2015 2015 Open Enrollment November 3, 2014 to November 21, 2014 Employees

1 Welcome to 2015 Benefits Annual Enrollment The 2015 Benefit Election Period is November 3-21, 2014. This is the only time of year for you to make changes to your benefit elections without a qualifying event. All employees must make benefit elections to participate in the 2015 benefit plans. Your current benefit elections will not be carried over into 2015 if you do not enroll during this benefit election period. Benefit elections made during this time will become effective January 1, 2015. Unless you have a qualifying event (such as marriage, birth, change in work hours, etc.) the elections you make now will remain in effect until December 31, 2015.

2015 Medical/Rx Plan Options Blue Cross Blue Shield MedTrak

3 2015 Medical/Rx Plan Options A Traditional PPO plan A High Deductible Health Plan

4 What do both plans have in common? Both plans cover preventive care services at 100% Both plans use the Blue Cross provider networks Both plans offer coverage both in-and out-of-network With either plan you choose, you may pay significantly more if you go to an out-of-network provider How do the plans differ? If you use an in-network provider, the PPO plan costs you less at the time you use services. You will be responsible for office visit, ER, and Rx co-payments at time of service. You will also be responsible for a lower deductible and applicable coinsurance. This plan will cost you more out of your paycheck (higher premium). The HDHP initially costs you more at the time you use services. You will be responsible for a higher deductible before any expenses are paid by the plan. This includes all services except preventive care. This plan will cost you less out of your paycheck (lower premium). If you enroll in the HDHP, you may open and contribute to a Health Savings Account (up to $3,350 single/$6,650 family) If you enroll in the PPO, you may contribute to a Flexible Spending Account (up to $2,500) 2015 Plan Design Comparison g\filepath

5 In-NetworkOut-of-Network Deductible: Individual/Family$750/$1,500$1,500/$3,000 Coinsurance (your share):20%40% Medical Out-of-Pocket Maximum: Individual/Family (includes deductible, coinsurance and all co-pays other than Rx co-pays/coinsurance) $3,600/$9,000$7,200/$18,000 R(x) Out-of-Pocket Maximum: Individual/Family $2,000/$4,000Not covered Primary Care Office Visit$25 co-pay, not subject to deductibleDeductible then 40% Specialist Office Visit$40 co-pay, not subject to deductibleDeductible then 40% Preventive Services100%, not subject to deductibleDeductible then 40% Hospital: Inpatient or OutpatientDeductible then 20%Deductible then 40% All Other Covered Services (this includes, but is not limited to, x-rays, labs, inpatient and outpatient services, other physician services, ambulance, medical equipment, home health and hospice) Deductible then 20%Deductible then 40% Emergency Room Services$100 co-pay per visit then 100% (co-pay waived if admitted) Traditional PPO Plan

6 High Deductible Health Plan (HDHP) In-NetworkOut-of-Network Deductible: Individual/Family$3,000/$6,000 Coinsurance (your share):0%40% Out-of-Pocket Maximum: Individual/Family (includes deductible and Rx co-pays/coinsurance) $6,000/$12,000$9,000/$18,000 Primary Care Office VisitDeductible then 0%Deductible then 40% Specialist Office VisitDeductible then 0%Deductible then 40% Preventive Services100%, not subject to deductibleDeductible then 40% Hospital: Inpatient or OutpatientDeductible then 0%Deductible then 40% All Other Covered Services (this includes, but is not limited to x-rays, labs, inpatient and outpatient services, other physician services, ambulance, medical equipment, home health and hospice) Deductible then 0%Deductible then 40% Emergency Room ServicesDeductible then 0%

7 Traditional PPO Plan Prescription Drug Out-of-Pocket Maximum Individual/Family $2,000/$4,000 Generic$5 co-pay Name Brand$100 deductible, then $30 co-pay + 20% of remaining balance (the $100 deductible on Brand Name Drugs can be waived for members who attain Gold or Platinum Vitality status) HDHP You must meet your deductible first then: Prescription Drug Out-of-Pocket Maximum Individual/Family Rx co-pays and coinsurance go towards medical OOPM, then all medical and Rx drugs covered at 100% Generic$5 co-pay Name BrandDeductible, then $30 co-pay + 20% of remaining balance Prescription Drugs

