2008 Annual EnrollmentTraining Presentation

April 2008

2

Agenda

Overview of 2008-2009 benefits– What’s new and/or changing July 1

What you need to do– Enrollment dates and My Benefits Access

Benefits enrollment Questions?

2008-2009 Benefits

4

Overview of 2008-2009 Health Benefits

Medical Dental Vision Flexible Spending

Accounts Basic Life Insurance Optional Life Insurance Basic Accidental Death and

Dismemberment Optional Accidental Death

and Dismemberment

Short-term Disability (if offered by your sector)

Long-term Disability Employee Assistance

Program Voluntary Insurance

(through the Northrop Grumman Federal Credit Union)

5

What’s Changing July 1

Medical– New carrier for Premium and Preferred PPOs

Flexible Spending Accounts reduced annual limit of $2,500 for highly compensated employees

Cost increases for Premium PPO and Cigna EPP

6

Anthem Blue Cross

Provider network is the same as the Blue Cross Blue Shield network

New medical ID cards issued before July 1, 2008

Access to Anthem’s care management program, 360 Degree Health

7

Flexible Spending Accounts

If you earn $100,000 or more in 2008, your annual contribution limit to the Dependent Care FSA will be reduced to $2,500

8

Employee costs

Changes to how employee contributions are calculated

Significant cost increases for Premium PPO and Cigna EPP options

9

Lumenos HRA Plan

Traditional Health

Coverage

Health Reimbursement

Account

The Lumenos Program

• Benefit plan year allocation from Northrop Grumman

• Plan pays 100% when funds are available

• Use it on HRA Extras

• Additional protection covers the services allowed by Northrop Grumman

• You pay coinsurance for covered services

• 100% coverage after coinsurancemaximum is met

Bridge• Employee’s responsibility if

expenses exceed the benefit plan year HRA allocation

• Paid only as expenses are incurred

• Can be reduced or eliminated by HRA rollover

Pre

ven

tive

Car

e 1

00%

Co

vera

gePreventive

Care• 100% coverage

for nationally recommended services

• No deductions from the HRA

Traditional Health

Coverage

Health Reimbursement

Account

The Lumenos Program

• Benefit plan year allocation from Northrop Grumman

• Plan pays 100% when funds are available

• Use it on HRA Extras

• Additional protection covers the services allowed by Northrop Grumman

• You pay coinsurance for covered services

• 100% coverage after coinsurancemaximum is met

BridgeBridge• Employee’s responsibility if

expenses exceed the benefit plan year HRA allocation

• Paid only as expenses are incurred

• Can be reduced or eliminated by HRA rollover

Pre

ven

tive

Car

e 1

00%

Co

vera

gePreventive

Care• 100% coverage

for nationally recommended services

• No deductions from the HRA

(in-network)

10

EmployeeEmployee +

SpouseEmployee + Child(ren)

Family

$1,000 $1,500 $1,500 $2,000

$800 $1,200 $1,200 $1,600

90% covered for in-network providers 60% of R&C for out-of-network providers

$4,200 $6,300 $6,300 $8,400

Traditional Health Coverage

Coinsurance Maximum

Health ReimbursementAccount (HRA)

Bridge

Mental Health/Substance Abuse and prescription drug benefits are covered under the plan.

Pre

ven

tive

Car

e 10

0%

Plan Year Amounts

Lumenos HRA Plan

11

Comparing the Medical Plan Options

PPO EPOLumenos HRA Plan HMO

I want to choose a PCP to coordinate all my care and specialist referrals (in most

cases)

I want to visit any provider I choose, without referrals

I want to be able to go out of network, even if it’s at a higher cost (but still covered)

I want Northrop Grumman to help me pay for some of my expenses through a company-funded HRA

12

Comparing the Medical Plan Options

PPO EPOLumenos HRA Plan HMO

I want 100% coverage for preventive care (after a small

copay)(after a small

copay)(after a small

copay)

I want the lowest paycheck contributions

I am worried about health care costs rising, and want a plan that helps me manage that better

13

Example: Sharon

Average user of health care benefits Family coverage Potential health care services/needs (with assumed

actual cost of service):– Three routine preventive care visits ($125 each)– Two specialist visits ($175 each)– 20 physical therapy visits for treating sports-related

injury ($100 per visit)– Two generic maintenance prescriptions filled

monthly ($20 each per month)– One preferred brand prescription ($60)

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Lumenos HRA Plan

Preferred PPO Premium PPO

Preventive care $0

+

3 visits @ $20 copay = $60

+

3 visits @ $15 copay = $45

+Specialist visit 2 visits @ $175 per

visit = $350 +

2 visits @ $40 copay = $80

+

2 visits @ $30 copay = $60

+

Physical therapy 20 visits @ $100 per visit = $2,000

5 visits @ $100 per visit up to individual annual deductible

= $500+

Remaining 15 visits @ 10% coinsurance per visit = $150

3 visits @ $100 per visit up to

individual annual deductible = $300

+Remaining 17 visits @ 10% coinsurance

per visit = $170

* This example assumes in-network services only.

Example: Sharon’s Costs

15

Lumenos HRA Plan

Preferred PPO Premium PPO

Prescription drugs 2 generic Rx each month for 12 months @ $20 retail cost =

$480+

1 preferred brand Rx at $60 retail cost =

$60

2 generic Rx each month for 12 months @ $5 copay = $120

+1 preferred brand Rx at $20 copay = $20

2 generic Rx each month for 12

months @ $5 copay = $120

+1 preferred brand Rx at $20 copay =

$20

Total $2,890 $930 $715

Example: Sharon’s Costs (cont.)

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Lumenos HRA Plan

Preferred PPO

Premium PPO

Amount covered by Health Reimbursement Account (HRA) funded by Northrop Grumman to help pay for cost of coverage

$2,000(Sharon’s total

HRA at the beginning of the plan year

is $2,000)

$0 $0

Total out-of-pocket for Sharon after using HRA

$890 $930 $715

Annual paycheck cost $ $$ $$$

Example: Sharon’s Costs (cont.)

What You Need To Do

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What You Need To Do

Review – Current benefits coverage and 2008-2009

options with eligible family members– How you use your benefits, and what your

needs will be in the coming benefit plan year

– Whether you could save money by choosing a different (but still appropriate) option

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What You Need To Do (cont.)

Enroll – Use the tools and resources at My Benefits Access to

evaluate your options– Make changes to current health benefits coverage

during your enrollment period– If You Don’t Enroll

• Continue current coverage for medical, dental, vision, life, disability, and AD&D (as applicable) at new plan year costs

• Current coverage in following plans will continue unless you make a change:

– Health Care and/or Dependent Care FSAs (unless you are impacted by the reduced Dependent Care FSA limit)

Benefits Enrollment

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Two Enrollment Periods

April 28 May 9Corporate / Newport News / Integrated Systems / Information Technology /Space Technology

May 12 May 23Mission Systems / Electronic Systems / Ship Systems / Technical Services

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How to Enroll > Online

Go to Benefits OnLine at http://benefits.northropgrumman.com and click on the “Enroll With Your Sector” button– Select your sector to review general benefits and

enrollment information– Log into My Benefits Access

• First-time visitors will need to set up a user ID and password

– Make your elections and print a confirmation statement

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How to Enroll > By Phone

No Web Access? – Call the Northrop Grumman Benefits Center

(NGBC) at 1-800-894-4194 to enroll• If hearing impaired, will need to use a relay

service through TTY/TDD provider

– Available Monday through Friday, 9:00 a.m. to 6:00 p.m. Eastern time

Questions?