Welcome

2. Welcome Busco, Inc – Arrow Stage Lines Annual Enrollment January 1, 2012

3. Agenda - What we will cover • Review your Medical Plan Options for 2012 – Transitioning to United Healthcare • Introduce a new benefit feature – Health Savings Account (HSA) • Compare/Contrast the Flexible Spending Account (FSA) and the new HSA • What Medical plan option is the right plan for you and your family • Quick summary of other benefits • Timeline for enrollment changes

4. Medical Plans – Two options • Traditional Plan – Co-pay plan • Qualified High Deductible Health Plan (QHDHP) with a Health Savings Account (HSA) – HSA Plan • Both are PPO plans – You save when you see a participating provider.

5. Co-pay Plan Design Note: No Lab card Under the UHC plans.

6. QHDHP HSA Plan Design Note: No Lab card Under the UHC plans Remember – No Copays

7. Prescription Drug Coverage If you enroll in the HSA plan, you may want to shop around for the best value. Not all pharmacies have the same price!

8. HSA BASICS

9. Health Savings Accounts (HSAs) Everything You Need to Know

10. What is an HSA? A health savings account (HSA) is an account that you can use to pay medical expenses Must be in conjunction with a qualified high-deductible health plan (QHDHP) You own the account, but both you and others can contribute funds Tax-advantages: contribute pre-tax money, funds accrue tax-free and withdraw funds tax-free (if they are for eligible medical expenses) Go to optumhealthbank.com for more information. (You will be able to complete enrollment and bank account set up process through the online enrollment system.)

11. Benefits of an HSA Decreases Taxable Income and Increases Spendable Income for medical expenses Funds rollover each year, so you can use your HSA to save tax-free money for retirement You own the account, even if you leave the company Lower monthly premiums than a traditional health plan

12. Qualified High-Deductible Health Plan HSAs can only be offered with a qualified high-deductible health plan (QHDHP) No Office or Prescription Drug Co-pays (first dollar expenses) Preventive/Routine services covered 100% This is a plan that must provide coverage as defined by the IRS Minimum Deductibles Maximum Out of Pocket

13. How Does The HSA/QHDHP Work? You contribute money to the HSA (either a lump sum payment or periodically through payroll deductions) If you have an existing HSA account, you can request a Roll-over of funds to your OptumBank account. You can use HSA dollars to pay: Section 213(d) medical expense, such as out-of-pocket expenses you may have for items such as medical, dental and vision including health insurance deductibles. COBRA premiums QLTC premiums (Qualified Long Term Care) Health premiums while receiving unemployment benefits If Medicare eligible due to age, health insurance premiums except Medicare supplement policies

14. How Does The HSA/QHDHP Work? • You pay first dollar charges up to the deductible for medical expenses: • No Office co-pays • No Prescription Drug Co-pays: • (You will receive discounted rates when you stay ‘in-network’ • Once deductible is met, eligible medical expenses are covered at 80% • Once the out of pocket maximum is met, eligible medical expenses are covered at 100% for the remainder of the calendar year. • Preventative/Routine medical services are covered at 100% • No Deductible • No co-pay • No annual limit

15. Who is Eligible for an HSA? Anyone who is: Covered by an QHDHP Not enrolled in Medicare (Note: Medicare Part A is automatic when you turn age 65) Not covered under other health insurance* (A spouse who is covered under Arrow’s plan and also covered under another plan that is NOT a QHDHP would impact eligibility for the HSA Account) Not another person’s dependent *Other health insurance doesnot include: specific disease or illness insurance, accident, disability, dental care, vision care and long-term care insurance *Other health insurance does include: SHOP (Supplemental Hospital) Plans, Tri-Care, or Medical Coverage you receive as a Retired employee from a prior employer.

