2018 Annual Enrollment Guide

Transcription

1 2018 Annual Enrollment Guide For Active Employees 2018 Annual Enrollment Begins: Monday, October 30, 2017, at 8 a.m. Central Standard Time Ends: Friday, November 10, 2017, at midnight Central Standard Time Enroll online at Enroll in Your Benefits WHEN: Between 8 a.m. Central Standard Time on Monday, October 30, 2017, and midnight Central Standard Time on Friday, November 10, You can make changes throughout the Annual Enrollment period. Elections saved as of the close of the enrollment period will take effect January 1, 2018 and continue through December 31, WHERE: HOW: Log in to or call BaxHR4U ( ) and follow the prompts to speak with a Baxter Employee Benefit Center (BEBC) representative. Service representatives are available to take your call Monday through Friday from 8 a.m. to 5 p.m. Central Standard Time.

2 Inside This Guide 2018 Benefit Changes... 4 Medical Plan Options... 6 Prescription Drug Coverage for the PPO and BTO Plans... 9 Enrollment Deadline After November 10, 2017, you can change elections only if you have a qualified change in status such as marriage, adoption or birth of a child, divorce, death of a covered dependent or a change in your spouse s or domestic partner s employment status. Changes due to a qualified change in status must be made within 31 days of the event. Dental Plan Options Other Benefits You Can Elect...12 Notices about Your Benefits Coverage and Rights...15 The Affordable Care Act requires employers to send IRS Form 1095-C, an annual statement, to all employees eligible for coverage. The statement includes a description of the medical insurance available to them, the coverage they have enrolled in for 2017 and cost information. Employees may receive multiple forms if they were offered coverage by more than one employer and a separate 1095-B form if they are covered under an insured plan (HMO). These IRS forms will be sent in January Be sure to review your covered dependent names and Social Security Numbers listed on for accuracy to ensure proper reporting of healthcare coverage. To sign-up for e-delivery of your Form 1095, login to and go to At Your Fingertips and select the IRS Form 1095 (ACA Reporting) link. 2

3 Your benefits represent a valuable portion of your total compensation package at Baxter. Each year during Annual Enrollment, you have the opportunity to review your benefit elections and make changes to meet your needs and the needs of your dependents. This Enrollment Guide will help you make decisions on the following benefits for 2018: Medical Coverage Dental Coverage Flexible Spending Accounts Commuter Benefits Long-Term Disability Plus Insurance Supplemental Life Insurance Personal Accident Insurance Voluntary Benefits If You Are on Leave of Absence During Annual Enrollment, you can only make changes to your medical and dental coverage. When you return to active work, you can complete your other benefit elections, if eligible. Changes can be made by logging in to within 31 days of your return to active work. 3

4 2018 Benefit Changes Consistent with our goal to align our benefits with the marketplace, the following changes have been made for the upcoming year: Benefit Medical Plans (PPO and BTO) Dental Plan HMOs Flexible Spending Account Medical Contribution Rates Incentive Investment Plan (IIP) Commuter Benefits What s Changing PPO and BTO: Employee and family deductible and out-of-pocket maximum (OOP) will increase by $75 for individual and by $150 for family coverage ($500/$1,000 deductible and $2,725/$5,450 OOP). Out-of-network amounts will also increase. See Page 6 for details. PPO and BTO: Emergency room copay will increase by $25 (to $100 per visit). Basic and Basic Plus: Baxter will be moving to a new vendor for dental benefits: Cigna. There are no changes to the dental plan designs with this move, but you may see other changes, such as greater access to care via a larger network of providers. You will also see minimal changes to your dental contribution rates for See Page 11 for more details. HMO offerings may have changes to plan design and premiums. Visit for details. To comply with IRS limits, the maximum contribution rate will be increased from $2,550 to $2,600. Both you and Baxter will see an increase in medical contribution rates in 2018 consistent with marketplace trends. The new employee contribution rates for your benefits can be found online at beginning October 30. Please note that your costs depend on the plan you choose and the number of eligible dependents you cover. Baxter will increase the employee automatic enrollment contribution percentage from 3% to 4% for new hires. Baxter will increase the employee auto-escalation cap from 6% to 10% for all auto-enrolled employees. See page 14 for more details. The commuter benefits program is changing from a subsidy to a pre-tax approach. This benefit will now be administered through WageWorks (our current Flexible Spending Accounts vendor). Employees can use pre-tax funds to pay for parking and public transit-such as train, subway, UberPool, bus or vanpool-as part of their commute to work. See page 12 for more details. Summary of Benefits and Coverage A summary of each medical plan offered is available to help you understand and evaluate your medical insurance choices. The summaries can be found online at Additionally, you may request a paper copy by calling the Baxter HR Center at BaxHR4U ( ) and following the prompts to the BEBC. New ID Cards If you are enrolled in the PPO or BTO medical plans, you will receive a new ID card with the updated 2018 emergency room copay amount. If you are enrolled in the Basic or Basic Plus Dental Plan options, you will receive an ID card from the new dental vendor, Cigna. Additionally, if you switch medical plans or enroll in a medical or dental plan for the first time, new plan ID cards will be mailed to your home by January 1,

