CarMax & Healthcare Reform Healthcare Reform is changing healthcare in the United States. These changes will affect most adult Americans and can be difficult to understand. To help you make the best choice for your healthcare, the CarMax Benefits team has assembled the following FAQs. We hope this helps clarify information related to healthcare reform and its impact on you in 2014. Q. I’ve heard about federal healthcare reform taking effect in 2014. What do I need to do? A. It depends on your current health coverage situation.

• If you are currently covered under the CarMax Health Care Plan (“Medical Plan”) and you:



- want to continue buying coverage through CarMax, you don’t need to do anything. You can keep buying coverage through CarMax.



- don’t want to continue buying coverage through CarMax, you can explore the options available through your state’s Health Insurance Marketplace.



• If you are not currently covered under the Medical Plan and you are:



- satisfied with coverage you have elsewhere (for example, through a spouse’s employer), you don’t need to do anything. You can keep that other coverage.



- not satisfied with your other coverage, or you don’t have other coverage, you can purchase coverage through the CarMax Medical Plan, if you are eligible, or explore the options available through your state’s Health Insurance Marketplace.

*For more information related to State/Federal Health Insurance Marketplaces please refer to the section labeled “Health Insurance Marketplace” and visit healthcare.gov Q. How is Healthcare Reform affecting CarMax? A. CarMax is required to comply with healthcare reform laws, such as the Affordable Care Act (“ACA”). The Benefits team is closely monitoring these laws and related regulations.

Additionally, CarMax evaluated other Plan offerings to determine if coverage alternatives would benefit our Associates as well as the Company.



We are happy to announce that beginning March 1, 2014, CarMax will offer a total of three health plans to all eligible full-time Associates. These three Medical Plan options give Associates a choice in coverage and cost. More information about these options will be available later this fall. We will publish the costs for these options at the start of our Open Enrollment in January 2014.



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Q. What is an “affordable” plan and will CarMax offer one? A. Beginning March 1, 2014, CarMax will offer a health plan option that is considered affordable and meets the minimum essential benefits under the ACA regulations.

“Affordable” is specifically defined by the ACA regulations for purposes of healthcare reform. For specific information regarding “affordability,” please refer to healthcare.gov.



While you may be eligible to enroll in coverage offered through your state’s Health Insurance Marketplace, a premium subsidy (tax credit) is not expected to apply since an affordable plan will be available through CarMax.

Q. Will the cost of CarMax coverage go up? A. At this time, we can’t predict how our prices will change for the Plan Year beginning March 1, 2014, but in general, healthcare costs continue to rise across the nation.

The addition of two new Medical Plan options will, however, provide you the option of enrolling in a plan that better suits your and your family’s needs. This can help you control your costs more effectively, depending on how you use the Plan. For example, you may choose to pay a lower “premium,” where less money is deducted from your paycheck in exchange for paying more out of pocket at the time a medical need arises.



And, we can’t forget the fact that all of the work that you, our Associates, do to help control healthcare costs at CarMax has paid off since we were able to keep cost increases below industry standards over the last 2 years. We are confident that this trend will continue.

Q. Will CarMax cut my hours so they don’t have to offer health insurance to me? A. CarMax has no plans to change its scheduling practices. We will continue to monitor hours to ensure that all Associates are working the appropriate number of hours for their part-time or full-time classification. In order to be considered a full-time Associate and eligible for coverage under the Medical Plan, you must be regularly scheduled to work at least 30 hours per week. Q. I’ve recently heard of companies not allowing coverage for spouses. Will I still be able to cover my family through CarMax insurance? A. Yes. CarMax will continue to offer coverage to spouses and eligible children based on the eligibility rules of each benefit plan.

Individual Mandate Q. What is the individual mandate? A. The individual mandate requires that all individuals living in the United States have at least a minimum level of medical coverage beginning on January 1, 2014, or pay a tax penalty.

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Q. Is anyone exempt from the individual mandate? A. Yes, some individuals may be exempt. Examples include those with very low income or individuals who would have to pay more than 8% of their household income for individual coverage. Q. What happens if I do not have health insurance after January 1, 2014? A. If you do not have medical coverage on or after January 1, 2014, you may be subject to a tax penalty for each month in which you and/or your dependents are not covered. The penalty will be assessed when you file your year-end federal income taxes for the 2014 tax year, but will be applied on a monthly basis.

