0. DEVELOPMENT OF THE NECA/IBEW FAMILY MEDICAL CARE PLAN
NECA LABOR RELATIONS
CONFERENCE
PLAN OVERVIEW
OCTOBER 2009

1. Healthcare in the U.S. 44,000,000 uninsured Americans
16.2% total GDP spent on healthcare in 2007 (estimated at 17% in 2008)
Projected to be 19% by 2014
Projected to be 25% by 2020
U.S. has poorer health outcomes than many other nations, even though it spends 1/3 to 1/2 more than those nations.
The future of government-sponsored national health plan is in doubt, although the current administration is taking a close look at some version of national coverage.
Much of the coverage for electrical employees is provided through small plans and employers and is neither stable nor cost-effective.

2. Somebody Has to do Something….
In 2003 and 2004, IBEW and NECA took on the job
Began surveys and research on benefit plans and financing
Extensive studies of existing plans in various regions
Selection of IBEW 10th District as pilot group

3. Growth of the IBEW National Plan
Began operations January 1, 2006
3,500 employees
12 Local Unions
$17 million in assets
Status as of July 1, 2009
13,800 employees
38 Local Unions
$74 million in assets

4. States Currently Participating
Alabama
Arkansas
Florida
Georgia
Louisiana
Michigan
Mississippi
Missouri
North Carolina
Ohio
South Carolina
Tennessee
Texas
Virginia
Washington

5. Trustees of the National Plan
Current Union Trustees
Lindell Lee
Michael Long
John Nickles
Shane Roberts
Current Employer Trustees
Geary Higgins
Howard Hughes
Larry Moter
Jerry Sims
Kevin Tighe
Union Trustees selected by IBEW from Vice-Presidential Districts
Employer Trustees selected by NECA
Trustees’ obligation is to manage the Plan and its resources in the best interests of the participants

6. How the Board of Trustees Interacts
Trustees accept input from all local plans and participant groups
Two Trustees from each IBEW VP District help oversee the interests of their regions
Local parties have options available for contract negotiations

7. Service Providers Fund Counsel PPO Network and
Mr. Hugh Arnold, Arnold & Kadjan
Mr. Gary Lieber, Schmeltzer, Aptaker & Shepard
PPO Network and
Medical Claims Processor
Blue Cross Blue Shield of Georgia
Fund Consultant/Actuary
Mr. Jack Diem, Blomquist & Company
Mr. Kurt Starbuck, Blomquist & Company
Pharmacy Benefits Manager
Sav-Rx
Dental Claims Processor
Metropolitan Life Insurance Company
Fund Administrator
Mr. Joel France, CompuSys
Ms. Jeri Hill, CompuSys
Life and AD&D Insurance
Union Labor Life Insurance Company
Fund Auditor
Mr. Bruce Pavlik, Legacy Professionals

8. Cost Benefits Reduced administration eliminates redundant services
Larger asset pool allows professional management and more efficient asset allocations
Reduced net operating expenses
Reduced investment management expenses
Larger volume discounts with providers
Transparency of operations and expenses
Flexibility with regard to reserves and funding
Improved bargaining position through larger group

9. Benefit Designs
Several Plan design options available for smaller groups
Various deductibles & out-of-pocket limits
Dental or no dental
Vision or no vision
Life and A&D insurance options
Plan 1 Standard Benefits
Handouts provided
Plan 10 Higher Benefits
Customized Plans Available for Larger Groups

10. Funding and Rating
Pooled rates based on demographic and geographic factors
Variation of pooling and self-funding for custom plans

11. Advantages of Blue Card® Network
No balance billing to participants.
Lower out-of-pocket cost to participants, and savings to Plan.
Same benefit schedule for participants regardless of region or state in which they receive medical care.
All Blue Cross plans linked together nationally.
Large national provider network:
270,416 primary care physicians
468,240 specialists
5,698 hospitals
80% of all physicians contract with Blue Cross
90% of all hospitals contract with Blue Cross

12. Blue Card® National Network
Participant Access to Blue Card® Network
Participant shows I.D. card to his doctor or hospital.
Doctor or hospital submits the claim to the local Blue Cross plan.
The local Blue Cross plan transmits the claim to Blue Cross Blue Shield.
Blue Cross Blue Shield adjudicates the claim and credits the local Blue Cross plan.
The local Blue Cross plan sends payment to the doctor or hospital.
Blue Cross Blue Shield sends an EOB to the participant.
Participant is billed his portion of the claim by the doctor or hospital.

13. Blue Cross Blue Shield of Georgia
Claim adjudication is transitioning to CompuSys in early 2010
BCBSGa provides access to national savings
90% all hospitals nationwide participate
80% all physicians nationwide participate
Plan contracts directly with BCBSGa, so all fees and expenses are fully revealed
Although Plan contracts directly with BCBSGa, participants can seamlessly access any Blue Cross provider in any state
BCBSGa and local Blue Cross plan coordinate benefits behind the scenes

14. Customer Service Enrollment or paperwork issues: Claim Issues
Dedicated Fund Office
Claim Issues
Medical — Dedicated CompuSys office
Dental — MetLife
Vision — VSP

15. Reporting for the National Plan
The National Plan is a transparent Health and Welfare Plan
Monitoring by auditor, consultant and two independent legal counsels
CompuSys, the administrator, is the principal point of contact for issues and concerns, but decisions are made by Trustees
The National Plan provides reports showing experience, utilization and trends
All Plan information is completely available to the Trustees

16. Special Fund (HRA)
A special additional amount can be contributed on a tax-free basis to the employees’ Special Fund (HRA) accounts.
Employee can use it to pay deductibles, copays or other qualifying expenses, including self-payments that otherwise would have to be paid with after-tax earnings.
The reimbursable expenses are limited to specific allowable expenses under the Internal Revenue Code.
Unused balances are carried forward from year to year and are not lost if not used. However, an employee’s balance is not vested—there is no provision for cashing in an account balance.
If an employee dies while an account balance remains, his dependents can use it.
Interest earned on accumulations in the Special Fund defrays the Fund’s operating expenses.
Not available to non-bargaining employees.

17. Special Fund (HRA) Covered Expenses Non-Covered Expenses
Deductibles & co-payments
Acupuncture
Self-payments for Plan coverage
Medical expenses not covered by the Plan
Vision expenses not covered by the Plan
Dental treatment not covered by the Plan
Smoking cessation programs
Certain transportation expenses
Vision-correction surgery
Weight loss programs
Christian Science practitioners
Non-Covered Expenses
Cosmetic surgery or treatment
Health club memberships or expenses
Household help
Maternity clothes
Food or dietary supplements

18. Implementation Steps
Modify labor agreements to reflect new contribution rates
Transition employees into eligibility under National Plan
Terminate existing contracts
Transfer COBRA qualified beneficiaries
Transfer disabled employees
Transfer retirees