Stratfor Medical Plan ReviewPlan Year 2008-2009

Benefit In-Network Out-of-Network

Deductible $750 Individual/$2,250 Family

Co-Insurance 80% 60%

Max Out of Pocket $3,000 (I)/ $9,000(F) $6,000 (I)/ $18,000 (F)

Office Copay $20 60% after deductible

ER Facility Copay $100

ER Physician 80% after deductible

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Summary of Changes From Current Plan

•Co-Insurance • Current = 90% In-Network / 70% Out-of-Network

•Max Out of Pocket – Family Limit Out-of-Network• Current = Unlimited

•ER Copay• Current = $50

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Benefit In-Network Out-of-Network

Deductible $2,500 (I) / $5,000 (F) $5,000 (I) / $10,000 (F)

Co-Insurance 100% 70%

Max Out of Pocket N/A $5,000 (I) / $10,000 (F)(does not include deductible)

Office Copay 100% after deductible 70% after deductible

ER Facility Copay 100% after deductible

ER Physician 100% after deductible

Preventive Care 100% (no deductible)

If You Elect This Plan:

• All Preventive Care is FREE! NO copays, NO deductibles

• You are eligible to open a Health Savings Account (HSA)

• Stratfor will contribute to your HSA on your behalf

Health Savings Accounts are portable, tax-advantaged savings accounts

Unused money is rolled over from year to year (there is no “use it or lose it”)

Money grows through interest and investments Can be used to pay for a wide variety of health and

wellness related products and services Any adult who is covered by a high deductible health plan

(and has no other first dollar coverage except for preventive care) may establish an HSA.

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In Addition to Paying for Current Health Expenses

To pay for services not covered under a future plan

Portable from employer to employer and across state

lines

Long-term care for you or family members

Out-of-pocket expense for MedicareOOP Costs while enrolled on a

Medigap plan*

Medical Insurance during unemployment

No “Use It or Lose It” Rules

COBRA

Premium

$

*Cannot be used to pay for Medigap Insurance premiums 5

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For a list of allowable expenses, visit http://www.ustreas.gov/offices/public-affairs/hsa/

Single Family

Minimal Deductible* $1,150 $2,300

Maximum Out-of-Pocket $5,800 $11,600

Preventive Care 100% First Dollar Coverage Allowed

Rx Costs Must apply to Deductible and Maximum Out-of-Pocket

Annual Tax Deductible Contribution Limits

Max Contribution for 2009 $3,000 Max Contribution for 2009 $5,950

*Deductible applies to the Maximum Out-of-Pocket

IRS Requirements –High Deductible Health Plan (HDHP)

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Who Can Contribute?

Catch up contributions:

2009 and after - $1,000

Individual

Employer

Consumers age 55-65 can make

“catch up” contributions

Others

• You can contribute in a lump sum or in any amounts or frequency you wish

• Contributions can be made by you, your employer, or both

• Contributions are aggregated to determine whether you have contributed the maximum allowed

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The account holder must have an HSA qualified high deductible health insurance plan.

You cannot be covered by any other health insurance that reimburses you for health expenses you incur, unless it is another HSA qualified high deductible health plan.

Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs) may make you ineligible for an HSA unless they are: ◦ “limited use” (limited to dental, vision, child care OR◦ “post deductible” (pay for medical expenses after the

plan deductible is met).

Eligibility Requirements to Contribute

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If you are enrolled in Medicare or Medicaid, you cannot have an HSA.◦ If you are Medicare eligible and are not enrolled in

Medicare, you can open or contribute to an HSA if you have an HSA qualified health insurance plan.

Tricare does not currently offer an HSA qualified high deductible health plan. Therefore, if you are on Tricare, you cannot have an HSA.◦ If you have received any Veterans Administration health

benefits in the last three months, you cannot have an HSA.

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Tier Stratfor You Annual Max

Single $100 mo / $1,200 yr Up to $1,800 $3,000

Family $200 mo / $2,400 yr Up to $3,550 $5,950

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You can not exceed the annual maximum amount set annually by the IRS; for 2009 the maximums are:◦ $3,000 Individual◦ $5,950 Family

You must have an HSA qualified high deductible health plan to open or contribute to an HSA.◦ If you no longer have an HSA qualified high deductible health

plan, you cannot contribute to your Health Savings Account, but you can continue to spend or save the funds already deposited as you see fit.

If you become covered under a high deductible health plan in a month other than January you may make the full HSA contribution for the year.

◦ Eligible individuals during the last month of a tax year are treated as having been eligible during every month during the tax year for purposes of computing the annual maximum HSA contribution

◦ You make contributions for months before you were enrolled in a high deductible health plan.

◦ This provision is contingent upon maintaining status as an eligible individual during a prospective 12-month “testing period” which includes continuing coverage under a high deductible health plan.

◦ If you fall out of qualifying insurance coverage (for reasons other than death or disability) before you have fulfilled the number of preceding month for which you made the HSA contributions, all the back loaded months of HSA contributions are includible in your gross income and you face a 10-percent additional tax to the amount includible.

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If you have contributed an amount into your HSA which exceeds your maximum allowable deposit, you may withdraw the excess amount and any earnings on the excess amount prior to April 15th of the following year without paying a tax penalty.

◦ You must pay income tax on your excess contributions and income tax on any earnings of the excess contribution.

◦ If you do not withdraw the excess contribution to your HSA prior to April 15th of the following year, you must pay a 10% excise tax on the excess contribution, and on any earnings of the excess contribution.

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Aggregate Deductible◦ Only applies to those who elect dependent coverage◦ Any one or more family members have to satisfy the full family

deductible before receiving co-share benefits.

Embedded Deductible ◦ A separate individual (embedded) deductible amount for each

family member of at least the minimum deductible amount for family coverage as governed by IRS guidelines: $2,300 for 2009

◦ Must also have an overall “umbrella” (aggregate) deductible amount for the whole family.

NOTE: If the embedded individual deductible is less than the minimum HSA deductible amount for family coverage (i.e. $2,300 for 2009), the product is not a qualified HDHP.

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Allows one-time roll-over from FSAs, HRAs, and IRAs into HSA accounts

Maximum annual HSA contribution no longer limited by the insurance deductible

HSA contributions are no longer pro-rated in plans that begin in mid-year, e.g. if the plan begins in September, an HSA contribution may be made for the entire year

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THEN (2004)…

◦ 438,000 -- Individuals were covered in November 2004 by HSA-type insurance plans -- according to the America Health Insurance Providers (AHIP).

◦ 113,000 (roughly 240,000 individuals) -- IRS data on individual tax returns reporting HSA deductions in tax year 2004.

◦ Individual tax returns do not reflect employer financed HSA contributions.

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THE FUTURE… ◦ 14 million by 2010 -- Treasury Department projection of

HSA policies (covering 25 to 30 million people) -- based on current law.

◦ 21 million by 2010 -- Treasury Department HSA policies

estimates rise by 50 percent (covering 40 to 45 million people) -- based on the President’s health care initiative.

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