8 Key Differences in the HDHP Plan You pay 100 percent of your office visits, prescription drugs and other medical expenses until you reach your deductible Offers a lower premium Allows you to open a Health Savings Account Contributions made through payroll deduction will be to a UMB account NEW FOR 2015: Your pharmacy benefit plan will now include coverage for certain generic preventive medications at a $0 co-pay to help protect against or manage medical conditions. Preventive drugs are intended to maintain your quality of life and keep you from developing other health conditions. For a full listing of the most commonly prescribed preventive drugs, please check here.here

Understanding Health Savings Accounts (HSAs) UMB

10 Top 10 custodian of Health Savings Accounts (HSAs) Provide solutions for: More than 3.25 million healthcare accounts 450,000+ HSA accounts with more than $800 million in HSA deposits Leader in Healthcare Payments industry since 1996 Who Is UMB Healthcare Services? Image 2013 Thinkstock. All rights reserved.

11 Understanding the HSA Concept Health Insurance Plan HSA HSA Qualified High Deductible Health Plan (QHDHP) Covers preventive health care and claims beyond deductible Individually owned Tax advantaged Used to pay for current out-of- pocket expenses Used as a savings and investment vehicle to prepare for future expenses

12 Benefits of HSAs Savings Tax SavingsTriple tax advantage Long term savings opportunity Lower costs ControlYou decide: How much money to put into the account How to spend your money Whether to invest any of your HSA money Which investments to make Portability You own italways! Image 2013 Thinkstock. All rights reserved. *Neither UMB Bank n.a., nor its parent, subsidiaries, or affiliates are engaged in rendering tax or legal advice and this presentation is not intended as tax or legal advice. All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. Please check with each states tax laws to determine the tax treatment of HSA contributions, or consult your tax adviser.

13 Understanding an HSA Contributions Distributions Earnings Pre-tax/Tax Deductible Tax Deferred Growth Tax Free Distributions (for Qualified Medical Expenses)

14 Eligibility for HSAs To be eligible to contribute to an HSA: You must be enrolled in an HSA-qualified HDHP like the HDHP option that Waddell & Reed is offering You cannot be enrolled in Medicare, TRICARE or TRICARE for Life You cannot be eligible to be claimed as a dependent on someone elses tax return You cannot be covered by your spouses health plan (unless it is a qualified HDHP) healthcare FSA, or Health Reimbursement Account (HRA) You cannot have any other non-permissible coverage

15 Permissible Coverage Permissible coverage includes: Limited purpose FSAs (like the one that Waddell & Reed will offer) Critical Illness Insurance (like the AFLAC plan offered by Waddell & Reed) Accident or Disability Dental and Vision care Long-Term Care Insurance Non-permissible coverage is basically any coverage that could provide medical coverage prior to meeting your deductible (other than preventive care) Note: Refer to IRS Publication 969 for specific questions

16 HSA Contributions Employer Employee Posttax Employee Payroll Deduction Total=Maximum Contribution Limit

17 Catch-up Provision (Age 55 and older) $1,000 make-up contribution allowed Two spouses 55 and older need two accounts Coverage Class Dictates Contribution Limits Spouses that both have single coverage Tax Year Funding April 15th tax deadline Contributions Employees are responsible for tracking limits (includes employer contributions).

