October 1 – 31, 2013 KCTCS EMPLOYEE OPEN ENROLLMENT 2014

HEALTH CARE REFORM  The Kentucky Employee Health Plan (KEHP) is in compliance and meets all requirements of the new Affordable Care Act (ACA). Health care insurance is offered to all eligible employees. The Plan provides affordable health care insurance for eligible employees.  Employees may shop the new Healthcare Exchange for coverage.  Purchasing health insurance through the Exchange will: Disqualify the employee from receiving potential tax credits

KCTCS PERSONNEL SYSTEM CONTRIBUTION STRATEGY  The state non-tobacco user contribution rate is reduced by 25 percent. KCTCS personnel system employees have reduced out-of- pocket contributions.  The $50 Benefit Allowance is available to eligible employees to offset out-of-pocket benefit expenses.

2014 PLAN YEAR HIGHLIGHTS  Emphasis on overall wellness LivingWell Promise  Four new plans with new deductibles, co-insurances and copays Two CDHPs and two PPOs  No cost in-network preventive care  Expanded dependent eligibility  No pre-existing conditions  Tobacco Use Declaration

THE KEHP LIVINGWELL PROMISE  Requires members to do two things: Promise to take the HumanaVitality Health Assessment between January 1 and May 1, Keep their contact information up-to-date in the KEHP system.

THE KEHP LIVINGWELL PROMISE  If the LivingWell Promise is not fulfilled between Jan. 1 and May 1, 2014, the member will not be allowed to enroll in a LivingWell plan for Both members of a LivingWell cross-reference payment plan must take the Health Assessment. Dependents CAN take the Health Assessment, but are not required to do so.

HEALTH INSURANCE HIGHLIGHTS Health and FSA/HRA elections from 2013 do NOT automatically roll-over.  Health elections, including waivers, must be made in both PeopleSoft and the KHRIS system.  FSA/HRA, Dental and $50 Benefit Allowance elections must be made in PeopleSoft.  DEI (Department of Employee Insurance) has mailed IDs and instructions to create a new password for the KHRIS system to employees’ homes.  Forms, information and the 2014 DEI Benefits Selection Guide are available on the DEI web-site:

THE NEW PLANS! LivingWell Consumer Driven Health Plan (CDHP) Similar to current Maximum Choice LivingWell PPO Similar to current Optimum PPO Standard PPO Similar to current Standard PPO Standard CDHP The default There is no “free” plan as in past years.

LIVINGWELL CDHP  LivingWell Promise required  Covers 100% in-network preventive care  Lowest co-insurance by member – 15% for in-network services  Embedded HRA Single receives $500; Couple, Parent + or Family receives $1000 Use toward deductibles and out-of-pocket maximums Reduces deductible by 40%; out-of-pocket maximums by 20% Remaining funds rollover to next year if CDHP is elected  Lowest annual out-of-pocket maximum; best co-insurance percentage  Remaining HRA balances from 2013 Maximum Choice can roll into this plan.

LIVINGWELL PPO  LivingWell Promise required  Covers 100% in-network preventive care  Copays for some medical and all pharmacy services  2 nd lowest co-insurance by member – 20% for in-network services  Lower deductibles, but higher premiums  Same out-of-pocket maximum as LivingWell CDHP No HRA funds to help reduce member costs!

STANDARD PPO  No LivingWell Promise required  Covers 100% in-network preventive care  Pharmacy costs are 30% of total in-network Rx cost within a minimum/maximum range  3 rd lowest co-insurance by member – 30% for in-network services  Same employee-paid contribution as LivingWell CDHP  Higher deductibles than LivingWell PPO  No HRA funds to help reduce member costs!

STANDARD CDHP  No LivingWell Promise required  Covers 100% in-network preventive care  Embedded HRA Single receives $250; Couple, Parent + or Family receives $500 Use toward deductibles and out-of-pocket maximums Reduces deductible by 40%; out-of-pocket maximums by 20% Remaining funds rollover to next year if CDHP is elected  Lowest premiums in exchange for higher deductibles  Remaining HRA balances from 2013 Maximum Choice can roll into this plan.  The default plan at single coverage level if no election is made!

KCTCS E-BENEFITS (EMPLOYEE SELF-SERVICE)  The e-Benefits feature in PeopleSoft Self-Service will be used again for this Open Enrollment. A navigation guide is located on thePoint.  Make elections for Health, Dental, FSA, HRA and $50 Benefit Allowance.  To get there: Log into PeopleSoft and go to Employee Self-Service.

