Health Exchanges that Work for Business IOWA ISCEBS September 2011 CONFIDENTIAL

Healthcare Reform Heightens the Need for Accurate and Efficient Ben Admin and requires each State to have its own health exchange by 2014 I’ll close this portion of the presentation today by tying back to the data Lisa presented on the biggest concerns employers have around benefits. If you re-call, the cost of providing sufficient health and welfare benefits and Healthcare Reform top the list. With the passage of the Patient Protection and Affordable Care Act these two concerns will come even closer together. Take for example the requirement to provide benefits to dependents up to the age of 26. What will that cost your firm? It should be easier to administer any way , right? Well, maybe not when you consider the questions that are yet unanswered about dependents that are employed and offered health benefits and who is responsible to cover the dependents of those dependents? Not to mention how state specific laws will “trump or not trump” the federal law such as Nebraska’s requirement to cover dependents to age 30!! In the next 3 to 5 years as this legislation gets sorted out we can expect non-stop change and even more complexity. For many companies, this is an ideal time to wring out inefficiencies in benefit activities. Companies that are interested in learning where they lack automation and what that is costing them are invited to take the 30 minute version of our survey. We’ll provide you with contact information shortly. The Senate Health Care Bill Printed 11/17/2018

The world of employee benefits is complex and rapidly changing

How does an exchange work? bswift Admin Portal HR Portal EE Portal Carrier A Carrier B Carrier C Carrier D Etc.

Guiding Principle #1 Provides consumers with real choices by: Allowing carriers to sell small group product outside the exchange Placing no artificial restrictions on the number and/or types of product options available inside or outside the exchange CONFIDENTIAL

Guiding Principle #2 Maximizes competition between health insurance carriers by: Encouraging small group insurance carriers to offer product in Iowa (and all States) both inside and/or outside of the exchange Allowing any carrier to participate in the exchange Utilizing an open and transparent process so that there is confidence in the choices presented by the exchange CONFIDENTIAL

Guiding Principle #3 Controlling costs to the consumers by: Eliminating benefit mandates inside and/or outside the exchange Encouraging the availability of innovative plan designs, such as high deductible plans to address the need to attract the “young invincibles” Protecting the pre-tax benefits of buying insurance through an employer Supporting 2 separate exchanges, one designed specifically for the small employer and one for the individual market, operated by the appropriate governing structures Including health care cost and quality transparency requirements CONFIDENTIAL

Guiding Principle #4 Uses qualified and licensed agents/brokers to assist employers interested in using the exchange by: Establishing adequate compensation levels to licensed agents/brokers that assist small employers and individuals in purchasing health insurance through the exchange Allowing any qualified and licensed broker/agent to sell products through the exchange CONFIDENTIAL

Guiding Principle #5 Does not increase the size and cost of State Government by: Utilizing the oversight capabilities which the OCI is already equipped and designed to provide Not creating an additional governmental agency or quasi-governmental agency to “run/operate” the exchange Utilizing technology and/or services that already exist in the private sector CONFIDENTIAL

The Utah Health Exchange CONFIDENTIAL

Advantages of the Utah Health Exchange EMPLOYERS Simplified Benefits Management Predictable costs Expanded Coverage Choices Preserve Tax Benefits EMPLOYEES Individual Control and Choice Pay with Pre-tax dollars Plan Portability Premium Aggregation CONFIDENTIAL

Similarities: Massachusetts and Utah State-based solution designed to be responsive to state-specific issues, customs, business practices, etc. Consumer-centered approach Achieved broad, bipartisan consensus supporting the basic reform elements Utah State-based solution designed to be responsive to state-specific issues, customs, business practices, etc. Consumer-centered approach Achieved broad, bipartisan consensus supporting the basic reform elements CONFIDENTIAL

Differences: Massachusetts and Utah Individual mandate Employer mandate Government role is contracting agent Established Massachusetts Connector Authority with broad regulatory responsibilities Acted first on public sector reforms; now rolling out private insurance market reforms Utah No individual mandate No employer mandate Government role is market facilitator Regulatory authority strictly limited to establishment of electronic data standards Began by implementing private market reforms first; public sector reforms to follow CONFIDENTIAL

Differences: Massachusetts and Utah No risk adjustment mechanism included Upfront appropriation of $25 million; ongoing funding through retention of a portion of premium Staff of approximately 45 employees Utah Risk adjustment mechanism established to deal with adverse selection issues Upfront appropriation of $600,000; ongoing funding through annual appropriation and technology fees Staff of 2 employees CONFIDENTIAL

How does the Exchange work? Step 1 – Employer signs up Step 2 – Employee enters information Step 3 – Premiums are generated Step 4 – Employee comparison shopping and open enrollment period Step 5 – Finalize enrollment Step 6 – Plans go into effect on designated date CONFIDENTIAL

CONFIDENTIAL

Employees use the Exchange to begin the health plan selection process CONFIDENTIAL

The Utah Health Exchange offers an employer-funded (Defined Contribution), consumer-centric solution for the purchase of health insurance CONFIDENTIAL

HDHP’s/HSA-eligibility Consumers shop from 4 carriers and 100+ plans, with the ability to search for the optimal plan based on: carrier provider HDHP’s/HSA-eligibility CONFIDENTIAL

bswift’s Best Fit tool empowers consumers to find the optimal plan, given the health status of the employee/family and likely health needs and expenses. CONFIDENTIAL

Plans can be sorted based on Premium Cost, Estimated OOP Costs, and Total Costs CONFIDENTIAL

Consumers then compare plans in more detail to make the best selection CONFIDENTIAL

Dependents are then enrolled or waived, as desired CONFIDENTIAL

If the employee selects a qualified HDHP, an HSA option is presented. CONFIDENTIAL

Upon viewing the plan selections, coverage and costs, the employee confirms the purchase CONFIDENTIAL

For more information contact: Ray Seaver Joe Thomas Executive Vice President Regional VP of Sales bswift (312 ) 878- 0408 (414) 899-8155 ( 952) 836- 8278 rseaver@bswift.com jthomas@bswift.com www.bswift.com CONFIDENTIAL