2018–2019 S T I EFNE B EMPEE YO L E D I UGM ENL T L O ENR · · 2018-05-15Enrolling from your...

For internal use only.

EMPLOYEE BENEFITS ENROLLMENT GUIDE

2018–2019

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For internal use only.This enrollment guide provides highlights of Legg Mason’s medical, dental, vision, life insurance, long-term disability, commuter programs, flexible spending accounts, employee assistance, and voluntary benefits. Legg Mason has made every effort to ensure that this enrollment guide accurately reflects plan documents and contracts. If there is any inconsistency between this enrollment guide and those documents or contracts, the documents or contracts will take precedence. Legg Mason reserves the right to terminate or amend its benefit plans at any time and/or for any reason. Contact the Human Resources Department if you have any questions that are not answered in this enrollment guide. The general corresponding tax information provided in this enrollment guide is believed to be true but does not constitute tax advice by Legg Mason; please consult your individual tax advisor for more information.Plan Descriptions are available on Legg Mason Exchange or you may request a hard copy at any time by contacting Human Resources.

Who is eligible for benefits? 3 Information for new employees 5 Information for current employees 5 What’s new or changing? 6

Medical coverage 7 Prescription drug coverage 10 Dental coverage 11 Vision coverage 12 Your cost for coverage 13

Flexible spending accounts 14 Health savings account 16 Voluntary benefits (accident, legal, GUL) 18 Commuter programs 20 Life insurance 21

Short-Term disability 22 Long -Term disability 22

Legal services plan 23 Employee assistance program 24 Domestic partner benefits 25 Regulatory notices related to Health Plans 26 Life event changes 29

Additional benefits 30 Important contact information 31

Contents

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For internal use only. Plan Descriptions are available on Legg Mason Exchange or you may request a hard copy at any time by contacting Human Resources.

WHO IS ELIGIBLE FOR BENEFITS?

A full-time, regular employee.

A part-time, regular employee who works at least 20 hours per week.

A temporary employee who regularly works at least 20 hours per week.

You can enroll for benefits if you are:

Full-time employees vs Part-time employees vs Temporary employees

Full-time employee

A full-time, regular employee is defined as an employee who is not temporary, leased or contractual.

As a full-time, regular employee, you and your dependents are eligible for:

• Medical Coverage• Dental Coverage• Vision Coverage

You automatically receive company-provided coverage for:

• Identity Monitoring• Life/AD&D Insurance• Long-Term Disability

You are also eligible to participate in the:

• Accident Insurance• Commuter Programs• Flexible Spending Accounts• Legal Services Plan

As a temporary, benefits-eligible employee, you and your dependents are eligible for:


Temporary employee

A temporary, benefits-eligible employee is defined as an employee who is not leased or contractual and who regularly works at least 20 hours per week.


• Accident Insurance• Commuter Programs• Flexible Spending Accounts

As a part-time, regular benefits-eligible employee, you and your dependents are eligible for:



• Identity Monitoring• Accident Insurance• Commuter Programs• Flexible Spending Accounts• Legal Services Plan

Part-time employee

A part-time, regular benefits-eligible employee is defined as an employee who is not temporary, leased or contractual and who regularly works at least 20 hours per week but less than the hours for full-time status.

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Note: All employees will be required to provide social security numbers for any spouse or domestic partner and children that are enrolled in the plan. In addition, employees will be required to sign a Spouse, Domestic Partner and Dependent Child Eligibility Affidavit when enrolling spouses or domestic partners. A spouse, domestic partner or child’s status as an eligible dependent is subject to auditing by Legg Mason Human Resources for verification purposes.

Eligible dependentsYour dependents may include your:• Lawful spouse (opposite and same gender)• Domestic partner (opposite and same gender)• Children up to age 26 regardless of student,

employment or marital status

Coverage may also be extended for unmarried children of any age who are mentally or physically unable to support themselves. The definition of “dependent” differs for the Flexible Spending Accounts. More details in their respective sections.

Domestic partnersEmployees may elect medical, dental, and vision coverage for their same and opposite gender domestic partners. See page 25 for details.

If a dependent child, spouse or domestic partner ceases to be eligible for benefits due to divorce, it is the responsibility of the employee to make the appropriate benefit change via Workday within 30 days of the event. For more information about making changes in Workday, go to the Legg Mason Exchange (LMEX) > Employee Resources Workday Learning > Job Aid Library > Employee Self Service > Benefits. Additional information on Qualified Life Events can be found on page 29.

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If you are a new employee, you must make your elections within 30 calendar days of your first day of employment to participate in any of Legg Mason’s health and welfare plans. Coverage begins on your date of hire.

Online enrollment via WorkdayEnrollment may be completed from work or home within your first 30 days of employment. You will receive a task in your Workday Inbox giving you the option to enroll in benefits as one of the steps to onboarding.

If you do not enroll by the deadline, your benefits will be as follows:

If you are a current employee, you may make changes to your benefit elections during the annual open enrollment period or within 30 calendar days of a qualified life event. (See the Life Event Changes section on page 29 for more information.)

What is Open Enrollment?Open Enrollment is the annual period when you may change your benefit choices for the upcoming benefit plan year.

This year, open enrollment takes place from February 12 through February 26, 2018. You will receive a notice in your Workday inbox when Open Enrollment starts and changes can be made to your benefits.

The changes you make to your benefits during open enrollment will be in effect from April 1, 2018 through March 31, 2019.

Enrolling online:From a Legg Mason work location:Access the Legg Mason Exchange (LMEX), go to Employee Resources and select Workday in the bottom margin.

Enrolling from your home:Use this URL: https://www.myworkday.com/leggmason

New Employee Enrollment

Current Employee Enrollment

Online enrollment

Plan Coverage

Medical No coverage

Dental No coverage

Vision No coverage

Life Insurance (full time, regular only)

Basic company provided coverage of 1.5 times BAR (maximum benefits of $500,000)

Long-Term Disability (full time, regular only)

Basic company provided coverage of 60% of basic monthly pay (maximum benefits of $15,000 per month)

Flexible Spending Accounts

No participation

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The new Benefit Plan Year is April 1, 2018 to March 31, 2019. All employees must re-enroll in benefit plans for the coverage period that begins April 1st. Unlike past enrollment periods, prior-year elections will not be carried into the new benefit plan year.

WHAT’S NEW OR CHANGING?

Medical Plans: Eligible Employees can choose from four medical plans. A comparison chart of the four plan is on page 8-9. • Aetna Select — no changes to current plan

• Aetna Choice POS II — no changes to current plan

• Aetna $1,500/$3,000 High Deductible Health Plan* (HDHP) — NEW

• Aetna $4,500/$9,000 High Deductible Health Plan* (HDHP) —NEW

Aetna HealthfundThe Aetna Healthfund plan will not be offered in the new plan year.

Health Savings Account (HSA) A Health Savings Account is a tax advantaged personal savings account that works with a high deductible health plan (HDHP). The HSA provides a triple tax advantage: money goes in tax-free, it grows tax-free, and it’s tax-free when withdrawn to pay for eligible medical, dental, or vision expenses. Once your balance reaches $1,000, you can invest it in a selection of investment funds through Bank of America Merrill Lynch. More details on HSAs can be found on page 16.

Flexible Spending Accounts (FSA) Health Care FSA maximum contribution amount has increased to $2,650 for the plan year.

