2018 Kaiser Permanente-Alliance National Agreement

1. 2018 Kaiser Permanente-Alliance National Agreement Summary of key provisions for workers, managers and physicians March 2019

2. Labor Management Partnership 21 Years of Successful Partnership • Established 1997 as a strategy for frontline engagement, workplace innovation and performance improvement • Measurable results for KP members and patients, union-represented workers and the organization • Jointly led and funded by Kaiser Permanente and participating unions • Recognized as an effective forum for solving problems, engaging frontline workers and sharing successful practices 2

3. Results for Both Parties Performance Improvement, Workplace Innovation, Growth 129,000 82,000 57,000 15,000 improvement projects started in 2018 Membership growth in partnership unions 3 2005 2018 1996

4. New Partnership Agreement In May 2019, KP and the Alliance of Health Care Unions signed a new Labor Management Partnership Agreement to recommit to core principles, including: • Adhere to norms and behaviors reflecting mutual respect, trust and collaborative problem solving • Refrain from legislation, ballot initiatives or other conduct that may harm another member of the partnership • Expedited processes to resolve disputes 4

5. 2018 National Agreement With a new Partnership agreement in place, KP and the Alliance negotiated a 3-year labor contract, the 2018 National Agreement. The National Agreement furthers the goals of the Partnership, with a focus on: • Economics • Commitment to Partnership • Operational Excellence 5

6. Economics: Wages Across-the-Board Wage Increases Lump Sum Payments *Provided KPCO projects operating income above the planned 2% operating margin sufficient to fund an additional 1% ATB for Alliance union members 6

7. Economics: Medical and Dental Highlights • Active Medical • 2019: No changes in any region in 2019* • Starting in 2020, employees have same office co-pay of $10** • Reopener for co-pays in all regions in 2021 • Retiree Medical • Employees in CO, GA, HI, MAS, NW who retire on or after January 1, 2021, will receive $2,500 per year of service (up from $2,000) in a Health Reimbursement Account (HRA), consistent with funding for employees in other regions. • Retiree medical premium subsidy discontinued for employees hired after January 1, 2021 • Dental • Diagnostic and preventive services covered 100%, basic services 90% *Except IUOE 501 transitions to SCAL $5 co-pays in 2019 **Except Colorado Region 7

8. Economics: KP Washington • KPWA negotiated across-the-board wage increases before joining the Alliance of Health Care Unions, which are still in effect. • In addition, under the 2018 National Agreement: • Across-the-board increase of 2% effective October 2019 for Professional/technical and Optical units • Across-the-board increase of 2.25% effective October 2020 for Pharmacy units • KPWA now has an HRA program starting at $250 per year of service 8

9. Economics: Sustaining Our Partnership • New KP-Alliance Partnership Trust Fund to support partnership programs and activities • KP to contribute $8 million per year, plus $2 million in 2018 and $2 million in 2019 for start-up costs • 9-cent per hour union wage diversion continues • Joint Wage Committee to review job classifications and pay rates to reach joint understandings in preparation for next round of national bargaining • All earlier Labor Management Partnership agreements and side letters that do not have expiration dates are in effect for the Alliance, for instance, the Employment and Income Security Agreement (EISA), etc. 9

10. Commitment to Partnership • Code of conduct clarifies what labor and management can expect from each other as partners • Joint committee to study status of the Partnership and develop a plan for the future, with help of a statistically valid employee survey • Continued support for unit-based teams and their performance improvement work • Alliance union contract specialists ratio increased to 1 specialist per 1,200 union members 10

11. Commitment to Partnership • Total Health: Continued training and support for UBT health and safety champions; Path to Performance to include additional health and safety targets; Total Health Incentive Plan discontinued • Partnership training for middle managers, frontline staff and new hires • LMP Strategy Group to meet at least twice a year to provide oversight of a joint project action plan for keeping Partnership on track 11

12. Operational Effectiveness • Joint sponsorship team at regional levels to oversee implementation of staffing per National Agreement language • Joint Partnership subgroup to identify best practices for sharing information on budget and financial performance with frontline workers • Improved Performance Sharing Program (PSP): • All regions have a financial gate for full payouts • If region doesn’t meet its financial gate, Alliance-represented workers can get up to $1,000, pro-rated among the goals met • National attendance committee to convene, develop best practices 12

13. Educational Trust • Ben Hudnall Memorial Trust funding increased from 0.4% of Alliance payroll to 0.5%, to ensure stable funding for training, career counseling and career development • Enhanced benefits include: • $3,000 per person/year for education, training, professional development and degree, certification or licensing needs • Tuition reimbursement: amount allowed for travel to increase to $750 13