Cisco 2011 U.S. Benefits Enrollment

1. Cisco 2011U.S. BenefitsEnrollment October and November 2010 Global Benefits and HealthConnections In-Depth Session

2. Agenda • Changes for 2011 • Medical plans and accounts • Processing of claims • Pharmacy benefit • Health Incentives • Resources This presentation is an overview. Detailed plan information can be found in the Summary Plan Description on the US Benefits portal.

3. US Benefits Enrollment We continue on our multi-year strategy to: • Preserve our market-competitive offerings to employees and their families • Encourage and support health and prevention • Manage expense long term for Cisco and its employees via a self insured shared rewards approach • Cisco pays on average 83 percent of total employee health care costs, with employees paying 17 percent of the cost

4. Highlight of Changes for 2011 Program Updates • Special one-time $225 rebate • Employee contributions remain flat for PPO and HPSP plans • Employee contributions increase for EPO plans • EPO plans will be eliminated in 2012 Medical Plan Changes • New pharmacy benefits manager for all CIGNA and UHC medical plans…CVS Caremark • New CIGNA Health Plus Savings Plan (HPSP) option Eligibility and Enrollment (Changes Due to Healthcare Reform) • Dependent eligibility increase to age 26 • OTC no longer eligible for reimbursement via HSA/ FSA • Four-week Benefits Enrollment period, no extension: October 25 – November 24, 2010

5. 2011 PPO and EPO Plans • No increase in employee contributions for PPO (UHC Choice Plus & CIGNA Open Access Plus) • 40% increase for EPO (UHC Choice, CIGNA Open Access)

6. 2011 Health Plus Savings Plan with CIGNA/UHC • No increase in employee contributions for HPSP • Both CIGNA and United Healthcare will offer this plan in 2011

7. 2011 HMO Plans – Kaiser and Harvard Pilgrim • Paycheck contributions increase $0.53-$1.61 (single) to $2.81-$10.62 (family)

8. Your Medical Plan Decision Drives Your Financial Account Options

9. PPO, EPO, OOA and the HIA Medical Plan (PPO, EPO, OOA) Deductible + Coinsurance model PPO: in- and out-of-network coverage EPO : in network only OOA : available in certain parts of the country Health Incentive Account (HIA) • How money accumulates tax-free: • The unused account balance from your 2010 HIA • Health incentives you and/or your spouse/domestic partner earn • Plus…$225 one-time rebate in 2011

10. More About the HIA and FSA Health Incentive Account (HIA) • Automatically established for Cisco employees • Cisco owns the account and either CIGNA or UHC administers it • HIA balances are rolled over from year to year as long as you are enrolled in a PPO, EPO, or OOA plan Flexible Savings Account (FSA) You may contribute up to $5,000 of your own money to a Health Care FSA to pay out-of-pocket medical, dental, and vision expenses not covered by your plans. Plan carefully! The HIA pays first.

11. Using Your Accounts:PPO/EPO/OOA Medical Expense * If there are no funds in the HIA, you can submit claims later to get reimbursed. ** FSA receipts should be kept to document tax deductible costs in the event of an IRS inquiry.

12. Using Your Accounts:PPO/EPO/OOA RX Expense * If there are no funds in the HIA, you can submit claims later to get reimbursed. ** FSA receipts should be kept to document tax deductible costs in the event of an IRS inquiry.

13. HPSP and Your HSA High-deductible medical insurance • Your deductible = annual out-of-pocket maximum • HPSP has lower payroll contributions than EPO, PPO, OOA • Preventive care paid at 100 percent • Your HSA can help you pay the deductible • How money accumulates tax-free: • Remaining account balance from your 2010 HSA • Cisco’s annual contribution, including the one-time rebate for 2011 • Your pre-tax contributions, including catch-up contributions • Health incentives earned by you and/or your spouse/domestic partner • Any investment earnings Health Savings Account (HSA)

14. More About the HSA Long-term savings vehicle with investment options • Automatically set up when you enroll in the HPSP • You own the account and Chase administers it • HSA balances are rolled over from year to year • Earnings accumulate tax free • Your account is fully portable Limited Purpose Flexible Savings Account (LPFSA ) You may contribute up to $5,000 of your own money to a Limited Purpose FSA to pay out-of-pocket dental and vision expenses not covered by your dental and vision plans.

15. HSA Contributions Contributions Sources • Health Incentives • Employee max $800 • Spouse/Partner max $400 • Cisco contribution • $500 employee only/ $750 with covered dependents • $225 one-time rebate • Employee contribution (optional) Maximum Annual HSA Contributions* • Up to $3,050 for employee-only coverage • Up to $6,150 with covered dependents • If you are age 55 or older, you can make an additional $1,000 catch-up contribution* * As determined/allowed by the IRS

16. Using Your Accounts:HPSP Medical or Rx Expense * Claims are sent to CIGNA or UHC for processing. Once you meet the plan deductible, the plan pays 100% for the rest of the year. ** You will be issued a debit card (and checks, if requested). Use these to pay your out of pocket medical and pharmacy costs directly from your HSA. If you have an LPFSA, it can be used for dental and vision costs. Receipts should be kept to document tax deductible costs in the event of an IRS inquiry.

