Open Enrollment Guide 2009

APPLIED® CHOICES 2009 Open Enrollment Guide

Take Charge of Your Life

Welcome to the Applied Industrial Technologies Open Enrollment for healthcare benefits.

As an Applied® associate, you have the opportunity each year to select the healthcare plans that best meet the needs of you and your eligible dependents. During this Open Enrollment period, you’ll be making your plan choices for the 2009 calendar year.

The Open Enrollment period begins with your receipt of this Guidebook and materials. The Electronic Benefit System is open and available beginning Monday, November 3 for you to make your benefit selections for 2009. The system will remain open through Friday, November 21, 2008.

You must complete your plan selections by November 21, 2008.

Open Enrollment Period

The benefits Open Enrollment Period begins November 3, 2008 and ends November 21, 2008.

Open Enrollment Guidebook 2009 Table of Contents

Benefit Plan Changes for 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Before You Enroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

How To Enroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Changing Your Plan Coverage In The Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Your Medical Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Your Prescription Drug Plans* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Notice of “Creditable” Coverage (Medicare Part D) . . . . . . . . . . . . . . . . . . .12

Your Dental Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Your Vision Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Flexible Spending Accounts (FSAs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

A Summary Of Your Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

What You Need To Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

For More Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

About This Guidebook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

* Review Carefully – New Plan Information

IMPORTANTWe urge you to keep this Guidebook with your personal records throughout 2009. The Guidebook contains valuable information, which will be helpful to you if you have future questions about your benefit plan selections.

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Benefit Plan Changes for 2009

Applied® is committed to providing eligible associates with quality healthcare plan options, at competitive levels of associate contributions. Since Applied® is ‘self-insured’ for virtually all the healthcare expenses of our associates and their eligible dependents, we recognize that rising healthcare costs are placing an increased financial burden on both our associates and the Company. Nevertheless, in 2009 Applied® will continue to pay the majority of the healthcare expenses for these benefit plans.

Medical Plan Changes• Associatecontributionsfor2009willbe

increased consistent with the increase in medical inflation as well as the benefits paid under each plan.

• TheBasicPPOprescriptionplanannualmaximum benefit will be increased to $2,500.

Mandatory Mail order PrograM:The Anthem mail order program, serviced by WellPoint NextRx, must be used for all long-term maintenance medication needs. Maintenance medications are those that a physician prescribes on a long-term basis (60 days or more) for continuing care of a health condition. Examples of maintenance prescriptions would be diabetic medicine, cholesterol medicine, or any other drug that is taken on a daily or consistent basis. All Applied® associates with Anthem are required to participate in the mail order program if they, or a covered dependent, are prescribed a maintenance drug. There are no exceptions to the mail order program.

Flexible Spending (FSAs)Remember, you must re-enroll each year that you wish to maintain an FSA. Review page 19 for details regarding the program.

Self-Insured

Applied® does not pay a monthly insurance premium to an insurance company. Rather, the Company pays all healthcare expenses incurred by our associates and their eligible dependents out of the general assets of the Company. Therefore, these expenses directly impact our bottom line.

Dependent Eligibility:To control costs for all Applied® associates who participate in our healthcare plans, it is important that only those dependents who are eligible for benefits are enrolled in the plan(s). Detailed information regarding the definition of an “Eligible Dependent” can be found at the HR Intranet site under OE 2009.

As you participate in the Electronic Open Enrollment process, please use these descriptions to determine who is eligible for enrollment in the plan(s). You will be required to confirm that you have reviewed the eligibility of the dependents that are covered on your Company sponsored healthcare plans.

If you have a question regarding the eligibility status of any person you wish to enroll in the Applied® healthcare plan(s), you are encouraged to call the Human Resource Services Call Center at 216-426-4269 prior to completing the electronic Open Enrollment process.

Anthem Healthplan Participants: Anthem’s MyHealth Risk Assessment

If you graded your health today, what score would you get? Anthem offers you the ability to not only measure your overall health, but it also provides you with specific action steps for changing your habits and reducing your health risks.

How to get started?

Simply log in at www.anthem.com and click on MyHealth ➟ Personalized Health Manager ➟ MyHealth Assessment.

A p p l i e d C h o i c e s

What You Need to Do On-Line

1. If you are keeping the same benefits coverage (except FSAs) for 2009, no action is required. You will be automatically re-enrolled in the same medical plan(s) for 2009. Confirmations will be mailed mid-December confirming your elections.

2. If you are making changes in your medical coverage, simply click on the medical plan you want to select and follow the screen prompts.

Summary Plan Descriptions

Anthem Booklets, known as Summary Plan Descriptions, are available online at www.myApplied.com. Simply click on the “Forms” tab located on the menu bar of the home page and choose the appropriate booklet.

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Before You Enroll…We encourage you to choose your benefit plans wisely. To help in the selection process, a Case Study & Personal Worksheet can be found on the HR Intranet site under OE 2009. The goal of these tools is to assist you in performing a careful financial analysis of your medical expenses. Please refer to it frequently as you consider your options for 2009.

How to EnrollWhen you are ready to enroll, log on to www.myApplied.com. You can enroll from your home computer or at work.

To Log on From Your Home Computer (with Internet access):

• Typewww.myApplied.com.Thiswilltakeyou to the log on screen.

• Next,enteryourJDEdwardsUserNameand Password. If you do not currently have aJDEUserNameandPassword,youwillbe required to complete the registration processwithinJDEdwardstoobtainone.Detailed instructions can be found on the HRIntranetsiteunderthe“JDEdwards”tab.

• Enteryourone-timeactivationcode(ifyouhave not already done so in 2008) found in the upper right-hand corner of the enrollment letter included in this packet.

• OnceyouhavereachedthemyApplied.com home page, select “Enrollment” from the menu to begin the on-line process.

To Log on From the PC at Your Service Center or Other Work Location:

If you are accessing the Internet at work and have the Company Intranet site called “Within Applied” set as your default log on, simply click on the myApplied.com link.

