Optum Bank Open Enrollment Virtual Benefit Fair Presentation

Optum Bank Open Enrollment Virtual Benefit Fair Presentation 2020

Optum Bank Overview Connecting health and finance in a way that no one else can • HSAs, FSAs, HRAs, Lifestyle Accounts • Transportation • COBRA administration Member FDIC Optum Bank® is a national leader in health care banking and a member of the FDIC. Optum Bank has multiple layers of cyber fraud protection to protect accounts. 1 4 M HSA provider HSAs # 17% 1 Higher HSA balances than industry avg 2 $ 12 B 5. 7 M 1 1 Assets Total Consumer Accounts 48 K Employers across multiple health plans 1. Optum Bank BOB as of 12/2019; 2. Compared to 2019 Midyear Devenir HSA Research Report Executive Summary report as of 09/2019 © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 2

Digital Tools Make Saving, Paying & Investing Easy VIEW, PAY AND STORE CLAIMS VARIETY OF INVESTMENT OPTIONS CONNECT WITH CUSTOMER SUPPORT ON-DEMAND HSA ACCESS TRACK TRANSITIONS VIA EXPENSE JOURNAL REIMBURSE YOURSELF VIRTUAL ASSISTANT + ALEXA, GOOGLE HOME MOBILE APP manage your health accounts onthe-go Investments are not FDIC insured, are not guaranteed by Optum Bank ®, and may lose value. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 3

Top Health Saving Account (HSA) Resources • • Flyer: Overview of the tax benefits of an HSA, • provided by Optum Bank, making it easy to qualified medical expenses manage your HSA online • asked HSA questions • • Flyer: List of qualified medical expenses that can Flyer: Explore reasons for enrolling in an HDHP your tax savings Video: Find out about the purpose of an HSA and Tool: Learn what expenses are qualified by using Flyer: Overview of the investment feature at Optum Bank, how to get started, and the tools and resources available online (investment flyer without Betterment) • Video: Discover how the investing feature works on optumbank. com (investment Tool: Use the HSA Calculator to determine your maximum contribution and estimate how it works • withdrawals from your HSA • • Video: Learn how to make deposits and be paid for with an HSA paired with an HSA • Flyer: Highlights the tools and resources eligibility requirements, contribution limits and Flyer: Answers to some of the most frequently Investing + App How to Use an HSA What is an HSA video without Betterment) • Flyer: Introducing features of the new Optum Bank mobile app • Video: Check out all of the great features the Optum Bank mobile app has to offer the Qualified Medical Expense Search Tool © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 4

What is an HSA? Health savings accounts (HSAs) are individually owned savings accounts that offer a taxadvantaged way to save and pay for qualified medical expenses. Requires a qualifying high-deductible health plan (HDHP) Annual contribution limits are set by the IRS — triple tax savings Funded by employer or employee Balances can be carried over from year to year Option to invest a portion of the HSA once it meets a minimum threshold Integration with the #1 -rated mobile app © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 5

What You Need to Know About an HSA Deposits are exempt from income tax Savings grow income tax-free Money spent on qualified medical expenses comes out of your HSA income tax-free If you are covered on COBRA or collecting unemployment, your HSA can be used to reimburse premiums income tax-free Use the QM E Tool on optumban k. com to see if your specific expense q ualifies for reimburse ment Examples of qualified expenses - more than just deductibles and copaysüChiropractic üDental treatment üEyeglasses Click here to Watch Video Examples of non-qualified expenses: x. Cosmetic surgery x. Electrolysis or hair removal x. Teeth whitening © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 6

Optum Bank Urges Everyone to Enroll in an HSA Prepare — while you’re healthy — for a chronic condition or health complications and reap the tax benefits. Sarah, single, 25 years old Rick and Nancy, married, 55 years old Each year for 20 years, she contributes $3, 500* for a total contribution of $70, 000. She invests any balance for $3, 500. Each year for 20 years, they contribute the maximum for a family, $7, 000* and an extra $1, 000 for every year the account holder is over 55 years old, for a total contribution of $150, 000. They invest any balance over $2, 500. She uses $10, 000 for qualified medical expenses. They use $30, 000 for qualified medical expenses. In 20 years, she saves $17, 000 in taxes (24% tax bracket). Her investments earn almost $50, 000. ** Hypothetical examples are for illustrative purposes only. All events, persons, and results described herein are entirely fictitious and amounts will vary depending on your unique circumstances. In 20 years, they save $36, 000 in taxes (24% tax bracket). Their investments earn over $102, 000. ** *Examples are based on 2019 contribution limits, which may change based on IRS regulation. **Assumes 6% rate of return, compounded annually. Investments are not FDIC insured, are not guaranteed by Optum Bank, and may lose value. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 7

