What is Your Benefit?

What is Your Benefit?City of Chesapeake Employees:

Narrators for Today:Elizabeth DonohueSenior Benefits Specialist757-382-6373Health and Dental

Allison MyersAssistant Human Resources Director757-382-6583Supplemental Benefits

Add health and dental insurance. ElAdd Legal Resources 2What We Will Cover:Health CoverageDental CoverageLong Term CareLife InsuranceVirginia Retirement System (VRS)Flexible Spending Account (FSA)Legal Resources

Health Coverage Start Date:Hire Date 1st 15th of the month*Example: Hire Date 01/8/1216th last day of monthExample: Hire Date 01/22/12

Effective Date1st of the month immediately following the date of hireExample: Effective Date 02/1/121st of the next following monthExample: Effective Date 3/1/12* If employee will not be paid on the 15th of the month, the employee will be double deducted in their paycheck on the 30th of the month.Effective/Eligible Date = Based on the Hire Date

4Narrator: Based on your new employee orientation date, you may either start .Two Types of Health Care Coverage:

There are two types of health care coverage:5Which one should I choose?Anthem Blue Cross Blue ShieldOptima Health

Which should I choose?6Health Insurance Terms:(Rollover the word for the definition)

Co-Pay

Co-Insurance

Deductible

Out of Pocket Max

Copay- set amount the subscriber pays for services; typically collected at the point of serviceCoinsurance- The percentage of a procedure/service that is paid by the employee and a percentage is paid by insurance carrier. Deductible- The amount the employee is responsible for before the plan pays.Out of Pocket Maximum- The maximum amount an employee will pay out of pocket during the plan year.

prescription copays/coinsurance and premiums are NOT included in the out of pocket maximumRollover with definitions.

7Health InsurancePlan OptionsAnthem PPOOptima High HMOAnthem High HMOOptima Low HMOAnthem Low HMOAnnual Deductible$200/$400$0$0$0$0Preventive Care copay$0$0$0$0$0Physician copay$25 PCP $50 Spec.$20 PCP $50 Spec.$20 PCP $50 Spec.$25 PCP $70 Spec.$25 PCP $70 Spec.Outpatient Surgery10% coinsurance$150 copay$150 copay$150 copay$150 copayUrgent Care10% coinsurance$50 copay$50 copay$70 copay$70 copayEmergency Room10% coinsurance$200 copay$200 copay$200 copay$200 copayOut of Pocket Maximum$2250/$4500$2000/$4000$2000/$4000$2000/$4000$2000/$4000Pharmacy$10/30/50/20%$10/30/50/75$10/30/50/20%$10/30/50/75$10/30/50/20%

Mail Order Pharmacy: Doctor writes script for a 90 day supply, send in application, and receive a 3 month supply for 2 copays.High: Go the Dr often (less co-pay), more out of checkLow: Go to the Dr less often (higher co-pay), less out of check North Carolina A lot of people from this area has Anthem - not that many optionsIn VA, 95% is Optima and 65% is AnthemPPO & Optima No referral neededOpen Enrollment May and June

8Before you decide, ask yourself:

On what tier do my medications fall?

9Before you decide, ask yourself:How often do I see a Specialist or a Primary Care Physician?

10Before you decide, ask yourself:

Are my Physicians currently accepting Optima or Anthem?

Before you decide, ask yourself: a

How much will be deducted from my pay check?

If you do not have a Primary Care Physician now is a great time to establish one!

Choosing between health insurance options can be difficult. Listed below are some questions that can help you make a decision:1. Premium- How much will be deducted from my paycheck?2. Physician Options- Are my physicians currently accepting Anthem or Optima? 3. Prescription copays- On what tier do my medications fall?4. Copays- How often do I see a Specialist or Primary Care Physician?

12Health InsurancePlan OptionsAnthem PPOOptima High HMOAnthem High HMOOptima Low HMOAnthem Low HMOAnnual Deductible$200/$400$0$0$0$0Preventive Care copay$0$0$0$0$0Physician copay$25 PCP $50 Spec.$20 PCP $50 Spec.$20 PCP $50 Spec.$25 PCP $70 Spec.$25 PCP $70 Spec.Outpatient Surgery10% coinsurance$150 copay$150 copay$150 copay$150 copayUrgent Care10% coinsurance$50 copay$50 copay$70 copay$70 copayEmergency Room10% coinsurance$200 copay$200 copay$200 copay$200 copayOut of Pocket Maximum$2250/$4500$2000/$4000$2000/$4000$2000/$4000$2000/$4000Pharmacy$10/30/50/20%$10/30/50/75$10/30/50/20%$10/30/50/75$10/30/50/20%

