in a Medicare drug plan, you may be required to prove whether you had creditable coverage when you join Medicare to determine whether you are required to pay a higher premium. Once you leave your PSE-sponsored plan, you may contact your medical carrier to request a personalized notice showing the dates you had creditable coverage.

More information about your current PSE prescription drug benefitEach carrier has its own formulary, which is a list of preferred medications. The formulary generally changes each year. You can obtain the formulary, a directory of retail pharmacies, and mail order details by contacting the carrier at the phone number or website shown on the chart.

PSE Prescription Drug CopaysCoverage Pharmacy Type

# Days Supply

Tier 1 Preventive

Tier 2 Generic Formulary

Tier 3 Brand Formulary

Tier 4 Nonformulary

Group #

Group Health 888-901-4636 ghc.org

Retail

In-network30 days $4 $8 $25 $50

UA/Non-Rep: 061000

IBEW: 6170700Mail Order

(in-network only, $5 discount per 30-day supply)

90 days $0 $9 $60 $135

Regence BlueShield 866-240-9580 regence.com

Retail 30 days $0 $5 $25 $50

All groups: 10000780Mail order 90 days $0 $10 $50 $100

HSA Retail & Mail30 or 90 days

$0Deductible +20%

Deductible +20%

Deductible +20%

More information about your options under Medicare prescription drug coverageMore information about Medicare prescription drug plans is available in the Medicare & You handbook. If you are eligible for Medicare, you will receive a copy of the handbook in the mail every year from Medicare. You may also be contacted directly by Medicare prescription drug plans. You can get more details by:

• Visiting medicare.gov.

• Calling your State Health Insurance Assistance Program (see the inside back cover of your copy of Medicare & You handbook for the phone number).

• Calling Medicare at 1-800-633-4227 (TTY: 877-486-2048).

For people with limited income, help is available to pay for a Medicare prescription drug plan. Find out more from the Social Security Administration online at socialsecurity.gov or by calling 1-800-772-1213 (TTY: 800-325-0778).

1616

HIPAA Notice of Privacy PracticesTHIS NOTICE DESCRIBES HOW MEDICAL INFORMATION ABOUT YOU MAY BE USED AND DISCLOSED AND HOW YOU CAN GET ACCESS TO THIS INFORMATION. PLEASE REVIEW IT CAREFULLY.

If you have any questions about this notice or if you wish to exercise any of your rights, please contact the Privacy Officer, Michele Ritala, Health & Welfare Program Manager at Puget Sound Energy, Inc., P.O. Box 97034, PSE-10N, Bellevue, WA 98009-9734.

This notice describes the health information practices of those benefits covered by the administrative simplification provision of the federal Health Insurance Portability and Accountability Act and its implementing regulations (“HIPAA”) under the Puget Sound Energy, Inc. Health & Welfare Benefits Program (the “Program”).

This notice tells you about the ways in which the Program may use and disclose health information about you. It also describes your rights and the Program’s obligations regarding health information. The Program understands that information about you and your health is personal. The Program is committed to protecting this information. This notice applies to the health information covered by HIPAA that the Program maintains, uses, and discloses. Your personal doctors, other health care providers and other insurers may have different policies or notices regarding the use and disclosure of health information about you.

Effective date: The current version of this notice is effective October 2015.

How the Program may use and disclose health information about youTreatment, payment and health care operations

The Program uses and discloses health information about you, without your authorization, as permitted by law:

• To pay for your health care services, such as providing information about your health care to an insurance provider or obtaining payment for health care services you receive. The Program will send letters and information to the enrolled employee, including information about the employee’s spouse and dependents who are covered by the Program.

• To run the Program, for example, reviewing information as part of the Program’s quality improvement program.

• For treatment, such as sharing test results and other information with your health care providers so they can take care of you.

• To PSE, as plan sponsor, so PSE can manage the Program. Health information about you cannot be used for employment purposes without your authorization unless otherwise permitted by law.

Other uses and disclosures of health informationThe Program also may use and disclose health information about you, without your written authorization, as allowed by law, as described below. These are examples and do not cover everything. Most of the time, the Program will ask for, use and share only the minimum information needed.

• As required by law;

• For workers’ compensation and similar benefits;

• For public health activities;

• For health oversight activities;

• To respond to court or administrative tribunal orders, subpoenas, discovery requests or other lawful process;

• To provide specific information to law enforcement or correctional institutions;

• To lessen a serious threat to health or safety;

• To report abuse, neglect or violence;

• To provide information to a coroner, medical examiner, funeral director or organ procurement organization;

• For limited research activities;

• For military affairs, veterans’ affairs, national security, intelligence, Department of State, or presidential protective service activities;

• As incidental uses or disclosures;

• To inform a family member, another relative or a close friend when information is: (i) relevant to the person’s involvement with your care or payment for your care; or (ii) necessary to notify the individual of your location, general condition or death

The Program is not allowed to use genetic information for underwriting purposes, such as to decide whether to give you coverage or the price of that coverage. (This does not apply to long term care plans.)

The Program may contract with business associates to perform various services on behalf of the Program. To perform these services, business associates may create, receive, maintain and transmit health information, but only after they agree in writing to appropriately safeguard the health information.

“Personal representatives” may be able to act on your behalf and exercise your privacy rights.

17 17

AuthorizationsOther uses and disclosures of health information not covered by this notice or permitted by the laws that apply to the Program will be made only with your written authorization. For example, in general, unless you give us written authorization, we will not: use or disclose psychiatric notes about you; use or disclose health information for marketing; or sell health information about you.

If you provide a written authorization, then you may revoke the authorization, in writing, at any time. Any revocation will not apply to any actions already taken in reliance on the authorization.

Your rights regarding health information Subject to legal limitations, you have rights related to the use and disclosure of health information about you, including the right to:

• Request restrictions on certain uses and disclosures, although the Program may not be obligated to agree to requested restrictions (unless otherwise required by law);

• Request confidential communications of health information;

• Inspect and copy health information about you;

• Amend health information about you that is incomplete or inaccurate;

• Request an accounting of certain disclosures of health information about you; and

• Obtain a paper copy of this notice.

The Program’s dutiesThe Program is required by law to:

• Maintain the privacy of the health information about you;

• Give you a copy of this notice and follow the privacy practices described in this notice; and

• Notify you of a breach of unsecured health information about you.

Changes to this noticeThe Program reserves the right to change this notice and to make the changed notice effective for health information the Program already has, as well as any information it receives in the future. You can get the current notice on PSEWeb/Human Resources/Benefits/Medical benefits or by contacting the Privacy Officer.

Questions and ComplaintsPlease contact the Privacy Officer if you believe your privacy rights have been violated or if you have any questions or concerns related to health information maintained by the Program. You also may file a complaint with the Office for Civil Rights of the United States Department of Health and Human Services.

You will not be penalized, or in any way retaliated against, for filing a complaint with us or with the Office for Civil Rights.

This document highlights some of the provisions of the company’s benefits programs as of January 1, 2016. Complete details may be found in the guide

and in the official plan documents. In case of a conflict between the information contained in this guide and the plan documents, the plan documents always

prevail. In addition, the company reserves the right to amend or end these plans at any time for any reason.

Copyright 2015 Mercer LLC . All rights reserved . 306290 10/15