United pilots contract, LOA 12-04 — Medical and Dental Rate Setting

I. The following provisions apply to Medical rate setting under Sections 24-B-5 and 24-F-5 of the Agreement:

A. In the implementation of the provisions of Sections 24-B-5 and 24-F-5 of the Agreement, the determination of the Required Monthly Contributions for years after the One-time Cost Share Reset, the Company and the Association shall annually follow the procedures set forth in this Letter of Agreement

B. Contributions For Calendar Years After One-time Cost Share Reset for Pilots in Active Service.

For each calendar year, the Required Monthly Contribution in a Core Medical Option or Select Regional Medical Plans shall not exceed twenty percent (20%) of the actuarially- determined “Total Projected Cost” of the Option or Plan for such calendar year, for each Coverage Tier, subject to the adjustments, limitations and permitted variances hereinafter set forth. Total Projected Cost shall be determined in accordance with Paragraph I.D below and the Experience True-up to correct for deviations of actual from projected cost as provided in Paragraph I.E below. The rate of Required Monthly Contributions is subject to the permitted deviation and the limitation on maximum year-over-year increases in Required Monthly Contributions provided in Paragraph I.F below.

C. Definitions.

For purposes of Paragraphs I.A through I.G the following terms shall have the meanings ascribed to them:

(1) “Claims Experience”: For purposes of determining Total Projected Cost of any self- insured medical plan or program in which active employees of the Company and/or pre-Medicare retirees of the Company are eligible to participate, the term “Claims Experience” means the per-capita rate of actual claims paid and incurred plus unpaid claim liability during the Experience Period by all active employees of the Company and pre-Medicare retired employees of the Company, enrolled in a domestic medical plan (U.S. and territories). For any insured plan or the insured portion of any plan, “Claims Experience” is eighty-five percent (85%) of the most recent available gross premium rate. Total Projected Cost of any medical program offered to Medicare- eligible retired employees of the Company shall be determined as a separate risk pool.

(2) “Costs of Administration”: For self-insured plans or programs, and for the self-insured component of any hybrid plan or program, “Costs of Administration” means the actual charges of any third-party claims administrator, pharmacy benefits manager, behavioral health manager, disease management/smoking cessation vendor, and wellness vendor including any “load” or other charge for administration of the wellness initiatives. For fully-insured plans or programs, and for the insured components of any hybrid plan or program, “Costs of Administration” shall be fifteen percent (15%) of the gross premium paid. “Costs of Administration” include any excise tax relating to medical plans imposed upon the Company pursuant to Section 49801 of the Internal Revenue Code of 1986, as amended by Section 9001 of the Patient Protection and Affordable Care Act of 2010, Public Law 111-148 (the “Excise Tax”). “Costs of Administration” does not include any other cost, fee, charge or expense of the Company in connection with maintaining the plan or program, including, without limitation, any charge or expense of any third-party vendor (other than the vendors listed in the first sentence of this Paragraph) or for wages or benefits of Company employees providing ancillary, administrative, record-keeping or other support services for the plan or program. Should the Company pursue a re-insurance (stop- loss) coverage, the expected net cost of coverage, which is calculated as gross premium minus expected recoveries, shall be included in the costs of administration. For purposes of determining Total Projected Costs, Costs of Administration for fully- insured and self-insured options are pooled and applied as a level percentage of Total Projected Cost.

(3) “Determination Year”: The year prior to the Rating Year, during which the Company Actuary, in collaboration with the ALPA Actuary, determines Total Projected Cost and contribution rates to be effective during the Rating Year.

(4) “Experience Period”: The “Experience Period” is a period of twenty-four (24) consecutive months divided into historical segments of twelve (12) consecutive calendar months each and given equal weight assuming consistent experience.

(5) “Look Back Year”: The year immediately preceding the Determination Year.

(6) “Margin”: “Margin” refers to any intentional difference between a measure or quantity as used and the same measure or quantity reflecting “best estimate” assumptions. Margins may be implicit (derived using modified assumptions or elements) or explicit (derived by modifying the end result).

(7) “Offsets”: “Offsets” shall include discounts and manufacturer, vendor and other rebates and payments, together with any other amounts agreed by the Company

Actuary and the ALPA Actuary as being properly treated as an offset to costs. Government subsidies received by the Company, such as subsidies under the federal Medicare Part D Retiree Drug Subsidy Program administered by the Centers for Medicare and Medicaid Services (“CMS”) pursuant to the Medicare Prescription Drug Improvement and Modernization Act of 2003, Public Law 108-173, shall be applied as offsets at such time as any Excise Tax becomes includible in Costs of Administration.