Limited Purpose Flexible Spending Accounts (LPFSA) A Limited Purpose FSA (LPFSA) is a flexible spending account that only reimburses you for eligible dental and vision expenses. A LPFSA is available to employees who are enrolled in a high deductible health plan (HDHP) and health saving accounts (HSA).

You cannot submit medical, prescription drug, or over-the-counter medication expenses to your limited purpose health care FSA for reimbursement — those expenses are eligible only for reimbursement from your health savings account.

More details on both the standard health care FSA and limited purpose FSA can be found on pages 14-15.

NEW Aetna Accident Insurance Aetna’s Accident plan provides cash directly to the insured to help cover out of pocket costs, such as deductibles or coinsurance, day care, utility bills or whatever else you need as a result of a covered accident. You can enroll yourself, spouse, domestic partner, and/or children. See page 18 for more details.

WellnessXchange We are consolidating our financial and health wellness programs. This year we will not be offering an incentive to complete a biometric screening.

* Both new High Deductible Health Plans are Health Savings Account (HSA) compatible.

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For internal use only.See summary plan description on the Human Resources site on Legg Mason Exchange (LMEX) for the schedule of services — or more information on covered preventive care visit rules.Plan Descriptions are available on Legg Mason Exchange or you may request a hard copy at any time by contacting Human Resources.

MEDICAL COVERAGE

Aetna Select® (Open Access)

Aetna Choice® POS II (Open Access)

Aetna $1500/$3000 High Deductible Health Plan Health Savings (HSA) compatible

Aetna $4500/$9000 High Deductible Health Plan Health Savings (HSA) compatible

All employees, have the opportunity to choose from the following options:

On the following pages you will find highlights of each of these plans. A detailed comparison chart of these options and covered services is located on page 8-9.

Aetna Select® (Open Access)The Aetna Select® Open Access plan gives you the opportunity to see any doctor who participates in the Aetna network, without a referral. There are no out-of-network benefits with this plan. You pay a $15 copay for visits to a PCP or primary provider and a $25 copay for visits to a specialist. You can find a network provider for this plan at www.aetna.com/docfind. Select Aetna Open Access Plans and then Aetna Select (Open Access).

Aetna Choice® POS II (Open Access)With the Aetna Choice® POS II plan, you have the freedom to visit any provider you want whenever you need care. It is similar to a traditional PPO medical plan. When you use providers in the Choice POS II network, you save money. You are responsible for any charges by an out-of-network provider that are above reasonable and customary (R&C). For each service, you pay a coinsurance percentage after you have met your deductible: the plan pays 80% in-network and 60% out-of-network. You can find a network provider for this plan at www.aetna.com/docfind. Select Aetna Open Access Plans and then Aetna Choice POS II.

Aetna network providers overview

Aetna $1500/$3000 High Deductible Health PlanThe Aetna HDHP plan with a HSA offers you more control over how you spend your health care dollars. When you use providers in the Choice POS II open access network you save money. For each service, you pay a coinsurance percentage after you have met your deductible: 20% in-network & 40% out-of-network. You also pay any charges above R&C by an out-of-network provider. NOTE: Once Family Deductible is met, all family members will be considered as having met their Deductible for the remainder of the plan year. There is no individual deductible to satisfy within the family deductible. You can find a network provider for this plan at www.aetna.com/docfind, select Aetna Choice POS II Open Access.

Aetna $4500/$9000 High Deductible Health PlanThe Aetna HDHP plan with a HSA offers you more control over how you spend your health care dollars. When you use providers in the Choice POS II open access network you save money. For each service, you pay a coinsurance percentage after you have met your deductible: 30% in-network & 50% our-of-network. You also pay any charges above R&C by an out-of-network provider. NOTE: There is an individual deductible ($4,500) to satisfy within the family deductible. When an individual member satisfies the individual deductible he/she is considered to have met the deductible even if the family deductible has not been met. You can find an in-network provider at www.aetna.com/docfind, select Aetna Choice POS II

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For internal use only. Out-of-network benefits are based on reasonable and customary (R&C) charges for covered services. You are responsible for any charges

above R&C, and they do not count towards your deductible or out-of-pocket maximum. This chart is a summary of key features and does not include complete coverage details. Some benefit limits apply. Full details are provided

in the company’s Summary Plan Descriptions, located on Legg Mason Exchange (LMEX) or provided in hard copy upon request. Plan Descriptions are available on Legg Mason Exchange or you may request a hard copy at any time by contacting Human Resources.

Summary of key features

Medical coverage

Aetna Select® Open Access Aetna Choice® POS II

In-network Out-of-network In-network Out-of-networkNetwork Select Open Access Choice POS II

HSA Compatible No No

Employer Contribution N/A N/A

Deductible N/A N/A $250 per person;$750 per family

$500 per person; $1,500 per family

Deductible Type N/A Embedded

Annual Out of Pocket Maximum

$1,000 per person; $3,000 per family

N/A $2,000 per person; $6,000 per family


Preventative care $0 N/A $0 40% coinsurance after deductible

Office visit for illness/injury

$15 copay per visit to primary physician; $25 copay to visit specialist

N/A 20% coinsurance after deductible 40% coinsurance after deductible

Urgent care facility $25 copay per visit N/A 20% coinsurance after deductible 20% coinsurance after deductible

Teladoc $15 copay per visit N/A $40 copay per visit N/A

Hospital admission $150 copay per admission + 10% coinsurance

N/A $150 copay + 20% coinsurance after deductible

$200 copay + 40% coinsurance after deductible. Must be precertified to avoid penalty.

Emergency room You pay $150 per visit You pay $150 per visit 20% coinsurance after deductible 20% coinsurance after deductible

Diagnostic X-Ray and lab

10% coinsurance N/A 20% coinsurance after deductible 40% coinsurance after deductible

Outpatient surgery 10% coinsurance N/A 20% coinsurance after deductible 40% coinsurance after deductible

Outpatient mental health

$25 copay per visit N/A 20% coinsurance after deductible 40% coinsurance after deductible

Inpatient mental health

$150 copay per admission + 10% coinsurance

N/A $150 copay + 20% coinsurance after deductible

$200 copay + 40% coinsurance after deductible. Must be precertified to avoid penalty.

Pharmacy Retail — 30 day supply

Generic $5 copay per prescription N/A $5 copay per prescription N/A

Preferred Brand 30% coinsurance (max $50) N/A 30% coinsurance (max $50) N/A

Non-Preferred Brand 30% coinsurance (max$75) N/A 30% coinsurance (max$75) N/A

Pharmacy Mail — 90 day supply

Generic $0 N/A $0 N/A

Preferred Brand 30% coinsurance (max $120) N/A 30% coinsurance (max $120) N/A

Non-Preferred Brand 30% coinsurance (max$180) N/A 30% coinsurance (max$180) N/A

Pharmacy Out of Pocket Maximum





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For internal use only. Out-of-network benefits are based on reasonable and customary (R&C) charges for covered services. You are responsible for any charges

above R&C, and they do not count towards your deductible or out-of-pocket maximum. This chart is a summary of key features and does not include complete coverage details. Some benefit limits apply. Full details are provided

in the company’s Summary Plan Descriptions, located on Legg Mason Exchange (LMEX) or provided in hard copy upon request. Plan Descriptions are available on Legg Mason Exchange or you may request a hard copy at any time by contacting Human Resources.

