Cigna Health Savings Account Administered by HSA Bank

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1 Cigna Health Savings Account Administered by HSA Bank A unique feature of the HSA 2500 and HSA 1500 is that, when enrolled in these programs, you can contribute to a Health Savings Account (HSA). An HSA provides a before-tax opportunity to fund health care expenses for the current year and beyond. You may choose to enroll in the Cigna HSA and enjoy the convenience of contributing through payroll deductions. Please note: You may enroll in the Cigna HSA or in an HSA with another financial institution of your choice. Company Contributions for the Cigna HSA When you participate in the HSA 2500 or HSA 1500, Prudential will contribute to a Cigna HSA on your behalf, if you are eligible. You are not required to contribute to an HSA to receive the company contribution. The company contribution amount is based on: Your job grade as of the first day of that calendar year (or when you enroll in the HSA 2500 or HSA 1500, if later); and Your HSA 2500 or HSA 1500 coverage level. The table below shows the 2017 annual company contribution amounts for individual coverage and family coverage (if you are covering one or more dependents). For Employees in These Job Grades Paygrade Equivalents Maximum Company Contribution for Individual Coverage Maximum Company Contribution for Family Coverage 13P 18P D10, D30, D50, NE0, NPS $800 $1,600 10P 12P 450, 45S, 500, PRD $600 $1,200 8P 9P 520, 52S, 200, LMS $400 $800 Prudential Advisors Financial Professionals 6P 7P 07A, 540, 550, 560, 770, 790, AMS, DMS $300 $600 $200 $400 1P 5P 56A $0 $0

2 Maximum Contribution Amounts to the Health Savings Account According to the federal guidelines, the maximum allowable contributions to an HSA for 2017 (including the company contribution, if applicable) will be: $3,400 if you have individual coverage; and $6,750 if you have family coverage. If you will be age 55 or older by December 31, 2017, the maximum annual catch-up contribution is $1,000. blank Important Notice It is Prudential s intention to comply with Department of Labor guidance set forth in Field Assistance Bulletin No , which specifies that a Health Savings Account (HSA) is not a plan subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA) if certain requirements are satisfied. The HSA described here is not an arrangement that is established and maintained or sponsored by Prudential as your employer and is not a part of The Prudential Welfare Benefits Plan. Rather, the HSA is established and maintained by you with the HSA custodian. Your payroll deductions can be deposited into the Cigna HSA administered by HSA Bank. For your convenience, a brief description of the Cigna HSA administered by HSA Bank is included in this section. If you enroll in Prudential s HSA 2500 or HSA 1500, you are eligible to elect to contribute to the Cigna HSA administered by HSA Bank. You are not eligible to contribute to the Cigna HSA if you are: Enrolled in a different Prudential medical program or other medical program that is not a high deductible health plan (for example, through a spouse s employer); Enrolled in Medicare Parts A and/or B; Enrolled in Tricare (benefits offered to military personnel); Enrolled in the Health Care Flexible Spending Account (Health Care FSA). However, you may enroll in the Limited Purpose Health Care FSA to reimburse eligible dental and vision expenses only and still be eligible for the HSA (see Health Care FSA and Limited Purpose Health Care FSA ); Covered as a dependent under a health care Flexible Spending Account (FSA) through your spouse s employer; Claimed as a dependent on someone else s tax return; A resident of Puerto Rico or Hawaii; or Residing outside of the United States.

