2007 - 2008 Annual Enrollment Guide - Benefits Online

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2007 - 2008 Annual Enrollment Guide - Benefits Online

20072008

Enrollment Guide

Are your benefits right for you

Could you be paying less for coverage

Now’s the time to take a closer look at your benefits and

make changes. Use this guide to help you make informed

decisions for you and your family.


Enrollment Is Here!

This is an important time of year — for most of us, the decisions we

make now will remain in effect for the entire 20072008 benefit plan

year. So, even though Northrop Grumman is not making significant

changes this year, we encourage you take some time to review your

choices and reflect on your benefit needs for next year.

Finding the Right Balance for You

We’re all responsible for our own health care. Northrop Grumman

provides a range of benefit options, and it’s up to each of us to evaluate

those options and make the choices that are best for our current

needs. When thinking about our benefits, most of us probably look

for an option that meets our health care needs, covers us in case of

emergencies, and fits our budgets.

However, studies have shown that many employees overinsure

themselves. In other words, they choose and pay for more coverage

than they really need based on fear of the unknown. All of Northrop

Grumman’s medical plan options provide coverage for the big “what

if” (a potential catastrophic medical situation), so it should be less of

a factor in your decision-making than your actual coverage needs over

the next year.

Even if you are satisfied with your current coverage, be sure to take

a fresh look at your options and make informed decisions. You might

discover another choice that meets your needs and also helps keep

your costs down throughout the year. If you end up choosing your

current coverage again, you’ll have the peace of mind of knowing that

it is the right choice for you.

Your Next Steps

Be sure to review this Benefits Decision Guide carefully to help you

think through your options and choose the benefits coverage that’s

right for you — the coverage that balances your needs, coverage in

case of unexpected events, and your budget.

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.

Your health is one of our top priorities — thank you for making it one

of yours.

Look Inside

How to Choose Your Benefits: 2

Making the Right Enrollment

Decisions For You

When and How To Enroll 6

Important Reminder: You must

select a beneficiary for your basic life

and AD&D insurance, and if applicable,

optional life and AD&D insurance.

You can update your beneficiary

information through My Benefits Access.

If you (and/or your

dependents) have

Medicare or will become

eligible for Medicare in

the next 12 months, a

federal law gives you

more choices about

your prescription drug

coverage. Please see

“Special Note About

Medicare Prescription

Drug Choices” on

the back cover of this

Benefits Enrollment

Guide for more details.


How to Choose Your Benefits

Making the Right Enrollment Decisions For You

You need to make your enrollment decisions — but where do you start There’s a lot of information to

consider, and it may seem overwhelming to try to make sense of it all.

That’s where this guide and your new online tools and resources on My Benefits Access come in. Start

by following the steps outlined below. They’ll help you evaluate your choices and think about your needs.

There’s something for everyone to consider, whether you’re satisfied with your current benefits or are

looking for a change.

1

Review your current

benefits coverage

and usage.

2

Estimate your needs

for next year and

evaluate which plan

is right for you.

3

Take advantage

of the information,

tools, and resources

available to you.

1

Review your current

benefits coverage

and usage.

First things first: Look at your current coverage and how you’ve been using it. 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 some important questions:



Costs: Are you really using what you’re paying for, or have you chosen the same coverage year after

year, and now you’re paying for more than you need Which services are covered under your current

plan Have you used those services For example, how many times have you visited the doctor Or,

have you met the annual deductible

Choice: Are you basing your choices on “what if” situations rather than on realistic projections of

your needs

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


Do any of these scenarios sound familiar

The Northrop Grumman Health Plan participants described in the examples below and on page 4 all have

something to gain by reviewing their benefit options and reflecting on which choice would meet their needs

for next year.

Participant 1


My current coverage

is fine as is.


My current benefits have worked for years, so why change them now I don’t have time to

look at other options, and I’m satisfied with what I’ve got. Sure, my costs go up each year,

but since health care costs are continually increasing, that means I should be paying

more … right

Not necessarily. Health care costs are continually increasing, but that doesn’t mean your costs also

have to rise at the same rate. In fact, during this time, it’s more important than ever to look at your

options to see which one provides the appropriate amount of coverage for you and keeps your costs

in check. One way that Northrop Grumman has responded to rising health care costs is by regularly

reviewing our benefits, making changes as needed, and offering you a variety of options so you can

choose the right balance of coverage for the cost.

For example, the Lumenos HRA Plan emphasizes preventive care (covered at 100%) and puts you in

control of how you spend your money for other types of care (plus, you have a Health Reimbursement

Account to help you pay for your care). It also has low paycheck costs — proof that just because

health care costs are on the rise doesn’t mean that you can’t manage your individual costs.

Participant 2


I need to be prepared.


I need to make sure that I have the best coverage possible, just in case something happens to me. I’m not as

worried about how much I pay for coverage each month as I am about how much it will cost if I get really sick.

I mean, it will all work out in the wash if I have a serious medical condition and use my benefits … right

That’s a big “if.” Remember, all of the Northrop Grumman medical plan options provide coverage in case of a

catastrophic event. If you choose your coverage mostly based on the “what if,” you’re throwing your money away.

