2. 1 Open Enrollment 2010 Health Reimbursement Arrangement

3. 22 Enable informed decision-making by providing members with meaningful & easy to use information Engage consumers with health & wellness programs that emphasize routine preventive care which can lead to healthier behaviors now and in the long term Encourage members to make informed health care decisions by creating financial incentives, such as portable health care cash accounts with balance rollover The concept of consumer directed health plans (CDHP) focuses on encouraging members to become more involved in and taking more responsibility for their health care decisions, purchases and use of health care services. Definition of Consumer Directed Health

4. 3 Capital's CDH Strategy

5. 44 Capital BlueCross markets CDH products under the name of SimplySelect. SimplySelect incorporates products, web tools and clinical programs into a cohesive, packaged consumer directed product. Consumer Directed Product Suite

6. 55 Capital’s strategy incorporates all of these components into our Consumer Directed Health strategy. Capital’s CDH Strategy

7. 6 Health Reimbursement Arrangement HRA Overview

8. 77 Health Reimbursement Arrangements (HRAs) allow the employer to set aside a specified pool of dollars that help members pay for a portion of their deductible. What is an HRA?  Generally, not an employee account with money in it  Employer contributions only  Employer owns the funds upon termination  Rollover is determined by the employer  No financial partner required  No qualified HDHP required  No investment opportunities for employees

9. 88 Capital’s HRA has three basic components… HRA Components Combined, the HRA fund + the remaining deductible paid by the employee, make up the entire plan annual deductible. Plan HRA 2000 Annual $2,000 deductible $1,000 + = $2,000 HRA fund Employee Deductible Annual deductible 1.HRA Fund - Your employer sets a specific amount of money aside for you each year to pay for eligible medical expenses. Your HRA can be set-up to pay before or after your deductible is met. 2.Employee Deductible – Your cost- sharing responsibility. You may be required to pay a deductible before or after you access your HRA funds. 3.HDHP – Underlying medical coverage with an out-of-pocket maximum. Once you’ve met any applicable deductible and exhausted your HRA funds, the PPO medical plan covers your expenses (less applicable copays). Preventive Care Most preventive services are covered and are not applied to the deductible HRA Fund $1,000 Employee Deductible Remaining deductible paid by you $1,000 HDHP (medical coverage) Pays for services after the entire annual $2,000 deductible has been met Sample HRA Plan Design (HRA 2000)

10. 99 Capital HRA has deductibles ranging from $1000-$4000. HRA Plan Designs PPO HRA 1000PPO HRA 2000PPO HRA 3000PPO HRA 4000 Deductible $1,000 member; $2,000 family $2,000 member; $4,000 family $3,000 member; $6,000 family $4,000 member; $8,000 family OOP Max None Coinsurance 100/80 PCP $20 Specialist $20 ER $100 IP Copay None OP Facility Copay None

11. 10 Key selling points of the HRA product include… HRA Key Features HRA Explanation of Benefits (EOB) with each transaction Quarterly statement issued to members Automatic reimbursement out of the HRA – No paper forms for the member to fill out! 24/7 online account inquiry from mycapbluecross.com – status of HRA claim, balance, transaction history, etc

12. 11 HRA account information from mycapbluecross.com… Online Access for HRA

13. 12 HRA Process Flow Member pays Provider Provider bills Member Capital mails EOB to member, SOR to provider If NOT ELIGIBLE for HRA funds (e.g., employee bridge/deductible portion) Member receives EOB indicating provider payment Funds sent to provider for service If ELIGIBLE for HRA funds Claim is processed and applied to deductible Capital mails check to provider and EOB to member Capital processes claim under HDHP Capital determines if deductible met Provider submits claim to Capital for adjudication Member receives medical services No Yes EOB = Explanation of Benefits HDHP = High Deductible Health Plan SOR = Statement of Remittance OOP = Out of Pocket

14. 13 SimplySelect is offered by Capital Advantage Insurance Company®, a Capital BlueCross subsidiary. Independent licensees of the Blue Cross and Blue Shield Association. Communications issued by Capital BlueCross in its capacity as administrator of programs and Provider relations for all companies.