MAKE THE MOST OF YOUR HEALTH PLAN

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1 CONGRATULATIONS! You enrolled in the HSA Gold Plan or the HSA Silver Plan. This guide will provide tips and tools to help you save money while giving you more control over your health care spending. Get Started If you enrolled in a high deductible health plan (HDHP) with Health Savings Account (HSA) for the first time for 2017, you will receive the following: Your medical plan ID card from Aetna, UnitedHealthcare or BlueCross BlueShield. Your prescription drug ID card from Express Scripts. Your HSA welcome letter from UMB Bank along with your HSA debit card from Your Spending Account (YSA). If you haven t received these items by January 1, or have questions, contact your medical plan carrier (contact information listed at the end of this guide). Note: This guide does not apply to team members in Hawaii, Puerto Rico or Guam. MAKE THE MOST OF YOUR HEALTH PLAN Your Guide to Help You Navigate Your High Deductible Health Plan with Health Savings Account

2 YOUR MEDICAL AND PRESCRIPTION DRUG PLAN OVERVIEW The medical insurance portion of an HDHP* has lower premiums than the POS Platinum Plan, in exchange for a higher deductible. This means you ll pay less out of your paycheck each month for coverage, but will have to meet a higher dollar amount before the plan starts paying for eligible expenses. Medical Coverage Grainger s Annual Health Savings Account (HSA) Contribution Your Annual HSA Contribution $3,400 IND $6,750 FAM Annual HSA Maximum Contribution (IRS Limit) HDHP with HSA User s Guide HSA Silver Plan HSA Gold Plan Not applicable $500 Individual (IND) $750 IND + Spouse (SP)/Domestic Partner (DP) or IND + Child(ren) $1,000 FAM $3,400 IND $6,750 FAM Age 55+ can contribute an additional $1,000 In-Network Preventive Care 1 Covered at 100% Annual Deductible (In-Network) $1,500 IND $3,000 FAM Coinsurance You Pay (In-Network) 20% $2,900 IND $6,000 IND + SP/DP or IND + Child(ren) $5,750 FAM Annual Out-of-Pocket Maximum (In-Network) $3,000 IND (includes deductible) $6,000 FAM (includes deductible) Prescription Drug Coverage Annual Deductible (In-Network) Combined with health plan deductible 2 Retail Pharmacy (In-Network) Home Delivery (In-Network) Generics Preventive: 100%; no deductible Non-preventive: $5 copay after health plan deductible is met Brand Formulary Brand Non-Formulary 25% of cost or $20 minimum copay after health plan deductible is met 25% of cost or $45 minimum copay after health plan deductible is met Generics Preventive: 100%; no deductible Non-preventive: $10 copay after health plan deductible is met Brand Formulary Brand Non-Formulary 20% of cost or $40 minimum copay after health plan deductible is met 20% of cost or $90 minimum copay after health plan deductible is met Annual Out-of-Pocket Maximum (In-Network) Combined with health plan out-of-pocket maximum 3 1 This includes visits such as your annual physical, well woman exam, checkups for your dependent children and flu shots. Flu shots are available at your doctor or in-network pharmacy through Express Scripts for covered team members or on-site at some Grainger locations. 2 The health plan deductible includes medical, prescription drug and behavioral health costs. 3 The health plan out-of-pocket maximum includes medical, prescription drug and behavioral health costs. Due to Internal Revenue Service (IRS) limitations, if you elect Family coverage in the HSA Gold Plan or HSA Silver Plan, the entire family annual deductible must be met before any copays or coinsurance is applied for any individual family member. For example, if you cover yourself and any family members, you must meet the family deductible of $3,000 before benefits are payable for any individual. The same IRS rule applies to the out-of-pocket maximum.