18 Special Contribution Topics Excess Contributions Excise tax (6%) when you file your taxes Prorated Contributions Contribute maximum allowed is pro-rated for number of months eligible Mid-year changes in coverage status (single/family)

19 How Do You Use Your HSA? Step 1: Doctor/hospital bills BCBS Step 2: BCBS processes Sends explanation of benefits to you and doctor/hospital Step 3: Provider bills you Step 4: Settle payment with provider

20 Distributions/Payments Debit Card (No Transaction Fees!) Up to 5 cards for free for spouse and children $5,000 daily limit Online Transfer (No daily limit!) Online Bill Pay

21 Distribution Topics Substantiation Not Required to be Submitted to UMB Healthcare merchant (MCC) coding Receipts Non-Qualified Distributions 20% penalty before age 65 Qualified Medical Distributions Must be after account establishment Tax free No time restriction on reimbursement Retaining records

22 Qualified Medical ExpensesDefined by the IRS Medical out-of-pocket expenses such as deductibles, coinsurance, prescription drugs and lab tests Dental treatment such as fillings, braces, extractions Hearing aids including batteries Eye exams, eyeglasses, and contact lens Chiropractic care and acupuncture Premiums for qualified long term care insurance (dollar limits may apply) and COBRA Medicare premiums Source: www.irs.gov, IRS Publication 502

23 Your Responsibilities With an HSA Not Employer Responsibility Employee (Accountholder) Eligibility Contribution Maximum Tax Filing 1099-SA 5498-SA Form 8889 SubstantiationITEMIZED receipts

24 One HSA... Many Ways to Save Each accountholder may choose one or both of the investment options Base Account (Default) Fidelity Money Market Sweep Option Self Directed Brokerage Option

25 Base Account Interest bearing FDIC Insured All contributions and distributions flow through the base account All funds in the Base Account and the Money Market can be accessed via debit card and/or UMBs website.

26 Money Market Sweep Account Fidelity Money Market Online enrollment $1,000 minimum base account balance Automatic sweep capabilities Not FDIC insured A peg balance (currently $1,000) is set to determine the amount of money that moves in and out of the money market mutual fund. Funds in your HSA up to the $1,000 peg balance, are a deposit in an FDIC-insured account. Funds in excess of $1,000 are an investment in a money market mutual fund that is not insured by the FDIC or any other governmental agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Investments in securities, whether through the Money Market Sweep Account or through investments in the Self-directed Brokerage Account are: Not FDIC-Insured May Lose Value No Bank Guarantee.

27 Investment Options Most of the Ivy Funds included Online enrollment and trading Trades are $7.95 each or $2.00 for recurring trades (same fund) Comprehensive website tools $1,000 minimum base account balance to invest Investments in securities, whether through the Money Market Sweep Account or through investments in the Self-directed Brokerage Account are: Not FDIC-Insured May Lose Value No Bank Guarantee. Investments you make through your HSA are not FDIC-insured. Securities offered through UMB Financial Services, Inc., member FINRA (www.finra.org), SIPC (www.sipc.com). UMB Financial Services, Inc. is a subsidiary of UMB Bank, n.a. UMB Bank, n.a. is a wholly owned subsidiary of UMB Financial Corporation. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks.

28 Accountholder Service Unparalleled Service & Dedication Expert knowledge; dedicated healthcare staff Account service and investment account questions Online account access, web chat, and e-mail Availability 24/7 account access (IVR, lost/stolen cards) Live HSA support center Monday Friday: 7:00 a.m. 7:30 p.m. Central Time Saturday: 8:00 a.m. 5:00 p.m. Central Time 300 languages supported All calls digitally recorded Domesticlocated in Kansas City, MO 866-520-4HSA (4472) hsa.umb.com 866-520-4HSA (4472) hsa.umb.com

29 Internet Portal and Mobile Banking

30 Internet Banking Portal Real-time account management 24/7 Account balance and transaction history Current and prior year tax information Online transfer to/from HSA Online contributions Online reimbursement Investment enrollment Update information Online bill-pay and mobile banking Healthcare resources Forms

31 What Happens After I Enroll in the HDHP and Open my HSA? Identity verification Materials sent (normally received within 5-7 days) Separate mailings Welcome letter Debit card (follow activation instructions) Remember to signup for online access! Have questions? 866-520-4HSA (4472) hsa.umb.com 866-520-4HSA (4472) hsa.umb.com

32 Tier 1 group health plan employees First Year Seed: $500 for employee only coverage $1,000 for family coverage Second & Third Year Seed: $250 for employee only coverage $500 for family coverage HSA Employer Contribution *Regardless of any seed money received in 2014, Tier 1 employees enrolled in the HDHP will be eligible for the seed amounts specified above.