3 If You Are Not Eligible to Contribute to an HSA If you enroll in the HSA 2500 or HSA 1500, Prudential will automatically contribute the applicable company contribution amount to a Cigna HSA administered by HSA Bank, unless you notify the Prudential Benefits Center that you are not eligible to contribute to an HSA. If you are not eligible to contribute to an HSA and you receive Prudential s contribution to your Cigna HSA, you may be subject to adverse tax consequences. You should speak to your tax advisor to understand the implications of contributing to an HSA when you are not eligible to do so. Contributions made while you were not eligible to contribute to an HSA do not qualify for the tax benefits associated with Health Savings Accounts. You will not be allowed to take an income tax deduction for such contributions, and you may also be subject to an excise tax. If you need to withdraw excess contributions, contact Cigna member advocates at Neither Prudential nor its representatives are authorized to provide tax, legal or financial advice on behalf of the Plan. You are encouraged to consult your own tax, financial and/or legal advisors for advice regarding your particular situation. HSAs generally have the following features: HSA contributions may be made on a before-tax basis through payroll deductions (tax advantage realized directly on your Prudential Form W-2) or on an after-tax basis as personal payment arrangements you make to transfer funds from your checking account to your HSA (tax advantages realized when you file your taxes for the year); Investment income on HSA funds is tax-deferred; All HSA withdrawals used exclusively for qualified health care expenses for you and your covered dependents are tax-free; All unused HSA balances carry over to the following year. There is no maximum carry-over provision associated with these accounts; and HSAs are portable, which means that if your employment with Prudential ends, you have 100% ownership and rights to your HSA balance. Please Note: If you are a new Cigna HSA participant and you participated in the Health Care FSA for the prior year (referred to as the Health Care Reimbursement Account, or HCRA, in 2016) and you have a Health Care FSA balance as of December 31, you will not be eligible to contribute to the HSA until the Health Care FSA s prior year claims period ends on March 15. You can start contributing to the HSA as of April 1 and you will receive the company contribution in April, if you are eligible. However, if you have a zero balance in your Health Care FSA as of December 31, your contributions to the HSA can begin immediately on January 1 of the following year and you will also receive the company contribution in January, if you are eligible.

4 Since HSAs offer a number of potential financial benefits, the federal government requires that they be offered only in conjunction with a high deductible health plan. In order to elect to contribute to the Cigna HSA administered by HSA Bank, you must first enroll in Prudential s HSA 2500 or HSA Many financial institutions offer HSA products to their customers. Any individual who is enrolled in a high deductible health plan can choose to open an HSA through one of these other institutions, subject to those institutions HSA terms and conditions. If you choose to open an HSA other than the Cigna HSA administered by HSA Bank, you must make such arrangements independently, and outside the Prudential enrollment process. However, the company contribution will only be made to the Cigna HSA administered by HSA Bank. The following information is provided by Cigna and describes the details of the Cigna HSA administered by HSA Bank. What You Should Know About the HSA Before You Enroll Debit card and checkbook When you open a Cigna HSA, you will receive a debit card that is associated with your account. When you incur qualified health care expenses that are eligible to be paid out of your HSA, you can either use your debit card to pay at the point of service (for example, at the doctor s office or at the pharmacy), or you can use your HSA debit card to withdraw funds from an ATM to reimburse yourself for covered, qualified health care expenses. After you enroll in the Cigna HSA, you can also elect to receive a checkbook associated with your HSA. Similar to the debit card, you can use your checkbook to pay for qualified health care expenses at the point of service. HSA Bank will provide you with a checkbook at a fee of $10.65 per each 50-check order. Keep receipts and records The tax rules that govern HSAs place the obligation on the individual account holder to correctly report applicable taxability. That is, as the account holder, you are ultimately responsible for ensuring that you only use the money in your HSA to cover qualified health care expenses. It is your obligation to keep all receipts and records, as applicable, to be able to prove to the IRS that distributions made from your HSA are for qualified health care expenses. If you withdraw any amounts for expenses that are not qualified, those amounts are taxable (includable in your gross income) and subject to a 20% penalty. The penalty does not apply if you are over age 65. On an annual basis, you will receive copies of tax forms that are also sent to the IRS that may be useful for filing your federal tax return. Tax considerations Depending on your individual circumstances, there may be unique tax issues regarding the contributions and deductions available to you, so you should consult with your tax advisor for more detailed information. Beneficiaries HSAs are personal bank accounts. Once you receive your bank account number, if you would like your Cigna HSA balance to be assigned to a beneficiary upon your death, then you should