3 YOUR MEDICAL AND PRESCRIPTION DRUG PLAN OVERVIEW More Savings with the HSA Gold Plan Although both high deductible health plans cover the same types of health care services and have the same network of doctors with each carrier, there are a few key differences: While both the HSA Silver and HSA Gold Plans cover in-network preventive care services and preventive generic prescription drugs at 100% (per health care reform), the HSA Gold Plan covers additional generic prescription drugs (preventive plus) at no cost to you. Both plans give you the opportunity to contribute your own pre-tax dollars to an HSA via payroll deduction. But if you enroll in the HSA Gold Plan, Grainger contributes money to the HSA too, offering an additional safety net for unplanned health care expenses. That s free money from Grainger you can use to help pay for health care! The HSA Gold Plan has a higher monthly payroll deduction than the HSA Silver Plan. For 2017, new participants who enroll in the HSA Gold Plan will receive 50% of Grainger s contributions the first full calendar week in January, and the remaining 50% of Grainger s contributions will be split evenly across your paychecks for the year. Key Terms to Know Annual Deductible the amount you pay out of pocket for medical services (including behavioral health services) and prescription drugs before the health plan pays for medical services and prescription drugs. Coinsurance the percentage of eligible medical expenses (including behavioral health services) and prescription drugs you and the plan are responsible to pay. Coinsurance applies after the deductible is met. Out-of-Pocket Maximum the most you pay for medical services (including behavioral heath services) and prescription drugs out of pocket during the plan year then the plan pays 100% of your costs HDHP with HSA User s Guide

4 HEALTH SAVINGS ACCOUNT ADVANTAGES The HSA, administered through Your Spending Account (YSA), is a convenient way for you to pay for your current health care expenses and save for future health care needs. The HSA has some great perks: It s easy Upon enrolling in a high deductible health plan, your HSA is automatically opened for you at UMB Bank. You can access your money to pay for eligible health care expenses with a personal debit card. Note: If you didn t select a medical plan option and received the HSA Silver Plan, no pre-tax contributions will be allowed until you create an annual HSA goal amount through Your Benefits Resources. It s tax-free You may contribute up to $3,400 annually for Individual coverage or $6,750 annually for all other coverage levels. If you re age 55 or older, you can contribute an additional $1,000 to your HSA. These limits are set by the IRS each year and include Grainger s contributions. It s flexible You can use your HSA to pay for eligible medical, prescription drug, dental or vision costs today, next year or anytime in the future, including during retirement! Examples of qualified medical expenses include: Doctor s office visits Dental care and braces Eyeglasses, contacts and LASIK surgery Prescription medications Acupuncture Chiropractic services Hearing aids Long term care medical expenses and insurance premiums* Physical therapy Psychiatric care Psychological counseling Nursing home care It grows Money in your account earns tax-free interest. And when you save at least $1,000 in your HSA, you can choose to invest your money in several funds offered through the HSA bank administrator, UMB Bank. 5 It s all yours Any money in your HSA, whether it s Company contributions or your own pre-tax or after-tax savings, is yours to keep. You own it and have full access to your account. Even if you switch from the HSA Gold Plan or HSA Silver Plan to another type of medical coverage or retire, you may continue to use your HSA dollars for eligible expenses, but you cannot contribute to the account once you are no longer enrolled in a high deductible health plan. * The premiums for long term care insurance that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually by the Internal Revenue Service HDHP with HSA User s Guide

5 HEALTH SAVINGS ACCOUNT ELIGIBILITY CRITERIA Even if you participate in a high deductible health plan, you are ineligible for the HSA if you are: Enrolled in Medicare. Covered by another health insurance plan that is not an HDHP (such as TRICARE, TRICARE for Life, or the general purpose health care FSA of your spouse). Claimed as a dependent on someone else s tax return. Covered by IHS benefits. You are also ineligible for the HSA if you are age 62 or older (and have applied for Social Security retirement benefits). If you are ineligible for the HSA, you cannot receive Company contributions or contribute your own money to an HSA. Because Grainger could not make contributions to your HSA and the HSA Gold Plan includes a Grainger contribution to an HSA on your behalf, you would be eligible only for a high deductible health plan (without the HSA) that is referred to as the HSA Silver Plan. IRS regulations state that pre-tax dollars contributed to the HSA cannot be used to reimburse expenses incurred by domestic partners and their dependents, unless the person receiving the reimbursement qualifies as your IRS tax dependent. However, your domestic partner can open his or her own HSA and contribute up to the family HSA maximum (plus catch-up contributions, if applicable) in addition to you contributing up to the family HSA maximum to your HSA HDHP with HSA User s Guide

