Benefits Overview Tier 2 The information contained in

Benefits Overview Tier 2 The information contained in these slides is intended to be a summary only. Please refer to the Summary Plan Description and/or insurance certificates for detailed information. January 14, 2013

Benefit Carriers BC/BS of Michigan-Simply Blue PPO Medical/Prescription coverage BC/BS of Michigan Dental coverage BC/BS (VSP) of Michigan Vision coverage Lincoln Financial Group Life and AD&D, LTD, STD, and Accident Insurance Help. Net Employee Assistance Program

Deadlines • Benefit Elections must be made within 30 days of your date of hire. • Dependent certification is due within 30 days of your date of hire • Benefit Elections go into effect on your 31 st day of employment.

Documentation • Proper documentation is needed for all eligible dependents that you would like to cover on the medical & prescription, dental or vision plan. • Copies are accepted and can be faxed or emailed to human resources. Child (Children can be covered until the day before their 26 th birthday. ) • Birth Certification or Adoption order or court document showing relationship. Spouse (2 documents needed) • Marriage Certificate • Proof of current marriage (last year’s tax return or recent bill coming to your name and spouse’s name at same address.

Premium Costs for Medical and Prescription Insurance • Single coverage = No cost to the employee • 2 -Person coverage = $210. 76/bi-weekly • Family coverage = $301. 08/bi-weekly *Premiums are based on 24 pays

Medical Deductible with BCBS • Single = $1, 250 Family = $2, 500 • KRESA will be depositing a pro-rated amount of the single coverage deductible into your Health Savings Account (H. S. A. ) *This amount is pro-rated based on your start date after January 1, 2013

Medical Plan Overview • Ability to choose in-network or out-of-network care for medical services or supplies In Network Out-of. Network $1, 250 per member $2, 500 for family $2, 500/$5, 000 100% 80% Office Visit Deductible 80% after deductible Urgent Care Deductible 80% after deductible ER Visit (waived if admitted) Deductible 80% after deductible % Co-Insurance 100% 80% % Co-Insurance Maximum Does not Include Deductible In & out of network does not cross accumulate $1, 000 per member $2, 000/family $2, 000/4, 000 Deductible In & out of network does not cross accumulate Co-Insurance • Choose in-network whenever possible as cost will be cheaper • All medical and RX expenses go towards the deductible • Once deductible is met your medical expenses are covered at 100% (Rx subject to copay $10/$40/$80 No o t. C isi O e. V ffic ! ays -p

Medical Plan Overview Preventive Care Services (generally one per calendar year) In Network Out-of. Network Preventive Services Covered at 100% Health maintenance exam, includes chest x-ray, EKG, cholesterol screening and other lab procedures Covered 100% N/A Gynecological exam Covered 100% N/A Pap smear—lab and pathology Covered 100% N/A Well-baby & child care (see multiple visit limits by age) Covered 100% N/A Mammography screening Covered 100% N/A Immunizations-pediatric & adult Covered 100% N/A

Medical Plan Overview Other covered services In Network Out-of. Network Allergy testing and therapy 100% after deductible 80% after deductible Chiropractic manipulation--12 visits per year 100% after deductible 80% after deductible Outpatient physical, speech and 100% after deductible 80% after deductible occupational therapy-30 combined visits per year • • No Pre-existing Conditions No Lifetime Maximums

Prescription Plan Overview • • • Cost of Prescription Applied to the Deductible Once Deductible Met – Copay’s Apply Once Copay’s Accumulate to the Out of Pocket Maximum $1, 000 Single / $2, 000 Family plan pays 100% Step Therapy Prescription Drug Coverage In-Network Benefits (up to a 30 day supply) – $10 (or less) co-pay: Generic – $40 co-pay: Formulary (Preferred) Brand Name drugs – $80 Non-Formulary (Non-Preferred) Brand Name drugs – Oral and Injectable contraceptives – covered with applicable copay – Applicable co-pay applies for elective drugs, i. e. infertility, weight loss & sexual impotency – Rx formulary can be found BCBSM web site on www. bcbsm. com and has also been placed on the KRESA internal employee web site

Prescription Plan Overview Mail Order • Mail Order: Prescription Drug Coverage In-Network Benefits home delivery for a 31 to 90 day supply • Prescription Drugs will be subject to the following co-pay once the Single / Family deductible has been met – Generic drugs – $20 co-pay – Formulary drugs - $80 co-pay – Non formulary drugs $160 co-pay • Your plan also offers a retail 90 benefit. Members are able to obtain a 90 day supply of medication from a participating retail pharmacy. The Retail-90 program offers you the same financial incentive as the mailorder program (buy 2 get 1 free).

Dental Plan Overview • Member’s responsibility (co-pays and dollar maximums) • Can use both provider networks (Dental Network of America or Traditonal Plus) found on BCBSM web site. • Dollar maximums Annual maximum (for Class I, II and III services) $1, 000 per member Lifetime maximum (for Class IV services) $1, 500 per member Class I services Class III services Class IV services - 25% of approved amount 50% of approved amount **Review your Dental summary for specific services

Premium Costs for Dental Insurance • Single coverage = No cost to the employee • 2 -Person coverage = $18. 41/bi-weekly • Family coverage = $26. 30/bi-weekly *Premiums are based on 24 pays

Blue Vision SM Choice with VSP • Annual Vision Exam - $10 • Lenses & Frames - $25 copay – Lenses every 12 months – Frames every 12 months • Contact Lenses - $25 copay – Medically necessary – Elective $130 allowance – 12 months • VSP (Vision Service Plan Network) • Discounts on additional pairs of prescription and nonprescription glasses, including sunglasses • Laser Vision. Care. SM program Discounts on LASIK and PRK 15% off or 5% off promotional offers.