5 Who s Eligible? You and the following family members are eligible for the Baxter benefits* outlined in this guide: Your spouse. Your domestic partner of the same or opposite gender. If you intend to enroll a domestic partner and/or the children of a domestic partner, call the Baxter HR Center at BaxHR4U ( ) and follow the prompts to the BEBC. Your children, including the children of your domestic partner, under age 26, are eligible for medical, dental, life, and personal accident insurance coverage. * Short- and Long-Term Disability Insurance plans are available only to you. Dependent Eligibility Audit Baxter conducts dependent eligibility audits on an ongoing basis. This means that if one or more of your dependents are enrolled in Baxter benefits, you are required to provide proof of their eligibility for coverage (such as a birth certificate or a marriage license). Please ensure the family members you are covering are eligible for coverage and make changes as needed. If you participated in Baxter s Dependent Eligibility Audit in the past and received a confirmation letter, your verification process for those dependents is complete. If you enroll a new dependent, or if you did not previously participate in the audit, you are required to provide the necessary documentation for each dependent shortly after the start of the plan year. Additional information will be mailed to your home after Annual Enrollment. For a complete list of eligible dependents, see the Medical Summary Plan Description (SPD) under Plan Information at What Happens If You Don t Enroll? If you are currently enrolled in: Medical Coverage Dental Coverage Supplemental Life, Long-Term Disability, and Personal Accident Insurance Healthcare and Dependent Care FSAs If you do not enroll: Your current election, if available, will continue for If your current election is NOT available, you will default to the PPO (Preferred Provider Option). If the PPO is not available, you will default to the BTO (Baxter Traditional Option). Your current election, if available, will continue for If your current election is NOT available, you will default to the Basic Dental Plan. Your current elections will continue for Your current elections will NOT continue for These accounts must be elected each year per IRS rules. Mandatory Medical Coverage Acknowledgement If you waive medical coverage, you must complete the Waiving Medical Coverage survey online at during Annual Enrollment. 5

