Health Plan Changes for Medicare-Eligible Retirees

1. Health Plan Changes for Medicare-Eligible Retirees Effective January 1, 2013

2. What is Changing • Reynolds American Inc. is changing the way it provides health care benefits to retirees who are eligible for Medicare • More choices in health coverage through the individual market • In many cases, coverage available in the individual market costs less than the current group plan through RAI. • Access to benefit advisors to help with choosing coverage that fits your health-care and financial needs.

3. Assistance Provided to You • Assistance in choosing individual health coverage • RAI has made an arrangement with Extend Health, Inc. an insurance broker that specializes in individual Medicare supplemental insurance coverage. • Financial Assistance with purchasing medical coverage • Retirees and their dependents who are eligible for Medicare and have been receiving a subsidy from RAI towards the cost of medical coverage will continue to receive financial help when they enroll through Extend Health. • RAI will make an annual contribution into a tax-free account, called the Health Reimbursement Arrangement.

4. Introducing Extend HealthThe Industry’s Largest Medicare Exchange

5. Who is Extend Health? • Independent company • Partner with 75+ health plan carriers • Objective and Trusted US based benefit advisors • Focused on helping each participant make an informed and confident decision

6. Why Extend Health • We are experienced in helping people just • like you • Our services are at no cost to you

7. Market-Leading Private Sector Clients 175 Employers – 40 Fortune 500 Companies 95%+ Client Retention Rate

8. Plans & Partners • All Medicare Plan Types • Medicare Advantage • Medigap (supplement) • Prescription Drug (Part D) • Vision • Dental Select Carriers

9. The Process

10. EducationGetting Started Guide • Gather information • (e.g. prescriptions) • Pre-existing conditions will not limit your plan selection* • Give us a call: 855-835-3811 • www.ExtendHealth.com/rai * except end-stage renal disease

11. EducationEnrollment Guide • Prepare you for enrollment discussion • Review Medicare basics • Appointment confirmation letter

12. Decision Support Tools • Help Me Choose • Prescription Profiler

13. Evaluate and Enroll Licensed Benefit Advisor • 100% domestic workforce • Objective advocacy • Neutral compensation • Extend University • Licensed, certified, appointed • Average age 43 Hours of Operation Monday – Friday 8 a.m. – 9 p.m. Eastern Time

14. Enrollment Process Benefit Advisors can discuss coverage options with anyone – need to speak to the participant to complete the enrollment. Once you have made a coverage selection, enrollment is conducted via telephone. 100% of calls are recorded.

15. Medicare and You

16. Your Future Coverage • Primary Coverage • Medicare A & B • Additional Coverage (Your Choice) • Medicare Advantage with Prescription Drug (MAPD) • Medigap + Prescription Drug Optional Coverage (your choice) Dental and Vision

19. Medicare PrescriptionDrug Coverage

20. Location Specific plans

21. Plan Availability in Winston/Salem

22. Plan Availability in Winston/Salem

23. Plan Example Medicare Advantage Plan • $0 per month • $47 per month - network: PPO • Deductible: $0 • Doctor co-pay: $15 Specialist co-pay: $40 • Hospital: $195 co-pay days 1-6 • Emergency Room: $65 co-pay if not admitted • Rx: $7/$40/$80/33% • Mail order: (90 day discount)

24. Plan Example Medigap Plan F and PDP – 70 year old male • Medical/Rx $215 ($175 - $40) • $173 – ($137/plan F + $36/pdp) • Network: any doctor that accepts Medicare • Deductible: $0 • Doctor co-pay: $0 Specialist co-pay: $0 • Hospital: $0 • Emergency Room: $0 co-pay • Rx: $0 deductible $7/$39/$74/33% • Mail order: (90 daydiscount)

25. Auto-Reimbursement How the Process Works Health Reimbursement Arrangement

26. What Is An HRA? • Tax-advantaged account used to reimburse you for eligible health care expenses • You must meet Reynolds American Inc.’s eligibility requirements to qualify for HRA • Your HRA funds will be available January 1, 2013

27. Health Reimbursement Arrangement: How It Works Participant enrolls in a medical plan through Extend Health to enroll in individual coverage Reynolds American Inc. allocatesbenefit dollars to HRA account of eligible participant Participant is reimbursed for healthcare expenses using HRA benefit dollars Participant HRA AccountAdministered by Extend Health

28. How to File a Paper Claim

29. Extend HealthHRA Claim Form Remember, You can be Reimbursed for Part B by sending in your statement

30. How Auto-Reimbursement Works

31. Next Steps

32. Next Steps

33. Advocacy and support services Toll Free number to contact Extend Health representative Direct support for claims issues, appeals and network questions Renewal process – ability to pick new coverage for future years – not locked into this year’s choice Ongoing enrollment services Post Enrollment Customer Service

34. Questions