1. For Eligible
Kaiser Permanente
Employees
Georgia Region
November 2009

2. Overview Effective January 1, 2010 Health Reimbursement Account (HRA)
Offered to eligible employees represented by Labor Management Partnership (LMP) Unions
Tax-free reimbursement for:
out-of-pocket eligible medical, dental, and vision care expenses.
HRA account funded with 80% of value of unused sick leave as of termination date
An account will be opened automatically when eligible
No action required
Retiree medical eligibility, medical plan and benefit levels are not affected by the HRA
On January 1, 2010, Kaiser Permanente will provide a new medical reimbursement account called the Health Reimbursement Account (HRA). HRA is an innovative account, never offered before at Kaiser Permanente.
This new benefit offering is a result of the National Agreement Re-opener. The benefit is offered to employees in selected employee groups. These are employees represented by a Labor Management Partnership union. In addition, The Guild for Professional Pharmacists in Northern California and the Northwest regions will be eligible for this benefit.
The HRA rewards long-term commitment to the organization, preserves sick leave, and provides an additional healthcare resource at termination.
The HRA allows participants and their dependents to get reimbursed tax-free for out-of-pocket eligible medical, dental, and vision care expenses.
You do not pay federal income or employment taxes on the amounts Kaiser Permanente contributes to your HRA
HRA contributions are not included in your income. Reimbursements from HRA account are not taxable.
Kaiser Permanente makes deposits into eligible participants’ HRA accounts based on their unused sick leave as of their termination date.
Ceridian, our third party administrator of the HRA, will send you a Notification of Enrollment letter when you become eligible for an HRA, and an HRA account will be opened for you.
Your retiree medical plan eligibility, medical plan and benefit levels are not affected by the HRA.

3. Regions Affected Colorado Georgia Mid-Atlantic States
Northern California
Northwest
Ohio
Southern California
This new benefit will be offered to certain LMP and non-LMP employee groups in the following regions:
Colorado
Georgia
Mid-Atlantic States
Northern California
Northwest
Ohio
Southern California

4. Eligible Groups - Georgia
United Food and Commercial Workers, Local 1996 (Professional)
United Food and Commercial Workers, Local 1996 (Technical/Clerical)
Participating employee groups in the Georgia region are as noted.

5. What is the HRA? What is a Health Reimbursement Account?
The HRA, also referred to as a Health Reimbursement Arrangement, allows retirees and their eligible dependents to pay for out-of-pocket qualified medical, dental, vision, and hearing care expenses, as well as premiums paid to a Kaiser Permanente medical plan, on a tax-free basis.
The Health Reimbursement Account (HRA), also referred to as a Health Reimbursement Arrangement, allows retirees to pay for out-of-pocket qualified medical, dental, vision, and hearing care expenses, for themselves and for their eligible dependents, as well as premiums paid to a Kaiser Permanente medical plan, on a tax-free basis.

6. Eligibility Eligibility requirements at termination of employment:
At least age 55
15 or more years of Service
as defined under the KP-sponsored defined benefit
plan, or the pension plan under the union trust, as applicable
HRA eligibility is independent of retirement eligibility
Age and years of Service requirement waived for Disability Retirement
To be eligible for the HRA when you terminate employment with Kaiser Permanente, you must be at least age 55, and have at least 15 or more years of Service as defined under a KP-sponsored Defined Benefit pension plan, or the pension plan under the Union Trust, as applicable.
Please note that the age and years of service eligibility requirements for the HRA are independent from retirement eligibility requirements.
If you qualify for a Disability retirement under the Defined Benefit pension plan, the age and service requirements are waived. Remember, eligibility requirements for the HRA may differ from eligibility requirements for the pension or retiree medical plan. And, not all Kaiser Permanente Defined Benefit plans include a Disability Retirement provision. Refer to your Summary Plan Description for specific information about your Defined Benefit pension plan.
If you are on an approved unpaid leave of absence at the time of termination or retirement, you must be eligible for Kaiser Permanente medical coverage on the last day prior to the start of the unpaid leave of absence.

7. Eligibility (cont’d)
Eligibility requirements at termination of employment (cont’d):
eligible for KP medical coverage on last day of employment
enrollment in plan not required
must be in an employee group that participates in the HRA
You must be eligible for medical benefits even if you are not enrolled in the plan.

