Welcome to Northrop Grumman - Benefits Online

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Welcome to Northrop Grumman - Benefits Online

Welcome to Northrop Grumman

New Hire Benefits Orientation


Today’s Agenda

Northrop Grumman Health Plan

Northrop Grumman Savings Plan

• Questions

2


Northrop Grumman Health Plan

• Overview

• Eligibility

• Medical Plan Options and Prescription Drug

Coverage

• Dental Plan Options and Vision Plan

• Flexible Spending Accounts (FSAs)

• Life, LTD and AD&D Insurance

• Additional Benefits Offerings

• Enrollment

• Tools and Resources

3


Northrop Grumman Health Plan Overview

Basic benefits

• Basic Life

• Basic Accidental Death

and Dismemberment

(AD&D)

• Basic Long-Term

Disability (LTD)*

• Employee Assistance

Program (EAP)

* 100% paid by some business units

Optional benefits

• Medical

• Dental

• Vision

• Optional LTD

• Optional life insurance

(employee, spouse,

children)

• Optional AD&D

insurance (employee,

family)

• Flexible Spending

Accounts (FSAs)

• Group Legal

You must

enroll to

select these

benefits

4


Who Is Eligible?

• Most employees who regularly work 20 or more

hours per week

• Eligible dependents

– Your spouse

– Your unmarried child(ren) under age 19 (or under

age 25 if full-time students)

– Your unmarried child(ren) of any age who are

disabled

– Your same-sex or opposite-sex domestic partner and

his or her eligible dependent child(ren)

5


If Your Spouse or

Domestic Partner Works

• For Northrop Grumman:

– One of you can enroll as an employee, the other as a dependent

OR

– Both of you can enroll separately as an employee

• Only one of you can enroll your eligible dependent children

in each type of coverage (medical, dental, vision, life, AD&D)

• For another employer:

– If your spouse or domestic partner’s employer offers medical

coverage and pays at least 50% of the cost of the plan, your

spouse or domestic partner must enroll in his/her employer’s plan

to be eligible to enroll in the Northrop Grumman Health Plan

– If your spouse’s or domestic partner’s employer subsidizes less

than 50%, he/she is eligible to enroll in the Northrop Grumman

Health Plan without enrolling in his/her employer’s plan

6


How the Plan Works

• You choose the coverage that meets your needs

• Coverage levels for medical, dental, vision

– Employee only

– Employee + spouse

– Employee + child(ren)

– Employee + family

• You must make your choices by the deadline shown on your

enrollment letter

• Your choices remain in effect for the entire benefit plan year, as

long as you are eligible July 1, 2008 — June 30, 2009

– You cannot make changes until the next enrollment period (May

2008) unless you have a qualified life event (e.g., marriage or

birth of a child)

7


Medical Plan Options

• Blue Cross Blue Shield (BCBS) Preferred Provider

Organization (PPO) options

– BCBS Preferred Medical PPO Option

– BCBS Premium Medical PPO Option

• Aetna Exclusive Provider Organization (EPO)

available in many states nationwide

• Lumenos Consumer-Driven Health Plan HRA

• Health Maintenance Organization (HMO) options

and Regional EPO options (in some areas)

• Aetna Global Benefits (overseas employees)

8


PPO Medical Plan Options

• Both PPO options are available in all U.S. locations

• You can go to any doctor or hospital

– You will pay less when you go to a doctor in the PPO

network

– You do not need to select a primary care provider (PCP)

• Prescription drug coverage through Express Scripts

– Express Scripts network includes most major pharmacy

chains

– Mail Service Program for long-term maintenance

medications, up to a 90-day supply delivered to your home

– 24-hour/seven days a week customer service line

• Mental health/substance abuse treatment coverage

through ValueOptions

9


Comparing the PPO Medical Plan

Options

Benefit plan

year

deductible

Office visit

copay

Coinsurance

Benefit plan

year out-ofpocket

maximum

10%

BCBS Preferred PPO

In-network

$500 per

individual/

$1,000 per

family

$20 (specialist

visit: $40)