(8) “Rating Year”: The “Rating Year” is the year for which total costs are being projected, and in which the contribution rates being established, by the methodology provided in this Paragraph I, shall be charged to Pilots.

(9) “Total Projected Cost”: “Total Projected Cost” means the Claims Experience for the Experience Period, drawn from all health care programs offered by the Company during the Experience Period, across all Coverage Tiers, adjusted for differences in plan design between the Experience Period and the Rating Year, normalized using relative values, consolidated, trended to reflect reasonably anticipated changes in health costs, and actuarially projected to the Rating Year, subject to such other adjustments, if any, as are determined by agreement of the Company Actuary and the Association Actuary to be actuarially appropriate, plus expected Costs of Administration, less Offsets, without explicit or implicit Margin. Rates per unit of coverage in the Core Medical Options shall be derived from Total Projected Cost. True-up amounts in accordance with Paragraph E are separately determined amounts and are not part of Claims Experience or Total Projected Cost.

D. Determination of Total Projected Cost and Rates Per Unit of Coverage.

The methodology and procedure the parties shall follow each Determination Year, in accordance with the schedule set forth in Paragraph III.G, to determine Total Projected Cost for the Rating Year, and to derive from Total Projected Cost the rates of contribution for each Core Medical Option (including the prescription drug component of such Core Medical Option) and Coverage Tier for the Rating Year, shall be as set forth herein.

E. Experience True-Up.

In each Determination Year, actual costs incurred in the Look-Back Year are compared to the Total Projected Cost for the Look-Back Year to determine if adjustment is required under the following rules:

(1) Adjustment for Deviations of Actual Enrollment from Expected Enrollment.

The Total Projected Cost that was used to set contribution rates for the Look-Back Year shall be adjusted to correct for deviation of actual enrollments in the various medical plans, options and programs from the anticipated enrollments originally used to determine Total Projected Costs for the Look Back Year (“Enrollment-adjusted Total Projected Costs”).

(2) Gains and Losses.

Historical gains and losses (the difference between the Enrollment-adjusted Total Projected Costs and actual incurred costs for the Look-Back Year) are identified and quantified.

(3) Application of Gain/Loss Corridor.

[Reserved]

(4) Amortization of Gains and Losses.

Gains or losses for 2014, 2015 and 2016 will continue to be amortized in accordance with the prior provisions of this Paragraph I-E-4 (i.e., only gains or losses in excess of plus or minus four percent (±4%) will be amortized, levelly over two Rating Years). Beginning with gains or losses for 2017, and for all subsequent years, one-half of the gains or losses for any Look Back Year shall be applied per capita to Pilots in Active Service and retired Pilots in the Before-Medicare Medical Benefits without interest to decrease (in the case of gains) or increase (in the case of losses) the Total Projected Cost levelly over two Rating Years beginning with the Rating Year immediately following the Determination Year in which the True-Up calculation is made. For example, the first true-up Determination Year under this revised amortization provision shall be 2018, with 2017 as the first Look Back Year and, if an adjustment is required because 2017 gains or losses were plus or minus one percent (±1%), one-half of one percent (0.5%) of the enrollment-adjusted Total Projected Cost for the Look Back Year (which is one-half of such gain or loss) would be applied, together with any remaining unamortized gain or loss for 2016, to adjust the Total Projected Costs for the 2019 Rating Year. The remaining half of the gain or loss for 2017, as remeasured in the 2019 Determination Year would be applied to adjust Total Projected Costs for the 2020 Rating Year. Due to additional runout claims, the second year amortization of the gain or loss may not exactly match the first year and second year amortization, respectively. Amortization schedules shall be maintained so that, for each Rating Year after 2018, the accumulated net amortizable gain or loss required to be taken into account in that Rating Year shall be subtracted from, or added to, Total Projected Cost for purposes of determining contributions.

(5) Aggregate Contribution Adjustments.

Required contributions for non-retired Employees for coverage under all medical plans offered by the Company excluding the Core HDHP option, shall be subject to the further limitation that the Company shall pay not less than eighty percent (80%) in the aggregate of the Enrollment-adjusted Total Projected Cost (adjusted as hereinafter provided) of all medical plans offered by the Company to its employees, provided “employees” for this purpose means in addition to Pilots any other workgroups that subscribed to all of the Pilot medical plan offerings and contributions, in accordance with the following:

(a) Each year beginning with 2013, Enrollment-adjusted Total Projected Costs (excluding Total Projected Costs for the Core HDHP Option), shall be compared to the aggregate contributions, using year-to-date data through May for preliminary pricing and through July for final pricing, for coverage under all medical plan options offered by the Company, excluding the Core HDHP.

