McKesson 2005 Annual Report Download - page 196

a. Amount of COBRA Contributions. “COBRA Contributions” are required to be paid by the Participant for each period of the
Participant’s COBRA Continuation Coverage. The COBRA Contributions for continued coverage cannot exceed 102% of the estimated cost of
providing such benefits under the Plan for the current year for similarly situated beneficiaries with respect to whom a Qualifying Event has not
occurred. Notwithstanding the foregoing, the COBRA Contributions during the 19th through 29th month of COBRA Continuation Coverage,
for Executives and Dependents who are determined by the Social Security Administration to be disabled under Title II or XVI of the Social
Security Act at any time during the first 60 days of COBRA Continuation Coverage, shall be an amount determined by the Company, in its
sole discretion; provided, however that such amount will not exceed 150% of such estimated cost. Such estimated cost will be determined by
the Company based on (i) the projected costs for such year determined on the basis of actuarial factors prescribed by regulations under section
4980B(f) of the Code, or (ii) the actual cost to the Plan for the preceding year for such similarly situated beneficiaries, adjusted by the
percentage increase or decrease in the implicit price deflator of the gross national product (calculated by the Department of Commerce and
published in the Survey of Current Business) for the 12-month period ending on the last day of the sixth month of such preceding year.
However, (ii) above will not apply in any year in which there is a significant difference in Plan benefits or in the number of Executives covered
by the Plan since the preceding year.
Notwithstanding the foregoing, the COBRA Contributions for continued medical, dental or vision coverage, or any combination thereof, as
applicable, for Executive who perform service in the Uniformed Services of the United States for less than 31 days as provided under
USERRA, cannot exceed the Executive share, if any, with respect to an Executive for whom a Qualifying Event has not occurred.
b. Due Dates of COBRA Contributions. An Executive’s COBRA contributions for each month of COBRA Continuation Coverage are
due prior to the first day of that month. However, any payment made within 30 days after the due date will be considered timely made.
COBRA Contributions for any retroactive election of COBRA Continuation Coverage made pursuant to Section I.5. are due and payable
within 45 days after the date of election.
c. COBRA Contribution Shortfalls. If an Executive or an individual who is treated as an Executive remits a timely monthly contribution
to the Plan or Insurance Company that is significantly less than the actual COBRA Contribution due for the month, the period of COBRA
Continuation Coverage of the Executive or the individual who is treated as an Executive will be terminated immediately. If an Executive or an
individual who is treated as an Executive remits a timely monthly payment that is not significantly less than the actual COBRA Contribution
due for the month, the payment will be deemed to satisfy the Plan’s requirement for the amount that must be paid, unless the Plan notifies the
Executive or the individual who is treated as an Executive of the amount of the deficiency and permits the Executive or the individual who is
treated as an Executive to pay the deficiency within 30 days of the date of the notice of deficiency. Executives and individuals who are treated
as Executives are responsible for paying all deficiencies. A monthly contribution of an Executive or an individual who is treated as an
Executive will not be considered significantly less than the actual COBRA
17