8. Eligible Dependents Legal spouse Domestic partner
Unless divorced or legally separated
Must be of the opposite sex to whom legally married under federal law
Domestic partner
If they qualify as a dependent on employee’s federal income taxes
May not use HRA account to pay expenses for the child of domestic partner if domestic partner claims the child as a dependent on his or her tax return
Your unmarried dependent children under age 25
If divorced, children will be considered eligible under the plan if employee is responsible for children’s support and have custody of children for more than half of the calendar year, per the IRC
For purposes of the HRA, an eligible dependent is any individual who is your tax dependent as defined in the Internal Revenue Code (IRC). Please note that the definition of dependents for the HRA may differ from what is used for medical and dental coverage, or when determining personal income taxes.
Here is the definition of eligible dependents.
Your legal spouse, unless you are divorced or legally separated. Your spouse must be someone of the opposite sex to whom you are legally married under federal law.
Your domestic partner and his or her children under age 25 are considered eligible dependents for this plan only if they qualify as a dependent on your federal income taxes. You may not use your IRA account to pay expenses for the child of your domestic partner if your domestic partner claims the child as a dependent on his or her tax return.
Your unmarried dependent children under age 25. If you are divorced, your children will be considered eligible under the plan if you are responsible for their support and have custody of your children for more than half of the calendar year, per the IRC.

9. Eligible Expenses
IRS determines which expenses are eligible (qualified) for reimbursement
May not also claim the expense through your health care plan, insurance program, or income taxes
Consult a tax advisor for tax implications
Of course, if an expense was covered by your Kaiser Permanente medical plan, you would not have an expense or receipt to submit to the HRA for reimbursement. And, you cannot also claim an expense under your tax return for an expense for which you were reimbursed under HRA.
You may want to consult with a tax advisor to determine any tax implications and details.

10. Eligible Expenses* Acupuncture Chiropractic care
Dental implants, supplies
Dental insurance premiums and copayments
Hearing exams and treatment
Long-term care insurance premiums
*Sample list only, not a complete list
A sample list of some of the expenses eligible for reimbursement through the HRA are as noted.

11. Eligible Expenses (cont’d)
Medical insurance premiums paid for a Kaiser Permanente medical plan only*
Medical copayments
Medicare premiums
Premiums paid under COBRA (medical, dental)
Substance Abuse Treatment
Vaccinations
Wheelchair
* Unless you live in an area where KP medical is not offered
If you live in an area where a Kaiser Permanente medical plan is not offered, you may be able to submit premiums for you medical plan for reimbursement through the HRA. You will need to submit an additional claim form, the Eligibility for Reimbursement of Non-Kaiser Permanente Insurance Premiums form, which can be downloaded from the Ceridian Web site.

12. Ineligible Expenses* Baldness treatments or hair transplants
Dancing lessons
Exercise equipment
Herbal and holistic drugs or remedies
Special diet foods
Swimming lessons
Vacation expenses (even if recommended by a doctor)
*Sample list only; not a complete list
Here are some of the expenses not reimbursable through the HRA. Keep in mind that this is a sample list only. If you have questions about whether or not an expense is eligible for reimbursement under the HRA, contact Ceridian, our third-party administrator.

13. How the HRA is established
On termination or retirement:
HRA-eligible hours converted at 80% of value
Kaiser Permanente deposits into HRA
No employee contributions allowed
$100 minimum required to establish account
No cost for this new benefit
Automatic participation, if eligible
No opt-out option
HRA-eligible hours are used to establish your HRA, as follows…
Your HRA-eligible hours are converted at 80% of value, and Kaiser Permanente uses these funds to establish an HRA account for you.
Please note that only Kaiser Permanente can make contributions to your Health Reimbursement Account. Employee contributions are not allowed.
There is a $100 minimum required to establish an HRA account for you.
Once you become eligible for the HRA, your participation is automatic. There is no OPT OUT option.

14. PTO and Extended Sick Leave
October 2010, new Extended Sick Leave (ESL) account
Based on unused Paid Time Off (PTO) days
HRA-eligible ESL hours
So that you can participate in the HRA benefit, your Paid Time Off program has been enhanced. Here’s how this will work.
As if the usual process, in September you paid time off (PTO) balance will be assessed, and any excess amount over the minimum accrual will be determined. Up to two days of accumulated, unused PTO days will be paid out to you, and any remaining hours will be converted to a new Extended Sick Leave account for you.
Upon termination, your HRA-eligible ESL hours will be converted at 80% of value and deposited into your HRA. Only ESL hours credited to you as part of the excess PTO cash-out process beginning in 2010 are eligible for conversion to the HRA.

