2 0 1 2 L u n a I n n o v a t i o n s Benefits Enrollment Guide

MEDICAL AND PRESCRIPTION DRUGS

Medical Insurance will be renewing with Anthem Blue Cross and Blue Shield again this year. There will still be 3 medical offerings, 2 Health Reimbursement Account Plans and 1 High Deductible Health Plan paired with the health savings account.

A Health Savings Account is owned by the employee. The employee can make tax free deposits into the Health Savings Account. This money set aside in the Health Savings Account is used to pay eligible medical expenses and you can take it with you if you were to cease employment with Luna Innovations.

With a Health Reimbursement Account (HRA), Luna Innovations puts a set amount of money into an account for you depending on which plan you choose. You can use this money to pay the underlying medical plan deductible. This money does not roll over from year to year. If you were to leave Luna, the funds in the HRA account would stay with Luna.

HRA 809

The $2,000 (individual)/$4,000 (family) deductible will be shared by you and Luna. Individual Example: $2,000 deductible – Luna will pay the first $1,500 and you will be responsible for the remaining $500 Family Example $4,000 deductible – Luna will pay the first $3,000 and you will be responsible for the remaining $1,000

HRA 808

The $5,000 (individual)/$10,000 (family) deductible will be shared by you and Luna. Individual Example: $5,000 deductible – Luna will pay the first $1,000 and you will be responsible for the remaining $4,000 Family Example: $10,000 deductible – Luna will pay the first $2,000 and you will be responsible for the remaining $8,000 ANTHEM MEDICAL AND PRESCRIPTION DRUGS

Please see a brief summary of the plan offerings listed below:

Services Plan 809 (HRA) Plan 808 (HRA) Plan GHSA448

$2,000/$4,000 $5,000/$10,000 $3,000/$6,000 Routine Wellness Paid at 100% Paid at 100% Paid at 100% Checkup Deductible -Individual $2,000/$4,000 $5,000/$10,000 $3,000/$6,000 -Family** Out of Pocket Maximum $3,000/$6,000 $6,000/$12,000 $4,000/$8,000 -Individual -Family HRA Contribution to offset $1,500/$3,000 $1,000/$2,000 N/A deductible - Individual - Family Primary Care Subject to deductible Subject to deductible Subject to deductible Physician $0 afterwards $0 afterwards $0 afterwards Specialist Subject to deductible Subject to deductible Subject to deductible $0 afterwards $0 afterwards $0 afterwards Outpatient Subject to deductible Subject to deductible Subject to deductible Facility/Outpatient $0 afterwards $0 afterwards $0 afterwards Hospital Inpatient Hospital Subject to deductible Subject to deductible Subject to deductible $0 afterwards $0 afterwards $0 afterwards Inpatient Subject to deductible Subject to deductible Subject to deductible Behavioral Health $0 afterwards $0 afterwards $0 afterwards Care & Substance Abuse Outpatient Subject to deductible Subject to deductible Subject to deductible Behavioral Health $0 afterwards $0 afterwards $0 afterwards Care & Substance Abuse Urgent Care Subject to deductible Subject to deductible Subject to deductible $0 afterwards $0 afterwards $0 afterwards

2 Emergency Care Subject to deductible Subject to deductible Subject to deductible $0 afterwards $0 afterwards $0 afterwards Services Plan 809 (HRA) Plan 808 (HRA) Plan GHSA 448

$2,000/$4,000 $5,000/$10,000 $3,000/$6,000 Dependent Age End of the month the dependent attains age 26

Prescription Drugs After above After above After above deductible deductible deductible -Generic Retail/Mail Order Retail/Mail Order Retail/Mail Order -Preferred Brand $10/$10 $10/$10 $10/$10 -Non-Preferred Brand $30/$60 $30/$60 $30/$60 $50 or 20%/$150 or $50 or 20%/$150 or $50 or 20%/$150 or 20% 20% 20%

*In-Network Only Benefits are shown in this example **Please note that the family deductible could be met by one member or a combination of members enrolled in the plan. Employee Bi-Monthly Cost (24 Pay Periods) Employee Employee & Employee & Employee & Employee & Only Spouse Child Children Family HRA 809 $24.04 $214.82 $73.03 $197.50 $357.12 HRA 808 $0 $159.19 $49.37 $144.11 $269.35 GHSA 448 $0 $106.98 $22.04 $89.96 $192.36

ANTHEM Blue View Vision

Below is a summary of the vision benefits that are included in the medical plans above. In addition to the services listed below there are valuable discounts on additional eyewear and accessories.

