NOTICE TO OPERATING ENGINEERS

HEALTH & WELFARE PLAN PARTICIPANTS

APRIL 2010

Your Health & Welfare Plan has been operating at a loss due to:

·        Health care cost increases averaging 12% to 15% per year because of higher charges from doctors, hospitals, and drug companies.

·        Increased use of the Plan benefits, particularly the prescription drug benefit, by active & retired participants.

·        A 32% decline in work hours from October, 2007 to February, 2010.

·        A smaller number of members working fewer hours, helping pay the increased health care costs of an increasing number of retirees.

Therefore, the Board of Trustees has changed the Active and Retiree Fee for Service and PPO Plan benefits to help reduce the Health & Welfare Plan’s deficit. (See the following page for details of the changes.)

These changes are effective for claims incurred on and after May 1, 2010.  A claim is “incurred” on the date you see a doctor or other health care provider or enter the hospital.

Note that these changes Do Not apply to Kaiser, Health Net or Health Plan of Nevada benefits.

You may contact the Fund Office if you have specific questions about your coverage 626-356-1004.

The Active and Retiree Fee-for-Service and PPO Plan benefits will change as follows:

1.      Add an In-Network (PPO) calendar year deductible of $250 per individual and $500 per family (not applicable to Medicare primary participants)

2.      Increase the Out-of-Network calendar year deductible from $250 per individual and $750 per family to $300 per individual and $900 per family (not applicable to Medicare primary participants)

3.      Change the amount payable for an office visit to:

·              In-Network  (PPO) – Add a $20 co-pay per visit

·              Out-of-Network – Change maximum payment from $35 per visit to $15 per visit

4.      Limit the In-Network (PPO) chiropractic visit maximum payment to 50% of the contract allowed

5.      Reduce the amount payable for surgeon, assistant surgeon and anesthetist as follows:

    ·              In-Network (PPO) – From 100% of contract allowed to 95% of contract allowed

·              Out-of-Network – Surgeon and anesthetist from 100% of the Active   Surgical Schedule to 95% of the Active Surgical Schedule (assistant surgeon from 20% of the Active Surgical Schedule to 15% of the Active Surgical Schedule)

6.   Reduce the amount payable for emergency room (facility) charges as follows:

·              In-Network (PPO) – From 90% of contract allowed (participant pays 10% of charge) to 85% of contract allowed (participant pays 15% of charge)

·              Out-of-Network – From 80% of the Reasonable & Customary charge to 70% of the Reasonable & Customary Charge

7.   Increase the mail order co-pays to be two (2) times the retail co-pays as follows:

·        Generic medication mail order co-pay from $15 to $20

·        Brand medication mail order co-pay from $30 to $40