New Retiree Healthcare Benefi ts
This brochure explains the new individual healthcare benefi ts for Medicare-eligible Retirees, their Medicare-eligible spouses,* and their surviving spouses* who are Medicare-eligible due to age or disability. It also outlines the steps you must take and communications you’ll receive as you prepare to enroll for your 2010 healthcare benefi ts. The good news is that you have a lot of choices for healthcare coverage for 2010. The better news is that Extend Health can help you navigate through your options and select the benefi ts that best meet your needs – customizing your coverage and potentially saving you money. And, to help you pay for healthcare expenses and insurance premiums, Avon will contribute $1,000 in 2010 to a tax-free Health Reimbursement Arrangement (HRA) for you and your Medicare-eligible spouse.* Funds from your HRA can be used to pay you back on a tax-free basis for some of the money you spend on healthcare.
What’s Inside
■ Introducing Extend Health – Your Personal Benefi t Advisor ■ A Step-by-Step Guide to Enrolling in Healthcare Coverage
for 2010
■ Health Reimbursement Arrangement (HRA) 101 – What You
Need to Know
■ Where to Go for Help
Remember to read all of the information you receive in the coming weeks so that you know how to contact an Extend
Health benefi t
advisor. The advisor will serve as your guide throughout the Open Enrollment process – from start to fi nish. See inside for more information.
Take Action!
Who Is Eligible For The HRA and Services from Extend Health
The information in this brochure pertains to Avon Medicare-eligible Retirees, their Medicare-eligible
spouses,* and their surviving spouses* who are Medicare-eligible due to age or disability. If your spouse* is currently not Medicare-eligible, he or she will be directed to enroll in one of Avon’s non-Medicare-eligible Retiree healthcare plan options. Information about this Medicare-eligible healthcare offering will be sent to your spouse* approximately three months before he or she becomes eligible for Medicare.
In addition, in order to be eligible for the annual HRA contribution, one of the following rules must apply to you and/or your family’s situation:
• You must be enrolled in Avon’s Retiree Medical Plan on December 31, 2009, OR
• You were hired before January 2, 2005, and you otherwise satisfy Retiree medical eligibility rules, OR
• You temporarily waived enrollment in Avon’s Retiree Medical Plan when you retired and planned on enrolling at a future date.
You are NOT eligible if you had been previously enrolled in Avon’s Retiree Medical Plan and subsequently dropped coverage prior to January 1, 2010.
New for 2010 – Dental and Vision Benefi ts for Retirees
For the fi rst time, during this year’s Open Enrollment period, you can enroll in individual dental and vision coverage through Extend Health! Previously, Avon’s Retiree benefi ts did not include these options. That means you can choose coverage for 2010 that meets even more of your healthcare needs.
Note: If your dependent child is Medicare-eligible, he/she will also be eligible for services from
Extend Health. However, he/she will not receive an HRA contribution from Avon. The maximum
Avon contribution a Medicare-eligible family will receive in 2010 will be $2,000.
Calendar of Events
Over the next few weeks, you’ll receive important information from Extend Health. This information will help you transition to your new individual Retiree health coverage. Keep the dates below in mind as you prepare for Open Enrollment.
Early September Getting Started Guide Arrives in the MailGetting Started Guide Arrives in the MailGetting Started Guide
Review the material in this guide. Early September Enrollment Appointments Begin
Beginning September 8, an advisor from Extend Health will be calling you to introduce themselves, verify your contact information, give you an idea of what to expect, and schedule an enrollment appointment that is convenient for you.
Early to Mid October
Attend Information Sessions and Webinars
Learn more about your individual benefi t options and how to enroll, and get answers to your benefi t questions. Look for details about dates and times provided with the Getting Started Guide.
Mid-October Enrollment Guide Arrives in the Mail
Review this detailed information about how to evaluate your individual healthcare coverage options.
