Tribune Company Dependent Audit Results

From: Corporate-Relations
Sent: Friday, October 12, 2007 1:03 PM
Subject: Message from Luis Lewin/Benefits Update

Dear Fellow Employee:

With open enrollment set to begin on Monday, healthcare issues are in the media nearly every day. In a recent Chicago Tribune article, the American Hospital Association (AHA) noted that the price tag for just three common conditions - asthma, diabetes, and hypertension - is $30 billion a year. The AHA's president said, "The message is clear:Preventative medicine and wellness programs must be central to our health care system." (To read the article, click here)

That is exactly why Tribune, as part of our 2008 benefits plan, is focusing attention on reducing prescription drug expenses associated with these three most prevalent medical conditions. Under our primary medical plans, employees and covered dependents who purchase prescriptions for asthma, diabetes or hypertension through the mail order program will receive generic drugs for free and brand-name drugs for only $5. This will enable people with these conditions to get the important medications they need and reduce overall medical costs.

It's vitally important that the company do everything it can to contain these expenses. In 2008, Tribune expects to spend nearly $100 million on medical, dental and vision plans.

Another way to control healthcare expenses is by ensuring that dependents covered under our medical plans are eligible according to the plan rules. Because healthcare is an expense shared by the company and our employees, covering ineligible dependents results in higher medical insurance costs for everyone.

Last week, Tribune received preliminary results of the second phase of a "dependent audit" that began earlier this year. For those of you who were involved, we greatly appreciate your assistance as we realize that this was a rigorous and inconvenient process. Thanks to your cooperation, more than 700 individuals who did not meet eligibility requirements were removed from our plans, resulting in an annual savings of nearly $1.3 million. This savings will help contain healthcare expenses for all Tribune employees.

Finally, two more important changes to our 2008 medical benefits are designed to promote wellness and contain expenses. Both involve the implementation of "medical fees," a growing trend among large U.S. companies. Peer companies like Gannett and Scripps, as well as Fortune 500 companies such as General Mills, PepsiCo and others currently utilize one or both of these fees.

• Tobacco Use: The Centers for Disease Control and Prevention estimates that tobacco users cost companies about $5,700 more per year than non-smokers. To encourage a smoke-free lifestyle, on October 17, Tribune will begin offering a company funded smoking cessation program. Information about the program can be found on the Human Resources page of TriLink. While Tribune employees who use tobacco products (or have covered dependents who do), will pay a $100 per month fee (per family) in addition to their medical premium, the monthly fee will be waived upon completion of the program.

• Spousal/Domestic Partner Coverage: Employees who enroll a spouse/domestic partner under Tribune's medical plan when that person also has access to coverage through another employer will pay a $75 per month fee in addition to their medical premium. This fee enables the company to recoup some of the expense incurred by insuring individuals who have access to other insurance plans. Employees should keep in mind open enrollment for benefits begins Monday, October 15, and ends on Friday, November 2. Be sure to access eBenefits via the TribLink homepage or tribuneathome.com to review your elections any time during this period, and feel free to call the Tribune Benefits Service Center at 800.872.2222 if you have any questions.

Sincerely,
Luis E. Lewin
Senior Vice President/Human Resources