KCTCS E-BENEFITS (EMPLOYEE SELF-SERVICE) KCTCS Open Enrollment will be a multi-step process: 1.October 1 – 31, 2013: Begin your benefits enrollment through e-Benefits Review the cost of each benefit on the Enrollment Summary page 2.October 1 – 31, 2013: Enroll for health insurance or waive health insurance in DEI (KHRIS) website Print the confirmation page from DEI 3.November 11 – 22, 2013: If eligible, enroll in the KCTCS $50 Benefit Allowance through e- Benefits

DEI ONLINE ENROLLMENT Reminder! You MUST enroll for health insurance or waive health insurance through the KHRIS system.  Failure to enroll will result in automatic enrollment in the Standard CDHP Single coverage  DEI online access will be available October , 2013 at KHRIS.ky.gov See page 28 in the DEI Benefits Selection Guide for instructions  Do NOT enroll for Health Care Reimbursement (FSA) or Dependent Care Reimbursement accounts through KHRIS. Enroll through PeopleSoft for these!

DEI ONLINE ENROLLMENT (CONTINUED)  Once the online enrollment process is complete, a confirmation number will appear on the screen. Print this page as proof of enrollment.  If you enter an address during the DEI enrollment process, a confirmation message will be sent.  See page 27 of the DEI Benefits Selection Guide for contact information to answer KHRIS questions. Your KCTCS HR representative will be unable to answer questions about the DEI website.

A PAPER APPLICATION IS REQUIRED IF…  Anyone beginning or currently using the cross-reference payment option Any change to existing cross-reference coverage, including Ending a cross-reference payment option Switching the “primary” plan holder An employee paying by cross-reference with a retiree  Anyone with a disabled dependent  KERS retirees – contact KERS for paper application  Retirees who have returned to work and are age 65 or older  New employees hired between September 1 and December 31

NO COST, IN-NETWORK PREVENTIVE CARE  All plans cover an extensive list of preventive services by a network provider without charging a co-pay or co-insurance, even if the annual deductible hasn’t been met.  Provides for such services as immunizations, preventive screenings, well- child and well-adult visits

DEPENDENT ELIGIBILITY Dependent Eligibility to Age 26  The dependent: can be married (coverage does not extend to his/her spouse or children), does not have to reside with the plan-holder, and can remain on the parent’s plan regardless of whether the dependent is eligible to enroll in his/her own employer-sponsored plan through his/her employer  All contribution deductions are based on a pre-tax basis.  For All Newly Enrolled Dependent Children Age 19 to 26: Members must submit the affidavit “2014 Certification of Dependent Eligibility” for each dependent child age

PRE-EXISTING CONDITIONS  No longer an issue with the ACA!  Humana will still issue Certificates of Creditable Coverage if and when you terminate your KCTCS employment.

TOBACCO USE DECLARATION  The Commonwealth is committed to fostering and promoting wellness and health in the workforce  Focus on tobacco use – not just on smoking  Applies to spouses and dependents as well as KEHP member  KEHP plans provide support through Tobacco Cessation Programs Cooper Clayton 12-week program of OTC NRT products The Kentucky Quit Line provides unlimited OTC NRT products Rx from a physician for unlimited OTC NRT products or free prescriptions of Chantix

2014 Plan Comparisons (IN-NETWORK) HRA Annual Deductible Out of Pocket Maximum (in-network) Office Visit CoPays Rx CoPays (30-day supply) Benefit Payments (hospital, surgery, etc) Your Co-Insurance (payment amount) Standard PPO N/A $750 Single $1500 Family $3500 Single $7000 Family (Excludes Rx CoPays) N/A 30% Min Max $10 $25 $20 $50 $60 $100 70%30% Standard CDHP $250 Single $500 Family $1750 Single $3500 Family $3500 Single $7000 Family N/ADeductible, then 30% 70%30% LivingWell PPO N/A $500 Single $1000 Family $3500 Single $7000 Family (Excludes Rx CoPays) $25 PCP Copay $45 Specialist Copay $10 $35 $55 80%20% LivingWell CDHP $500 Single $1000Family $1250 Single $2500 Family $2500 Single $5000 Family N/ADeductible, then 15% 85%15% 22