(b) Until the Company and ALPA Actuary agree that the participation rate in a new or modified wellness credit has stabilized, the Company is free to set the participation assumptions in the new or modified wellness credit, at levels more likely to produce an Aggregate Contribution Adjustment under Paragraph I-E-(5)- (c) of this Letter of Agreement favoring Employees rather than a loss not recoverable by the Company. Once the participation rate is stable, the

contributions for all Company-offered medical options (excluding the HDHP) shall be normalized to reflect the assumed level of participation in the wellness credits. This provision shall not be used to subvert the basic Aggregate 80%/20% Contribution Limit.

(c) If aggregate contributions (excluding the Core HDHP Option) are 20% or less of the Enrollment-adjusted Total Projected Costs (excluding Total Projected Costs for the Core HDHP Option), no adjustment shall be made. However, if aggregate contributions (excluding the Core HDHP Option) exceed twenty percent (20%) of Enrollment-adjusted Total Projected Costs (excluding Total Projected Costs for the Core HDHP Option), an aggregate contribution adjustment, for the full year, equal to the excess, on a level percentage basis, shall be applied to the following year’s contribution rates. Such adjustment does not apply to the employees enrolled in the Core HDHP Option, nor those who have left the plan prior to the aggregate contribution adjustment. The limitation on year-over-year contribution increases described in Section F shall be based on the prior year’s contribution levels without regard to excess contributions (if any).

F. Limitation on Year-Over-Year Increases in Required Monthly Contributions for Pilots in Active Service. Any increase in the Required Monthly Contribution for the Core Medical Options and Select Regional Medical Plans, from one calendar year to the next, shall not exceed nine and one-quarter percent (9.25%) of the prior year’s contribution (except that this percentage shall vary for the individual Pilot after taking into account credits and surcharges), rounded to the nearest penny, consistent with the Core Option 80%/20% Limit, in accordance with the following:

(1) In no event will the Participant’s contribution by Coverage Tier on a composite basis exceed the lesser of: (A) twenty percent (20%) of Total Projected Cost, with an upward variation tolerance of one-tenth of one percent (0.1%), such variance permitted, not as a matter of routine, but in order to accommodate rounding, or (B) 109.25% of the prior year’s contribution by Coverage Tier on a composite basis. Composites for the purposes of this Paragraph combine the separate rates for tobacco users and those Pilots who incur spousal surcharges into an overall rate.

(2) The limitations provided in this Paragraph I-F-(2) shall be applied after all computations and adjustments described in Paragraphs I-D and I-E of this Letter of Agreement have been carried out.

G. Determination of Total Projected Cost for Retiree Medical Benefits. For purposes of determining the Total Projected Cost for Before- and After-Medicare Medical benefits for all retired Pilots (other than pre-7/1/03 sUA retired Pilots) the procedures described in Paragraphs I-D through I-F shall apply, except that, for Pilots retiring on or after the effective date of the Agreement, wellness credits and spousal surcharges shall be included for Before- Medicare Medical Benefit Coverage and excluded for After-Medicare Medical Benefit coverage.

H. The actuarial assumption for medical and prescription drug trends, to be applied to claims experience for 2015 and subsequent years for purposes of projecting costs for the 2016 Determination Year and all subsequent Determination Years, shall be established by the methodology provided in Exhibit A attached hereto.

II. The following provisions apply to Dental rate setting under Section 24-C-4 of the Agreement:

A. In the implementation of the provisions of Section 24-C-4 of the Agreement, the determination of the Required Monthly Contributions for years after the One-time Cost Share Reset, the Company and the Association shall annually follow the procedures set forth below.

B. Contributions For Calendar Years After One-time Cost Share Reset.

For each calendar year, the Required Monthly Contribution in the Core Dental Option shall not exceed twenty percent (20%) of the actuarially-determined “Total Projected Cost” of the Coverage Tier elected for such calendar year, subject to the adjustments, limitations and permitted variances hereinafter set forth. Total Projected Cost shall be determined in accordance with Paragraph II.D below. The rate of required contributions is subject to the permitted deviation and the limitation on maximum year-over-year increases in Required Monthly Contributions provided in Paragraph II.E below.

