1 Exchanges The Basics

Public Marketplace Qualified employees receive tax credits See plans from all participating carriers Private Marketplace Broader portfolio of products available May not participate in Public Marketplace Ancillary products available Consumer friendly experience Traditional method Familiar method Consumer friendly experience Prefer person-to- person interaction Considerations for purchasing 2

Major exchange requirements.3 Pricing limits & limits on out-of-pocket costs 4 “metallic plans” & catastrophic plan Restrictions on rescissions Essential Health Benefits (EHBs) Guaranteed issue

Considerations for purchasing 4 Pricing Variables

ACA prohibits denial based on pre-existing conditions Elimination of premium adjustments for medical conditions Guaranteed issue 5

We can account for the following cost factors: 6 Premium rating area or location Family composition or size Tobacco

 Qualified health plans on the exchange must include “essential health benefits” (EHBs) Essential health benefits 7 Source: AHIP Dec including oral & vision

We can account for the following cost factors: 8 Source: AHIP Dec. 2012

Within the exchanges, insurance plans are to be offered in four tiers with the exception of catastrophic plans. Metallic levels 9 Catastrophic Bronze Silver Gold Platinum 60% 70% 80% 90%

Considerations for purchasing 10 The Latest…

On July 2 nd the Obama administration delayed the Shared Responsibility of the Affordable Care Act …What does this mean? The Delay 11

Reporting - A delay in reporting for the following:  Employers with at least 50 full-time employees, including full-time equivalents  Employers with self- funded plans Play or Pay – Employers will not be required to:  Determine whether they employ on average 50 or more FT/FTEs on business days during the prior calendar year  Count employee hours to determine whether they average 30 or more hours per week  Offer Minimum Essential Coverage to all full-time employees (and dependents)  Offer coverage to all employees who average 30 or more hours per week  Offer coverage that is of minimum value AND affordable Delayed 12

Current Provisions  Elimination of pre-existing condition exclusion  Small business tax credit  Lifetime limits  Coverage for preventive care service  Appeals process and external review  Patient protections  OTC drug reimbursement and FSA limits  Elimination of rescissions  PCORI fees  Uniform summary of benefits and coverage  W-2 reporting  Dependent Coverage up to age 26  Medical loss ratio limits Not Delayed 13

Future Provisions  Subsidies for low-income individuals ( % FPL)  Individual Mandate  Establishment of Exchanges  Limits on cost-sharing  Elimination of annual limits  Employee notice of exchanges  Rating restrictions  Guaranteed issue and renewability  Limit of 90-day waiting period  Health insurance provider fee and reinsurance fee  Comprehensive benefits  Coverage for clinical trials  New requirements for wellness programs  Nondiscrimination rules (TBD) Not Delayed…continued 14

ABC Company is a larger employer  Employees working 40-hrs per week:100  Employees working hrs per week:20  Health benefit deign offered:Platinum (equivalent)  Employer contribution (40-hr worker only):80% What are ABC Company’s options in 2014? Scenario Analysis 15

Do Nothing… What does this mean?  ABC Company is now in direct competition with Exchanges  Affordability Issue  Cost  Lower short-term  Higher long-term  Employee confusion in 2015 Scenario Analysis…continued 16

Adjust your strategy… Defined Contribution  Core/Buy-up  Mitigate risk  Maintain employee satisfaction  2015 preparedness  Eliminate confusion and disruption Scenario Analysis…continued 17