6 HOW YOUR HEALTH SAVINGS ACCOUNT WORKS When you receive care, you choose whether or not to use your HSA to pay for eligible expenses (including prescription drugs). You may want to save the money in your account for future expenses, or you may use it when you need it. The choice is yours. Here are the steps to take when you need medical care or fill prescription drugs: 1 Present your ID card. You have separate ID cards for medical expenses and prescription drug expenses. Medical Your network provider will submit the claim to your medical plan carrier on your behalf, and you will be billed later. Prescription Drugs If you are at an in-network retail pharmacy or using home delivery, you can buy up to a 34-day supply (retail) or a 90-day supply (home delivery). 2 Review your Explanation of Benefits (EOB) if you received care. The EOB, available online or mailed to you after your visit, will show your provider s charges, the amount your medical plan carrier agreed to pay, how much is covered (if any) and your payment responsibility. 3 Pay your bill. When you pay your bill will depend on if you are receiving care or filling prescriptions. Medical Pay your provider what you owe after you receive their bill. The amount you owe on your provider s bill should match your responsibility shown on your EOB. Prescription Drugs Unlike your medical plan, you will be billed at the time of service and pay your prescription drug expenses up front HDHP with HSA User s Guide

7 ACCESS THE MONEY IN YOUR HEALTH SAVINGS ACCOUNT To pay for eligible expenses, you can access your money via: Your HSA debit card: Pay your doctor or hospital bills with your HSA debit card, or present your HSA debit card at the pharmacy, and the amount will be automatically deducted from your HSA. In many cases, you will not need to submit your receipts when you use your debit card. However, it s a good idea to save your receipts in case documentation is required. Direct deposit reimbursement: If you pay your doctor, hospital bills or your prescription drug costs out of pocket using a personal check or credit card, you can file claims and be automatically reimbursed from your HSA. To set up direct deposit, you will need to update your account profile and provide your banking information on the Your Benefits Resources website. Remember, you may only withdraw an amount up to your current HSA balance. Manage Your HSA Just like you manage your personal finances, it s important to manage your HSA wisely too. Remember: Keep your receipts when making withdrawals from your HSA. You may need them if you are asked to document your expenses, either for tax purposes or plan deductible purposes. It s a good idea to save them for at least 7 years after your transaction. You can only access the funds that have been contributed to your HSA (vs. your entire year s contribution). If you are a new participant who enrolled in the HSA Gold Plan, 50% of Grainger s contribution will be available the first full calendar week in January (e.g., $250 for Individual coverage). You can access the remaining contributions as they are deposited throughout the year. You can view your account balance and activity, submit claims for reimbursement, check eligible expenses and more at any time! Just log on to the Your Benefits Resources website, select the Other Benefits tab, and select Health Savings Account HDHP with HSA User s Guide

8 SAVING AND INVESTING YOUR HEALTH SAVINGS ACCOUNT As costs continue to rise, Social Security and Medicare may not be enough to cover your health care costs in retirement. Consider paying out of pocket for current health care costs and saving your HSA dollars for future needs. Saving and not withdrawing money from your HSA can add up over time. Once you save at least $1,000 in your HSA, you have the option to invest your money in several funds offered through the HSA bank administrator, UMB Bank. Just log on to the Your Benefits Resources website, select the Other Benefits tab, and select Health Savings Account. Then select the Manage Your Investment link in the Take Action box to launch the UMB Bank website. Enrolled in the Dental and Vision FSA? If you enrolled in both a high deductible health plan with HSA and the limited purpose Dental and Vision FSA, you will receive one YSA debit card to use when paying for all eligible health care expenses. When you swipe your debit card to pay for an eligible health care expense or provide your debit card number to a provider, your card will pull money from the appropriate spending account. For example, if you have a dental or vision expense, the card will take money from your Dental and Vision FSA, because it knows that this balance is use it or lose it, whereas your HSA balance rolls over from year to year HDHP with HSA User s Guide