6 Medical Plan Options Preferred Provider Option (PPO) The PPO, offered through Blue Cross and Blue Shield of Illinois (BCBSIL), is available to employees who reside in PPO coverage areas. The PPO gives you access to one of the nation s largest networks of doctors, hospitals and other healthcare facilities. While you can see any doctor, you will pay lower out-of-pocket costs when you go to doctors and facilities in the PPO network. To find a doctor in the PPO network, visit and use the Provider Finder tool. If you are prompted to enter an alpha prefix, enter BXE. Virtual Visits Convenient health care at your fingertips Getting sick is never convenient and finding time to get to the doctor can be hard. BCBSIL provides PPO plan participants and covered dependents access to care for non-emergency medical issues through MDLIVE. Board-certified doctors are available 24-hours a day, seven days a week through phone or video consultation. You can speak to a doctor immediately or schedule an appointment based on your availability to help treat conditions such as sinus infections, sore throat, pink eye and others. In most cases, if the MDLIVE doctor believes medication is warranted, he or she can write a prescription for non-narcotic medications, which can be sent directly to your pharmacy. Your cost (copay) for the consultation is $10. After registering, within 15 minutes you can have a virtual consult to diagnose non-emergency medical issues over the phone or through secure video on your computer or smartphone. Registration is available at MDLIVE.com/bcbsil or call MDLIVE ( ). You can also access MDLIVE through your BCBSIL app (available at the Apple App Store SM, Google Play TM or Windows Store ). To register, you ll need to provide your first and last name, date of birth and BCBSIL member ID number. 6

7 Key Features of the PPO Plan Changes for 2018 are noted in bold. Plan Feature In-Network Services Out-of-Network Services Annual Deductible Employee $500 $1,000 Employee + Family $1,000 $2,000 Annual Out-of-Pocket Maximum (including deductible and copays) Employee $2,725 $5,450 Employee + Family $5,450 $10,900 Preventive Care Routine Preventive Care, Colonoscopy Plan pays 100% Not covered Mammogram and Pap Tests Plan pays 100% Plan pays 60% after you meet the deductible Office Visits Primary Care Physician Plan pays 100% after $20 copay Plan pays 60% after you meet the deductible Specialist Plan pays 100% after $35 copay Plan pays 60% after you meet the deductible Hospital and Surgery Services Emergency Care Plan pays 80% after you meet the deductible and $100 copay (copay waived if admitted) Plan pays 80% after you meet the in-network deductible and $100 copay (copay waived if admitted); if not a true emergency, plan pays 60% after you meet the out-of-network deductible and copay Inpatient Hospitalization Plan pays 80% after you meet the deductible Plan pays 60% after you meet the deductible Outpatient Surgery Plan pays 80% after you meet the deductible Plan pays 60% after you meet the deductible Diagnostic X-Ray and Laboratory Services Plan pays 80% Plan pays 60% after you meet the deductible Mental Health and Substance Abuse Inpatient Plan pays 80% after you meet the deductible Plan pays 60% after you meet the deductible Outpatient Office Visits Plan pays 100% after $20 copay per visit Plan pays 60% after you meet the deductible Group Therapy: Unlimited Visits Plan pays 100% after $20 copay per visit Plan pays 60% after you meet the deductible Percentages (%) shown represent the percentage of eligible charges the Plan will pay for covered services. The eligible charge may be less than the actual billed charges. You are responsible for any expenses in excess of the eligible charge for services by an out of network provider. PPO network providers agree to accept negotiated fees and not bill for charges in excess of those fees. BCBS Cost Estimator Tool There s a lot to think about when deciding where to get health care. Prices can differ substantially from one provider to another, even for the same procedure. BCBSIL has enhanced their Provider Finder tool available through Blue Access for Members (SM) (BAM) to help make you a smarter health care shopper by allowing you to check costs before your appointment. Go to bcbsil.com, click Log In and enter your credentials. (Or, click the Register Now link if you are a new BAM user). Click, Find a Doctor or Hospital under the Doctors & Hospitals tab, then click, Find a cost. Once you select your search criteria, you can compare estimated out-of-pocket costs for medical services, view patient feedback and find a network physician, specialist or hospital. It s easy, immediate and secure. 7

