The retiree population is growing dramatically, thanks to healthy lifestyle choices and advanced medical technology. An increased retiree life span, in addition to mounting health benefits costs and the strict accounting regulations of FAS 106, have left today's businesses with the challenge of providing for the health benefits needs of retirees, while at the same time maintaining cost control. To help employers better control these health care costs, Aetna offers Retiree Reimbursement Account administration services. Retiree Reimbursement Accounts are "health reimbursement arrangements" (HRAs). Although similar in some ways to flexible spending accounts, there are some important differences:

• HRAs are funded solely with employer contributions.
• HRAs can be used to pay for health coverage premiums.
• Unused balances can be rolled over from year to year because the "use it or lose it" rule does not apply on an annual plan-year basis.
• Retirees receive reimbursements up to either the account maximum or the deposit balance, with any remaining unreimbursed expenses pended until additional deposits are made.

Aetna can mail member welcome statements to all flexible spending account participants at the beginning of every plan year. Welcome statements will confirm employees' enrollment information as well as provide them with a brief guide on how to use flexible spending account services. This initial member correspondence includes the following information:

• Toll-free Number and Office Hours for Customer Service Access
• Service Center Address
• Coverage Period
• Check Issue Frequency
• Health Care and Dependent Care Annual Elections
• Claim Submission Procedures
• Employee Statement Frequency
• Free Form Note Field

Streamlined/Integrated Claim Submission

Streamlined claim submission is a claim submission process that allows employees to elect as part of enrolling in the Health Care FSA at open enrollment, to have all unreimbursed medical, dental and pharmacy expenses automatically considered for reimbursement from their Health Care FSA. There are no claim forms to complete and no separate claim submission is needed. As medical and dental claims are filed, either by employees or providers, our medical, dental and pharmacy claim systems automatically send unreimbursed expenses directly to the FSA System where they are resolved. 70% of our current claim volume is processed this way.

The streamlined system interface for Health Care FSA claims exists for all Aetna medical, dental and pharmacy products.

The 2004 release of Integrated Processing, an enhancement to our current streamline process that will function similar to a debit card without the need for a card, will eliminate the risk of inaccurate claim payment and "pay and pursue" efforts, since expenses go through a "real time" rigorous claim editing process wherein only valid expenses will be paid, thus eliminating the cash flow burden to members.

In cases where we are the FSA administrator and not the medical administrator, we have a proven track record in accepting and updating third party electronic claim interface(s) for several pharmacy, dental and medical carriers and would therefore be able to easily accommodate our customers needs in this regard. Our third party claim administration is provided to customers who may have all or a portion of their medical, dental, managed mental health or pharmacy benefits with other carriers.

This process allows participants to submit their claims to their carrier and receive automatic reimbursement through their Aetna flexible spending account.

With direct deposit, flexible spending account participants can have their FSA reimbursements automatically deposited into their savings or checking accounts. The convenience and reliability of direct deposit makes flexible spending account participation easier and more attractive to employees. Each participant's account is credited three business days after the scheduled check run date. We also mail an Explanation of Payment to the member for each direct deposit transaction. Employees appreciate the convenience of direct deposit and the quick access to their funds.

As an Aetna health care FSA participant, you can track account status through Aetna Navigator™, Aetna's member and consumer self-service website, available 24 hours a day, 7 days a week, wherever you have Internet access. You will be able to view payment information, including amount awaiting payment, next payment date and minimum payment amounts, at www.aetna.com.

Additionally, you can register on Aetna Navigator to receive an e-mail notification when an FSA payment has been initiated.

Aetna Voice Advantage^SM, Aetna's state-of-the-art toll free interactive voice response (IVR) technology is available for health and dependent care flexible spending account participants 24 hours a day, 7 days a week. Participants can obtain balance information for both their Health and Dependent Care accounts as well as payment information including the next reimbursement amount, issue date, plan from which the payment will be made, and last claim submission date.