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2 0 1 3 B E N E F I T S G U I D E LifeCare | 1

Take charge.benefits enrollment

2013

2 0 1 3 B E N E F I T S G U I D E 2 | LifeCare

Now is the Time to Take Charge of your benefits!

They say change is the only constant thing. It’s true. It’s true in your personal life and in your work life. Things change, and they change every day. All of us know that there is a lot of change headed our way as it relates to health care whether it is eligibility changes, health care offerings or benefit plan provisions. The challenge is to try to anticipate or take care of those changes so that you are as prepared as you can be. LifeCare wants to

ensure that we get ahead of that change and begin to help you take charge of your choices as a health care consumer.

The best way for us all to get control of that change is to be better informed and have tools and resources available for us to take charge of our choices. For 2013, LifeCare is making some changes to its benefits package that will provide all of us the opportunity to be better consumers by putting you in charge when it comes to your health care options which, in turn, can help LifeCare control the rising cost of health care.

Inside this benefits guide, you will learn about the changes to your benefits plan that will be occurring in 2013 and also have a resource at your fingertips that provide more in-depth explanation of all your benefit plans.

2013 Annual Enrollment Changes

Benefits Changes/ Enhancements

Medical • New Medical and Prescription Vendor• Medical Plan Offerings• New high deductible medical plan with a Health Savings Account (HSA)• New Disability and Life Insurance Vendor• Health Care FSA Account Limit

What’s not changing

See what’s different for 2013

Benefits

• Non-tobacco credit of $25 will continue to be in effect - Don’t forget to take advantage of the non-tobacco credit by attesting you are a non-tobacco user. If you do not attest, you will not receive the credit off your premium.

• Spousal Surcharge of $50 per pay period will continue to be in effect - If you enroll in employee and spouse or employee and family an attestation box will pop up to allow you to attest whether your spouse is eligible for other “employer-sponsored insurance”. If they are and you continue to carry them on your plan, you will be responsible for paying the spousal surcharge.

• No premium increases for dental and vision, disability and life insurance• VSP will continue to be vision provider

Please review this 2013 Benefits Guide to review and understand your benefits for 2013.

This guide is intended to be only an overview of LifeCare’s benefit plans. The complete details of the plans are included in the Summary Plan Descriptions and Plan Documents.

If there are any inconsistencies between this guide and the Plan Documents, the documents will govern. The company reserves the right to change or end LifeCare benefit plans at any time.


2013 Annual Enrollment Changes

It’s Your Life.

TakeCharge.

It’s time to grab a bull by the horns and take charge of your benefits choices.

New Disability and Life Insurance Vendor

Health Care flexible spending amount limit will be $2500 effective January 1, 2013 as part of the

Health Care Reform Act changes.

Health Care FSA

MyCignaLearn more about your health status by completing a confidential online health assessment; available

for all employees on mycignaplans.com.

Any time you need any specific information regarding medical plan offerings, medical plan comparisons or changes, find participating doctors and other health care professionals by contacting the Cigna Enrollment Information line at 1.800.401.4041. the line is staffed 24 hours a day,

seven days a week.

Medical Plan Highlights• EPO and Open Access Buy Up plan will no

longer• available to new entrants• Open Access Core Plan deductible will be $625

per person and $1250 per family; out-of-pocket maximums will be $2500 per person and $5000 per family

• Open Access Economy Plan deductible will be $1250 per person and $2500 per family; out-of-pocket maximums will be $3750 per person and $7500 per family

• Choice Fund HSA is a new offering of a high deductible plan with a Health Savings Account. For more detailed information see page xx

* For detailed medical plan changes, view the medical pages in this guide.

New Medical and Prescription Vendor

Cigna will be our vendor for LifeCare’s medical and prescription benefit plans. Network disruption should be at a minimum, but if you want to find your provider you can go to www.cigna.com or call the pre-enrollment hotline at 1-800-xxxx. Cigna offers the convenience of 24/7 customer service hours. You will also have the convenience of having ot use only one care for medical and prescription benefits. Expect ID cards to be mailed the latter part of December.