Mail Order Pharmacy: Doctor writes script for a 90 day supply, send in application, and receive a 3 month supply for 2 copays.High: Go the Dr often (less co-pay), more out of checkLow: Go to the Dr less often (higher co-pay), less out of check North Carolina A lot of people from this area has Anthem - not that many optionsIn VA, 95% is Optima and 65% is AnthemPPO & Optima No referral neededOpen Enrollment May and June

13Example 1:Plan OptionsAnthem PPOOptima High HMOAnthem High HMOOptima Low HMOAnthem Low HMOAnnual Deductible$200/400$0$0$0$0Physician copay$25 x 4 = $100$20 x 4 = $80$20 x 4 = $80$25 x 4 = $100$25 x 4 = $100Pharmacy copay$20 x 12 = $240$20 x 12 = $240$20 x 12 = $240$20 x 12 = $240$20 x 12 = $240Annual Premium$7752$6564$4956$3468$3720Flexible Spending suggestion$340$320$320$340$340TOTAL (including FSA suggestion)$8092$6884$5276$3808$4060

Husband: I am enrolling in family coverage. I am a diabetic & take Metformin. Due to my condition, I see my PCP 4 times a year. My wife takes medicine for high blood pressure, but otherwise she is in good health. Our physicians are in both networks. We have 2 children & both are relatively healthy. I only anticipate my wife & children seeing their physicians for preventive care which is covered at 100%.

14Example 2:Plan OptionsAnthem PPOOptima High HMOAnthem High HMOOptima Low HMOAnthem Low HMOAnnual Deductible$200/400$0$0$0$0Out of Network coverageYESNO Emergencies onlyMAYBE *NO Emergencies onlyMAYBE *Annual Premium$3912$2832$2052$1320$1416*Some dependents may be able to guest service into another Anthem plan depending upon the geographic area in which they reside.

Mother: I am covering myself and my twenty year old son who is residing in Florida. We are both healthy, are not currently taking any prescription medications, and generally only see a doctor once a year for an annual check up. I want to make sure my son has comprehensive coverage just in case.

15Anthem Blue Cross Blue Shield

16

HMO=Healthkeepers; PPO=Keycare

19Optima Health

Health Coverage Choices:Five Options

Anthem Healthkeepers 20 HMO High Option(Group #: CCH002-04, Group Name: City of Chesapeake)

Anthem Healthkeepers 25 HMO Low Option(Group #: CCH002-05, Group Name: City of Chesapeake)

Anthem BC & BS PPO(Group #: 20253000, Group Name: City of Chesapeake)

Optima Vantage HMO High Option(Group #: 2325, Employer Name: City of Chesapeake)

Optima Vantage HMO Low Option (Group #: 2328, Employer Name: City of Chesapeake)

21Health CoverageKey Points

Covering Dependents

Selecting a Primary Care Physician

Coordination of Benefits

221. If covering any dependents (children, step-children, spouse) with a different last name than yours, a copy of a birth certificate and/or marriage license must accompany your application, along with proper social security numbers.

2. If you do not list a doctor on your application today, then the health insurance company will select one for you based on your home zip code. You can change your Primary Care Physician (PCP) at any time by calling member services (the number can be found on the back of your insurance card) or through the health providers website.

3. If you do not list a doctor on your application today, then the health insurance company will select one for you based on your home zip code. You can change your Primary Care Physician (PCP) at any time by calling member services (the number can be found on the back of your insurance card) or through the health providers website.

Make sure to sign and date the applicationDental InsuranceDental insurance is offered through Delta Dental

General Deductible: $50/person (max of 3/family/year = $150)Sealants are covered for dependents under age 16.Preventive care covered at 100%-includes semi-annual cleanings & annual x-raysBasic dental care covered at 80%-includes fillings & root canalsMajor dental care covered at 50%-includes dentures, bridges and crownsMaximum annual benefit is $1250/person

Sealants covers 1 application per tooth 23Long Term Care InsuranceLong Term Care insurance covers care typically not covered by medical insurance.Individuals who require long term care are generally not sick in the traditional sense, but instead are unable to perform the basic activities of living, such as, dressing, bathing, eating, and walking. (i.e. Individual is in a car accident and requires therapy to learn how to walk again.)