8 Baxter Traditional Option (BTO) If you live outside the PPO coverage area, the BTO will be available to you. The BTO gives you the flexibility to go to any doctor, hospital or other provider and pays 80% of your eligible charges once you meet the deductible ($500 individual, $1000 family). You are then responsible for any portion of payment not covered by the plan up to the out-of-pocket maximum. Eligible preventive care is covered at 100%. For more information on the BTO, visit Baxter Catastrophic Option (BCO) The BCO is available to all employees. This high deductible option, with a low premium cost, provides medical coverage in case you or an eligible family member develops a major illness or suffers a serious accident. Once you meet the plan s deductible limit ($5,000 individual, $10,000 family), the plan pays 100% of eligible medical and prescription drug charges. For more information on the BCO, visit Health Maintenance Organization (HMO) Options To find out if an HMO is available in your location or for details on plan design changes for Baxter s HMO offerings, visit If You Live Outside a Plan s Coverage Area If you live outside of a geographic area covered by a medical or dental plan, but still wish to enroll in one of these plans, you may request to do so during Annual Enrollment. To enroll online: 1. Select one of the medical or dental plans listed on your enrollment worksheet at Save your elections and print your confirmation statement. This step is necessary because requests for a plan outside a coverage area are subject to approval. 2. Go to Resource Library, print the Opt-In Appeal Form: 2018, complete and return it to the BEBC. Forms must be received no later than November 10, The plan administrator will determine if your request will be approved. If your request is denied, you will be enrolled in the plan(s) you elected in Step 1. Note: If you opted into coverage last year, please review your coverage options carefully as opt-in elections do not carry over from year to year. Pre-Certification and Verification As in the past, if you are covered under Baxter s PPO, BTO or BCO plans, you are required to pre-certify at least one business day before or within 48 hours following an emergency admission or for any inpatient admissions, residential treatment center care, skilled nursing care, private duty nursing and home healthcare. In addition, before receiving any services, it is your responsibility to verify medical necessity and understand your benefits. You can request a predetermination review for a recommended procedure to make sure it meets the plan s medical necessity criteria. For more information on your benefit coverage, pre-certification requirements, or predetermination review, call BCBSIL Customer Service at

9 Prescription Drug Coverage When you enroll in either the PPO or BTO medical plan option, you receive prescription drug coverage through CVS Caremark. Under the BCO, your prescription drug claims are covered under the medical plan after you meet the deductible. If you are in an HMO, your prescription drug coverage is provided through the HMO. Prescription Drug Coverage for the PPO and BTO Plans Generic drugs are covered at the lowest copayment (Tier 1). Brand-name drugs that have been selected by CVS Caremark for their clinical and cost-effectiveness are considered preferred (Tier 2) and cost you more than generics, but less than non-preferred brands. Brand-name drugs that are considered non-preferred (Tier 3) cost more than preferred brands. In most cases, Tier 3 non-preferred brand drugs have different brand or generic drug alternatives in Tiers 1 and 2 that treat the same condition, are more clinically effective and cost less. Drugs determined as non-formulary based on the prescription claims administrator s current formulary are not covered by the Plan. Additionally, there is a separate prescription drug out-of-pocket maximum: $2,000 individual/$4,000 family. Baxter will change the utilization management programs such as prior authorization, quantity limits, and clinical step therapy for select drugs to ensure cost-effective and safe use of drugs. If you utilize a drug impacted by this change, you will receive a letter in mid-november notifying you of the change and how to take action. Additional information on covered drugs and utilization management programs is available by phone (CVS Caremark at ). The copay / coinsurance structure is as follows: Key Features of Baxter s Prescription Drug Coverage Type of Prescription Drug Retail Amount You Pay* Mail Order Amount You Pay* Tier 1 - Generic $10 $20 Tier 2 - Brand name preferred (when a generic equivalent is not available) Tier 3 - Brand name non-preferred (when a generic equivalent is not available) Brand name (preferred or nonpreferred) when a generic equivalent is available 25% coinsurance ($25minimum/ $75 maximum) 40% coinsurance ($50 minimum/ $115 maximum) $10, plus the difference in cost between the brand name and generic equivalent 20% coinsurance ($50 minimum/ $150 maximum) $40% coinsurance ($100 minimum/ $230 maximum) $20, plus the difference in cost between the brand name and generic equivalent * The amount you pay will not exceed the drug cost. 9