LifeCare will continue to offer the Core and Economy plans. The new titles will be Open Access Core Plan and Open Access Economy

Plan with deductible amounts and out-of-pocket maximums adjusting.

Medical Plan Offerings

LifeCare is excited to offer a new high deductible medical plan with a Health Savings Account. LifeCare will make employer contributions to the HSA and employees will also be able to

contribute to the account. The Choice Fund HSA plan may be the right option for you to take

charge of your health care costs.

Health Savings Account (HSA)

Cigna will be our vendor for disability and life insurance coverage. There are no changes to the coverage levels or plan eligibility. However, for the upcoming annual enrollment period, there will be no required EOI for employees who had not previously enrolled in life and/or disability insurance. The only exception is if an employe elects coverage over guaranteed issue amounts. More information can be found on page 25.


Cigna Tools and Resources

Cigna provides robust tools and resources, as well as customer service available to you 24 hours a day, 7 days a week. Cigna representatives are available to help

you understand your plan benefits and answer specific claims questions.

Cigna Pre-Enrollment LineQuestions about Cigna coverage? Call the Cigna Enrollment Information Line today and speak with a knowledgeable enrollment specialist for:• Information on specific plans• Help finding participating doctors and other health care professionals• Comparisons of all Cigna products and resources available to you

Remember, this service is limited to providing information only. Enrollment cannot be completed through this line. You will need to go to www.lifecare.essbenefits.com to enroll.

Let myCignaplans.com help you make the right choice in health plans for you and your family. What you’ll find:• Powerful tools to help you estimate your costs for the coming year - you can even compare your Cigna

medican plan options side-by-side, including your payroll contributions• A directory of doctors, hospitals and other facilities that participate in the Cigna healthcare network• Benefit summaries that highlight what your plan covers• Average costs of common procedures and diagnoses• Frequently asked questions and answers• A glossary of medical terms

MyCignaPlans.com

Don’t spend more on benefits than necessary! Take Charge of your benefits and determine what plan is the best fit for you and your family.


LifeCare Introduces the Choice Fund Health Savings Account!

What is a Health Savings Account?A Health Savings Account, or HSA, is a vehicle that allows employees enrolled in a qualified medical plan to save - tax free - for further health-related expenses. Funds are kept in an interest bearing bank account until they are needed. Contributions can be made to the HSA by the employer, employee or both.

The Choice Fund Health Savings Acount (HSA) provides a health care plan with a tax free* health savings that allows you to contribute pre-tax savings to help offset your health care expenses. LifeCare will also contribute to your health savings account which helps you take charge of your health care costs.

What is a qualified medical plan?A qualified medical plan is often referred to as a “high-deductible health plan”. For 2013, qualified medical plans must meet certain criteria, including:• Minimum limits on deductibles and out-of-

pocket maximum• All claims, both medical and pharmacy, are

subject to a common deductible before coinsurance applies

• Preventive care may be covered at 100% before the deductible

• Once the out-of-pocket maximum is met, the plan pays 100% for covered medical and pharmacy expenses

How does LifeCare’s Choice Fund HSA work?

A high-deductible plan has been established. LifeCare will contribute to the Choice Fund HSA and give employes the ability to have payroll deductions made that will be directly deposited into the Choice Fund HSA.

LifeCare may contribute up to $500 for employees with single coverage if they meet certain criteria. For non-single employees, LifeCare may contribute up to $1,000.

These contributions are not subject to income tax which means that you don’t pay taxes on the money going in or coming out of your account as long as the funds are used for qualified medican expenses. Also, your HSA funds are placed in an interest bearing account which means that your contributions will grow tax free.

How Do I Get the Full Value of LifeCare’s contributions to my HSA account? Employees can get $50 for attesting they are a non-tobacco user and another $200 for completing a health risk assessment on www.mycignaplans.com. When you enroll in the high-deductible plan, you will be asked to attest whether or not you are a smoker/non-smoker. Also, you will be taken to the mycignaplans.com link once you complete your enrollment process on www.lifecare.essbenefits.com. For more information regarind the health risk assessment, please see page xx.