OUT-OF-POCKET INCREASES/DECREASES (IN-NETWORK) 2013 Standard to 2014 Standard PPO 2013 Optimum to 2014 LivingWell PPO 2013 Maximum Choice to 2014 LivingWell CDHP Annual Deductible Single $600 to $750$370 to $500$2450 to $1250 Family $1800 to $1500$740 to $1000$3650 to $ – Excludes Rx copays and all other copaysAll covered expenses Excludes Rx copays only Annual Out-of-Pocket Max Single$3000 to $3500$1390 to $2500$3700 to $2500 Family$6000 to $7000$2780 to $5000$5400 to $ – Excludes RX copays and all other copaysAll covered expenses Excludes Rx copays only Plan and Member Co-Insurance Plan pays75% to 70%85% to 80%90% to 85% Member pays25% to 30%15% to 20%10% to 15% Physician Co-Insurance/CoPay PCP (includes Chiropractor)75% to 70%$16 to $25 copay90% to 85% Specialist (include Maternity)25% to 30%$21 to $45 copay10% to 15%

OUT-OF-POCKET INCREASES/DECREASES (CONT.) 2013 Standard to 2014 Standard PPO 2013 Optimum to 2014 LivingWell PPO 2013 Maximum Choice to 2014 LivingWell CDHP Urgent Care Center CoPayN/A$21 to $50N/A Laboratory (outside physician’s office)75% to 70% $16 CoPay to Deductible then 20%10% to 15% Emergency Room CoPay $50 to $150 CoPay then Deductible, then 25% to 30% $92 to $150 10% to 15% Preventive CareN/A $11 CoPay to no charge N/A Prescription Drug CoPay (30-day) Tier 1-Generic 30% Min Max $10 $25 $20 $50 $60 $100 $11 to $10 Deductible then 10% to Deductible then 15% Tier 2-Formulary $26 to $35 Tier 3 Non-Formulary $48 to $55

WAIVING HEALTH INSURANCE  The employer contribution toward a Health Reimbursement Account (HRA) will continue to be $175 per month ($2,100/year).  Unused monies carry over to the next year if coverage is waived from year to year.  If an employee is hired after January 1, 2014, the $175 per month will be prorated.  Note: If you or your spouse is contributing to a Health Savings Account (HSA), consult a tax advisor prior to enrolling in an HRA or FSA.

REQUIRED DOCUMENTATION FOR WAIVERS  New and required as a result of the ACA  Required paper documentation will be either: Certificate of Creditable Coverage or Health Insurance ID card showing Persons covered under plan Effective date of plan, or Signed letter from planholder’s employer on letterhead, stating Persons covered under plan Effective date of plan

FLEXIBLE SPENDING ACCOUNT (FSA) VS. HRA In addition to the HRA, an employee may fund a Health Care Flexible Spending Account (FSA) to reimburse unpaid qualified medical expenses (deductibles, co-pays, co-insurance, dental, vision, etc.) If you have both a FSA and a HRA, reimbursement will come from your FSA account balance first. The FSA balance is forfeited at the end of the plan year (12/31/13) and 2½ month grace period (3/15/14). The waiver HRA will not roll-over if you change your plan selection. Any remaining HRA funds from a 2013 Maximum Choice Plan will rollover to either CDHP for 2014 if the CDHP is selected.

FLEXIBLE SPENDING ACCOUNTS (FSA) Two FSA’s are available:  Health care account for medical expenses Minimum $ 5 per paycheck (including $50 Benefit Allowance); annual maximum of $2,500 Note: The maximum election has been reduced due to federal regulations  Dependent day care account for dependent care expenses Minimum $ 5 per paycheck; annual plan maximum of $4,992

FLEXIBLE SPENDING ACCOUNT (FSA)  Employees who wish to enroll in a FSA must do so every year – IRS regulation  Enrollment must be made through e-Benefits  FSA enrollees may use the Benny card (for health expenses) or file a paper claim for reimbursement  Claims for reimbursement can be made for any dependents up to age 26  Substantiation for a Benny Card charge may be required

FLEXIBLE SPENDING ACCOUNT (FSA) (CONTINUED)  Termination date for a FSA and a HRA is the day employment ends or the day the employee retires  90 days to file claims for reimbursement of expenses incurred through your last date of service  Note: If you or your spouse is contributing to a Health Savings Account (HSA), consult a tax advisor prior to enrolling in an HRA or FSA.

FSA “GRACE PERIOD”  Left over money from 2013 may be used and claimed until 3/15/2014.  You may use your FSA Benny card for grace period expenses. Reimbursements will automatically be applied to the correct year.  Note for HRA/FSA users: If all of your FSA has been used for 2013 and you have money left in your HRA, you will need to file a paper claim for services you had in HRA money does not roll-over until April 1 st.