10 One way to get and stay healthy is to receive regular checkups and routine health screenings. Routine, in-network preventive and wellness care are covered at 100% in the PPO and BTO plans. This includes adult physical exams, wellbaby and well-child care, mammograms, Pap tests and colonoscopies. Through your medical plan, you may have access to fitness center discounts and other programs like smoking cessation and weight management resources that encourage you to stay active and healthy. Check with your medical plan for details. For more information, visit the intranet site by selecting from the Life & Career drop-down menu on the Baxter intranet homepage. You also have access to the Personal Wellness Profile Tool. Through this tool, you can confidentially review your health status and identify and set goals for improvement. For more information or to access the tool, visit the intranet site. Refer to Staying Well or go to Employee Assistance Plan Help when you need it The EAP provides you and your family members with up to three free counseling sessions for help with a wide variety of issues, including marital differences, stress, financial, legal, child or elder care issues and work-related concerns. The EAP network includes more than 50,000 providers nationwide who can offer you the right care in a manner that is comfortable and convenient for you: face-to-face, online or by phone. To talk to someone confidentially about your concerns, call the toll-free number, anytime or go to Beacon Health Options website: 10

11 Basic and Basic Plus Dental Plan Options New Vendor! Baxter periodically reviews our benefit program to ensure that our coverage remains competitive and continues to meet the needs of employees and the company. This year, we have decided to move to a partner that offers a broader network of dental providers. Beginning January 1, 2018, Cigna will become our new administrator for the Basic and Basic Plus Dental plans. Finding a Dentist Under the Basic and Basic Plus plans, you can use any dentist and receive the same level of benefits whether the dentist is in or out of network. However, your costs will likely be less when you use an in-network dentist because Cigna negotiates better rates with these providers. The network of providers that contract with Cigna is one of the largest in the country. That means there is a good chance that your dental providers will be in the network. To find a participating dental provider, visit and use the Find A Doctor tool. Key Features of the Dental Plan Options If You Are Receiving Treatment During the Switch If you are in the midst of receiving certain types of dental care (such as orthodontic services) at the time of the transition or have questions, contact Cigna at Cigna24 ( ). New ID Card If you are enrolled in dental benefits for 2018 through the Basic or Basic Plus Dental plan options, you will receive a new ID card from Cigna before January 1, DHMO (if available in your location) Cigna will continue to be the Dental HMO (DHMO) vendor as well. Your plan design features will remain the same for 2018 (as shown in the chart below). Under the DHMO, you must select a network dentist. The DHMO covers most dental expenses at contracted rates with no deductible or annual limit. Preventive care, general services and orthodontia are covered according to a schedule of benefits. For details, visit To find a participating dental center, visit and use the Find A Doctor tool. Service Basic Dental* Basic Dental Plus* DHMO Annual Deductible No annual deductible; $5 copay applies to all office visits Employee Employee + Family $150 $300 $125 $250 None None Preventive Plan pays 100% of reasonable and customary charges Plan pays 100% of reasonable and customary charges Plan pays 100% Basic (Endodontics, fillings, oral surgery, periodontics) Plan pays 65% of reasonable and customary charges after deductible Plan pays 80% of reasonable and customary charges after deductible Plan pays 100% Major (Crowns, prosthodontics, implants) Plan pays 50% of reasonable and customary charges after deductible Plan pays 50% of reasonable and customary charges after deductible Plan pays 60% (denture repairs 100%; implants are not covered) Orthodontia No coverage Plan pays 50% of reasonable and customary charges up to $1,500 per person, per lifetime** Plan pays 50% (no maximum benefits) Annual Benefit Maximum, per person $2,000 $2,000 No maximum * Charges for services provided by a Cigna network provider are based on negotiated rates. ** Spouses, domestic partners and dependent children over age 19 are not eligible for orthodontia. 11