16. HSA CONTRIBUTIONS

17. HSA Contribution Limits Each year, the IRS sets contribution limits These limits are for the total funds contributed, including company contributions, your contributions and any other contributions For 2012, total limits are: $3,100 for individual coverage $6,250 for family coverage (all other coverage levels) Note: IF you enroll in the QHDHP - Arrow will contribute $125 into your HSA accounts effective January 1, 2012. You will also be eligible for up to $125 in additional funds based on your participation in selected Wellness Activities during the year. If you are age 65 or over and not eligible for the HSA account, Arrow will contribute $125 to an FSA account on your behalf

18. HSA Contributions • HSA Contribution amounts are flexible. You can change your payroll deductions on a monthly basis. You are not locked in for the year. • You will see your per pay period premium deductions go down if you enroll in the HSA Plan. • The savings in your premium deductions should be contributed to your HSA accounts.

19. Per Pay Period Premium Savings

20. HSA Contributions You are allowed to contribute the entire year’s limit whenever you first become eligible for the HSA (even if that is in December) However, you must remain eligible for at least 12 months after that date, or you will be subject to taxes and penalties on the amount you contributed. When contributing lump sums outside of payroll deductions, you must claim on your tax return to take advantage of the tax savings. Section provided on tax return – after tax contributions to HSA

21. Catch-Up Contributions For individuals ages 55+, the IRS allows additional “catch-up contributions” Eligible individuals may contribute an extra $1,000 for the year 2012 This is to help save additional money for retirement

22. HSA DISTRIBUTION RULES

23. HSA Distribution Rules Distributions from your HSA are tax-free if they are taken for “qualified medical expenses” Your HSA can only be used for expenses that are incurred on or after the date the HSA was established However, HSA funds can be used for expenses from a prior year, as long as the expenses incurred on or after the date the HSA was established There is no annual plan year as with an FSA and the “Use it or lose it rule” does not apply.

24. HSA Distribution Rules HSA distributions can be taken for qualified medical expenses for the following: The account holder (person covered by the QHDHP) Spouse and Dependent Children of that individual (even if not covered by the QHDHP)

25. Distributions (Age 65+) For individuals age 65 and older, HSA distributions can be used for non-qualified medical expenses without facing the 20% penalty However, income taxes will apply for non-medical distributions This rule is regardless of whether the individual is enrolled in Medicare

26. Potential Savings at Age 65

27. QUALIFIED MEDICAL EXPENSES

28. Qualified Medical Expenses The IRS defines expenses that are considered “qualified medical expenses” for HSA distributions Expenses must be used primarily to treat or prevent a physical or mental defect or illness If you use HSA funds for expenses beyond what the IRS defines as qualified, you will be subject to income tax on the distribution and an additional 20% penalty

29. Qualified Medical Expenses (Posted on www.buscobenefits.com) Examples of qualified medical expenses include: Most medical care that is subject to your deductible (doctor visits, inpatient or outpatient treatment, etc.) Prescription drugs Over-the-counter drugs (only if you obtain a prescription) Insulin (with or without a prescription) Dental and vision care Select insurance premiums COBRA, qualified long-term care insurance, health insurance premiums paid while receiving unemployment benefits, health insurance after you turn 65 except for a Medicare supplemental policy

30. Ineligible Medical Expenses (Posted on www.buscobenefits.com) Expenses that are not considered “qualified medical expenses” include: Insurance premiums (other than the exceptions listed on the previous slide) Over-the-counter drugs (unless a prescription is retained from a physician – insulin is an exception) Surgery purely for cosmetic reasons Expenses covered by another insurance plan General health items such as tissues, toiletries, hand sanitizer

31. Recordkeeping Whenever you use HSA funds to pay for a medical expense, you should keep your receipt You may need to demonstrate to the IRS that HSA distributions were for qualified medical expenses If the IRS requests receipts for verification purposes, failure to provide those receipts could result in having to pay a 20% penalty and income tax.