OR,

• LaunchInternetExplorer.

• Typewww.myApplied.com.

• Onceyouhavecompletedtheenrollmentprocess, be certain to close the Internet Explorer to ensure that your information remains confidential.

If, for some reason, you are unable to enroll through the Electronic Benefits Enrollment system, request assistance from your location manager or supervisor.

If you have any questions, please contact the Human Resource Services Call Center at 216-426-4269.

Confidentiality and Information SecurityRegardless of the PC you use, you can be assured that all of your personal information is secure and confidential. Each associate’s enrollment information is protected by technology that encrypts all sensitive information.

Confirmation of Your SelectionsThe decisions you make using the Electronic Benefits Enrollment system will be confirmed to you in two ways:

1.) While you are still logged on to the Electronic Enrollment system, you will be given the option, at the end of the process, to “Print” a hard copy of your 2009 benefit selections. We encourage you to print that screen for your own records.

2.) In December 2008, you will receive a personalized letter from the Human Resource Services Department. This letter will confirm the benefit selections you made during the Open Enrollment process. Again, we encourage you to save the confirmation letter for your personal records.


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Changing Your Plan Coverage In The Future

Newborn Baby/Adoption Reminder

In order to be covered under an Applied® health plan, you MUST enroll your newborn or newly adopted child within 31 days of the date of birth or date of placement. Be certain to contact the Corporate Human Resource Services department within 31 days. Elections received after the 31st day will not be accepted, and you must wait until the next Open Enrollment period.

The choices you make during this Open Enrollment period will remain unchanged until December 31, 2009. The only way you can change the dependents listed on your plan is if you experience a Qualified Status Change.

You must contact the HR Department within 31 days of event occurrence for any of the Qualified Status Changes.

Your change in coverage must be consistent with a change in status that affects eligibility for coverage. For example, if you have a baby, adding a dependent to your coverage would be consistent as your baby would be newly eligible. Adding coverage for your spouse because his/her insurance contributions increased would not be considered a Qualified Status Change. You may not switch plan options mid year for any reason, other than a Qualified Status Change.

Requesting A ChangeAny of the above changes must be requested within 31 days of the Qualified Status Change. If you miss that deadline, you must wait until the next annual Open Enrollment period to make the change.

To make a change, you must obtain an Applied® Choices enrollment form. Forms can be found on the HR Intranet site under “Your Benefits” and on myApplied.com under “Forms–Medical.” This form must be returned within 31 days of the date of the Qualified Status Change.

Qualified Status Changes•Marriage/Divorce

•Birth/Adoption

•Death

•Disability

•Terminationofyouremployment

•Lossofadependent’seligibility

•Lossofcoverageduetoachangeinyourspouse’semployment

•IssuanceofaCourtOrderoradministra-tive decree that requires coverage for a dependent child

•Significantchangeinyourspouse’sbenefits (increases in plan contributions required by any employer do not meet this standard)

•Relocationofyourhomeorworksite,orthat of your spouse or eligible depen-dent, which takes you out of, or into, the plan’sservicearea(mayrequireaplanoption change)

Be sure to notify Human Resources

within 31 days of marriage if you wish

to add your spouse to your healthcare

coverage.


Eligible Dependent Reminder

Eligible dependents include: current legal spouse and unmarried natural born children, stepchildren, adopted children, custodial agreement children, incapacitated children and guardianship children up to the age 19 or 25 if full-time students. Complete information and definitions can be found on the HR Intranet site under OE 2009.

The health plan prohibits enrolling ineligible dependents in the plan. Be certain to notify the Human Resource Services department within 31 days of a change in dependent status. Ineligible dependents may not use the health plan beyond the date the dependent becomes ineligible. Please remember, you will be responsible for reimbursing the company for any benefits paid beyond the last day of eligible coverage.

Persons NOT Eligible for Enrollment

•Ex-Spouse (Regardless of court order)

•DomesticPartners

•SameSexMarriage

•PartTimeStudents

•MarriedChild

•OtherRelatives

•OtherHouseholdResidents

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Your Medical Plans

This section of the Guidebook addresses the medical plan providers and the plan designs that are available to Applied® associates. It also provides the 2009 associate contributions for each plan.

Your Medical ChoicesMedical Plan Options: You may choose a medical plan design. However, the medical plan options available to you depend on those available to your work location. Not all medical plans are available in all Applied® locations. Please refer to the personalized letter included in your Open Enrollment packet to learn which medical plan options are available to you.

CoverageLevels:Withallmedicalplanoptions, you can choose:

• AssociateOnly,

• Associate+1,

• Associate+2orMore,or

• NoCoverage.

Important Note: You can choose medical, dental and vision coverage separately. However, you must use the same coverage level for all your choices. For example, if you choose “Associate Only” coverage for your medical plan, then you must choose “Associate Only” coverage for the dental and/or vision plans.

Dependent Children:Unmarrieddependentchildren are covered under all the medical plans.UndertheAnthemBCBSplans,children can be covered to age 19, or to age 25 if they are full-time students. Please check the plan descriptions carefully, or contact your HMO directly.

Prescription Drug Coverage: All of the Applied® medical plans include prescription drug coverage.

The Women’s Health & Cancer Rights ActThis Federal legislation requires all medical plans to provide coverage for breast reconstruction following a mastectomy, including:

•Reconstructionofthebreastonwhichthe mastectomy was performed,

•Surgeryandreconstructionoftheotherbreast to produce a symmetrical appearance, and

•Prosthesisandtreatmentforphysicalcomplications in all stages of the mastectomy, including lymphedema.


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The Anthem BCBS Plan DesignsThrough Anthem BCBS, Applied® offers three very different PPO plan designs. Each plan varies in the level of coverage it provides and the associate contributions are reflective of the level of plan benefits you choose. Remember to carefully complete the Case Study found on the HR Intranet site under OE 2009 to ensure you are receiving the most economical plan for your healthcare needs. The Anthem BCBS plans are described below. A summary of the various plan coverages may be found on Page 10 of this Guidebook.