12 Other Benefits You Can Elect Commuter Benefits The commuter benefits program is changing from a subsidy to a pre-tax approach. This benefit will now be administered through WageWorks. Through this program, employees can use pre-tax funds to pay for parking and public transit such as train, subway, UberPool, bus or vanpool-as part of their daily commute to work. How It Works Simply decide how much to contribute up to the allowed monthly limit. Funds are withdrawn from your paycheck before taxes are deducted. Pause or cancel contributions to your account at any time. There is no use it or lose it as long as you are enrolled in the program and an active employee. How Much You Can Contribute Contribute up to a maximum of $255 Pre-Tax dollars per month for transit and eligible vanpools and up to $255 Pre-Tax dollars per month for qualified parking (as of 2017). These limits may change for Any monthly orders that are over $255 will have the difference deducted on a Post-Tax basis. How You Use It Use a variety of convenient payment methods associated with your account. You can have monthly transit passes or tickets mailed directly to your home, load funds onto your smart card, or purchase tickets with the WageWorks Commuter Card. For parking, you can use the WageWorks Parking Card to pay your parking provider directly, have WageWorks pay your parking provider directly on your behalf each month, or get reimbursed for eligible parking expenses you pay out of pocket. How You Manage It Manage your account via a secure website on any computer or mobile device that s connected to the Internet or via the WageWorks EZ Receipts mobile app. How You Get It Sign up and manage your commuter benefits account at the WageWorks website: any time beginning November 13th. There s no special enrollment period, however, you must sign up by the 10th of the month prior to when you want to use benefits. For example, you must sign up by December 10th for January passes. You can also set up recurring elections and payments. Learn more about commuter benefits at Life, Personal Accident, and Disability Insurance For details, go to Rates will be shown on your online Annual Enrollment worksheet. Healthcare and Dependent Care Flexible Spending Accounts (FSAs) You can save on taxes using pre-tax money you ve set aside in these accounts to pay for eligible expenses. The maximum amount you can contribute in 2018 to the Healthcare FSA is $2,600, and the maximum amount you can contribute to the Dependent Care FSA is $5,000 (some restrictions may apply if you are married). You can use your Healthcare FSA for eligible healthcare expenses not covered by your medical, dental or vision plans, including deductibles, copays and coinsurance amounts, as well as many common healthcare purchases (e.g., saline solution and first-aid supplies). Over-the-counter medicines (e.g. Claritin, Advil, cough syrups) are not considered eligible expenses unless accompanied by a prescription. Your Dependent Care FSA can be used for child care services for your eligible dependent children under age 13, or for services to care for other qualified dependent family members (e.g., elder care). Please note that you cannot use your Dependent Care FSA to cover your dependent s healthcare costs. Note: Both are use it or lose it accounts per IRS guidelines meaning you forfeit any unclaimed funds remaining in your account after the claim deadline. WageWorks, Baxter s FSA vendor, has tools to help you estimate your annual expenses (visit for details). When the current year ends on December 31, 2017, you will have a grace period of 2½ months (until March 15, 2018) to incur eligible claims. For the 2018 calendar year, you can be reimbursed for eligible expenses incurred up to March 15, Claims for eligible expenses must be submitted by March 31, For a comprehensive list of eligible expenses, see the SPD at or visit and view IRS Publications 502 (healthcare) and 503 (dependent care). 12

