Section 125 Enrollment Meeting

1. Section 125 Enrollment Meeting January 9th, 2009

2. Section 125Flexible Spending Plan • Allows employees to pay for qualified expenses on a pre-tax basis • Reduces taxes • Increases take-home pay • Diversified benefits – YOU choose only the benefit YOU need • Voluntary • Easy The Plan is there for YOU the employee… take advantage of this opportunity!!

3. Let’s Compare Without FlexSystem With FlexSystem Salary $1600 $1600 Flex Dollars $ 0$ 400 Taxable Income $1600 $1200 Income Tax $ 240 $ 180 State Tax (assume 5%) $ 128 $ 96 Social Security $ 122 $ 91 Income After Taxes $1110 $ 833 Medical Premium $ 150 Medical Expenses $ 50 Dependent Care $ 200$ 0 Take Home Pay $ 710 $ 833 Net Increase $ 123 Pay Periods x 12 Employee’s Annual Increase = $1476* * This is for illustration purposes only. Actual savings may vary.

4. Available Benefits Group premiums • Allows you to pay your share of employer sponsored health premiums (medical and dental) on a pre-tax basis. • This will automatically happen with your employer. You do not need to sign up to get medical and dental premiums paid for on a pre-tax basis.

5. Available Benefits Individual Premiums (non-employer sponsored healthcare premiums) • Allows you to pay your individual medical and dental premiums on a pre-tax basis.

6. Available Benefits Healthcare Flexible Spending Account • Reimburses out-of-pocket healthcare expenses • Co-Pays, deductibles, prescriptions, eyeglasses, etc. • Maximum election of $2,000 per year

7. Available Benefits Dependent Care Flexible Spending Account • Child day care – age 13 and under • Disabled child if qualified • Elder care if the individual is a dependent • IRS limit is $5,000 per year/per household($2,500 per if married, filing separately)

8. Example of Eligible Medical orMedical-Related Expenses(This list is to serve as a reference only. It is not a complete list of deductible expenses,nor is it an item-by-item approved list of expenses by the IRS. Acupuncture Healing service fee Over-the-counter drugs prescribed Alcoholism Hearing devices and batteries by a doctor Ambulance hire Home improvements motivated by Oxygen Artificial limbs/teeth medical consideration Prescribed medications (including Birth control pills Hospital bills/hospitalization insurance over-the-counter) Birth prevention surgery Insulin Psychiatric care Braces Laboratory fees Psychologist fees Braille – books and magazines Lasik eye surgery Routine physicals and other non- Care for handicapped child Laetrile by prescription diagnostic services and treatments Chiropractors Lead base paint removal for children “Seeing Eye” dog and its upkeep Christian Science fees with lead poisoning Sterilization fees Co-insurance Membership fee in association with Stop Smoking programs Communication equipment/deaf furnishing medical services, Surgical fees Contact lenses and cleaning solution hospitalization and clinical care Therapeutic care for drug/alcohol Crutches Needed medical supplies, prescribed addiction Deductibles by a doctor Therapy treatments Dental fees Nurses’ fees Transportation expenses Dentures Obstetrical expenses Tuition at special school for Diagnostic fees Operations handicapped Drug and medical supplies Orthodontia Wheelchair Education for the blind Orthopedic shoes Wigs (prescribed by a doctor) Eyeglasses, including exam fee Osteopaths X-rays

9. Use-It-Or-Lose-It-Rule Money not used by the end of the Plan Year to reimburse qualified expenses incurred during the year is lost. • Precautionary steps to avoid having large amounts left in the Section 125 Plan at year-end: • Be conservative on all of your elections. Set aside only dollars you will actually use. • Reports are generated for each participant to indicate the credits, debits and balance of his/her account. See TASC website www.tasconline.com or dial 1-800-422-4661 and press 3 from a touch-tone phone for our Interactive Voice Response system. • A run-out period of 90 days to accommodate expenses incurred during the Plan Year but not billed until after the new Plan Year has begun. This gives participants every opportunity to request for reimbursement the money set aside.

10. An extra safety net… • Spiral 16's has implemented the “Grace Period” for their employees. You now have 75 more days after your plan year ends to come up with a new expense (receipt) that may be used for the prior year. • If you had funds left over…you’ll have 75 more days to get another receipt and it will count towards last years elections! The new grace period softens up the “use it or lose it rule” to “use it” or we’ll give you an extra 75 days…then a 90 day run out period…then you’ll lose it! • So, your 1st year’s plan will run from February 1st to August 31st (it will be a short plan year). Going forward, your plan will run from September 1st thru August 31st. This 1st year only…will be a short plan year. • The “grace period” kicks in from Sept 1st to November 15th (get a new receipt that can be used for prior plan year). • Then on November 16th the run out period begins and you’ll have 90 more days to turn in a receipt for an expense that incurred during the Feb. 1st to Nov. 15th timeframe.

11. How to Enroll & Participate • Make your election • Voluntary • Be conservative! • Submit claims for reimbursement • Reimbursement forms will be supplied • Request reimbursement online atwww.tasconline.com • Fax, email or use TASC website • Collect your money • Daily reimbursement • Checks sent directly to your home or P.O. Box • Direct deposit available

12. Questions…? Thank you!