17. Key Differences

18. A Note About EPO • The cost of the current EPO plan has increased over theyears and Cisco has now aligned these costs with the rest of the plan portfolio • Employee paycheck contributions will increase—dollar amounts range from $5.79 (single) to $38.73 (family) per Plan design • Plan design will not change • The EPO plan will not be offered in 2012 • The HPSP or the PPO plan offer the same network of physicians, hospitals, and labs (CIGNA or UHC) as the EPO plans • Start planning for next year

19. Pharmacy Benefit: CVS Caremark • Newcombined Medical/Rx ID card • No change to Rx copay structure ($5/15/35) • New preferred drug list changes how brands are classified • Employees on a maintenance drug may pay less or more depending on the prescription. Most will pay less. • Retail network includes most major chains & many local pharmacies • Three ways to obtain a 90 day supply of maintenance drugs (required for PPO, EPO, OOA) • Any CVS pharmacy across the U.S. • LifeConnections Pharmacy in San Jose • CVS Caremark’s mail delivery service • Mail service delivery • Prescriptions for long-term medications transferred to CVS Caremark • If a new prescription is needed, CVS will help you get that in place • Use mail order beginning with third refill, or pay 2xcopay for a 30-day supply

20. 2011 Health Incentives

21. Health Incentives - Simplified Track ‘dollars’ not activities on the new Alere portal Spouse/Domestic Partner earn same incentive as an employee for the same activity Annual maximums by individual HPSP, PPO, EPO Employee — $800 Spouse/domestic partner — $400 HMO Employee — $300 Spouse/domestic partner — $200

22. Health Incentive Opportunities • Tier 1 Personal Health Assessment • Tier 2 • Alere health coaching (telephonic, secure chat) • Alere condition management support • Health advisor (CIGNA or UHC) for acute or complex needs • Tier 3 • Online 6-week healthy living programs • 4-week wellness challenges (offered 4x/yr) • Quarterly track your fitness • MyBrainSolutions (employees only) • Community fitness event

23. Health Incentive Tracking Incentives are: • Contributed to your Health Incentive Account (HIA) • Monthly; deposited by the 20th day of the month following program completion* • Deferred to your Health Savings Account (HSA) • Quarterly; deposited the month following the end of the calendar-year quarter* • Paid in cash quarterly for HMO participants Track your progress on the Alere portal View your HIA or HSA balances online: • PPO/EPO/OOA: www.mycigna.com or www.myuhc.com • HPSP:  www.Chasehsa.com * In most cases. Timing of deposit may depend on the type of program.

24. Tools, Resources, and Getting Started

25. Tools and Resources U.S. Open Enrollment is October 25 – November 24

26. Model Your Medical Plan Options With theMedical Plan Comparison Tool www.cisco.benefitscompare.com

27. Tools at myuhc.com (United Healthcare) Organize your claims – check status, view history, view or print statements Find a doctor – search by area, find specialist, get directions Get plan information • Look up your deductible or Out-of-pocket max • View your Health Incentive Account Improve my health • Read the most up-to-date, trustworthy, healthy lifestyle advice Get help with decisions • Learn more about health conditions or procedures, common symptoms • Connect with a nurse through live, & one-to-one online Nurse Chats • Explore various treatment options Use Quicken Health Expense Tracker to: • See a clear breakdown of every health care claim • Access medical claims and records going back up to 18 months • View medical information in clear language you can understand • Pay bills in a safe and secure environment

28. Tools at mycigna.com (CIGNA) My Health tab - health-related tools, including: • Cost and quality comparison tools • WebMD • Health management information Quicken health expense tracker • Organize, manage and monitor health claims all in one place My Medical Plans tab • Search for claims, view plan information • Access your plan-specific provider directory • Print a temporary ID card or request a new one My Plans—Accounts • View balances and transaction history for the HIA

29. Tools at www.caremark.com starting in Jan.Use www.caremark.com/cisco now • Refill a prescription • Find a local pharmacy • Sign up for automatic refills • Check the cost of a prescription drug, or generic alternative

30. Tools at kp.org (Kaiser Permanente) Get information and take action at My Health Manager (kp.org/experience) • E-mail your doctor (CA members only: attach pictures to your secure e-mail) • View most lab test results, order prescription refills, schedule routine appointments • Check eligibility and benefits information; View recent immunization records Use tools and resources • Physician Home Pages • Podcasts & videos • Interactive tools & calculators • Health & drug encyclopedia • Symptom checker

31. Tools at harvardpilgrim.org (Harvard Pilgrim) Health-Related Information -  research specific health topics  • Visit www.wellthen.org - a dynamic social networking community focused on well-being. • My Way to Better - a short, fun, visual, interactive questionnaire that allows users to chart their own personalized roadmap to optimal living. • Health Topics A-Z - powered by Healthwise, provides reliable and comprehensive online health information to help people make better health decisions. Consumer Engagement and Decision Support Tools • Understand Quality – designed to help consumers choose high-quality providers and practitioners. • WebMD Hospital Advisor - an interactive online tool, to help make key health care decisions. • Healthwise Decision Support Tools - offers interactive health tools that help members make better health decisions and develop the habits that will help reduce their health risks.