Services Blue View Vision 130/$25 12/24 Rider Annual Routine Eye Exam $15 copay Eyeglass Frames – Every two years you may select any eyeglass frame and receive the following allowance toward the purchase $130 allowance then 20% off remaining balance price Lens options (once every year) -Standard plastic single vision lenses (1 pair) -Standard plastic bifocal lenses (1 pair) $25 copay, then covered in full -Standard plastic trifocal lenses (1 pair) Eyeglass lens upgrades Member cost for upgrades -UV coating -$15 -Tint (solid and gradient) -$15 -Standard Polycarbonate -$40

3 -Transitions lenses -$75 -Progressive lenses -Progressive lenses -Standard -$65 -Premium Tier 1 -$91 -Premium Tier 2 -$97 -Premium Tier 3 -$103 -Standard Anti-Reflective Coating -$45 -Premium Tier 1 Anti-Reflective Coating -$57 Premium Tier 2 Anti-Reflective Coating -$68 -Other add-ons and service -20% off of retail price Contact lenses Contact lenses -Elective conventional lenses -$130 allowance then 15% off balance -Elective disposable lenses -$130 allowance -Non-elective contact lenses -Covered in full

DENTAL

Luna Innovations will continue to offer Dental Insurance through Delta Dental of VA.

Delta Dental Premier Plan Services Amount You Pay Preventive Services (100% Exams, cleanings, x-rays (Bitewings and Full mouth), Space coverage) Maintainers, Sealants, Healthy Smile, Healthy You* , Preventive benefits are not deducted from your annual maximum Deductible Applies to basic and major services only – $50 per person, $150 per family Basic Services Fillings, Oral Surgery, Endodontics, Periodontics (20% after deductible) Major Services (50% after Crowns, Dentures,Implants deductible) Annual Maximum The plan pays a maximum of $1,500 per year per covered person Orthodontics (50% after Covers dependent children up to age 19 deductible) Orthodontics Lifetime $1,000 (Exempt from the deductible) Maximum Dependent Status To the end of the month the dependent attains age 26

*Allows for one additional cleaning per year for members with diabetes, pregnant members and those with certain heart conditions.

4 Dental Employee Bi-Monthly Cost (24 pay periods) Employee Employee & Employee & Employee & Employee & Only Child Children Spouse Family $1.10 $21.18 $21.18 $17.27 $37.36

BASIC LIFE INSURANCE

Luna Innovations provides it’s innovators with Basic Life and Accidental Death and Dismemberment Insurance. Aetna life insurance will be administering this benefit this year. The coverage that is provided is 2 times annual earnings to a maximum of $500,000. Luna also provides dependent coverage in the amount of $2,000 for spouse and $1,000 for children.

VOLUNTARY LIFE INSURANCE

Innovators who want to supplement their group life insurance benefits may purchase additional coverage through Aetna. When you enroll yourself and/or your dependents in this benefit, you pay the full cost through payroll deductions. You are able to purchase life amounts in increments of $10,000 to a lesser of 5 times annual salary or $500,000. The guarantee issue amount is the lesser of 3 times salary or $150,000. The guarantee issue only applies when you are first eligible for coverage. If you do not apply within 31 days of first becoming eligible, you would need to submit for medical evidence of insurability.

Your spouse can purchase coverage in $5,000 increments to the lesser of 50% of your coverage or $250,000. Spouse guarantee issue is $20,000.

You also have the option to purchase life insurance on your dependent children until they attain age 19, 25 if a full time student. You can purchase coverage in increments of $2,000 to a $10,000 maximum.

All innovators have the option to increase coverage at open enrollment in $40,000 increments up to the guarantee issue without evidence of insurability. This option is only available if you enrolled when first eligible.

Cost is based upon age and amount chosen. Please refer to the Aetna enrollment form for a detailed over view of the cost.

5 DISABILITY INCOME BENEFITS

All Luna Innovations Innovators are provided with Short and Long Term Disability Benefits through Aetna. In the event you become disabled due to injury or sickness, disability income benefits are provided as a source of income. Disability benefits received are treated as taxable income to innovators.

