2008-2009 Annual Enrollment Guide - Benefits Online

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2008-2009 Annual Enrollment Guide - Benefits Online

20082009

Enrollment Guide

This year, it’s more important than ever to carefully evaluate

your benefits and choose options that meet your coverage

needs … and your budget. The information in this Enrollment

Guide can help you make informed decisions for you and

your family.


What’s Inside

Making the Right Enrollment Decisions for You 2

What’s New for 20082009 6

When and How to Enroll 7

Have You Updated Your Beneficiaries 8

Select Your Communication Preference

If you would like to receive future benefits communications (such

as Summary Plan Descriptions) electronically instead of in the mail,

go to Benefits OnLine at http://benefits.northropgrumman.com and

click on the My Benefits Access button. Enter your User ID and

Password when prompted. Once you are at My Benefits Access,

click on “Personal Information” to choose your preferred method of

communication. If you select electronic communication, you will be

notified when benefits communications are posted online for you to

view or download.

2


Enrollment Is Here!

During your enrollment wave, you will have the opportunity to choose your benefits for the next benefit

plan year. This year, it’s especially important to carefully evaluate your choices and make informed

decisions that give you the coverage you need while helping you control costs.

Although most of your benefit options will remain the same for the next benefit plan year, you will

notice an increase in employee contributions to the medical plan. While Northrop Grumman pays the

majority of the cost to provide health benefits, we continue to be profoundly affected by rising health

care costs nationwide. Cost increases will be most significant for participants in the Premium PPO and

CIGNA EPP. Starting with the new plan year, we will use the Preferred PPO as the basis for determining

contributions and will no longer fully subsidize options to the extent they are more costly than the

Preferred PPO. You will be responsible for any costs in excess of the Preferred PPO cost. This means

that if you enroll in an option with higher costs than the Preferred PPO — such as the Premium PPO

and CIGNA EPP — you will have significant increases in your contributions.

As health care costs continue to rise, we continue to look for ways to manage costs for everyone. Your

responsibility is to carefully evaluate your options and make informed choices. All of the options you

have today will still be available to you, but if you choose expensive coverage (such as the Premium

PPO), you will pay the extra costs, without benefit of a subsidy by other employees who are making

informed, more practical choices. Northrop Grumman has a responsibility, too — we provide you with

flexible coverage options, as well as the tools and resources to help you make important benefits

decisions.

Your Next Steps

Even if you are satisfied with your current coverage, be sure to take a fresh look at your

options, their cost for the next benefit plan year, as well as your coverage needs, so you can make

informed decisions. Review this Enrollment Guide carefully to help you think through

your options.

If you have any questions, or would like to view specific benefit details and compare

your options, be sure to log on to My Benefits Access through Benefits OnLine at

http://benefits.northropgrumman.com, or you may call the Northrop Grumman Benefits

Center (NGBC) at 1-800-894-4194.

1


Making the Right Enrollment

Decisions for You

Northrop Grumman provides resources — such as this Enrollment Guide and the online tools at

My Benefits Access — to help you make your enrollment decisions. Begin by following the steps

outlined below to evaluate your choices, think about your needs and consider which option will strike

the balance between your coverage needs and your budget for the 20082009 plan year. Remember,

your choices at enrollment must, in most cases, remain in effect from July 1, 2008, through June 30,

2009, so be sure to make the right choice for you!

■ ■ Review your current benefits usage and coverage. Once you have a good sense of your

current coverage and why you chose it, you will be better equipped to make informed decisions for

next year. Ask yourself these important questions:

Costs

Choice

Features

Are you really using the coverage that you’re paying for Have you used the

services covered by your plan How many times have you visited the doctor

Have you met the annual deductible For example, if you visit the doctor mostly

for preventive care but are enrolled in the Premium PPO or the CIGNA EPP,

chances are, you’re paying for coverage you’re not using. You could save

money by enrolling in the Lumenos HRA option or the Preferred PPO, which

are more in line with your actual health care usage (and still provide coverage in

case of an unforeseen event).

Are you basing your choices on “what if” situations rather than on realistic

projections of your needs Remember that most of the Northrop Grumman

medical options limit your out-of-pocket expenses, so be sure to review

those limits.

Are you familiar with the features of your plan and how you’re using them (or not

using them)

■ ■ Estimate your needs for next year and evaluate which option is right for you. After you’ve

reviewed your current benefits needs and usage, think about how your situation may change next

year. For example, are you adding a new family member (e.g., getting married or having a child) Will

you be covering fewer dependents (e.g., a child will no longer qualify as a dependent)

As you consider which option will help meet your needs, refer to the charts on the next two pages,

which show how the Northrop Grumman medical plan options cover services, as well as plan

features of the PPOs and Lumenos HRA option. You might discover that you are paying too much for

coverage you don’t use, or you may find another choice that meets your needs and also helps keep

your costs down throughout the year.