13 Voluntary Benefits Through YouDecide, an external vendor, you have the opportunity to enroll in the following employee-paid benefits through convenient payroll deductions: 1 Vision Insurance Legal Benefits Long Term Care Insurance Auto Insurance Homeowners Insurance Pet Insurance If you would like to enroll in Vision Insurance, Legal Benefits and/or Long Term Care Insurance, you must do so during Annual Enrollment. Coverage will begin on January 1, If you are currently enrolled in Vision, Legal and/or Long Term Care, your election and covered dependents will continue for the benefit year starting January 1, You can enroll in Auto, Homeowners and/or Pet Insurance benefits anytime during the year. For plan and rate information, to enroll, disenroll, or to make any changes to your Voluntary Benefits, visit 1 Baxter does not sponsor, endorse or have any responsibility for these benefits. Baxter s sole involvement with these benefits is to withhold the cost of any benefits that you choose to purchase from your paycheck, on an after-tax basis, and transmit the payments to the applicable provider. Any questions that you have about the benefits must be directed to the provider. For additional information, see the materials from the providers of these benefits. IIP Reminder Are you preparing for your financial future? To have the amount of income you ll need in retirement, you ll likely have to save up some of the income you earn while you are working. Baxter s IIP (401(k) Plan) provides an easy and efficient way to do that by offering great benefits such as: Reduced income taxes when you make before-tax contributions. Matching contributions from Baxter to help your account grow faster. Total control over how much to save and how to invest. The earlier you start saving, the longer your money can remain invested before you need it. Time can make a big difference in how much money you might end up with at retirement, so start today! Already saving in the 401(k) Plan? Give your account a checkup to make sure your contributions and your investments are still in line with your goals and your remaining time before retirement. The IIP website has tools like, MyOrangeMoney, to help you determine if you are on track. You can enroll, review your account, and make changes by phone or online. Phone: Call BaxHR4U ( ) Web: Log on to baxteriip.voya.com Employee Discounts You and your family have the opportunity to save money on a range of products and services such as electronics, fitness center memberships, movie tickets, flowers, gifts, books and music through Baxter s employee discount program. Visit for more details and offers. You will be prompted to create a username and password. In addition, you also have access to many other corporate discounts on items such as automobiles, cellular phones and travel-related services. For more details, search for Voluntary Benefits & Employee Discounts on the Baxter intranet. 13

14 Incentive Investment Plan (IIP): Stock Fund Changes As a reminder, there are changes to the Baxter Incentive Investment Plan (IIP) that will be effective on January 1, Below is a recap of the changes that are being made to the single stock funds. Three stock funds will be eliminated from the IIP. The Cardinal Common Stock Fund, the Edwards Lifesciences Common Stock Fund, and the Shire Stock Fund (collectively the Funds ) will be eliminated. Any assets remaining in these Funds will automatically be reinvested in the Vanguard Target Retirement Fund closest to the year you turn age 65. What you need to do: No action is required. However, if you are currently invested in one of the Funds, you may choose to access your account at and transfer your Fund holdings to one or more of the other available options at any time before 4 p.m. Eastern Time on Friday, December 29, 2017, or such earlier deadline as may be applicable due to any trading blackout window. Otherwise, any assets remaining in these Funds will automatically be reinvested in the Vanguard Target Retirement Fund closest to the year in which you turn age 65. Incentive Investment Plan (IIP): Update To help new hires take full advantage of Baxter s matching contribution and save for retirement, we will be increasing the automatic enrollment contribution percentage from 3% to 4% for newly hired employees. Employees who are enrolled in auto-escalation will have their contribution increased by 1% each year until they reach a new 10% cap (increased from 6%). If you reached the 6% cap previously, and have not since updated your contribution percentage, auto-escalation will resume at a rate of 1% each year until you reach the new cap of 10%. Baxter will not change contribution elections for employees who have updated their contribution percentage. If you are enrolled in auto-escalation, you will receive a letter in the mail one month prior to your next increase. If you would like to stop auto-escalation, simply log into your Voya account at and update your contribution percentage. Limits on the Baxter Common Stock Fund will be added. Participants will be unable to reallocate dollars into the Baxter Common Stock Fund until their Baxter Common Stock Fund balance represents less than 25% of their total IIP account balance. If, as of 4 p.m. Eastern Time on December 29, 2017, more than 25% of a participant s current account balance is already invested in the Baxter Common Stock Fund, they may maintain those investments and will not be required to transfer excess amounts out of the fund. Active employees will still have the opportunity to defer up to 25% of future payroll contributions to the Baxter Common Stock Fund regardless of current balance amounts. What you need to do: If you are currently deferring more than 25% of payroll contributions into the Baxter Common Stock Fund in the IIP, you will need to reduce your percent to no more than 25% by 4 p.m. Eastern Time on Friday, December 29, If you do not make this change, your percent will automatically be reduced to 25% after 4 p.m. Eastern Time on December 29, 2017 and the percent that is over 25% will be invested in the Vanguard Target Retirement Fund closest to the year in which you turn age 65. For more information on the Target Retirement Funds and other investment options offered in the IIP, visit or call Voya at BaxHR4U ( ). 14