33 Additional HSA Employer Contribution- Vitality Employees enrolled in the HDHP will be eligible for an employer contribution based on attaining Vitality status This is in addition to a premium discount! Gold Status $15 per month employees only $30 per month employee and spouse coverage Platinum Status $25 per month employees only $50 per month employee and spouse coverage

Flexible Spending Account BMO g\filepath

35 Healthcare FSA Allows you to be reimbursed with pretax dollars for qualified out-of-pocket healthcare expenses that you or your covered dependents incur Qualified Healthcare Expenses include: Deductibles, co-pays, and prescriptions Health services, supplies, or expenses not covered by your health, dental or vision plans IRS Publication 502 provides a complete list of eligible expenses at www.irs.govwww.irs.gov In general, you may use your Healthcare FSA to pay for healthcare expenses considered tax-deductible by the IRS, except for health insurance premiums. Remember! Use It or Lose It: Federal law requires you to use all the monies in your FSA by the end of the benefit year. g\filepath 2015 Healthcare FSA Contribution Limit $2,500

36 Dependent Care FSA Allows you to pay for qualified child and adult care expenses on a pre-tax basis. Qualified Dependent Care expenses include: Licensed day-care After-school camp Elderly care Eligibility: You are a working single parent. You and your spouse both work. Your spouse is a full-time student. Your spouse is mentally or physically disabled and unable to care for himself or herself or your dependent(s). g\filepath 2015 Dependent Care FSA Contribution Limit $5,000

37 Limited Purpose Healthcare FSA If you enroll in the HDHP and have an HSA, you may participate in the Limited Purpose Healthcare FSA. This FSA allows for reimbursement of eligible healthcare expenses other than medical. Vision Expenses Dental Expenses g\filepath 2015 Limited Purpose Healthcare FSA Contribution Limit $2,500

38 Transportation Management Account (TMA) The TMA allows you to pay for qualified transportation and/or parking expenses with pre-tax dollars. Any benefits eligible Employee is eligible Same eligibility as FSA program Examples of transportation expenses include: Bus/ Subway/ Mass Transit Monthly Passes Fare cards Van Pooling Monthly Parking Expenses 2014 Limits*: Mass Transit Benefits: $130/month Parking Benefits: $250/month 2015 limits are expected to be announced toward the end of year. You can change your elections throughout the year! Balance in the TMA may be carried forward into the next calendar year, but may not exceed the annual limits set by the IRS. g\filepath New for 2015! *We will communicate the 2015 limits once posted New for 2015!

Dental Plan Delta Dental of Kansas g\filepath

40 Dental Plan g\filepath In-Network Premier and PPO Out-of-Network Annual Deductible/Employee$50 Annual Deductible/Family$150 Deductible Waived for Preventive ServicesYes Annual Benefit Maximum$1,500 Preventive Services100%80% Basic & Restorative Services (Subject to Deductible) 80%60% Major Services (Subject to Deductible)50%40% Orthodontia (Children Under 19)50% Orthodontia Lifetime Maximum$1,500 Good News! No changes and no premium increase.