2


Which option will meet my needs

PPOs

EPO

Lumenos

HRA Option

HMO

I want to choose a primary care physician

(PCP) to coordinate all my care and

specialist referrals

I want to visit any provider I choose,

without referrals*

I want to be able to go out-of-network,

even if it’s at a higher cost (but still

covered)

I want the lowest paycheck contributions

I can get

I want Northrop Grumman to help me

pay for some of my expenses through a

company-funded Health Reimbursement

Account (HRA)

I want 100% coverage for eligible

in-network preventive care services

* Please note that when you visit in-network providers, you will receive a higher level of coverage, which means you pay less for your care.

Plus, you won’t have to worry about charges above usual, reasonable, and customary (URC), and your doctor will file your claims for you.

3


How the PPOs and Lumenos HRA option cover services

(In-network benefits)

Plan Feature Lumenos HRA Option Preferred PPO Premium PPO

Health Reimbursement

Account (HRA)

(funded annually by

Northrop Grumman)

Annual Deductible/

Bridge

Out-of-Pocket

Maximum

Preventive Care

(e.g., colonoscopy,

mammography,

routine physical)

$1,000 employee only

$1,500 employee + spouse

$1,500 employee + child(ren)

$2,000 family

$800 employee only

$1,200 employee + spouse

$1,200 employee + child(ren)

$1,600 family

Coinsurance Maximum

(after bridge):

$4,200 employee only

$6,300 employee + spouse

$6,300 employee + child(ren)

$8,400 family

Out-of-Pocket Maximum

(including bridge):

$5,000 employee only

$7,500 employee + spouse

$7,500 employee + child(ren)

$10,000 family

100% covered (before

deductible, not deducted

from HRA)

N/A

$500 employee only

$1,000 family

$3,000 individual

$6,000 family

Does not include

prescription drugs;

includes deductible

100% covered after

$20 office visit copay

($40 for specialist office visit)

N/A

$300 employee only

$600 family

$2,000 individual

$4,000 family

Does not include

prescription drugs;

includes deductible

100% covered after

$15 office visit copay

($30 for specialist office visit)

Did you

know

These are

the only

differences

between

the PPOs.

4

Office visit

100% covered when using You pay $20 copay* You pay $15 copay*

Specialist visit

funds in your HRA, then plan

pays 90% after deductible

You pay $40 copay* You pay $30 copay*

Hospital (inpatient)

Plan pays 90% after

deductible

Plan pays 90% after

deductible

Hospital (outpatient)

Plan pays 90% after

deductible

Prescription drugs** Generic: $5 copay or 10%

coinsurance, whichever is

greater, for up to a 90-day

supply

Preferred brand: $20

copay or 10% coinsurance,

whichever is greater, for up to

a 90-day supply

Brand: $40 copay or 10%

coinsurance, whichever is

greater, for up to a 90-day

supply

Provided through ESI

Plan pays 90% after

deductible

Generic: $5 copay or 10%

coinsurance, whichever is

greater, for up to a 90-day

supply

Preferred brand: $20

copay or 10% coinsurance,

whichever is greater, for up to

a 90-day supply

Brand: $40 copay or 10%

coinsurance, whichever is

greater, for up to a 90-day

supply

Provided through ESI

Per-paycheck cost $ $$ $$$ (most expensive of all

the Northrop Grumman

medical options)

* Not subject to deductible. ** Policies to encourage the use of generic drugs will apply for the PPOs in the new plan year.


■ ■ Take advantage of the information, tools and resources available to you. No

matter how many times you’ve been through Northrop Grumman enrollment, be sure to

take advantage of all the information available to you. By now, you should have received a

pre-enrollment package at home. You should also check out the enrollment Web site. From

Benefits OnLine, click on My Benefits Access to access personalized plan information, as well

as tools and resources to help you make informed decisions. At My Benefits Access, you’ll be

able to:

● ● Compare Your Medical Options — Compare features and services from up to three

different medical plan options. You can evaluate how different options stack up in terms

of the services you use most (e.g., doctor’s office visits, inpatient care, ease of access to

network providers).

● ● Estimate and Compare Medical Expenses — Estimate how much you would pay outof-pocket

under three different medical plan options so that you can see how each option

impacts your budget.

● ● Estimate Health Care Expenses — Estimate how much to set aside in a Health Care

Flexible Spending Account. The Health Care Flexible Spending Account allows you to set

aside pre-tax dollars to pay for eligible health care expenses.

