Summary of 2014 AT&T Retiree Health Plan Changes

Major changes to the 2014 AT&T retiree health plan will be in the form of increased contributions for retirees. The plan design of the regional plans and the alternative plan for both pre-Medicare retirees and Medicare-eligible retirees changed very little, with exceptions noted below.

1. Plan Design

a. Pre-Medicare – for the most part, plan design features remain the same. These are the changes:

a.i. Legacy T –

a.i.1. annual out of pocket max for individual increases by $20 from $1,065 to $1,085;

a.i.2. annual out of pocket max for retiree +1 increases $40 from $2,130 to $2,170;

a.i.3. annual out of pocket max for family increases by $60 from $3,195 to $3,255

a.i.4. hospital copay increases $5 from $210 to $215

a.ii. Southwest, East and Midwest –

a.ii.1. Hospital copay increases $5 from $215 to $220

b. Medicare – for the most part, plan design remains the same, with the following exceptions:

b.i. Legacy T

b.i.1. Deductible for single coverage increases $5 from $210 to $215

b.i.2. Deductible for retiree +1 coverage increases $10 from $420 to $430

b.i.3. Deductible for family coverage increases $15 from $630 to $645

b.i.4. annual out of pocket max for individual increases by $20 from $1,065 to $1,085;

b.i.5. annual out of pocket max for retiree +1 increases $40 from $2,130 to $2,170;

b.i.6. annual out of pocket max for family increases by $60 from $3,195 to $3,255 2. Monthly Contributions – Regional Plans

As a result of increases in monthly contributions, pre-Medicare retirees enrolled in the regional plans will pay $528 more per year for single coverage, $1,608 more per year for retiree + 1 coverage, and $1,812 more per year for family coverage.

Pre-Medicare Retirees 2013 Monthly Retiree 2014 Monthly Retiree Annual Difference in Regional Plans Contributions Contributions Retiree $75 $119 $528 Retiree +1 $221 $355 $1,608 Retiree + Family $221 $422 $1,812 As a result of increases in monthly contributions, Medicare-elibile retirees will pay $480 more per year for single coverage, $1,680 more per year for retiree + 1 coverage, and $1,680 per year for family coverage.

Medicare Eligible 2013 Monthly Retiree 2014 Monthly Retiree Annual Difference Retirees in Regional Contributions Contributions Plans Retiree $10 $50 $480 Retiree + 1 $20 $160 $1,680 Retiree + Family $20 $160 $1,680

3. Monthly Contributions – Alternative Plans

The alternative plan has a higher deductible and higher out of pocket maximum than the traditional regional plans. In 2013, this was a zero premium plan for retiree and dependents for both pre-Medicare and Medicare-eligible retirees. In 2014, contributions will be assessed for this coverage as shown below. Only single, Medicare-eligible retirees will retain a zero premium plan in 2014.

Pre-Medicare Retirees 2013 Monthly Retiree 2014 Monthly Retiree Annual Difference in Alternative Plan Contributions Contributions Retiree 0 $20 $240 Retiree + 1 0 $40 $480 Retiree + Family 0 $40 $480

Medicare-Eligible 2013 Monthly Retiree 2014 Monthly Retiree Annual Difference Retirees in Alternative Contributions Contributions Plan Retiree 0 0 0 Retiree + 1 0 $75 $900 Retiree + Famiily 0 $75 $900