Presented By: L. S. & Associates Insurance Consultants Inc. The Answer To Healthcare Reform

The following information is designed to help you understand the changing face of healthcare and the challenges we encounter with the implementation of the new healthcare reform laws. Healthcare, as we have known it, is a thing of the past. The complexities of Health Care Reform present new challenges for employers which have forced them to consider alternative business ideas to survive. Employers, now more than ever, are relying on their insurance benefits partner to think outside of the box with cutting edge ideas that provide real solutions. Insurance agents have become complacent and over the years have relied on a few convenient traditional healthcare options that have now run their course of un- productivity. The words new, outside the box. creative, cutting edge are not in their vocabulary or realm of expertise. Employers are looking for a benefits partner that can provide certainty in uncertain times. Employers are more than ever wanting their agents to earn their keep and identify the services and value they offer. Savvy business owners are tired of the same old games and are partnering with consultants who provide real solutions.

Average Annual Premiums for Single and Family Coverage $15,745* You can see by looking at this chart, that in a little over 10 years, the average cost of health insurance for a family has gone up by almost $10,000!. That is nearly a 175% increase!

1. Continue to do what you have always done and keep listening to the insurance agent that has gotten you into the situation you are in today and hope for the best? 2. Continue to shift more costs and out-of-pocket expenses to employees by increasing deductible’s, coinsurance limits and employee premium contributions? Or… 3. Consider thinking outside the box by using a creative strategy to guarantee savings without risk, and improve benefits at the same time.

Supplement al Medical Insurance (Secondary Plan). High Deductible Health Plan (Primary Plan) Pair a High Deductible Major Medical Plan with a Secondary Supplemental Medical Plan Complexities created by the new healthcare reform laws have opened the door for this creative concept to flourish. Employers have to meet the Essential Benefits Guidelines for benefit coverage and be within the 9.5% threshold of affordable premiums. Under the healthcare guidelines, the secondary plan does not have to be funded by the employer and can be sold on a voluntary basis with certain participation requirements being met which will lower the employers medical contributions towards employee premiums.

 A simple two I.D. card system. One card for Major Medical and another card for the Supplemental Medical.  If a covered claim is subject to the new high deductible or co- insurance limit by the Major Medical, the bill is applied to the secondary supplemental medical coverage, instead of the insured potentially being responsible. The benefits can be assigned and paid directly to the provider. This idea has been around for years. For example: With Medicare, seniors have out-of-pocket expenses after Part A & B pays their portion of services. A Medicare Supplement helps fill the void. Employers can utilize this concept with their group health benefits, giving them phenomenal health coverage and creating substantial savings.

Cost Effective Enhanced Benefits Greater Flexibility of Plan Designs Implements long range plan to help control medical costs Spreads the claims risk Minimizes the out-of-pocket expenses related to deductibles & co-insurance An attractive benefit plan that attracts and retains key employees

1.Modify your current benefit plan to a High Deductible (3k-5k) Health Insurance Plan (This creates an instant medical premium savings of 30-43%) 2.Customize the supplemental Out-Of-Pocket Medical Insurance plan that fits your needs (The supplemental insurance plan covers the increased deductible and coinsurance limit) The two plans combined in most cases cost less than your current plan with same or better coverage! Some models have shown employers saving thousands even hundreds of thousands of dollars

 Increase your major medical deductible  Create a substantial savings  Customize the supplemental plan that fits your needs best  Use a portion of the savings generated by moving to the higher deductible to pay for the supplemental medical plan  Enjoy the substantial premium savings and enhanced benefits for you and your employees

Old Medical Plan $1000 DED/20% TO $2000 New Medical Plan $ % + Secondary Medical Plan Designs Primary/Specialist$25/$50 Copay Calendar Year Deductible$1000$5000 Co-Insurance Percentage80% to $ % Hospital - In & Out-Patient Services Calendar Year Deductible$1000 Per Insured $5000 Per Insured In Patient Services$1000 Deductible/80% to $2000Secondary plan pays 100% to $5000 Out Patient Services Emergency room, Surgery & etc. $1000 Deductible/80% to $2000 Secondary plan pays 100% to $3500, Insured pays $1500 on the back end Diagnostic Testing MRI/CT/PET Scans $1000 Deductible/80% to $2000 Secondary plan pays 100% to $3500, Insured pays $1500 on the back end Total Out of Pocket$3000$0 Inpatient/$1500 Outpatient Example Case Design

Current Plan: $1000 Ded/20% to $2500 Co-Ins Limit/$3500 Total Out-of-PocketCensusCoverageMedicalTotal 48Employee$ EE/Spouse$ EE/Children$ Family$ $33, Renewal Plan: $1000 Ded/20% TO $2500 C0-Ins Limit /$3500 Total Out-of-Pocket CensusCoverageMedicalTotal 48Employee $ EE/Spouse $ EE/Children $ Family $ $37, New Plan $ % + Secondary 100% to $5000 Inpatient /100% to $3500 Outpatient CensusCoverageMedicalSecondaryTotal 48Employee $246.11$79.35$ EE/Spouse $516.84$182.51$ EE/Children $450.38$150.74$ Family $746.94$253.91$ $21, $ $28, “Annual” Savings versus Renewing As Is = $101,783.04

Administration Annual review of benefits; research proposals from every major carrier Work directly with the carrier underwriters Compliance COBRA Solutions (Tracking system designed to keep employers compliant of Federal COBRA Regulations. Section 125; docs & salary redirection agreements. COBRA/State Continuation (for groups under 20 employees). Online Access Available website access to materials; including enrollment forms and benefit summaries HR 360; a comprehensive online Human Resources portal; assisting with managing daily HR needs Customized online Power Point Benefit Presentation for employees Support Customer support to respond to questions regarding benefits, claims, eligibility enrollment changes and insurance I.D. cards. Annual payroll deduction spreadsheet based on employee elections at open enrollment. Carrier Billing reconciliation

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