HSA Savings How much could you save with your HSA? Start contributing early! 2 You withdraw $2, 000 to pay for qualified medical expenses 3 You earn interest on your account 4 You carry over $1, 000 HSA dollars into the next year Your federal and state income tax and FICA savings for the year are $1, 235* $ S AV INGS $ 1 In 2020, you deposit $3, 000 into your HSA through payroll deductions You pay no income taxes on the $2, 000 because it was used for qualified expenses You do not have to pay income taxes on your interest earnings This carryover option helps you save for the future *Assumes a 25% federal tax rate, 8. 5% state tax rate and 7. 65% FICA. Hypothetical example only. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 8

Getting Started Choose the HSA option during open enrollment and complete the application provided by your employer. Or visit optumbank. com and click enroll now to open an HSA You will receive your HSA welcome kit and Optum Bank debit Mastercard® shortly after opening your HSA Activate your account online at optumbank. com Download the Optum Bank app to conveniently manage your HSA © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 9

Contribution Limits Amount of Contribution The IRS determines how much you can deposit into your HSA each year, and limits are determined on a calendar/tax-year basis. Contribution Rules Individual coverage Family coverage 2020 2021 $ 3, 550 $ 3, 600 $7, 100 $7, 200 IRS rules state that contribution limits must generally be prorated by the number of months you are eligible to contribute to an HSA. Your eligibility is based on your coverage status on the first day of the month. Additional Contribution Those 55 years of age or older, but not yet enrolled in Medicare, can fund an additional $1, 000/year “catch-up” contribution. Spouses can make a separate $1, 000 catch-up contribution to an account in their own name. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 10

Determining Eligibility IRS REQUIREMENTS ü You must be covered under a qualifying high-deductible health plan (HDHP) on the first day of the month ü You have no other health coverage except what is permitted by the IRS ü You are not enrolled in Medicare, TRICARE or TRICARE for Life ü You haven’t received Veterans Affairs (VA) benefits within the past three months, except for preventive care If you have a disability rating from the VA, this exclusion doesn’t apply ü You can’t be claimed as a dependent on someone else’s tax return ü You do not have a health care flexible spending account (FSA) or health reimbursement account (HRA) Alternative plan designs, such as a limited-purpose FSA or HRA, might be permitted ü Other restrictions and exceptions may also apply. We recommend that you consult a tax, legal or financial advisor to discuss your personal circumstances © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 11

Making the Most of your HSA Set a plan and get your employer match (if applicable) Build balances to cover your deductible Use HSA funds to pay for qualified medical expenses Maximize tax savings opportunities Save for the future and grow funds income tax- free © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 12

HSA Contributions & Paying with an HSA How to make a deposit • Set up payroll deductions from every paycheck (if your employer offers this option) • Sign in to your account to set up one-time or recurring deposits • Mail in a check • Make a contribution with the Optum Bank Mobile App • HSA funds roll over from year to year • The money in your HSA is yours until you spend it, even if you retire or change jobs or health plans • You can continue to grow your HSA and use it into retirement Reimbursement Paying with an HSA Yours to keep • Use the Optum Bank debit Mastercard® to: • Pay on the spot at a doctor’s office, pharmacy or other health care facility • Pay a bill you receive from a doctor or other provider • Use online bill pay • Use our secure website to send payments directly to your health care providers, pharmacy or other payees. • When you pay for qualified expenses out of pocket, you can log in and request an ACH or check disbursement • If your HSA offers ATM access, you can use your Debit Mastercard at any ATM that displays the Mastercard acceptance mark to get cash to reimburse yourself (Note: You’ll need your PIN. There's a $300 per 24 -hour limit on ATM withdrawals*) Optum Bank mobile app • Use Apple Pay® or Google Pay® *There is a $2. 50 ATM withdrawal fee. Access fees may also be charged by the ATM owner. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 13