Non-Duplication of Benefits Provision Applies to All Anthem BCBS Medical and CIGNA Dental Plans

The benefits provided by our medical and dental plans will be coordinated with the benefits provided by any other plans that cover you and your eligible dependents. This does not apply to benefits provided by the Anthem WellPoint NextRx prescription plan or VSP.

This means that if the Applied® plan provides secondary coverage for your dependents, then the Applied® plan will adjust its benefits so that the total benefits payable under all plans, for eligible charges, do not exceed the eligible charges payable under the primary plan (other coverage). For example, if the primary plan would normally pay $80 of a $100 eligible expense and the secondary plan would pay $90, then the secondary plan (Applied®) would pay only an additional $10.

Because our plan contains a Non-Duplication of Benefit Provision, Anthem sends letters out each year in order to verify if there might be other insurance coverage. In order to avoid delays in processing claims, please be certain to respond to Anthem’sinquirypromptly.

M e d i c a l

PPOStandard

Associate Monthly

ContributionAssociate Only:

Full Rate $86

Non-Smoker Discount* $78

Associate +1:

Full Rate $214


Associate +2:

Full Rate $240


* You nor any of your dependents can use tobacco products, and you must live in a smoke-free environment.

Terms to Know•In-network – doctors and facilities that

have a contract with a health plan. When youuseadoctororfacilitythat’sin-net-work, your out-of-pocket costs are lower.

•Out-of-network – doctors and facilities that do not have a contract with a health plan are not part of the network. When you use a doctor or facility that does not participate in the network, your out-of-pocket costs are much higher.

•Deductible – the amount you must pay first before the plan begins paying ex-penses for a service. Co-pays do not apply toward your deductible.

•Co-pay – a fixed amount you pay when you receive a specific service (for example, an office visit).

•Co-insurance – the percentage you pay when you receive care (for example, under the PPO Plan, X-rays may cost $200. If your deductible is already met, the plan would pay 80%, or $160, and your co-insurance would be 20%, or $40).

•Out-of-pocket maximum – the maxi-mum amount you must pay before the plan pays 100% for covered services. This amount does not include deductibles.

•Out-of-pocket cost – the amount you pay when you receive care.

PPO STANDARD PLANThis is the “standard” plan of the healthcare industry. Often referred to as an “80/20” plan, the PPO Standard Plan is similar to that offered by most employers today. The PPO Standard Plan offers Applied® associates a quality healthcare plan at a very competitive price. Carefully review your anticipated healthcare costs for 2009. You may find that the PPO Standard Plan is the most efficient way to provide quality healthcare for you and your eligible dependents.


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PPO BASIC PLANIf you and your eligible dependents are in good general health, and you do not anticipate the need for extensive medical services in 2009, the PPO Basic plan design may be a good option for you. The co-pays and out-of-pocket maximums are higher, but the associate contributions are very low. This is a great plan design to combine with an FSA.

Tobacco-Free Household Discount

It’safactthatpeoplewhodonot smoke and who are not exposed to secondhand smoke are healthier. In recognition of that, Applied® offers a non-smoker discount for each of the medical plans. If you and your covered dependents do not smoke or use tobacco products and live in a smoke free environment, you can qualify for this discount. If your household smoking status changes during the year, please contact Human Resources for premium adjustments.

PPOBasic

Associate Monthly


Full Rate $32


Associate +1:

Full Rate $76


Associate +2:

Full Rate $84


Indemnity

Associate Monthly


Full Rate $86


Associate +1:

Full Rate $214


Associate +2:

Full Rate $240


PPOElite

Associate Monthly


Full Rate $190


Associate +1:

Full Rate $460


Associate +2:

Full Rate $510



PPO ELITE PLANThe PPO Elite Plan has this name because of the very high level of benefits it provides. The cost of these benefits comes at a high price, both to the associate and to the Company. Therefore, the PPO Elite Plan contributions are the most expensive of all the plans.

INDEMNITY PLAN (Note: this plan is only available if an associate has no access to the Anthem BCBS network)

With this plan, an associate may receive healthcare services from any medical provider. There are no network restrictions. However, the cost of medical care is not “discounted” by the medical provider, and the associate must pay a fixed percentage of the full cost of medical care.


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Your BCBS Medical Plans At-a-Glance Here’s a closer look at each of the BCBS plans and the key services covered under each one. The plans pay all eligible co-insurance (for example 80%) after you meet the deductible, if applicable.

M e d i c a l

‡Includes coverage for hearing aids – limit 2 per lifetime up to $800 each.*May be subject to certain limitations, separate deductibles or co-pays and/or plan limits per lifetime.** $300 penalty applies for non-compliance.***One annual routine mammogram is covered in full at an in-network facility. Office visit co-pay/deductibles apply.

PPO-Standard PPO-Basic PPO-Elite INDEMNITYIn-

NetworkOut-of-

NetworkIn-

NetworkOut-of-

NetworkIn-

NetworkOut-of-

Network

DeDuCTIble

Individual $200 $600 $1,500 $3,000 None $1,500 $200

Family $600 $1800 $3,000 $6,000 None $3,000 $600

OuT-Of-POCKeT MAxIMuM (does not include deductible)

Individual $1,000 $3,000 $5,000 $10,000 $500 $5,000 $1,000

Family $2,000 $6,000 $10,000 $20,000 $1,000 $10,000 $2,000

lIfeTIMe MAxIMuM Unlimited Unlimited Unlimited Unlimited Unlimited $2.5 million Unlimited

OffICe vISITS $20 co-pay* 60% $25 co-pay* 50% $20 co-pay 50% 80%

PReveNTIve CARe(includes physical exams, immunizations, OB-GYN, well child visits***)

