Elements Newsletter

Health Care Costs: In Critical Condition

CPChem is committed to providing you and your family with access to comprehensive health care coverage; however, health care costs continue to be a major concern, and a significant expense, for our company. While the topic of rising health care costs is a familiar one — we’ve been raising this issue for years — what’s different is that this situation is rapidly reaching a crisis stage for all of us.

In the past, we have tried to manage these costs by adjusting CPChem’s benefit plan designs and gradually increasing your premiums. And while this approach has helped to some degree in the past, it is an approach that no longer works. It has become merely a “band aid” for this ongoing health care problem. To make real inroads on managing costs, we need to step up our efforts … and we need your help. Bottom line, we need your active involvement if we hope to preserve the quality, affordability and continuity of our health care coverage.

There are a number of ways you can help CPChem take control of health care spending:

• Understand our benefit plans: Learn how our plans work and how to take advantage of cost-saving features, such as lower, pre-negotiated rates offered by in-network providers, generic prescription drugs and vision care discounts, as well as special discounted rates offered through our Alternative Care and Fitness Programs.



• Take advantage of our plans’ preventive care programs and services:
  • Well-child care
  • OB/GYN exams and mammograms
  • Vision and hearing exams
  In addition, this year, we’ll be introducing RediClinics in Houston, which offer convenient, affordable access to preventive care services.
• Manage chronic health conditions: Our Healthy Outlook Program (managed by Aetna) offers guidance to those who suffer from diabetes, coronary artery disease or chronic lower back pain. The Healthy Outlook Program includes:
  • A personalized health evaluation,
  • Disease-specific educational materials (booklets, videos, newsletters) relating to your condition,
  • Personalized case management, when necessary, and
  • Follow-up calls to make sure you understand your condition and your treatment plan.
• Maintain healthy lifestyle choices:
  • Eat healthier foods,
  • Exercise regularly,
  • Avoid cigarettes and excessive alcohol,
  • Get a good night’s sleep, and
  • Learn how to manage stress.

By acting now and taking steps to maintain your health and well-being and manage health care spending, both you and CPChem will enjoy a twofold reward: A “healthier” bottom line for the company and, more importantly, a healthier, happier life for you and your family.

An Update on Roth 401(k) Contributions

An exciting new retirement-savings contribution option will be available to Chevron Phillips Chemical employees starting January 1, 2008.

It's called a Roth 401(k) contribution, and like a Roth IRA, contributions can be made with after-tax dollars. While you won't get an upfront tax-deduction, the account will grow tax-free, and withdrawals taken during retirement will not be subject to income tax, provided you're at least 59 1/2 years of age and you've held the account for five years or more.

In addition, Roth 401(k) contributions will be subject to the contribution limits of regular 401(k)s — $15,500 for 2007, or $20,500 for those 50 or older by the end of the year — allowing individuals to stock away thousands of dollars more in tax-free retirement income than they would through a Roth IRA.

It might be a good time to start thinking about which contribution option will work best for you come 2008. Make Roth 401(k) contributions (after tax) and suffer a cut in take-home pay (since contributions are made with after-tax dollars), or stick with traditional 401(k) contributions (before tax) and hope that in retirement, your tax rate will be lower than it is now. Alternatively, you could hedge your bets by contributing both ways.

Making a sound decision hinges on your estimation of the taxes you think you'll pay in retirement, says Michael Kitces, director of financial planning with the Pinnacle Advisory Group in Columbia, Md.

If you expect your tax rate to be the same or higher in retirement than it is now, you might be better off with Roth 401(k) contributions. This is likely to be the case with young people who are just starting their careers and expect their income to increase in the future. "For folks who are in the 15% or 25% tax bracket, it may not be a bad idea to pay those taxes now and never have to worry about what tax brackets might become in the future," says Kitces. If you're in your peak earning years, on the other hand, and you figure your tax bracket will be lower in retirement, you'll benefit from continuing with traditional 401(k) contributions.

In reality, of course, things are much more complicated. For one, no one can predict with certainty what tax rates will be in the future, though the general consensus is that they're likely to rise to help the government offset growing budget deficits and pay for Social Security and Medicare. That's one reason why people in the top tax brackets have indicated their preference for the Roth 401(k), says Wray. "They are ready to pay the regular tax now, whatever it is, because the certainty that they won't have to pay taxes in the future offsets the value of the tax deferral."