Late October Extend Health Enrollment
If you haven’t scheduled an enrollment appointment you will need to call a benefi t advisor at Extend Health in October. Be sure to have reviewed the Extend Health in October. Be sure to have reviewed the Extend Health Getting Started Guide, the Enrollment Guide, and
Getting Started Guide, the Enrollment Guide, and
Getting Started Guide Extend Health’s online
tools. Your benefi t advisor will answer your questions and help you enroll in the individual healthcare coverage that fi ts you and your dependents best. The phone number to call will be provided in the Enrollment Guide.
Early December HRA (Health Reimbursement Arrangement) Welcome Guide Arrives in the Mail
This guide explains how the HRA process works and provides the information you’ll need to set up and manage your account.
December 31, 2009 Avon Group Retiree Medical Coverage for Medicare-eligible Retirees Ends December 31, 2009 Open Enrollment Deadline
Introducing Extend Health – Your Personal Benefi t Advisor
Avon is dedicated to making the transition to your 2010 healthcare coverage as easy as possible. That’s why we’ve made available Extend Health, a service that will offer you and your Medicare-eligible spouse* personalized assistance. For Open Enrollment, a licensed Extend Health benefit advisor will provide:
■ One-on-one telephone support to help you make an informed and confident enrollment decision for 2010;
■ Information about the differences between various options, and the costs of each of those options;
■ Advice and decision-making support, based on your current coverage and future needs;
and
■ Help enrolling in individual medical, prescription drug, dental, and vision plans.
You’ll receive information in early September about how to contact an Extend Health benefi t advisor Extend Health benefi t advisor Extend Health
at your convenience. These advisors will guide you through the entire Open Enrollment process so you can select the individual coverage that’s right for you. For immediate access to information,
Extend Health offers a personalized website for education, evaluation of options, and Open
Enrollment information. The services of Extend Health are being offered to you on a completely voluntary basis. You are under no obligation to use their services.
A Step-by-Step Guide to Enrolling in
Healthcare Coverage for 2010
Beginning in the fall, Extend Health will help you enroll in an individual healthcare policy customized to fit your needs and budget. This policy will work in partnership with the benefi ts you receive from Medicare. A licensed benefi t advisor will guide you through each step in this process:
Step 1. Get Ready...
Learn About Your Options and What You Need to Do
In early September, you will receive the Getting Started Guide from Getting Started Guide from Getting Started Guide Extend Health that will tell
you how to prepare for Open Enrollment and schedule a phone appointment with a benefi t advisor. It will also contain a schedule of key dates and deadlines; and a health history worksheet. Completing this worksheet before your phone appointment will help the Extend Health benefi t advisor verify key information and make the Open Enrollment process easier for you.
Then, toward the end of September, you will receive an Enrollment Guide from Extend Health with instructions about how to evaluate and enroll in the individual policy that’s right for you. The Enrollment Guide will provide helpful information on eligibility, and additional information about working with Extend Health.
Step 2. Get Set…
Get Expert Advice and Pick Your Plan
Using the Getting Started Guide, the Enrollment Guide, and Getting Started Guide, the Enrollment Guide, and Getting Started Guide Extend Health’s online tools, you
will review the options available to you before speaking with a benefit advisor. During your scheduled call-in time, you will provide medical background and other basic information to a benefit advisor, who will recommend certain options. Compare your options and decide what level of coverage is right for you.
Step 3. Go!
Enroll in Your New Healthcare Coverage
Health Reimbursement Arrangement (HRA) 101 –
What You Need to Know
Instead of receiving medical and prescription drug coverage through the Avon Retiree group healthcare plans, you will now be responsible for choosing and paying for your own individual health coverage. You can then be reimbursed on a tax-free basis from the new Avon HRA to the extent that funds are available in your HRA. In 2010, Avon will contribute $1,000 on a pro-rata basis to an HRA both for you and your Medicare-eligible spouse.*
Extend Health will be the administrator for Avon’s HRA. This means you will submit claims to Extend Health will be the administrator for Avon’s HRA. This means you will submit claims to
Extend Health Extend
Health, which will reimburse you with the funds in your HRA for qualifi ed healthcare expenses, including ■ Premiums for individual Medicare supplemental insurance such as Medicare Advantage,
Medigap, and prescription drug plans, whether or not you purchase a policy through
Extend Health;
■ Out-of-pocket expenses like deductibles and co-pays; ■ Dental and vision plan premiums; and
■ Eligible expenses incurred by your dependent children (Internal Revenue Service [IRS]
rules determine who is a dependent child for these purposes).