For example, if you go to the doctor a few times a year and purchase a couple of prescriptions, but you’re enrolled in

the Blue Cross Blue Shield Premium PPO, you’re paying a lot per paycheck — but you’re only using a small amount of

that coverage! By comparison, if you enroll in the Lumenos HRA Plan (which uses the Blue Cross Blue Shield National

PPO network) or the Blue Cross Blue Shield Preferred PPO, you would be paying less per paycheck, but a little more

when you actually use your benefits. And, you’ll have coverage if that big “what if” happens. If you’re still worried about

emergencies, you can set the extra money aside in a savings account specifically for that purpose, instead of paying

for coverage you might not ever use; or, you can put the extra money toward a vacation fund, college savings or the

Savings Plan to help build up your retirement nest egg.


Participant 3


I’m overwhelmed.


I recently got married, and I need to add my new spouse to my coverage. I guess I should also

re-evaluate my options to see which one is right for me. But, with so many options, I don’t know

how to decide. I guess I’ll just go with what looks familiar. After all, they’re all good choices, so I

can’t make a wrong choice … right

Choosing the “right” coverage should be based on your personal needs, not on your options.

The reason Northrop Grumman offers options is because everyone has different needs.

Fortunately, you have access to tools on My Benefits Access to help you make your decisions. At

My Benefits Access, you can compare your plan options and associated costs, use modeling tools to

see which plan would best fit your needs, and read detailed plan information. For instructions on how

to log on to My Benefits Access, see below.

It doesn’t matter who you are — one of these three participants or someone else — it’s worth the few

minutes to view you current coverage and think about how you use it and why you chose it. Go to Benefits

OnLine at http://benefits.northropgrumman.com, and click on My Benefits Access. Enter

your User ID and Password* when prompted.

* 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. You’ll

need them to enroll.

2

Estimate your needs

for next year and

evaluate which plan

is right for you.

Now that 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)

3

Take advantage

of the information,

tools, and resources

available to you.

Whether this is your first Northrop Grumman enrollment or your 20th time through the process, be sure to

take advantage of all the information available to you — especially since we have new tools and resources

this year. By now, you should have received the Pre-Enrollment Newsletter at home, and you may have

been invited to attend a presentation at work. You should also be sure to check out the new 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 out-of-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.



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

Using Your Benefits Wisely All Year Long

Being an informed user of health care doesn’t end with enrollment — that’s just the beginning. Here are

just a couple of steps you can take to live well and help keep your costs down year-round:



Participate in the Health Care Flexible Spending Account (FSA). It allows you to set aside pre-tax money

to pay for eligible medical, dental, vision, and/or prescription drug expenses (including over-the-counter

medications) that aren’t covered by your medical plan. You’ll also save money by lowering your taxable

income. If you enroll in the Health Care FSA for 20072008, you’ll have until September 15, 2008, to

use the money in your account for eligible expenses.

Use your health plan’s network to receive the highest level of benefits and lower your out-of-pocket

costs. Providers who participate in the network have agreed to charge a lower rate than out-of-network

providers. Important: If you enroll in an EPO or HMO, you must use a network provider, or you will be

responsible for the full cost.

What’s New for 20072008

Here’s an overview of what’s changing for the 20072008 plan year. For more details, please refer to the enclosed

Summary of Material Modifications.



If you are planning to purchase optional dependent life insurance for your child, you must provide your child’s information

in order to enroll. If you’re currently enrolled but don’t have your child’s information on file, you will default to no coverage.

Effective July 1, under both Blue Cross Blue Shield PPOs, all in-network preventive care services approved by the

American Medical Association will be fully covered with no limit (your office visit copayment will still apply).


Copayments for certain services under the EPOs will increase slightly.


The way that you designate your Flexible Spending Account contribution will change. Rather than selecting a per pay

period amount, you will select an annual amount. That amount will be divided by the number of paychecks you are

scheduled to receive. For example, if you decide to contribute $1,200 annually, and you are paid weekly, your per pay

period deduction will be $1,200 ÷ 52, or $23.08 per paycheck.


When and How To Enroll

This year, along with the new enrollment Web site and tools, there will be three enrollment periods, when

different groups of employees will have an opportunity to enroll. You will enroll with your sector. Your

enrollment period 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

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. You’ll

need them to enroll.

If You Don’t Enroll



You will continue to have the medical, dental, vision, life, disability, and accidental death and

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

If you participate in the Health Care and/or Dependent Care FSAs, and you don’t actively enroll,

you will automatically participate in the FSAs again, and your current per paycheck amount will be

converted to an annual amount.


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 and make any necessary changes.


Notice Regarding Women’s Health and Cancer Rights Act Benefits

Please review the important notice available at Benefits OnLine at

http://benefits.northropgrumman.com. The notice provides

information about benefits provided under the Northrop Grumman

Health Plan in accordance with the Women’s Health and Cancer

Rights Act of 1998. Please note that you may obtain a paper copy of

the notice free of charge by calling the Northrop Grumman Benefits

Center at 1-800-894-4194.

Special Note About Medicare Prescription Drug Choices

As noted on the first page of this Benefits Enrollment

Guide, if you (and/or your dependents) have Medicare

or will become eligible for Medicare in the next 12 months,

you have more choices about your prescription drug

coverage. Please review the important notice available

at Benefits OnLine at http://benefits.northropgrumman.

com. The notice contains important information about your

Northrop Grumman Health Plan prescription drug coverage

and Medicare Part D prescription drug coverage. Please

note that you may obtain a paper copy of the notice free of

charge by calling the Northrop Grumman Benefits Center

at 1-800-894-4194.

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.


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.

07-0010 April/Benefits Guide

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