The Big Picture

While many of the things you’ll be asked to do aren’t new, a key difference will be that you’ll be much more accountable for taking action to improve your health – and for achieving real results. To help, our traditional health plan will evolve into something better – a Plan For Health.

Going forward, we’ll be combining an innovative approach to health coverage with preventive care, wellness programs and new rewards – with you in the driver’s seat.

• CVS Caremark will continue to work hard to minimize increases to health care costs. How? By choosing the carriers that offer the best possible discounts and by giving you the rewards, the help and the tools you need to manage your costs and reduce risks to your health.
• Your responsibility will be to:
  • Use these resources to get results when it comes to your health; and
  • Take more control as a consumer over the cost of the services you use.

Colleagues who take action – and get results – will earn rewards and improve their health. Colleagues who don’t take action won’t receive rewards – and may face other financial consequences too.

The bottom line: reducing your health risks and making smart consumer decisions are still up to you. But there will be greater financial consequences for colleagues who don’t take action or who fail to achieve results that put them on a path to better health.

Introducing the Medical Plan Option of the Future – Today

The 2013/2014 plan year will be the final year that we will offer our Build Your Own Preferred Provider Organization (BYO PPO) options to eligible colleagues and their families. In 2014/2015, all our BYO PPO options will be replaced by a different type of medical plan option – the Health Savings Plan. This means that in future years, you’ll have your choice of multiple Health Savings Plan options – but no BYO PPO options.

To help you prepare, CVS Caremark won’t eliminate our BYO PPO options right away. Instead, when you enroll for 2013/2014 benefits, we’ll offer a single Health Savings Plan option alongside a streamlined number of our BYO PPO options.

Also known as a “high deductible health plan,” the Health Savings Plan option requires you to meet a higher deductible ($2,000 individual/$4,000 family) than you’re used to with the BYO PPO options before the plan starts paying benefits for eligible medical services and prescription drugs.

• Instead of paying a copay when you see your doctor, you’ll pay the full discounted rate (except for in-network preventive medical care, which is covered at 100%) until you reach your deductible.
• When you fill a prescription, you’ll need to pay the full discounted cost for drugs that are not on the CVS Caremark preventive drug list until you meet your deductible. Once you meet your deductible, you and the plan will share costs through coinsurance. (The deductible won’t apply to drugs that are on the CVS Caremark preventive drug list.)

The idea? To give you more incentive to make cost-effective consumer decisions about your care – including comparison shopping for providers and services.

Important! If you live in California, Hawaii or Puerto Rico, the Health Savings Plan option won’t be available to you for 2013/2014. However, CVS Caremark will continue to evaluate this option and may offer it to you in the future.

See how the new Health Savings Plan option works

So What’s in It for You?

While you’ll need to plan more carefully to manage a higher deductible, the plan offers attractive features you won’t find in any other CVS Caremark medical plan option:

• More money in your wallet. When you choose the Health Savings Plan option, you pay the lowest paycheck contributions – something that makes the higher deductible a lot more manageable.
• A special savings account. The Health Savings Plan is also the only CVS Caremark medical plan option that gives you the opportunity to open a special savings account. It’s called a “Health Savings Account” (HSA) and it works like a 401(k) plan for health care expenses – only with more tax advantages and more flexibility.

Setting Up Your HSA Is Easy!

If you choose the Health Savings Plan, don’t forget to open an HSA. The fastest and easiest way to do it is with PayFlex – our new HSA administrator. Just follow a few simple steps when you enroll for benefits on myHR.

Alternately, you may open your HSA with another custodian or financial institution of your choice. However, to make pre-tax payroll contributions to your HSA and to receive the CVS Caremark employer contribution, you must set up your HSA through PayFlex.

Don’t forget! You can’t receive CVS Caremark’s contributions to your account, or save your own money in it through pre-tax payroll deductions, until you open your HSA through PayFlex.