Summary of key features

Medical coverage

$1,500/$3,000 HDHP (HSA compatible) $4,500/$9,000 HDHP (HSA compatible)

In-network Out-of-network In-network Out-of-networkNetwork Choice POS II Choice POS II

HSA Compatible Yes Yes

Employer Contribution Employee Only: $750; Family: $1,500

Employee Only: $750; Family: $1,500



Deductible Employee only: $1500; Employee + 1: $3,000; Family: $3,000

Employee only: $3,000; Employee + 1: $6,000; Family: $6,000



Deductible Type True Family Embedded

Annual Out of Pocket Maximum





Preventative care $0 $0

Office visit for illness/injury

20% coinsurance after deductible 40% coinsurance after deductible 30% coinsurance after deductible 50% coinsurance after deductible

Urgent care facility 20% coinsurance after deductible 20% coinsurance after deductible 30% coinsurance after deductible 30% coinsurance after deductible

Teladoc $40 copay per visit N/A $40 copay per visit N/A

Hospital admission 20% coinsurance after deductible 40% coinsurance after deductible 30% coinsurance after deductible 50% coinsurance after deductible

Emergency room 20% coinsurance after deductible 20% coinsurance after deductible 30% coinsurance after deductible 30% coinsurance after deductible

Diagnostic X-Ray and lab


Outpatient surgery 20% coinsurance after deductible 40% coinsurance after deductible 30% coinsurance after deductible 50% coinsurance after deductible

Outpatient mental health


Inpatient mental health


Pharmacy Retail - 30 day supply

Generic 20% coinsurance after deductible N/A 30% coinsurance after deductible N/A

Preferred Brand 20% coinsurance after deductible N/A 30% coinsurance after deductible N/A

Non-Preferred Brand 20% coinsurance after deductible N/A 30% coinsurance after deductible N/A

Pharmacy Mail - 90 day supply

Generic 20% coinsurance after deductible N/A 30% coinsurance after deductible N/A

Preferred Brand 20% coinsurance after deductible N/A 30% coinsurance after deductible N/A

Non-Preferred Brand 20% coinsurance after deductible N/A 30% coinsurance after deductible N/A

Pharmacy Out of Pocket Maximum

Pharmacy costs are included in Medical Plan out of pocket max Pharmacy costs are included in Medical Plan out of pocket max

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Your prescription drug benefit is made up of two components — a retail pharmacy and a mail order program.

Visit Express Scripts’s web site at: www.express-scripts.com or call 1-800-711-0917 for information about participating pharmacies.

Retail pharmacyThe retail pharmacy is to be used when you need a prescription for a short period of time (up to a 30 day supply for each prescription/refill).

The mail order programThe mail order program is designed to be used when you need a prescription on an ongoing basis. When using the mail order program, your doctor must write the prescription for a 90-day supply.

Go to www.express-scripts.com/leggmason to look up the cost of your prescriptions drugs.

PRESCRIPTION DRUG COVERAGE

Generic choice featureA formulary is an extensive list of preferred drugs. The list of preferred drugs is created by physicians and pharmacists who evaluate each medication for its safety and efficacy and the availability of drugs in each therapeutic category.

If you choose a preferred or non-preferred drug when a generic drug is available, you will pay the generic copay plus the difference in cost between the generic and your prescribed drug. It is likely the cost will be more when selecting a non-preferred drug instead of a preferred drug.

You can find out what drugs are on the formulary by going to www.express-scripts.com or calling customer service at 1-800-711-0917.

Prescription drug benefits under all of the medical plans are provided by Express Scripts.

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DENTAL COVERAGE

With the MetLife Preferred Dentist Program (PDP), you have coverage for a broad range of dental care needs.

A list of participating dentists can be found on MetLife’s Web site at www.metlife.com/mybenefits. You will not receive a member card for this plan. Simply mention that you are a participant with MetLife in order to receive maximum benefits.

For internal use only. 1 A pretreatment estimate is recommended for major care services. Major care services must begin while you or your dependants are covered under this plan. Plan Descriptions are available on Legg Mason Exchange or you may request a hard copy at any time by contacting Human Resources.

Here’s a summary of your PDP coverage:

PDP coverage

In-network Out-of-network

Calendar year deductible $50 per individual; $150 per family

$50 per individual; $150 per family

Preventive care (routine exams & cleanings)

Plan pays 100% of R&C, no deductible

Plan pays 100% of R&C, no deductible

Basic care (filling & extractions)

Plan pays 80% of R&C, after deductible


Major care1

(crowns & bridgework)Plan pays 50% of R&C, after deductible


Orthodontia Plan pays 50% of R&C, no deductible; Lifetime maximum benefit of $3,000 per person

Plan pays 25% of R&C, no deductible; Lifetime maximum benefit of $3,000 per person

Annual calendar year maximum benefit

$2,000 per person $2,000 per person

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The importance of eye healthAn annual eye exam can be critical to your overall health. Your eye doctor may be the first to detect symptoms of serious eye and related health conditions, including diabetes, high cholesterol, and hypertension.

VISION COVERAGE

The Vision Service Plan (VSP) provides comprehensive eye care coverage for you and your family.

When you enroll in the vision plan, you and your family can receive an annual eye exam covered at 100% with no co-pay, when you visit a VSP provider. You can find a provider at www.vsp.com or 1-800-877-7195.

Vision coverage highlights

VSP provider Non-VSP provider

Routine annual eye examination (one per plan year)

$0 Reimbursement up to $52

Eyeglasses(one set of eyeglasses or contacts once each plan year)

• $20 copay for one set of eyeglasses with standard; single vision, bifocal or trifocal lenses

• Frames covered in full after copay, up to $150• 20% discount on remainder of frame cost• Polycarbonate lenses are covered in full for children• Free anti-reflective coating for lenses• Specialty lenses are offered at discounted rate and

tinting is paid at 100%• Photochronic lenses (Transitions) are paid at 100%

Reimbursement up to:• $55 for single vision lenses• $75 for bifocal lenses• $100 for trifocal lenses• $70 for frames

Contact lenses and contact lens exam(one set of eyeglasses or contacts once each plan year)

• Covered in full up to an allowance of $150 Reimbursement up to:• $105 for contact lenses

Additional discounts • 20% off additional Rx glasses• 15% off contact lenses services• Purchases must be with the same provider

and made within 12 months of each other to get the additional discounts

• Low vision services• Laser correction

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YOUR COST FOR COVERAGEYour cost for medical coverage is based on your Benefits Annual Rate (BAR). For current employees, your BAR is the average of your last three years of full earnings and is recalculated each year. For Newly Hired employees with less than one full calendar year of service, your BAR is equal to your base salary.