Still have questions about the Roth 401(k)? We thought so. And we've gone ahead and answered the most important ones.

1. Who is eligible to make Roth contributions?
Anyone whose employer offers it.

2. What happens to the employer match?
The employer match will be made on either your pre-tax or Roth 401(k) contributions, and will still be made with pre-tax dollars that will accumulate in a separate account and will be taxed as ordinary income at withdrawal.

3. What happens if I leave my job?
The Roth 401(k) balance can be rolled over into a Roth IRA.

4. Is the Roth 401(k) contribution option here to stay?
Yes. At one time, the Roth 401(k) option was set to expire after 2010, but it was made permanent by 2006 legislation. So this is a deal you can count on.

Speak with a nurse — any time day or night

Aetna’s 24-hour Informed Health® Line (IHL) is a nurse-facilitated information service designed to help you become a partner in your health care. While Informed Health® Line nurses cannot diagnose, prescribe or give medical advice, they can offer useful information about a variety of health topics; increase your awareness and understanding of important health issues; and, help you to more effectively communicate with your providers.

The IHL service offers 24-hour access to health information provided by qualified U.S.-based professionals, as well as supplemental written materials. These tools may help you to actively and knowledgeably participate in your health care, and in turn, improve the effectiveness and efficiency of care. For example, information provided by Informed Health Line nurses may help identify problems to your physician that might otherwise be ignored, thus leading to early diagnosis and treatment of potentially serious and costly health conditions.

Health Care Education through Informed Health® Line

The Informed Health® Line (IHL) is available as part of your group plan of benefits. IHL provides you with 24 hour, toll free access to credible health information in two ways:

Experienced, U.S.-based, registered nurses who can:

• Answer your questions about health concerns
• Provide current information regarding a wide-range of health issues such as: common prevention strategies, chronic conditions, complex medical situations
• Discuss options for seeking medical attention
• Help you prepare for appointments with your doctor(s)
• Assist multilingual callers by accessing AT&T’s language translation service

Toll Free Audio Health Library

IHL’s Audio Health Library, available in English or Spanish, offers increased flexibility by allowing you to choose how you access health information. Upon dialing IHL, you can opt to speak to a nurse immediately or access the audio health library which contains information on thousands of health topics including common conditions and diseases. To learn more about the health topics available in the Audio Health Library, log onto Aetna Navigator at www.aetna.com and click on “My Health Programs>Informed Health Line,” or call IHL directly.

You can also use one of the phone numbers listed below to request to speak to an IHL nurse:

• Direct: 1-800-556-1555
• TDD (Hearing Impaired): 800-270-2386

Did You Know? (NEW SECTION)

Starting with this issue, we’ll share a new “Did You Know?” moment in every newsletter. This feature is designed to get you thinking about your health in a different way, while providing you with useful facts and information you can act on.

Did You Know?

• Diabetes is the fifth deadliest disease in the Unites States. Since 1997, the death rate has increased by 45%. American Diabetes Association
• Moderate diet changes and increased physical activity can prevent or delay the development of Type II diabetes in those at risk. Even a loss of 5 pounds can help. National Diabetes Information Clearinghouse
• Normal cholesterol and blood fat levels will help prevent heart disease and stroke, the biggest health problems for people with diabetes. National Diabetes Information Clearinghouse
• Smoking and diabetes are a dangerous combination. Smoking raises your risk for diabetes complications and death. Center for Disease Control

Are you at risk for diabetes? You can find out by taking the diabetes risk test at www.diabetes.org.

Health for Life (NEW SECTION)

Going forward, we’ll be providing a new segment called “Health for Life”. Each installment of “Health for Life” will focus on a specific, timely topic that reaches beyond the workplace. Since the summer season is fast approaching, we’ll begin with some tips on how to stay healthy during your vacation.

Avoiding Health Hazards While On Vacation

Going on vacation can be exciting, but can it also be hazardous to your health? A blistering sunburn or a bad case of food poisoning can turn your dream vacation into a nightmare, so preparing for a healthy vacation just makes sense — especially if you’re traveling with kids!

Getting Ready...

While you’re getting together necessary travel documents for your trip, you might also want to check your destination for any potential health risks:

Vaccinations & immunizations — Find out about any vaccinations or anti-malarial medications recommended for your chosen destination. Remember that you may need to schedule a visit to your doctor 4 — 6 weeks before your trip as some immunizations are needed well in advance of possible exposure.

