The document summarizes a new Health Savings Account (HSA) option for employees beginning in 2009, as a less expensive alternative to the current health insurance plan. Key details include: the HSA would be paired with a lower-premium, high-deductible health plan; the employer would contribute a set monthly amount to each employee's HSA; and employees would save on insurance premiums and gain tax advantages by using an HSA to pay for medical expenses with savings from both employer contributions and their own. The document addresses common questions about HSAs and how they work.

1. Health Savings Accounts A new health insurance OPTION for ACPL employees beginning 1/1/09 August 21, 2008

2. Do you ever feel … … That you work all night & you work all day just to pay the bills you have to pay? Ain’t it sad? And does it seem like there still is not a single penny left for you? That’s too bad!

3. Do you ever feel … …That in your dreams you have a man (Jeff!)? That could get you a new health plan??!!

4. (Money, Money, Money …) …You’d still have to work all day But check out how this HSA would pay… And remember, this is about Money, Money, Money …so talk it over with your honey… It’s about Money, Money, Money!

5. Musical Interlude… For 60 seconds!

6. Please remember… All 2009 numbers are ESTIMATES ONLY! EE = Employee ER = Employer (ACPL)

7. What is an HSA? Bank account set up to help pay for uninsured medical expenses Goes with less $$ health plan (HDHP) (EE + ER save on premium) Part of ER savings get passed along to EE as monthly deposits to HSA to help with high deductible/OOP max (& medical expenses not reimbursed) EEs encouraged to deposit all or part of premium savings HSA $$ OWNED BY EE

8. The BIG difference? In current plan, EE pays : Flat dollar co-pay amounts for (Doc, ER, Meds, etc) 100% co-insurance items like X-Rays, Lab work, In-patient until deductible is met Then EE pays 20% until OOP Max is met After OOP met, EE pays only co-pays

9. The BIG difference? In HDHP, EE pays : Everything! Until deductible/OOP MAX is met EXCEPT Preventative care covered at 100% (mammograms, annual check-ups, etc) Nothing! After Deductible/OOP is met

10. HDHP vs ACPL PHP 2008 In-Network To satisfy FAM deductible, one member satisfies, then all others COMBINED can satisfy FAM deduct In HDHP, Deductible = Out of Pocket MAX! $2,500 $1,250 2009 PHP Out of Pocket MAX $5,000 $500 $2,500 $500 FAM $1,250 2008 PHP Out of Pocket MAX $2,500 $250 $250 IND 2009 HDHP Out of Pocket MAX 2009 PHP Annual Deductibl 2008 PHP Annual Deductible

11. HDHP vs ACPL PHP 2008 Out-of-Network To satisfy FAM deductible, one member satisfies, then all others COMBINED can satisfy FAM deduct In HDHP, Deductible = Out of Pocket MAX! $5,000 $2,500 2009 PHP Out of Pocket MAX $15,000 $1,000 $5,000 $1,000 FAM $2,500 2008 PHP Out of Pocket MAX $7,500 $500 $500 IND 2009 HDHP Out of Pocket MAX 2009 PHP Annual Deductibl 2008 PHP Annual Deductible

12. Why would anyone sign-up for an HSA?? There are several reasons…let’s talk premium …

13. Estimated Monthly Premiums based on 2008 - $118 (35%) $221 $339 Family EE contrib - $33 (39%) $52 $85 Single EE contrib - $489 (35%) $909 $1,398 Family Total premium - $178 (39%) $281 $459 Single Total premium Difference HDHP Traditional PHP

14. ACPL ESTIMATED Deposits into HSA Each Month, ACPL deposits $71 ($852/yr) (IND) or $90 ($1,080/yr) (FAM) into your HSA account Bank account to pay for medical expenses not reimbursed by insurance (cough syrup, bandages, co-pays, co-insurance, deductibles, etc.) It’s your money! (spend it on healthcare, save it, use it in retirement) You don’t ever lose it – but must be spent on healthcare

15. Employee Deposits into HSA Each year EE may contribute to his/her HSA: Up to $3,000 (IND) and $5,950 (FAM) EEs can take all or part of their lower health insurance premium and put in HSA – so $$ are there to handle the high OOP maximums EE + ER contributions can’t exceed deductible (IND $2500 – 852 = $1648) You can save money in “good” (health) years to pay for bills in “bad” years

16. Tax savings for employees in HSAs EE $$ into HSA is tax free ER $$ into HSA is tax free Gains on HSA money is tax free All HSA $$ are tax free when withdrawn - if for health related expenses including health insurance

17. How to tell if HSAs are good for ME? Probably good choice if you think you’ll have few claims to pay with your ACPL contribution (pay lower premiums and keep the monthly payments in the bank) Probably bad choice if you guess your claim amount amounts to hit the OOP maximums

18. How to tell if HSAs are good for ME? Probably good choice if you want to pro-actively manage your own healthcare Do you want to request generic drugs? Try to use family doctors instead of specialists? Try to find over the counter meds? Shop for best buy on drugs, medical procedures?

19. How to tell if HSAs are good for ME? You’re looking to retire soon , want $ in HSA for COBRA until Medicare You like the idea of moving the control from the insurance company to YOU

20. ACPL “Corporate Reimbursement” Not expected to be part of HSA Probably won’t be continued for those staying with traditional PHP coverage either

21. Why is ACPL Offering this?? Like Wellness Credits, over long term, people will help us change behaviors…to … Eat better … Be healthier … Be better consumers of health care When this happens, ACPL + EEs will save money Premium savings for ACPL in 2009

22. HSA Q & A Q - Can you change back to traditional PHP in 2010? A – Yes Q – Can you keep unused ACPL contrib if you change to PHP traditional plan in 2010? A - Yes

23. HSA Q & A Q – How with this actually work – when getting services? A – Show PHP card to provider Get service Provider bills PHP PHP processes bill Tells EE how much to pay

24. HSA Q & A Q – When will ACPL contrib be added to the HSA? A – At the beginning of each MONTH Q - What happens if I use ACPL (or my own contribs) for non-eligible expenses? A – Employee is responsible for using money within rules of plan (Misused HSA money becomes taxable with penalty) Q - Should I save receipts? Are their audits? A - Yes!

25. HSA Q & A Q – Will you have to pay back ACPL $$$ if you leave without using the ACPL money in HSA? A – No, employees own the money. Q – What if I get slammed with big bill in first month – no $ in HSA to cover!? A – Providers becoming increasingly accommodating on “payment plans”

26. Education Plan August/September table tents Brief email “teasers” PowerPoint on Insite Power point w/voice over on DVD Employee meetings at MAI & Branches

27. HR Blog Health Savings Account Questions & Answers will be posted on: http://acplhrqa.blogspot.com/

28. The End!