• Contributions from CVS Caremark. To help get you off to a good start with your HSA, CVS Caremark will make quarterly contributions to your account. The amount you get will depend on whom you cover and your annual base salary. Colleagues who cover themselves and dependent(s) will have to meet a higher deductible and therefore will receive larger contributions than colleagues who cover themselves only. Lower-paid colleagues will receive larger contributions than higher-paid colleagues. Use money from your HSA to pay eligible health expenses as they come along – or save it for future expenses. You can also add your own contributions tax-free:
  • Save up to a combined maximum of $3,250 if you cover just yourself.
  • Save up to $6,450 if you’re covering yourself and at least one dependent.
  You can also make up to an extra $1,000 “catch-up” contribution, starting in the year in which you turn age 55.
• No expiration date. There’s no “use-it-or-lose-it” rule. So any money left over in your account at the end of the plan year simply rolls over to the next year. It keeps growing tax-free until you use it and it’s always yours – even if you leave CVS Caremark.
• A better way to save for unplanned expenses. Even if you don’t expect to have many expenses, it’s still a great idea to start saving money this year in your HSA. That way, you’ll already have money in your account for next year when others will be just starting out with a Health Savings Plan option. Meanwhile, your savings will grow tax-free until you need it.

See how to put a Health Savings Account to work for you

Still Undecided?

Just use the new and improved tools on myHR when you enroll. Using them is the best way to avoid mistakes and choose the option that’s best for you.

Streamlining Our Current Medical Plan Options

When you enroll for 2013/2014 benefits, there’s a good chance your current medical plan option won’t be available.

• In California, the Health Net POS 90 option is being eliminated.
• In states where colleagues can choose a Build Your Own Preferred Provider Organization (BYO PPO) option, we’re eliminating some of the highest-cost options. For example, BYO PPO options with 90% coinsurance won’t be available. In addition, while some of the deductibles will stay the same, the lowest deductible option will be eliminated. A higher deductible option will also be added. Out-of-pocket maximums and office visit copays will generally be higher.

If You Don’t Enroll

If your current option is no longer available – and you don’t enroll – you’ll be automatically enrolled in a different option.

• Health Net POS 90 members who don’t enroll will receive Health Net POS 80 coverage.
• BYO PPO members whose current option will be eliminated for 2013/2014 and who don’t enroll will receive coverage under the Health Savings Plan. However, to get CVS Caremark’s contribution to your Health Savings Account (HSA), you must open an HSA with PayFlex – our new HSA administrator. Opening an HSA through PayFlex takes just a few simple steps and you can do it when you enroll. But don’t forget: CVS Caremark can’t open an HSA for you. So if you want to be able to use the money that CVS Caremark contributes, you must open an HSA through PayFlex.

New Wellness Rewards: Moving from Awareness to Accountability

You already know that to avoid the $600 Wellness Differential* and get the lowest possible costs for medical coverage, you must get a health screening and complete a Wellness Review by May 1, 2013.

But, starting in June, we’re raising the bar to put even more colleagues on their path to better health. Instead of simply knowing your risks, you’ll also be required to take action to reduce them.

This means that to be eligible for rewards, all colleagues covered under a CVS Caremark medical plan option must be tobacco-free by May 1, 2014. You’ll also need to take action to make sure that at least two of four important health measures are in acceptable ranges by May 1, 2014 (unless you’re medically unable to do so). These four measures are body mass index (BMI), blood pressure, blood sugar and cholesterol.

To see if your numbers are in acceptable ranges, just log on to the WebMD WellRewards website at www.webmdhealth.com/wellrewards. If you had a health screening and completed a Wellness Review by May 1, 2013, they’ll be displayed in June.

Tobacco-Free with Good Numbers? Great News!

If your numbers are in acceptable ranges for two or more measures and you noted that you are tobacco-free based on the screening and Wellness Review you completed by May 1, 2013, you’re on your way to earning rewards. To finish, just continue to be tobacco-free, keep your numbers in range and get your annual health screening and complete your annual Wellness Review between February 1, 2014 and May 1, 2014. When you do:

• You’ll avoid the $600 Wellness Differential for 2014/2015*.
• You’ll earn an additional $500 company contribution for your Health Savings Account in 2014/2015**.
• You’ll enjoy the benefits of better health, while you reduce your risk of a costly, preventable illness down the road.

