1. Cumberland Heights 2011 Employee Benefits Meeting

2. Introductions The Crichton Group – Your Team
Austin Madison, Employee Benefits Consultant
Melissa Bess, Employee Benefits Account Manager
Susan Newkirk, Benefits Administration Contact

3. Disclaimer
While every effort has been taken to accurately summarize the employee benefits in this overview, discrepancies or errors are always possible. If any discrepancies arise, the carrier certificates of coverage or plan document will be the governing document. For detailed plan information, please refer to the carrier benefits summaries included in your enrollment package and plan information on the Cumberland Heights intranet under Human Resources / Benefits.

4. Today’s Agenda Medical Plan Healthcare trends
Healthcare review process
Benefit plan changes and rates
Other Benefits
Dental
New Voluntary Vision Benefit!
Life
Long Term Disability
Flexible Spending Account/Dependent Care
Benefits Administration
Colonial Voluntary Products
Next Steps
Open enrollment

5. Rising Healthcare Costs, A National Trend
Why are healthcare costs increasing?
Healthcare Reform
Aging Population
Poor Economy
Unknown Future of Healthcare
Cost Sharing
Copay Mentality
Technology

6. 2011 Medical Renewal
Cumberland Heights received a 26.65% increase from BCBST on the current medical plans
Claims Experience was very poor for 2010
Claims are projected to be $2 million in 2010
BCBST will have received $1.7 million in premium by year end
Inpatient admission paid claims were 144.6% higher than the BCBST norm for 2010
Prescription Drug Paid Claims were 129% higher than the BCBST norm for 2010
3.6% of Cumberland Heights’ plan members drove 50.8% of claims dollars spent

7. 2011 Medical Renewal
This was a tough year for Cumberland Heights and its team members in many ways
Due to a very high renewal and other factors, it was deemed necessary to move from BCBST to UnitedHealthcare (UHC)
UHC owns it own Mental Health and Substance Abuse Program
UHC was very competitive in their rating and provided a one-network solution for all

8. 2011 Medical Renewal
Cumberland Heights will have one network with UHC, but will have the choice to choose between two different HDHPs (High Deductible Health Plans):
Option 1 will be an HDHP plan paired with a Health Reimbursement Arrangement
Option 2 will be an HDHP plan paired with a Health Savings Account

9. How Does CHF Compare?
Median Deductible for a Consumer Driven Health Plan (HRA/HSA Plans)
(2010 Milliman Benchmarking Study)
Median Monthly Health Insurance Premium
Deductible
Tennessee
CHF Option 1
CHF Option 2
Employee
$2,500
$1,500
Family
$5,000
$3,000
Premium Tier
United States
Tennessee
CHF Option 1
CHF Option 2
Employee
$412.00
$347.00
$568.76
$527.91
Family
$1,192.00
$1,027.00
$1,706.28
$1,583.72

10. How Does CHF Compare? Monthly Employee Premium Cost Share
(2010 Milliman Benchmarking Survey)
Employee % of Cost
Tennessee
CHF Option 1
CHF Option 2
Employee
27%
25%
19.5%
Family
64%
38%
33%

11. 2011 UHC Plan Design Benefit 2011 Option 1 2011 Option 2
Calendar Year Deductible
$1,500 Employee
$3,000 Family
$2,500 Employee
$5,000 Family
Calendar Year Out-of-Pocket Maximum
$3,500 Employee
$7,000 Family
(Includes Deductible)
(includes deductible and applies only to RX after Deductible is Met)
Coinsurance %
80%
100%
Office Visit Copay
Deductible/Coinsurance
Preventive/ Well-visit Copay
100% covered (In-Network Only)
Emergency Room Copay
Prescription Drug Copay
$10/$35/$60
$10/$35/$ (AFTER DEDUCTIBLE IS MET)

