Rochester Public Schools High Deductible Health Plan HDHP

Rochester Public Schools High Deductible Health Plan (HDHP) HRA Option February 2014 Corporate Office: 250 South Executive Drive, Suite 300 Brookfield, WI 53005 800. 627. 3660 Minnesota Office: 14852 Scenic Heights Road, Suite 210 Eden Prairie, MN 55344 800. 443. 6011 www. NISBenefits. com

HDHP/HRA Implementation for Rochester Public Schools High Deductible Health Plan was introduced along side the current Co-pay Plan effective January 1, 2013 As Employment Contracts are negotiated, acceptance of a Trust allows the District to contribute funds into a Health Reimbursement Account for employees to use towards health care expenses – Effective for Maintenance and Clerical Staff 1/1/2013 – Effective for Paraprofessionals 3/1/2013 – Effective for Principals 4/1/2013 – Effective for Off Schedule and RAA Groups on May 1, 2013 – Effective for REA on March 2014 NIS/Mid. America is the Third Party Administrator selected to administer the Trust and Health Reimbursement Account

Overview of Medical Coverage HDHP - $1, 500 Deductible $1, 500 Individual / $3, 000 Family $2, 500 Individual / $5, 000 Family $3, 500 Individual / $7, 000 Family $500 per calendar year of delivery No separate maximum 80% after deductible; up to the out-ofpocket maximum Annual Deductible Copay - $400 Deductible $400 Individual / $1, 200 Family Plan Design 80% after deductible; up to the out-of -pocket maximum 100% coverage $30 copay, then 80% coverage after deductible 80% coverage after deductible $50 copay, then 80% coverage after deductible Annual Medical Out-of-Pocket Maximum (includes deductible & coinsurance, does not include copays) Annual Maternity Out-of-Pocket Maximum (participation in prenatal support program required) Annual Coinsurance Preventive Care (Routine physical and eye exam, cancer screenings, well-child care) Physician Office Visits for Illness or Injury Chiropractic Care, Physical Therapy X-Ray and Lab Services Emergency Room Visit Inpatient & Outpatient Hospital Ø Family deductibles and out-of-pocket maximums must be met by three family member. This is a brief summary, please refer to the summary plan description for exact terms.

Overview of Prescription Drug Coverage Annual Deductible Annual Rx Out-of-Pocket Maximum Combined with Annual Medical Maximum Copay - $400 Deductible HDHP - $1, 500 Deductible Does not apply Plan Design Does not apply $1, 500 Individual / $3, 000 Family (Does not include Rx copays) (Does include Rx copays) No Yes $12 copay $30 copay $55 copay $60 copay $24 copay $60 copay $100 copay Retail Pharmacy (30 -day supply) Generic Preferred Brand Name Non-preferred Brand Name Specialty Drugs 90 day. Rx Retail and Mail (90 -day supply) Generic Preferred Brand Name Non-preferred Brand Name Ø Family out-of-pocket maximums must be met by three family member. This is a brief summary, please refer to the summary plan description for exact terms.

Corporate Office: 250 South Executive Drive, Suite 300 Brookfield, WI 53005 800. 627. 3660 Minnesota Office: 14852 Scenic Heights Road, Suite 210 Eden Prairie, MN 55344 800. 443. 6011 www. NISBenefits. com REA 2014

Our Alliance National Insurance Services Local client support is provided by NIS, located in Eden Prairie, MN. NIS is a leading provider of employee benefits to public sector employers. Founded in 1969, NIS currently works with more than 1, 500 public sector employers in 25 states. NIS offers a variety of services including group Medical, Dental, and Life and Disability Plans. NIS’s Retirement Income Products include VEBA/HRA/FSA and employer sponsored 401(a)/403(b) plans. Mid. America Administrative & Retirement Solutions, Inc. Mid. America provides innovative employee benefit programs to over 2, 200 school districts nationwide representing close to one million plan participants. Originally formed in 1995, Mid. America focused primarily on providing IRC Section 3121 Social Security opt-out programs for governmental employers. This core business has grown dramatically and has expanded to include HRA and FSA administration, Special Pay programs, and more recently, independent 403(b) administrative and common remitting services. American United Life Insurance Company®, a ONEAMERICA Company® Investments for our programs are provided by AUL, headquartered in Indianapolis, Indiana. AUL has been in business for over 125 years, has close to $6 billion of pension assets under management and has excellent financial ratings. Plan Sponsors can choose from over 100 quality variable annuity investment options to offer to plan participants covering the entire risk-return spectrum, including asset allocation funds and a high quality guaranteed fixed annuity option currently crediting interest at 2. 50%. 6