Investment Choice: Options for Every Type of Investor 1 THREE WAYS TO INVEST 2 3 Digitally managed investments The optimal way to save for retirement Online financial advice driven by artificial intelligence and algorithms that provides automated investment opportunities. Based on your goals, we make it easy to invest your funds now and into retirement. With an HSA, withdrawals for qualified medical expenses are Mutual funds income tax free. ** This is a key Optum Bank has a diverse set of 31 mutual funds, * including: • 17 Vanguard funds • Five target date funds • Three lifestyle funds Mutual funds average a four-star Morningstar rating, and represent some of the lowest expense ratios in the industry. way in which an HSA can be superior to a traditional 401(k) or IRA as a retirement savings vehicle. Once you begin to withdraw funds from a 401(k) or Self-directed an IRA plan, you pay income tax on that money, regardless of This option is ideal for experienced investors who want more control and options or those investors who seek to align their 401 K investments with their HSA investments. (Employer must opt-in) how the funds are being used. Investments are not FDIC insured, are not guaranteed by Optum Bank ®, and may lose value. For most employers, account holders can choose to start investing once they reach an HSA balance of $2, 000. *The bank makes mutual funds available through a Registered Investment Adviser. **Federal income tax free. Some states impose taxes. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 14

Pairing an HSA with a Limited Purpose FSA MAXIMIZE SAVINGS Pairing an HSA with a limitedpurpose FSA allows employees to maximize their savings by allowing them to tap into their limited FSA for costs associated with dental and vision while only using their HSA for qualified medical expenses. Reasons to pair an HSA with a limited- purpose FSA: • You plan on incurring eligible dental or vision expenses early in the plan year • You want to save your HSA contributions for future medical expenses • Your medical expenses are high enough that you will use the full HSA contribution limit to pay for your medical expenses each year • You wish to use your HSA as a primary/additional retirement or investment account or to cover healthrelated costs in retirement © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 15

HSA Rollover Transferring Funds If you have an HSA with another institution, you may want to consolidate your health care savings into one account. It’s simple to transfer or roll over HSA funds into an account at Optum Bank. Just follow these steps: • Transfer funds. Ask your existing HSA bank to transfer funds from your account with them to your new Optum Bank HSA • Such a transfer is not considered a rollover, and there is no limit on the number of such transfers • You do not include the amount transferred in your income for tax purposes, deduct it as a contribution or include it as a distribution from the account Roll Over Existing HSA Roll over funds from an existing HSA to your Optum Bank HSA: • You must withdraw the money from your HSA and then roll over (deposit) the amount to your Optum Bank account within 60 days after the date you received the funds • You can make only one rollover contribution to an HSA during a one-year period. Rollovers are not subject to the annual contribution limit Roll over your funds in two easy steps: • Log in to optumbank. com, and select “Roll over funds to your HSA” in the “Self Service” section • Enter the account number of the HSA you wish to transfer and the amount you’d like to transfer © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 16

Top Flexible Spending Account (FSA) Resources Filing Claims + Uploading Receipts What is an FSA • • • DCFSA & LPFSA Flyer: Understand how an FSA can help you Filing Claims DCFSA plan, save and pay for health care • • Flyer: Answer questions with this list of many of Video: Learn how to file an FSA claim by Uploading Receipts FSAs • Video: Discover the benefits of having a health money to pay for dependent care watching this short video the eligible and ineligible health care expenses for Flyer: Learn how you can use tax-free • Video: Learn how you can use tax-free money to pay for dependent care Video: Find out how to upload a receipt for an Optum Bank Mastercard® purchase care FSA • Tool: Learn what expenses are qualified by using the Qualified Medical Expense Search Tool LPFSA • Video: Discover why pairing a limited purpose FSA with an HSA can be a smart choice © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 17

FSA Account Types A health care, limited-purpose or dependent care FSA help you budget for expenses you’ll have this year while reducing taxable income. THREE TYPES HEALTH CARE LIMITED PURPOSE* Eligible expenses may include certain medical, dental, vision, prescription drug and qualified over-the-counter expenses that are not reimbursed by your group benefit plans or another source. A tax-advantaged account offered alongside an HSA, so employees can pay for dental and vision expenses with pretax dollars without having to dip into the HSA. *Optum Bank can administer a Post-deductible FSA. Limitations are lifted once the deductible is met and all eligible medical expenses can then be paid from FSA funds. DEPENDENT CARE The benefit plan allows employees to use pre-tax dollars to pay for dependent-care services incurred while they are at work. Typical expenses are incurred for the care of dependents under the age of 13 or older dependents incapable of self-care. © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 18

