New Plan Option

2. New Plan Option • Effective July 1, 2011, the Town of New Canaan employees will have an additional Medical plan option available to them and their dependents.

3. What exactly is a Health Savings Account (HSA)? • It’s a savings account that works with our health plan. • As money is added, you can use it to pay for health care expenses • Deductible, Coinsurance • Even IRS eligible expenses that are not covered by the health plan, such as dental and vision care • It’s your money. The account is owned and controlled by you • You don’t lose any money that you do not spend, any fund balance rolls into future years • Often described as a “Medical IRA” they were created by legislation in December 2003 • Triple Tax Savings • Your Contributions (payroll deduction on before-tax basis, or you may take a deduction on your personal taxes if you make lump sum contribution) • Interest and earnings on your HSA account balance are not taxed. • Tax-free withdrawals for qualified medical expenses • Not an insurance product

4. Health Savings Account • It is owned by the individual • It is portable (you keep it even if you change jobs, health plans or retire) • Accumulated HSA funds roll over – no “use it or lose it” forfeitures to worry about • Must be enrolled in a qualified High Deductible Health Plan (HDHP) • Insurance that does not cover first dollar medical expenses (except for preventive care) • Deductibles apply to prescriptions • Can not have other health insurance (including a spouse’s plan) unless it is also a HDHP

5. High Deductible Health Plan Design Features • Deductibles are Plan Year (7/1 – 6/30) • The Family Deductible is an Aggregate Deductible. Meaning, if you cover one or more dependents, you and/or your dependent (s) will have to meet the full family deductible before coverage begins. In-Network Coverage – 100% Coinsurance after Deductible $2,000 Single In-Network Deductible $4,000 Family In-Network Deductible $2,000 Single Out of Pocket Max (Deductible + Coinsurance) $4,000 Family Out of Pocket Max (Deductible + Coinsurance) Out-of-Network Coverage – 70% Coinsurance after Deductible $2,000 Single In-Network Deductible $4,000 Family In-Network Deductible $4,000 Single Out of Pocket Max (Deductible + Coinsurance) $8,000 Family Out of Pocket Max (Deductible + Coinsurance)

6. Town of New Canaan H S A Contributions • To help fund the deductible, the Town of New Canaan will put 69.9% of the In-Network Deductible amount into your H S A account.* This money will be deposited on July 1, 2011. • Single Deductible is $2,000 and you will receive $1,398 • Family Deductible is $4,000 and you will receive $2,796 *If you leave the H S A before 7/1/2012, you are required to reimburse the Town of New Canaan a pro-rated amount of what was deposited into your account on 7/1/2011.

7. High Deductible Health PlanRequirements • All covered benefits must apply to plan deductible, including Rx • Deductibles Cross-apply (In- and Out-of-Network) • In-Network Preventive Care Covered at 100%, Deductible Waived, No office visit copay • Services Include: • Routine Physical Exams for Adults and Children • Routine Gynecological Care Exams • One exam per calendar year, includes Pap Smear and related lab fees • Routine Mammograms • Females age 40 and over • Routine Digital Rectal Exam / PSA Test • For covered males age 40 and over • Colorectal Cancer Screening • For all members age 50 and over • Routine Eye Exam • 1 routine exam per 24 months

8. 100% Coverage after deductible In-Network Base Plan Coinsurance 100% Medical & Rx goods and services ↓↓ Deductible Expense $2,000 (Can be offset by funds in HSA) Preventive Care 100%, No Copay HSA Single Coverage ExhibitIn-Network

9. 100% Coverage after out-of-pocket maximum of $4,000 is reached Will be subject to balance billing Out-of-Network Plan Coinsurance 70% $2,000 Coinsurance Limit All Medical & Rx goods and services ↓↓ Deductible Expense $2,000 (Can be offset by funds in HSA) HSA Single Coverage ExhibitOut-of-Network

10. HSA Contributions • Maximum contribution* equal to: • $3,050 individual / $6,150 family • These amounts include the Town’s contribution • Catch-up contributions age 55+ • $1000 per individual* • No contributions permitted if Medicare enrolled * Subject to COLA in future years, The catch-up for age 55+ will be $1,000

11. HSA Withdrawals • Tax-free for qualified expenses • To obtain a list of qualified expenses go to www.irs.gov and click on “forms and publications” for Publication 502. • Permitted even if no longer eligible to contribute • Medicare enrolled • No longer enrolled in HDHP • Tax-free transfer to spouse upon employee death • Divided/disbursed in accordance with divorce decree NOTE: Individual is responsible for following contribution rules/limits and using HSA funds for qualified expenses.

12. HSA Withdrawals (Continued) • Cannot be used for insurance premiums, except: • Long-term care insurance premiums • COBRA premiums • Premiums while receiving unemployment • Premium for Medicare Part B, C, D, excluding Medicare Supplement (i.e., Medigap) • Non-qualified withdrawals • Taxable, plus 20% penalty • Taxable, but no withdrawal penalty for Medicare eligibles, or upon disability or death

13. Fund Distribution • HSA Visa debit card • Payment is up to available HSA funds at time of withdrawal • HSA checkbook • Option for accountholders to request checks for a fee

14. Individual No Longer In HDHP What happens if you leave the Town of New Canaan benefit plan and become covered under a NON-HDHP? • Individual can no longer contribute to HSA • HSA balance options: • Maintain with banking institution the Town of New Canaan designates • Transfer HSA to another HSA administrator within 60 days • Close HSA, receive funds subject to taxes and penalties

15. Thank You Open Enrollment will take place online and will begin May 25 through June 24th. Thank you for your time!