New Requirements for BlueFund Debit Cards and HealthyBlue Incentive Cards Effective April 1, 2013

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1 Date: March 11, 2013 Market: 1-199, 200+ Facets only New Requirements for BlueFund Debit Cards and HealthyBlue Incentive Cards Effective April 1, 2013 The purpose of this notice is to alert you of upcoming changes related to the Durbin Amendment regarding the way in which members can use the debit card linked to their BlueFund account. BlueFund accounts may include one or more of the following: Health Savings Account (HSA) Health Reimbursement Arrangement (HRA) Health Care Flexible Spending Account (FSA) Dependent Care Account (DCA) Incentive Gift Cards Beginning April 1, 2013, the Durbin Amendment applies to all debit card transactions, including BlueFund MasterCard transactions. What is the Durbin Amendment? The Durbin Amendment is part of the larger Dodd-Frank Wall Street Reform and Consumer Protection Act of Merchants pay different fees for different types of transactions. Currently, when consumers swipe the BlueFund MasterCard for payment, they must choose credit. Under this new law, merchants and consumers have the choice of how they use debit cards, either as credit, or debit. Merchants who accept debit cards can choose to process these cards as debit, which requires a PIN to complete the transaction. As a result, each impacted member will need to obtain a PIN for their debit card. Members spouses and dependents who also have debit cards will need to obtain separate PINs for each card in their possession. This change applies to any location that accepts the BlueFund MasterCard such as pharmacies, doctors offices, other health care locations, day care providers, etc. PIN Retrieval PIN retrieval is available online. Employees will not need to obtain a new card for the PIN to be assigned. Existing cards will remain active and a unique PIN will be generated for each card. Members should NOT destroy existing BlueFund MasterCard debit cards.

2 Before logging in to the PIN website, members will need to have the following information available: Employee ID (Social Security Number) Card Number To obtain the PIN, members will need to log onto the following website and follow the directions below: Login Register View Pin For additional information, Account and Member Notification PayFlex will send the attached letter to all accounts on or around March 18, PayFlex will also include the attached member letters for distribution by the accounts to their impacted members. Members with BlueFund accounts will receive the BlueFund letter. Members with HealthyBlue incentive cards will receive the HealthyBlue letter. Should you have any questions, please contact your Broker Sales Representative. Shekar Subramaniam Associate Vice President, Broker Sales

3 March 18, 2013 RE: Debit Card Changes Dear Cardholder: This notification is being sent to alert you about changes to the BlueFund MasterCard you were issued for the pre-tax account you have through your employer sponsored health plan. These accounts may include one or more of the following: Health Savings Account (HSA) Health Reimbursement Arrangement (HRA) Health Care Flexible Spending Account (FSA) Dependent Care Account (DCA) HealthyBlue Rewards Card Durbin Amendment On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into Federal Law. A component of this legislation, the Durbin Amendment, specifically targets the processing transactions originating from debit cards and prepaid cards, this includes HRA, FSA, and HSA benefit cards. The changes directed by this legislation go into effect April 1, 2013 and will impact how merchants use your benefit card. Today, when you use your card, you must choose credit. Beginning April 1, 2013, your debit card may be used as a debit or credit transaction. In fact, a merchant may require you to choose "debit". It is appropriate to ask the merchant to run the purchase as a signature transaction, although it is possible that you could be asked for another form of payment by the merchant. If you pay with your card and choose "debit," you will have to enter your PIN when prompted. This is true for any location that accepts your MasterCard pharmacies, doctors offices, other health care locations, day care providers, etc. Debit Card PIN Retrieval You will not need to obtain a new card for the PIN to be assigned. Existing cards will remain active and a unique PIN will be generated for each card. Please do not destroy your existing BlueFund MasterCard. Before logging in to the PIN website, you will need to have the following information available: Employee ID (Social Security Number) Card Number To obtain the PIN, please log onto the following website and follow the directions below: Login Register View Pin If your spouse or dependent also has a card for your account, they will have a unique PIN assigned to their card as well. This can be viewed under the subscriber s account. PIN numbers can ONLY be viewed by the subscriber. Your employer, insurance carrier or any other entity will not be able to view the PIN. If you have further questions or concerns, please call Member Services at: (888)

4 March 18, 2013 Dear Administrator: We are providing this notice to alert you of upcoming changes regarding the way in which your employees will use the debit card linked to their BlueFund account. These accounts may include one or more of the following: Health Savings Account (HSA) Health Reimbursement Arrangement (HRA) Health Care Flexible Spending Account (FSA) Dependent Care Account (DCA) HealthyBlue Rewards Card For your convenience, we are enclosing an employee communication that you can share so all are aware of these changes. Specific instruction is provided so they may obtain a PIN for their debit card which is a new requirement as of April 1, Beginning April 1, 2013, the Durbin Amendment applies to all debit card transactions. What is the Durbin Amendment? The Durbin Amendment is part of the larger Dodd-Frank Wall Street Reform and Consumer Protection Act of Merchants pay different fees for different types of transactions. Currently, when consumers swipe the BlueFund MasterCard for payment, they must choose credit. Under this new law, merchants and consumers have the choice of how they use debit cards. This means that merchants who accept debit cards can choose to process these cards as debit, which requires a PIN to complete the transaction. As a result, each employee in your plan will need to obtain a PIN for the debit card. If an employee also has cards for a spouse and/or dependent, they will need to obtain a separate PIN for each card in their possession. This change applies in any location that accepts BlueFund MasterCards pharmacies, doctors offices, other health care locations, day care providers, etc. Communicating with your employees Provide the enclosed employee communication The employee will not need to obtain a new card for the PIN to be assigned. Existing cards will remain active and a unique PIN will be generated for each card. Please advise your employees that they should not destroy the existing BlueFund MasterCard. The employee will be provided with a separate website to obtain the PIN: PIN numbers can ONLY be viewed by the subscriber

