1. How To Select a Third Party Administrator CapabilitiesCost Service Model Jerry L. Ripperger, Director – Business Development Registered Representative, Princor Financial Services Corporation

2. How To Select a Third Party Administrator Capabilities

3. Consulting Behaviors Benefit Structures Budgets

4. Benefit Design

5. Continuum of Care

6. Integration Data Integration –Medical claims –Pharmacy claims –Wellness assessment data –Biometric data Program integration –Proactive referrals –Bi weekly “grand rounds” Process integration –Care management and claims management –Health summary record

7. Incentive Plan Personal Improvement Population Improvement Outcomes Reporting Participation Tracking Communications Plan INDIVIDUAL ACTIVITIES Preventive Screening Health Coaching Wellness Assessment Seminars Challenges Campaigns Wellness Committees Local Events ORGANIZATIONAL ACTIVITIES Wellness Strategy Wellness Programs

8. Communication and Education

9. Consumer Driven Healthcare Health Reimbursement Arrangements (HRA) High Deductible Health Plans (HDHP) Health Savings Accounts (HSA) Health Flexible Spending Accounts (FSA)

10. Comprehensive Reporting Access –On-line 24x7 –In print Breadth of reporting –Financial –Clinical Depth of reporting (drill down capabilities) Ad hoc capabilities Reporting Analyzing Consulting

11. Stop Loss Preferred carrier relationships –Benefit and provisional match –No audit guarantees (“pay as we pay”) –Expedited reimbursement –No laser guarantees Breadth of options –Paid In/Incurred In Run in Run out –Terminal liability options

12. How To Select a Third Party Administrator Capabilities Service Model

13. Implementation approach Employer service team –Account management –Dedicated/Named –Local/Remote Participant service team –Claims –Benefit questions

14. Service Model Hours of operations On line capabilities Interactive voice response capabilities Tenure of staff Results –Turnaround time –Financial accuracy –Procedural accuracy

15. How To Select a Third Party Administrator Capabilities Service Model Cost

16. Claims costs –Provider networks –Pharmacy benefit management Administrative costs –Third party administration –Stop loss

17. retail Provider Networks Preferred provider organizations (PPO) –National –Quilted Wrap networks Supplemental networks Fee negotiation services

18. Pharmacy Benefit Management Brand and generic discounts –Retail –Mail order Convenience/locations Formulary Rebates Administration (fees, claims, and reporting)

19. Third Party Administration –TPA generate revenue from several sources –Most fees will be on a Per Employee Per Month (PEPM) –Other explicit fees may be stated as Percent of savings Per hour Cost plus –Other fees are implicit Administrative fees from vendors (such as disease management) Pharmacy revenue –Rebate capture –Discount Capture Should be fully disclosed to the client

20. Thank You This material is believed to provide accurate information on the subject matter covered. The accuracy of the content is not guaranteed, and it is provided with the understanding that Principal Life Insurance Company, its agents and representatives are not rendering legal, accounting, tax or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Health Savings Accounts provided by Principal Bank, Member FDIC, Equal Housing Lender.. High Deductible Health Plans and custodial services for HSAs provided by Principal Life Insurance Company. Insurance and securities are not FDIC insured and have no bank guarantees. Securities may lose value. Home Office: Principal Life Insurance Company. Securities offered through Princor Financial Services Corporation, 800/247-4123, member SIPC. Principal Life, Principal Bank, and Princor® are members of the Principal Financial Group , Des Moines, IA 50392. BZ © 2010 Principal Financial Services, Inc. 05/2010