12. How Much Will It Cost? UHC Option1 HRA EE $66.27 EE/sp $207.85
EE/child(ren) $178.16
Family $296.94
Rates shown are bi-weekly
HRA Funding
EE $1,000.00
EE/dependents $1,750.00
UHC Option 2 HSA Eligible Plan
EE $47.42
EE/sp $168.25
EE/child(ren) $144.22
Family $240.37
Rates shown are bi-weekly
HSA Funding
EE $1,
EE/dependents $1,750.00

13. Health Reimbursement Review
HRA stands for Health Reimbursement Arrangement
An HRA is a separate from the health plan
Funded only by employer $$
Provides $ for employees and their families to reduce their total exposure toward medical deductibles and out-of-pocket maximums
Keeps costs low for employees while maintaining strong medical coverage
HRA’s reduce cost for Employers and Employees by:
Employer self-funding the first half of the deductible
Reducing health insurance company’s risk
Reduces annual increases from medical insurance carrier

14. How Will the Cumberland Heights HRA Work?
Employee Only Coverage
Employees on the CHF medical Plan will have access to $1,000
Reduces their deductible and out-of-pocket max from $1,500/$3,500 to $500/$2,500
Funds work on a calendar year and renew every Jan. 1
Each employee will receive a debit card that will draw $ from the HRA
(This debit card will be used for both HRA and FSA)
Employee + Dependent(s)
Employees on the CHF medical plan will have access to $1,750
Reduces their deductible and out-of-pocket max from $3,000/$7,000 to $1,250/$5,250
Funds work on a calendar year and renew every Jan.1
Each employee will receive a debit card that will draw $ from the HRA
(This debit card will be used for both HRA and FSA)

15. What Is NOT Covered By the HRA?
Dental Expenses
Dental insurance is offered to take care of these expenses
Eye Glasses, Contacts, Eye Exams
A new Voluntary Vision Insurance Plan is being offered for this need
Prescription Drugs
RX copay plan is included with the UHC medical plan
Anything that is not a covered medical benefit under the UHC plan (e.g. cosmetic procedure or investigational treatment that UHC excludes)

16. Understanding a Health Savings Account How Does an HSA work?
There are two parts to an HSA.
Part 1: High Deductible Health Plan.
This plan has a higher deductible and is designed to cover major medical expenses as well as provide physician and hospital networks
On this plan everything counts towards your deductible; Once your deductible is met, you will pay copays for Rx and all other benefits will be covered at 100%. Once you meet your out-of-pocket maximum, Rx is covered at 100% too.
The HDHP also provides significant discounts to medical services covered by the insurance carrier.

17. Understanding a Health Savings Account How Does an HSA work?
Part 2: Health Savings Account (HSA).
The HSA is a bank account (in our case through Pinnacle) owned by the employee
Both the employer and the employee can contribute to the HSA
The account is portable and money deposited into the account grows at a small interest rate
The employee receives a debit card and can use this card and the money in the account to pay for medical expenses covered by the insurance plan, such as doctor visits, surgeries, RX, and many other IRS approved expenses.

18. Understanding a Health Savings Account How Does an HSA work?
How much can be contributed to an HSA?
As noted by federal law for the 2011 calendar year, the annual contribution limits are:
$3,050 for individual coverage or $6,150 for family coverage. This is the TOTAL contribution limit (Employer + Employee contributions).
Individuals age 55 or older may be eligible to make a catch-up contribution of $1,000 in 2011.
What is the difference between an HSA and Flexible Savings Account (FSA)?
An HSA can roll-over unused funds from year to year.
An FSA cannot roll-over unused funds from year to year.
An HSA is portable, and belongs to the employee.

19. Understanding a Health Savings Account How Does an HSA work?
Why should I elect an HSA?
Cost Savings
-Tax Benefits
HSA Contributions are excluded from federal income tax
Interest earnings are tax-deferred
Withdrawals for eligible expenses are exempt from federal income tax
-Reduction in medical plan contribution
-Unused money is held in an interest-bearing savings or investment account

20. Understanding a Health Savings Account How Does an HSA work?
Why should I elect an HSA?
2. Long-Term Financial Benefits
Save for future medical expenses
Funds roll over year to year
This is your account – you take it with you
3. Choice
You control and manage your health care expenses.
You choose when to use your HSA dollars to pay your healthcare expenses.
You choose when to save your HSA dollars and pay healthcare expenses out of pocket.