$20 co-pay*Not

covered$25 co-pay*

Not covered

$20 co-payNot

covered80%*

eMeRgeNCy CARe

Doctor’s office $20 co-pay* 60% 75% 50% $20 co-pay 50% 80%

Hospital 80% 80% 75% 75% $100 co-pay (waived if admitted)

$100 co-pay (waived if admitted)

80%

Urgent care 80% 80% 75% 75% $25 co-pay $25 co-pay 80%

Out of area 80% 80% 75% 75% $50 co-pay $50 co-pay 80%

Ambulance 80% 80% 75% 75% No charge No charge 80%

INPATIeNT HOSPITAl 80% 60%* 75%* 50%* $250 co-pay 50% 80%

OuTPATIeNT HOSPITAl 80% 60%* 75%* 50%* $125 co-pay 50% 80%

SuRgeON’S feeS 80% 60%* 75%* 50%* No charge 50% 80%

x-RAyS/lAb 80% 60%* 75%* 50%* No charge 50% 80%

DuRAble MeDICAl eQuIPMeNT

80% 80% 75% 75% 100%‡ 50% 80%

MeNTAl HeAlTH

Outpatient $25 co-pay* 50%* $25 co-pay* 50%* $25 co-pay* 50%* 80%*

Inpatient 80%* 60%* 75%* 50%* $250 co-pay* 50%* 80%*

SubSTANCe AbuSe

Outpatient $25 co-pay* 50%* $25 co-pay* 50%* $25 co-pay* 50%* 80%*

Inpatient 80%* 60%* 75%* 50%* $250 co-pay* 50%* 80%*

ClAIM fORMS? No Yes No Yes No Yes Yes

HOSPITAl PReCeRTIfICATION ReQuIReD?

Doctor Responsibility

Associate** Responsibility







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How to Read the Charts in This Guidebook

Any time you see a percentage listed in a chart, this is the percentage the plan pays.

Asanexample,let’slookatthemedical plan chart on page 10. UnderX-rays/labinthe in-networkPPOoption,you’llsee 80%. This is what the plan pays (after you pay the deductible). So, in this case, you would pay 20% of the cost (plus your deductible) if you get X-rays taken or use a lab service.

Health Maintenance Organizations (HMOs) Although the Anthem BCBS network serves the vast majority of Applied® associates, it does have a few geographic limitations. As a result, Applied offers an HMO option in those few geographic areas. You will know if you may select an HMO by reading the personalized letter enclosed in this Open Enrollment packet. The personalized letter provides you with the plan choices for your Applied® work location.

With an HMO, you must use the medical providers in that HMO plan. If you seek medical treatment “out-of-network,” the HMO plan will not provide any coverage – except in the case of a true life-threatening emergency.

The HMO plan also provides coverage for prescription drugs. Please consult the HMO summary plan description for the co-pay amounts and limitations the HMO may place on prescription drug coverage. If you have questions regarding these options, contact the HR Call Center at 216-426-4269.

HMO Associate Monthly ContributionUnited Healthcare Kaiser

Associate Only:

Full Rate $142 $138

Non-Smoker Discount* $128 $124

Associate +1:

Full Rate $354 $330


Associate +2:

Full Rate $388 $366



Out-of-Pocket Maximum and Co-InsuranceIt is very important to understand that once you reach an “out-of-pocket maximum” during a plan year, the plan you choose will pay 100% of in-network medical expenses. for example, if you incur a $20,000 hospital bill under the PPO Standard Plan, and you have already met your family’s deductible and out-of-pocket maximum earlier in the plan year, the plan will pay 100% of the $20,000 hospital bill.

“Out-of-pocket maximum” does not include deductibles.

Check the Anthem website at www.anthem.com to locate a network provider, or to make certain that your doctor or hospital participates in the Anthem network.

Always verify with your provider that they are part of the Anthem PPO network.


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To help reduce your healthcare expenses, be sure to use generic medications whenever possible.

Your co-pay for a generic drug will be substantially lower than your co-pay for the brand name equivalent.

Here are some key things to know about your prescription drug plan:

• TheAnthemBCBSmedicalplansinclude prescription drug coverage, also provided by Anthem BCBS. Your Anthem Identification Card is to be used for both medical and prescription drug services.

• TheHMOmedicalplansincludetheirown prescription drug coverage, so HMO participants will not receive benefits through WellPoint NextRx.

• Refertopage13forimportantinformationregarding the Mandatory Maintenance Drug Program.

Highlights of Your Prescription Drug Plan

You pay a co-pay each time you get a prescription filled, so you always know up front how much your prescriptions will cost.

Prescription drug coverage is included in the monthly cost for your medical plan. You do not pay a separate amount for this benefit.

Maintenance Drugs – If you are an Anthem participant, you and your eligible dependent(s) must use the mail order program for maintenance drugs.

Your Prescription Drug Plans

Categories of DrugsThere are three categories of prescription drugs:

•Genericdrug – these drugs have the exact same active ingredients as brand name drugs, but can cost one-half to two-thirds less than the brand name equivalent drug. Please use generic drugs whenever possible.

•Formularydrug – these are brand name drugs that are listed in the Anthem Formulary Drug List. This list may be found at www.anthem.com. Because Anthem has negotiated a contract price for these drugs, your co-pay is lower when your doctor prescribes one of these medications.

•Non-Formularydrug – also brand name drugs, Anthem has no price guarantee for these medications. Therefore, your co-pay is higher as well. Share the Formulary Drug List with your physician. It might be to your advantage if your physician prescribes a similar medication from the Formulary List.

letter of “Creditable” Prescription Drug CoverageThe Medicare Part D prescription drug program went into effect on January 1, 2006. Under this program, Applied Industrial Technologies is required to notifyassociatesand/ortheirdependentswho may be eligible for Medicare that the Applied® prescription coverage is considered “creditable.” This means that Applied® plan is at least as good as Medicare Part D Drug plan.

