City of Phoenix Retiree Benefits Information Meeting Changes effective January 1, 2016

What we’ll cover today. What is changing and why How this affects you Introducing OneExchange Going forward Questions & Answers

Background Feedback from retirees over the years: Retiree healthcare premiums are too high. There needs to be a lower family premium for couples. More choice in plan designs is desired. Some retirees need to cover only a child or spouse.

What is Changing The City of Phoenix is changing the way it provides health benefits to retirees and their eligible family members to address the concerns shared by retirees over the years. A competitive bidding process occurred earlier this year and OneExchange from Towers Watson was selected by a committee of retirees and staff to provide these services to City retirees. The Health Care Task Force, the Health Care Trust Board, the City Manager, and the City Council approved this change. Note: You pay no fees to OneExchange to provide these services. OneExchange staff do not receive commissions.

What is Changing You may choose to enroll you and your dependents as a family or you may choose plans as individuals based on your household income. MERP will be provided annually in January instead of monthly and will be held in a Health Reimbursement Arrangement (HRA) account administered by OneExchange. Medical premium payments will not be deducted from pension checks for coverage after December 2015.

How This Affects You How you select a medical, dental and/or vision plan. A highly qualified Benefit Advisor will speak with you and your spouse by phone to understand your needs and identify a small selection of plans. How you enroll.You will work with OneExchange via telephone to select and enroll in a plan and establish your HRA. Your support.Ongoing support will be available from OneExchange for questions and concerns. Payment.You will make premium payments directly to your insurance carrier.

Helping You Prepare For Your Upcoming Health Insurance Enrollment 7

About OneExchange Towers Watson over 100 years experience Bringing 9 years of private Medicare Exchange expertise to bear on Pre-65 Healthcare Personalized options with plans from a nationwide network of carriers Ongoing service, support and help Enrolled Hundreds of Thousands with a 94% Customer Satisfaction Rating Proprietary technology gives you safety and security Not Commissioned Licensed advisor provides knowledgeable guidance © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. Never a fee for our service 8

Our Service Centers Salt Lake City, UT Dallas, TX 100% U.S. Workforce © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. Hours Now through October 31 st 5 am to 6 pm AZ Time, M – F Hours Beginning November 1 st 6 am to 7 pm AZ Time, M – F 9

Wide selection of plans from leading national / regional carriers Plans and Partners Platinum Gold Silver Access to All "Metal" Plans Medical, Dental and Vision Plans Bronze © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 10

Your Experience Announcement & Education Consultation & Enrollment Ongoing Help and Support © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 11

Key Points to Remember Select a plan from: Public Marketplaceor T owers Watson’s OneExchange The Public Marketplace is the only place to receive Premium tax credits (Federal Subsidy) Cost-sharing reductions Even without tax credits or cost sharing reductions you can save money each month on your medical premium! © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 12

Do You Qualify For Lower Costs? © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. Number of people in your household You may qualify for lower premiums on a $11,670 - $15,730 - $19,790 - $23,850 - $27,910 - $31,970 - Marketplace insurance plan if your yearly income is between… $46,680$62,920$79,160$95,400$111,640$127,880 See next row if your income is at the lower end of this range. You may qualify for lower premiums AND lower out-of-pocket costs for Marketplace insurance if your yearly income is between $11,670 – $29,175 $15,730 – $39,325 $19,790 – $49,475 $23,850 – $59,625 $27,910 – $69,775 $31,970 – $79,925 13

Plan Levels of Coverage Current City Plans fall between the Gold and Platinum Levels © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. Levels of Coverage Plan Pays on Average Out of Pocket Costs on Average In addition to the monthly premium Platinum90%10% Gold80%20% Silver70%30% Bronze60%40% 14

We’ll Help You to Explore & Consider H Hospital Coverage © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. Medical Coverage Prescription Drug Coverage Dental Coverage Vision Coverage 15

Benefit Advisors Licensed / Certified / Appointed OneExchange University™ Objective, unbiased, non commissioned 100% U.S. workforce Licensed benefit advisors have no financial incentive or reward to sell one insurance company or type of plan over another. Benefit advisors are available Now through October 31 st : 5:00 a.m. to 6:00 p.m. AZ Time, M – F Beginning November 1 st : 6:00 a.m. to 7:00 p.m. AZ Time, M – F © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 16

Discuss Choices with a Benefit Advisor Application forwarded to Public Marketplace Application Submitted to Carrier ID Cards sent to You cannot receive MERP and a Federal Subsidy/ Tax Credit. Pre-65 Retiree, Spouse or Child Public Marketplace QHPs w/o Federal Subsidy Private Exchange QHPs or Federal Tax Credit Eligibility Determination Public Marketplace Qualified Health Plans w/ Federal Subsidy Retiree/Dependents © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 17

Your Enrollment Period November 1 – December 15 © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. January 1, 2016 Coverage Begins 18

towerswatson.com © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. Special Election Periods (SEP) For a 60 day period you may enroll in a new plan or make a change to their current coverage. Certain qualifying future events may allow you to change plans outside of the Annual Enrollment Period You lose your health coverage due to a layoff, a divorce, turning 26 and no longer eligible to be on your parents’ plan, losing eligibility for Medicaid or CHIP, or other similar circumstances You move outside the area covered by your health insurance plan 19

Coming to Your Mailbox Call Toll Free OneExchange.com/phoenix © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. 20

towerswatson.com © 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only. MERP and the Health Reimbursement Arrangement HRA 21

What is MERP? MERP is a monthly amount provided to qualified retirees to reduce their out-of-pocket healthcare expense. Basic MERP: An amount of $117 to $202 per month. This is received no matter where you get your medical coverage. Category MERP: An additional $100 per month for certain retirees based on union agreements. Category MERP is only available when you are enrolled in a medical plan through OneExchange. Supplemental MERP: This is an additional amount of $10 - $50 per month for those whose total annual pension is less than $25,000. MERP continues, but beginning January 1, 2016 it is delivered in an annual amount to a Health Reimbursement Arrangement (HRA).

What is an HRA? Tax-free account used to reimburse you for eligible health care expenses — you pay first and then get reimbursed If you receive MERP today, you continue to receive it via an HRA. The City will make an annual contribution to your Health Reimbursement Account. You may use HRA funds to reimburse yourself for eligible medical, prescription drug, dental and vision premiums, as well as eligible out-of-pocket healthcare expenses No Double-Dipping If you elect to use MERP through the HRA Federal Regulations don’t allow you to also use tax credits for which you may be eligible. The Benefit Advisor will review this with you when you call in. Your HRA funding will be available January 1, 2016 Unused funds roll over 23

Health Reimbursement Arrangement You may be reimbursed up to the amount available in the HRA! 24

Prepare for your call with a Benefit Advisor Have your W-2s and/or tax return ready Have your Social Security card handy Have your doctor and hospital info ready Have prescription info ready – name, dose, frequency Preparing for your call with a OneExchange benefit advisor will help you select the right coverage for you and your family. 25

Schedule your call Contact OneExchange Review the Your Guide booklet Gather medical and prescription info Call now to complete your profile and schedule a consultation. We are Ready! You may also go online to create your profile at oneexchange.com/phoenix 26

Call Now; We Are Ready!