$3,000 per

individual/

$6,000 per

family

40%

Out-ofnetwork

Out-ofnetwork

$800 per

individual/

$1,600 per

family

40%

coinsurance

$5,000 per

individual/

$10,000 per

family

10%

$2,000 per

individual/

$4,000 per

family

BCBS Premium PPO

In-network

$300 per

individual/

$600 per family

$15 (specialist

visit: $30)

$800 per

individual/

$1,600 per

family

40%

coinsurance

40%

$5,000 per

individual/

$10,000 per

family

10


BCBS PPO Preventive Care Benefit

• No dollar limit for in-network preventive care

services, such as routine physicals and

mammograms

– Services must be coded properly as “routine” care by

your physician to be covered (deductibles and

coinsurance will not apply)

– Services not coded as “routine” will not be eligible for

preventive care reimbursement (will be paid as

coded and covered; deductibles and coinsurance will

apply)

• Office visit copayment will apply

11


EPO and HMO Options

• One national EPO offered through Aetna

(available in many states nationwide)

• Regional EPOs vary by state

– California – Health Net, PacifiCare or Aetna

– Colorado – PacifiCare

– North Carolina – CIGNA

– Virginia – CIGNA or Aetna

• EPOs and HMOs work in the same way

• HMOs also vary by state

12


Aetna Global Benefits

• Available only for employees located overseas

• Dental coverage is included with the medical

(no separate election needed)

• Offers coverage both overseas as well as

within the U.S.

• Coverages offered are based on whether

services incurred overseas or within U.S:

– Overseas

– In-network within U.S.

– Out-of-network within U.S.

– Out-of-area within U.S.

13


Prescription Drug Coverage in the EPOs

and PPOs

• Your cost varies depending on the type of prescription drug you purchase

Type of Drug

Generic

Network Retail Pharmacy

(30-day supply)

$5 copay or 10% coinsurance,

whichever is greater

Preferred Brand $20 copay or 10%

coinsurance, whichever is

greater

Brand $40 copay or 10%

coinsurance, whichever is

greater

Mail Service Pharmacy

(up to 90-day supply)

$5 copay or 10%

coinsurance, whichever

is greater

$20 copay or 10%

coinsurance, whichever

is greater

$40 copay or 10%

coinsurance, whichever

is greater

In the PPOs, you can go to a non-network pharmacy and pay 50% of the eligible

cost. (Non-network coverage is not available in the EPOs.)

The annual out-of-pocket maximum for prescription drugs is:

• In the PPOs – $2,000/individual and $4,000/family

• In the EPOs – $1,500/individual and $3,000/family

14


Lumenos HRA Option

The Lumenos Program

Preventive

Care

• 100% coverage

for nationally

recommended

services

• No deductions

from the HRA

Preventive Care 100% Coverage

Health

Reimbursement

Account

Traditional

Health

Coverage

• Benefit plan year allocation from

Northrop Grumman

• Plan pays 100% when funds are

available

• Use it on HRA Extras

Bridge • Employee’s responsibility if expenses

exceed the benefit plan year HRA

allocation

• Paid only as expenses are incurred

• Can be reduced or eliminated by HRA

rollover

• Additional protection covers the

services allowed by Northrop

Grumman

• You pay coinsurance for covered

services

• 100% coverage after coinsurance

maximum is met

15


Lumenos CDHP

Plan Year Amounts

Employee

Employee +

Spouse

Employee

+

Child(ren)

Family

Preventive Care 100%

Health Reimbursement

Account (HRA)

Bridge

Traditional

Health Coverage

Coinsurance Maximum

$1,000

$800

$1,500

$1,200

$1,500

$1,200

$2,000

$1,600

90% covered for providers who accept Lumenos

discounts

60% of R&C for providers who do not accept Lumenos

discounts

Mental Health/Substance Abuse

and prescription drug benefits

are covered under the plan.