Medical Plans

Aetna Select Aetna POS$1,500/$3,000 Aetna

HDHP $4,500/$9,000 Aetna

HDHP

Benefits Annual Rate <$50,000

Employee $45.00 $45.00 $36.00 $27.00

Employee+1 $120.00 $120.00 $94.50 $75.00

Family $185.00 $185.00 $141.50 $109.00

Benefits Annual Rate $50,000–$89,999

Employee $56.00 $56.00 $45.50 $37.50

Employee+1 $142.50 $142.50 $117.50 $96.50

Family $217.50 $217.50 $170.00 $140.00


Employee $67.50 $67.50 $52.00 $40.00

Employee+1 $168.50 $168.50 $130.50 $107.00

Family $261.00 $261.00 $198.50 $163.50


Employee $78.50 $78.50 $58.50 $43.00

Employee+1 $198.50 $198.50 $150.00 $123.50

Family $304.50 $304.50 $222.00 $179.00

Benefits Annual Rate $250,000+

Employee $97.50 $97.50 $75.00 $48.00

Employee+1 $243.50 $243.50 $189.00 $150.00

Family $369.50 $369.50 $283.50 $225.50

MetLife Dental PDP Plus

Employee $12.25

Employee + Child(ren) $22.50

Employee + Spouse/ Domestic Partner

$24.50

Family $35.00

VSP Vision Employee $4.41

Employee+1 $8.82

Family $14.20

For internal use only. Premiums shown are pretax and per pay period

Medical, Dental, & Vision premiums listed are semimonthly rates.

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Legg Mason offers three FSA options: Health Care FSA (traditional) for eligible health care expenses with WageWorks Dependent Care FSA for eligible dependent (child) care expenses with WageWorks

Limited Purpose FSA for qualified dental & vision expenses (HDHP only) with Bank of America Merrill Lynch


FLEXIBLE SPENDING ACCOUNTS

The Flexible Spending Accounts (FSAs) offer a way for you to save money on eligible out-of-pocket health care and dependent care expenses by paying for these services with before-tax dollars.

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1 Remember the “use it or lose it” clause and be conservative with your elections! Budget for expenses that you will incur between April 1, 2018 and March 31, 2019. Remaining balances cannot be rolled over into the next plan year.

Minimum and maximum FSA contribution amounts

Monthly minimum/maximum

Annual minimum/maximum

Health Care FSA (traditional) with WageWorks $20 / $220.83 $240 / $2,650

Dependent Care FSA with WageWorks(Single or married and file a joint tax return*)

$20 / $416.66 $240 / $5,000

Limited Purpose Health Care FSA (HDHP only) with Bank of America

$20 / $220.83 $240 / $2,650

* If married and you and your spouse file separate tax returns, it is recommended that you seek the guidance of a tax adviser.

IF you enroll in one of the Aetna HDHP medical plan you can select an HSA and LPFSA

IF you enroll in the Aetna Select or Choice POS II plan you can select a HC FSA.

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Flexible spending accounts

Tax benefits of the Flexible Spending AccountYou can use WageWorks’ online calculator tools to help determine your tax savings and plan your expenses — go to www.wageworks.com.

Account access online or by phoneYou can manage your health care and dependent care accounts online at www.wageworks.com or by calling 877-924-3967.

Getting reimbursed from your Flexible Spending Account

Health Care Card by WageWorksWorks like a debit card to pay for eligible expenses. According to the IRS you must save your receipts. You may be asked by Wage Works to substantiate your expense. (This feature is not available for Dependent Care Flexible Spending Accounts.)

Pay My ProviderWorks like a bill service that deducts directly from your Flexible Spending account.

Pay Me BackPay for your eligible expense, keep the receipt and submit it to Wage Works online or EZ Receipts app.

Limited Purpose Health Care FSA

1. You can only enroll in a Limited Purpose FSA (LPFSA) if you are enrolled in a high deductible health plan.

2. You may only use an LPFSA to pay for dental and vision expenses.

3. Eligible expenses include: eyeglasses, contact lenses, laser eye surgery, and your copays & coinsurance for dental & vision expenses.

Health Care FSA (traditional)Expenses eligible for reimbursement under the Health Care FSA are those that the IRS allows as qualified health care expenses, which are not reimbursed by any health plan.

These may include:

Deductible amounts

Coinsurance and copayments

Expenses that exceed reasonable amounts

Expenses that exceed plan maximums

IRS-qualified expenses not covered by any insurance

You may be reimbursed for expenses incurred by you or any dependent you claim on your federal income tax return (expenses for Domestic Partners are not reimbursable under current tax law). Neither you nor your dependents have to be enrolled in a Legg Mason health care plan to participate in the Health Care FSA.

Dependent Care FSAYou may use the Dependent* Care FSA to pay for dependent child care or elder care expenses (in most cases) so that you (and your spouse, if you are married) can work. [Please note: If you are married, both spouses must be working to qualify for this benefit.] Other expenses may include:• au pair services• before or after school programs• nursery/preschool • summer day camp*Your dependent children under age 13 whom you are entitled to claim as dependents on your federal income tax return, and/or your spouse or another dependent of any age who lives with you at least eight hours a day, is physically or mentally unable to care for himself or herself, and can be claimed as a dependent on your federal income tax return.

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WHAT IS A HEALTH SAVINGS ACCOUNT (HSA)? A Health Savings Account is a tax advantaged personal savings account that works with a high deductible health plan (HDHP). It is not a medical plan; it is a personal account that you can use in combination with your HDHP to pay for your current or future health expenses. You can contribute pre-tax up to the IRS calendar year limit.

2018 IRS Annual limits1:

Single Coverage: $3,450

Family Coverage: $6,850

Catch up Contribution for those age 55+: $1,000

Who can establish and contribute to an HSA?Eligible individuals:• Must be enrolled in one of the Aetna HDHP plan on the

1st day of the month. If your coverage under the HDHP plan becomes effective after the first of the month, you can open an HSA on the 1st of the following month.

• May not be covered under any other health plan that is not a qualified HDHP.

{{ You may not be covered under your spouse’s or parents non HDHP.

{{ You may not be covered under a traditional health care flexible spending account, this includes your spouse's enrollment in a HC FSA too.

• May not be enrolled in any Medicare programs.

• May not be claimed as a dependent on another individual tax return.

Electing an HDHP mid yearOutside of the annual open enrollment period, you are only able to change your medical plan enrollment if you have a qualified Life Event such as marriage, divorce, or birth of a child. If you consider enrolling or unenrolling from the Aetna HDHP plans during the year, you want to be aware of the following: • The amount paid towards your annual deductible will not

transfer to another plan.

• You cannot contribute (or receive an Employer contribution) to an HSA if you are covered under a traditional FSA.

• If unenrolling, be aware of the tax treatment of your HSA contributions if you reached that calendar year maximum in the calendar year. See IRS Publication 969 or ask your tax advisor.

For internal use only. 1 Limits are calendar year and include employer funding. You can only contribute to the HSA for the months you are eligible.

April – June

July - September

October- December

January - March

Single Coverage $750 $562.50 $375 $187.50

Family Coverage $1500 $1125 $750 $375

Legg Mason HSA ContributionsLegg Mason will contribute $750 if you are covering yourself only and $1500 if you are covering yourself and another eligible dependent into your HSA. You will receive the contribution on the first of the month you are eligible to contribute to your HSA.

If you enroll in the Aetna HDHP plan midyear, the Legg Mason contribution will be prorated based on the following schedule:

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For internal use only. 2 You must be enrolled on the 1st of the month in the HDHP medical plan to begin contributing to your HSA. For example, if your HDHP coverage begins on April 10th

you can begin contributing to your HSA from your May 15th paycheck.

Under an HSA, a dependent is defined under IRS rules. Therefore, your adult child or domestic partner health care expenses may not be eligible expenses under an HSA account. Your adult child or domestic partner can open their own personal HSA account to save or use for medical plan expenses. Please review IRS Publication 969 for complete HSA eligibility rules.

