1. An Introduction to Allied National Small Group Health Plans
Level-Funded
Small Group Health Plans
11419s0117

2. Topics for today: Who is Allied National? What is “Level Funding?”
Why Level-Funded Plans Now?
Funding Advantage – The Product
Network Options
Pay or Play Solutions
Allied National Website
Sales Contacts

3. Allied National Operational Profile
Underwriting
Claims Administration
Policy Service
Actuarial
Compliance
Product Development
Case Management
Sales & Marketing
Legal

4. Allied National Risk Partners
AM Best A or better

5. What is Level Funding? Employer is the risk bearer! Fully Insured
Risk bearer is the insurance company
All RISK transfers to insurance company
Level Funded
Employer is the risk bearer!
Claims paid from employers claims fund
Employer hires/assigns a claims administrator to pay claims
Employer purchases stop-loss insurance to limit risk

6. Stop Loss Insurance Employer’s risk is contained Specific Stop Loss
Claims paid by carrier when an individual’s claims exceed a set dollar amount
Aggregate Stop Loss
Claims paid by carrier when the group’s total claims exceed a set dollar amount

7. Our Culture and Business Model “Underwriting Trumps Sales”
Since our core product offering is small group self-funded plans, our ability to continue to offer these products over the long-term is driven by the underwriting profitability of our overall pool of business. We follow a very disciplined approach to underwriting every risk, both as a new business and at renewal. Good risks receive favorable rates, poor risks are declined; the best risks will have an opportunity to participate in the underwriting profits on their account.

8. “Employee Only” Rate Illustration
Why Level Funding Now?
“Employee Only” Rate Illustration
Repeal of ACA??
$700
Fully Insured
$600
Rate Shocks
“Employee Only” Rate
Level-Funded Costs
$500
$400
Level-Funded Costs
After refunds
$300
2014
2015
2016
2017
2018
2019
Year
This sample chart illustration is provided for educational purposes only. Actual results may vary and are not indicative of future performance.
Allied National, Inc. l W. 107th St. Suite 100 l Overland Park, KS l l l l twitter.com/alliednational

9. 2016 Milliman Study of Health Care Costs
Projected Family Cost by 2020 = $31,267 9

10. What is the difference between self funding and level funding?
The employer’s ultimate costs are variable and unknown and based entirely on the cost of claims
These plans are subject to terminal liability
Typical for employers with 100 FTES or more
Level Funding
The employer’s ultimate costs are limited to a specified dollar amount
Level-funded Plans are limited to 12 monthly payments
Terminal liability costs included in monthly costs
Available for groups as small as 2 lives

11. Why Level Funding
Long Term – It’s the most cost effective way to finance a group health plan
Reduces insurance company profit
Eliminates state insurance premium taxes
Eliminates state benefit mandates
Allows employer to take control of group benefit plan
Money not spent on claims belongs to the employer – not the insurance company
Avoids many negative impacts of ACA

12. ERISA and Level-Funded Plans
ERISA – Employee Retirement Security Act of 1974
ERISA Preempts state law
ERISA Preempts certain state benefit mandates
Applies to all welfare benefit plans including level-funded plans
States jurisdiction over level funding
Stop-loss carrier licensing
Stop-loss carrier financial solvency
State premium taxes collected on stop-loss contracts
No state jurisdiction over level-funded rates or plan design
Self- & level-funded plans not subject to state guaranty funds

13. What is Funding Advantage?
Alternative Funded Small Group Medical Plan
Level Funding “on training wheels”
2 or more lives – ACA compliant
Level funding made “SIMPLE”
Prepackaged plan docs and specific and aggregate stop-loss
Level-funded plan
Terminal liability coverage included
Medically underwritten
Full accommodation

14. A Level-Funded Solution

15. A Level-Funded Solution
(No Refund)

16. Funding Advantage Features
Accommodation
When claims exceed money in claim fund – insurer loans employer money
Reporting
Detailed monthly reporting showing claim fund activity
Plan Year and Claims Run-Out
12/21 plan
Claims incurred during plan year are payable for 9 months past end of plan year
At end of the 9-month run-out – all remaining claims funds belong to employer!
No hidden terminal liability costs

17. Sample Monthly Report Self Funding Client Accounting Report

18. 100% refunds – no admin back charges
The value proposition of Allied National small group level-funded health plans:
ERISA and ACA compliant Lower costs over time Flexible benefit structures Detailed claims data Broad network choices Refunds for favorable claims experience
100% refunds – no admin back charges

19. Ineligible Risks
Sales
Prospect
Municipalities, public institutions and religious organizations = ERISA exempt
Law firms
No husband-wife groups
(not ERISA qualified)
No owner-only groups

20. Allied™ Funding Advantage
Life Cycle “Vocabulary”
“Street Rate”
Based on initial census and benefit plan design.
No underwriting load
Rate will increase based on underwriting conditions
NOT A FINAL RATE!

