1. Health Plan Changes for Medicare-Eligible Retirees 1 Effective January 1, 2013

2. 2 What is Changing Reynolds American Inc. is changing the way it provides health care benefits to retirees who are eligible for Medicare – More choices in health coverage through the individual market – In many cases, coverage available in the individual market costs less than the current group plan through RAI. – Access to benefit advisors to help with choosing coverage that fits your health-care and financial needs.

3. 3 Assistance Provided to You Assistance in choosing individual health coverage – RAI has made an arrangement with Extend Health, Inc. an insurance broker that specializes in individual Medicare supplemental insurance coverage. Financial Assistance with purchasing medical coverage – Retirees and their dependents who are eligible for Medicare and have been receiving a subsidy from RAI towards the cost of medical coverage will continue to receive financial help when they enroll through Extend Health. – RAI will make an annual contribution into a tax-free account, called the Health Reimbursement Arrangement.

4. 4CONFIDENTIAL | Introducing Extend Health The Industry’s Largest Medicare Exchange

5. 5CONFIDENTIAL | Independent company Partner with 75+ health plan carriers Objective and Trusted US based benefit advisors Focused on helping each participant make an informed and confident decision Who is Extend Health? Who is Extend Health?

6. 6CONFIDENTIAL | Why Extend Health We are experienced in helping people just like you Our services are at no cost to you

7. 7CONFIDENTIAL | Market-Leading Private Sector Clients 175 Employers – 40 Fortune 500 Companies Client Retention Rate 95%+ Client Retention Rate

8. 8CONFIDENTIAL | Plans & Partners All Medicare Plan Types Medicare Advantage Medigap (supplement) Prescription Drug (Part D) Vision Dental Select Carriers

9. 9CONFIDENTIAL | Educate Evaluate/Enroll Manage The Process

10. 10CONFIDENTIAL | Gather information –(e.g. prescriptions) –Pre-existing conditions will not limit your plan selection* –Give us a call: 855-835-3811 –www.ExtendHealth.com/raiwww.ExtendHealth.com/ Education Getting Started Guide * except end-stage renal disease

11. 11CONFIDENTIAL | Prepare you for enrollment discussion Review Medicare basics Appointment confirmation letter Education Enrollment Guide

12. 12CONFIDENTIAL | Decision Support Tools Help Me Choose Prescription Profiler

13. 13CONFIDENTIAL | Licensed Benefit Advisor 100% domestic workforce Objective advocacy Neutral compensation Extend University Licensed, certified, appointed Average age 43 Hours of Operation Monday – Friday 8 a.m. – 9 p.m. Eastern Time Evaluate and Enroll

14. 14CONFIDENTIAL | Enrollment Process Benefit Advisors can discuss coverage options with anyone – need to speak to the participant to complete the enrollment. Once you have made a coverage selection, enrollment is conducted via telephone. 100% of calls are recorded.

15. 15CONFIDENTIAL | Medicare and You

16. 16CONFIDENTIAL | Your Future Coverage Primary Coverage Medicare A & B Additional Coverage ( Your Choice ) Medicare Advantage with Prescription Drug (MAPD) Medigap + Prescription Drug Optional Coverage ( your choice ) Dental and Vision

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19. 19CONFIDENTIAL | Initial Coverage You pay Deductible and co-pays for your plan Coverage for the first $2970 in actual cost of meds Coverage Gap – Donut Hole You pay 47.5% of brand drugs and 79% of generics until out of pocket costs reach $4750 Catastrophic Coverage You pay $2.65 for generics and $6.60 for brand or 5% whichever is greater Medicare Prescription Drug Coverage

20. 20CONFIDENTIAL | Location Specific plans

21. 21CONFIDENTIAL | Plan Type Number of Plans Offered 2012 Monthly PremiumCompany Medicare Advantage 15$0 - $100 AARP, Humana, BCBS of NC, Medigap/ Medicare Supplement 32$58 - $191 AARP, Aetna, Humana, BCBS of NC, American Continental Part D 19$15 - $113 AARP, Aetna, BCBS of NC, Cigna, CVS, Humana, Coventry, WellCare, Community CCRx Plan Availability in Winston/Salem

22. 22CONFIDENTIAL | Plan Type Number of Plans Offered 2012 Monthly PremiumCompany Vision 1 $14 per person per month Annual eye exam: $15 Coverage for eye glasses, lenses and frames Vision Service Plan (VSP) Dental 2 $19 - $48 $0 - $50 deductible $1,000 - $1,600 annual maximum Humana, Delta Dental (Renaissance Dental) Plan Availability in Winston/Salem

23. 23CONFIDENTIAL | – $0 per month – $47 per month - network: PPO – Deductible: $0 – Doctor co-pay: $15 Specialist co-pay: $40 – Hospital: $195 co-pay days 1-6 – Emergency Room: $65 co-pay if not admitted – Rx: $7/$40/$80/33% – Mail order: (90 day discount) Plan Example Medicare Advantage Plan

24. 24CONFIDENTIAL | – Medical/Rx$215 ($175 - $40) – $173 – ($137/plan F + $36/pdp) – Network: any doctor that accepts Medicare – Deductible: $0 – Doctor co-pay: $0 Specialist co-pay: $0 – Hospital: $0 – Emergency Room: $0 co-pay – Rx: $0 deductible $7/$39/$74/33% – Mail order: (90 day discount) Plan Example Medigap Plan F and PDP – 70 year old male

25. 25CONFIDENTIAL |  Auto-Reimbursement  How the Process Works Health Reimbursement Arrangement

26. 26CONFIDENTIAL | What Is An HRA? Tax-advantaged account used to reimburse you for eligible health care expenses You must meet Reynolds American Inc.’s eligibility requirements to qualify for HRA Your HRA funds will be available January 1, 2013

27. 27CONFIDENTIAL | Reynolds American Inc. allocates benefit dollars to HRA account of eligible participant Participant HRA Account Administered by Extend Health Participant enrolls in a medical plan through Extend Health to enroll in individual coverage Participant is reimbursed for healthcare expenses using HRA benefit dollars Health Reimbursement Arrangement: How It Works

28. 28CONFIDENTIAL | How to File a Paper Claim Participant pays plan premium or co-pays Participant fills out claim form, attaches required information Extend Health verifies receipt of payment and eligibility Extend Health reimburses customer

29. 29CONFIDENTIAL | Extend Health HRA Claim Form Remember, You can be Reimbursed for Part B by sending in your statement

30. 30CONFIDENTIAL | How Auto-Reimbursement Works Participant pays plan premium to insurance company Insurance company forwards receipt of payment to Extend Health Extend Health verifies receipt of payment and eligibility Extend Health reimburses participant

31. 31CONFIDENTIAL | Initial AR reimbursement may take up to 3 months All premiums paid prior to activation of AR will be reimbursed at once If you need your reimbursement sooner, simply file a paper claim Forms and instructions provided in your HRA Welcome Kit Once AR is activated, you can expect to receive your reimbursement around the same time each month Auto-Reimbursement…

32. 32CONFIDENTIAL | Next Steps

33. 33CONFIDENTIAL | Next Steps Review “Getting Started Guide” Gather Medicare Prescriptions and Doctor information Call Extend Health (855) 835 -3811

34. 34CONFIDENTIAL | Post Enrollment Customer Service Advocacy and support services Toll Free number to contact Extend Health representative Direct support for claims issues, appeals and network questions Renewal process – ability to pick new coverage for future years – not locked into this year’s choice Ongoing enrollment services

35. 35CONFIDENTIAL | Questions