32. Contribution Savings Examples Based on 24 pay-periods in a year

33. Differences Between FSA & HSA

34. How to Set Up an HSA Account • You will enroll in the HSA plan online during the annual enrollment process. • You will be directed to set up your HSA account via a link that will be included in the Online enrollment system. • Once enrolled, you will receive a debit card for the HSA plan. You will also receive a welcome kit with important information about your HSA Account. • Note – Arrow will pay the account fees for the first year (as you build up your account balances).

35. Which Plan Works for You? • Both Plans provide valuable protection. • Both Plans provide maximum out of pocket protection during the year. • Both Plans provide 100% coverage for Preventive and Well Child Care.

36. Comparing Your Medical Options

37. Comparing Your Medical Options

38. Other Important Information • The DRP program is going away effective for claims incurred January 1, 2012. • The UHC Pharmacy program may have differences between drugs on Tier 1, 2, or 3. We have an RX transition handout to assist with questions. • You will receive an ID – Includes Medical and RX information. Be sure to share a copy with your pharmacy and physician the first time you see them in 2012.

39. Basic Life and AD&D - LFG Employee – Paid by Employer Current Life Benefit: $15,000 Current AD&D* Benefit: $15,000 *Accidental Death and Dismemberment

40. Voluntary Term Life/AD&D- LFG(Employee Paid) • Employee Coverage Increments: $10,000 Maximum: Lesser of 4X annual earnings or $500,000 Guarantee Issue: Less than 70 - $100,000; Over 70 - $50,000 Dependent Coverage Spouse(Employee participation required) Increments: $5,000 Maximum: 50% of employee amount up to $250,000 Guarantee Issue: Less than 60 - $30,000: Over 60 – No GI Child(ren)(Employee participation required) Increments: $2,000 (beyond 6 months) Maximum: $1,000 (Birth to 6 months) $10,000 (6 months to 19 years (23 if FT Student)) Guarantee Issue: $10,000

41. Voluntary Life Benefit • This is your Annual Enrollment opportunity to make changes to your coverage amount, or request to enroll for coverage under the plan. • This is NOT an open enrollment. If you did not enroll when you were initially eligible, you may request enrollment now, but your request will be subject to Evidence of Insurability.

42. Dental – UCCI (Rates & Benefits stay the same)

43. Voluntary Vision Plan - EyeMed • Rates and Benefits Stay the same • $10 copay for Exam with Dilation (Every 12 months) • Contacts - $115 Allowance Conventional and Disposable • Frames - $100 Allowance (Every 24 Months) • Lens Allowances (Once every 12 Months): • $25 copay for Single Vision • $25 copay for Bifocal • $25 Copay for Trifocal • $25 Copay plus 20% off retail less $55 allowance for Standard Progressive Refer to more detailed Plan Summary “Online”

44. Other Benefits • myuhc.com – Your resource and access to relevant and helpful tools • Treatment Cost Estimator • Provider Search • Quicken Health Expense Tracker • Cost & Quality Ratings • Enhanced Personal Health Record • Make sure you visit Health Care Lane!

45. Other Benefits • Care24 – EAP • 24/7 access to nurses or master’s level counselors • Health Education • Medical Triage – 24/7 • UHC’s Wellness Program – Simply Engaged (Watch for additional information) • Health Assessment (20 minute questionnaire) • Online Coaching • Healthy Mind, Health Body Newsletter • Incentives from $75 to $350 for participating. • Earn additional Arrow contributions to your HSA account as well.

46. KEY DATE: November 18, 2011! • All Employees must review and verify his or her name, address and dependent information by November 18, 2011. • Any changes in your benefit elections also need to be confirmed by November 18, 2011 • REMEMBER – If you are currently enrolled in a medical option, you will default to the H.S.A. Plan Option if no benefit election is completed online. • If you are not enrolling, you must Waive coverage via the online enrollment system. www.buscobenefits.com

47. Questions? Thank you for your attention!

48. Thank you!