C. Definitions.

For purposes of Paragraphs II-D through II-E of this Letter of Agreement, the definitions in Paragraph I-C of this Letter of Agreement shall apply, except as follows:

(1) “Claims Experience”: For purposes of determining Total Projected Cost of any self- insured dental plans or programs in which active employees of the Company are eligible to participate, the term “Claims Experience” means the actual claims paid and incurred plus unpaid claim liability during the Experience Period by all active employees of the Company. In the event the Company offers an insured plan, excluding dental HMOs, such plan or the insured portion of any plan, “Claims Experience” is eighty-five percent (85%) of the most recent available gross premium.

(2) “Costs of Administration”: For self-insured plans or programs, and for the self-insured component of any hybrid plan or program, “Costs of Administration” means the actual charges of any third-party claims administrator. For fully-insured plans or programs, and for the insured components of any hybrid plan or program, “Costs of Administration” shall be fifteen percent (15%) of the gross premium paid. “Costs of Administration” include any excise tax relating to dental plans imposed upon the Company pursuant to Section 49801 of the Internal Revenue Code of 1986, as amended by Section 9001 of the Patient Protection and Affordable Care Act of 2010, Public Law 111-148 (the “Excise Tax”). “Costs of Administration” does not include any other cost, fee, charge or expense of the Company in connection with maintaining the plan or program, including, without limitation, any charge or expense of any third- party vendor (other than the vendors listed in the first sentence of this Paragraph) or for wages or benefits of Company employees providing ancillary, administrative, record-keeping or other support services for the plan or program.

(3) “Offsets”: “Offsets” shall include discounts and manufacturer, vendor and other rebates and payments, together with any other amounts agreed by the Company Actuary and the ALPA Actuary as being properly treated as an offset to costs.

(4) “Total Projected Cost”: “Total Projected Cost” means the Claims Experience for the Experience Period, drawn from all dental care programs, excluding dental HMOs (insured or self-insured), offered by the Company during the Experience Period, across all Coverage Tiers, adjusted for changes in plan design from the Experience Period to

the Rating Year, normalized using relative values, consolidated, trended to reflect reasonably anticipated changes in dental costs, and actuarially projected to the Rating Year, subject to such other adjustments, if any, as are determined by agreement of the Company Actuary and the Association Actuary to be actuarially appropriate, plus Costs of Administration, less Offsets, without explicit or implicit Margin. Rates per unit of coverage in the Core Dental Option shall be derived from Total Projected Cost.

D. Determination of Total Projected Cost and Rates Per Unit of Coverage. The methodology and procedure the parties shall follow each Determination Year, in accordance with the schedule set forth in Paragraph III.G, to determine Total Projected Cost for the Rating Year, and to derive from Total Projected Cost the rates of contribution for the Core Dental Option and Coverage Tier for the Rating Year, shall be as follows:

E. Limitation on Year-Over-Year Increases in Required Monthly Contributions. Any increase in the Required Monthly Contribution for the Core Dental Option, from one calendar year to the next, shall not exceed nine and one-quarter percent (9.25%) of the prior year’s contribution, rounded to the nearest penny. In no event shall the Participant’s contribution by Coverage Tier exceed the lesser of: (A) twenty percent (20%) of Total Projected Cost, with an upward variation tolerance of one-tenth of one percent (0.1%), such variance permitted, not as a matter of routine, but in order to accommodate rounding, or (B) 109.25% of the prior year’s contribution by Coverage Tier.

III. The following General Provisions apply to Medical and Dental rate setting:

A. Retention of Actuarial Professionals.

The Company and the Association shall each retain or employ an independent, qualified health actuary who shall be a Member of either the American Academy of Actuaries or the Society of Actuaries (the “Company Actuary” and “ALPA Actuary”) to determine Total Projected Cost in accordance with this Agreement. The Company Actuary shall work in collaboration with the ALPA Actuary as required by this Agreement. In determining Total Projected Cost for each calendar year, the goal of the Company Actuary shall be to provide, in good faith, its best estimate of what the actual costs shall be in the upcoming calendar year in accordance with professional guidelines. In reviewing the Total Projected Costs for each calendar year, the goal of the ALPA Actuary shall be to provide, in good faith, its best review and opinion of what the actual costs shall be in the upcoming calendar year, in accordance with the professional guidelines. Neither the Company nor the Association shall exert influence on its respective actuary to violate these professional guidelines.

