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Frontier Communications The Customer First – Always!

Frontier Communications The Customer First – Always!. IBEW 363-NY Company Benefits Proposal 2010 Collective Bargaining CONTRACT RATIFICATION Nov 29 – Dec 2 2010. Benchmark Statistics – Medical Premium Cost Sharing. Total Premium Cost Sharing (Employee) Watson Wyatt / NBGH Survey, 2010 1

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Frontier Communications The Customer First – Always!

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  1. Frontier CommunicationsThe Customer First – Always! IBEW 363-NY Company Benefits Proposal 2010 Collective Bargaining CONTRACT RATIFICATION Nov 29 – Dec 2 2010

  2. Benchmark Statistics – Medical Premium Cost Sharing Total Premium Cost Sharing (Employee) Watson Wyatt / NBGH Survey, 2010 1 20092010 21% 22% Total Premium Cost Sharing (Employee) Towers Watson Survey 2010 2 SingleFamily 20% 23% • 2011 FTR Legacy IBEW average employee cost sharing is at 22% • 2011 FTR Legacy all Unions average employee cost sharing is at 21% • IBEW 363 employees currently pay 19% 1 Combined Single and Family, NBGH – National Business Group on Health 2 Towers Watson 2010 Health Care Cost Survey 2

  3. Tobacco User Premium & Tobacco Cessation Program Tobacco User Premium Effective 1/1/2011, introducing Tobacco User Premium for all employees Tobacco User Premium = 10% of the premium cost of single coverage of the medical plan in which employee enrolls, if a covered employee or covered spouse is a tobacco user Tobacco Cessation Program Offered to all employees and their spouses, fully paid by the Company Features: 5 scheduled one on one phone counseling sessions with professional coach Unlimited inbound calls to coach Lifetime web support OTC Medications, fully paid by Company (Patch, Lozenges, or gum) Tobacco use increases risk of: Blood Clots, which may lead to aneurysms and strokes* Cancer (especially in the lung, mouth, larynx, pancreas, esophagus, bladder, kidney and cervix)* High blood pressure and diabetes* Pregnancy-related problems, including miscarriage and premature labor* Asthma* “Secondhand smokers” are at risk of asthma, coronary artery disease, lung cancer and allergy* On average tobacco users spend $140 a month or $1,680 a year on tobacco/cigarettes * Based on “American Journal of Respiratory and Critical Care Medicine”, July 2006

  4. 2010 Medical Plan Enrollment 8

  5. MVP Plan for 2011& Beyond • MVP presented Frontier with double digit renewal increases for the past five years • 2011 current MVP plan’s renewal came with a 10.2% increase • Proposed plan will result in lower per pay period employee contributions, but slightly • higher out of pocket at the time of service Company subsidy and Employee contribution % for MVP will follow the FTR Exclusive EPO and FTR Preferred PPO Plan for the life of the contract.

  6. Drug Plan Design • 2009 Frontier population’s Prescription Drugs Utilization as a % of total Prescriptions filled: • Generic = 66.3% • Formulary Brand = 23.9% • Non-Formulary Brand = 9.8% • In 2009 plan year 99.3% of Frontier population utilized Generic Drugs, if a Generic Drug was available. NOTES: (a)- Various plan limitations that are summarized in the 2010 Summary Plan Description (SPD) will continue to apply for the duration of this contract. (b)- Mail order co-pay for a 90-day supply = two and a half times (2.5x) the Retail 30-day supply co-pay (c) - As per Section 27.01.3(2), the Company may increase co-pay rates by up to 25% year over year. This does not apply to the items listed above in which specific increases are shown for 2011 plan year.

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