Presented by Mark R. Anderson 4/12/2019 Spring Kinder, Gentler CDHC Plans - Strategies for Gradual Implementation & Minimal Cost Shifting Presented by: David Cowles Vice-President Benemax - The Benefit Management Co. A brief introduction either by a third party, or the presenting vendor company. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation. Seven West Mill St. Medfield, MA 02052 1-800-528-1530 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Benemax Founded in 1975 First Consumer Directed Health Plan: 1986 First Consumer Directed Dental Plan: 1988 Independent Patient Advocate: 1995 Web Based Benefit Management: 1998 One slide from each presenter describing his/her previous healthcare experience. Company information or logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Who is “The Consumer” in a CDHC Plan? * Employee > Own Health > Own Money * Employer > Majority of employee health care cost > Lost productivity (15%) due to disability Describe what business problem the client faced. Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 What Makes CDHC Work? * Consumerism * Tools & Incentives > to stay healthy or get healthier > to consume cost effectively * The Claim Cost Curve Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 The Claim Cost Curve * 20% of claims = 1/2% of members * 47% of claims = 3% of members * 87% of claims = 31% of members * 69% of members = 13% of all claims * Median non-Rx claim cost = $500 Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 70% 69% 60% $1,259 pmpm 50% 60% 40% $176 pmpm 30% $30 pmpm Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 20% 26% 24% 10% 13% 8% 0% Healthy Transitional Chronically Ill/High Risk ($1-$999) ($1,000-$4,999) ($5,000-$100,000) % Members % of Dollars 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 The Impact of Disability * 10% of all employees file a disability claim * 55% of all claims come from disabled ees * Absence Management = Return to Work > 30% reduction in average length of disability > 40% reduction in average health claim cost * Only employer can manage disability claims This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Kinder, Gentler CDHC Step #1 - The Wrap * Employer adds a High Deductible to Plan > HMO, POS or PPO > $500 to $5,000 * Employer Self-funds that Deductible Describe the solution to the business problem. Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 The Wrap - Results * Reduces premium by 20% to 50% * Reduces net cost by 10% to 20% * ER benefits from good experience * ER incented to promote health * ER incented to promote consumerism * ER has greater plan design flexibility Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Kinder, Gentler CDHC Step #2: Virtual HRA * Employer funds HRAs = New Deductible * Employer sets Employees’ Expectations: > Deductible increase or HRA decrease in year 2+ * Employer introduces tools: > Promote health > Educate consumption Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Virtual HRA - Results * 10% to 20% net savings year one * Employees become cost conscious year one * Year of grace before any cost shifting * Year to improve health (using tools) * Year to adjust consumption (using tools) * Year to build-up benefit bank (HRA balance) Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Kinder, Gentler CDHC Step #3: FSA * Employer adds corridor of employee liability * Employer contributes to employees’ FSAs * Employees may also contribute: pre-tax $$ * Employer introduces health tools * Funds may be used to pay for: > employee’s health plan claims liability > dental, vision & alternative care expenses * Funds unused at year end are forfeited Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Employer Funded FSA - Case Study * HMO Renewal = +15%; Goal = +5% * Add $500 (2x fam) deductible; Renewal = 0% * Contribute 5% to employees’ FSAs ($300 ea) * Employees may fund additional cost pre-tax * FSA may pay any IRC 213 expenses Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Kinder, Gentler CDHC Step #4: Triple Option Plan (TOP) * Employer buys a base high deductible plan * Employer self-funds options below deductible * Employees choose: Gold, Silver, Bronze * Employees pay more for richer options * Employer cost = same for all options Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 TOP - Sample Employee Options * Gold = Virtual Indemnity Plan (100% benefit) * Silver = Base Plan + HRA + FSA * Bronze = Base Plan + FSA only Summarize what the client learned. Describe what the vendor and/or client would have done differently. Logos are not to be included in this section. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 TOP - Case Study * Renewal = 20%; Goal = 0%; EEs pay 20% * Add $1,000 deductible; Renewal = 0% * Gold: EE cost up 100%; no benefit change * Silver: EE cost up 50%; $500 HRA * Bronze: No EE cost change; $1k deductible Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Kinder, Gentler CDHC Step #5: The Blend * Employer buys high deductible base plan * Employer sets lower employee deductible * Employer “wraps” the deductible difference * Employer funds HRA @ 50% of ee deduct * Employees may fund net claims cost via FSA Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 The Blend - Case Study * Renewal Rates = $370/980 * Employer buys plan with $3,000 deductible * Member deductible = $1,000 (2x family) * Employer “wraps” the $2,000 difference * Employer funds HRA @ $500 ($1k family) * Employees may fund net claims cost via FSA Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 The Blend - Case Study Results * Premiums reduced 40%: $222/588 * “Wrap” cost = $0 on 69% of members * HRA pays 100% of cost for median member * HRA + FSA tax savings = 65% of deductible * Wrap + 1st year HRA + Admin = $60/160 * Net Plan Cost Savings: 24% Describe the benefits of applying the solution. Quantify the benefits. Were the benefits by a third party? Logos are not to be included in this section. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 Summary * Employers can save $ without shifting cost: > Take maximum advantage of claim cost curve > Provide health & health care tools > Manage absence toward “back to work” > Incent employees to measure health care behavior > Provide employees health & health care incentives This is where the presenters may give a brief overview of their organization and their role. Limit one slide per presenter. Content should be in 24 point type (minimum) throughout the presentation. 4/12/2019 For additional information 281-374-0394

Presented by Mark R. Anderson 4/12/2019 David Cowles Vice President Benemax – The Benefit Management Company This slide may be used during the Q&A from the audience. Leave 10 minutes for questions. We suggest, if need be, you ‘plant’ a few questions in the audience, in order to ensure lively participation. 1-800-528-1530 4/12/2019 For additional information 281-374-0394