Alcon Retiree Medical Coverage Medicare Topics to Cover

Alcon Retiree Medical Coverage & Medicare

Topics to Cover • • • Which Plan Is Primary – Alcon or Medicare? Which Parts Of Medicare Do I Enroll In? When & How To Enroll In Medicare Coordination of Alcon Medical Plan Benefits with Medicare Coordination Examples How to Find UHC Network Providers Filing Claims when Medicare is Primary Funding for Retiree Medical Premiums

Which Plan is Primary – Alcon or Medicare? • Retirees and spouses less than age 65: the Alcon Retiree Medical Plan • Retirees and spouses age 65 or older: Medicare (Parts A and B) is primary, the Alcon Medical Plan is secondary. Medicare coverage, both Parts A & B, are required in order to receive benefits under the Alcon Retiree Medical Plan. • Disabled Individuals: if entitled to Social Security disability benefits, Medicare is primary in most cases, even if younger than age 65

What If I Am 65 but my Spouse is not? Or, Vice Versa • If your spouse is less than 65: the Alcon Retiree Medical Plan will provide primary coverage (even if you are age 65 or older), until he/she reaches age 65, then the Alcon Plan becomes secondary to Medicare • If your spouse is age 65 or older: Medicare will be his/her primary coverage, and the Alcon Plan will be secondary, even if you have not yet reached age 65

Which Parts Of Medicare Do I Enroll In? • When you reach age 65 and are retired, Medicare becomes your primary health insurance: – You should enroll in Medicare Parts A and B – Medicare Part A is hospital insurance; Medicare Part B is supplementary medical insurance (doctor’s fees, outpatient hospital services) – The Alcon Plan will not pay benefits until Medicare has first paid its portion of the charges under Part A or Part B (except for prescription drug benefits) • If you retire after age 65: – You will already be enrolled in Medicare Part A – You will have a “Special Enrollment Period” following retirement to enroll in Part B without penalty

Which Parts Of Medicare Do I Enroll In? • Do NOT enroll in Medicare Part D (Prescription Drug coverage). The Alcon Plan provides full prescription drug coverage and cannot coordinate with Medicare Part D. • Alcon Retiree Medical coverage will be cancelled and cannot be reinstated if: – You enroll in Medicare Part D, or – You enroll in a Medicare Advantage Plan/ Medicare HMO that has prescription drug benefits

When & How To Enroll In Medicare • Medicare is available at the beginning of the month in which you reach age 65 - contact Medicare to apply 1 -3 months before your 65 th birthday • Medicare coverage begins 1 st day of month that you reach age 65 – You will be automatically enrolled in Medicare Part A (hospital coverage) when you become eligible & will get a Medicare ID card – You must make an election to enroll in Medicare Part B and pay the applicable premiums: • If you don’t enroll when initially eligible - must wait until next Medicare enrollment period and pay surcharge on Part B premiums • The Alcon Medical Plan will not pay benefits on Part B eligible expenses until Part B has paid first

Coordination of Alcon Medical Plan Benefits with Medicare New Coordination Method 1/1/2010 – “Medicare Carve Out” • Approach used by over 80% of our industry and the majority of other U. S. employers who offer retiree medical • How it Works– The Alcon Plan will first determine what it would normally pay before any Medicare payment. Then, any Medicare payment is subtracted from that amount to determine the amount the Alcon Plan pays. – If Medicare’s payment is greater than or equal to the Alcon plan’s normal benefit, the Alcon plan will pay $0. • You will have to pay most Alcon Plan deductibles, copays and coinsurance, just like active employees and pre-65 retirees.

