Fremont Area Medical Center 2007 Open Enrollment

Agenda Highlights of Plan Changes for 2007 Medical/Dental Contribution Rates for 2007 Flexible Spending Accounts Enrollment Process

Today’s Environment Healthcare costs continue to increase Premium increases stabilizing some, but still outpacing cost of living Trend to consumer-driven healthcare – Awareness of costs – Obtaining best quality care

What is the Answer? All of us need to understand and have greater accountability for understanding costs and making the most responsible choices for ourselves and our family members. Analogy: Taking care of our cars so they last a long time.

2007 Plan Highlights 1. No Increases in Deductibles or Coinsurance 2. Increased Preventive Care Benefits: Base benefit increases to $500, plus added costs go to coinsurance 3. Rx Co-pay Changes: Move to one tier of co- pays for the drug plan. 4. Addition of coverage for Smoking Cessation Prescription Drugs

2007 Plan Highlights (continued) 5. Dental Plan remains Status Quo 6. No changes in Flexible Spending Account Participation. No need to re-enroll if you wish to leave your 2007 account deductions the same. 7. Voluntary Life Insurance: No changes.

Medical/Dental Contributions Cost varies by plan choice and category of coverage – no one pays more than 70% Plan 1 is a “richer” plan and costs more Coverage for family members is more expensive than employee only

Medical/Dental Contributions National 2006 medical inflation trend is 7% FAMC is below this trend at 4% A few years ago these were as high as 13% Nationally, the average cost of employee sponsored family health coverage is $11,480 FAMC cost in 2007 will average $11,375

FAMC Philosophy Move to contribution strategy that makes the $800 Plan a “base” plan and the $300 Plan, an enhanced plan Establish contribution levels that provide internal equity and consistency, as well as the percent FAMC contributes – currently about a 10% spread in employee contributions between two plans. For example, FAMC pays 80% of Plan II Family and 70% of Plan I Family Maintain competitive employee contribution levels

Plan I - $300 Deductible Coverage Category Monthly Contribution* Increase per Paycheck* EE Only$80.00$3.50 EE + 1$254.00$8.50 EE + Family * All are pre-tax. $319.00$0.00

Plan II - $800 Deductible Coverage Category Monthly Contribution* Increase per Paycheck* EE Only$42.00$0.00 EE & Spouse$142.00$3.50 EE & Family *All are pre-tax $188.00$2.50

Factors to Consider When Making Your Decision Only if you and a family member anticipate and experience very serious medical problems during the year does it make financial sense for you to choose Plan 1 - $300 Deductible. Save the money if you choose Plan II over Plan I. Put the difference into a Flexible Spending Account to pay for deductibles and co-pays.

Flexible Spending Accounts Tax advantaged way to pay for qualified out-of- pocket health care expenses and work-related day care expenses On average, people save 30% in taxes by paying their out-of-pocket qualified expenses on a pre-tax basis. You don’t pay federal income or Social Security taxes on this money and, in most states, you don’t pay state taxes either.

Flexible Spending Accounts You estimate your qualified expenses for the year and set aside those funds into your account(s) Submit claim form along with documentation and receive reimbursement Use it or lose it, but new grace period

Examples of Qualified Expenses Medical Deductibles & co-pays Coinsurance Annual Physicals Dentures Eye Exams Prescription Glasses, Eyeglasses, Contacts OTC Drugs Hearing Exams, Aids & Batteries Total Annual Maximum: $2,500 Dependent Care Custodial care for qualified dependents (children and adults) Before/after school care Day care centers Au pair or nanny expenses Looking for work expenses While working and/or in school full-time Total Annual Maximum: $5,000

Enrollment Process Must return if – You want to make changes for 2007 and/or – You want to change your spending account New this year…If you do not want to make a change in your 2007 spending account deductions, no new form is necessary. All changes due to HR by Wednesday, November 29, 2006.