Benefits Overvi ew Tier 2

1. Benefits OverviewTier 2 The information contained in these slides is intended to be a summary only. Please refer to the Summary Plan Description and/or insurance certificates for detailed information. January 14, 2013

2. BC/BS of Michigan-Simply Blue PPO Medical/Prescription coverage BC/BS of Michigan Dental coverageBC/BS (VSP) of Michigan Vision coverageLincoln Financial Group Life and AD&D, LTD, STD, and Accident Insurance HelpNetEmployee Assistance Program Benefit Carriers

3. Deadlines • Benefit Elections must be made within 30 days of your date of hire. • Dependent certification is due within 30 days of your date of hire • Benefit Elections go into effect on your 31st day of employment.

4. Documentation • Proper documentation is needed for all eligible dependents that you would like to cover on the medical & prescription, dental or vision plan. • Copies are accepted and can be faxed or emailed to human resources. • Child (Children can be covered until the day before their 26th birthday.) • Birth Certification or Adoption order or court document showing relationship. • Spouse (2 documents needed) • Marriage Certificate • Proof of current marriage (last year’s tax return or recent bill coming to your name and spouse’s name at same address.

5. Premium Costs for Medical and Prescription Insurance • Single coverage = No cost to the employee • 2-Person coverage = $210.76/bi-weekly • Family coverage = $301.08/bi-weekly *Premiums are based on 24 pays

6. Medical Deductible with BCBS • Single = $1,250 Family = $2,500 • KRESA will be depositing a pro-rated amount of the single coverage deductible into your Health Savings Account (H.S.A.) *This amount is pro-rated based on your start date after January 1, 2013

7. Medical Plan Overview • Ability to choose • in-network or out-of-network care for medical services or supplies • Choose in-network whenever possible as cost will be cheaper • All medical and RX expenses go towards the deductible • Once deductible is met your medical expenses are covered at 100% (Rx subject to copay $10/$40/$80 No Office Visit Co-pays!

8. Medical Plan Overview Preventive Services Covered at 100%

9. Medical Plan Overview No Pre-existing Conditions No Lifetime Maximums

10. Prescription Plan Overview Cost of Prescription Applied to the Deductible Once Deductible Met – Copay’s Apply Once Copay’s Accumulate to the Out of Pocket Maximum $1,000 Single / $2,000 Family plan pays 100% Step Therapy Prescription Drug Coverage In-Network Benefits (up to a 30 day supply) $10 (or less) co-pay: Generic $40 co-pay: Formulary (Preferred) Brand Name drugs $80 Non-Formulary (Non-Preferred) Brand Name drugs Oral and Injectable contraceptives – covered with applicable copay Applicable co-pay applies for elective drugs, i.e. infertility, weight loss & sexual impotency Rx formulary can be found BCBSM web site on www.bcbsm.com and has also been placed on the KRESA internal employee web site

11. Prescription Plan Overview Mail Order Mail Order: Prescription Drug Coverage In-Network Benefits home delivery for a 31 to 90 day supply Prescription Drugs will be subject to the following co-pay once the Single / Family deductible has been met Generic drugs– $20 co-pay Formulary drugs - $80 co-pay Non formulary drugs $160 co-pay Your plan also offers a retail 90 benefit. Members are able to obtain a 90 day supply of medication from a participating retail pharmacy. The Retail-90 program offers you the same financial incentive as the mail-order program (buy 2 get 1 free).

12. Dental Plan Overview Class I services - 25% of approved amount Class II services - 25% of approved amount Class III services - 50% of approved amount Class IV services - 50% of approved amount **Review your Dental summary for specific services • Member’s responsibility (co-pays and dollar maximums) • Can use both provider networks (Dental Network of America or Traditonal Plus) found on BCBSM web site. • Dollar maximums Annual maximum (for Class I, II and III services) $1,000 per member Lifetime maximum (for Class IV services) $1,500 per member

13. Premium Costs for Dental Insurance • Single coverage = No cost to the employee • 2-Person coverage = $18.41/bi-weekly • Family coverage = $26.30/bi-weekly *Premiums are based on 24 pays

14. Blue Vision SM Choice with VSP Annual Vision Exam - $10 Lenses & Frames - $25 copay Lenses every 12 months Frames every 12 months Contact Lenses - $25 copay Medically necessary Elective $130 allowance 12 months VSP (Vision Service Plan Network) Discounts on additional pairs of prescription and nonprescription glasses, including sunglasses Laser VisionCareSM programDiscounts on LASIK and PRK 15% off or 5% off promotional offers .

