© 2015 VMware Inc. All rights reserved.

Aetna and Health Equity

Aetna HDHP Medical and Health Savings Account

Tony Ertassi – Aetna Colton Pond – Health EquityDanny Humphrey – Health Equity

October 6 and 7, 2015

Copyright © 2013 HealthEquity, Inc. All rights reserved. HealthEquity and the HealthEquity logo are registered trademarks and service marks of HealthEquity, Inc.

Confidential and proprietary. Reproduction without express written consent is prohibited.

VMware

Winning with an HSA

Aetna HDHP Medical Plan Features

• Allows you to elect an HSA account administered by

HealthEquity

• There are no copays

• A deductible must be satisfied before coinsurance

kicks-in

• Plan has a maximum out of pocket. Once satisfied the

plan pays medical and pharmacy costs at 100%

3

Aetna HDHP Plan (Aetna Choice POS II) HSA Eligible

4

In-Network Out-of-Network

Calendar Year

Deductible$1,350– Individual

$2,700– Family$1,350– Individual

$2,700– Family

Coinsurance 10% after deductible 30% after deductible

Calendar Year Out-of-

Pocket Maximum

$2,000– Individual

$4,000– Family

$6.000– Individual

$12,000– Family

Office Visit 10% after deductible 30% after deductible

Preventive Care 100% 30% after deductible

Hospital 10% after deductible 30% after deductible

Lab and X-Ray 10% after deductible 30% after deductible

Emergency Room10% after deductible 10% after deductible

How Does the Aetna HDHP with HSA Plan Work?

5

Single Coverage

Ou

t-o

f-p

ock

et

Ma

x

0% after you reach the OOP

$2,000 in-network/

$6,000 out-of-network

Pay the deductible

$1,350 in-network/

$1,350 out-of-network

Then pay coinsurance

10% in-network/

30% out-of-network

10

0%

Pre

ve

nti

ve

Care

(in

-ne

two

rk)

De

du

cti

ble

*Contribution$750 Employer + Employee $

Coverage Level

Family Coverage

Ou

t-o

f-p

ock

et

Ma

x

0% after you reach the OOP

$4,000 in-network/

$12,000 out-of-network

Pay the deductible

$2,700 in-network/

$2,700 out-of-network

Then pay coinsurance

10% in-network/

30% out-of-network

10

0%

Pre

ve

nti

ve

Ca

re

(in

-ne

two

rk)

De

du

cti

ble

Coverage Level

*Contribution$1,500 Employer + Employee $

*Includes one time seed money of $250 for single and $500 for family in 2016

Aetna HDHP (Choice POS II)

Aetna Pharmacy Management

Prescription ProgramsParticipating

Pharmacy

Non-Participating

Pharmacy

Rx – Retail

Generic Formulary

Brand Formulary

Non-Formulary

(up to a 30 day supply)

10% after deductible

10% after deductible

10% after deductible

***Coinsurance applies after

deductible is met***

50% after deductible

50% after deductible

50% after deductible

Rx – Mail Generic Formulary

Brand Formulary

Non-Formulary

(*Up to a 90 day supply)

10% after deductible

10% after deductible

10% after deductible

***Coinsurance applies after

deductible is met***

Not Covered

***Preventive Medications– Deductible is waived for certain preventive medications such that only the coinsurance applies. A

full list of these drugs is available on Aetna Navigator or the following link Preventive Drug List

* * Obtain a 90 day Rx from your MD. Mail Order Drug (MOD) forms can be found on www.aetna.com/aetnarxhomedelivery. Once on MOD obtain refills onlineObtain a 90 day Rx

from your MD. Mail Order Drug (MOD) forms can be found on Once on MOD obtain refills online

6

.

Winning with an HSA

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Two Parts: Health Plan + Savings Account

• HSA-qualified plan: Aetna High Deductible

Health Plan

• Preventative services covered at 100%

• Office Visits, Rx, Deductible, Copays, and

Coinsurance ALL count towards Out of

Pocket maximum

• HSA through HealthEquity

• Tax-free savings for medical

expenses

• Works in conjunction with the

HSA powered plan

Why choose an HSA?