Long Term Care InsuranceLTC insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home, and Alzheimers facilities.Premiums are payroll deducted on a pre-tax basis.Premiums are based on age and lifetime maximum; the younger a person is when they purchase LTC insurance, the less expensive the premium.Coverage is portable.

Genworth - Long Term Care

Employee Benefits Flexible SpendingMedicalAllows employees to set aside pre-tax dollars for post tax medical expensesMedical, Dental, and Vision expenses not covered by insurance are generally includedFunds are available on the first day of the plan yearVISA debit card may be used for qualified purchasesAnnual election may be up to $5000Use or lose benefit, important to only elect an amount that will be used during the plan year

Dependent CareAllows employees to set aside pre-tax dollars for post tax dependent care expensesChildcare and pre-k tuition is includableFunds must be withdrawn from your paycheck prior to receiving reimbursementAnnual election may be up to $5000Use or lose benefit, important to only elect an amount that will be used during the plan year

Understanding your Discovery Benefits FSA

27Estimate your income and child care expenses for the upcoming year.Compare your expenses to the child care credit allowances. For married couples filing jointly, the child care tax credit for 2009 is up to $3,000 for one child and $6,000 for two or more children. That means if you spend $5,000 a year for one child you can only get a credit for up to $3,000; if you spend $5,000 a year for two children, you get a credit for the entire amount.Understand the allowances for a Dependent Care Flexible Spending Account. In 2009, married couples filing jointly could put up to $5,000 into a flex account for child care expenses, no matter how many children they had. The full $5,000 could be used on a single child's day care expenses. Money put into a flexible spending account is not subject to any federal, Social Security or Medicare taxes, ultimately lowering your tax bill more than by just taking the child care credit.Note that some workers can use both the child care credit and the flexible spending account. If you have two or more children and pay more than $5,000 in child care costs so that you may work, you can put $5,000 into a DFSA and qualify for up to an additional $1,000 child care credit.Do the math. If you and your spouse make more $43,000 a year and each of you makes more in a year than the cost of child care, then the DFSA is usually the better deal. For couples with only one child who spend more than $3,000 a year on child care, the DFSA is also usually a better deal. For couples making less than $43,000 or for single parents, the tax breaks may be different and you should consult a tax specialist.Remember there are some disadvantages to flexible spending accounts. The money is taken out of your paycheck, and you typically have to apply for reimbursement by filling out a form or sending in receipts. Flexible spending accounts are also "use it or lose it" accounts. Don't overestimate your child care costs because any extra money in the account at the end of the year is kept by the government.

FSA ExampleYou and your family members add up your medical expenses and determine the following annual expenses:Prescriptions: ($30.00/month x 12 =) $360.00Eyeglasses & contacts: $200.00Dental expenses $100.00TOTAL $660.00If you are in the 28% tax bracket, you will save $184.80 in taxes based on a FSA election of $660.00/annually.

The plan year runs from August 1st through July 31st

Complete Discovery Benefits enrollment form if interested in flexible spending.

28Maximum $5,000 per yearLegal ResourcesLEGAL RESOURCES All attorney fees for legal services listed in the "Summary of Services" are either covered in full at 100% or discounted at 25%, depending on the legal matter.There is a monthly fee of $17. This fee includes unlimited use of covered services for all covered family members.You can only enroll in this plan during the open enrollment period (April) or within the first 30 days of employment.

29Page 34You have to use the lawyers listed in the brochure

Virginia Retirement System For Plan 2 EmployeesKey Points

Retirement benefit is paid by you and the City.

You are vested after 5 years.

You are eligible to retire with an unreduced benefit at normal Social Security retirement age with at least 5 years of VRS service, or when your age and service credit equal at least 90. (example: age 60 with 30 years of service credit).

You may retire with reduced benefits at age 60 with 5 years of service

Unreduced retirement is equal to 51% of your salary based on the average of your 60 consecutive months of highest compensation.

If you are not vested and leave the City, you are eligible for any contributions that you have made to your member contribution account plus accrued interest. If vested, you will receive a full refund of your member contribution account balance.

30Purchasing Prior Service Plan 2 EmployeesTypes of Prior Purchased Service: Active duty military serviceFull-time salaried federal serviceFull-time salaried public service other than prior VRS-covered serviceNon-covered service with a VRS-participating employerApproved leave for the birth or adoption of a child, provided you were on leave from a VRS-covered positionApproved educational leave, provide you were on leave from a VRS covered positionNon-ported service. You do not need to apply for this service. The amount of service you are eligible to purchase will be determined during the portability process.

