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

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

Today’s Agenda

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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

• ver budget by year end

– 1,160 visits to the ER (Jan - Apr) with a total spend of $3,358,837; 30% non- urgent

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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

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What Got Us Here

Domestic Medical 2019 Rates

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What’s Changing

Monthly Contributions

Domestic Medical 2019 Rates

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What’s Changing

Monthly Contributions – Comparison [2019 vs. 2018]

Plan / Tier 2019 2018 Difference

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

Increase: 12.4%

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What’s Changing

2019 Domestic Medical Plan Pricing - Benchmarking

Plan / Tier CPChem 2019 Mercer 2017 Chemicals 500+ Mercer 2017 National 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

Monthly Contributions

• 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

Domestic Dental 2019 Rates

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What’s Changing

Monthly Contributions – Comparison [2019 vs. 2018]

Plan / Tier 2019 2018 Difference

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

Increase: 4.2%

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

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What’s Changing

HSA Limits FSA Limits

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What’s Changing

2019 2018 EE Only $3,500 $3,450 EE + all other dependents $7,000 $6,900 2019 2018 Health Care FSA & Limited Purpose FSA $2,650 $2,600 Dependent Care FSA $5,000 $5,000

Note: $1,000 HSA catch-up contribution available in year you turn 55

• 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.

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

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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

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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

• f 1/1/2020 or two years of disability

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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

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What’s Changing

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What’s Not Changing

• CPChem will continue to contribute the employee’s HSA:

$500/year for employee only and $1,000/year for all

• thers (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)

Wellness Program – Your Journey to Wellness

• Incentive Program for 2019 remains unchanged
• Total reward of $200 when all items are completed

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What’s Not Changing

• Open Enrollment Period: October 10th – October 26th
• 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

Open Enrollment Overview

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• 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.

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Open Enrollment Overview (continued)

Open Enrollment Overview (continued)

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• 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

We’re all in this together

• Although the cost increase is high again for 2019, the company is

maintaining the same cost share between the company and the employees.

— The company’s increase is $8.8MM and the employee’s increase is $1.3MM, maintaining the cost sharing of 86% employer and 14% employee. — In the meantime, the Benefits Committee and Benefits Team are working on a long term strategy to stabilize cost increase while improving the participant experience. — CPChem medical costs are almost $19,000/year per employee versus benchmarking of $17,000/year. One reason is that employees on LTD average $41,400/year in medical costs versus active employees at $18,800/year.

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Communication Plan – Key Messages

We’re all in this together

• Stay on top of your preventive care – it’s better for all involved,

especially you!

• Don’t go to out-of-network facilities, where the company pays at

least 2 times more than in-network facilities, even if the out-of- network facility unethically waives copays

• Go to Emergency Rooms when needed, but ONLY for

emergencies

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Communication Plan – Key Messages

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Communications Schedule

Audience Description Date All Employees Open Enrollment postcards mailed September 19 All Employees Open Enrollment guides mailed October 1 All Employees Roadshows and webcasts October All Employees Open Enrollment Window October 10 - 26 All Employees Open Enrollment Benefit Confirmations Mail November 12

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Notice to Participants

This Chevron Phillips Chemical Benefits presentation, including the examples contained herein, are not intended to constitute a promise or contractual commitment by the Company or a right to benefits under any of its employee benefit plans. The Company reserves the right to unilaterally change or terminate any or all of its employee benefit plans at any time and without prior notice. Also, modifications may be necessary to comply with applicable legal requirements. In the event of any inconsistency between a statement contained in this presentation and the relevant plan document, the plan document will control. Employees covered by collective bargaining agreements will also be subject to the benefit plan provisions contained in the applicable collective bargaining

• agreements. In addition, this presentation is not intended to be and should not be

treated as investment advice or tax advice. Participants should not rely upon the information contained in this presentation as a substitute for obtaining specific tax advice

• r investment advice from their tax advisor or financial planner.