Short-Term Disability Long-Term Disability

Benefits Begin Day 8 After 90 days

Benefits Payable 12 weeks Social Security Normal Retirement Age Percentage of Income 60% 60% Replaced Maximum Benefit $1,000 per week $10,000 per month

EMPLOYEE ASSITANCE PROGRAM

All employees have access to a counselor through Anthem’s employee assistance program. This program offers 24/7 access for numerous issues. This program offers 4 face to face sessions per issue.

6 FLEXIBLE SPENDING ACCOUNT

Want to enjoy additional tax relief—Enroll in Luna Innovations Flexible Spending Account and Premium Only Plan

 Save up to 25 percent! Money put into the plan and used for qualified expenses goes in tax free.  Dependent and health care expenses are eligible.  Get reimbursed for eligible out-of-pocket medical expenses such as medical copays, Rx copays, glasses, contacts or contact solution, dental or orthodontia services.  Pay Medical/Dental Premiums with pre-tax dollars  OTC medications are no longer an eligible expense unless you have a prescription from your provider.

Take advantage of the opportunity to enroll during open enrollment or within 30 days of a qualifying event. Flexible Spending Account/Premium Only Calculator

On the next page is an example of how you can calculate your own medical and dependent care expenses as well as the portion of premium you are paying. Once you have estimated what your total medical, dental, vision, dependent care expenses, and portion of premium that you are paying will be, add all of those amounts up. Look to the chart on the right that is the tax estimate table. Multiply total expenses by your tax bracket percentage to get your annual tax savings. Then divide by your monthly paycheck to see the increase in spendable income!!!

Please note that if you have a Health Savings Account or will be implementing one this year, you are not eligible to use the medical flex account.

The maximum amount that employees can set aside in a medical account is $2,300. The maximum amount for the dependent care account is $5,000 or $2,500 if married and filing separately.

7 Medical Vision Dental Dependent Care Expenses Deductibles $ Exams $ Routine Exam $ Children $ Copays $ Eye Surgery $ Fillings/Crowns $ Adults $ Prescriptions $ Lenses/Frames $ Orthodontics $ Over the $ Contacts/Solutions $ Other $ Cou nter Dru gs Other $ Other $ $ Total $ Total $ Total $ Total $

Estimated Annual Expenses & Tax Savings

Total Medical + Vision + Dental Expenses $____ Tax Estimate Table Total Dependent Care Expenses +____ Annual Household Estimated Tax Rate Total Medical/Dental Premium +____ Earnings Total Expenses $____ < $30,000 25% Tax Bracket Percentage (see right) X____ $30,000 - $40,000 29% Annual Tax Savings $____ $40,000 - $70,000 31% Number of Pay Periods / ____ > $70,000 33% Estimated Savings Amount Per Paycheck $____ *Based on Social Security, federal, and state income taxes. Rates are estimates based on national averages and may not reflect your actual tax rate.

The information in this Enrollment Guide is presented for illustrative purposes and is based on information provided by the employer and the insurance carriers. The text contained in this Guide was taken from various summary plan descriptions and benefit information. While every effort was taken to accurately report your benefits, discrepancies, or errors are always possible. In case of discrepancy between the Guide and the actual plan documents the actual plan documents will prevail. All information is confidential, pursuant to the Health Insurance Portability and Accountability Act of 1996. If you have any questions about your Guide, contact Human Resources.

8 Q U E S T I O N S & A N S W E R S

Changes that can be made effective January 1, 2012?  Enroll in the Medical plan.  Add or drop dependents in the Medical plan  Enroll in the Dental plan.  Add or drop dependents in the Dental plan.  Enroll yourself, spouse and dependent children in the Voluntary Life insurance plan.  Update Beneficiary  Complete Benefits Enrollment Worksheet. Make sure the emergency contact information is updated on this form.  Re-enroll in the flexible spending account. All employees have to re-enroll if you wish to participate in the flexible spending account.  This Guide is intended to be a Summary of Material Modification (SMM) for your Benefit Plans. It explains changes being made to the plan effective January 1, 2012. This is important information, so please keep this document with your Summary Plan Description (SPD) and other benefits information.