Medical services — Learn what medical services your health coverage will cover overseas, as well as any plan exclusions.

Personal travel kit — Take care of minor health problems as they occur and treat pre-existing medical conditions with a customized personal travel kit. What you need in your kit depends on where you’re going and for how long. You may want to include:

• Acetaminophen, aspirin, ibuprofen, or other medication for pain or fever
• Antibacterial hand wipes or alcohol-based hand sanitizer
• Anti-diarrheal medication • Antihistamine
• Motion sickness medication
• Any personal prescription medications
• Basic first-aid items
• Insect repellent containing DEET (up to 50%)
• Oral rehydration solution packets
• Sunscreen (preferably SPF 15 or greater).

Getting There...

Whether you’re traveling by plane, train, bus or car, sitting for extended periods of time can increase your risk of developing blood clots or Deep Vein Thrombosis (DVT). DVT is the formation of a blood clot in one of the deep veins, usually the lower leg. This condition can happen during the trip, or hours — or even days — later. The risk increases with the length of the journey, for example, flights over five hours. Symptoms can include pain, swelling, redness, tenderness and possible discoloration, particularly at the back of the leg below the knee. To reduce the risk of developing DVT, try to:

Keep on the move — While on a plane or train, get up from your seat every hour and walk up and down the aisle. Exercises you can do while sitting upright include: • Knee lifts — lift one knee up and the other, keep alternating legs as if you were walking, repeat 20 times • Foot pumps — with your leg straight out in front of you, move your feet up and down quickly to improve circulation, repeat 20 times • Shoulder rolls — roll your shoulders back 10 times and forward 10 times.

Drink plenty of water — It’s important to keep well hydrated. Drinking plenty of water also ensures that you regularly get up from your plane seat or have rest breaks from driving!

While on vacation...

Healthy traveling doesn’t stop when you reach your destination. Remember to stay sun smart and watch what you eat and drink.

Stay sun smart — Spending time outdoors is often a major part of being on vacation, but it’s easy to burn when you least expect it, so if you forget to protect your skin, you could ruin your vacation before it has started. Furthermore, overexposure to UV (ultraviolet) rays in sunlight damages skin and can increase the risk of skin cancer.

Here’s how to be sun SMART: Spend time in the shade between 10 a.m. and 4 p.m. If possible, it’s best to avoid the sun during these hours, as the sun’s UV rays are strongest in the hours around midday. Make sure you never burn. Your skin burns when you stay in the sun too long. Sunburn is the body’s chemical response to over-exposure to UV rays. Aim to cover up with a t-shirt, hat and sunglasses. When shade is not available, the best way to protect your skin from the sun is with loose clothing, a wide-brimmed hat and good quality sunglasses. Remember to take extra care with children. Young skin is delicate and very easily damaged by the sun. All children should be protected from the sun’s rays. Then use sunscreen, factor 15+ or higher. There will always be times when you’re out in the sun without adequate shade or cover-up clothing, and sunscreen is useful for protecting exposed skin from the sun’s rays. However, sunscreen alone will not protect you completely from sun damage.

Watch what you eat and drink — Travelers’ diarrhea (TD), associated with changes in food and water, is the most common illness affecting travelers. The onset of TD usually occurs within the first week of travel but may occur at any time during your trip, or even after you return home. Symptoms usually include frequency and urgency of loose bowel movements and can be accompanied by abdominal cramps, nausea, vomiting, and fever. TD often resolves without specific treatment; however, drinking plenty of clean water and other non-alcoholic liquids is essential to replace lost fluids and electrolytes. You can minimize the risk by taking preventive measures:

• Eat hot, freshly cooked food.
• Avoid eating raw or undercooked meat and seafood. Water, ice, unpasteurized milk, and dairy products are also associated with increased risk for TD.
• Eat fruit that you have peeled yourself.
• Drink bottled or cooled boiled water.
• Wash your hands before eating.

To find out more about healthy traveling, check out these websites:

• www.cdc.gov/travel
• www.healthytravel.com (click on “Travel Tips”)

Not Quite Ready to Talk — Another Option with EAP

Do you feel like you could use some perspective on a current problem you’re facing, but aren't sure that you’re ready to discuss it with another person? You may find an online self-assessment is a great first step to working through the problem.

