2019 CPCHEM BENEFITS ENROLLMENT OCTOBER 10 OCTOBER 26, 2018 2019 - PowerPoint PPT Presentation

2019 CPCHEM BENEFITS ENROLLMENT OCTOBER 10 – OCTOBER 26, 2018 2019 Open Enrollment Benefits Presentation

Today’s Agenda • Background – “What Got Us Here” • What’s Changing in 2019 • Open Enrollment Overview • Communication Plan – Key Messages • Open Enrollment Communications Schedule 2

What Got Us Here Domestic Medical • CPChem’s domestic medical plan is self-funded: employees and the Company pay all medical claims, and Aetna simply processes the claims for an administrative fee • 2017 claims cost were 112.6% of budget, resulting in a $9.2MM deficit – 3,391 visits to the ER with a total spend of $9,992,117 in 2017; 33% non-urgent • Claims experience year to date in 2018 has improved from 2017, but as of June 2018 we are still projected to be $4.3MM over budget by year end – 1,160 visits to the ER (Jan - Apr) with a total spend of $3,358,837; 30% non- urgent 3

What Got Us Here Domestic Medical • Combined employer/employee cost increase is 12.4% for 2019, down from 14.3% in 2018 – primarily due to sustained elevated count of high cost claimants, out-of-network provider utilization, and non- urgent use of Emergency Rooms • Company will fund a projected $8.8MM of the increase for 2019, resulting in medical premium cost sharing of 85.9% Company: 14.1% Employee 4

What’s Changing Domestic Medical 2019 Rates Monthly Contributions 5

What’s Changing Increase: 12.4% Domestic Medical 2019 Rates Monthly Contributions – Comparison [2019 vs. 2018] 2019 2018 Difference Plan / Tier EPO EE Only $217.89 $193.92 $23.97 EE + Spouse $525.45 $467.64 $57.81 EE + Child(ren) $452.31 $402.55 $49.76 EE + Family $629.50 $560.25 $69.25 PPO EE Only $90.39 $80.45 $9.94 EE + Spouse $238.12 $211.92 $26.20 EE + Child(ren) $204.97 $182.42 $22.55 EE + Family $285.26 $253.88 $31.38 Value CDH EE Only $0.00 $0.00 $0.00 EE + Spouse $34.38 $30.60 $3.78 EE + Child(ren) $29.60 $26.34 $3.26 EE + Family $41.19 $36.66 $4.53 6

What’s Changing 2019 Domestic Medical Plan Pricing - Benchmarking Monthly Contributions Mercer CPChem Mercer Plan / Tier 2017 National 500+ 2019 2017 Chemicals 500+ EPO EE-Only $217.88 $147.00 $128.00 Family $629.50 $462.00 $484.00 PPO EE-Only $90.38 $155.00 $140.00 Family $285.26 $435.00 $470.00 Value CDH EE-Only $0.00 $84.00 $83.00 Family $41.18 $274.00 $318.00 • CPChem’s claims-based pricing strategy has led to our EPO being higher than benchmarks and PPO/CDH being lower than benchmarks • After 2019’s pricing, the PPO and CDH premiums are still lower than 2017 benchmarks 7

What’s Changing Increase: 4.2% Domestic Dental 2019 Rates Monthly Contributions – Comparison [2019 vs. 2018] 2019 2018 Difference Plan / Tier Preventive Dental EE Only $7.56 $7.25 $0.31 EE + Spouse $15.12 $14.50 $0.62 EE + Child(ren) $15.88 $15.23 $0.65 EE + Family $23.43 $22.48 $0.95 Comprehensive Dental EE Only $20.67 $19.83 $0.84 EE + Spouse $41.34 $39.66 $1.68 EE + Child(ren) $43.42 $41.65 $1.77 EE + Family $64.08 $61.47 $2.61 8

What’s Changing Dental Plan Enhancements • Adding coverage for dental bone grafts, which are sometimes coupled with dental implants • Adding coverage for injectable (Exparel) pain medication as a substitute for opioid prescriptions 9

What’s Changing HSA Limits 2019 2018 EE Only $3,500 $3,450 EE + all other dependents $7,000 $6,900 Note: $1,000 HSA catch-up contribution available in year you turn 55 FSA Limits 2019 2018 Health Care FSA & Limited $2,650 $2,600 Purpose FSA Dependent Care FSA $5,000 $5,000 • CPChem increases the limits for the HSA as allowed by the IRS. • IRS announces the FSA limit increases later in the year, beyond the time when we could incorporate them in the Open Enrollment requirements. 10