Because your current prescription drug coverage through Applied® is considered at least as good as the standard Medicare Part D Prescription drug coverage, you do NOT have to enroll in Part D coverage and you can keep your Applied® coverage. Provided you do not have a lapse of more than 63 days in “creditable” prescription coverage, you will not have to pay a higher Part D premium if you decide to enroll in Medicare Part D prescription coverage at a later date. You will receive a notice of “creditable” coverage each year.


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How To Fill PrescriptionsHow you get your prescriptions filled depends on whether you use maintenance or non-maintenance drugs. Maintenance drugs are drugs that are used to treat chronic, long-term conditions, such as diabetes or high blood pressure. Non-maintenance drugs are drugs used to treat occasional, short-term conditions.

Maintenance Drugs – MANDATORY MAIL ORDER

If you are required to take a prescription drug for a chronic or long-term condition such as high blood pressure or asthma, you will need to utilize the Anthem mail order program once you have received two “fills” at your local pharmacy. This means you can have the original prescription filled and then receive one additional “refill.” If you need to continue to take this prescription you should ask your doctor to write a new prescription for a 90-day supply for a one-year duration. For your convenience, mail ordered prescriptions can be refilled via the Internet at www.anthem.com (members log-in). Prescriptions are then mailed right to your home.

Non-Maintenance DrugsIf you need a prescription for a non- maintenance drug, you can use a retail pharmacy and receive a 30-day supply and if needed one refill. You must show your Anthem card when you pick up your prescription.

Using Mail Order NextRx

There are three convenient ways to use “NextRx,” the name giventoAnthem’sprescriptionmail order service.

New Presciption Orders:•Telephone:888-613-6091

NextRx Customer Service will contact your physician for your prescription. When you call, please have the following information ready: medication name, physician name and phone number, your Anthem ID card, and your credit card information.

•FAX:UsingtheFaxPhysicianOrder Form, your physician can FAX the medication order toNextRxfromthedoctor’soffice.

•Mail:Usingtheinitialorderform, you may mail your prescription to: NextRx Mail Service Pharmacy PO Box 746000 Cincinnati, OH 45274-6000

Refills: •Telephone:NextRxCustomer

Service 800-962-8192•Internet:goto

www.anthem.com

Important Reminders:•Alwaysallow10-14business

days to receive your medication from NextRx.

•Priorpaymentofyourco-payis required before NextRx will ship your medications.

•NextRxCustomerServiceisready to assist: 800-962-8192

Terms to Know• Co-pay – a fixed amount you pay when

you have a prescription filled.

•generic drug – these drugs have the exact same active ingredients as brand name drugs and are the most cost effective for both you and the Company.

• Maintenance drug – a drug used to treat a chronic, long-term condition.

•brand Name drug – a prescription drug that is protected by a patent that is only issued to the original drug company. Some examples include: Nexium, Zoloft and Lipitor.

•Non-maintenance drug – a drug used to treat an occasional, short-term condition.

•Formularydrug – brand name drugs that areincludedonAnthem’sFormularyDrugList. Using formulary drugs saves you money.

•AnthemFormularydrugList – the list of those name brand medications which Anthem has selected, based on quality, safety and cost.

•Non-Formularydrug – brand name medications that are not included on Anthem’sFormularyDrugList.Thesearethe most expensive drugs and are subject to the highest co-pay.


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Prescription Plan Co-paysWhat You Need To Do About Prescription Drug Coverage

Nothing. Your prescription drug plan is included with your medical coverage.

PPO-Standard, PPO-Elite, Indemnity

Retail 30-day SupplyMail Order 90-day

Supply**Generic $10 co-pay $20 co-pay

Formulary Brand $25 co-pay $50 co-pay

Non-Formulary Brand $45 co-pay $90 co-pay

PPO-Basic*

Retail 30-day SupplyMail Order 90-day

Supply**Generic $20 co-pay $40 co-pay

Formulary Brand $30 co-pay $60 co-pay

Non-Formulary Brand $45 co-pay $90 co-pay

*The maximum PPO-Basic benefit per year is $2,500 per person. Once Anthem NextRx has provided $2,500 in prescription coverage, no additional prescription benefits will be available for the remainder of the calendar year.

**Mail Order – Must be used for all maintenance drugs used to treat chronic or long-term conditions.

Helpful Tip: How to Save on your Prescription Drug Costs

• Reviewwithyourdoctorthedrugshe/shehas prescribed for you. Ask if a generic drug is available. If not, check the Anthem Formulary Drug List to see if a formulary brand drug can meet your needs. This could decrease your costs.

• Ifyouwanttousebrandnamedrugs,askif your doctor thinks it is appropriate to prescribe drugs that are on the Anthem Formulary Drug List. Using these formulary brand drugs cost you less.

P r e s c r i p t i o n D r u g

PPO-Basic RX Coverage Update

The PPO-Basic prescription plan annual maximum benefit will be increased to $2,500.


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Your Dental Plan

Your Dental PlanThe dental claims administrator is CIGNA Dental. CIGNA’s Dental national network is one of the nation’s largest and includes more than 76,000 dentists. You can access the CIGNA network of dentists at www.cigna.com. When you visit the Web site, be sure to click on “CIGNA Dental DPPO,” and then click on “Core Network.”

Also available through CIGNA Dental is a program referred to as Healthy Rewards, which provides discounts on such services as massage therapy, fitness club memberships, tobacco cessation, weight management and more. Visit the Web site at www.cigna.com or call CIGNA at 1-800-870-3470 for a list of discounts and benefits.

Your Coverage Levels You can choose:

• AssociateOnly,

• Associate+1,


• NoCoverage.

Remember, you can elect dental, medical and vision coverage separately. However, if you elect more than one, the coverage level for each one you elect must be the same. For example, if your dental coverage is at the Associate Only level, then your medical and/or vision coverage must also be at the Associate Only level.

Dependent Children: Dependent children are covered under the dental plan to age 19, or to 25 if they are full-time students.