Why NIS / Mid. America? • Committed 100% to the Education and Governmental Market, representing over 2, 200 employers and close to one million participants • HRA Programs have been core businesses since 2002, with over 500 plans on the books • We will be there in the event of an IRS audit • Several of our clients have been audited without incident • Proven long-term relationship with our insurance partner, American United Life Insurance Company®, a ONEAMERICA Company® 7

New for 2013: The Health Reimbursement Arrangement (HRA)! • High Deductible Health Plan with District HRA contribution • The HRA is 100% tax-free to you, your spouse and eligible tax dependents • Section 125 flex plan HRA integration 8

What is an HRA (Health Reimbursement Arrangement)? • HRA is a tax-exempt account used to pay for eligible medical expenses • HRA dollars grow tax-free • Unused funds roll over from year to year and are not forfeited at the end of the year • Funds grow tax-free and are used tax-free while actively employed or after separation of service • Procedures if there is no surviving spouse or tax dependents 9

Key Points of the High Deductible Health Plan with HRA • Preventative care is 100% covered and NOT subject to the deductible • Covered medical expenses are paid at 80% after the deductible of $1, 500 for single and $3, 000 for family is met up to your out of pocket maximum • Pharmacy costs apply the annual out of pocket maximum • Network provider discounts are always applied • District Annual HRA Contributions*: • Single • Family $ 750 $1, 500 10

HRA helps you build a rainy-day fund for unexpected medical expenses… …and a retirement nest-egg to pay for future medical expenses • Unused funds roll over from year to year • Accounts earn interest tax-free currently crediting 2. 5% with variable investment options also available • Goes with you wherever you go • Funds can be accessed by you, your spouse and any eligible tax dependent 11

What can you use the HRA funds for? • • • Medical Prescription drugs Dental Eye glasses Laser eye surgery Long-term care Nursing home care Surgeries Etc…* *All eligible IRS 213(d) medical expenses 12

Investment Line-up • • • • AUL Fixed Interest (I 2) One. America Money Market (AB) One. America Investment Grade Bond (AA) American Century Strategic Allocation: Aggressive (MK) Russell Lifepoints Conservative Strategy (Y 1) American Century Strategic Allocation: Moderate (MM) One. America Asset Director (A 9) One. America Value (AC) American Century Equity Income (MD) American Funds Fundamental Value (8 C) State Street Index 500 (X 7) T. Rowe Price Growth Stock (T 6) *Other Funds are available • • • Calvert Social Investment Equity Fidelity Advisor Lev. Co Stock First America Mid Cap Index Oppenheimer Main St Small & Mid Cap First America Small Cap Index T. Rowe Price International Growth & Income (T 9) Oppenheimer International Growth Oppenheimer Developing Markets Russell 2020 Strategy (Y 7) American Century Livestrong 2035 American Century Livestrong 2045 Securities offered through GWN Securities, Inc. 11440 Jog Road, Palm Beach Gardens, FL 33418 / 561. 472. 2700 Member FINRA, SIPC 13

2014 High Deductible Health Plan with HRA Choices: REA Illustration Single Plan ($1, 500 deductible/$3, 500 out of pocket max) Annual total cost of the plan: $7, 548 District annual share: $7, 548 / Your share: $0 District annual HRA contribution: $750 Family Plan ($3, 000 deductible/$7, 000 out of pocket max) Annual total cost of the plan: $15, 192 District annual share: $15, 192/ Your share: $0 District annual HRA contribution: $1, 500 14

RISK Breakdown for Single Plan Single $1, 500 Deductible, $3, 500 Out-of-Pocket Maximum Plan: Worst Case Scenario: Your plan premium cost: Deductible: Maximum Out-of-pocket: Total Expense: $ 0 $ 1, 500 $ 3, 500 District HRA Contribution*: $ Worst Case Scenario: 750 $ 2, 750 Best case: Use preventative care only and save the district HRA contribution in your account. Your HRA savings = $750 for future medical nest egg or use toward uncovered eligible expenses such as vision or dental. 15