Premium Costs for Vision Insurance • Single coverage = No cost to the employee • 2 -Person coverage = $3. 82/bi-weekly • Family coverage = $5. 45/bi-weekly *Premiums are based on 24 pays

Flexible Spending Account Dependent Care FSAs give you a convenient way to pay for eligible healthcare and/or day care (child and adult) expenses • Set aside pre-tax dollars through convenient payroll deductions • Use your debit card for eligible expenses • Save money on taxes • Contribute $100 - $5, 000 • If you do not use it you do lose it

Health Savings Accounts (HSAs) – Health Equity Health Savings Accounts – What Is It? • Tax-advantaged savings accounts available to individuals who have a high deductible health plan and no other first dollar medical coverage • Contributions can be made by employer, employee, employer and employee and/or third party • You can stop or start contributing at any point in time. KRESA will be depositing this amount into your Health Savings Account (H. S. A. ) • This amount is pro-rated based on your start date after January 1, 2013 Maximum Contributions: Single $3250** Family $6450** ** Includes KRESA employer contribution

What are the advantages of an HSA? • • • Flexibility – You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover, or save the money in your account for future needs, such as: • Health insurance or medical expenses if unemployed • Medical expenses after retirement (before Medicare) • Out-of-pocket expenses when covered by Medicare • Long-term care expenses and insurance Savings – You can save the money in your account for future medical expenses and grow your account through investment earnings. Portability – Accounts are completely portable, meaning you can keep your HSA even if you: • Change jobs • Change your medical coverage • Become unemployed • Move to another state • Change your marital status

What are the advantages of an HSA? • Ownership – Funds in your HSA belong to you and are always 100% vested. – Unlike other medical spending accounts HSA funds can remain in the account year to year. There are no “use it or lose it” rules for HSAs. • Tax Savings – Contributions to your HSA can be made on a pre-tax basis. HSA earnings grow tax-free and, as long as the funds are used for qualified medical expenses, withdrawals from your HSA are also tax-free. – If you spend any of your HSA money on non-qualified medical expenses prior to age 65, you will pay ordinary income tax on those funds and will have to pay a 20% IRS penalty.

Who is NOT eligible for an HSA? • Examples of “ 1 st dollar” medical benefits that make someone ineligible for an H. S. A. per IRS guidelines – – – *Medicare SSID (social security disability insurance) Tricare Coverage Full Medical Flexible Spending Arrangements (HRA) Adult Children – that do not qualify as a your tax dependent (IRS Publication 502) – Covered by a spouses FSA or HRA plan (you cannot have an HSA if you are covered by your spouses plan that can pay for any of your medical expenses with an FSA or HRA before your HSA health plans deductible is met) *If an eligible person isn’t enrolled in Medicare, even though that individual has reached age 65, the person can contribute to an HSA until the month they enroll in Medicare. Also can contribute “catch up” contributions until enrolled in Medicare. (you can continue to use your HSA care expenses, but you can no longer make contributions to your HSA savings account)

• View balance Member Portal • Review account activity • Transfer HSA funds • Pay bills online • View Insurance Information Be o re t su add a i nef be t ary ci o a our y ! • Online account co statements • Online tutorials • Online support links • Calculators • Forms **You will receive a welcome kit along with your debit card shortly after your benefits begin.

Accessing Funds from the spending accounts are disbursed in the following ways: – Debit card – Online bill payment – Online reimbursement 2 Debit Cards

Lincoln Financial Group

Lincoln Financial Group • • • Employer Paid Life Insurance Employer Paid Long Term Disability Voluntary Life Insurance Voluntary AD&D Insurance Voluntary Short Term Disability Voluntary Accident Plan Benefit

Employer Paid Life and Long Term Disability • Life Insurance Benefit – $20, 000 Employee Term Life Insurance • Long Term Disability Benefit – – 60% of your wages + 10% progressive Income benefit 70% total income benefit up to $6000/month Benefit begins on 91 st day

Employee Voluntary Coverage Options • Voluntary Life Insurance – – • Employee - $10 K increments up to 5 x salary - $500 k max Spouse - $5 K increments up to 2. 5 x emp salary - $250 k max Dependent Children – 4 options - $2500 $5000 $7, 500 $10, 000 Guaranteed issue amount is $140, 000 for employees and $25, 000 for a spouse Voluntary AD&D Insurance – Employee - $10 k increments but no more than 5 x salary – Spouse - $5 k increments up to 100% of employee election – Dep Children - $2 k increments up to $10, 000 • Voluntary Short Term Disability Benefit – 60% of your wages min $100/wk – max $1, 200/wk – Begins 1 st day accident / 8 th day of Illness – Benefit duration is 13 weeks

Employee Assistance Plan Help. Net • FREE to you and anyone living in the same household – – Savings Center Work/Life Balance Trainings/Development Financial Resources • Strictly confidential • Limited counseling services – – – – Addictions Emotional Problems Legal and financial concerns Careers Relationships Stress, Anxiety and depression Aging Parents Marital and family issues

Wellness • Wellness at KRESA – Ways to get involved • Wellness Committee – The wellness committee exists to raise awareness of our wellness program as well as create opportunities for our colleagues to learn about and live a healthier lifestyle.

What needs to be COMPLETED? Enrollment Form Lincoln Beneficiary Form Lincoln Evidence of Insurability If electing over the guaranteed issuing amount

QUESTIONS AND ANSWERS