CIGNA also offers discount programs to our dental participants that promote healthy living.

Information about these discount programs are listed on the Web site at www.cigna.com or you can get information by calling 1-800-870-3470. These special offers and savings are in addition to the CIGNA Dental PPO plan. You and all of your covered dependents are eligible. You may be able to save even more on things that can help you feel better and stay healthy!

Terms to Know

• Network – a group of dentists affiliated with a dental plan. When you use a dentist who’sintheCIGNAnetwork,yourout-of-pocket costs are lower and your benefit level is higher.

• Out-of-network – dentists who are not part of the network. When you use a dentist who does not participate in the CIGNA network, your out-of-pocket costs are higher and your benefit level is lower.

• Deductible –the amount you must pay first before the plan begins paying ex-penses for a service.

• Co-insurance – the percentage you pay when you receive care (for example, basic services).

• Out-of-pocket cost – the amount you pay when you receive care.

• Annual maximum – the total amount the plan will pay per covered person, per year.

• uCR – usual customary and reasonable. The prevailing amount allowed for a service performed by a healthcare profes-sional.

• PD – predetermination estimate.


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If you are keeping the same benefits coverage (except FSAs) for 2009, no action is required. You will be automatically re-enrolled in the dental plan for 2009.

Confirmations will be mailed mid-December confirming your elections.

Your Dental Plan At-a-GlanceHere’s a look at the services and coverage under the dental plan:

D e n t a l

DentalIn-Network

(CIgNA Dental Core Network)

Out-of-Network (Subject to uCR)

Deductible None $25Individual/$75Family

Annual Maximum $1,500 Per Covered Person $1,000 Per Covered Person

Preventative Services/ DiagnosticX-raysOral ExaminationsProphylaxisFluoride TreatmentSpace MaintainersEmergency Care

100% 100%

Basic ServicesFillingsOral SurgeryRoot CanalExtractions

90% of the CIGNA Fee 80% After the Deductible

Major ServicesComplete or Partial DenturesCrownsInlaysOnlaysFixed Bridges & Crowns (when part of a bridge)


Orthodontia 50% of the CIGNA Fee 50% After the Deductible

Orthodontic Lifetime Maximum

$1,000 Per Covered Person $750 Per Covered Person

Temporal Mandibular Joint Dysfunction (TMJ) Diagnosis surgery, in mouth appliance therapy, non-surgical treatment, and restoration and construction, which alter the jaw, jaw joints or bite relationships.


TMJ Lifetime Maximum $1,500 Per Covered Person $1,000 Per Covered Person

Associate Monthly Dental Contribution

Associate Only: $12

Associate +1: $16

Associate +2: $22

CIGNA has changed its dental network’s name to the CIGNA Dental Core Network.

To locate a CIGNA Dental Core Network Provider:

Go to www.cigna.com•

Click “Provider Directory” at •the top of the page

Click “Dentist”•

Enter search criteria (location, •name, etc.)

Select the CIGNA Dental •DPPO, and in the drop down menu, select “Core Network”


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Your Vision PlanVision Service Plan (VSP) insures our vision plan. Nearly all your vision needs are covered through this benefit.

VSP allows you to:

• useaproviderintheVSPnetworkandreceive a higher level of benefits; or

• useaproviderwhodoesnotparticipateinthe VSP network and receive a lower level of benefits.

Contact VSP member services at 1-800-877-7195 or check VSP’s Web site at www.vsp.com for a list of providers in the network. Click on “Members and Consum-ers,” then “Find a Doctor.” Simply tell your provider that you participate in VSP. The plan does NOT issue ID cards.

How the Plan WorksWhen you need vision care, VSP offers a choice of providers.

• In-NetworkProviders:Thebestvalueinvision care lies with using a provider in the VSP network. In doing so, your cost is limited to the co-pays, unless you select frames and/or lenses, which exceed the plan allowances.

• Out-of-Network:VSPwillstillpayaportion of your vision care expenses if you choose an ‘Out-of-Network’ provider. However, reimbursement for these services from VSP is limited to smaller, stated dollar amounts for specific services.

Your Vision Plan

Highlights of Your Vision Plan

•Theplanprovidesreducedcosts for eye exams, glasses and contacts.

•Theplanfeaturesin-networkand out-of-network options.

•Planfeaturesdiscounttowards LASIK surgery.

Terms to Know•In-Network – a group of vision care

providers affiliated with a vision plan. When you use a provider who is in-network, your out-of-pocket costs are lower.

•Out-of-network – vision care providers who are not part of the network. When you use a provider who does not partici-pate in the network, your out-of-pocket costs are higher.

•Co-Pay – a fixed amount you pay when you receive a specific service (for example, an eye exam).

•Out-of-pocket cost – the amount you pay when you receive vision services.


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Your Coverage Levels

You can choose:

• AssociateOnly,

• Associate+1,


• NoCoverage.

Remember, you can elect dental, medical and vision coverage separately. However, if you elect more than one, the coverage level for each one you elect must be the same. For example, if your dental coverage is at the family level, then your medical and/or vision coverage must also be at the family level.

Dependent Children: Dependent children are covered under the vision plan to age 19, or to 25 if they are full-time students.

Your Vision Plan At-a-GlanceHere’s a look at the services and coverage under the vision plan. Please refer to the enclosed VSP brochure for complete details of the Contact Care Program.


If you are keeping the same benefits coverage (except FSAs) for 2009, no action is required. You will be automatically re-enrolled in the vision plan for 2009.

Confirmations will be mailed mid-December confirming your elections.

