1. MAKE YOUR CURRENT HEALTH INSURANCE WORK BETTER FOR YOU Bridging The GAP

2. How will you prepare for Out-of-Pocket charges from hospital and doctors bills? As healthcare costs continue to increase, many individuals and businesses are moving towards high-deductibles and increased co-insurance on major medical plans in an effort to reduce costs. While this approach reduces the cost of your health insurance, it puts you at greater financial risk. In fact, more than six in 10 adults who say they have problems paying their medical bills are covered by health insurance. * * Kaiser Family Foundation/Harvard School of Public Health Care Costs Survey Bridging The GAP

3. How will you prepare for Out-of-Pocket charges from hospital and doctors bills? Philadelphia American Life Insurance Company’s (PALIC) GAP Plan helps bridge the gaps in the coverage that exist in your current health insurance plan by reducing or even eliminating the Out-of-Pocket expenses that are associated with hospital and doctors bills. Benefits payments are limited to the deductibles, co-pays and co-insurance amounts that you or each of your covered family members are required to pay under your Primary Medical Insurance Bridging The GAP

4. Benefit Options/ Rates/ Commissions To help bridge the coverage gap you can select an annual calendar maximum benefit starting as of low as $2,000 or a maximum benefit of $10,000 (in $1,000 increments).  Deductibles are available: $ 0, $250, $500 or $1,000.  Plan Rates are based on the highest age when including spouse. Example Individual & Spouse and Individual & Family.  Commissions will be paid at the same commission rate as the HSP product line for Guaranteed Issue enrollments with a higher 1 st year commission for Simplified Issue regardless if it is an individual plan or list bill. Bridging The GAP

5. Benefits We will pay Hospital Inpatient Benefits equal to 100% and Outpatient Benefits equal to 50% of any co-payments, deductibles or co-insurance for which You are responsible under Your Primary Medical Policy, up to the Maximum Annual Calendar Year Benefit you selected. When you file a claim, please send the Explanation of Benefits provided by your Primary Medical Policy. If a claim is filed within the 12 month pre-existing period a claim form is also required. Bridging The GAP

6. Excepted Benefit PALIC’s GAP Plan is considered an Excepted Benefit under the ACA and must follow a strict criteria to maintain this status. Some of the key elements that must be taken into consideration are:  The policy must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles.  The policy must be supplemental and issued by an entity that does not provide the primary coverage.  The cost of coverage under the supplemental policy must not exceed 25% of the cost of the primary coverage. This requirement does NOT apply to Short-Term Major Medical since STM is not considered an Excepted Benefit under the ACA. By including the deductible options with the GAP plan it allows you more flexibility in meeting the ACA this requirement for Excepted Benefit plans : $250 / $500 / $1,000 You can also sell less: Instead of $5,000 sell 80% or $4,000 Bridging The GAP

7. Excepted Benefit Percentage Individual Age 38 GAP Plan Benefit: $ 6,000 Premium:$ 42.80 Percentage: 12.9% GAP Plan Benefit: $ 4,000 Premium:$ 34.30 Percentage: 9% Benefit:$ 3,000 Premium:$ 29.00 Percentage: 7.6% Bridging The GAP

8. Excepted Benefit Percentage Male, Female age 38 & 2 Children GAP Plan Benefit: $ 6,000 Premium:$ 156.30 Percentage: 15.6% GAP Plan Benefit: $ 4,000 Premium:$ 118.20 Percentage: 10.5% Benefit:$ 3,000 Premium:$ 101.90 Percentage: 8.8% Bridging The GAP

9. In which plan would you be better off ? GAP Plan Benefit: $ 6,000 Premium: $ 156.30 Bronze Level $ 1,002.00 Total $ 1,158.30 VERSUS You save almost $500 a month plus the Platinum Plan still has a $950 Deductible Bridging The GAP

10. Rates Inpatient Deductible $ 0 Total Annual Benefit Amount Attained Age2,0003,0004,0005,0006,0007,0008,0009,00010,000 <40Insured Only 24.00 29.00 34.30 40.40 42.80 46.20 48.40 51.70 53.90 40-49Insured Only 38.80 45.10 52.80 61.30 67.90 73.30 77.20 82.50 86.80 50+Insured Only 60.10 68.50 80.50 93.50 104.60 113.70 120.40 129.60 136.80 <40Insured & Spouse 48.00 58.00 68.50 80.80 85.50 92.40 96.80 103.40 107.80 40-49Insured & Spouse 77.60 90.10 105.50 122.60 135.80 146.50 154.40 165.00 173.50 50+Insured & Spouse 120.20 137.00 160.90 187.00 209.20 227.40 240.80 259.10 273.60 <40Insured & Children 55.00 68.00 78.30 91.70 102.90 108.60 114.00 119.60 123.80 40-49Insured & Children 72.80 87.10 100.00 116.00 129.10 136.50 143.50 150.70 156.70 50+Insured & Children 91.10 113.20 123.60 143.00 159.50 169.60 178.40 188.60 196.70 <40Insured & Family 83.00 101.90 118.20 139.00 156.30 167.00 176.00 186.10 193.60 40-49Insured & Family 117.20 138.80 160.40 186.60 207.90 222.10 234.50 248.20 259.60 50+Insured & Family 152.40 187.40 206.60 239.70 268.20 288.20 304.70 324.70 340.80 Bridging The GAP