32. To Get Started • Understand your options • Utilize tools and resources available to you • Click to Chat with HRC • Family-accessible website • Medical Plan comparison tool • And others • Engage in health enhancement programs • Start with the Personal Health Assessment (PHA) • Go to the U.S. Benefits portal to update your plan selections and enroll for 2011. • Internal login: http://wwwin.cisco.com/employee/benefits • External login: https://fed.cisco.com/ • Update your FSA election, if applicable Complete your benefits enrollment by November 24, 2010

33. Summary Changes for 2011 Medical Plan Changes • CVS Caremark is the new pharmacy benefits manager for CIGNA and UHC medical plans • New CIGNA HPSP option Medical Plan Costs • Special one-time $225 rebate • Contribution increase for EPO plans • EPO plans will be eliminated in 2012 Eligibility and Enrollment • Dependent eligibility to age 26 • Four-week benefits enrollment period: October 25 – November 24, 2010 HealthConnections Program • More ways to engage in health enhancement • Simplified incentives HSA and Flexible Spending Accounts (FSAs) • Over-the-counter medications, with the exception of insulin, are no longer eligible for reimbursement unless prescribed by a physician. • Grace period for the Health Care FSA and Limited Purpose FSA will be eliminated effective December 31, 2011. • Effective January 1, 2011, 20% penalty for non-qualified HSA medical withdrawals

34. Glossary Deductible – amount you pay before the benefit plan pays for services Coinsurance – percentage sharing of costs. For example, if the plan has a 90% coinsurance feature, the plan pays 90% and you pay 10%. Out-of-pocket maximum – limit that applies to your coinsurance payments and may include your deductible. Once your coinsurance amounts equal the out-of-pocket maximum, the plan pays 100% of reasonable and customary charges. Co-pays – flat dollar amount you pay for a medical service. HIA (HRA) – Health incentive account (under IRS rules, a Health Reimbursement Account or HRA). Part of the medical plan (PPO/EPO/OOA) that holds your incentive payments. Balances are used to cover deductible and coinsurance costs you have to pay. Account rolls over but does not earn interest. HSA – Health Savings Account. Personal cash account that is only available if you have a high deductible health plan such as the Health Plus Savings Plan. If used for medical expenses then benefits, contributions and earnings are not taxed under Federal tax rules. Account rolls over and may earn interest or be invested. FSA – Flexible spending account (may be health care or dependent care). “Use it or lose it” account that can be used to pay medical or dependent care expenses each year. LP FSA – Limited purpose flexible spending account (medical only). “Use it or lose it” account that can be used to pay dental and vision expenses only each year. Only available if you participate in a high deductible health plan such as the Health Plus Savings Plan.

35. Glossary (continued) HealthConnections–Cisco’s health enhancement program for employees and their families to provide customized resources and information to take charge of their health and well-being. PPO – Preferred provider organization. A health plan that uses network and out-of-network providers. Examples are Choice Plus (UHC) and Open Access Plus (CIGNA). EPO– Exclusive provider organization. A health plan that uses network only providers. Examples are Choice (UHC) and Open Access (CIGNA). OOA– Out of area plan. Medical coverage for employees outside major network and metropolitan areas. HPSP– Health Plus Savings Plan. Cisco’s tax qualified high deductible health plan. HMO – Health maintenance organization. A legally qualified health care organization that provides medical services in a geographic area. Examples are Kaiser and Harvard Pilgrim Healthcare. R&C/U&C– Reasonable and Customary/Usual and Customary. The amount that health care providers charge in a geographic area for a specific service. Amounts charged by a specific provider may be in excess of R&C/U&C if the provider is out-of-network. Personal Health Assessment (PHA) – An online tool that gives you a personalized analysis of your current health status and lifestyle practices, and may include data such as height, weight, cholesterol, triglycerides, blood pressure and blood glucose measurements. Participating in the PHA is a requirement in order to receive incentives from HealthConnections.

36. Glossary (continued) Preventive Care – Provided as recommended by the US Preventative Service Task Force: The U.S. Preventive Services Task Force is an independent panel of experts in primary care and prevention that systematically reviews the evidence of effectiveness and develops recommendations for clinical preventive services. Sponsored since 1998 by the Agency for Healthcare Research and Quality (AHRQ), the Task Force is the leading independent panel of private-sector experts in prevention and primary care. For more information please visit: http://www.ahrq.gov/clinic/uspstfix.htm#pocket Publication 502- describes qualified medical expenses. For more information please visit: http://www.irs.gov/publications/p502/index.html