V i s i o n

Vision

In-NetworkOut-of-Network

(Reimbursement Amount)Eye Exam(one per calendar year)

$10 co-pay $35

Lenses(one per calendar year)

Special Note:Polycarbonate lenses for children under 19 are covered in full at an in-network provider

$25 co-pay •Single:upto$25/pair •Bifocal:upto$40/pair •Trifocal:upto$55/pair •Lenticular:upto$80/pair

Frames(one per calendar year)

or:

Up to $130 retail Upto$45/pair

Soft Contact Lenses Programcurrent soft contact wearers: (one per calendar year)

$120 benefit provides full coverage for the simple exam

(fitting & evaluation) and contact lenses

None

Contact Lenses1st time contact wearers, or current wearers with special needs or materials, evaluation fees and fitting costs (one per calendar year)

•Elective:upto$120•15%discountoffthecost

of contact exam (fitting & evaluation)

Elective: up to $105

LASIk / PRk Discount is available None

Associate Monthly Vision Contribution

Associate Only: $8

Associate +1: $12

Associate +2: $16

Remember, you can elect dental, medical and vision coverage separately. However, if you elect more than one, the coverage level for each one you elect must be the same. For example, if your dental coverage is at the familylevel,thenyourmedicaland/orvisioncoveragemust also be at the family level.


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Highlights of Your Flexible Spending Accounts

•Theaccounts–thehealthcarereimbursement account and the dependent care reimbursement account save you money on eligible expenses because your taxable income is reduced by the amount of money you put aside in the account.

•Youdecidehowmuchyouwant to set aside for each account (up to the annual limits).

•Whenyoucontributetoan FSA, you decrease your taxable income because the contributions are taken before Federal, state and FICA taxes that are calculated.

•FSAcontributionsaredeductedfrom every paycheck.

•Refertotheenclosedbrochurefor additional information.

Flexible Spending Accounts are an excellent way to save money. Any money you contribute to an FSA is deducted from your gross income, before your Federal taxes, FICA, and state taxes are calculated.

Once you open an FSA, you can use your contributions to reimburse yourself or an eligible dependent for:

• HealthcareExpenses

• DependentCareExpenses

You must open a separate FSA for each of these two expense categories. You cannot combine both expense categories into one FSA.

Both types of FSAs are discussed in further detail below:

How the FSA Process Works • Determinewhatyoubelieveyour2009out-

of-pocket expenses will be for one of the expense categories above.

• Theon-lineenrollmentsystemallowsyou to open an FSA account for the total amount you wish to contribute during 2009.

• During2009,equalpayrolldeductionswillbe taken from each paycheck until the total amount is accumulated in your FSA.

• Asyouincurout-of-pocketexpensesduring 2009, submit the receipts for eligible expenses to the FSA administrator. You do not have to wait until the end of 2009 to be reimbursed. You may submit expense receipts throughout the year.

• TheFSAadministratorwillsendyouareimbursement check each month for the eligible expenses you submitted.

• YouhaveuntilMarch31,2010,tosubmitreceipts for reimbursement for expenses incurred during 2009.

• Minimumannualamount$100.

IRS Rules for FSAsThe IRS has established certain rules for FSAs, which must be followed:

• FSAs do not automatically renew from one year to the next. You must enroll to create a new FSA for 2009, even if you had an FSA in 2008.

• Ifyoudonotusetheentireamountyoucontributed to your FSA, you must forfeit any money remaining in your account. However, you have until March 31, 2010 to submit expenses incurred in 2009. Helpful Hint: Carefully estimate your expenses for the coming year and do not set aside more money than you are certain you will use.

• IfyouopentwoFSAs,oneforHealthcareand one for Dependent Care, you cannot transfer money between your two accounts.

• YoucannotuseaDependentCareAccountfor healthcare expenses. Nor can you use a Healthcare Account for dependent care expenses.

• Changestoboththehealthcareanddependent care can be made in the event of an IRS approved qualifying event.

Healthcare Reimbursement AccountsYou may set aside up to $3,600 each year for eligible healthcare expenses, for yourself and all eligible dependents, that are not covered by any other healthcare plan. Further, if an-other healthcare plan does not reimburse the full amount of a medical expense (example: the co-pay for an office visit), you may submit this expense for reimbursement from your FSA. You do not have to participate in the health plan in order to participate in the FSA.

Flexible Spending Accounts (FSAs)


What You Need to Do On-line

1. If you want to participate in one or both of the FSAs, follow the on-screen directions.

2. If you contributed to an FSA in 2008 and wish to continue in 2009, you must re-enroll by November 21, 2008. Enrollment for FSAs is not automatic. See page 5 for log on information.

F l e x i b l e S p e n d i n g A c c o u n t s

Over-the-Counter MedicationsYou may submit the cost of “over-the-counter” medications for reimbursement from your FSA. This ruling is great news, especially for associates who use “over-the-counter” medicines, which had formerly been prescription drugs.

Reimbursement is also permitted for “over-the-counter” medications such as:

• Allergydrugs

• Coldandfluremedies

• Aspirinandotherpainreliefmedications

Unfortunately,otherhealthcareitemsarenoteligible for reimbursement. These products include vitamins, nutritional supplements, first aid products and cosmetics.

More information about this IRS ruling can be found on the Web site of our FSA administrator:

NEO Administration Company www.FlexNEO.com

eligible Healthcare Reimbursement Account expensesThese are some of the expenses that can be reimbursed through a healthcare FSA:

• Over-the-counterdrugsandmedicinessuch as allergy, cough and cold, and pain relief medications

• Deductibles,co-paysandcoinsuranceformedical and dental plans

• Physician’sfees

• Dentalcare

• Obstetricalexpenses

• X-raytreatments

• Eyeglasses,contacts

• LASIKeyesurgery

• Prescriptiondrugsorinsulin

• Eligiblesmokingcessationprograms

• Wheelchair

• Crutches

• Hearingaids

• Braces(orthodonticdevices)

• Vaccinations

• Eligibleweightreductionprogramstotreat diagnosed medical problems

• Nursingservicesforcareofspecificmedical ailment

• Servicesofpsychotherapists,psychiatristsand psychologists

• Optometrist’sorophthalmologist’sfees

• Laboratoryfees

• Acupuncture

• Treatmentforalcoholismordrugdependency

• Physicaltherapy

• Costofaguideforablindperson

• Artificialteethorlimbs

• CostofBraillebooksandmagazinesinexcess of the cost of regular editions

• Householdvisualalertsystemfordeafperson

• Wigs(ifnecessaryforthementalhealthof an individual who loses hair because of disease)

• Anyprescriptiondrugusedtoalleviatetheeffects of nicotine withdrawal

Note: Coverage for some of the above may already be provided through your medical plan.