$4,200

$6,300

$6,300

www.info.lumenos.com

Username: northrop Password: ngc123

1-866-835-6862

$8,400

16


Dental Plan Options

• Three Delta Dental Preferred Provider Organization

(PPO) Plan Options

– Dental Care Plan Option

– Dental Care Plus Plan Option (includes orthodontia)

– Preventive Care Plan Option

• CIGNA Dental Health Maintenance Organization

(DHMO) Option (in some areas)

– You must select a CIGNA primary dentist

– No coverage if you access care without a referral

from your

primary dentist

– You pay a copay and the plan pays the rest

– Includes orthodontia

17


Comparing the PPO Dental Plan Options

Dental Care

Dental Care Plus

Preventive Care

Deductible

$50/$100 Preferred

$100/$200 Premier

$150/$250 Out-of-

Network

$50/$100 Preferred

$100/$200 Premier

$150/$250 Out-of-

Network

$0

(in- and out-of-network)

Annual Maximum

(per person)

Your Coinsurance

Preventive

Basic

Restorative

Major

Restorative

Orthodontia

$1,500 Preferred

$1,250 Premier

$1,000 Out-of-network

0%

80% Preferred

75% Premier

70% Out-of-network

50%

Not covered

$2,000 Preferred

$1,500 Premier

$1,000 Out-of-network

0%

80% Preferred

75% Premier

70% Out-network

50%

50% up to a lifetime

maximum of $2,000

$500

(in- and out-of-network)

0%

Not covered

Not covered

Not covered

18


Vision Plan Option

Northrop Grumman Vision Plan

– Administered by Vision Service Plan (VSP)

– You can see any vision provider, but will save money when

you visit a VSP network provider

• In-network coverage includes:

– Exams and lenses each benefit plan year ($10 copay)

– Frames every two benefit plan years ($10 copay)

• Plan pays up to $120

– Contact lenses (instead of eyeglasses) every benefit plan

year

• Plan pays up to $105

• Includes disposable lenses

19


Flexible Spending Account (FSA)

Options

Health

Care FSA

Description

– Allows you to set aside pre-tax

money to pay for eligible health care

expenses (e.g. deductibles,

copays, coinsurance, orthodontics

and some over-the-counter drugs)

– Elections are made on an annual basis

Maximum Annual

Contribution

$5,000

Dependent

Day Care FSA

– You can set aside pre-tax dollars from

your paycheck to pay for eligible

dependent day care expenses

– Elections are made on an annual basis

$5,000

You must use all the dollars in your FSA accounts,

or lose them at the end of the grace period (September 15,

2008), so estimate your expenses carefully!

20


Automatic FSA Claims

Reimbursement

• Your carriers will submit claims on your behalf if

you enroll in the Health Care FSA and select:

– One of the Blue Cross Blue Shield medical plan PPO

options – which includes prescription drugs through

Express Scripts

– The Aetna EPO

– Lumenos HRA

– A Delta Dental PPO plan option

• Benesyst (the FSA claims administrator) will

automatically reimburse you through your health

care FSA

21


Long-Term Disability (LTD) Benefits

• Basic LTD*

– 50% of your monthly base salary

• Optional LTD

– Your options are:

• Additional 10% for total coverage of 60% of your

monthly base salary

• Additional 20% for total coverage of 70% of your

monthly base salary

– No evidence of insurability (EOI) is required if you

enroll when newly eligible

• Maximum monthly benefit of $15,000 (reduced by

any other disability income you receive)

* 100% paid by some business units

22


Life Insurance

• Basic life

– Greater of: 1 X your annual base salary or $50,000

– Can limit to $50,000 to avoid imputed income

– 100% company-paid

• Optional life

– You may choose to purchase additional coverage for

yourself, your spouse/domestic partner, and your children

• Employee: 1, 2, 3, 4, 5, 6, 7, or 8 x your base salary,

up to $1 million

• Spouse/domestic partner: 1, 2, 3, or 4 x your coverage

amount, $25,000, $50,000 (up to a maximum of the lesser of 50%

of your total coverage — basic and optional — or $500,000)