Note: Dependent definition is different under the Legg Mason health plans. You can cover your dependent child up to age 26 and same/opposite sex domestic partner under the HDHP medical plan.

Tax ReportingSince your HSA is a tax advantaged account the IRS requires you report contributions and distributions on your tax return. You will receive the following: • W-2: Legg Mason will provide you with your W-2. This

reports all employer contributions and pre-tax payroll deductions. Employer contributions are not considered part of your income.

• Form 1099- SA: Bank of America will provide you with a 1099-SA. This form reports your distributions from the previous calendar year.

• Form 5498-SA: Bank of America will provide you with a 5498-SA. This form reports your contributions and/or rollovers into your HSA for the previous tax year.

• Form 8889: This form is used to calculate your HSA deduction amount and to report any distributions you have had. You and your tax preparer complete this form.

New to an HSA?To learn more about how HSAs can help you manage your health care spending, visit Bank of America’s educational resource center at www.saveituseit.com and access: • Calculators

• How-to videos

• HSA User guide

How do they WorkSave itThere are three types of tax advantages to using an HSA:

1 Pre-tax payroll contribution

2 Tax free interest and investment earnings

3 Tax free payments for qualified health expenses

Pre-tax Payroll Contribution: The money you save into your HSA is exempt from Federal income tax. States can choose to follow the federal tax treatment guidelines or establish their own.

You can change your payroll contribution to your HSA throughout the year without a life event via Workday (www.myworkday.com/leggmason).

Invest in your future

Once your balance reaches $1,000, you are eligible to invest any portion of your HSA balance above this level within a select menu of mutual funds.

Use itYou choose when to use your HSA dollars. For example, when you go to the doctor's office you can choose to pay with your HSA dollars right then or pay out of pocket and save your HSA dollars for future expenses. Eligible expenses include your deductible, coinsurance, dental and vision expenses, and other qualified health care expenses. Accessing your money is easy with your HSA Visa debit card, online portal, and mobile app with Bank of America.

Never lose itAny unused balance in your HSA carries over from one plan year to the year. Your HSA belongs to you, which means you can use the money in your account to pay for qualified health care expenses throughout your life — even if you change insurers, change employers, or retire.

Whose expenses does your HSA cover? HSA distributions are tax-free if used for qualified health expenses for you, your spouse, or dependent you claim on your tax return.

Health Savings Account (HSA)

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VOLUNTARY BENEFITSA variety of additional benefits are available for you to choose coverage that meets your needs.

Accident Insurance Aetna’s Accident plan provides cash directly to the insured to help cover out-of-pocket costs, such as deductibles or coinsurance, day care, utility bills or whatever else you need because of a covered accident. You can enroll yourself, spouse, domestic partner, and/or children up to age 26. You will enroll via workday at www.myworkday.com/leggmason

You can see the schedule of benefits on LMEX – Employee Resources -Benefit Summaries

Your premiums for accident coverage are based on the coverage level you select. Your coverage begins on the first of the month.

Your per paycheck (post-tax) premiums:Employee Only: $3.03Employee + 1: $5.33Employee + Family: $7.64

Supplemental Group Universal Life InsuranceLegg Mason offers full-time, regular employees the option to elect additional life insurance coverage. Group Universal Life from MetLife is portable life insurance. You can elect from one to ten (1–10) times your BAR to a maximum of $3,000,000 in coverage. Premiums are taken through payrolldeduction on a post-tax basis.

Enrollment for Group Universal Life: You can enroll and find the rates at www.metlife.com/mybenefits.

New employees can elect up to three (3) times BAR or $1.5 million, whichever is less, within the first 30 days of employment without medical underwriting. Additional multiples are subject to medical underwriting approval.

Current employees may enroll or change coverage at any time, but any coverage increase is subject to approval from the insurance carrier before becoming effective.

Group Universal Life insurance — cash fundGroup Universal Life is life insurance that lets you and your covered spouse/domestic partner set aside money in a tax

deferred cash fund, which will earn a competitive rate of interest. You may select a certain dollar amount to contribute automatically through post-tax payroll deductions. You maytake a loan or withdraw some or all of the cash at any time for any purpose. Some withdrawals may be taxable if they exceed the total premium paid, which includes the cost of insurance and cash fund contributions. Please contact MetLife or your tax advisor for more information on the tax consequences.

Group Universal Life insurance for spouses or domestic partnersGroup Universal Life insurance coverage is also available for spouses and domestic partners. Coverage amounts are available from $10,000 to $100,000, in increments of $10,000. A Statement of Health is required for any amounts over $30,000.

If your spouse or domestic partner is also an employee of Legg Mason, he/she can either enroll for employee supplemental coverage or spouse coverage, but not both. In the event of death, the employee is the beneficiary to any spousal/domestic partner life insurance coverage.

Will preparationParticipants in the Supplemental Group Universal Life plan have access to a Will preparation service that provides free Will preparation and consultation with an experienced local attorney. Call 1-800-821-6400 to get started.

Special events enrollment for Group UniversalLife insuranceIf you get married/divorced, have a baby/adopt a child or purchase a home, you can increase your coverage by one salary multiple without evidence of insurability (subject to plan limits). You must request the change within 30 days of the special event.

Beneficiaries for supplemental Group UniversalLife insuranceWhen you complete the enrollment for Group Universal Life insurance you will need to designate a primary beneficiary. To change your beneficiaries, contact MetLife directly at 1-800-GET-MET8 (1-800-438-6388).


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Term life insurance for dependent children Term life insurance for dependent children is available in increments of $5,000 and $10,000. The monthly cost is $0.60 for the $5,000 option and $1.20 for the $10,000 option. Coverage is available for eligible children under the age of 26. In the event of death, the employee is the beneficiary of any dependent child life insurance coverage. You can enroll in this coverage in Workday at www.myworkday.com/leggmason.

InfoArmorLegg Mason, regular, non-temporary employees can enroll themselves and their family members in free identity monitoring services provided by InfoArmor. Go to www.InfoArmor.com/LeggMason to enroll.

• Identity and Credit Monitoring Enjoy peace of mind with proactive monitoring for the most damaging types of fraud. Uncover and resolve issues early to help minimize damages. Your credit is monitored through TransUnion.

• Credit Scores and Reports Stay informed and protect your financial assets by detecting credit misuse quickly. Access a monthly credit score and a credit report each year from TransUnion.

• Threshold Monitoring Gain control of your finances as you set limits on and manage all transactions, from all your accounts in one place.

• Social Media Reputation Monitoring Actionable alerts help defend you and your family from reputational damage or cyberbullying. InfoArmor monitors Facebook, LinkedIn, Twitter, and Instagram profiles.

• Wallet Protection InfoArmor can easily replace the contents of a lost or stolen wallet through an online, secure vault that conveniently stores important documents.

Student Loan Genius AdvisorEmployees and immediate family members have free access to this online tool to optimize student loan repayments. Choose from among 70+ options to lower your monthly payment, pay your loans off faster, and/or refinance. View a short “how-to” video on LMDU, and sign-up at app.studentloangenius.com/hello/leggmason.

Care@workAnnual membership fees for Care.com are waived for Legg Mason employees. Membership provides access to a large network of caretakers for children, seniors, home, pets and more. Users can screen, hire and pay caretakers on one convenient platform. Find additional details on LMEX, view a “how-to” webinar on LMDU, and sign up at leggmason.care.com.