How does Choice Fund HSA work when I have a medical claim?You will pay an annual deductible before the coinsurance begins to pay. You can use the money from your HSA to help offet the annual deductible expenses. Once you meet the deductible, you will pay a percentage of the cost, which is coinsurance, for your covered expenses and LifeCare will pay the rest.

Where do I start?

You can start by estimating your health care spending for next year. Here’s how:• Determine your medical and prescription drug costs from last year• Consider any expected changes in your medical spending in the coming year, such as surgery or

pregnancy• Estimate what you’re out-of-pocket payments will be before your plan pays 100% - and don’t forget to

include your payroll contributions to your medical plan• Compare the employer-funded amound you will receive in your account when you enroll in the

Choice Fund HSA to what you expect to have in expenses -- keep in mind the coinsurance you will be responsible for once the money in your account is spent

To help identify more specific health coverage expenses, log in to www.mycignaplans.com. For more information on the tools available, see page xx.

How does this approach let me take charge of my health care costs?The money in the HSA belongs to you. You decide how and when to use the money in your HSA - pay for qualified expenses during the year, save it for future needs or use it to open an investment account.



Example

Carlos

Carlos is a 35-year-old man who is healthy, with the exception of an occasional sports injury. He enrolled in the Cigna Choice Fund HSA that includes a $1,750 deductible and a medical plan with 90% coinsurance payments for in-network services. Here’s how Cigna Choice Fund works for Carlos.

*HSA contributions and earnings are not subject to federal taxes and not sub-ject ot state taxes in most states. A few states do not allow pretax treatment of contributions or earnings. We have identified the following states as having these tax considerations: Alabama, California, New Hampshire and New Jersey.



How it works

1Year 2Year

Carlos opens his HSA with an initial contribution $1,000

Carlos has his annual preventive care exam that is covered 100% by the medical plan $0He also receives care for his sports injuries:• Visit to an urgent care center $70• Visits to a sports medicine specialist $160• Fills 2 prescriptions $165

Total medical expenses applied to plan deductible $395

Paid from Carlos’ HSA -$395

Carlos’ HSA balance at end of year 1 ($1,000 minus $395) $605

These costs and plan features are for example only and may not reflect your actual experience. For simplicity, the example does not include interest or fees.

Carlos’ beginning balance $605

Carlos makes an additional contribution to his HSA +$1,000

Carlos’ HSA balance $1,605

Carlos has his annual preventive car exam that is covered 100% by the medical planHe also receives care for his sports injuries:• Visits a specialist (2 visits, 2 x $160) $320• Fills 1 prescription $75

Total medical expenses applied to plan deductible $395

Paid from Carlos’ HSA -$395

Carlos’ HSA balance at the end of year 2 ($1,605 minus $395) $1,210



Tax advantagesYour contributions are not subject to income tax

Your payroll contributions are deducted from your paycheck pre-tax, meaning they are not subject to current federal and state taxes.

Here’s an example of how your HSA can work. Based on an annual contribution of $2,500 and ex-pected tax rates, your estimated tax savings could be as much as $1,016.

Remember, if the money is used for products or services that are not qualified medical expenses, the amount will be taxable as income and subject to an additional tax penalty.

Your HSA balance earns interest -- tax-freeWith Cigna Choice Fund HSA, any earnings on your contributions grow tax-free. In other words, earnings on your HSA dollars are not subject to taxation. So instead of paying taxes on interest and investment earnings each year, more of your money can stay in your account to keep growing. Over time, this feature, in combination with compound interest, can have a powerful effect.

Estimate your tax savings and future account value at www.Cigna.com/HSAcalculator

** Assumes a 5% rate of return on investment earnings, a Federal Income Tax Rate of 28%, and a State Tax Rate of 5%.


HR Portal

Human Resources Portal & Benefits Website:This is your one-stop shop for information and answers to all your HR needs including Employee Handbook, New Hire Center, Status Change Center, Separation of Employment Center, Benefits Information, Employee Discount Program and More!