9

**Source: Fidelity http://www.fidelity.com/inside-fidelity/employer-services/fidelity-analysis-reveals-extra-health-care

*Tax statements refer to federal taxes. A few states treat HSA contributions as taxable. Those states include California, Alabama, and New

Jersey. Consult your tax advisor for more details.

• In tax free

• Grows tax free

• Out tax free

Easy win in today’s complex health care system:

– Save now:

• Lower monthly insurance premiums

• HSA deposits aren’t taxed*

• Typically lowers income tax liability*

– Save for the future:

• The average retired couple will need $220,000 tocover medical expenses not covered by Medicare in retirement**

• HSA funds roll over from year to year

• Tax-free interest earned

• You keep the money even if you changejobs or insurance plans

• Comprehensive and easy investment options

– Same doctors, same network, same pricing

Triple Tax

Savings!!

How an HSA works

10

- Larger monthly premium

- Lower deductible

Traditional health plan vs. HSA-qualified health plan

- Lower monthly premium

- Higher deductible

- Money into savings account

(Aetna PPO) (Aetna High Deductible)

How an HSA works

11

You and VMware

$

$

Qualified medical expenses:Exams, prescriptions, procedures, vision, dental and more

For a complete list of qualified expenses see Publication 502

Maximize your savings

12

Maximize your HSA contributions in 2016:

• Single-coverage: $3,350 Save up to $1005 in Taxes!*

• Family-coverage: $6,750 Save up to $2025 in Taxes!*

• Catch-up contribution, age 55+: $1,000

*Based on 30% tax rate. Actual results may vary.

How to contribute to your HSA

13

• VMware is contributing into your HSA!

• Individual: $500, Family: $1,000

• Plus first year seed: $250, $500

• Make pre-tax contributions through payroll deductions

• Change your payroll contributions at any time

• Make post-tax contributions directly to HealthEquity online or by sending a check

• Fully fund your HSA on day one

• Make contributions anytime after your HSA is open

• Can make contributions up until April 15th

for the previous tax year *Post-tax contributions ONLY

Who is eligible for an HSA?

To contribute to an HSA, you as the

account holder need to:

– Be covered ONLY by an HSA-qualified

health plan

• Other health coverage (including

Medicare, Tricare, a traditional health

plan) may disqualify you

– No general purpose FSA (including

through a spouse)

– Not claimed as a dependent on

someone else’s tax return

14

Who can use my HSA dollars?

• Spouse

– For Federal tax purposes, HSAs can be used to pay medical expenses of same-sex spouses

– For Federal tax purposes, domestic partners are not considered spouses

• Domestic Partners can set-up their own unsponsored HSA with HealthEquity

• Tax Dependents

– If a child is still a tax-dependent (up to age 19 or, if full-time student, age 24), then the child’s out-of-pocket medical expenses can be paid with your HSA

– When your child is no longer a tax-dependent but on your medical insurance plan (through age 26), then your child’s out-of-pocket medical expenses cannot be paid with your HSA

• Dependent can set-up their own unsponsored HSA with HealthEquity

15

HSA winners

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The shopper

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SHOPPER:

• High medical utilizer

• Hits out-of-pocket maximum with

traditional health plan

How a Shopper wins:

• Significantly lower monthly

premiums

• No copays on top of out-of-pocket

expenses

• Out-of-pocket expenses are paid

with tax-free HSA funds

* Results may vary. Based on plan design, contributions and your tax rate.

The minimalist

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MINIMALIST:

• Low medical utilizer

• Desires flexibility and minimum monthly

premium

How a Minimalist wins:

• Significantly lower monthly premiums

• Out-of-pocket expenses are paid with

tax-free HSA funds

* Results may vary. Based on plan design, contributions and your tax rate.

The saver

19

SAVER:

• Financially savvy

• Optimizes account savings

How a Saver wins:

• Another avenue for investing tax-free

• Significantly lower monthly premiums

• Out-of-pocket expenses are paid with

tax-free HSA funds

* Results may vary. Based on plan design, contributions and your tax rate.