What’s Changing Current State: LTD Leave Employment • Current Disability Leave Provisions — Employees enrolled in and receiving a disability benefit may remain on Disability Leave as long as they meet the requirements specified in the Disability Leave policy and continue to be certified for Long-Term Disability benefits under the Long-Term Disability plan (currently provided by MetLife) — Reinstatement rights will terminate twenty-four (24) calendar months from the date the initial Long-Term disability benefits commence — The employee may continue to participate in all active employee benefits with the exception of 401(k) Plan contributions, Occupational Accidental Death and Personal Loss Insurance (OAD&PL), and the Business Travel Accident Plan while on Disability Leave 11

What’s Changing Background: LTD Leave Employment Changes • As of June 30, 2018, 124 CPChem employees are on Approved Long-Term Disability Leave • Average annual medical cost per LTD employee is $41,100/year, while the average annual medical cost per non-LTD employee is $18,800/year; this increases the Company’s average cost by $644/year per employee • Peer Benchmarking – 16 companies — 7 same as CPChem current treatment — 8 terminate medical benefits after 2 years — 1 has no LTD program 12

What’s Changing Effective 1/1/2019: LTD Leave Employment Changes • End employment after 2 years of Approved LTD Leave, coinciding with the ending of the reinstatement period — Will not end the employee’s LTD benefit payment from the insurer (typically MetLife) • Will end the employee’s access to all active benefits (i.e. health & welfare plans, pension pay credits, RRA accruals, basic life insurance, etc.) • Other available coverage and resources not affected — Most LTD recipients will be eligible for disability Medicare — As per DOL requirements, 18 months of COBRA (or to age 65 if earlier) will be available at full rates post termination — Eligible retirees will receive RRA and will have access to pension benefits upon termination of employment – Termination date for those already out on disability as of 1/1/2019 will be the later of 1/1/2020 or two years of disability 13

What’s Changing Effective 1/1/2019: LTD Leave Employment Changes • Benefits Team will send additional communications to employees on Approved LTD Leave as of 1/1/2019 • For employees not disabled as of 1/1/2019, new hires, and rehires, the new provisions will take effect as of 1/1/2019 14

What’s Not Changing • CPChem will continue to contribute the employee’s HSA: $500/year for employee only and $1,000/year for all others (EE + Spouse, EE + Child(ren), EE + Family) • No rate increases for the following products: — Vision — Critical Illness — Hyatt Legal (MetLaw) — All Life Insurances and LTD (subject to age banding, pay increases) 15

What’s Not Changing Wellness Program – Your Journey to Wellness • Incentive Program for 2019 remains unchanged • Total reward of $200 when all items are completed 16

Open Enrollment Overview • Open Enrollment Period: October 10 th – October 26 th • You can make your elections one of these ways: – By logging into the website at www.cpchembenefits.mercerhrs.com (available 24 hours/day) – By calling 1-800-446-1422, option 1 (available from 8:00 a.m. to 5:00 p.m. U.S. Central time, Monday through Friday) • Open Enrollment is your annual opportunity to make changes to your health and welfare plans without a qualified status change 17

Open Enrollment Overview (continued) • Most elections will roll over. If you don’t make changes during the enrollment period, your current elections for medical, dental, vision, supplemental life and AD&PL insurance, long-term disability (LTD) insurance, Critical Illness and group legal will continue for 2019. • Flexible Spending Account (FSA) and Health Savings Account (HSA) contribution elections DO NOT carry over – you must re-elect these every year. • Spousal Surcharge attestation must be completed each year, or the surcharge will be assessed regardless of the previous year’s attestation. • For 2019, the Spousal Surcharge will be treated like other health benefits, meaning you can only change it during Open Enrollment or after a qualified life event, including “spouse changes employment.” • Company will periodically conduct spot audit sampling and will require spousal surcharge related documentation for life events; timely and satisfactory response will be required. 18

Open Enrollment Overview (continued) • Increases to life insurance and LTD insurance require a Statement of Health • Any dependents you remove from coverage during Open Enrollment will not be offered COBRA • Eligible dependents include: — Legally married spouses, and — Biological children, stepchildren, foster children, legally adopted children, children placed for adoption and children under permanent legal guardianship and/or sole managing conservatorships • Failure to properly and timely respond to the post-enrollment Dependent Verification process will result in the dependent(s) being dropped from coverage 19