NECAIBEW FAMILY MEDICAL CARE PLAN NECA LABOR RELATIONS

NECA/IBEW FAMILY MEDICAL CARE PLAN NECA LABOR RELATIONS CONFERENCE PLAN OPERATIONS OCTOBER 2009

Plan Purposes • • • Consolidation Efficiency Availability Stability Market power 1

Plan Structure • • Taft-Hartley multi-employer welfare plan Multiple benefit plans Flexible funding methods Nationwide scope 2

Plan Management • • Trustees selected by NECA and IBEW Attorneys and other professionals selected by Trustees 3

Trustees of the National Plan • • Current Union Trustees • • Current Employer Trustees • • • Lindell Lee Michael Long John Nickles Shane Roberts Geary Higgins Howard Hughes Larry Moter Jerry Sims Kevin Tighe Union Trustees selected by IBEW from Vice-Presidential Districts Employer Trustees selected by NECA Trustees’ obligation is to manage the Plan and its resources in the best interests of the participants 4

How the Board of Trustees Interacts • • Trustees accept input from all local plans and participant groups • Local parties have voice in contract negotiations Two Trustees from each IBEW VP District help oversee the interests of their regions 5

Plan Operations • Contribution rates set by Board of Trustees • Pooled plans • • By geographic and demographic cost factors Separate plans • • By overall plan experience By specific group experience Contributions are hourly for construction and monthly for others Compu. Sys collects and distributes contributions Various service providers pay claims Compusys dedicated office provides customer service Investment consultant and investment managers focus on safety, liquidity and returns 6

Benefit Designs • Several Plan design options available for smaller groups • • • Vision or no vision Life and A&D insurance options Handouts provided Plan 10 Higher Benefits • • Dental or no dental Plan 1 Standard Benefits • • Various deductibles & out-of-pocket limits Handouts provided Customized Plans Available for Larger Groups 7

Claim Administration • Medical claims • • Met. Life Vision Service Plan (VSP) Disability claims • • Sav-Rx Vision claims • • Anticipate change of adjudication to Compu. Sys for more control Dental claims • • BCBS currently adjudicates claims Prescription drug claims • • Blue Cross Blue Shield PPO network Compu. Sys Life insurance • ULLICO 8

Plan Investing • • Focus on preservation of capital and liquidity Investment vehicles • • 80% fixed income 15% equities (low-fee index fund) 5% cash Monitored by investment consultant 9

Reporting for the National Plan • • The National Plan is a transparent Health and Welfare Plan Financial and operating results are monitored and reported • • • Administrator Consultant Auditor The National Plan provides reports showing experience, utilization and trends All Plan information is completely available to the Trustees 10

Special Fund (HRA) • A special additional amount can be contributed on a tax-free basis to the employees’ Special Fund (HRA) accounts. • An employee can use it to pay deductibles, copays or other qualifying expenses, including self-payments that otherwise would have to be paid with after-tax earnings. • Reimbursable expenses are limited to specific allowable expenses under the Internal Revenue Code. • Balances are carried forward from year to year and are not lost if not used, but employee’s balance is not vested— no provision for cashing in an account balance. • • If an employee dies while an account balance remains, his dependents can use it. • Not available to non-bargaining employees. The interest earned on accumulations in the Special Fund defrays the Fund’s operating expenses. 11