● ● Find a Doctor in Your Medical Plan — Search for providers in your plan’s network.

Please note that provider networks are updated from time to time, so it’s a good idea to check

which doctors are in the network of the plan option you’re considering before you enroll.

● ● Compare Hospital Quality and Compare Doctor Quality — Review hospital and

doctor ratings, so you can make informed decisions before you choose a provider or facility.

Enrolled in the Premium PPO

If you’re still enrolled in the Premium PPO, you are paying for the most expensive

Northrop Grumman medical plan option! You can save money by enrolling in the

Preferred PPO. As you can see in the chart on page 4, the differences between the

two PPOs are small compared to the difference in paycheck costs. Even if you have

a lot of health care needs in the coming year, you are likely to have lower costs overall

if you enroll in the Preferred PPO, which has lower paycheck costs compared to the

Premium PPO.

Or, consider the Lumenos HRA option, which has the lowest paycheck cost and

uses the same network of providers as the Premium PPO. All eligible preventive care

services are covered at 100% without a copay, and you can visit any provider you

want (the plan pays a higher level of benefits if you use in-network providers). For

other services, you can use your Health Reimbursement Account, funded by Northrop

Grumman, to help you pay for health care costs. Once you meet your deductible

under the Lumenos HRA option, you pay a percentage of the cost for health care

services, and the plan pays the rest.

5


What’s New for 20082009

Here’s a summary of what’s changing for the 20082009 plan year. Please refer to the preenrollment

package you received last month for more information, or go to Benefits OnLine at

http://benefits.northropgrumman.com.

■ ■ New carrier for Premium and Preferred PPOs. Anthem Blue Cross will replace Blue Cross

Blue Shield of Illinois as the carrier for the Premium and Preferred PPOs. You will receive a new

medical ID card from Anthem before July 1, 2008.

■■ Prior authorization requirement for home infusion therapy under Premium and

Preferred PPOs. As part of the change to Anthem, prior authorization (also referred to as utilization

management, or UM, by Anthem) for home infusion therapy will be required effective July 1, 2008.

For more information, please visit Anthem’s Web site at www.anthem.com/ca.

■ ■ Medical plan contributions. Starting July 1, Northrop Grumman will no longer fully subsidize

options to the extent they are more costly than the Preferred PPO. You will pay 100% of the cost in

excess of the Preferred PPO.

■ ■ New prescription drug policies under PPO and EPO options. Several changes designed

to encourage the use of generic drugs and the mail-order service will apply to prescription drug

benefits under the PPOs and the EPO.

■ ■

Reduced lifetime maximum for infertility treatment under the PPO and EPO options.

The lifetime maximum for infertility treatment — meaning the total amount the plan options pay for

covered infertility services over your lifetime — under the PPO and EPO plan options will be reduced

to $12,500 (from the current maximum of $25,000).

■ ■ Access nurse lines through your medical plan carrier. Starting July 1, 2008, the Nurse

Advice Line through Carewise will no longer be available. Most carriers in the Northrop Grumman

Health Plan offer a nurse line service. To reach your carrier’s nurse line, please contact your carrier.

Contact information is located at Benefits OnLine (http://benefits.northropgrumman.com).

■■ Reduced Dependent Day Care Flexible Spending Account (FSA) contribution limit

for highly compensated employees. If you earn $100,000 or more in 2008, your annual

contribution limit to the Dependent Day Care FSA will be reduced to $2,500 effective July 1, 2008

in order to comply with Internal Revenue Code policies. If you earn $100,000 or more in 2008 and

currently contribute more than $2,500 to the Dependent Day Care FSA, your Dependent Day Care

FSA contribution election will automatically default to $2,500 for the next plan year, unless you elect

a lower amount or no FSA coverage during enrollment.

Reminder: Your FSA and Automatic Claims Submission Elections Will Carry Over

If you are enrolled in a Flexible Spending Account (FSA), your current contribution amount

and your Automatic Claims Submission (ACS) election will automatically apply in the new

plan year unless you actively elect otherwise during enrollment. Even if you are not planning

to make any other changes at enrollment, be sure to review your FSA current contribution

amount carefully and make any necessary changes during enrollment. If you are currently

participating in the Health Care FSA, keep in mind that you have until September 15, 2008,

to use the money in your account and until December 31, 2008, to submit claims.

6 6


When and How to Enroll

There will be two enrollment periods this year. You will enroll with your sector. Your enrollment wave is indicated

on your enclosed enrollment worksheet. There are two ways to enroll for your benefits:

■■

Go to Benefits OnLine at http://benefits.northropgrumman.com and click on “Enroll With Your Sector.” Review

the enrollment information and the Summary Plan Description posted online. When you’re ready to enroll, log in

to My Benefits Access, click on “Annual Enrollment,” and then “Enroll Now.” Enter your User ID and Password*

when prompted. If you have forgotten your User ID and/or your Password, please follow the instructions on the

screen to reset

or

■■ Call the Northrop Grumman Benefits Center at 1-800-894-4194.