Extend Health will mail you an HRA Guide in late December that will help you open and access your HRA Guide in late December that will help you open and access your HRA Guide
HRA, and provide claims and processing information. The HRA Guide will also include a complete HRA Guide will also include a complete HRA Guide
listing of HRA reimbursable expenses. Under existing IRS regulations, HRA reimbursements are NOT taxable and funds can remain in your HRA year after year.
HRA Funding and Claim Reimbursements
In 2010, Avon will provide an annual contribution of $1,000, which will be made available on a monthly basis ($83.33 per month) for reimbursement. Here is how it will work:
Example: Retiree is eligible for the HRA on January 1, 2010
In February 2010, the Retiree will have $166.66 of their annual contribution of $1,000 available for reimbursement. The Retiree incurs $250 of eligible expenses on February 15, 2010. The Retiree submits a claim form to Extend Health to be reimbursed by the HRA. A payment of $166.66 will be authorized from the HRA and the remaining balance of $83.34 from the claim will pend. When the March HRA contribution of $83.33 is posted to the Retiree’s HRA account, another payment of $83.33 will be automatically generated.
In general, participants can submit claims at any time, but if the claims you incur and submit in a calendar year exceed your annual HRA contribution, any eligible and unreimbursed claims will be carried forward to the next year and be reimbursed with the next monthly allocation. Conversely, if a Retiree has an account balance left over at the end of the year, the Retiree can carry forward that balance to use for future expenses.
Establishing Direct Deposit for Your HRA Reimbursements
To receive your reimbursements as quickly as possible, we encourage you to establish direct deposit, where available. By using this method, once a claim is submitted, Extend Health can make a direct deposit from your HRA to your designated checking or savings account. You can fi nd information about how to establish direct deposit for your reimbursements in the Extend Health HRA Guide that you will receive in mid-December. Unless you choose HRA Guide that you will receive in mid-December. Unless you choose HRA Guide
to set up direct deposit, all reimbursements will be made by check and mailed to your address on fi le with Extend Health.
* Funds will be prorated and deposited to your HRA at the beginning of each month. If a Retiree or dependent becomes eligible for Medicare coverage during the year, that person will be allocated a prorated HRA contribution that will begin coincident with the fi rst day of the month the Retiree or dependent becomes Medicare-eligible. For example, if a Retiree or dependent becomes eligible for Medicare coverage in June, the monthly HRA contributions will begin in June and continue for the balance of the year. That person will not receive funds retroactive to the beginning of the year. The following year, contributions will begin in January.
How HRAs work
You incur an eligible health expense.
You pay for that expense. You submit your claim to Extend Health. Extend Health reimburses you
Where to Go for Help
Choosing the right healthcare coverage is
important, so let us help! In the weeks ahead, you’ll receive additional communications from
Extend Health with much more information.
Please review these materials closely. In the meantime, if you have questions about your current benefi ts, please contact the Avon Benefi ts Center at 1-877-781-1960.
This publication is a general description of the changes to the benefi t plans presently available to Medicare-eligible Retirees of Avon Products, Inc. and certain of its present and former subsidiaries, their eligible spouses, surviving spouses, domestic partners, and their eligible dependents. The Company reserves the right to change its benefi t plans or any part of them, and amend or terminate at any time any plans or programs for Associates, Retirees, surviving spouses, domestic partners, and their eligible dependents. The HRA is described in detail in offi cial plan documents. If this material inadvertently disagrees with the plan documents, the plan documents will prevail. The individual medical coverage offered through Extend Health is not supported, endorsed, or maintained by Avon and participation is completely voluntary.