FSA AND HRA Reminder! Due to federal regulations, Over-the-Counter (OTC) medications (except for insulin and those prescribed by a physician) will no longer be reimbursed by a health care Flexible Spending Account (FSA) or Health Reimbursement Account (HRA).

HEALTH REIMBURSEMENT ACCOUNT (HRA) Embedded HRA – LivingWell CDHP or Standard CDPH  Any remaining HRA funds from the old Maximum Choice Plan will rollover to a CDHP for 2014  Will continue to be administered by Humana and DEI  HumanaAccess Visa card issued Stand alone HRA – health insurance waiver  Funded with employer money only  Administered by Chard-Snyder  MasterCard issued

HEALTH REIMBURSEMENT ACCOUNT (HRA) HRAs are not available to:  A retiree who has gone back to work and elects coverage under the retirement system,  Retirees, or  Spouse of a hazardous duty retiree NOTE: The DEI offers a limited purpose Waiver Dental/Vision ONLY HRA to employees of agencies who participate in the KEHP’s HRA/FSA program. KCTCS does not participate in the KHEP’s HRA/FSA program; its employees are not eligible.

WAIVER HRA PRE-PAID BENNY CARD: A TIP FOR THE PHARMACY If you waived coverage because you are covered under a spouse’s plan:  Use your spouse’s health plan card first to pay for prescriptions.  Then use your Chard-Snyder HRA Benny Card to pay for any remaining co- pay or coinsurance amounts. This saves your HRA money for future use, instead of paying the bulk of that Rx cost with your HRA money.

MEDICARE AND AN HRA If you are an active employee over the age of 65:  The KCTCS Health Plan is considered “primary” over Medicare.  You do not need to sign up for Medicare Part “B” until you terminate employment.  The prescription drug plan offered through the KEHP is considered “Credible Coverage.” There is no need to sign up for a Medicare part “D” plan.  If you are over age 65, enrolled in Medicare and choose to waive health insurance through the KEHP, your waiver HRA will be your primary health plan over Medicare for you and any eligible dependents.

MEDICARE AND AN HRA If you are enrolled in Medicare and waive your KCTCS insurance,  You must enroll ALL your dependents who would have claims reimbursed under your HRA account, due to federal Medicare reporting requirements. This enrollment must be made in e-Benefits and will be a necessary part of your online enrollment.

HRA AND FSA REIMBURSED EXPENSES Save ALL Your Itemized Receipts!  The IRS requires proof (substantiation) that expenses are qualified under your plan’s benefits.  Also save your explanations of benefits (EOBs) in case there is a request to verify an expense.  If a refund is needed: The card should be credited by the provider. If the provider refunds the member directly, the member will be required to refund the card (per IRS guidelines.)

DEPENDENT CARE FLEXIBLE SPENDING ACCOUNT  Retirees are not eligible to participate.  The maximum amount that can be contributed is based on the employee’s tax filing status. Check the Chard Snyder paper enrollment form for maximums.  Reimbursement is done by claim form only. The Benny card is not available for use with the Dependent Care FSA. Direct deposit of reimbursements is available.  The plan maximum contribution is $4,992 per year.

WEB ENROLLMENT: FSA AND HRA NOT DEI Website  KCTCS employees will NOT enroll for FSA and/or HRA coverage through the DEI Website  A message will appear that states that KCTCS is a non-participating agency and to contact the Insurance Coordinator. You must enroll through e-Benefits.  There will be no Chard-Snyder web enrollment as in previous years. You must enroll through e-Benefits.

$50 BENEFIT ALLOWANCE  Available to KCTCS personnel system regular, full-time employees enrolled in single healthcare coverage or who have waived healthcare coverage  May be used for: Health or dental insurance premiums, Healthcare FSA (FSA enrollment must be completed in e-Benefits), or Purchasing voluntary supplemental benefits  May not be used to purchase Group Life Insurance or Supplemental Long Term Disability

$50 BENEFIT ALLOWANCE (CONTINUED)  You will need to pre-plan for your $50 Benefit Allowance election during the initial open enrollment period (October 1 – 31.) Important: If you allocate all or part of this benefit to a FSA, you must enroll in your FSA during the initial enrollment period. You will not be able to go back and enroll later.  In November, you will receive an notice if eligible to enroll in the $50 Benefit Allowance. Enrollment will be November 11 – 22.  $50 Benefit Allowance enrollment election must be completed in e- Benefits in November to participate in 2014.