If you have questions, please call the Northrop Grumman Benefits Center at 1-800-894-4194. If you are calling

from outside the United States, please call 718-354-1338. Benefits services representatives are available to

assist you Monday through Friday from 9:00 a.m. to 6:00 p.m. Eastern time, excluding holidays. If you are

hearing impaired, you will need to use a relay service through your TTY/TDD service provider.

* If you haven’t registered on My Benefits Access, be sure to do so now so that you can set up your User ID and Password. From the log in

page, select “Register as a New User.” You’ll need your User ID and Password to enroll.

Reminder for Participants Electing Spouse Life Insurance and/or Child Life Insurance

If you choose to participate in Spouse Life Insurance and/or Child Life Insurance during enrollment, you

must have a dependent on file (i.e., a spouse for Spouse Life Insurance and a dependent child or Child

Life Insurance), or your election will not be valid.

If You Don’t Enroll

■■ You will continue to have the medical, dental, vision, life,

disability, and accidental death and dismemberment elections

you have now (as applicable), but at the new plan year costs.

■■ If you participate in the Health Care and/or Dependent Day Care

FSAs, and you don’t actively enroll, you will automatically

participate in the FSAs again at the same annual contribution

level. Your Automatic Claims Submission (ACS) election will also

automatically apply in the 2008-2009 plan year.

■■ If you participate in a Dependent Day Care FSA, earn more

than $100,000 in 2008, and your current Dependent Day Care

FSA contribution is more than $2,500, your contribution will

automatically be $2,500 for the next plan year.

■■ Your Group Legal plan election will continue.

Please keep in mind that your current coverage may not meet your

needs for next year. We encourage you to think carefully about your

options, even if you’re satisfied with the coverage you have now.

Special Note Regarding

Dependent Information

All individuals linked to

your account, such as

beneficiaries, are listed

on the “Your Dependent

Information” page on the

enrollment Web site. They

are noted as to whether

or not they are eligible for

coverage. If the information

listed is correct, click

“Continue Enrollment” to

proceed. To update your

dependent’s eligibility, click

on the dependent’s name

and make any necessary

changes.

7


Have You Updated

Your Beneficiaries

Have you designated your beneficiaries online If the answer is no, if you’re not sure or if it’s simply

been a while since you’ve done so, now’s the time to take action. Taking a few minutes now to

check and/or update your beneficiary designations online is the key to making sure your loved

ones receive benefits in the event of your death.

To review and update your beneficiary designations, go to Benefits OnLine at

http:// benefits.northropgrumman.com and log in to My Benefits Access. Your beneficiaries

are listed under the Personal Information tab. Simply click on the dependent’s name and/or

the plan to make updates.

Confirm Your Contact Information

Now’s a good time to check your contact information to make sure it’s current. If you’ve

moved or changed your phone number (or need to add your information), be sure to provide

the updated information to your HR Department so you can continue to receive important

communications.

8


Important Notice About the Women’s Health and

Cancer Rights Act

If you receive plan benefits in connection with a mastectomy, you

are entitled to coverage for the following under the plan:

■■ Reconstruction of the breast on which the mastectomy was

performed

■■ Surgery and reconstruction of the other breast to produce a

symmetrical appearance

■■ Prostheses and treatment for physical complications for all

stages of a mastectomy, including lymphedemas (swelling

associated with the removal of lymph nodes).

The plan will determine the manner of coverage in consultation

with you and your attending doctor. Coverage for breast

reconstruction and related services will be subject to deductibles

and coinsurance amounts that are consistent with those that

apply to other benefits under the plan.

If you would like more information about the Women’s Health and

Cancer Rights Act, call the Northrop Grumman Benefits Center

(NGBC) at 1-800-894-4194.

9


This Guide and the content on the Benefits OnLine and My Benefits Access Web sites provide a summary of important

information about your participation in the Northrop Grumman Health Plan. The Guide is not a summary plan description, but

is a summary of material modifications. Complete details about the plan are contained in the legal plan documents that govern

plan operation and administration. If there is a discrepancy between the information provided in the Guide or enrollment Web

site and the provisions of the plan documents, the plan documents will govern.

10

Northrop Grumman reserves the right in its sole discretion to terminate, suspend, withdraw, amend, or modify the plan at any

time and for any reason.

08-0013 April/Benefits Guide

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