VOLUNTARY RETIREE MEDICAL BENEFIT PLAN IMPORTANT INFORMATION PLEASE KEEP FOR FUTURE REFERENCE. making the most of my benefits portfolio

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1 VOLUNTARY RETIREE MEDICAL BENEFIT PLAN IMPORTANT INFORMATION PLEASE KEEP FOR FUTURE REFERENCE making the most of my benefits portfolio

2 Trinity Health strives to be an employer of choice in each of our communities, which means that we work hard to provide our people with competitive compensation and benefits. As a result, you may spend the better part of your career here, working for the organization until you re ready to retire. During the time you re actively employed by Trinity Health, you enjoy the security of knowing that your employer-sponsored medical coverage is there to help pay for care when you need it. But as you may know, this coverage will end when your employment ends. If you postpone retirement until you re 65 and eligible for Medicare, losing access to Trinity Health s medical coverage won t be a problem. But what if you want to stop working early? For example, let s say you decide to retire at age 55. Without medical coverage you may not be able to afford necessary medical care during the 10-year period before you become Medicare-eligible especially if you become seriously ill or hurt during that time. After years of setting aside money to enjoy a comfortable lifestyle after you stop working, you certainly don t want to put your retirement savings at risk by going without medical coverage. Unfortunately, it s not so easy to find let alone afford retiree medical insurance on your own. To address this need, Trinity Health has developed a voluntary retiree medical benefit plan that provides competitively priced coverage for people who wish to retire before they are eligible for Medicare. Introducing Trinity Health s Voluntary Retiree Medical Benefit Plan If you leave Trinity Health at or after age 55 with 10 or more years of Benefit Service, you ll be able to purchase high-quality retiree medical coverage for yourself and your eligible family members. You can use this coverage to bridge the gap between the day your employer-sponsored benefits end and the day you become eligible for Medicare. Coverage under Trinity Health s Voluntary Retiree Medical Benefit Plan (the Plan ) is offered at group rates, which means that, generally, you ll pay less than the cost of individual retiree medical insurance. Plus, the Voluntary Retiree Medical Benefit Plan includes outpatient prescription drug coverage, which is rarely available with individual policies. How much does Trinity Health s retiree medical coverage cost? The Plan is voluntary, which means that you are responsible for paying the full cost of coverage for you and your eligible family members. Since premium rates are subject to change at any time, you ll need to contact one of the following resources for current group rates: Trinity Health Retirement Program representative or NGS American Who is eligible? When you retire or otherwise terminate from a Trinity Health organization on or after December 31, 2003, you and your eligible family members can participate in the Plan, provided: You are at least age 55 when you leave Trinity Health, You have completed 10 or more years of qualifying Benefit Service with Trinity Health, You are not eligible for continued medical benefits as a Trinity Health active employee (for example, as part of a severance package), You have exhausted your COBRA benefits through Trinity Health, and You are not covered by Medicare. 1