11. Example of Inpatient Benefit PALIC’s GAP Plan will help by paying your in-patient hospital expenses for plan deductibles and co-insurance which are not paid by your Primary Medical Insurance Policy but are still considered eligible expenses by your Primary Medical Insurance Policy Without GAP Benefits With $5,000 GAP Benefits Deductible$2,500 Co-Insurance @ 20% Out- of-Pocket $2,600 Minus GAP Benefit$0($5,000) Total Out-of-Pocket$5,100$100 Hospital Admission + Surgery = $15,500 Bridging The GAP

12. Example of Outpatient Benefit Outpatient expenses are paid at 50% of the eligible outpatient expenses related to your co-insurance and / or deductible. These expenses must be considered eligible expenses under your Primary Medical plan but are not paid by the plan. Without GAP Benefits With GAP Benefits Applied to Deductible$150 Paid by Primary Medical$0 Minus GAP Benefit @ 50% of Outpatient $0 ($ 75) Total Out-of-Pocket$150$ 75 Doctor office visit = $150 Bridging The GAP

13. Outpatient Benefits (Policy) We will pay Outpatient Benefits equal to 50% of any copayments, deductibles or coinsurance as outlined below for which You are responsible under Your Primary Medical Policy, up to the Maximum Annual Benefit each calendar year, for You or a Family Member covered under the Primary Medical Policy. Expenses for Outpatient Benefits include: Facility and Physician expenses for outpatient surgery in a Hospital or free-standing outpatient surgery center Facility and Physician expenses for outpatient diagnostic testing in a Hospital or free-standing imaging facility or free-standing laboratory Hospital and Physician expenses for treatment in an emergency room Hospital and Physician expenses for other outpatient treatment in a Hospital Copayments for Physician’s office visits (deductibles or coinsurance are not eligible expenses) This benefit has been changed by amendment see next slide Bridging The GAP

14. Outpatient Benefits (Amendment) AMENDMENT – Effective January 1, 2014 This Amendment is effective as of the later of January 1, 2014 or the Effective Date shown in the Policy Schedule of Benefits. The Benefits, Outpatient Benefits, Expenses for Outpatient Benefits include, section of Your Policy is amended by: Deleting the following: Copayments for Physician’s office visits (deductibles or coinsurance are not eligible expenses) Adding the following: Physician’s office visits This Amendment is attached to and made a part of the policy Bridging The GAP

15. Outpatient Benefits We will pay Outpatient Benefits equal to 50% of any copayments, deductibles or coinsurance as outlined below for which You are responsible under Your Primary Medical Policy, up to the Maximum Annual Benefit each calendar year, for You or a Family Member covered under the Primary Medical Policy. Expenses for Outpatient Benefits include: Facility and Physician expenses for outpatient surgery in a Hospital or free-standing outpatient surgery center Facility and Physician expenses for outpatient diagnostic testing in a Hospital or free-standing imaging facility or free-standing laboratory Hospital and Physician expenses for treatment in an emergency room Hospital and Physician expenses for other outpatient treatment in a Hospital Copayments for Physician’s office visits (deductibles or coinsurance are not eligible expenses) This is what the Amendment accomplished Bridging The GAP

16. Bucket of Money Think of the GAP benefit as purchasing a bucket of money at a fraction of the cost to help offset the expense associated with your medical deductible and co-insurance. Bridging The GAP

17. Bucket of Money You will take enough money out of the bucket to pay for your plan’s Deductible. Deductible Bridging The GAP

18. Bucket of Money You will also take enough money out of your bucket to pay your Co-insurance amount. Co-Insurance Deductible Bridging The GAP

19. Bucket of Money And then each calendar year we will refill the bucket up to your annual pre-selected amount. Bridging The GAP

20. Approved States AK OR NV AZ TX LA AR MO KS NE IA MS AL GA FL IL IN OH KY WV VA PA HI WI CA ID MT WY WA UT CO NM OK SD ND MN TN SC NC MI ME NY Approved States Filed Pending Approval Bridging The GAP

21. GAP PROTECTION Completing The Healthcare Puzzle