Voluntary Benefits


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Pre-tax limitationsCurrent 2018 tax regulations limit your pre-tax benefits for public transportation (which includes vanpool) and parking to the following monthly limits:

The remainder will be deducted from your paycheck on an after-tax basis. These limits may change based on future legislation.


It’s simple: You set the amount to be automatically deducted from your paycheck and tell WageWorks how you get to work. WageWorks will use that money to pay for your transit pass or vanpool voucher and mail it to your home every month. If you drive, you can have WageWorks pay your parking lot every month.

Benefits eligible employees may enroll in the WageWorks Commuter Program, an easy-to-use commuter benefits program.

COMMUTER PROGRAMS

Key enrollment dates for changes or cancellationsOrders, changes or cancellations must be made by the 4th of the month to be effective the following month. For example, if you want an October 1 effective date, you must make the change by September 4.

Paying for your benefitThe net cost of your benefit election will be deducted automatically from your paycheck each pay period. The same deduction will be made until you change or cancel your order.

Eligible and ineligible expensesEligible expenses include transportation to work via bus, train, subway, vanpool and ferry, as well as parking at or near work. Expenses for tolls and residential parking are ineligible for the pre-tax commuting benefit.

Two ways to sign up

Sign up online

Visit www.wageworks.com and select “Employees” in the top margin.

Sign up by phone

Call 877-924-3967 (877-WageWorks) and speak to a WageWorks Customer Service representative.

$260 per month

$260 per month

Public transportation: Parking:

P

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LIFE INSURANCE

Basic Life and AD&D insuranceLegg Mason automatically provides basic life insurance coverage to full-time, regular employees equal to 1.5 times your Benefits Annual Rate (BAR) up to $500,000. In addition, full time regular employees also receive Accidental Death & Dismemberment coverage equal to their basic life insurance amounts.

Your BAR is the average of your last three (3) years of gross earnings, and is recalculated each year. (If you have less than three years of service, your BAR is calculated using the average of any year’s gross earnings at Legg Mason. For newly hired employees, your BAR is equal to your base salary.)

Reduction due to ageThe amount of basic life insurance for which you are eligible will reduce if you reach certain ages while insured. On January 1 following your 65th birthday, your basic life insurance coverage is reduced to 65% of your basic life insurance prior to the reduction. On January 1 following your 70th birthday, your basic life insurance coverage is reduced to 39%.

Beneficiaries and benefit paymentsYou can designate a primary and contingent beneficiary via Workday.

Additional information on the Life and AD&D benefit can be found on the Legg Mason Exchange (LMEX) or by contacting the Benefits Group.

Met Life provides basic life and AD&D insurance.

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An employee is eligible for this salary continuation plan if the following conditions are met:

• Employee is a regular, full-time employee• All documentation requirements have been

satisfied, and • The claim has been approved as an eligible disability.

DISABILITY

Short-Term Disability (STD)

STD Benefits provide income continuation during periods of serious illness or injury resulting in partial or total disability.You may be considered disabled if you are unable to perform your job duties due to a non-work-related injury or illness, as certified by your health care provider (HCP).

Additional information regarding Legg Mason’s Disability and Leave Policies can be found on Legg Mason Exchange (LMEX) under Employee Resources > Time Off > Leave.

Long-Term Disability (LTD)

LTD Coverage provides ongoing income if you are unable to work because of a disabling illness or injury. Benefits generally begin after you have been disabled for six (6) months (the elimination period). Benefits may continue until age 65 if you remain disabled.

Basic LTD coverageLegg Mason provides all full-time, regular employees with Basic LTD coverage. Basic LTD coverage provides a benefit equal to 60% of your average monthly pay up to a maximum of $15,000 per month. Average monthly pay is determined using your Benefits Annual Rate (BAR). Coverage is based on a maximum benefits base of $300,000.

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Enrollment & costYou must enroll online through Workday during Open Enrollment or your new hire period to be eligible for these services. The cost for the services is $201 per year, or $16.75 per month, on a post-tax basis.

ServicesHyatt Legal Plans, Inc., a MetLife Company, provides services for MetLaw through a panel of carefully selected Participating Law Firms. Lawyers in this network are called Plan Attorneys. When you enroll in the plan, you will have full representation for these services:

Estate Planning Documents, including wills, trusts, and living wills

Financial Matters, including negotiations with creditors, identity theft, personal bankruptcy

Real Estate Matters, including sale, purchase or refinancing of your primary residence, boundary or title disputes, property tax assessment

Family Law, including uncontested adoption, uncontested guardianship, name change, protection from domestic violence

Defense of Civil Lawsuits, including administrative hearings, civil litigation defense, and school hearings

LEGAL SERVICES PLAN

Immigration Assistance, including advice and consultation, review of immigration documents, preparation of affidavits, and powers of attorney

Traffic Offenses, including defense of traffic tickets (excludes DUI) and driving privileges restoration (includes license suspension due to DUI)

Juvenile Matters, including juvenile court defense, and criminal matters

For More InformationVisit the MetLaw Web site: www.legalplans.com, click on “Thinking About Enrolling?” and enter 1500238 or METLAW. Or call the Client Service Center at 1-800-821-6400.

Hyatt Legal, a MetLife Company, provides unlimited telephone advice and office consultations on personal legal matters with an attorney of your choice.

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What is an EAP?An Employee Assistance Program (EAP) is a counseling and consultation service that provides assistance and counseling for emotional health, marital and family problems, and work issues.

Covered services are paid for by Legg Mason and are available to employees, any person permanently residing in the eligible employee’s household, and individuals who qualify as dependents of the employee for federal income tax purposes. All services are confidential. Covered services are available 24 hours a day, 7 days a week with no limit on the number of times a participant may contact the EAP for different issues.

Covered services include:In-person counseling sessions with LifeMatters counselors up to a maximum of three (3) visits per incident, per calendar year or three (3) scheduled telephonic counseling sessions.

In-person legal consultations for issues relating to relationships / marital issues, family conflicts, stress, anxiety and emotional distress, depression, and alcohol or drug abuse.

EMPLOYEE ASSISTANCE PROGRAM (EAP)

The following services are available:

Child and elder care referrals, such as help identifying care-giving options and available community resources.

Federal tax assistance, including income tax planning assistance.

Daily Living services — referrals for everyday errands, travel, pet-care and more.

Legal services — consultations for virtually all issues except employee-employer disputes or disputes with LifeMatters.

Contact InformationText Messaging: Text "Hello" to 61295

Mobile: Download the LifeMatters App (LEGG1 access code)

Client Service: 1-800-634-6433

Website: www.mylifematters.com access code: LEGG1. For a referral to a LifeMatters counselor you will be prompted to supply additional information.

Note: All benefits are subject to possible exclusions and limitations and Legg Mason reserves the right to change the amount of its contributions toward the cost of coverage.

The EAP is a useful resource for information and assistance with emotional health, relationships, finances and legal matters.

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EligibilityTo be eligible for coverage, a domestic partner must meet the following criteria:

A person with whom the employee is emotionally committed as a family in a long-term relationship of indefinite duration.

Jointly financially responsible for each other’s common welfare of the employee and self, or the employee is primarily responsible for supporting the domestic partner.

Not related by blood to a degree of closeness that would prohibit legal marriage in the state of residence.