3 If you should die, your spouse can continue coverage by continuing to pay the required premiums provided he or she is enrolled in the Plan at the time of your death. Please note: You are not required to begin collecting your Trinity Health pension benefits to be eligible to enroll in the Voluntary Retiree Medical Benefit Plan. However, if you elect to postpone enrollment beyond your initial eligibility date, you will be required to provide proof of continued medical coverage through another group or individual health plan. What s in it for me? There are several important advantages to participating in the Trinity Health Plan. 1. You have easy access to high-quality, competitive medical and prescription drug coverage. Because of strict underwriting rules for individual insurance policies, access to medical coverage is often very limited for persons between the ages of 55 and 65. And even if you manage to purchase an individual policy, chances are it won t include an outpatient prescription drug benefit. 2. You pay a lower group rate for coverage. We all know that there is strength in numbers, particularly when it comes to buying insurance coverage. Because you can take advantage of the group purchasing power of all of Trinity Health s pre-medicare-eligible participants, your premiums may be lower than those charged by individual policy carriers. 3. You can save even more when you use Trinity Health providers. Like most health care coverage, the Plan offers a choice of using in-network or out-of-network providers. The Plan pays a higher level of benefits when you use discounted in-network providers and the highest level when you receive care from Trinity Health facilities. 4. You can use the Plan in conjunction with a Health Savings Account (HSA). Late in 2003, Congress authorized the creation of the HSA, which is a tax-sheltered vehicle that allows participants enrolled in a high deductible medical plan to contribute money to pay for current qualified health care expenses and to save for future qualifying expenses. To maximize your tax savings opportunity, you can elect to enroll in an HSA in conjunction with the Trinity Health Plan. How does an HSA work? The money you elect to contribute to an HSA account which is professionally managed by an investment company is allowed to grow tax-free until it s used to pay for qualifying medical expenses. Withdrawals are also tax-free and are made using a special debit card or checking account. Participants receive a monthly statement that details deposits, withdrawals, fees (if applicable), and investment earnings. If you retire from Trinity Health between the ages of 55 and 65 and you elect retiree medical coverage through the Plan, you can contribute tax-free dollars each year to your HSA up to the plan deductible amount, as follows: Single coverage: up to $1,250, or 2-person or family coverage: up to $2,500. Along with these allowable amounts, individuals who are age 55 or older can make an additional catch-up contribution each year. The catch-up limit for 2005 is $600. (Please note: this amount is indexed for inflation and will probably increase each year.) The money in an HSA account can be used to pay for out-of-pocket medical expenses such as deductibles and co-payments, doctor s fees, prescription and nonprescription medicines, or hospital services that are not covered by the Plan. 2

4 Unlike other kinds of medical savings accounts, the HSA has no use-it-or-lose-it rule. Any unspent funds will roll over from year to year, allowing you to build a tax-free nest egg to pay future medical costs. If you have money left in your HSA after you become eligible for Medicare, you can use it to pay your Medicare premiums. (Congress does not allow contributions to an HSA once you become eligible for Medicare.) When you enroll in Trinity Health s Voluntary Retiree Medical Benefit Plan, you will receive a package of materials from Mellon Financial Corporation that will give you further information about HSAs and how you can go about opening one. Please note: To be eligible to open an HSA account, you must not be claimed as a dependent on another person s tax return. What benefits does the medical plan provide? The key benefits provided under the Plan are summarized below. Covered Services Trinity Health Facility In-Network Out-of-Network Single 2-Person Single 2-Person Single 2-Person Deductible $1,250 $2,500 $1,750 $3,500 $2,250 $4,500 Annual Out-Of-Pocket Max $3,500 $7,000 $5,000 $10,000 $10,000 $20,000 Inpatient / Outpatient Hospital Services Co-insurance 90% after deductible 80% after deductible 60% after deductible Inpatient per-admission $250 per admission after $500 per admission after $750 per admission after deductible, per regular deductible regular deductible regular deductible episode, per year Physician Services 80% after deductible 80% after deductible 60% after deductible and Professional Fees (e.g., surgical fees) Physician Office Visit $25 after deductible Co-payment Home Health Care Deductible and co-insurance apply Maximum of 100 home health care visits per calendar year Skilled Nursing Deductible and co-insurance apply, subject to inpatient admission co-payment Facility Care Maximum of 120 days per calendar year Inpatient or Outpatient Deductible and co-insurance apply Hospice care Lifetime Maximum Benefit $400,000 combined for all plan benefits Prescription Drugs Subject to in-network annual deductible, then: (mandatory generic and mail-order provisions Retail generic: Retail formulary: $15 (34-day supply) 20% ($25 min., $100 max.) apply) Retail non-formulary: 40% ($50 min., $200 max.) Mail-order generic: $30 (100-day supply) Mail-order formulary: 20% ($50 min., $200 max.) Mail-order non-formulary: 40% ($100 min., $400 max.) Preventive Care Services* Covered 100%, not subject to deductible *Preventive care includes such services as routine physical exams and related tests, screenings, and diagnostic procedures as defined in the summary plan description. For more information on Plan benefits, refer to the summary plan description or call NGS American at