21. Who CANNOT participate in an HSA?
The Following individuals cannot participate in or contribute to an HSA:
Individuals participating in Medicare
Individuals receiving care through TriCare or the VA
Domestic Partners
Individuals not participating in an HSA-qualified High Deductible Health Plan

22. 2011 Medical Plan Changes (HSA contribution) effective 1-1-2011
Cumberland Heights will contribute $1,000 annually to employee only enrollees and $1,750 to employee/dependent(s) coverage in the following way
Employee Only: $250 January 1; $50 February 1; $70 a month March-December
Employee/Dependent(s): $500 January 1; $50 February 1; $120 a month March-December
You may contribute additional money into your HSA with pre-tax payroll deductions.
A list of Qualified Medical Expenses is included in the open enrollment packet.
Pinnacle Bank will be your banking partner for the Cumberland Heights HSA accounts.

23. HSA Contribution Limits
The HSA contribution limits mandated by the IRS are listed below. This is the TOTAL contribution limit (Employer + Employee).
*a $1,000 “catch up” contribution may be made by employees age 55 and over.
Please keep copies of all medical expense receipts and EOB’s (Evidence of Benefits) for your records.
HDHP Election
2011 Contribution Limits
Self Only
$3,050.00
Family
$6,150.00

24. 2011 Plan Design Review UnitedHealthcare (UHC) is the new carrier
CHF will utilize UHC’s CHOICE PLUS network.
CHF offers two plans: an HRA Plan and an HSA eligible HDHP
Domestic Partners coverage under the plan is available. Please see your HR department for details
IN-NETWORK Preventive Services are now covered at 100%: Includes mammograms, PSA, immunizations, etc.
Healthcare reform legislation mandates:
Removal of lifetime maximum
No pre-existing condition limitation for children to age 19
Dependents to age 26 are eligible for coverage.

25. 2011 Transitional Items Moving from BCBST to UHC
Check your prescriptions to see which tier they fall into; UHC has a different formulary than BCBST.
We expect for everyone to be in UHC’s system before 1/1/2011 but it would be a good idea to get your prescriptions filled before the end of the year.
UHC’s Choice Plus network is comparable to BCBST Network P so we expect very little, if any, network provider disruption. However, if you are in the middle of a course of treatment (e.g. third trimester of pregnancy; undergoing chemo, etc.) and you find out that your provider does not participate in UHC’s network, you can apply for Transition of Care.
Questions about UHC? Visit with the UHC rep who is here today.

26. Colonial Medical Bridge Summary
This plan continues to be free for all employees who participate or enroll in the CHF Health Insurance Benefit
Plan pays a lump sum benefit of up to $500 for:
Outpatient Surgical Procedure
Hospital Confinement
Plan also pays the participant $100 per day for up to 15 days per confinement in a rehabilitation unit if transferred immediately after period of hospital confinement
Plan has a “wellness benefit”, which pays the participant $50 for going to have an annual physical
The plan is Guarantee-Issue and all Pre-Existing Condition clauses are waived for employees

27. Colonial Medical Bridge, contd.
Employees enrolled in the CHF Health Insurance Plan can:
Increase the benefit from $500 to $1,000 (employees are responsible for any premium over and above the $500 amount)
Add coverage for a dependent or spouse
Employees are responsible for the premium for dependent or spouse coverage
Coverage for Spouse or Dependents is:
Guarantee Issue (cannot be declined)
Pre-Existing Conditions still apply toward spouse or dependent coverage (12 month pre-existing condition)
If you elect Medical Option 2 HDHP with the HSA, we will need to transfer you to an HSA-compliant Medical Bridge Plan. The only difference is that the HSA-compliant Medical Bridge Plan does not have a benefit for outpatient procedures, as legislated by law.