15. When Your Account Opens
Welcome Kit
Notification of Enrollment Letter from Ceridian
Kaiser Permanente’s contribution to your HRA
Quarterly Statements
When you become eligible for an HRA, you will receive a welcome kit, which will provide you with details about the plan.
In addition, Ceridian, our third-party administrator, will send you a Notification of Enrollment letter, which will indicate the dollar amount Kaiser Permanente deposited into your HRA.
Subsequently, you will receive quarterly statements of your account from Ceridian.

16. How to File for Reimbursement
Submitting claims is easy
Submit claims through Ceridian
Fax:
Mail:
Ceridian FSA Services
P.O. Box
St. Petersburg, FL
Reimbursement via check or direct deposit
Check on the status of your claim or payment at
You submit claims to Ceridian, the plan’s third-party administrator. You may fax your eligible out-of-pocket healthcare expense to them at , or if you prefer, you may send your receipts to them at their St. Petersburg address listed in the slide.
You can set up your HRA account so that Ceridian sends a reimbursement check directly to you, or Ceridian will deposit the funds directly into your checking or savings account.
Once your HRA is established, you can check on the status of your claim or payment at their Web site,

17. Claims Guidelines Claims processed weekly Submit claims within 60 days
No limit on number of claims
No minimum/maximum dollar amount
Submit claims within 60 days
Unused funds carry over from year to year
There is no limit to the number of claims you may submit in a month or week, etc., nor is there a minimum or maximum dollar amount.
Claims are processed every Friday. It takes approximately three business days to process a claim. For example, if you submit a claim on Tuesday, Ceridian will process your reimbursement on Friday of the same week. If your claim reaches Ceridian on Thursday, your reimbursement will not be processed until the following Friday.
Claims must be submitted within 60 days of the date on which the expense was incurred.
The funds in your HRA carry over from one year to the next, as long as you remain eligible for the HRA, and are available for submitting eligible out-of-pocket expenses.

18. Account Closes HRA Account closes if: Account balance is $0
Account is abandoned
Death, with no surviving eligible dependents
Upon the death of surviving eligible dependents
If during the termination or retirement process, you are deemed ineligible for the HRA
Your HRA account will be closed if:
The balance in your account reaches $0.
Your account is “abandoned.”
“Abandoned” means that Ceridian has not been able to make contact with you during a three-year period at your last known address, and no distributions were made during the immediate prior three years. Note: Your account is not considered abandoned if you, as a termed employee, become re-employed by Kaiser Permanente.
Upon your death, and you have no surviving eligible dependents
Upon the death of your surviving eligible dependents
Or, if during the termination or retirement process, it is determined that you are no longer eligible for the HRA

19. Account Suspended Account suspended Account Reactivated
If you are rehired and return to work at Kaiser Permanente in any capacity
Account Reactivated
When you terminate again
No minimum balance required
Your account will be suspended if you return to work at Kaiser Permanente in any capacity.
Your account will be reactivated when you terminate again. [Note to speaker: There is no HRA minimum balance required for reactivating HRA accounts. The $100 HRA minimum funding requirement must be met only when an HRA is initially established.]

20. Customer Service Ceridian Customer Service 1-866-370-2534or
Online at
Social Security number (with dashes)
Initial password/PIN
(last 4 numbers of your SSN reversed)
You may speak with a customer service representative Monday through Friday between 5 a.m. and 5 p.m. Pacific Time.
If you use their online services, you will need to sign-on with your Social Security number (including dashes) and your initial password/PIN, which is the last four numbers of your Social Security number in reverse order. You may change your password/PIN after you sign in.

21. Contact Information
For HRA detailed questions, covered expenses and claims:
Ceridian
Monday-Friday, 5 a.m.-5 p.m. Pacific Time
For HRA general questions:
Employee Services
(404)
For additional information about the HRA, contact the above.

22. HRA Communications Timeline
Late November 2009
Customized communications sent to all impacted employees
Cover letter from region
Brochure containing
Summary of Material Modification (SMM)
Frequently Asked Questions (FAQ)
Claims process
January 1, HRA becomes effective
Communications regarding the HRA will be sent in late November You will receive a brochure explaining the changes, which will serve as a Summary of Material Modification, along with frequently asked questions and details about the claims process.

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