15 Notices About Your Benefits Coverage and Rights For more information on these notices, go to and click on Resource Library for the Summary Plan Descriptions. If you have questions, call the Baxter HR Center at BaxHR4U ( ) and follow the prompts to the BEBC. HIPAA Privacy Notice Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Baxter plans are required to provide you with a HIPAA Notice of Privacy Practices ( Notice ) at the time of your enrollment in the plan, and at certain other times. In addition, the plan is required to periodically notify you of the availability of the Notice and provide you with information on how to obtain a copy of the Notice. You may request a copy of the plan s Notice by visiting and clicking on Resource Library. To the extent that the plan contains benefits other than those covered under HIPAA s privacy rule, this reminder pertains only to those healthcare benefits that are covered under HIPAA s privacy rules. A copy of the latest notice is included in this mailing. Women s Health and Cancer Rights Act of 1998 The Women s Health and Cancer Rights Act of 1998 requires Baxter to advise you annually of the following benefits. Your Baxter medical plan provides for mastectomy-related services, including reconstruction and surgery to achieve symmetry between the breasts. It also provides for mastectomy-related prostheses and provides for services to address complications resulting from a mastectomy, including lymphedema. For more information, consult your medical plan s member services department. Notice of Special Enrollment Rights Children s Health Insurance Program ( CHIP ) Effective April 1, 2010, if you and your eligible dependents are not already enrolled in Baxter s medical plan, you may enroll yourself and your eligible dependents if (1) you or your dependents lose coverage under a state Medicaid or CHIP, or (2) you or your dependents become eligible for premium assistance under the state Medicaid or CHIP, as long as you request enrollment no more than 60 days from the date of the Medicaid/CHIP event. Notice of Grandfathered Plan Status For the 2018 Plan Year, the BCO option remains a grandfathered health plan under the Patient Protection and Affordable Care Act (the Affordable Care Act). All other options under the Baxter Medical Plan are no longer grandfathered health plans. As permitted by the Affordable Care Act, a grandfathered healthcare plan can preserve certain basic healthcare coverage that was already in effect when that law was enacted. Being a grandfathered healthcare plan means that your plan may not include certain consumer protections of the Affordable Care Act that apply to other plans; for example, the requirement for the provision of preventive healthcare services without any cost sharing. However, grandfathered healthcare plans must comply with certain other consumer protections in the Affordable Care Act; for example, the elimination of lifetime limits on benefits. Questions regarding which protections apply and which protections do not apply to a grandfathered healthcare plan and what might cause a plan to change from grandfathered healthcare plan status can be directed to the plan administrator. You may also contact the Employee Benefits Security Administration, U.S. Department of Labor at or This website has a table summarizing which protections do and do not apply to grandfathered healthcare plans. 15

16 Baxter International Inc. One Baxter Parkway Deerfield, Illinois This guide provides highlights of your Baxter benefits for the 2018 plan year. Please keep this guide with your Summary Plan Descriptions (SPD) and other important papers. This guide is not your SPD. For a copy of your SPD, log in to and click on Resource Library. This guide is based on official plan documents. If there is any discrepancy between this guide and the official documents, the official documents will govern. Nothing in this guide says or implies that participation in the plans described is a guarantee of continued employment with Baxter, nor is it a guarantee that the plans will remain unchanged in the future. Baxter reserves the right to suspend, amend or terminate these plans at any time. For questions about your benefits, call the Baxter HR Center at BaxHR4U ( ) and follow the prompts to the BEBC.