Presented By: Marijane Norris Geary, President How To Strategically Use Medical Tax Favored Vehicles

Personal & Lifestyle Behaviors Limited Cost Transparency Rising Healthcare Costs Health Care: A Structurally Flawed System

High Deductible Plan Designs Minimum deductible amounts apply for certain types of plans Individual Health Spending Accounts Flexible Spending Account (FSA) Healthcare Reimbursement Arrangement (HRA) Health Savings Account (HSA) Empowering Employees Information Tools Health & Expense Management A Comprehensive Strategy: Consumer Directed Health Plans

Developing a CDHP Strategy: Weighing The Options  HRA? HSA? FSA?  Which one works best for our need?  Plan Changes  What are the major changes involved?  Cost Analysis  Does this make sense from a cost perspective?  Workforce Characteristics  Well/Chronic conditions?  High Cost Claimants?  Employee Demographics  What’s the impact on different segments?

Tax Advantaged Accounts: Which Type? Health Reimbursement Arrangement (HRA) Employer Owned Employer Funded Must be integrated with group health coverage No IRS limits on contributions No non-medical reimbursements allowed Interest earned and paid to the employer Rollover funds allowed Health Savings Account (HSA) Individual & Employer Owned Employer & Employee funded Must be paired with an HDHP that falls within IRS deductible limits Non-medical reimbursements allowed, but taxed as income with 20% penalty Interest accrues tax free Rollover funds allowed Flexible Spending Account (FSA) Employer Owned Employer & Employee Funded FSA must qualify as excepted benefits by meeting a maximum benefit requirement and must be offered with other group medical coverage No non-medical reimbursements allowed No interest accrual Rollover (up to $500) or grace period allowed

CDHPs - Plan Design: What Will Change?  Preventive Care - Covered  How are prescriptions handled?  Does the deductible apply?  Is there a separate deductible?  How is catastrophic care covered?  Is there coinsurance?  How high is the out-of-pocket maximum?  What are the general up-front out of pocket costs?  Copays? Deductible?  Should we replace our existing plan or add new plan as an option?  Does this plan make sense for everyone?

Tax Advantaged Accounts: What Else?  What are the administrative costs?  Do we need a vendor?  What are the rules we want to set up?  Deductible only expenses?  Fund the 1 st or 2 nd half of the deductible?  Paper claims or claims fed automatically?  Does the reimbursement account pay the member or provider?

Cost Analysis: Do The Financials Make Sense?  Should we adjust the current employee and employer contribution?  How large is the up-front deductible versus premium savings?  Are there administrative costs associated with the plan?

Demographics: What’s the Impact of a CDHP?  How are the different segments of our employees effected? Healthy/Younger Employees Multiple Dependent Families Lower Wage Employees Higher Income Employees CDHP Impact

Workforce: Is a CDHP a Good Fit?  Does our employee workforce experience a lot of turnover?  What are our waiting periods?  Prevalence of chronic conditions?  Employees health habits?

Communication: How Will Employees Know? Employee Empowerment Newsletters Open Enrollment Meetings Lunch & Learn Internet Resources Client Portals

Questions? Marijane Norris Geary President