HR Portal located online: LifeCare Standard Links-LifeCare Hospitals Employee Web Portal- Departments-Human Resources

Benefits Website located online: www.lifecare.essbenefits.com


• Medical & Prescription Coverage• Dental Coverage• Vision Coverage• Flexible Spending Accounts (FSA)• 401(k) Savings Plan• Paid Time Off (PTO)

Enrollment Basics

How to Select Your Benefits

You are required to re-enroll in Flexible Spending Accounts each year even if you want to continue with the amount you are currently contributing to either the Health Care or

Dependent Care accounts.

The Benefits Package Offered by LifeCare

For current employees: Your choices will take effect January 1, 2013 and will remain in effect until December 31, 2013.

For new employees: You will make your enrollment selections within thirty (30) days of your hire date, with choices effective through December 31, 2013. Your benefits become effective the first day of the month following 30 days from your date of hire. If you change your status from PRN to full-time, weekend, or part-time, your benefits become effective the first day of the month following your status change as long as you meet the new hire eligibility requirements.

Who is Eligible for Coverage?

LifeCare employees eligible for all coverages include:• Full-time employees • Weekend employees• Part-time employees

PRN employees are only eligible to participate in Colonial and MetLife Voluntary Benefits (excluding MetLaw).

In addition, for certain benefits you may enroll your eligible dependents. Eligible dependents include:• Your legal spouse• Your biological children, legally adopted children, and step-children up to age 26• Any other children for whom you serve as a legal guardian, as defined by a court order

To make the enrollment process as easy as possible, this guide includes the information you need to choose your benefits. You’ll also find additional tools and resources at www.lifecare.essbenefits.com. If you are considering changes or additions to your current benefit elections, be sure to make those changes during Annual Enrollment, October 29- November 18, 2012 or enroll within 30 days of your hire date if you’re a new employee.

• Basic Life and Accidental Death & Dismemberment (AD&D)

• Optional Employee Life and AD&D• Optional Spouse Life and AD&D• Optional Child Life and AD&D• Voluntary Benefits

• Basic Long-term Disability (Company Provided)

• Buy-Up Long-term Disability• Optional Short-term Disability

& Enhancement• Tuition Reimbursement


Enrollment Basics

How to Enroll Online

What Happens If I Don’t Enroll?

If you don’t enroll by the close of annual enrollment, November 18, 2012, you will continue current benefit elections at the new 2013 costs. Your medical premium costs will default to the tobacco rate and the spousal surcharge if applicable. If you previously elected to participate in a FSA and do not enroll for 2013 it will default to “no coverage.”

If you are a new hire or change your employment status from PRN to full-time, part-time or weekend, and don’t re-enroll within 30 days of your hire/status change date, you will default to “no coverage.”

If you elect to waive coverage, go online to www.lifecare.essbenefits.com and select “no coverage” on the applicable benefit plans. Be sure to press SUBMIT to record your choices.

Steps to Enrolling Online

1. Go to the benefits web site at www.lifecare.essbenefits.com.2. On your initial visit to the web site, you will need to enter your employee ID number in the field titled “Employee

ID.” If you have not logged on previously, your initial password is a 4-digit PIN made up of your birth month and the last 2 digits of your birth year. Example: if your birth date is 02/10/1972, your password will be 0272.

3. You will be asked to reset your password.4. Click on your corresponding link (example: Annual Enrollment, Newly Eligible, etc.).5. Make your selections.6. Be sure to press SUBMIT to save your elections and print a confirmation of your elections when you are

finished. Log off to keep your information confidential.

7. If you have forgotten your password, click on the “forgot your password link” or contact your local HR representative.

Please note: • Voluntary Benefits are not online, you will need to contact Colonial and MetLife directly. • Please send MetLaw enrollment forms to LMS Benefits Dept. • 401(k) enrollment kit will be mailed to your home reminding you of the auto-enrollment process.