B. Actuarial Methodology.

Projections of claims are based on “best estimate” assumptions as mutually agreed to in advance by the Company Actuary and the ALPA Actuary. Such assumptions include, but are not limited to: health trends, anticipated enrollments, relative plan values, benefit changes, adjustments for claims accrual, changes in relevant demographics, morbidity and non-recurring events. Any omissions or ambiguities in this Medical and Dental Rate Setting Letter of Agreement (“Rate Setting Agreement”) with respect to the actuarial methodology for projecting or truing up costs, or for establishing or adjusting rates, shall be resolved by agreement between the Company Actuary and the ALPA Actuary.

C. Collaboration and Information Sharing for Purposes of Rate Setting and True Up Adjustments.

Both parties acknowledge that the purpose and intent of the processes described in this Rate Setting Agreement is to establish a good faith, collaborative, non-adversarial, transparent process for medical and dental plan rate setting so that ALPA can obtain the informed professional judgment of its health care actuarial advisor that the projection of Total Projected Costs, Aggregate Contribution Adjustment, and the Experience True-up have been carried out in accordance with the professional guidelines, and with the assumptions, methodology and standards, to which the parties have agreed as set forth in this Rate Setting Agreement. The parties further acknowledge and agree that ALPA shall rely, and is entitled to rely, on this process as the source of assurance that the rates per unit of coverage proposed to be charged to Pilots as described in this Rate Setting Agreement have been reasonably and correctly determined consistent with sound actuarial practice and the parties’ agreed assumptions, methodology and standards.

Details related to the assumed enrollment and projected Aggregate 80/20 Cost Share for the Rating Year shall not be provided by the Company nor reviewed by the ALPA Actuary prospectively. The Company Actuary shall provide a statement to the ALPA Actuary regarding the aggregate cost share target for the Rating Year, attesting that the rates and assumptions used are projected to achieve the target. The Company Actuary shall provide ALPA the data and methodology reasonably required to validate the calculation of the Aggregate Contribution Adjustment at the same time the calculated is completed.

With respect to any new or modified wellness credit for the Core Medical Options and the Select Regional Medical Plans, the Company shall select participation assumptions and shall provide this information to the ALPA Actuary but shall not be reviewed by the ALPA Actuary, except at the time and to the extent necessary to verify the amount of any credit to Pilots as a result of the Aggregate 80/20 Cost Share.

D. Sharing of Information.

Both parties further agree that, in order for the rate-setting and Experience True-up processes to function in accordance with this Rate Setting Agreement, the Company, shall make full, fair and timely disclosure of all information affecting, or reasonably anticipated consistent with sound actuarial practice to affect, total plan costs for the applicable Rating Year and any year during the Experience Period, together with all information that could reasonably be considered relevant but that the Company and/or the Company Actuary have determined not to take into account, or are considering not taking into account, whether on grounds of lack of materiality, or lack of sufficient experience data to permit projection, or any other grounds. It is acknowledged that the disclosure required is the disclosure reasonably required to enable ALPA and ALPA’s Actuary to satisfy themselves that the Company’s rate setting and Experience True-up assumptions and calculations conform to the standards articulated in this Rate Setting Agreement. Any doubt is to be resolved in favor of disclosure at the earliest practicable time.

E. Confidential and Proprietary Information.

It is understood that, from time to time, adherence by the Company to the disclosure standards articulated herein may require disclosure to ALPA, to the ALPA Actuary and to other ALPA representatives, of information which is confidential or proprietary to the Company or to one or more of the Company vendors. The Company agrees that the

confidential or proprietary character of the information is not a ground for the Company to refuse disclosure, provided that, if requested by the Company or an affected vendor, ALPA and ALPA consultants and representatives enter into a confidentiality agreement substantially similar to confidentiality agreements used by the parties in the past.

F. Restrictions Applicable in Event of Non-Disclosure.

No fact or consideration having the effect of materially increasing Total Projected Cost, whether by increasing trend assumptions or otherwise, shall be taken into account for purposes of rate setting unless such fact or consideration has been disclosed to ALPA and the ALPA Actuary by June 1 of the Determination Year, the date by which the Company is required to provide ALPA preliminary data under Paragraph III.G. Nothing in the foregoing sentence shall preclude the routine updating of experience data prior to July 10 of the Determination Year.