15. Premium Costs for Vision Insurance • Single coverage = No cost to the employee • 2-Person coverage = $3.82/bi-weekly • Family coverage = $5.45/bi-weekly *Premiums are based on 24 pays

16. Flexible Spending AccountDependent Care FSAs give you a convenient way to pay for eligible healthcare and/or day care (child and adult) expenses • Set aside pre-tax dollars through convenient payroll deductions • Use your debit card for eligible expenses • Save money on taxes • Contribute $100 - $5,000 • If you do not use it you do lose it

17. Health Savings Accounts – What Is It? Tax-advantaged savings accounts available to individuals who have a high deductible health plan and no other first dollar medical coverage Contributions can be made by employer, employee, employer and employee and/or third party You can stop or start contributing at any point in time. KRESA will be depositing this amount into your Health Savings Account (H.S.A.) This amount is pro-rated based on your start date after January 1, 2013 Health Savings Accounts (HSAs) – Health Equity • 2013 Maximum Contributions: • Single $3250** • Family $6450** • ** Includes KRESA employer contribution

18. What are the advantages of an HSA? Flexibility You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover, or save the money in your account for future needs, such as: Health insurance or medical expenses if unemployed Medical expenses after retirement (before Medicare) Out-of-pocket expenses when covered by Medicare Long-term care expenses and insurance Savings You can save the money in your account for future medical expenses and grow your account through investment earnings. Portability Accounts are completely portable, meaning you can keep your HSA even if you: Change jobs Change your medical coverage Become unemployed Move to another state Change your marital status

19. What are the advantages of an HSA? • Ownership • Funds in your HSA belong to you and are always 100% vested. • Unlike other medical spending accounts HSA funds can remain in the account year to year. There are no “use it or lose it” rules for HSAs. • Tax Savings • Contributions to your HSA can be made on a pre-tax basis. HSA earnings grow tax-free and, as long as the funds are used for qualified medical expenses, withdrawals from your HSA are also tax-free. • If you spend any of your HSA money on non-qualified medical expenses prior to age 65, you will pay ordinary income tax on those funds and will have to pay a 20% IRS penalty.

20. Who is NOT eligible for an HSA? Examples of “1st dollar” medical benefits that make someone ineligible for an H.S.A. per IRS guidelines *Medicare SSID (social security disability insurance) Tricare Coverage Full Medical Flexible Spending Arrangements (HRA) Adult Children – that do not qualify as a your tax dependent (IRS Publication 502) Covered by a spouses FSA or HRA plan (you cannot have an HSA if you are covered by your spouses plan that can pay for any of your medical expenses with an FSA or HRA before your HSA health plans deductible is met) *If an eligible person isn’t enrolled in Medicare, even though that individual has reached age 65, the person can contribute to an HSA until the month they enroll in Medicare. Also can contribute “catch up” contributions until enrolled in Medicare. (you can continue to use your HSA care expenses, but you can no longer make contributions to your HSA savings account)

21. Member Portal • View balance • Review account activity • Transfer HSA funds • Pay bills online • View Insurance Information • Online account statements • Online tutorials • Online support links • Calculators • Forms Be sure to add a beneficiary to your account! **You will receive a welcome kit along with your debit card shortly after your benefits begin.

22. Accessing Funds Funds from the spending accounts are disbursed in the following ways: • Debit card • Online bill payment • Online reimbursement 2 Debit Cards

23. Lincoln Financial Group

24. Lincoln Financial Group • Employer Paid Life Insurance • Employer Paid Long Term Disability • Voluntary Life Insurance • Voluntary AD&D Insurance • Voluntary Short Term Disability • Voluntary Accident Plan Benefit

25. Employer Paid Life and Long Term Disability • Life Insurance Benefit • $20,000 Employee Term Life Insurance • Long Term Disability Benefit • 60% of your wages + • 10% progressive Income benefit • 70% total income benefit up to $6000/month • Benefit begins on 91st day

26. Employee Voluntary Coverage Options • Voluntary Life Insurance • Employee - $10K increments up to 5x salary - $500k max • Spouse - $5K increments up to 2.5x emp salary - $250k max • Dependent Children – 4 options - $2500 $5000 $7,500 $10,000 • Guaranteed issue amount is $140,000 for employees and $25,000 for a spouse • Voluntary AD&D Insurance • Employee - $10k increments but no more than 5x salary • Spouse - $5k increments up to 100% of employee election • Dep Children - $2k increments up to $10,000 • Voluntary Short Term Disability Benefit • 60% of your wages min $100/wk – max $1,200/wk • Begins 1st day accident / 8th day of Illness • Benefit duration is 13 weeks

27. Employee Assistance Plan HelpNet • FREE to you and anyone living in the same household • Savings Center • Work/Life Balance • Trainings/Development • Financial Resources • Strictly confidential • Limited counseling services • Addictions • Emotional Problems • Legal and financial concerns • Careers • Relationships • Stress, Anxiety and depression • Aging Parents • Marital and family issues

28. Wellness • Wellness at KRESA • Ways to get involved • Wellness Committee • The wellness committee exists to raise awareness of our wellness program as well as create opportunities for our colleagues to learn about and live a healthier lifestyle.

29. What needs to be COMPLETED? Enrollment Form Lincoln Beneficiary Form Lincoln Evidence of Insurability If electing over the guaranteed issuing amount

30. QUESTIONS AND ANSWERS