U.S.Government Sector October 22, 2015

2 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2014 Cigna Current and anticipated future impact on Cigna from the following: Affordable Care Act (ACA) Centers for Medicare & Medicaid Services (CMS) Public & Private Exchanges OBJECTIVES

ANTICIPATED CURRENT & FUTURE IMPACTS: ACA 3 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna Impact Highlights to CignaRecommended Cigna Response Minimum Essential Coverage (MEC) Mandate Employer Impact - Beginning 2015, large employers must offer minimum value and affordable MEC to full-time employees and dependents, or be subject to a penalty. Individual Impact - Beginning 2014, individuals must have minimum essential coverage that does not lapse more than three consecutive months, or be subject to a penalty Cigna needs to be able to adapt all current systems for newly introduced limits on all benefits, that can change frequently and/or anytime. Each ACA mandated benefit limit change results in many systems changes, Cigna is encouraged to look at a more modular way of systematically controlling compliance related technology vs. embedding it in each individual application suite in production. MEC Tax Reporting Minimal Essential Coverage (MEC) is required for all adults and their dependents. For adults, the monthly penalty is 1/12 of the greater of the dollar penalty or the gross income penalty amounts.  Tax penalty is $95 per individual to a maximum of $285 per family, or 1% of household income  Tax penalty is $325 per individual to a maximum of $975 per family, or 2% of household income  2016 – Tax penalty is $695 per individual to a maximum of $2,085 per family, or 2 ½% of household income Cigna needs to provide MEC reporting to the IRS for all Individuals and fully insured Employers. Cigna needs to inform all ASO clients that it is their responsibility to provide the IRS with all MEC reporting. For Fully insured U.S. Employer clients with insured employees worldwide, Cigna will need to provide MEC reporting based on the tax state of the employee, not the international location of the employee. Recommend that Cigna explore the reporting opportunity available to sell to our ASO clients, as this is their responsibility, but we have the data. Cadillac Tax A permanent (as of 2018), 40% non-deductible excise tax on employer-sponsored health coverage that provides high cost benefits. Cigna’s fully insured employer clients calculate and then Cigna pays. Cigna’s self-funded employer clients calculate and "the person who administers the plan benefits" pays, which is Cigna. For HSAs and Archer MSAs, Employers calculate pay. PPACA regulations are updated and released constantly and many are still in development. Cigna needs to continue to be agile at implementing all compliance and regulatory related projects while balancing the risk and/or return possibilities with each new regulation.

ANTICIPATED FUTURE IMPACTS: CMS 4 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna ImpactRecommended Cigna Response CMS has proposed increasing the number of quality measures used from 34 to 37. New measures would include: 1) Whether patients say providers informed them about treatment costs 2) The rate of patients who are admitted to skilled nursing facilities within 30 days of being discharged from a hospital 3) Unplanned readmissions for patients with diabetes, heart failure or more than one chronic condition for any reason. (Modern Healthcare) Leverage our Provider network and educate them to be prepared for the change reducing the risk of non-compliance. Be able to track items 2 and 3 at a provider level. CMS detailed plans to raise Medicare outpatient payments by 2.1% for hospitals and by 1.2% for ambulatory surgery centers next year. (Modern Healthcare) Plan for programming and plan changes now. With this we will be able to adequately plan and test the changes. Identify new reporting to allow providers to track their quality for theses metrics. Work with Providers to prep them for the change. Hospitals that do not meet certainly outpatient quality reporting requirements would have their reimbursements reduced by 2%. (Modern Healthcare) Identify hospitals which will be affected and start preparing for the quality reporting now. This will prevent a 2% drop in their revenue. Under new propose rule, payments to dialysis providers in 2017 and 2018 would be tied to new quality and performance targets. Dialysis providers that fail to meet a specific minimum quality performance score would be paid less than facilities that meet the target. Basic payment rates for the providers in 2015 would match 2014 rates. (Modern Healthcare) Plan for programming and plan changes now. With this we will be able to adequately plan and test the changes. Identify new reporting to allow providers to track their quality for theses metrics. Work with DME providers to prep them for the change.

ANTICIPATED FUTURE IMPACTS: PUBLIC & PRIVATE EXCHANGE 5 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna ImpactRecommended Cigna Response Employers may decide to drop coverage for their employees Cigna can provide a safety net so that their coverage can remain at Cigna We anticipate this is a significant revenue/growth opportunity Medical /Pharmacy and Dental Means we have to be fast, and delivery products to market quickly Employees are in the drivers sheet to select across multiple insurance carriers side by side Our opportunity to sell to these customers Opportunity to sell supplemental benefits (Life, Accident, Specific Disease) Obama promoted the concept of Americans having “one stop shop” Many americans cannot afford it, therby increasing the Mediicaid population being eligible Insurers are prohibited from using pre-existing condition information We have an opportunity to sell to desired customers (i.e., offer gym memberships or other healthy products to attract healthy customers) The idea of “essential benefits” was born (ambulatory care, emergency services, hospitalization including surgery, maternity, MH/SA, rehab, preventive, wellness, pediatric, maternity, with no benefit limitations Creates an opportunity for Cigna to manage costs in these areas Heath advocacy/care management programs will be key