DENTAL OPEN ENROLLMENT Three Dental Plans for 2014: Delta Dental Comp Benefits Health Resources  Dental coverage will “rollover” from 2013 to  Verify your coverage in e-Benefits.  If you wish to add or drop family members, terminate coverage or change carriers, a new enrollment must be completed in e-Benefits.

2013 INSURANCE/BENEFIT CARDS Health Insurance and Prescription Drugs  New ID cards will be issued for all plans. Dental  New cards will be issued for all Health Resources subscribers.  New cards for Delta Dental and CompDent will be issued only if coverage is changed. FSA and HRA  A new Benny card will be issued to new enrollees or if the current card expires at the end of  Only one Benny card is issued if the employee has both a FSA and waiver HRA.  Remaining waiver HRA balances from 2013 do not rollover until April 2014.

LIFE AND AD&D INSURANCE OPEN ENROLLMENT  No changes in rates for  Paper applications must be completed and returned to your local HR Department. This enrollment will NOT be done through e-Benefits.  No proof of insurability is required for an increase of one level of coverage (for example, 2x to 3x salary). Employee must have an existing Optional Life and AD&D plan to increase coverage level. Moving from the Basic coverage ($20,000) to 1x salary does not satisfy this requirement.

2014 LIFE AND AD&D RATES Employee AgeLife and AD&D Rate Monthly Rate per $1,000 Salary

OPTIONAL DEPENDENT LIFE RATES Dependent PlanFlat Rate Option 1 Spouse $10000 Child(ren) under 6 months - $2500 Children 6 months or older - $5000 $4.50/month Option 2 Spouse $5000 Child(ren) up to 6 months - $1500 Children 6 months or older - $3000 $2.30/month Option 3 Spouse $5000 No coverage for children $2.00/month Option 4 Spouse $10,000 No coverage for children $4.00/month Option 5 No coverage for spouse Child(ren) up to 6 months - $2500 Children 6 months or older -- $5000 $0.50/month

REMINDER: NO DOUBLE DIPPING! KRS 18A.225 (13) “Any employee who is eligible for and elects to participate in the state health insurance program as a retiree, or the spouse or beneficiary of a retiree, under any one (1) of the state-sponsored retirement systems shall not be eligible to receive the state health insurance contribution toward health care coverage as a result of any other employment for which there is a public employer contribution. This does not preclude a retiree and an active employee spouse from using both contributions to the extent needed for purchase of one (1) state sponsored health insurance policy for that plan year.”

RETIREES RETURNING TO WORK KTRS Retiree  KTRS retirees returning to active employment MUST select coverage through the active employer (KCTCS). KERS Retiree Early (under age 65)  KERS retirees returning to active employment have the option to select coverage either through KRS or the active employer (KCTCS). Retirees should consult KERS for guidance. Medicare Eligible (Age 65 or older)  KERS retirees returning to active employment MUST select coverage through the active employer (KCTCS).

QUALIFYING EVENTS Qualifying Events (QE’s) – changes permitted outside the Open Enrollment period  QE application must be signed within the QE time frame.  Supporting documentation must be submitted with the QE application.  Verification of dependent/spouse must be included with application. Coverage will not be activated until applicable verification is received.  Effective date of QE will be subject to federal guidelines – coverage will be activated retroactively if needed.

SUPPLEMENTAL VENDORS  Supplemental insurance products are available from a variety of vendors: AFLAC Colonial Life Insurance Washington National Insurance Lincoln National Life Insurance Co. Life Insurance of Alabama Midland National Life AccuFlex Services Inc. (National Teacher’s Assoc.) TransAmerica  Premiums can be deducted from your semi-monthly paycheck.  Depending on your health insurance elections, you may also use the $50 Benefit Allowance to purchase supplemental benefits.  Enrollment is NOT available through e-Benefits. Paperwork must be submitted to local HR Departments.

KEHP WELLNESS BENEFITS KEHP has expanded its robust Wellness Program with many initiatives:  Free flu shots  Compass ChoiceRewards  Humana Vitality Program  Vitality HealthyFood 5% off Great for You foods at Wal-Mart  HumanaHealth Nurse Support Programs  EyeMed Vision Discount Program Visit the “LivingWell” KEHP wellness website for further information at:

CONTACT INFORMATION ▪Your first point of contact should be your local HR Representative! ▪For assistance with DEI online access, use the contact numbers on page 27 of the DEI 2014 Benefits Selection Guide. ▪Information and forms are located on thePoint.