It is our understanding that individuals who do not have coverage in January or February of 2014, but who have enrolled in the Medical Plan beginning March 2014, will not be assessed a tax penalty for those two months.

Q. Do I have to elect CarMax coverage? A. No, you do not have to elect coverage through the CarMax Health Care Plan. If you have access to coverage through another qualified plan, such as your spouse’s employer, you may elect coverage under that plan. You also have the option of purchasing coverage on your state’s Health Insurance Marketplace. If you are eligible for and elect coverage through the CarMax Health Care Plan, your coverage will meet the requirements of the individual mandate. Q. Where is the best coverage for me? What is my most affordable option? A. Only you can know the best coverage for you and your family and what will be most affordable for you. Generally, the CarMax Health Care Plan offers comprehensive coverage at affordable rates. With the CarMax Health Care Plan, the cost of coverage is shared between you and CarMax.

The medical plans available through the state Marketplaces will meet regulated coverage requirements, but the cost of coverage generally will be paid entirely by the individual.

Q. How will the government know if I have coverage or not? A. Information about your coverage will be reported at year end on your federal income tax filing. Q. Do I have to buy other coverage, like dental and vision? A. No. Under the healthcare reform laws, you are only required to have medical coverage.

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CarMax & Healthcare Reform Health Insurance Marketplace Q. What is a Health Insurance Marketplace? A. Each state will have a Health Insurance Marketplace that offers affordable, qualified medical insurance options to individuals and small business owners. Q. Who can buy coverage through the Health Insurance Marketplace? A. Almost everyone will be able to buy coverage through their state Marketplace. Keep in mind that the Marketplace may not offer the most cost-effective choices for you. You should evaluate all available health coverage options before making your selection. Q. Will all states have a Health Insurance Marketplace? A. Yes. Every state will offer a Health Insurance Marketplace to residents of that state. Q. How can I get more information about my state’s Health Insurance Marketplace? A. Individual state plan information should be available by late September 2013. Marketplace enrollment periods will begin October 1, 2013 for coverage effective January 1, 2014.

The federal government’s healthcare website healthcare.gov contains helpful information and is being updated regularly with state-specific details.

Q. Can I buy coverage from another state’s Health Insurance Marketplace? A. No. Current regulations indicate that you will only be able to purchase coverage from your own state’s Marketplace. Q. What coverage is available through the Health Insurance Marketplace? A. Generally, there will be three or four levels of medical coverage to choose from. All coverage offered through the Marketplace meets the minimum standards established by the regulations. The cost for each type of coverage is commensurate with the value of the plan. Each state will have its own unique set of plans and costs. Q. How much will I pay for medical coverage if I get it through the Health Insurance Marketplace? A. The cost of coverage will vary by plan and by state. Please monitor the healthcare.gov website for the plan and rate information applicable to your state.

Generally, the CarMax Health Care Plan is expected to be more affordable for our eligible Associates than coverage on the Health Insurance Marketplace since CarMax contributes significantly to the cost of your coverage. Since CarMax Associates generally are not expected to be eligible for premium subsidies through the Marketplace, you will pay the full cost of coverage in the Health Insurance Marketplace. In addition, if you purchase coverage through the Health Insurance Marketplace, you will be paying with after-tax dollars. When you purchase your coverage through CarMax, premiums are withheld on a pre-tax basis, which saves you money.

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Q. How do I pay for coverage if I get it through the Health Insurance Marketplace? A. You will pay for coverage directly to the Health Insurance Marketplace.

Q. Is it true I can get help paying for insurance through the Health Insurance Marketplace? A. Some individuals will qualify for premium subsidies (tax credits) to help defray the cost of medical insurance through the Health Insurance Marketplace based on household income and the cost of coverage. If you are eligible for coverage as a CarMax Associate, however, you are not expected to be eligible for these premium subsidies.

Q. Does CarMax pay anything if I elect insurance through the Health Insurance Marketplace? A. No. CarMax does not contribute toward the cost of coverage purchased through the Health Insurance Marketplace.

Q. What if I try the insurance offered by the Marketplace, but don’t like it and want to switch back to CarMax? A. IRS regulations limit when Associates can enroll, change or discontinue coverage in our plans. If you waive coverage in the Medical Plan, you will only be able to enroll in coverage during an annual Open Enrollment period or if you have a qualified change in status event (e.g., get married, have a child, etc.).

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