5 name a beneficiary for your HSA using the Beneficiary Designation Form that will be available to you once you enroll through the Cigna custom website for Prudential (at or the Cigna website for enrolled members (at HSA contributions While covered by a high deductible health plan, such as the HSA 2500 or HSA 1500, and if you have a Cigna HSA administered by HSA Bank, you may choose to fund your HSA through automatic payroll deductions, which come out of your pay on a before-tax basis and are deposited directly into your HSA. As an alternative, you may choose to fund your HSA by making personal payment arrangements directly from your checking account to your HSA. You can do this by sending a check along with an HSA contribution form to HSA Bank. Contribution forms will be sent to you along with your HSA debit card and can be found on the HSA Bank customer portal available via the Cigna website for enrolled members (at You can also elect to deposit funds one time or on a recurring monthly schedule from a personal account to your HSA using an electronic funds transfer. If you fund your HSA using post-tax money from your personal checking account, you will still get the advantage of federal before-tax savings, but you will only realize that benefit when filing your taxes for the year. Please note, however, that certain states do not follow the federal income tax treatment of HSAs. HSA contributions and earned interest are exempt from federal taxation and most states allow before-tax treatment of these funds and fund earnings in regard to state income taxes. However, several states have not enacted legislation to allow before-tax treatment of HSA contributions or earned interest. Some of these states may be considering changes to their tax code to allow for before-tax treatment of HSA contributions and/or earnings. You should work with your tax advisor to ensure that you are aware of any changes that may occur in these states. Company contribution Please see the Company Contributions for the Cigna HSA section for the 2017 Prudential HSA contribution for individual and family coverage. For purposes of the company contribution, your job grade and your coverage level under the HSA 2500 or HSA 1500 are established as of the first day of the plan year in which the contributions will be made, or the date you enroll in the HSA 2500 or HSA 1500, if later. There will be no company contribution for those in job grades 1P to 5P (and equivalents). Annual HSA contribution limit If you have individual HSA 2500 or HSA 1500 coverage with Prudential, your annual HSA contribution limit for 2017 will be $3,400. If you cover yourself and others under the HSA 2500 or HSA 1500, your annual HSA contribution limit will be $6,750. If you are eligible for the company contribution, your maximum contribution will be reduced by the company contribution. If you enroll in the HSA 2500 or HSA 1500 mid-year, you will be eligible to contribute up to the annual contribution limit, regardless of the number of months during which you are covered by the HSA 2500 or HSA 1500, as long as you maintain continuous coverage through the end of the year and the following 12-month period following the plan year. That is, if you have HSA 2500 or HSA 1500 coverage for only half of the year, you

6 are still eligible to contribute up to the HSA limit of $3,400 for individual coverage or $6,750 for family coverage. However, you can only contribute up to one-twelfth of the annual maximum each month through payroll deductions. For example, if you are only covering yourself under the HSA 1500, you can contribute up to $ ($3,400/12) through payroll deductions (includes the company contribution, if applicable). If you wish to contribute more to your HSA, you must make a personal payment arrangement directly with HSA Bank. Catch-up contributions Higher catch-up contributions are allowed for individuals age 55 and older. These individuals can contribute an additional $1,000 in Catch-up contributions may be made as automatic payroll deductions or as personal payment arrangements directly from your checking account to your HSA. As the account holder, it is up to you to make sure that contributions to your HSA do not exceed the annual maximum limits. Rollovers You may generally roll over balances between HSAs on a tax-free basis. Rollovers do not affect your annual HSA contribution limits. To initiate a rollover, visit the Cigna website for enrolled members (at select Health Savings Account (HSA) under the Review My Coverage tab. In the Account Balance section on the left-hand side, select the link called Visit your HSA bank to manage your account. Select Tools & Support, then select the HSA Direct Rollover-Transfer Form. If you have any questions, you may also call Cigna member advocates at Investing For specific information about investments in the Cigna HSA, visit the Cigna website for enrolled members (at select "Health Savings Account (HSA)" under the Review My Coverage tab. In the Account Balance section on the left-side, select the link called Visit your HSA bank to manage your account. Select Manage Investments. If you have any questions, you may also call Cigna member advocates at Withdrawing funds You can use the money in your HSA to cover any qualified health care expenses for qualified dependents. These expenses are defined in Section 213(d)(2) of the Internal Revenue Code. You can use your HSA debit card at the point of service or at an ATM. Alternatively, you can use your HSA checkbook (if you have purchased one) at the point of service. ATM fees may apply. For more information about fees, see the Fees section on the following page. When used for this purpose and in this manner, any funds withdrawn from your HSA are tax-free. It is your obligation to keep all receipts and records, as applicable, to be able to prove to the IRS that distributions made from your HSA are for qualified health care expenses. If you plan to use the money in your HSA to cover qualified health care expenses, you should first ensure that you have a sufficient balance in your cash account to cover those expenses. Withdrawals and payments from your HSA do not reduce the balance in your investment account. Therefore, you may first need to transfer money from your investment account to your cash account to cover the amount of your

