Kaiser Permanente Health Reimbursement Account

For Eligible

Kaiser Permanente

Employees

Southern California Region

November 2009

Overview

Effective January 1, 2010 Health Reimbursement Account (HRA) Offered to eligible employees represented by Labor Management

Partnership (LMP) Unions Tax-free reimbursement for:

out-of-pocket eligible medical, dental, and vision care expenses.

HRA account funded with 80% of value of unused sick leave as of termination date

An account will be opened automatically when eligible No action required

Retiree medical eligibility, medical plan and benefit levels are not affected by the HRA

HRA Participation

Eligible Groups Participating in the HRA: Employees represented by LMP Unions

participating in: Earned Time Off Program, or Work/Life Balance Time Off Program

Eligible Groups - SCal

Groups participating in the Earned Time Off Program

International Brotherhood of Teamsters, Local 166, AFL-CIO Kaiser Permanente Association of Southern California

Optometrists Kaiser Permanente Nurse Anesthetists Association of

Southern California United Healthcare Workers-West, Healthcare Professionals

Chapter United Healthcare Workers-West, Psych-Social Chapter

Eligible Groups – SCal (Cont’d)

Groups participating in the Work/Life Balance Time Off Program United Healthcare Workers—West

United Healthcare Workers-West, American Federation of Nurses

The Office and Professional Employees International Union,

AFL-CIO, CLC, Local 30 (including the California Service Center)

United Food and Commercial Workers International Union, Bakersfield

United Food and Commercial Workers International Union, Clinical

Laboratory Scientists

United Food and Commercial Workers International Union, Pharmacy

United Nurses Associations of California/Union of Health Care

Professionals, NUHHCE, AFSCME, AFL-CIO-CLC

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied

Industrial and Service Workers International Union, Local 7600

What is the HRA?

What is a Health Reimbursement Account? The HRA, also referred to as a Health

Reimbursement Arrangement, allows retirees and their eligible dependents to pay for out-of-pocket qualified medical, dental, vision, and hearing care expenses, as well as premiums paid to a Kaiser Permanente medical plan, on a tax-free basis.

Eligibility

Eligibility requirements at termination of

employment: At least age 55 15 or more years of Service

as defined under the KP-sponsored defined benefit

plan, or the pension plan under the union trust, as applicable

HRA eligibility is independent of retirement eligibility Age and years of Service requirement waived for Disability

Retirement

Eligibility (cont’d)

Eligibility requirements at termination of employment

(cont’d): eligible for KP medical coverage on last day of

employment enrollment in plan not required employees represented by the UFCW Pharmacy must be

eligible for the union-sponsored medical plan

must be in an employee group that participates in the

HRA

ACP may participate

Eligible Dependents

Legal spouse Unless divorced or legally separated Must be of the opposite sex to whom legally married under federal law

Domestic partner If they qualify as a dependent on employee’s federal income taxes May not use HRA account to pay expenses for the child of domestic

partner if domestic partner claims the child as a dependent on his or her tax return

Your unmarried dependent children under age 25 If divorced, children will be considered eligible under the plan if

employee is responsible for children’s support and have custody of children for more than half of the calendar year, per the IRC

Eligible Expenses

IRS determines which expenses are eligible (qualified) for reimbursement

May not also claim the expense through your health care plan, insurance program, or income taxes

Consult a tax advisor for tax implications

Eligible Expenses*

Acupuncture Chiropractic care Dental implants, supplies Dental insurance premiums and copayments Hearing exams and treatment Long-term care insurance premiums

*Sample list only, not a complete list

Eligible Expenses (cont’d)

Medical insurance premiums paid for a Kaiser Permanente medical plan only*

Medical copayments Medicare premiums Premiums paid under COBRA (medical, dental) Substance Abuse Treatment Vaccinations Wheelchair

* Unless you live in an area where KP medical is not offered, or if you are represented by the UFCW, Pharmacy in the Southern California Region

Ineligible Expenses*

Baldness treatments or hair transplants Dancing lessons Exercise equipment Herbal and holistic drugs or remedies Special diet foods Swimming lessons Vacation expenses (even if recommended by a doctor)

*Sample list only; not a complete list

How the HRA is established

On termination or retirement: HRA-convertible sick leave hours converted at

80% of value Kaiser Permanente deposits into HRA No employee contributions allowed $100 minimum required to establish account

No cost for this new benefit

Automatic participation, if eligible

No opt-out option

Work/Life Balance Time Off Program

Banked Sick Leave (BSL) Unused hours accrued in 2006 and

thereafter converted at 80% of value Deposited into HRA

No Credited Service for post-2005 BSL hours

Earned Time Off Program

Extended Sick Leave (ESL) Effective first pay period of 2010, two ESL banks

Current ESL bank Pre-2010 ESL bank

ESL hours beginning first pay period 2010 go into current ESL bank

Unused ESL hours last pay period 2009 used to establish pre-2010 ESL bank

Accrued, unused ESL in current ESL account converted at 80% of value and deposited into HRA

No Credited Service for unused post-2009 ESL hours

When Your Account Opens

Welcome Kit from the HRSC Notification of Enrollment Letter from Ceridian Kaiser Permanente’s contribution to your HRA Quarterly Statements

How to File for Reimbursement

Submit claims through Ceridian Fax: 1-866-717-3820 Mail:

Ceridian FSA ServicesP.O. Box 534200

St. Petersburg, FL 33747-4200 Reimbursement via check or direct deposit Check on the status of your claim or payment at

www.ceridian-benefits.com

Submitting claims is easy

Claims Guidelines

Claims processed weekly No limit on number of claims No minimum/maximum dollar amount

Submit claims within 60 days Unused funds carry over from year to year

Account Closes

HRA Account closes if: Account balance is $0 Account is abandoned Death, with no surviving eligible dependents Upon the death of surviving eligible dependents If during the termination or retirement process,

you are deemed ineligible for the HRA

Account Suspended

Account suspended If you are rehired and return to work at

Kaiser Permanente in any capacity

Account Reactivated When you terminate again

No minimum balance required

Customer Service

Ceridian Customer Service 1-866-370-2534

or Online at www.ceridian-benefits.com

Social Security number (with dashes) Initial password/PIN

(last 4 numbers of your SSN reversed)

Contact Information

For HRA detailed questions, covered expenses and claims: Ceridian

Monday-Friday, 5 a.m.-5 p.m. Pacific Time 1-866-370-2534 www.ceridian-benefits.com

For HRA general questions: My HR Web site

http://insidekp.kp.org/myhr Human Resources Service Center (HRSC)

1-877-4KP-HRSC (1-877-457-4772)

HRA Communications Timeline

Late November 2009 Customized communications sent to all impacted

employees Cover letter from region Brochure containing

Summary of Material Modification (SMM) Frequently Asked Questions (FAQ) Claims process

January 1, 2010 - HRA becomes effective

Thank you!