To make things as simple as possible, enrollment in your health and welfare benefits is administered online. Online enrollment is fast and easy. When you visit www.lifecare.essbenefits.com, be sure to have your employee ID number available (can be found on the back of your employee badge). Read the rest of this guide to learn more about available benefit choices. During annual enrollment you will have the opportunity to attend benefit meetings where you will be able to ask questions and pick up benefit vendor materials. If you’re hired in 2013, you will have an opportunity to pick up additional materials from your local HR representative.

Online, you can:

• Review and print your current benefit summary• Make any changes to your benefits for 2013, including adding or dropping eligible dependents• View and print a confirmation of your 2013 elections


What if I Need to Make a Change During the Year?

Family Status Change Required DocumentationBirth/Adoption Birth CertificateMarriage Marriage CertificateDivorce/Annulment Divorce decree or annulment paperworkDependent gains other coverage Proof of other coverage, letter from spouse’s employer with

start date of employment and start date of benefitsDependent loses other coverage Proof of loss of other coverage, i.e., Certificate of Creditable

CoverageDeath of a spouse/child Death CertificateAddition/deletion of court ordered dependent

Court order paperwork

Change in dependent care costs Letter from day care provider

The benefit change must be consistent with the reason for the change. To change your benefits because of a family status change, notify your local HR representative within 30 days of the change. You will be asked to supply the appropriate documentation. In the event documentation cannot be provided within 30 days, please contact your local HR representative. Once you have been notified that your family status change has been approved, you will be required to log on to www.lifecare.essbenefits.com to make your family status change elections.

NOTE: When adding new dependents, you must go to the dependents section and add dependent information. You will also need to add/delete your dependent(s) from the coverage(s) that apply to each benefit area (medical, dental, etc.). Simply adding or deleting your dependent from your record does not automatically add/delete the dependent from medical, dental, vision or any eligible coverage.

If your status changes from full-time, part-time or weekend to PRN (benefits ineligible status) or you leave LifeCare:

• Medical, dental and vision coverage will cease on the last day of the month in which you become ineligible or terminate

• Flexible Spending Account coverage and deductions will stop at the end of the current pay period in which you become ineligible or terminate

• All other benefits will end on the date you become ineligible or terminate, and deductions will be taken out of the pay period from which you become ineligible or terminate

• Medical, dental and vision deductions are taken from available pay through the end of the covered month

When Your Coverage Ends

Family Status Change


Full-Time StatusEmployee Contributions

(Pre-Tax) / Biweekly Premiums

Choice Fund

Non-Tobacco Rate/ No Spousal Surcharge

Tobacco Rate/ No Spousal Surcharge

Non-Tobacco Rate/ Spousal Surcharge

Tobacco Rate/ Spousal Surcharge

Employee $13.47 $38.47 $13.47 $38.47

EE + Spouse $82.66 $107.66 $132.66 $151.66

EE + Child(ren) $52.91 $77.91 $52.91 $77.91EE + Family $102.50 $127.50 $152.50 $177.50

Core Plan





Employee $35.64 $60.64 $35.64 $60.64

EE + Spouse $150.37 $175.37 $200.37 $225.37EE + Child(ren) $96.24 $121.24 $96.24 $121.24EE + Family $186.46 $211.46 $236.46 $261.46

Economy Plan





Employee $15.92 $40.92 $15.92 $40.92EE + Spouse $97.69 $122.69 $147.69 $172.69EE + Child(ren) $62.52 $87.57 $62.52 $87.57EE + Family $121.14 $146.14 $171.14 $196.14

Medical Plans

* See your local HR Representative for Part-Time status premiums.