5 Debit Card PIN Retrieval The employee should access the provided website to obtain the PIN. They will be required to register and set up a user name and password for future use. The employee will not need to obtain a new card for the PIN to be assigned. Existing cards will remain active and a unique PIN will be generated for each card. Please advise your employees that they should not destroy the existing BlueFund MasterCard. If the employees, spouse and/or dependents card has been lost or destroyed and they need to obtain a replacement card, please have the employee call the number on the back of their insurance card to request a new card. Once they receive the new card(s), they will need to utilize the separate website to obtain the new PIN. If your employees have any questions concerning these changes, please refer them to the number on the back of their debit card. For employers with questions concerning these changes, please contact us at: Bluefundquestions@payflex.com Phone: (866)

6 March 18, 2013 RE: Debit Card Changes Dear Cardholder: This notification is being sent to alert you about changes to the HealthyBlue Rewards MasterCard you were issued. Durbin Amendment On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into Federal Law. A component of this legislation, the Durbin Amendment, specifically targets the processing transactions originating from debit cards and prepaid cards, this includes HRA, FSA, and HSA benefit cards. The changes directed by this legislation go into effect April 1, 2013 and will impact how merchants use your benefit card. Today, when you use your card, you must choose credit. Beginning April 1, 2013, your debit card may be used as a debit or credit transaction. In fact, a merchant may require you to choose "debit". It is appropriate to ask the merchant to run the purchase as a signature transaction, although it is possible that you could be asked for another form of payment by the merchant. If you pay with your card and choose "debit," you will have to enter your PIN when prompted. This is true for any location that accepts your MasterCard pharmacies, doctors offices, other health care locations, day care providers, etc. Debit Card PIN Retrieval You will not need to obtain a new card for the PIN to be assigned. Existing cards will remain active and a unique PIN will be generated for each card. Please do NOT destroy your existing BlueFund MasterCard. Before logging in to the PIN website, you will need to have the following information available: Employee ID (Social Security Number) Card Number To obtain the PIN, please log onto the following website and follow the directions below: Login Register View Pin PIN numbers can ONLY be viewed by the subscriber. Your employer, insurance carrier or any other entity will not be able to view the PIN. If you have further questions or concerns, please call HealthyBlue at: (866) Option 2. CareFirst BlueChoice, Inc. is an independent licensee of the Blue Cross and Blue Shield Association. CareFirst BlueCross BlueShield is an independent licensee of the Blue Cross and Blue Shield Association, providing access to the Preferred Provider Organization Network only and does not assume any financial risk or obligation with respect to claims.

7 Frequently Asked Questions Q. Why do I need a PIN now? A. After April 1, 2013, merchants and providers that have the ability to accept a PIN at their locations may require a PIN for BlueFund MasterCard transactions. Q. How are PIN s assigned? A. PINs are calculated and unique to your card. The PIN associated with your card cannot be modified. Your Administrator will provide information on how to obtain your PIN. Q. Will I receive a new debit card? A. No, your existing card will simply be assigned a PIN. Q. Is the PIN shared by all cardholders on an account (Participant as well as Dependents)? A. No, each benefit card will have its own, specific PIN. The primary account holder will have the ability to view all of the PINs associated with the dependent cards connected to the account. Q. Can a PIN be customized? A. No, a PIN cannot be customized at any point. The PIN is specific to the given card. If a card is reported lost/stolen, a new card must be issued, and that card will have its own PIN. Q. Do Participant Plans change by adding the PIN? A. No, your plan(s) does not change as a result of the PIN requirement. Q. Can the PIN be used to withdraw cash? A. No, cards will not be cash-enabled. You will not be able to make cash withdraws at ATM s or at stores that allow for cash back on PIN debit purchases. Q. What should I do if I forget my PIN? A. If you forget your PIN, you can log back into the Generic PIN Retrieval website to view your existing PIN. Q. What should I do if the PIN becomes compromised? A. If your PIN becomes compromised, please call the number on the back of your insurance card to request a new debit card. Once the new card has been issued, you can log into the Generic PIN Retrieval website to access your new PIN.

8 Q. A card is officially reported as Lost/Stolen, does the user get a new PIN with the new card? A. Yes, when you report your card as lost or stolen and your administrator issues a replacement card, the replacement card will have a new number and a new PIN. Once you receive the new card you can retrieve the PIN electronically. Q. When is the PIN used? A. You may be prompted to enter your PIN at the point of sale terminal, when you use your benefit card to make a purchase, instead of signing the receipt as you may have done in the past. Q. Is the PIN required for online purchases? A. No, you will not need your PIN to complete online purchases of eligible items. Q. What if the PIN is forgotten at the time of the transaction? A. If you forget your PIN at the time of a sale, you can request that the merchant run the transaction on the "signature network." You would then sign the receipt, as you may have done in the past with your benefit card. Q. When I entered my PIN, it was declined at the point-of-sale, even though I used the same card to purchase eligible items in the past. A. If your transaction is declined when using your PIN, and you think it should have approved, you can request that the merchant run the transaction on the "signature network." You would then sign the receipt, as you may have done in the past with your benefit card. If you are still having an issue with the transaction, call your administrator for further resolution procedures.