Didn’t Meet 2 of 4 Health Measures? Take These Steps

If you didn’t meet at least two of the four key health measures based on the screening and Wellness Review you completed by May 1, 2013, here’s what you need to do to be eligible for rewards:

• Continue to be tobacco-free;
• Get your annual screening and complete your annual Wellness Review between February 1, 2014 and May 1, 2014 to avoid the $600 Wellness Differential*; and
• Get two of four of your numbers into acceptable ranges by May 1, 2014 (unless you’re medically unable to do so).

Tobacco User? Here’s What You Must Do

If you indicated that you were not tobacco-free on the Wellness Review you completed by May 1, 2013, you’re still eligible for rewards as long as you:

• Quit tobacco
  or
  Participate in the WebMD tobacco cessation program (regardless of whether you quit at the end) and complete three telephonic health coaching sessions by May 15, 2014;
• Get your annual screening and complete your annual Wellness Review between February 1, 2014 and May 1, 2014 to avoid the $600 Wellness Differential*; and
• Keep your numbers within the acceptable ranges (unless you’re medically unable to do so).

Have Work to Do? Get Started Early!

Improving your numbers and reducing your risks takes time. So make a plan to start early. The more time you give yourself to improve your numbers, the more likely it is that you’ll hit your target, avoid a last-minute crunch and maximize your rewards from CVS Caremark. Need help getting – or staying – on the path to better health? Starting in June, partner with a WebMD wellness coach over the phone at no cost to you!

*The $600 Wellness Differential does not apply to colleagues in Hawaii due to state requirements of the Hawaii pre-paid Health Act.
**The company Health Savings Account contribution will only apply for colleagues who are eligible for a Health Savings Plan option in 2014/2015.

Aligning Our Benefits with Our Business

As a health care company, it’s critical for CVS Caremark to provide innovative solutions to our customers. Whenever possible, we also need to find ways to test and use them ourselves – so we can benefit from them too.

Over the next few years, we’ll see many innovations and new services as the health care market evolves and as we take our customers on their path to better health. Going forward, we’ll continue to implement many of these solutions for CVS Caremark colleagues.

Introducing the Value Formulary

One of the first of these new solutions – a Value Formulary for prescription drug medications – will be offered in 2013/2014. Depending on the medical plan option you select, you may be able to choose between two options for prescription drug coverage:

• The Standard Formulary covers the generic, preferred and non-preferred brand drugs you have coverage for today if you’re currently enrolled in the CVS Caremark medical plan. Use generics whenever possible to get the best value. To view a list of preferred brand drugs, click here.
• The Value Formulary is a new option that covers a more limited range of the most effective prescription drugs for all conditions in return for lower paycheck contributions. It focuses mainly on generics and doesn’t cover certain lifestyle drugs.
  • See a complete list of all medications included in the Value Formulary.
  • View a Quick Reference List you can share with your doctor.

New Approaches to Provider Networks

CVS Caremark will also be working with our carriers – Aetna is the first – to pilot new approaches to provider networks. For 2013/2014, we’ll offer the following:

• Preferred lab partner for Aetna members. If your carrier is Aetna, you’ll pay less for lab work when you use Aetna’s preferred lab partner, Quest Diagnostics^®. Why? Because Quest offers Aetna members deeper discounts than other labs for the same services.
• High performing networks. In limited areas, CVS Caremark will be working with Aetna to pilot high performing networks. In this approach, Aetna has identified the doctors (for 20 specialties) and facilities within its network that have met defined cost and quality standards.
  For the specialties and facilities that are included in the Aetna Performing Network (APN):
  • When you use these high performing providers or facilities, you get a higher level of coverage and generally will pay less.
  • When you use in-network providers or facilities that aren’t on the high performance provider list, you’ll generally pay more.
  For 2013/2014, Aetna will offer its APN in the following areas:
  • Connecticut (select areas): 3-digit zip codes 064–069
  • New Jersey (state-wide): 3-digit zip codes 070–079; 082–085; 087–089
  • New York (select areas): 3-digit zip codes 100–119

In addition, if you live in one of these markets, you’ll get a higher level of coverage and pay less for diagnostic lab work if you use a Quest Diagnostics lab.