How do I enroll?  You only need to fill out an Anthem form if you are enrolling for the first time or making a change.  You only need to fill out a Delta Dental form if you are enrolling for the first time or making a change.  If you are increasing voluntary life coverage by more than $40,000 (up to the guarantee issue) or if you choose to enroll now and did not do so when first eligible, you will need to submit evidence of insurability to Aetna.  Everyone who chooses to participate in the flexible spending account will have to re enroll and specify what amount is to come out of their paycheck  Benefits Enrollment Worksheet - everyone needs to fill out  All forms are available on the Luna Innovations portal with the exception of the Benefits Enrollment Worksheet. What is the deadline to enroll in the benefits?  All paperwork is due to HR by close of business on December 2nd, 2011.

I am not enrolling in the benefits. Is there anything that I need to do?  You must still fill out the benefit enrollment worksheet. This form also has a place to waive coverage and update emergency contact information.  If you are opting out of coverage, you need to complete the Opt Out Insurance Form which can be found out on the portal.

9 Who do I contact with questions? Contact Gail Sterner in Human Resources.

******* PLEASE NOTE: IT IS THE EMPLOYEE’S RESPONSIBILITY TO REPORT ANY CHANGES TO HUMAN RESOURCES. EXAMPLES OF CHANGES ARE; MARRIAGE, DIVORCE, ADDRESS CHANGE, PHONE NUMBER CHANGE, ETC. THESE CHANGES MUST BE REPORTED TO HUMAN RESOURCES WITHIN 30 DAYS OF THE CHANGE. S p e c i a l E n r o l l m e n t N o t i c e

This notice is being provided to ensure that you understand your right to apply for group health insurance coverage. You should read this notice even if you plan to waive coverage at this time.

Loss of Other Coverage

If you are declining coverage for yourself or your dependents (including your spouse) because of other health insurance or group health plan coverage, you may be able to enroll yourself and your dependents in this plan if you or your dependents lose eligibility for that other coverage (or if the employer stops contributing toward you or your dependents’ other coverage). However, you must request enrollment within 30 days after you or your dependents’ other coverage ends (or after the employer stops contributing toward the other coverage). There is a 60 day special enrollment period for employees and their dependents if their Medicaid or CHIP coverage is terminated due to loss of eligibility. Please note that program information about the Medicaid and the Children’s Health Insurance program(CHIP) is located out on the Luna Portal.

Example You waived coverage because you were covered under a plan offered by your spouse’s employer. Your spouse terminates his/her employment. If you notify your employer within 30 days of the date coverage ends, you and your eligible dependents may apply for coverage under our health plan.

Marriage, Birth, or Adoption

If you have a new dependent as a result of a marriage, birth, adoption or placement for adoption, you may be able to enroll yourself and your dependents. However, you must request enrollment within 30 days after the marriage, birth, or placement for adoption. Example When you were hired by us, you were single and chose not to elect health insurance benefits. One year later, you marry. You and your eligible dependents are entitled to enroll in this group health plan. However, you must apply within 30 days from the date of your marriage.

10 For More Information or Assistance

To request special enrollment or obtain more information, please contact:

Name: Human Resources

If you and your eligible dependents enroll during a special enrollment period, as described above, you are not considered a late enrollee. Therefore, your group health plan may not require you to serve a pre-existing condition waiting period of more than 12 months. Any pre-existing condition waiting period will be reduced by the time served in a qualified plan.

The Women’s Health and Cancer Rights Act of 1998 Important Notice

In October 1998, Congress enacted the Women’s Health and Cancer Rights Act of 1998. This notice explains some important provisions of the Act. Please review this information carefully.

As specified in the Women’s Health and Cancer Rights Act, a plan participant or beneficiary who elects breast reconstruction in connection with a mastectomy is also entitled to the following benefits: 1. Reconstruction of the breast on which the mastectomy has been performed; 1. Surgery and reconstruction of the other breast to produce a symmetrical appearance; and 2. Prosthesis and treatment of physical complications in all stages of mastectomy, including lymphedemas.

Health plans must determine the manner of coverage in consultation with the attending physician and the patient. Coverage for breast reconstruction and related services may be subject to deductibles and coinsurance amounts that are consistent with those that apply to other benefits under the plan.

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