FSA Flexible Reimbursement Options Online Claim Submission Manual Claims Exchange Optum Master. Card ® Payment Card • Complete interactive claim form online • Upload with required documentation via online or mobile app • Submit paper claim form to Optum with required documentation via fax or U. S. mail • Automatically reimburse patient-responsibility portion of employees’ eligible expenses directly from their CDH accounts • Provides two payment cards: one for employee, one for spouse or dependent • Allows participants to pay for health care services at the point of care • No need to submit documentation for transactions (auto-substantiated) • Easy photo submission of receipts via mobile app © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 19

HRA and Health Care FSA HRA • An account that is connected to your health plan. The HRA helps pay for eligible health care expenses, including those that may apply to your annual deductible • Optum automatically pays the claim from the HRA first, as long as money is available in the account • An account that helps pay for eligible health care expenses, including those that may apply to your annual deductible. • Also helps pay for eligible health care expenses that may not be paid by the HRA or the plan, such as pharmacy, vision and dental Pay Directly • If all the HRA and FSA dollars have been spent, the doctor will bill you directly. When you receive the bill, you can pay the bill with cash or a credit/debit card • If there are not enough HRA dollars in the account to cover the cost of the claim, the remaining balance is automatically paid from your FSA account Learn more by visiting: https: //www. optumbank. com/all-products/account-comparison. html © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 20

FSA Cost Savings Example Estimating costs: Here’s an example based on having $100 withdrawn from every paycheck and deposited into an FSA: Many FSAs have a “use it or lose it” rule, meaning you can’t carry money from one year over to the next. Some FSAs allow a limited carryover rule Federal income tax (25%): $25. 00 State income tax (5%): $5. 00 Be sure to estimate your contributions carefully FICA (7. 65%): $7. 65 Even if you leave funds behind, however, there’s a good chance you’ll still come out ahead due to the tax savings Tax savings every paycheck: $37. 65 Tax savings annually (26 pay periods): $978. 90 © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 21

Top Health Reimbursement Account (HRA) Resources What is an HRA + How to use it • Flyer: A guide explaining how an HRA works, how to submit claims and use the mobile app • Flyer: For those with an Optum Bank FSA or HRA. This flyer reviews the features of the Optum Bank Mastercard® and how to use it • Flyer: Shows how "Julie" uses her HRA to manage her health and her money © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 22

What is a HRA? Employer-funded plan used as part of a benefits package to help offset health care costs for eligible expenses Allowed with most types of health plans, and Optum Bank can accept contributions from most vendors Funds are not taxable to the employee Funded by employer (no contribution restrictions) Employer can choose to have unused funds roll over from year to year Your Employer: Employees: • Determines the annual contribution amount • Determines when funds are available • Determines if funds roll over from year to year • Are responsible for understanding what expenses qualify for reimbursement and keeping track of those expenses • Pay for eligible expenses using their Optum Bank debit Mastercard® - or - pay for eligible expenses with their own personal funds and submit a claim on optumbank. com, by mail, or by fax © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 23

HRA and Health Care FSA HRA • An account that is connected to your health plan. The HRA helps pay for eligible health care expenses, including those that may apply to your annual deductible • Optum automatically pays the claim from the HRA first, as long as money is available in the account • An account that helps pay for eligible health care expenses, including those that may apply to your annual deductible • Also helps pay for eligible health care expenses that may not be paid by the HRA or the plan, such as pharmacy, vision and dental Pay Directly • If all the HRA and FSA dollars have been spent, the doctor will bill you directly. When you receive the bill, you can pay the bill with cash or a credit/debit card • If there are not enough HRA dollars in the account to cover the cost of the claim, the remaining balance is automatically paid from your FSA account Learn more by visiting: https: //www. optumbank. com/all-products/account-comparison. html © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 24