21. Allied™ Funding Advantage “Submission”
Life Cycle “Vocabulary”
“Submission”
Account submitted for a full underwriting review
Required underwriting documents:
Accurately completed Allied enrollment forms
Paper or Online Enrollment Forms acceptable
Allied employer statement
All applicable waivers executed
Current wage and tax statement
All Cobra-eligible must complete enrollment
Allied account transmittal form
Current or renewal rates
Current Allied proposal showing benefits proposed

22. Allied™ Funding Advantage Electronic Enrollment Options
Allied National Call Jill Carroll at
Form Fire
EasyApps
Ehealth
EaseCentral

23. Underwriting Reviews
Our Underwriting team will contact the employer to get permission to talk to selected employees to determine the status of current medical conditions.

24. Sample Underwriting Data Sheet

25. Allied™ Funding Advantage Life Cycle “Vocabulary”
“Offer of Firm Rate”
Proposed rate after all medical underwriting is completed.
This may or may not be the final rate. Final rate could be affected by employer requested plan design or census changes made after underwriting is complete.

26. Allied™ Funding Advantage Life Cycle “Vocabulary”
“Accepted Final Rate”
This is the rate at which the contract will be issued. May differ from “Offered Final Rate” because of changes made after “Offered Final Rate” was issued.
Including:
Demographic group make up
Disclosed medical conditions
Final plan design
This IS the final rate!

27. Allied™ Funding Advantage
Specific Attachment Levels
Group Size
Default Specific Attachment
Optional Specific Attachment
2 to 19
$10,000
20 to 34
$15,000
$20,000
35 to 44
$25,000
45 to 64
$35,000
65 to 89
$50,000
90 to 139
$75,000
140 to 199
$100,000

28. Funding Advantage Rating Methods
Group 2-9
Groups
Group 100+
Age-Banded Rates
Medical Underwriting
Composite Rates
Medical Underwriting
Composite Rates
Experience Rating

29. Retail Agent’s Default Compensation Structure
<25 lives 6%
>26<50 lives 5%
> lives 4%
> lives 3%
151+ lives
2.5%
Agent’s comp is not impacted by GA involvement

30. Allied National Network Options
Traditional PPO
PHCS, Cigna, Healthlink and more
Narrow Networks
by region – Oklahoma - Texas
Open Network
Freedom Plan
Direct Primary Care compatible plans

31. “Freedom Plan” Rate Comparisons ALLIED FREEDOM PLAN RATE
ALLIED NATIONAL FREEDOM PLAN RATE COMPARISON
$2,500 Deductible, 80% Coinsurance, $35 Office Visit, $2,500 Coinsurance Max, Rx-Formulary-$0 Deductible
Effective Date: 10/01/2016, SIC Code: (Engineering)
AREA
PPO NETWORK
PPO EE ONLY RATE
ALLIED FREEDOM PLAN RATE
DIFFERENCE
Dallas, TX 75210
Cigna
$459.00
$343.00
34%
Carrollton, GA 30118
$398.00
$335.00
19%
Bloomington, IL 60117
$429.00
$341.00
26%
Anderson, IN 46013
$409.00
$300.00
36%
Cheyenne, WY 82009
$470.00
$415.00
13%
Columbus, OH 43214
$446.00
$360.00
24%
Charleston, SC 29402
$378.00
$313.00
21%
Phoenix, AZ 85015
$337.00 0%
Clifton, VA 20124
$420.00
$365.00
15%
Tulsa, OK 74119
PHCS
$665.00
$418.00
59%
Oklahoma City, OK 73114
First Health
$371.00
$267.00
39%

32. Will the “Freedom Plan” be accepted?
Increase in Medicare eligible next 5 years
U.S. Census Bureau
2015 Total U.S. Population
321,418,820
2015 Total
>
Medicare eligible
54,048,013
16.82%
>
73,117,890
22.75%
Increase
19,069,877
5.93%
By 2020, 23% of the U.S. population will be receiving medical services at a “Medicare-based” reimbursement rate.

33. Allied National Renewal Retention 2016
Service
Renewal
Allied National Renewal Retention 2016
Cases Retained – 83%
Billings Retained – 86%
Average rate increase on retained cases 14.4%

34. Claims Claims are processed internally, not outsourced
10-day turn-around time
Financial accuracy greater than 99.5%

35. Allied Pay or Play Solutions
“PMEC” or Skinny Plans
$48 per employee per month
Avoids the “sledge hammer” penalty ($2,000/FTE)
Does not avoid the “tack hammer” penalty ($3,000/FTE)
Preventive services only
Satisfies individual mandate penalty
Need census count ONLY to offer a proposal
Guaranteed issue
Employer pays 100%
MediPay reimbursement
Self-funded chassis 12/21 plan
Requires 75% participation after valid waivers

36. Online sites accessed via www.alliednational.com
Service Access
Service
Online sites accessed via
Employer Self-Service Site
Member Self-Service Site
Agent Self-Service Site

37. Short Term Medical PLUS
What are you offering your clients now that the marketplaces have closed?
Coverage available for up to 12 months (364 days)!

39. Thank you! Allied Sales Support Phone: 888-767-7133 Fax: 913-945-4390
• twitter.com/alliednational

40. Allied National Sales Team
Contact Us by:
Phone:
Fax:
Our Team
Dan Meylan: National Sales Director;
Bill Ringhofer: Regional Sales Manager;
Randy Wehner: Sales Manager;
Jill Carroll: Account Executive;
Josh Campfield: Account Executive;