28. 2011 Dental Plan Highlights
Cumberland Heights will remain with Assurant Dental
Preventive services covered at 100% - These services do not count against the annual max
Basic services covered at 80%
Major services covered at 50%
Calendar Year maximum of $1,500
Calendar Year Deductible $50/$150 (individual/family) applies to
Basic and Major services only
Plan is a PPO, employees are not forced to see “network dentists”, but will experience the greatest discounts for seeing network dentists

29. *Rates shown are bi-weekly
2011 Assurant Dental Rates
Employee Only $12.13
Family $31.52
*Rates shown are bi-weekly

30. New! Vision Insurance VISION – Humana
This is a new voluntary benefit offered by Cumberland Heights
$20 annual eye exam
$20 materials copay for lenses
$45 allowance (wholesale) for frames or $110 allowance on contact lenses
Contacts are covered in lieu of glasses
IMPORTANT ! (routine annual vision exam no longer covered by medical plan)

31. Humana Vision Cost
2011 Election
Vision bi-weekly payroll deduction
Employee Only
$6.42
Employee + Spouse
$12.85
Employee + Child(ren)
$12.21
Family
$19.19
Questions about the new vision plan? Speak with the Humana rep that is here today.

32. Life Insurance
Humana (Kanawha) will be the provider for both Basic Life/AD&D and Voluntary Life/AD&D Insurance
Cumberland Heights will continue to provide $25K of Basic Life / AD&D coverage for all eligible employees.
Employees can elect to purchase additional insurance for themselves, spouses, and children
If employees are increasing/adding Voluntary Life Insurance this year, then they must submit Evidence of Insurability
Newly hired employees are eligible for Guarantee Issue of $100K
Spouse eligible for Guarantee Issue of $25K
Children eligible for Guarantee Issue of $10K per child

33. Long Term Disability Humana (Kanawha) will be the new the LTD carrier
Long Term Disability is paid for 100% by Cumberland Heights for all eligible employees
90 Day waiting Period
Covers 60% of monthly earnings to a monthly maximum of $10,000
Short Term Disability will be offered on a voluntary basis through Colonial

34. Flexible Spending Account
A flex spending account is available to any eligible employee who is not participating in the HSA eligible HDHP
Employees can save from 20% - 40% on the costs of their health care by contributing pre tax dollars from their paycheck (max of $5,000 annually)
Cumberland Heights will no longer provide $ for employees that elect not to participate in medical coverage
Employees may elect to have money taken out of their paycheck on a pre-tax basis to cover medical expenses including RX if they so choose

35. Flexible Spending Account Dependent Care
Eligible Employees also have the option to contribute up to $5,000 of pre-tax payroll dollars into their Flex Spending Account for Dependent Care
The Dependent Care Account can be used to pay for child care expenses or for home health care for family members

36. Benefits Administration
Cumberland Heights employees will have a dedicated number and contact for any employee benefit related questions or concerns they may have (see benefit guide)
Susan Newkirk from The Crichton Group remains the
dedicated Benefits Administrator for all employees of Cumberland Heights
Susan will be handling all benefit related questions & responsibilities (be it enrollments, terminations, claims, ID cards, questions, etc.).
Susan will work closely with Bette White concerning employee benefits.

37. Colonial Voluntary Products
Colonial Products are voluntary and payroll deducted, all products are the employee’s responsibility
The following products are offered for CHF employees:
Short Term Disability
Cancer
Critical Illness
Medical Bridge (in addition to what is provided by CHF)

38. Next Steps: Open Enrollment
Every Benefit Eligible Employee has received an Open Enrollment Packet and their benefit statement
All enrollment forms must be returned to Bette White by 3pm on November 30th.– Bette and Susan can help with any concerns/questions you may have about current benefits and 2011 options
Susan and the UHC representative will be back on Monday and will be available to answer your questions!

39. Open Enrollment 2011
Thank you for allowing The Crichton Group to partner with Cumberland Heights!
Questions?