9 HIGH DEDUCTIBLE HEALTH PLAN WITH HEALTH SAVINGS ACCOUNT TIPS You re already paying less per paycheck for medical coverage. Use these tips to save more and stretch your HSA dollars Use in-network providers. Choosing in-network providers physicians, labs, outpatient facilities, urgent care, hospitals, etc. instead of out-of-network providers will help you keep more money in your wallet. To find out if your provider is in-network, visit your medical plan carrier website listed on the next page. Consider virtual medicine.* If you need help with a routine or non-emergency health matter like cold/flu symptoms, allergies and ear infections, you can conveniently access board-certified physicians 24/7 via smartphone, tablet or computer with video. While the exact cost depends on your medical plan carrier (approximately $40 under the HSA Gold and HSA Silver Plans), virtual medicine typically costs less than visiting your doctor. Schedule preventive care. When you use in-network providers, preventive care services such as annual physical exams, well child care and immunizations, and preventive generic prescription drugs are covered at 100%; you don t even need to pay your deductible first! Double-check your medical bills. Mistakes happen all the time in health care billing. When you are in the doctor s office or leaving the hospital, request an itemized bill and review it carefully. You should also review your EOB after you receive care to make sure the service was billed and paid for correctly. Understand your treatment options and their costs. Make a list of questions before your appointment, and ask for more details if you don t understand your doctor s explanation. Research the cost and quality of procedures (e.g., surgeries and tests). To estimate the cost for common services and procedures, call your medical plan carrier or visit your carrier s website to use cost estimator tools (contact information listed on the next page). * Contact your medical plan carrier regarding certain state and service exclusions HDHP with HSA User s Guide

10 Your Resources Resource Your Benefits Resources Questions about benefits, enrollment and changing your HSA contributions during the year Your Spending Account (YSA) (HSA, limited purpose Dental and Vision FSA, Dependent Care FSA) Aetna UnitedHealthcare Contact Grainger Benefits Service Center HR4U (4748) (inside a Grainger facility) or (outside a Grainger facility) Select Option 3. Monday through Friday from 7 a.m. to 5 p.m. Central Time Medical: Virtual Medicine: Teladoc Excludes AR; Video not available in TX Don t Forget to Enter Your Annual HSA Contribution Amount Log on to the Your Benefits Resources website at select the Health & Insurance tab, and select Health Accounts. Then select Change Your Contribution in the Health Savings Account section. Note: No pre-tax contributions will be allowed until you create an annual HSA goal amount through Your Benefits Resources. Changes will be effective the first of the month following your change. Medical: BlueCross BlueShield Virtual Medicine: Excludes AL, AK, AR & TX Phone available 24/7; Video available 7 a.m. to 9 p.m. member local time Medical: On the Go? Download the free mobile apps available through each of the carriers listed on this page from the Apple App Store or Google Play. Express Scripts Prescription Drug Program Virtual Medicine: OptumHealth Behavioral Solutions Behavioral Health Program Employee Assistance Program (EAP) Excludes AR; Video not available in TX and Phone not available in ID (enter grainger ) Want more on HDHPs? On the health hub ( select HDHPs with HSA under the Your Benefits tab and then select the 2017 HDHP with HSA video link. Your Benefits Resources is a trademark of Hewitt Associates LLC. W.W. Grainger, Inc. reserves the right to modify, suspend, or terminate any of its benefits at any time; to provide for different funding mechanisms and/or a different cost-sharing allocation between W.W. Grainger, Inc. and participants; or to amend its benefit plans in any other respect. You will be notified of any changes. U.S. 1/2017