BCBS Benefits Summary Choice Fund HSA

In-Network Out-of-NetworkDeductiblesCalendar Year Deductible (CYD)/HSA Contribution

$2,250 per person$4,500 family


Annual Out-of-Pocket Maximum(Excludes Deductible)


Amounts paid on in-network and out-of

network apply


Amounts paid on in-network and out-of-network apply

Individual Lifetime Maximum UnlimitedPreventive Care

Immunizations, Routine Physicals, Well Baby

No deductible 60% after deductible

Preventive Care Calendar Year Individual Maximum Benefit

Unlimited

Physician Services

Services in Physician’s Office, Lab & X-Ray EPO also includes Surgical

80% after deductible 60% after deductible

Surgical Services

Physician Surgical Services (any setting)EPO-Outpatient Facility

80% after CYD 60% after CYD

Urgent Care 80% after CYD 60% after CYDHospital Services

Hospital per-admission deductiblePenalty for Failure to Pre-certify

$500after deductible

60% after deductible

Hospital Services 80% after $500 per admission deductible

80% after admission deductible

Emergency Services

- Emergency Room / Treatment Room- Accident & Medical- Facility Charges

80% after deductible

Emergency Room Physician Charges 80% after deductibleNon-Emergency Situations

Facility ChargesPhysician Charges

80% after deductible 60% after deductible

* Any services that are not pre-certified will only be paid at 50% out-of-network.** See “Out-of-Network and Out-of-Area Information”.***All benefits and services rendered (whether in-network or out-of-network) count toward these limits.


BCBS Benefits Summary

DeductiblesCalendar Year Deductible (CYD)

Annual Out-of-Pocket Maximum(Excludes Deductible)

Individual Lifetime MaximumPreventive Care

Immunizations, Routine Physicals, Well BabyPreventive Care Calendar Year Individual Maximum BenefitPhysician Services

Services in Physician’s Office, Lab & X-Ray EPO also includes Surgical

Surgical Services

Physician Surgical Services (any setting)EPO-Outpatient FacilityUrgent Care

Hospital Services

Hospital per-admission deduct-iblePenalty for Failure to Pre-certify

Hospital Services

Emergency Services

- Emergency Room / Treatment Room- Accident & Medical- Facility ChargesEmergency Room Physician Charges

Non-Emergency Situations

Facility ChargesPhysician Charges

Open Access Core Plan Open Access Economy Plan

In-Network Out-of-Network In-Network Out-of-Network

$625 per person$1,250 family





Amounts paid on in-network and out-of-network

apply


Amounts paid on in-network and out-

of-network apply



apply



apply

Unlimited

100% 100% 100% 100%

Unlimited

100% after $30 PCP $45 Specialist

copay

70% after CYD100% after $30 PCP

$45 Specialist copay

60% after CYD

90% after CYD 70% after CYD 80% after CYD 60% after CYD

100% after $45 Specialist copay

70% after CYD 100% after $45 Specialist copay

60% after CYD

$400None

$400 Reduced to 50% if

failure to pre-certify

$500None

$500 Reduced to 50% if failure to pre-

certify90% after $400 per

admission deductible & CYD

70% after $400 per admission

deductible & CYD


deductible & CYD


deductible & CYD

90% after $250 copay, waived if admitted 80% after $250 copay, waived if admitted

90% 80%

90% after $250 copay and CYDcopay waived if

admitted90% after CYD








BCBS Benefits Summary

Other Services

Skilled Nursing Facilities

Home Health Care

Hospice Care

Lab & X-Ray in Other OutpatientFacilities

Certain Diagnostic Procedures

Independent Lab & X-Ray MRI’s are subject to coinsurance

CT scans are subject to coinsur-ancePhysical Medicine Services

- Outpatient HospitalPhysical Medicine Services

- Office (EPO - combined 30 visits max)Mental/Serious Mental Illness

Inpatient Physician Services

Illness Office Visit/Consultation

Emergency Room/ Treatment RoomFacility Charges

Buy-Up Plan ($250 Deductible)

In-Network Out-of-Network

90% after CYD, 60 days max

90% after CYD, 60 visits max

90% after CYD

70% after CYD 60 days max***

70% after CYD 60 days max***

70% after CYD

90%

90%

90% after $450 copay

90% after $250 copay

70% after CYD

70% after CYD

70% after CYD

70% after CYD

90% after CYD 70% after CYD

100% after $25 PCP/ $40 Specialist copay

70% after CYD

90% after CYD

100% after $25 PCP

90% after $250 copay, copay waived if admitted

70% after CYD

70% after CYD

70% after $250 copay and CYD**

copay waived if admitted