The online assessment offered by Cigna Behavioral Health is designed to help you generally gauge the current state of your behavioral health, and to give you a snapshot of your emotional and social outlook, your stress level and general well-being.

It can offer some basic, confidential information for you to consider on your own. It can also help you identify concerns you’d like to get more information about, or that you may wish to discuss with a behavioral health professional. Just log on to www.cignabehavioral.com, click on “Are You a Member”, and then “Take a Self-Assessment” located on the left hand side of the page.

This self-assessment is not designed to take the place of a face-to-face assessment. Should you have a serious concern or be facing a crisis issue, please obtain immediate assistance by contacting CIGNA Behavioral Health at 1.800.554.6931 and asking for a crisis counselor.

nPower Moves to Elements

Welcome to the first nPower edition in Elements! Going forward, the same great HR stories you have come to expect in nTouch every quarter can now be found right here in the Elements newsletter.

Even though the location may have changed, the content will remain the same. nPower will still bring you clear, concise, and relevant information on topics such as:

• Career Growth,
• Learning & Development,
• Performance Management,
• HR Policies & Procedures,
• Diversity,
• HR News,
• Recruiting/Staffing, and
• Compensation.

To find out more about any topic covered in nPower, contact your HR Business Partner. They are there to act as both an advisor and advocate on your behalf.

Keeping CPChem Informed During an Emergency

Hurricane season is upon us once again, so it’s a good time to remind everyone what to do about reporting to work in case of an emergency.

Hurricanes, tropical storms, environmental and/or security emergencies and plant incidents could impede your ability to report to work. In an emergency situation, your family and personal safety is priority number one. However, CPChem needs to be kept informed about your ability to report to work or stay at work in the case of a business interruption due to local, state, federal or Company issued mandates.

Each facility/location has an emergency/evacuation plan in place that outlines critical and non-critical personnel. If you are unsure of your status, please check with your immediate supervisor to make sure you understand what your status is within your organization. Additionally, CPChem’s corporate Emergency Disaster Evacuation Plan outlines emergency procedures that must be followed by all employees.

Employee Check In

If you are unable to report to work, contact CPChem’s toll-free All Employee Check-in Hotline @ 800-801-4253 as soon as possible. Operators will gather information, such as reliable contact numbers and your current location. You must keep the Hotline informed if there are any changes in your situation. The Employee Check-in Hotline can be used by employees, their families, contractors and friends to report the whereabouts of other CPChem employees or contractors.

Where to Find Information

In the event of an emergency, a crisis information web page (www.cpchem.us) will be activated. It will include emergency phone numbers, plant status updates and emergency/disaster relief policies. If you do not have Internet access, continue to call your facility’s emergency information phone number at least once a day for updates.

When to Return to Work

Employees should return to an evacuated area as instructed or when permitted by governing authority or Company management. Local management may grant additional time off with pay for those employees whose primary residence suffered severe damage. Employees who do not return to work, or are not granted additional time off with pay will either be charged with vacation hours or placed on a leave of absence without pay. Non-exempt and hourly employees who check in with management may be able to make up such time within the same work week, provided work is available.

Failure to Report Your Whereabouts

It is each employee’s responsibility to advise management of their inability to report to work. Employees who do not report to management, or who do not return to work in a timely fashion, and have not received management approval, will be placed on a leave of absence without pay and will be subject to disciplinary action up to, and including, discharge at the discretion of local management.

How to Pitch In

Interested in pitching in? We encourage (and welcome) you to initiate contact with your manager or others to determine how you can help in the clean-up process. Depending on the severity of the situation, CPChem may also ask you to relocate, work at alternate locations or do work not related to your primary job. The goal is to safely resume operations as quickly as possible. To do so will require flexibility from all involved.

Help with Personal Issues Related to a Crisis

We know emergency situations can be extremely stressful for everyone involved. Should you need help dealing with that stress, you and your dependents have access to free and confidential counseling services through CPChem’s Employee Assistance Program. For lost insurance cards, doctor referrals, and other benefits related questions, contact the CPChem Benefits Service Center at 800-446-1422.

A Tour of the New HR Intranet Site

Have you had a chance to visit HR’s new website on nSight yet? You’ll see that much of the old content has been updated, and additional important-to-know information has been added!

