AT&T Plans for aMedicareRetiree HealthExchangeCWA Review for Legacy TLocal Officers} RetireeCouncil Presidents and StaffAugust 13} 2014

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What you need to know aboutAT&T'splans for MedicareExchangeso Who, What, When, Where, Why and How

o Timeline for Implementation

o Medigap Policies and MedicareExchanges

o The Health Reimbursement Account

o Resources

o Where to Go with Questions

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Caveatso Thispresentation represents CWA's

understanding and interpretation of theMedicare Retiree Health Exchange beingoffered by AT&Tbeginning in 2015.

o For detailed information from AT&Tand Aon,go to www.myretireehealthexchange.com.

o On the website, access:o Educational videos

o Checklists, guides, documents

o Answers to frequently asked questions.

Who, What, When, Where,Why and How

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Whoo The change affects "Retirees and their

dependents who are Medicare eligible on orafter January 1, 2015."

o Does NOT affect:o Grandfathered pre- 3/1/1990 retirees who

will continue to be covered under theircurrent plan at no premium cost.

o Pre-age 65 retirees or dependents who arenot Medicare eligible.

o Individuals receiving Medicare Disabilitybenefits who are under age 65.

Whato "AT&Twill provide access to retiree health

insurance coverage that supplementsgovernment-sponsored Medicare through aprivate insurance marketplace, apart fromthe federal government's Affordable CareAct exchanges."

o AT&Twill no longer sponsor a group healthplan for Medicare retirees and dependents.

o Instead, AT&Twill offer individual coveragethrough a private retiree health exchangerun by Aon.

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Wheno "In 20 15 .... "

o In the fall of 2013, the company beganrolling out the plan to switch fromcompany-provided group health insuranceto a private exchange for Medigapcoverage. They did this to provide a longperiod for education of retirees.

o 2014 will include education opportunitiesand the enrollment period for 2015coverage.

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Whereo Nationwide.

o The Aon Retiree Health Exchange willprovide coverage for every Medicare-eligible retiree and dependent (notincluding those on Medicare Disabilitybenefits under age 65).

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Whyo "Thisapproach continues to provide you with

significant support while moving towards amarket level benefit for retirees."o A T&Thas joined the growing number of

employers who are getting out of thebusiness of providing retiree healthbenefits.

o The company will reduce its administrativeoverhead and cap its retiree healthliability.

Howo "Thisnew approach will replace your AT&Tmedical

plans and will let you choose insurance with theterms, cost, and coverage that best fitsyour needs,while still receiving financial support from AT&Tif youare eligible. "o The exchange will offer a variety of individual

Medigap and Medicare Advantage plans,o Rather than group health coverage - uniform

benefits at universal rates - the cost of coveragewill depend on the age of the retiree or .dependent, the tocotion and health costs in thatarea, and the specific plan selected,

o AT&Twill offer a health reimbursement account(HRA) to help offset the cost of coverage, The HRAmay be used to pay monthly premiums or toreimburse for out of pocket costs for eligiblemedical, prescription drug, dental and vision plans,

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Timeline for Implementationof the Aon Retiree HealthExchange

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Timeline: April - June 2014o April: Transition Guide mailed

o Explains basics and process of the new program

o May: Education Kit mailedo Includes letter with time and date for

telephonic call with Benefits Advisoro Information also available on website

www.myretireehealthexchange.com

o May - June: Meetings and Webinarso Meetings across the country - 8 in CAo 12Webinars offeredo Set up online account

Timeline: July - Septembero July - September: Education

Appointments with Benefit Advisorso Must call to confirm or reschedule

the education appointmento Benefits Advisor will then call to

review current coverage, Rx,doctors, etc

o Info based on 2014 plans and costs;2015 plans and cost available inOctober

o Benefit Advisor will discuss the HRA

Timeline: Septembero September: Enrollment Kitsmailed

o From Aon Retiree Health Exchangeo Includes info about pre-scheduled

enrollment appointment with BenefitsAdvisor

o Includes insurance guideo Retiree must confirm or reschedule

enrollment appointment

Timeline: October - December

o October - December: Complete Enrollmento Benefits Advisor will call retiree for the

enrollment appointmento Benefits Advisor will guide retiree through

the selection and enrollment processo The retiree can also enroll online, but must

confirm choices with Advisor

Medigap Policies andMedicare Exchanges

AT&TSets Up Private Exchangefor iMedicare Retireeso Currently, AT&T's Medicare-eligible retirees

get coverage from two main sources:o Original Medicare isthe primary payer

o AT&T'sretiree group health insurance plan issecondary, picking up charges that Medicaredoes not cover.

o Beginning in 2015 AT&T'sgroup insuranceplan will be replaced with access to aprivate insurance exchange where retireescan purchase individual Medigap policies.

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What Does Medicare Cover?

Part A(OriginalMedicare)

• Covers inpatient hospltol. skillednursing, hospice, home health care

• Copayments, coinsurance, anddeductibles may apply

• No premiums

Yes. Mandatory in orderto get Medigapcoverage.