5 I spend the winter down south every year. Will my benefits be available while I m away? You re covered under the Plan s out-of-network benefits regardless of where you may be in the United States. In addition, your network may have facilities in the area where you stay. Contact NGS American at or for help in locating any in-network facilities that are available outside your permanent residence area. If I retire from Trinity Health before I turn 65, what do I need to do to continue my medical benefits? First, you ll need to elect COBRA coverage. COBRA is a federal law that grants employees the right to continue the employer-provided medical benefits that they would normally lose when their job with that company ends. Continuing your medical benefits through COBRA for the maximum allowable time is advised because COBRA provides a higher level of benefits at a lower cost than the Voluntary Retiree Medical Benefit Plan. As a former Trinity Health employee, you may elect COBRA continuation coverage and receive the same level of benefits you had as an active employee. You and your eligible family members are eligible for COBRA continuation coverage for up to 18 months (up to 36 months in certain circumstances). You are required to pay the full cost of the premiums for this coverage, along with a 2 percent administrative fee. You may apply for re-employment by a Trinity Health organization after early retirement provided you have satisfied the bona fide termination requirement. This means that you must not perform any paid work for Trinity Health for at least 120 days before becoming re-employed by the organization. If you return to work at Trinity Health in a benefits-eligible position, you will have an opportunity to re-enroll in the active employee medical plan. Alternatively, you may choose to work for a company other than Trinity Health and enroll for coverage through that employer. If you have exhausted benefits under COBRA, and you do not have access to active employee coverage through Trinity Health or another employer, you can enroll in Trinity Health s Voluntary Retiree Medical Benefit Plan. How do I enroll in Trinity Health s Voluntary Retiree Medical Benefit Plan? If you meet the eligibility requirements of the Plan when you leave Trinity Health (and you have exhausted the benefits available to you under COBRA), a Plan enrollment packet will automatically be mailed to you. You ll simply complete the enrollment paperwork and submit it to Trinity Health by the deadline. You will receive information on enrolling in an HSA after you enroll in the Plan. When can I enroll? If you meet the criteria for the Voluntary Retiree Medical Benefit Plan when you leave Trinity Health, you will become eligible to enroll in the Plan after your COBRA continuation period expires. If you elect COBRA coverage at the time you leave Trinity Health, your COBRA period will begin immediately. However, you may choose not to enroll in COBRA because, for example, you begin working at a new job that provides access to active employee medical benefits. Or, you may be able to enroll for coverage under your spouse s employer s plan. In either of these instances, because participation in Trinity Health s Voluntary Retiree Medical Benefit Plan does not begin until after your COBRA period expires, your actual enrollment date will be later. When you enroll in the Plan, you will be required to provide proof that you have been continuously covered by another medical plan. Please see the summary plan description for details. When will my voluntary medical benefit coverage end? Coverage will end for you and / or your spouse in the event that Trinity Health terminates the Plan, if you fail to pay the required premiums, or if you or your spouse become eligible for Medicare at age 65. You may choose to purchase supplemental coverage at that time. Remember, if you participate in an HSA and you have money left in that account when your Medicare benefits begin, you can use it to pay your Medicare premiums. However, premiums for Medicare supplemental insurance cannot be paid with HSA funds. 4

6 Will supplemental medical benefit coverage be available to me through Trinity Health when I become eligible for Medicare? There are many insurance policies that supplement Medicare available through various carriers independent of Trinity Health. One such carrier is Bankers Life and Casualty Company, which offers group rates to Trinity Health retirees. You ll receive information from Bankers Life regarding coverage options available to you before you become eligible for Medicare. You can find out more about Bankers Life by calling , ext For More Information If you d like more details about coverage costs, eligibility, covered benefits, or health savings accounts, please contact one of the following resources: Trinity Health Retirement Program representative or NGS American IMPORTANT This brochure and its content is intended to help you understand the value of Trinity Health s Voluntary Retiree Medical Benefit Plan. It is only an overview, and is not intended to be a detailed description of the Plan s benefits. The summary plan description and official plan document cover this Plan in more detail. Whenever there is a discrepancy between printed materials, the official plan document will prevail. Trinity Health maintains the right to amend or terminate this Plan at any time. 5

7 Novi, Michigan MISSION CORE VALUES We serve together in Trinity Health, in the spirit of the Gospel, to heal body, mind and spirit, to improve the health of our communities and to steward the resources entrusted to us. Respect, Social Justice, Compassion, Care of the Poor and Underserved, Excellence Copyright (c) Trinity Health - Novi, Michigan 06-05, 2K