RISK Breakdown for Family Plan Family $3, 000 Deductible, $7, 000 Out-of-Pocket Maximum Plan: Worst Case Scenario: Your plan premium cost: Deductible: Maximum Out-of-pocket: Total Expense: $ 0 $ 3, 000 $ 7, 000 District HRA Contribution*: $ 1, 500 Worst Case Scenario: $ 5, 500 Best case: Use preventative care only and save the district HRA contribution in your account. Your HRA savings = $1, 500 for future medical nest egg or use toward uncovered eligible expenses such as vision or dental. 16

Mail-in Reimbursements 1. Incur eligible medical expenses totaling $100 or more. 2. Fill out a form. Attach your receipt or Explanation of Benefits (EOB). 3. Mail or fax the form and receipt to Mid. America. 4. Mid. America will send a check. 5. $5 fee for each reimbursement, not to exceed $30 per year. 17

Online Reimbursements 1. Incur eligible medical expenses totaling $100 or more. 2. Fill out a digital PDF form (found on Mid. America’s website). 3. Use a digital copy of your Explanation of Benefits (EOB), prescription record or scan your receipt. 4. Email to claims@midamerica. biz 5. Mid. America will send a check. 6. $5 fee for each reimbursement, not to exceed $30 per year.

Things to remember: • You are required to use your Section 125 funds first prior to accessing your HRA balance • HRA reimbursements may be made by direct deposit (authorization form must be completed) • $5 Fee reimbursement not to exceed $30 annually; you control frequency • HRA funds are never taxed when deposited or when reimbursed • If employee separates from service prior to one year of participation in the HRA, unused amounts will be forfeited back to the District 19

For additional questions, contact: National Insurance Services Aaron A. Casper, AIF® aacasper@NISBenefits. com www. NISBenefits. com 20

Premiums Plan 1 (Copay plan) (HDHP) Actual Cost of Plan Dependent: Plan 2 Single: $756. 00 $766. 00 $629. 00 $637. 00 Effective with the February paychecks for March Insurance Coverage: Plan 1 (Copay plan) Employee Pays Single Coverage District Pays Employee Pays $756. 00 $0 Plan 2 (HDHP) District Pays $629. 00 $0 Dependent Coverage $530. 46 $235. 54 $637. 00 $1286. 46 $235. 54 $1266. 00 $0 $0 Cost Shifting language may apply to Employees’ dependent coverage when your spouse is offered Employer-sponsored coverage, and that Employer offers to pay any portion of the premium, but your spouse chooses to NOT participate in his employers plan.

Premiums Ø If you and your spouse are both benefit- eligible District employees under the REA, your monthly premium will be: $0/mo. for Plan 1 (Copay Plan) Family Coverage (District pays up to $1, 522/mo. according to contract) $0/mo. for Plan 2 (HDHP) Family Coverage (District pays up to $1, 522/mo. according to contract)

Eligibility to the Insurance Benefits is based on your Employment contract language and Plan Language. If you are under a. 5 FTE, you may participate in the health plan, but are not eligible for the District contribution nor the HRA, even if you elect the HDHP. Special Enrollment allows only a change to your Health Insurance Plan Election. No change can be made to your dental, nor flexible spending elections. Special Enrollment elections will impact coverage beginning March 1 st, 2014 thru Dec 31 st, 2014.

How to Access the Form § A Special Enrollment form will be available February 10 -14, 2014. § All REA members are being e-mailed the link to access the form or § You can access the form on the Insurance Services web page at www. rochester. k 12. mn. us/insurance, or § You can complete a paper form in the Insurance Services office at MSB

Additional Comments § You only need to complete the Special Enrollment form if you want to make a change to your current health plan election. § If you are currently enrolled in the High Deductible Health Plan, you will automatically be enrolled in the HRA-you do not need to do anything.

Effective Dates § Special Enrollment elections made will be implemented on your February paychecks impacting your coverage beginning March 1 st, 2014. § If you change plans during special enrollment, claim activity from January and February 2014 will NOT be applied to your new plan. These charges will not apply to your new plans deductible nor out of pocket maximum. § The Health Reimbursement Account will be established for REA members as of March 1 st, 2014, therefore claim expenses prior to March 1 st will not be eligible to be turned in for reimbursement.

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