Some of the biggest changes you’ll see include:

• Employees on the Move — Company-wide personnel announcements.
• HR News — Benefits news, Learning & Development updates, HR Policy happenings and more.
• Organizational Charts — Can be accessed from the home page, as well as under Employee Help.
• Who’s Who in HR — A name, photo and contact information directory of all HR Business Partners, HR Service Team members, Corporate HR staff, Payroll Service Team members, etc.
• Careers — Links to the Talent Stewardship program, 360 Degree Review program, Career Navigator, Diversity and more.

Visit the site often so you can stay in touch with what’s happening in HR. Have any feedback? We’d love to hear it! Send your comments to: CPC RA HR Service Team@cpchem.com.

Tallying the Cost of Absenteeism

We’ve all been there. The alarm goes off and you’re exhausted from a night spent up with a sick child or a night out with friends. The idea of crawling back under the covers for a few more hours of sleep is just too good to pass up. Playing hooky just this once won’t hurt, will it?

While taking an unscheduled day off here and there may seem harmless, the true cost of employee absenteeism adds up. In fact, according to a recent study from the University of Pennsylvania’s Wharton School, expenses associated with absenteeism at U.S. companies runs upward of $74 billion annually.

And while 93% of employees cite illness as their reason for being away from work, a CCH/Harris Interactive Study showed that in reality, 65% of all workplace absences have nothing to do with health. In truth, employees stay away from the office for lots of different reasons, including family problems, personal needs and an entitlement mentality.

Of all the expenses related to absence, unscheduled time off has the biggest impact on productivity, profitability and morale. The inability to plan for unscheduled absences forces a Company to hire last-minute temporary staff, pay overtime and add a staffing margin to replace anticipated lost labor, all of which contributes to total cost.

“On average, 3.75 % of Chevron Phillips Chemical’s U.S. workforce is absent every day due to unscheduled issues or disability claims," explained Norm Berkley, Human Resources Manager. "In total, the Company spends an average of $4 million a year on employee absenteeism."*

To keep the costs of absenteeism down, Chevron Phillips Chemical has created a Manufacturing Attendance Initiative team to investigate new ways to improve work-life balance programs. “Our goal is to find ways to balance employee needs while still mitigating the costs associated with employee absenteeism,” said Berkley.

While there will be times when you truly are too sick to come to work, Chevron Phillips Chemical urges you to use your vacation time and personal days for absences that can be anticipated. “We want employees to take time away from work to recharge their batteries. Just please make sure that time has been scheduled in advance whenever possible so that your team’s productivity stays high,” said Berkley.

Engineering a Great Engineer

“If you could design the “perfect” engineer, what skills would he or she have?”

That was the question debated by a multi-disciplinary team back in January. The team had gathered to figure out how to better prepare Chevron Phillips Chemical’s new hires for a successful career with the Company.

“Considering how competitive it is for new engineering graduates, it is vitally important that we have a plan in place to attract and retain new hires, as well as prepare them for future assignments within the organization,” explained Doug Digman, Borger Plant Manager and sponsor of the Facilities Learning & Development Best Practice Team.

The result of the January meeting was the “New Hire Engineer Development Program,” a two-year program which officially kicks-off in June 2007. The program will utilize a number of training vehicles, including classroom activities, online training and one-on-one conversations with supervisors, peer advisors and co-workers. With these different approaches, the New Hire Engineer Development Program will cover topics such as:

• Chevron Phillips Chemical practices, procedures, and philosophies,
• Tenets of operation,
• Environmental ethics compliance,
• Troubleshooting,
• Cost estimating,
• Planning & scheduling projects,
• Leadership,
• Conflict resolution,
• Economic analysis & modeling,
• Incident investigation,
• Maintenance engineering,
• Construction engineering,
• Control systems, etc.

This New Hire Engineer Development Program will cover the key areas that new employees should be exposed to in order to obtain a basic level of understanding of their position. “When completed, the New Hire Engineer Development Program graduates will have had a good mix of opportunities and experience — making them better rounded overall,” said Maricella Caballero, Global Staffing & Strategy Manager.

Brain Exercises (NEW SECTION)

An active mind is a healthy mind, so why not give yours a workout!

EAP Word Search

Below are 11 words associated with the EAP program. Can you find them all?

Sudoku

Can’t find a lunch date — how about a game of Sudoku instead?