The survivor

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SURVIVOR:

• One or more chronic conditions

• Hits out-of-pocket maximum with

traditional health plan

How a Survivor wins:

• Prescription out-of-pocket expenses are

capped, no copays

• Significantly lower monthly premiums

• No copays on top of out-of-pocket

expenses

• Out-of-pocket expenses are paid with

tax-free HSA funds

* Results may vary. Based on plan design, contributions and your tax rate.

Plan comparison tool & Member Resource Site

21

• VMware HealthEquity Member Resource Site:

– www.healthequity.com/ed/vmware

• Aetna Plan Comparison Tool

– https://www.aetna.com/planselection/mbrDis.jsp?id=871

Convenient Access

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• Convenient access– Debit card

– Online

• Single Sign on through the VMware benefits site

• www.healthequity.com/ed/vmware

– Using our free mobile app

– By telephone

• Use your HealthEquity account to– Check your balance

– Review transactions

– Review claims

– Submit new claims or documents

– Send payments and reimbursements

– Access tax documents

– Invest your HSA dollars

Copyright © 2013 HealthEquity, Inc. All rights reserved. HealthEquity and the HealthEquity logo are registered trademarks and service marks of HealthEquity, Inc.

Confidential and proprietary. Reproduction without express written consent is prohibited.

HSA Investment overview

VMware

HSA fund lineup summary

24

No fund minimums, loads, short-term redemption fees or trading costs

Options for customization to mirror 401(k) plan funds (mutual funds only)

Investor Choice I, II & III can be made the primary fund lineup

VMware

Metrics HSA Investments

Number

of funds26

Management

style

Active (14)

Passive (12)

Fund expense

average

Active 0.49

Passive 0.14

HQY Investment

Admin fee0.40

Share class

typesInstitutional Admiral

*Administration & bookkeeping fee of 0.40% (40 bps) annual paid to HealthEquity via fund expense in the form of a revenue share.

HealthEquity Advisor™

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GPS

Self-driven

Auto-pilot

Two levels of

advisory

service to

choose from:

25

GPS

26

• Recommended portfolio advice

• Recommended rebalance

• Recommended fund and asset class rotation

• Weekly performance summary (SEC Compliant)

• Monitoring & alerts (emails & texts)

• Subscription-based, cancel at any time

• Easy trade button

• Monthly fee .05% of invested balance

($.50 per $1000)

Guidance provided by Advisor,

implemented by you

Auto-pilot

27

• Execution on advice

• Rebalancing

• Mutual fund rotation

• Asset class rotation

• Weekly performance summary (SEC Compliant)

• Monitoring and alerting (emails, text messages)

• Subscription based, cancel at anytime

• Monthly fee .08% of invested balance

($.80 per $1000)

Automatically implemented and

managed for you

Health Care Costs in Retirement

• The average couple will incur $220,000* to

cover medical expenses during retirement

• This is $325,000 gross withdrawal from

traditional 401(k) plan to achieve net $220,000

medical expense in retirement**

-or-

• Only $220,000 tax free withdrawal from HSA

28* Fidelity Benefits Consulting https://www.fidelity.com/viewpoints/retirement/retirees-medical-expenses

** Assumes 33% tax rate

Impact of investments

• HSA Investors* vs. Eligible Non-investors**

• HSA Investors (annually):

– Contribute 54% more

– Balances 184% larger

– Spend the same for medical

• HSA Investors maximize the tax deferred benefits of the HSA substantially

more than those who don’t invest

• * Eligible Investors are account holders with >$500 above their respective minimum investment threshold and have investment balance

>$0.

• ** Eligible Non Investors are account holders with >$500 above their respective minimum investment threshold, and have investment

balance = $0

29

Trusted Advisors

30

Always availableOur member services agents are taking calls 24 hours a

day, every day of the year

Call todayLet us conduct a personal assessment of your plan

options

866.296.2857 www.healthequity.com/ed/vmware