Vision Plan VSP g\filepath

42 Vision Plan NEW FOR 2015! Your in-network retail frame allowance and contact lens allowance has increased from $120 to $200. If you choose one of VSPs Featured Frames, your allowance will be $220. Waddell & Reed employees will now have access to VSPs retail chain providers, which will give you added convenience and additional retail locations. Changes have been made in the out-of-network fee schedule for 2015. The following is a brief overview of the vision benefits. There will be slight increases to premiums for 2015. To access a provider directory, visit www.vsp.com.www.vsp.com g\filepath

43 Vision Plan g\filepath In-NetworkOut-of-Network Eye ExamCovered after $35 Co-payReimbursed up to $45 Material Co-pay$35N/A Single LensesCovered after Co-payReimbursed up to $30 Lined Bifocal LensesCovered after Co-payReimbursed up to $50 Lined Trifocal LensesCovered after Co-payReimbursed up to $65 Frame$200 Allowance ($220 if one of VSPs Featured Frames) Reimbursed up to $70 Contacts in Lieu of Glasses$60 Maximum Co-pay on Contact Lens Exam (Fitting and Evaluation) $200 Allowance Toward Contact Lenses Up to $105 Allowance Toward the Contact Lens Exam (Fitting and Evaluation) and Contact Lenses Combined Frequency Limit (Based on Calendar Year, not Service Year) Exams 12 Months Lenses 12 Months Frames 24 Months Per Pay Period Premium Contribution $4.19 Member Only $8.39 Member + Spouse $8.98 Member + Child(ren) $14.36 Member + Family

Critical Illness Aflac

45 Critical Illness Critical illness insurance can pay a lump sum benefit at the diagnosis of a covered condition including: Cancer Heart attack Stroke And many others Guaranteed coverage is available in the amount of $20,000 for employees, $10,000 for spouses, and $5,000 for children. g\filepath NON-TOBACCO Semi-Monthly RatesTOBACCO Semi-Monthly Rates EMPLOYEESPOUSEEMPLOYEESPOUSE Ages$20,000$10,000Ages$20,000$10,000 18-29$4.58$2.7318-29$7.08$3.98 30-39$7.68$4.2830-39$12.58$6.73 40-49$14.68$7.7840-49$29.88$15.38 50-59$25.81$13.3550-59$50.88$25.88 60-69$40.88$20.8860-69$80.88$40.88 Critical Illness is a great companion plan to the High-Deductible Health Plan!

2015 Annual Enrollment Summary

47 Upcoming Changes for 2015 Waddell & Reed will continue to offer a High-Deductible Health Plan (HDHP) in 2015, along side a Traditional PPO option. The family prescription drug OOP maximum for the PPO plan has decreased from $6,000 to $4,000. If you select the HDHP option, Waddell & Reed will continue to provide seed money to the UMB HSA for Tier 1 group health plan employees. The HDHP pharmacy benefit plan will now include coverage for certain generic preventive medication at a $0 co-pay to help protect against or manage medical conditions. Your vision plan in-network retail frame allowance and contact lens allowance has increased from $120 to $200! Waddell & Reed employees will now have access to VSPs retail chain providers, which will give you added convenience and additional retail locations. Waddell & Reed employees will now have the option to open up a Transportation Management Account (TMA)! g\filepath

48 2015 Dependent Eligibility Audit Waddell & Reed is committed to providing affordable healthcare. One way to do this is to ensure that only eligible persons are enrolled in the plan. Partnership with BMI to conduct audit in early 2015. More communications to follow early in 2015 regarding process and next steps. Will include collection of documents validating dependent eligibility. Annual enrollment is great time to ensure that you are only enrolling eligible dependents. Eligible Dependents Include: A same-sex or different-sex spouse, but not a common-law spouse. A same-sex or different-sex domestic partner, including a common-law spouse. A child who is a natural child, stepchild, foster child, adopted child, or a child that a covered employee is legally obligated to support. The limiting age for a child is 26 years, except that there is no limiting age for an incapacitated dependent. Eligible Dependents DO NOT Include: Former spouses, grandchildren, siblings, neighbors, pets, etc. g\filepath

49 How to Enroll Be looking for an e-mail on November 3 rd that will contain an informational booklet and instructions on how to enroll!

Questions? g\filepath

Documents

2015 2015 Open Enrollment November 3, 2014 to November 21, 2014 Employees