7 planned withdrawal to avoid having the transaction rejected because of insufficient funds and/or to avoid overdraft penalties if you use your optional HSA checkbook. Fees As a personal account, your HSA is subject to certain fees. Some of these fees will be deducted directly from your account while others may be paid by Prudential on your behalf. As long as you are an active employee and maintain your HSA 2500 or HSA 1500 coverage through Prudential s benefit program, Prudential will pay the monthly account maintenance fees for you as well as the monthly investment account maintenance fees, if applicable. However, if you are in a terminated status and choose to keep your HSA open, or if you are active and subsequently drop your HSA 2500 or HSA 1500 coverage, but choose to keep your HSA open, you will be responsible for paying additional fees that are detailed in the following tables. If you open an HSA other than the Cigna HSA administered by HSA Bank for example, if you open an HSA at your local bank you will be responsible for all fees associated with that HSA.The 2017 Cigna HSA fees (administered by HSA Bank) are summarized in the table below and on the following page. Fee Description Amount Paid By Frequency Setup fee debit card N/A 1 Prudential Per occurrence Maintenance N/A 1 Prudential Monthly Paper statement $1.25 You Online statement Replacement debit card $0.00 for up to two replacements You Per occurrence Debit card transaction at point of service Cash advance See ATM withdrawal and teller withdrawal You Teller withdrawal ATM withdrawal $ You ATM balance inquiry $ You ATM or point of service denial $ You ATM failure $ You Checkbook issuance $10.65 per order of 50 checks You Check payment Check stop payment $20.00 N/A

8 Fee Description Amount Paid By Frequency Check copy $20.00 You Check NSF (not sufficient funds) Check deposit (into another account) $0.00 You Check deposit return $10.00 You Electronic funds transfer setup or change Electronic funds transfer reject $0.00 You Foreign currency conversion 2.5% (of purchase amount) You Request copy of statement $0.00 You Account closing (including receiving a check for the balance) Account rollover Distribution of excess contributions Returned deposit or electronic funds transfer Investment account maintenance $0.00 You N/A 1 Prudential Monthly 1 This fee is paid by Prudential for active employees enrolled in the HSA 2500 or HSA If your coverage under the HSA 2500 or HSA 1500 terminates for any reason and you continue to maintain your HSA, you will be responsible for the fees listed below. 2 ATM fees will apply for using a non-webster Bank ATM. HSA Bank reserves the right to change any of the fees described in the table on the previous pages, as well as to impose additional fees upon 30 days prior written notice to you. All fees that are paid by the individual account holder are deducted directly from your cash account. Fees are not deducted from the investment account portion of your Cigna HSA. If your balance falls to or below $0.00 (for example, if you incur fees that result in your balance going negative), further transactions will be denied until you make sufficient deposits. Any deposits that you make after that point will first be applied to bring your account back to a positive balance. If you do not make sufficient deposits in a 60-day period to return your account to a positive balance, your Cigna HSA may be closed.

9 Additional fees for individuals with HSAs who are not active employees enrolled in the HSA 2500 or HSA 1500 include the following: HSA debit card issuance fee $6.00 per card; and Monthly account maintenance fee $3.00. Online Access When you open a Cigna HSA, you will be provided with instructions for using a secure website to track your Cigna HSA, review your account history, initiate investment transfers and change your investment allocations. For More Information About the Cigna HSA For questions related to the Cigna HSA (for example, HSA contributions, using your HSA debit card to access your HSA funds and other HSA transactions), contact Cigna member advocates at ; and For more information about investing your Cigna HSA and initiating rollovers, visit the Cigna website for enrolled members (at