Medicare Coordination Example 1 – UHC Network hospital stay 2009 Alcon Retiree Medical Plan 2010 Alcon Retiree Medical Plan Medicare Supplement Medicare Carve-Out * Total Charge: $8, 000 Medicare ineligible charge: $1, 000 (provider must write-off) Net Claim: $7, 000 Medicare Pays 80% = $5, 600 Alcon Plan pays $7, 000 – $5, 600 = $1, 400 Without Medicare, Alcon Plan would have paid = $6255 ($7, 000 - $50 deductible x 90%) Alcon plan pays $6255 – $5600 = $655 Total Paid = $7, 000 Total Paid = $6, 255 Retiree pays $0 Retiree pays $745 *if Medicare’s payment is equal to or greater than the Alcon plan’s normal benefit, the Alcon plan pays $0

Medicare Coordination Example 2 – UHC Network Doctor’s visit 2009 Alcon Retiree Medical Plan 2010 Alcon Retiree Medical Plan Medicare Supplement Medicare Carve-Out Plan* Total Charge: $300 Medicare ineligible charge: $75 (provider must write-off) Net Claim: $225 Medicare Pays 80% after $155 deductible = $56 Alcon Plan pays $225 - $56 = $169 Without Medicare, Alcon Plan would have paid $225 - $20 copay = $205 Alcon plan pays $205 – $56 = $149 Total Paid = $225 Total Paid = $205 Retiree pays $0 Retiree pays $20 *if Medicare’s payment is equal to or greater than the Alcon plan’s normal benefit, the Alcon plan pays $0

Medicare Coordination Example 3 – Out of Network provider 2009 Alcon Retiree Medical Plan 2010 Alcon Retiree Medical Plan Medicare Supplement Medicare Carve-Out * Total Charge: $8, 000 Medicare ineligible charge: $1, 000 (provider must write-off) Net Claim: $7, 000 Medicare Pays 80% = $5, 600 Alcon Plan pays $7, 000 – $200 deductible - $5, 600 = $1, 200 Without Medicare, Alcon Plan would have paid $7, 000 - $300 deductible x 60% = $4, 020 Alcon plan pays $0* Total Paid = $6, 800 Total Paid = $5, 600 Retiree pays $200 Retiree pays $1, 400 *if Medicare’s payment is equal to or greater than the Alcon plan’s normal benefit, the Alcon plan pays $0

How to Find UHC Network Providers • Using UHC network providers after age 65 can save $$ for you & Alcon: – Higher benefits paid under the Alcon Plan – Discounts on services given by UHC network providers • From the internet: – Open Internet Explorer and go to www. myuhc. com – Click on Find Physician or Facility – Search by provider type or geographic area to get a list of UHC participating providers • By phone: call UHC member service at 800 -582 -3607

Filing Claims when Medicare is Primary • Medical claims should be submitted to Medicare FIRST by the provider or you: – If the provider accepts Medicare Assignment, Medicare will make payment directly to the provider; if the provider does not accept Medicare Assignment, Medicare will make payment to the patient – Medicare will pay its Part-A and Part-B benefits based on the “Medicare approved charge” • After Medicare has paid, the remaining expense will be sent to UHC under the “Medicare Direct Rollover” program for consideration under the Alcon Plan • If you need to file a claim yourself, submit an Alcon medical claim form with the Medicare “Explanation of Benefits” statement to United Health. Care • Prescription drugs are covered ONLY under the Alcon plan use your Alcon Medical Plan ID card to fill prescriptions under the Alcon plan (don’t file with Medicare)

Funding for Retiree Medical • Alcon has contributed $113. 5 million to a VEBA Trust which can only be used for health benefits of employees, retirees and their dependents • An additional $65 million has been contributed to a special 401(h) account and can be used only for Retiree Medical costs

Retiree Medical Premiums • Retiree medical premiums based on retiree’s Medicare status, years of service with Alcon, and dependents covered • When retiree reaches age 65, retiree medical premiums are reduced (1 st day of month following 65 th birthday) • Premium payments administered by ADP Direct Bill – – Premiums may be paid by bank account draft or check – Premium Payments made 1 month in advance – Contact ADP at 888 -612 -5266, option 2, for questions or changes

Have Questions? • Medical Claims & coverage: contact United Healthcare, 800 -582 -3607 • Retiree Premium Payments: ADP Benefits Solution Center, 888 -612 -5266, option 2 • Medicare: 800 -633 -4227 or visit your local Social Security office • Other questions: Alcon Benefits Department, 817 -551 -4820 or 888 -757 -8353