At least 18 years of age and mentally competent to consent to contract.

Former spouses cannot be added to the plan as an eligible domestic partner for a period of 6 months from the date of divorce.

When enrolling spouses or domestic partners, all employees will be required to sign a Spouse, Domestic Partner and Dependent Child Eligibility Affidavit.

DOMESTIC PARTNER BENEFITS

Premiums for domestic partnersEmployees electing medical, dental or vision coverage for their domestic partner will pay the same premiums as employees who are covering spouses or other dependents. However, there are specific tax rules associated with domestic partner coverage that will affect the employee’s taxable income, as described below.

Tax rules and imputed incomeCurrent tax law stipulates that coverage for a domestic partner who is not a tax dependent of the employee cannot be provided on a pre-tax basis. Therefore, the amount of premium paid for the domestic partner and his or her dependent children will generally be a post-tax deduction.

In addition, the IRS requires employers to report the fair market value of the domestic partner coverage minus any post-tax contribution for that coverage. This value becomes imputed income to the employee.

Exception to Tax RulesIn some cases, a domestic partner may qualify as a dependent under Internal Revenue Code Section 152 and therefore may be included in the employee’s pre-tax deduction for health coverage.

A child of your domestic partner who is not your adopted or biological child may qualify as your Section 152 dependent for a tax year in certain situations.

You should consult with a tax adviser if you have questions about whether your domestic partner or a child qualifies.

Employees may elect medical, dental and/or vision coverage for their same or opposite gender domestic partner.

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The Patient Protection and Affordable Care Act (PPACA), was enacted on March 23, 2010. Health Plans in existence at that time have the option of retaining grandfathered status. Effective September 1st, 2012 Legg Mason’s Health Plan did not retain grandfathered status.

REGULATORY NOTICES RELATED TO HEALTH PLANS

The Affordable Care Act requires most people to have health care coverage that qualifies as “minimum essential coverage.” This plan or policy does provide minimum essential coverage.

The Affordable Care Act establishes a minimum value standard of benefits of a health plan. The minimum value standard is 60%. This health coverage does meet the minimum value standard for the benefits it provides.

Public Health Insurance Marketplace Coverage NoticeThis Marketplace Notice provides general information and answers basic questions about purchasing health carethrough the Public Health Insurance Marketplace. Thisnotice is distributed at the beginning of your employment.You may request a copy of the notice at any time bycontacting Legg Mason Human Resources.

Group health plans are subject to several regulatory requirements. This section highlights the mandatory notices to participants.

Key provisions of PPACA that apply to non-grandfathered plans

Non-grandfathered plan provisions

Legg Mason Health Plan

Extends dependent coverage to age 26 for covered participant child

In place

No lifetime dollar limits In place

Pre-existing conditions exclusions for children under age 19 eliminated

In place

Restricted annual dollar limits on essential benefits, phased amounts until 2014

In place

Coverage cannot be rescinded except for fraud or misrepresentation

In place

No cost-sharing for in-network preventive services

In place

Emergency Room services must be covered at in-network level regardless of provider

In place

No OB/GYN pre-authorization or referral requirement

In place

Eligibility waiting periods may not extend beyond 90 days (starting in 2014)

In place

Key provisions of PPACA that apply to non-grandfathered plans

Non-grandfathered plan provisions

Legg Mason Health Plan

Changes to internal claims' appeals procedures and addition of new external claims appeal process

In place

Self-insured plans must provide the uniform summary of benefits and coverage on paper or electronically

In place

Legislation requires coverage of routine patient care costs related to clinical trials

In place

27


Notice of special enrollment rightsAs you know, if you have declined enrollment in Legg Mason’s health care plan coverage for yourself or your dependents (including your spouse) because of other health insurance coverage, you or your dependents may be able to enroll in some coverages under this plan without waiting for the next open enrollment period, provided that you request enrollment within 30 calendar days after your other coverage ends. In addition, if you have a new dependent as a result of marriage, birth, adoption, or placement for adoption, you may be able to enroll yourself and your eligible dependents, provided that you request enrollment within 30 calendar days after the marriage, birth, adoption, or placement for adoption.

Legg Mason will also allow a special enrollment opportunity if you or your eligible dependents either:• Lose Medicaid or Children’s Health Insurance Program

(CHIP) coverage because you are no longer eligible, or

• Become eligible for a state’s premium assistance program under Medicaid or CHIP.

For these enrollment opportunities, you will have 60 days — instead of 30 — from the date of the Medicaid/CHIP eligibility change to request enrollment in the Legg Mason group health plan. Note that this new 60-day extension does not apply to enrollment opportunities other than due to the Medicaid/CHIP eligibility change.

Note: If your dependent becomes eligible for a special enrollment rights, you may add the dependent to your current coverage or change to another health plan.

Health Insurance Portability and Accountability Act:Notice of health information privacy practicesThis notice describes how medical information about you may be used and disclosed, and how you can get access to this information. This notice is distributed in writing every three years as required. You may request a copy of the notice at any time by contacting Legg Mason Human Resources.

Newborns’ and Mothers’ Health Protection ActGroup health plans and health insurance issuers generally may not, under federal law, restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than 96 hours following a cesarean section. However, federal law generally does not prohibit the mother’s or newborn’s attending provider, after consulting with the

mother, from discharging the mother or her newborn earlier than 48 hours (or 96 hours as applicable). In any case, plans and issuers may not, under federal law, require that a provider obtain authorization from the plan or the issuer for prescribing a length of stay not in excess of 48 hours (or 96 hours).

Women’s Health and Cancer Rights Act of 1998:Notice of required coverage following mastectomiesIn compliance with the Women’s Health and Cancer Rights Act of 1998, the Legg Mason Benefits Plan provides the following benefits to all Plan participants who elect breast reconstruction in connection with a mastectomy, to the extent that the benefits otherwise meet the requirements for coverage under the Plan:

Reconstruction of the breast on which the mastectomy has been performed.

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

Coverage for prostheses and physical complications of all stages of the mastectomy, including lymphedemas.

The benefits shall be provided in a manner determined in consultation with the attending physician and the patient. The Plan will not deny eligibility, or continued eligibility, to enroll or to renew coverage solely to avoid providing these benefits. Further, the Plan will not penalize or otherwise reduce or limit the reimbursement of an attending provider, or provide incentives (monetary or otherwise) to an attending provider, to induce the provider to provide care to an individual participant or beneficiary in a manner inconsistent with the Women’s Health and Cancer Rights Act of 1998.

Plan terms such as any annual or lifetime maximums, deductibles, coinsurance and so on, as described in the Plan, apply to these benefits. Please contact the Human Resource Department or refer to the Summary Plan Description (located on Legg Mason Exchange (LMEX)) for more detailed information regarding deductibles and coinsurance for these benefits under the Plan.

If you have any questions about this notice, please send them in writing to: Legg Mason, Human Resources Department, 100 International Drive, Baltimore, MD 21202

Regulatory notices related to health plans

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Credible coverage disclosure notice for those Eligible for Medicare If you have Medicare or will become eligible for Medicare in the next 12 months, you have more choices about your prescription drug coverage.

Medicare prescription drug coverage became available in 2006 to everyone with Medicare through Medicare prescription drug plans and Medicare Advantage Plans that offer prescription drug coverage. All Medicare prescription drug plans provide at least a standard level of coverage set by Medicare. Some plans may also offer more coverage for a higher monthly premium.