• Child: $10,000, $20,000, or $30,000

– You pay for coverage with after-tax payroll deductions

23


Evidence of Insurability (EOI) for

Life Insurance

• No EOI required when you are first eligible, unless

you:

– Select optional employee life insurance coverage

greater than 5 x annual base pay or more than

$600,000

– Select optional spouse coverage greater than

$50,000

• If you are required to submit EOI, your additional

coverage will not go into effect until the EOI is

approved

24


Accidental Death and

Dismemberment (AD&D) Insurance

• Basic AD&D

– Greater of $50,000 or 1 x your annual base salary

– 100% company-paid

• Optional AD&D

– Employee only

• You may purchase coverage from 1 up to 10 x your annual base

salary, up to a maximum of $1 million

– Employee + family

• You may purchase coverage from 1 up to 10 x your annual base

salary, up to a maximum of $1 million

• Family coverage amounts vary depending on who’s covered

– You pay for coverage with after-tax payroll deductions

25


Beneficiary Designations

• You must select a beneficiary for your

basic life and AD&D insurance, even if you

do not elect optional coverage

• Electing a beneficiary is easy

– You can review and update your beneficiary

designations on My Benefits Access

available through Benefits OnLine

– If you do not have online access, you can

call the NGBC to request a paper form

26


Employee Assistance Program

(EAP)

• Confidential counseling, support and referral services

• Designed to help with personal and work-related issues

• Free for Northrop Grumman employees AND

their family members

• 8 free consultations per family member per issue per

year

• Administered by ValueOptions

1-800-982-8161

24 hrs a day, 7days a week

27


Additional Benefit Offerings

Legal Resources

• Two plan options — Comprehensive and Basic

• Both plans provide coverage for legal services,

such as:

– Legal telephone advice and consultations

– Document review

– Debt collection

– Will preparation

– Estate advice

28


Additional Benefit Offerings

Voluntary Insurance Program

• Offered through the Northrop Grumman Federal Credit Union to

all employees and retirees (not part of the Northrop Grumman

Health Plan)

• Voluntary benefits such as dental and vision care, long term care

and portable term life insurance, auto and homeowners

insurance, and Medicare supplement insurance as well as banking

services.

• You do not need to be a NGFCU member to take advantage of

these voluntary benefits. Some benefits, including long term care

and term life insurance, provide guaranteed issue coverage if you

enroll within 60 days after your date of hire.

• Access www.voluntaryinsurance.net or call 1-800-633-2848.

Note: Northrop Grumman does not endorse or recommend this

coverage, and the company cannot assist with questions or

disputes regarding the program.

29


Northrop Grumman Savings Plan


Northrop Grumman Savings Plan —

Features

Employee Contributions

• Maximum — 75% if not

considered highly compensated

by the IRS; 35% if considered

highly compensated

• Tax-deferred and/or after-tax

contributions

• Age 50 catch-up contributions

(if applicable), with company

matching contributions

Investment options

• Core investment funds

• Retirement Path Portfolios

• Schwab Personal Choice

Retirement Account (PCRA)

31


2008 Savings Contribution Rates

Your Tax-Deferred

Contribution Limit

Limit on Total

Contributions (your

tax-deferred

contributions plus

Northrop Grumman’s

contributions and/or

matching contributions

If you are Under

Age 50

Maximum of $15,500

1%-75% for non-HCEs

100% of annual pay or

$46,000 or whichever is

less

*If you are age

50 or older

Additional $5,000 in

catch-up contributions,

for a maximum of up to

$20,500

100% of annual pay or

$51,000 ($46,000 +

$5,000 in catch-up

contributions),

whichever is less

* You must be at least 50 years old by the end of 2008 to be

eligible to make catch-up contributions in 2008.