20 A p p l i e d C h o i c e s

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Dependent Care

Expenses for dependent care must be incurred before they are eligible for reimbursement.

Dependent Care Reimbursement AccountsA Dependent Care Reimbursement Account lets you pay for:

• Daycareexpensesforadependentchild

• Daycareexpensesforadependentadult

This FSA allows you to pay for day care expenses for your dependents while you and your spouse work or attend school full-time. You can contribute to a Dependent Care FSA in the following amounts:

• $5,000eachyearifyouaremarriedandfilea joint tax return, or you are single and file taxes as the head of the household

• $2,500eachyearifyouaremarriedandfileyour taxes separately

FSA AdministrationNEO Administration Company administers the FSAs for Applied®. NEO administers both the Healthcare Accounts and the Dependent Care Accounts. You can log onto their Web site www.FlexNEO.com or, contact their Member Services Department at 1-800-775-3539 to obtain further information about NEO Administration or about Flexible Spending Accounts (FSAs).

Reimbursement ProcedureIt is easy to be reimbursed for eligible expenses from your FSA. Simply complete an FSA Reimbursement Form. This form is available through any one of the following:

• NEO’sWebsiteatwww.FlexNEO.com

• “WithinApplied”–theHRIntranetsiteunder “Your Benefits.”

Once you have completed the proper FSA Reimbursement Form, simply mail or fax the form, along with your receipts, to the NEO Administration address printed on the form. The fax number is 330-572-8125.

Note: To be reimbursed for “over-the-counter” medications, send:

• Thestorecashregisterreceiptthatshowsthe item description, the date of purchase, and the price you paid for the item.

• Ifthestorereceiptdoesnotshowtheitemdescription, you must send the actual product package, along with the dated cash register receipt, to NEO Administration.

You have until March 31, 2010, to request reimbursement for expenses incurred during 2009. For example, if you have an expense on December 15, 2009, but you do not pay the bill until February 9, 2010, you may still be reimbursed since the expense was actually incurred during 2009.

Reminder: Any unused money in your FSA after March 31, 2010 will be forfeited, in accordance with the IRS rules for FSA administration.

Checking your balance:To check the balance in your Flexible Spending Account, you can visit www.FlexNEO.com for online access to your complete account history.

Method of Reimbursement Payment

You will receive a check, mailed directly to you from NEO Administration, for the eligible expenses you submitted. Or, if you prefer the added convenience of a direct deposit, NEO Administration can arrange for your money to be deposited directly to your checking or savings account. Please note that there is a $25 minimum amount for reimbursement checks. Contact NEO Administration to arrange for direct deposit of your money. You may also contact the Human Resource Services Call Center at 216-426-4269 for assistance.


22

These charts show your monthly contributions for all your benefit elections:

A Summary of Your Contributions

VisionAssociate Monthly Contribution

Associate Only: $8

Associate +1: $12

Associate +2: $16

DentalAssociate Monthly Contribution

Associate Only: $12

Associate +1: $16

Associate +2: $22

HMOAssociate Monthly Contribution

United Healthcare KaiserAssociate Only:

Full Rate $142 $138


Associate +1:

Full Rate $354 $330


Associate +2:

Full Rate $388 $366



BCBSAssociate Monthly Contribution

PPO-Standard PPO-Basic PPO-Elite IndemnityAssociate Only:

Full Rate $86 $32 $190 $86

Non-Smoker Discount* $78 $28 $168 $78

Associate +1:

Full Rate $214 $76 $460 $214


Associate +2:

Full Rate $240 $84 $510 $240



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About This Guidebook

This Guidebook is provided to assist you in selecting your benefits. More complete information can be found in the official plan documents. While every effort has been made to provide accurate information, if there are any discrepancies between the information provided in this Guidebook and the plan documents, the plan documents will govern. Applied Industrial Technologies can amend or terminate any of its benefit plans at any time and for any reason. This Guidebook does not serve as a guarantee of continued employment.

To enroll or make changes to your benefits, simply log on to the myApplied.com Web site and click on “Enrollment.” Remember to enroll by the deadline of November 21, 2008 so you don’t miss out on this once a year opportunity to make changes to your benefit elections for 2009.

1. If you want to continue through 2009 with the same benefit plans (except FSAs), no action is required. You will be automatically re-enrolled in the same benefit plans for 2009.

2. Please refer to the Eligible Dependent information to verify that only eligible dependents are enrolled in your healthcare plan(s).

3. If you want to contribute to an FSA during 2009 or make changes in your benefits, the Applied® on-line enrollment system will guide you through the enrollment process.

What You Need to Do

For More Information

Applied® Human Resource Services

HR Call Center (telephone) 216-426-4269

HR Question and comment e-mail address (company PC only) [email protected]

benefit Web Address Telephone

MedicalAnthem BCBS www.anthem.com 866-725-7520

United Healthcare www.uhc.com 800-705-1687800-357-0971

Kaiser www.kp.org 800-813-2000503-813-2000

(Portland area)

Prescription DrugAnthem BCBS www.anthem.com 866-725-7520

NextRx Mail Order

New Prescriptions www.anthem.com 888-613-6091

Refills www.anthem.com 800-962-8192

DentalCIGNA Dental www.cigna.com 800-244-6224

visionVision Service Plan (VSP) www.vsp.com 800-877-7195

flexible Spending AccountsNEO Administration Company

www.flexNEO.com 800-775-3539


HR-0907-14-4180

of Your Life

Take Charge

Business

Open Enrollment Guide 2009