G. Annual Rate-Setting and Aggregate Contribution Adjustments Schedule.

The parties shall adhere to the following timeline each year, unless otherwise agreed:

H. Rate Setting and True-Up Disputes.

In the event any dispute arises between the Company Actuary and the ALPA Actuary regarding the accuracy or inaccuracy of data having a material effect on the computation of “Total Projected Cost” or “Aggregate Contribution Adjustments”, or as to whether any assumption meets the “best estimate” standard, then the Company may implement their suggested rate change and the Association shall be free to file an MEC grievance with an expedited arbitration on the issue of whether the data are accurate or whether the assumptions are appropriate.

I. Definition of Company.

Notwithstanding anything herein to the contrary, for purposes of this Letter of Agreement the terms “United Airlines” and “Company” include United Air Lines, Inc., Continental Airlines, Inc., and any other affiliate of such entities which sponsors any medical or dental plan referred to herein.

IV. The following provision applies to Bridge Retirement for Continental Pilots:

Any Pilot covered by the Prior CAL CBA who retires on or after the effective date of the Agreement and prior to January 1, 2014, shall be eligible to elect to retire under the retiree bridge medical provisions of Section 27, Part 6 of the Prior CAL CBA or under the retiree medical provisions of Section 24-F of the Agreement. In either case, such Pilot shall be eligible to participate in the RHA VEBA under Section 24-G of the Agreement.

This Letter of Agreement shall be effective on the Date of Signing of the Agreement and shall remain in full force and effect concurrent with the provisions of 24-G of the Agreement, Insurance.

AGREED, this 18th day of December, 2012.

For United Airlines, Inc.: For the Air Line Pilots Association, International:

Captain Fred Abbott Senior Vice President Flight Operations Captain Donald L. Moak President Air Line Pilots Association, International

P. Douglas McKeen Senior Vice President Labor Relations

Captain Jay Heppner Chairman UAL MEC

Captain Jay Pierce Chairman CAL MEC

Exhibit A to LOA 12-04

Methodology for Determining Actuarial Assumption for Medical and Rx Trend The Company and ALPA agree on the following methodology for determining the actuarial trend assumption:

Part 1: Modified Combined S&P Medical and Rx Trend Rate

a. The S&P "National ASO FFS Total Cost Index" (representing allowed amount trend for pre- Medicare active and retiree ASO plans) values as of December of the most recent prior year, with 3 months of run-out, will be obtained for Medical Only and Rx Only (and Combined Medical and Rx for purposes of comparison). A Reweighted Combined S&P Medical and Rx trend rate will be obtained based on the actual United Airlines proportion of incurred medical and Rx claims experience from the same period, applied to the S&P Medical Only and Rx Only trend rates. Any adjustments to the Reweighted Combined S&P Medical and Rx trend rate or its underlying components to reflect anticipated economic changes not already reflected in the S&P Indices must be mutually agreed to by ALPA and United Airlines.

b. A plan design leveraging factor will be agreed upon each year by actuaries representing ALPA and United Airlines and added to the Reweighted Combined S&P Medical and Rx trend rate.

The Reweighted Combined S&P Medical and Rx trend rate, plus the plan design leveraging factor creates the Modified Combined S&P Medical and Rx trend rate.

Part 2: Provided Health Care Trend Survey Result

ALPA and United Airlines' strategic actuary will each specify a preferred and an alternate independent published health care trend survey source. Published surveys may include, but are not limited to, the following sources:

a. Aon Hewitt

b. Milliman

c. National Business Group on Health (NBGH)

d. Willis Towers Watson

e. PricewaterhouseCoopers

f. Mercer

g. Health Care Cost Institute (HCCI)

h. Kaiser Family Foundation

The published results should attempt to reflect the most recent available trend rates before plan design changes for large, self-insured employer health plans. These trend rates will generally be combined Medical+ Rx.

The preferred and alternate sources must be designated before such results are published and used unless agreed to. Either or both parties may also choose to not provide published health care trend survey result(s). For both ALPA and United Airlines survey results respectively, the values used in Step

2 will be from a single source, in order of stated source preference. Any survey results used in Step 2 must be available by the deadlines and delivery dates specified in LOA5.

Part 3: Combined Trend Results

Combined medical and Rx trend rates from Parts 1 and 2 will be averaged to create the United Airlines Combined Medical and Rx trend rate. This average rate will be compared to the Part 1 Reweighted Combined result, with the resulting ratio applied to the respective Medical-only and Rx-only components (including leverage). The adjusted Medical-only and Rx-only rates may be rounded to the nearest 0.05%.