Within one year of becoming eligible, your cost will be based on an approximate normal cost rate as a percentage of your compensation or average final compensation, whichever is higher.

Download a Purchase of Prior Service form on the VRS website (www.varetire.org, Form VRS-26), complete the form with the appropriate employer representative signature, and submit to VRS. VRS will send a cost letter informing the employee how much service he/she can purchase and at what cost.31ViRetirement System for Plan 1 EmployeesKey PointsRetirement is paid fully by the City

You are vested after 5 years

You are eligible to retire with unreduced benefits at either age 65 with 5 years of service; or age 50 with at least 30 years of service.

You are able to retire with reduced benefits at age 50 with 10 years of service or age 55 with 5 years of service.

Unreduced retirement is equal to 51% of your salary based on the average of your 36 consecutive months of highest compensation.

If you are not vested, you will receive a refund of any contributions you have made, plus accrued interest, and any employer contributions and interest made before July 1, 2010, if applicable. You are not eligible for a refund of any employer contributions and interest made after July 1, 2010. If you are vested, then you will receive a full refund of your membership account balance.

Once a Plan 1 employee takes a refund of their contribution account then if he/she ever returns to a VRS covered position then he/she will be rehired under Plan 2 guidelines.32Purchasing Prior Service - Plan 1 EmployeesTypes of Prior Purchased Service: Active duty military serviceFull-time salaried federal serviceFull-time salaried public service other than prior VRS-covered serviceNon-covered service with a VRS-participating employerApproved leave for the birth or adoption of a child, provided you were on leave from a VRS-covered positionApproved educational leave, provide you were on leave from a VRS covered positionNon-ported service. You do not need to apply for this service. The amount of service you are eligible to purchase will be determined during the portability process.Within three years of becoming eligible, your cost will be based on 5 percent of your compensation or average final compensation, whichever is higher.

Download a Purchase of Prior Service form on the VRS website (www.varetire.org, Form VRS-26), complete the form with the appropriate employer representative signature, and submit to VRS. VRS will send a cost letter informing the employee how much service he/she can purchase and at what cost.

33

Virginia Retirement System (VRS)

VRS Basic Group Life InsuranceIncluded with your VRS Retirement Benefit.

The life insurance benefit of 2x your annual salary, rounded up to the next thousand. Example: Joe Smith earns $22,345 annually. Rounded up, this is $23,000 annually. His VRS Life Insurance policy is worth $46,000. (2 x $23,000)

Life Insurance is available immediately upon VRS membership.If you retire with the City, the policy will carry with you in retirement.

35Life insurance in retirement: After an employee is retired for 1 full calendar year the policy will reduce by 25% each January until it reaches 25% of its original value. The Life insurance amount is based on the salary the employee is making with the City upon retirement.Optional Life InsuranceOptional life insurance allows you to purchase additional life insurance for yourself, your spouse (unless your spouse is a VRS eligible employee) and/or your dependent children under age 21.

You can purchase up to an additional four times your salary for yourself; up to an additional two times your salary for your spouse and up to $30,000 for your dependent children.

Guaranteed issue is available within your first 31 days of employment.

Coverage is portable; you can take it with you if you leave the City. This option is available once you have maintained coverage for 60 months. You also have the option of converting to a whole life policy upon retirement.

36You may purchase life insurance any time after the 30 days, but you will have to complete a Proof of Good Health form.Death In Service BenefitsBenefits available to employees if he/she develops a life-threatening condition or passes away in service:

Health Insurance Benefits- paid for one month after death; coverage can be continued under COBRA for up to 36 months for eligible dependents

Life Insurance Benefits-paid to beneficiary at 2 times the annual salary or 4 times the annual salary if accident causes life threatening health condition. Accelerated death benefit is available which is equal to the regular benefit when a terminal condition is determined with an expectancy of 12 months of less

Retirement Benefits- Beneficiary receives refund of contributions plus interest or a monthly check, if eligible, based on a portion of the projected monthly benefit which would have been paid to the employee upon retirement

Annual Leave Payout-Accumulated leave will be paid out to beneficiary of the employee

Thank you for your TimeIf you have any questions related to your benefits, please contact your Payroll Clerk or write your questions down for your New Employee Orientation.

We are excited to have you join us here at the City of Chesapeake.

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