Top Transportation Resources Online Ordering Model Employer Election Model • Flyer: Learn how transportation benefits can save • and parking expenses with pre-tax dollars you money on commuting costs • Flyer: Learn about the benefits of paying for mass transit FAQ: Find out how to enroll in this benefit and get some answers to frequently asked questions • Flyer: User guide outing how to place orders for transit and parking © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 25

Transportation — Employer Election model Want to save money on your commuting costs to and from work? It’s easier than you may think! Pay for Qualified Expenses – Public transit fares for buses, ferries and commuter rail – Vanpool fares – Parking expenses – Bicycle commuting expenses, if offered How it Works – Enroll in transportation benefit through your employer – Choose how much you want to contribute – Your employer deducts your chosen contribution amount from your paycheck before taxes. So you don’t pay federal, state or payroll taxes on your contributions (although some states do tax these contributions) – Use your Optum Payment card to access your funds for qualified transportation costs – Save money as you lower your income taxes Your Benefits Your Way You decide how and where to spend your commuting dollars. Federal regulations currently let you set aside each month before income and payroll taxes, up to: – $270 for qualified transit expenses – $270 for qualified parking © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 26

Transportation — Online Ordering model Want to save money on your commuting costs to and from work? It’s easier than you may think! Pay for Qualified Expenses – Public transit fares for buses, ferries and commuter rail – Vanpool fares – Parking expenses – Bicycle commuting expenses, if offered How it Works Easy-to-use, self-service transportation ordering system: – Simply go to optumbank. com and log in as an account holder – Click on the transportation services link – Select the transit or parking services you want – Place your order – Set up an automatic order to make the same purchase every month – Receive your order at home by mail Your Benefits Your Way You decide how and where to spend your commuting dollars. Federal regulations currently let you set aside each month before income and payroll taxes up to: – $270 for qualified transit expenses – $270 for qualified parking © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 27

Spanish Assets HSA Qualified Medical Expenses • A list of qualified medical expenses that can be paid for with an HSA Introduction to HSA • An overview of the tax benefits of an HSA, eligibility requirements, contribution limits and qualified medical expenses Investing with HSA • An overview of how the investment feature at Optum Bank works, how to get started, and the tools and resources available online FAQ HSA • Answers to some of the most frequently asked HSA questions FSA Enrollment • Understand how an FSA can help you plan, save and pay for health care FSA Enrollment Carryover • The FSA enrollment brochure for employers who offer the carryover option FSA User Guide • A guide explaining how to manage an FSA, pay for expenses and use the mobile app DCFSA • Learn how you can use tax-free money to pay for dependent care Transportation Benefit Election Model • Flyer: Learn how transportation benefits can save you money on commuting costs Ordering Model • Flyer: Learn about the benefits of paying for mass transit and parking expenses with pre-tax dollars Health Account Comparison • HSA-FSA-HRA Comparison Guide: This chart compares the benefits of HSAs, FSAs and HRAs. • HSA-FSA Comparison Guide: This chart compares the benefits of HSAs and FSAs © 2020 Optum, Inc. All rights reserved. Confidential property of Optum. Do not distribute or reproduce without express permission from Optum. 28

Investments are not FDIC-insured, are not guaranteed by Optum Bank and may lose value. All Optum trademarks and logos are owned by Optum, Inc. All other brand or product names are trademarks or registered marks of their respective owners. Because we are continuously improving our products and services, Optum reserves the right to change specifications without prior notice. Optum is an equal opportunity employer. Health savings accounts (HSAs) are individual accounts offered or administered by Optum Bank®, Member FDIC, and are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Fees may reduce earnings on account. Flexible spending accounts (FSAs) and health reimbursement accounts (HRAs) are administered by Optum. Health Financial Services and are subject to eligibility and restrictions. Mutual fund investment options are made available through the services of an independent investment advisor. Shares are offered through Charles Schwab & Co. , Inc. , a registered broker-dealer. Orders are accepted to effect transactions in securities only as an accommodation to HSA owner. Optum Bank is not a broker-dealer or registered investment advisor, and does not provide investment advice or research concerning securities, make recommendations concerning securities, or otherwise solicit securities transactions. This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment and restrictions. Hypothetical examples are for illustrative purposes only. All events, personas and results are described herein are entirely fictitious and amounts will vary depending on your unique circumstances.