Legg Mason has determined that the prescription drug coverage offered by the Legg Mason Plan is, on average for all plan participants, expected to pay out as much as the standard Medicare prescription drug coverage will pay and is considered Credible Coverage.

Legg Mason provides an annual Notice of Credible Coverage to all Plan participants and beneficiaries who are eligible for Medicare. The notice has information about your current prescription drug coverage with Legg Mason and prescription drug coverage available for people with Medicare. It also explains the options you have under Medicare prescription drug coverage and can help you decide whether or not you want to enroll. At the end of the notice is information about where you can get help to make decisions about your prescription drug coverage.

The information contained here is a highlight of the Credible Coverage Notice. You have the right to request a copy of the full text of the Credible Coverage notice at any time by contacting:

Legg MasonHuman Resources Department100 International DriveBaltimore, MD 21202

Children’s Health Insurance Program Reauthorization Act of 2009CHIPRA is a shared federal and state program that provides health insurance coverage to lower income pregnant women and children who do not otherwise qualify for Medicaid but fall within the federal poverty level.

Below is a summary of the major components:Premium assistance available at the state level for income eligible participants. States may elect, but are not required, to offer premium assistance to low-income children and their families who are eligible for qualified employer sponsored coverage but unable to afford their portion of the premium. These States use funds from their Medicaid or CHIP programs to help people who are eligible for employer-sponsored health coverage, but need assistance in paying their health premiums.

Eligibility for programGroup health plans must now permit eligible employees and their dependents to enroll in the health plan if:

An employee or dependent loses their eligibility status to participate in Medicaid or CHIP.

An employee or dependent qualifies for premium assistance under Medicaid or CHIP at the state level.

Coverage under the plan must be sought within 60 days of either (1) losing eligibility to participate in Medicaid or CHIP or (2) within 60 days of being notified that an individual is eligible for premium assistance from the state in which they reside.

If you or your dependents are not eligible for Medicaid or CHIP, you won’t be eligible for these premium assistance programs, but you may be able to buy individual coverage through the Health Insurance Marketplace.

To find out if your state is eligible for these assisted programs, please review the Regulatory Section on LMEX under the Employee Resources > Health > Regulatory Notices.

Regulatory notices related to health plans

29


Qualifying life eventsQualifying life events are major events in your life that allow you to change your health care coverage outside of the open enrollment period.

A qualifying event typically includes but is not limited to: Marriage or divorce

Birth or adoption of a child

Death of a spouse or dependent child

A change in employment status for an employee or a spouse

Enrollment in (or loss of) other medical coverage

New domestic partner or loss of domestic partner

Court judgment or decree

Being newly eligible for Medicare coverage

Eligible for (or loss of) coverage under a state Medicaid or CHIP Program

LIFE EVENT CHANGES

Making life event status changesAny changes in coverage must be made within 30 calendar days of the life event. If you miss the window, you will have to wait until the next open enrollment period or another qualifying life event. Changes to your benefits can now be initiated via Workday. For more information, go to the Legg Mason Exchange (LMEX) > Employee Resources > Workday Learning > Job Aid Library > Employee Self Service > Benefits, and choose the topic that applies to you. You will be required to provide documentation as proof of the event. Documents can be attached in Workday by clicking the plus icon under “Attachments” section and then “Submit”.

During the course of your Legg Mason career, you are likely to experience many changes in your life outside of work. Some of these changes could impact your benefits.

30


Employee DiscountsWorking advantage discount websiteWorking Advantage provides a variety of discounts on entertainment and shopping, including Broadway Theatres, amusement parks, sporting events, apparel, retail services and many others. Promotions change regularly — log in to the website to take full advantage of the latest discounts! Go to www.workingadvantage.com. The member ID code can be found on LMEX.

MetPay Auto and Home insuranceDiscount auto and home insurance is available for Legg Mason employees. Contact MetLife Auto and Home at 800-GET-MET1 (800-438-6381) to obtain a free, no-obligation quote. Premiums are taken as post-tax deductions from your payroll and adjust automatically with each policy renewal.

Other discountsOther employee discounts are available and regularly updated. Refer to Employee Resources on Legg Mason Exchange (LMEX) for a complete listing.

Services for parents of children with special needs

ADDITIONAL BENEFITS

MetLife’s Division of Estate Planning for Special Kids (MetDESK) is a service created to help employees and their families plan for the future of their children and other dependents with special needs. MetDESK is dedicated to helping families secure both lifetime care and quality of life for their children or other dependents with special needs.

To take advantage of these services, visit www.metlife.com/mybenefits or call MetDESK at 1-877-MetDESK (1-877-638-3375).

Other Employee BenefitsDetails on additional employee benefits may be found on the Employee Resources site on Legg Mason Exchange (LMEX):

401(k) Savings Plan

Employee Stock Purchase Plan

529 College Savings Plan

Tuition Reimbursement

Paid Time Off

Student Loan Genius Advisor

Care@Work

In addition to our benefits plan, Legg Mason offers employees additional benefits and employee discounts.

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If you have questions, contact [email protected] or call 410-454-3303.

IMPORTANT CONTACT INFORMATION

Contact resources

If you have a question about... Vendor Phone number Web site

Medical Coverage Aetna Customer service: 1-866-687-6996

Member website:www.aetnanavigator.com

Provider directory:www.aetna.com

Prescription Drug Program Express Scripts 1-800-711-0917 www.express-scripts.com

Dental Coverage MetLife Group Number: 300241

1-800-942-0854 www.metlife.com/mybenefits

Vision Coverage VSP 1-800-877-7195 www.vsp.com

Group Universal Life Insurance

MetLifeWill Preparation

1-800-523-28941-800-821-6400

www.metlife.com/mybenefits

Flexible Spending Account(s)

WageWorks 1-877-924-3967 www.wageworks.com

COBRA Coverage Conexis 1-877-452-6272 https://mybenefits.conexis.com

HSA or LPFSA Bank of America Merrill Lynch

1-877-994-5344 www.benefits.ml.com

401(k)/Profit Sharing Account

Merrill Lynch 1-877-994-5344 www.benefits.ml.com

Employee Stock Purchase Plan

Merrill Lynch 1-877-994-5344 www.benefits.ml.com

MetPay Auto and Home MetLife 1-800-GET-MET-1 www.metlife.com/mybenefits

MetLaw Legal Services MetLife/Hyatt Legal 1-800-821-6400 www.legalplans.com enter: METLAW

Commuter Programs WageWorks 1-877-924-3967 www.wageworks.com

Employee Assistance Program (EAP)

Life Matters 1-800-634-6433 www.mylifematters.com access code: legg1

Accident Insurance Aetna 1-888-772-9682 www.aetnavoluntaryforms.com

For internal use only. © 2018 Legg Mason Investor Services, LLC. Member FINRA, SIPC. Legg Mason Investor Services, LLC is a subsidiary of Legg Mason, Inc.

773239 CORP016462 2/18

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• A broad mix of equities, fixed-income, alternatives and cash strategies invested worldwide

• A diverse family of specialized investment managers, each with its own independent approach to research and analysis

• Over a century of experience in identifying opportunities and delivering astute investment solutions to clients

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QS Investors

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Western Asset 1-800-822-5544LeggMason.com

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