1. Open Enrollment Presentation October, 2012

2. Click to add text Filice Insurance Agency Nina Gardner, Joyce Manansala Nina Gardner, J.D. – Your Employee Benefits Consultant – strategic benefit planning Joyce Manansala – Your Account Manager – day-to-day administration – questions, plan design inquiries, claims and coverage issues, billing questions, etc. Serena & Lily’s Customized Website – Your Own Intranet www.filice.com/benefits/serenaandlily

3. What is Open Enrollment?  Once-per-year opportunity for employees to:  Enroll or drop coverage  Add or delete dependents

4. When Can I Change My Election?  OPEN ENROLLMENT OR A STATUS CHANGE…  Marriage  Divorce or legal separation  Birth or adoption of a child  Death of a spouse or child  Change in your spouse’s employment  You or your spouse change from full-time to part-time,  You or your spouse experience an unpaid leave of absence  Major changes to your spouse’s benefit program  You must notify HR and enroll within 30 days of the event.

5. Challenges in Health Care  Drivers of Increased Health Care Cost:  Aging population  Medical inflation – driving 51% of the growth in healthcare spending  New expensive technology and drugs  Cost of expanding and improving health care facilities  Less competition in the market place  Increased utilization and demand for services  Providers adjust prices charged to insurers to offset losses from non- payers  Government regulations:  Health Care Reform  Mandated Benefits

6. Health Care Costs Controlled by You  Lifestyle Choices:  Smoking  Obesity  Exercise (lack of)  Stress  Accessing preventive care  Taking medications as prescribed  Seeking care at the appropriate level (urgent care clinics and physical office visits instead of emergency room care)  Fraud prevention  Check your claims. If you need help, contact Joyce.

7. How can you help control costs?  Wellness: Eat, sleep and exercise appropriately. Check out your new wellness website with Filice. Monthly newsletters.  Utilize appropriate level of care: Call the 24-hour nurse line, only go to the emergency room for true emergencies, use urgent care as necessary, and schedule annual check-ups.  Engage: Manage your health and your health-related expenses. Always stay inside the network whenever possible.

8. Ways to Save on RX  Ask your doctor for generic alternatives  Use mail order for long-term and maintenance drugs  Use over-the-counter medications instead of prescription drugs when possible  Ask physician for free samples  Annually review your medications with your doctor

9. Benefits Overview  Blue Shield – New plan names but similar to last year. Blue Shield changed its small group portfolio.  Premier PPO 35 – Base Plan  Access HMO Enhanced 25 – Buy-up Option  Premier PPO 25 – Buy-up Option - New  Dental – Direct Dental (Assurant Network) - Enhanced  Vision – VSP – New Benefit  Life and disability – Mutual of Omaha  EAP  Travel Assistance  FSA – New Provider on 1/1/2013  401(k) – New Provider on 1/1/2013

10. Company Contribution  Medical: Serena & Lily pays 100% of premium for employees and 50% of the premium for dependents for the Blue Shield Premier PPO 35 plan. If you choose the Access HMO Enhanced 25 or Premier PPO 25, you will pay the difference.  Dental: Serena & Lily pays 100% of premium for employees and 50% for dependents for your Direct Dental plan.  Vision: Serena & Lily pays 100% of premium for employees and 50% for dependents for your VSP vision plan.  To calculate your cost per paycheck, please multiply monthly cost by 12 and divide by 26.  Long-Term Disability: Paid by Serena & Lily  Life Insurance: Paid by Serena & Lily  EAP program: Paid by Serena & Lily  Travel Assistance: Paid by Serena & Lily

11. Medical Plan Designs  Blue Shield Premier PPO 35  Deductible:$750/member; $1,500/family ($500/$1,000 last year)  Office Visit Co-Pay:$35 (deductible waived) ($40 last year)  Preventive Care:No Charge  Hospitalization:35% after deductible ($500/admit + 30% last year)  Surgery:35% after deductible ($250/surgery + 30% last year)  Emergency Room:$100/visit (waived if admitted) + 35% after deductible ($100/visit + 30% last year)  Prescriptions: $10/$30/$50/30% up to $100 per fill ($250 deductible - last year) Mail: $20/$60/$100/30% (90 day supply)  Annual OOP Max:$4,000 /member; $8,000/family (excludes deductible)

12. Medical Plan Designs  Blue Shield Premier PPO 25  Deductible:$500/member; $1,000/family  Office Visit Co-Pay:$25 (deductible waived)  Preventive Care:No Charge  Hospitalization:25% after deductible  Surgery:25% after deductible  Emergency Room:$100/visit (waived if admitted) + 25% after deductible  Prescriptions: $10/$30/$50/30% up to $100 per fill Mail: $20/$60/$100/30% (90 day supply)  Annual OOP Max:$3,000 /member; $6,000/family (excludes deductible)