Part B(OriginalM.edicare)

• Covers doctors visits,outpatienthospital, devices, preventive servlces

• Copovrnents, coinsurance, anddeductibles may apply

• Premiums apply

Yes. Mandatory in orderto get Medigapcoverage.

Part C • "Medicare Advantage" No. Illegal to buy• Single private policy that can Include Medigap when covered

A, B, D, and/or other benefits by Medicare Advantage.

P·art 0 • Separate prescription drug coverage Yes. Medigap does notcover drugs,

What isa Medigap Policy?o A Medigap policy, or Medicare Supplemental

Insurance ishealth insurance sold by privateinsurance companies to fill the \\gaps" in OriginalMedicare Plan coverage.

o Medigap policies help pay some of the healthcare costs that Original Medicare doesn't cover.

o Medigap isdifferent from a Medicare Advantageplan, which provides complete Medicare benefitsand may also include other benefits, likeprescription drugs.

Things to Know about MedigapPolicieso Must have both Medicare Part A and Part B.o Pay a monthly premium to a private insurance

company in addition to monthly Part B premiumspaid to Medicare.

o A Medigap policy covers only one person.Married couples will need separate policies.

o A standardized Medigap policy isguaranteedrenewable as long as you pay the premium.

o Medicare prescription drug coverage issoldseparately as Medicare Part D.

o Plans are identified by letters of alphabet, A-No Different letter plans include different benefits,

coverage levelso None include prescription drugs; must enroll in

separate Medicare Part D prescription drugplan

o Rates can vary based on age, location, insurer I·

Medigap Policies AreStandardized

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Medigap Policies AreStandardized

Medicare Supplement Insurance (Medlgap) Plans

Benefits A B C D p- G K L M NMedicare Part A 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%coinsurance and hospitalcosts (up to an additional365 days after Medicarebenefits are used)Medicare Part B 100% 100% 100% 100% 100% 100% 50% 75% 100% 100%coinsurance or copayment ....Blood (first 3 ints) 100% 100% 100% 100% 100% 100% 50% 75% 100% 100%Part A hospice care 100% 100% 100% 100% 100% 100% 50% 75% 100% 100%coinsurance or co a meritSkilled nursing facility care 100% 100% 100% 100% 50% 75% 100% 100%coinsuranceMedicare Part A deductible 100% 100% 100% 100% 100% 50% 75% 50% 100%Medicare Part B deductible 100% 100%

Medicare Part B excess 100% 100%cha es

Foreign travel emergency % 100% 100% 100% 100% 100%(up to Ian limits)

Out-of-pocket limit

in 2014"$4,940 $2,470

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Medicare Advantage Planso Comprehensive plans including Part A, B

and drug coverageo May also include other benefits: dentaL

hearing, visiono Use in-network doctors, like an HMOo May require copays and out of pocket

costso Caps on out of pocket costso Often have lower premiums

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What is an Exchange?o An exchange vendor contracts with insurance

carriers to offer a variety of Medicaresupplemental policies (Medigap) and MedicareAdvantage plans to retirees of participatingemployers.

o The plans are individual plans; not group rated.

o The retiree may select from among the plansoffered on the exchange; the spouse must selecta separate plan - can be different plan.

o The vendor provides administrative and customerservice functions for the program.

Health ReimbursementAccount

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AT&TWill Contribute to RetireeHealth Thru an HRAo AT&T to contribute for retiree and spouse:

o Retiree contribution = $2700o Spouse contribution = $1500o Couple contribution = $4200

o Spouse contribution only for 65+ spouseo Pre-65 spouse covered under pre-65 plan

o The contribution amount for 2015 is"comparable to" amount in 2014 -- between70% - 80% of costs.

More on HRAso The retiree must be enrolled in either the

medical or the Rxplan or both to get the HRA.o HRA monies must be spent on benefits offered

in the Aon Retiree Health Exchange.o Exchange benefits will include medicaL Rx,

dental and vision.o HRA can pay for monthly premiums and/or out

of pocket expenses.o Any balance in the account at the end of the

year is rolled over.

Getting Reimbursements fromthe HRA1. Retiree pays premium to insurance carriers

for each plano Carrier may offer auto-pay option from

checking or savings accounts2. Insurance carrier notifies HRA administrator

that premium payment has been received3. HRAsends reimbursement to retiree4. For out of pocket expense relrnbursernents.

must send proof of payment receipts to HRAAdministrator.

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Resources --myretireehealthexchange.com

o Videos -o Retiree health changeso Medicare Advantage and Medigap Planso Prescription Drug Coverage

o Documents -o Transition Guideo Guide to Medicare and Medigap

Coverageo Checklist for Enrollment

Where to Go with Questions1 . Check the website -

www.myretireehealthexchange.como Under \\Important Documents" see "Frequently Asked

Questions ~2. Retiree contacts dedicated Aon Benefits Advisor3. Aon Retiree Health Exchange

o 1-800-928-8027o 7am - lOpm Central Time

4. Submit question to:o Martha Flagge, CWA Representative, at mflagge@cwa-

union.orgo ~/he will submit questions to the CWA/ AT&TRetiree Benefits

ubcommittee5. Responses will be emailed back and posted on the

website in the FAQ section.