32


Northrop Grumman Savings Plan —

Features

Loans

• Up to two at one time

• Maximum of $50,000

Payment Options

Other features

• Partial distributions

• Lump sum

• Company match

(depending on business

unit)

• 100% immediate vesting

• Daily valuation

33


Integrating the Retirement Path Portfolios into

Our Savings Plan Investment Lineup –

Two “paths” to retirement

1 2

Let an investment

professional do the

work with a

Retirement Path

Portfolio

The Savings

Plan’s core

investment

funds

Build and monitor your

own portfolio with…

Stocks, bonds and

mutual funds

through the

Schwab PCRA

34


Path 1 ─ Retirement Path Portfolios

• Five investment options

– Target Retirement Path

– 2010 Retirement Path

– 2020 Retirement Path

– 2030 Retirement Path

– 2040 Retirement Path

For participants who are retired

or approaching retirement

For participants who are

beginning their careers

• You select a portfolio based on your expected

retirement date

• Each portfolio is well diversified and designed to meet

your investment goals prior to and beyond retirement

• As you get closer to the year you want to retire, the

investment manager adjusts the portfolio mix to

maximize return for the level of risk appropriate at

each life stage

35


Path 2 – Build and Monitor Your Own

Portfolio

• Core Investment Funds

– Stable Value Fund

– U.S. Fixed Income Fund

– Balanced Fund

– U.S. Equity Fund

– International Equity

Fund

– Small Cap Fund

– Emerging Markets Equity

Fund

Northrop Grumman

Fund

• Schwab Personal Choice

Retirement Account

(PCRA)

– Self-directed brokerage

account

– Invest among a

selection of more than

3,200 available mutual

funds and individual

securities (e.g., stocks

and bonds)

36


Automatic Enrollment

• You are automatically enrolled in the Northrop

Grumman Savings Plan at a contribution rate of

2% per pay period 45 days after your date of hire

• Your contributions are deducted on a tax-deferred

basis and contributed to the Retirement Path that

most closely targets the year in which you will

reach normal retirement age

• If you do not want to participate in the Northrop

Grumman Savings Plan, you must log on to My

Benefits Access to decline enrollment

37


Quick Enrollment - Process

• Default contribution will be at the rate to maximize

company match

• You can change your contribution rate any time

• Automatic escalation of 1% per year also provided

• Retirement Path portfolio will be default investment

option

• My Benefits Access Website will offer a choice to use

Quick Enrollment or the regular process

– If Quick Enrollment is selected, you will be presented with

a default contribution rate and investment election

– You can accept or change the defaulted investment

election

38


Reminders

• You must enroll in optional Health Plan benefits if you

want coverage for the benefit plan year

– Enroll by the deadline shown on your enrollment

letter

– Even if you do not want optional coverage, go online

or call to elect “no coverage”

– If you do not enroll, you will not have optional

benefits for yourself or your family

• Enroll in the Savings Plan

– If you do not want to participate, you must decline

enrollment

• Elect your beneficiaries for basic and optional life and

AD&D insurance and your Savings Plan

39


Enrolling is Easy

• Go to Benefits OnLine at

http://benefits.northropgrumman.com and click on the “New

Hire Enrollment” button

• Review highlights of the Northrop Grumman Benefits Program and

enroll in the Health and Savings Plan

• Print a confirmation statement

No Web Access?

• Call the Northrop Grumman Benefits Center (NGBC) at 1-800-

894-4194 to enroll. Benefits Services Representatives are

available to assist you Monday through Friday, 9:00 a.m. to 6:00

p.m. Eastern time

• Hearing impaired participants will need to use a relay service

through service provider.

• The number for participants outside the United States to call is

718-354-1338

40


Benefits OnLine

http://benefits.northropgrumman.com

41


Questions?

44

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