13. Medical Plan Designs  Blue Shield Access Enhanced HMO 25  Deductible:None  Office Visit Co-Pay:$25/ $35 specialist  Preventive Care:No Charge  Hospitalization:25% of allowed charges  Surgery:25% of allowed charges  Emergency Room:$150 (waived if admitted)  Prescriptions:$10/$30/$50/ 20% up to $100 per fill ($300 Tier 2 & 3 Rx deductible) ($15/Generic; $30 Brand after $250 Rx deductible – last year) Mail: $20/$60/$100 ($300 Tier 2 & 3 Rx deductible) – 90 day supply  Annual OOP Max:$3,000/member; $6,000/family ($3,500member; $7,000/family – last year)

14. Dental Plan Overview  Direct Dental (Assurant Network)  $1,500 annual (plan year) maximum benefit  $50/individual (plan year) deductible  Ortho: $1,000 lifetime max for children and adults ($500 per year)  Plan design co-insurance levels InOut  Preventative 100%100%  Basic90%80%  Major60%50%  Ortho50%50%

15. Vision Plan Overview  VSP  Co-Pay:$10/$25  Exams:Every 12 months  Lenses:Every 12 months  Frames:Every 12 months (up to $130 + 20% off)  OR  Contact Lens Care:Every 12 months (up to $130)

16. Life, AD&D and Disability Overview  Life and AD&D Insurance – Mutual of Omaha  Benefit: 1 x salary to a maximum of $250,000  Long Term Disability – Mutual of Omaha  Benefit: 60% of salary – maximum benefit of $10,000/month  Elimination:90 days

17. Voluntary and AD&D Term Life Insurance MinimumMaximumGuaranteed For You$10,000$250,000$100,000 For Your Spouse$5,000$50,000$25,000 For Your Children2,000$10,000 Employee can elect up to 5 times their salary to a maximum of $250,000. Guarantee issue amount is 5 times salary up to $100,000. Spouse can elect up to 50% of employee’s benefit to $50,000. Children can elect up to 50% of employee’s benefit to $10,000.

18. EAP Program – Mutual of Omaha  24/7 online resources and confidential telephonic consultation with licensed EAP consultants who provide assistance and guidance on: Family, relationship and parenting issues Emotional and stress-related issues Conflicts at home or work Alcohol and drug dependencies Financial issues Depression Parenting On-line resources and tools  Up to 3 in-person counseling sessions each year with a licensed mental health professional.

19. The need for emergency travel assistance is growing. ■ Whether your travel is for business or personal reasons, our worldwide emergency travel assistance program goes with you when you travel to a foreign country or just 100 miles or more from home. ■ If you, your spouse or your dependent children need immediate assistance anywhere in the world. Worldwide emergency travel assistance services

20. FSA Vendor Change 1/1/2013  Provided by Benefit Resource, Inc., starting 1/1/2013  This move will enhance your current services with the following:  Online access to your account  Phone app to submit claims and to check your balance  Professional customer service via phone, email, and live chat  Faster reimbursement process including direct deposit  Just one debit card that holds both your medical FSA and your commuter and parking elections More details at the November enrollment meeting

21. New Benefit 1/1/13 Pre-Tax Commuter and Parking Pay $125 of your monthly eligible commuter expenses and $240 of your monthly eligible parking expenses pre-tax. More details at the November enrollment meeting

22. Flex Plan Benefits Insurance Premiums Health Flexible Spending Account (Health FSA) Dependent Care Assistance Account (DCAP)

23. Serena & Lily is also introducing a new-look 401(k) plan. Enhancements will include:  A lower cost, higher quality investment menu  A higher-touch servicing approach  One-on-one, customized advice & Much More. Our new retirement plan will be provided by Portico Wealth Advisors and Verisight Will be meeting with you to determine how to best position your 401(k) account Will be providing the website and all of the backend support for your account 401(k) Retirement Plan More details will follow over the next few months.

24. Enrollment Instructions  For Blue Shield, if you are staying on the most similar plan to last year’s plan, you don’t need to do anything. If you are moving to a new plan, please fill out a change form. For dental, you only need to fill out the form if you are new or making changes. Please complete the VSP enrollment form. Please fill out the Mutual of Omaha form as well as the beneficiary form. No forms to fill out for group life, disability, EAP and travel assistance. Everyone must turn in rate sheet.  Forms, applications, plan designs, etc. can be found at www.filice.com/benefits/serenaandlily under the Forms section.www.filice.com/benefits/serenaandlily  For questions, please call Joyce Manansala at 925- 299-7203 or email at joyce@filice.com.joyce@filice.com

25. 25 Q & A Open Enrollment for your plans is the month of September, 2012. Please return all forms to the office by Monday, September 24, 2012. Go to www.filice.com/benefits/serenaandlily to access all your benefit informationwww.filice.com/benefits/serenaandlily