2014 Forum Discussion Topics I.Private Exchanges II.Defined Contribution Plans III.Self-Funding for Small Employers Start Here NASH & POWERS INSURANCE SERVICES Experts in Insurance

What is a ‘Private Exchange’? 1.Complete cloud-based enrollment platform 2. Can facilitate enrollment in all lines of benefits a)Medical b) Dental c)Life, STD, LTD, Voluntary Benefits, etc… 3. Wider choice of benefits for employees 2 NASH & POWERS INSURANCE SERVICES Experts in Insurance

Private Exchange Overview Save small businesses time and money; make life easier for them. Provide access to more benefit choices and better health options for small business employees Enhance the relationship between Nash and Powers and its: (i) small business customers, and (ii) its small business customers’ employees Key Points 3

Private Exchange Overview Free cloud based software that streamlines many HR functions Robust reporting and employee management tool for HR administrators Reduces the time, effort and cost of offering health benefits. Most small businesses still operate in a paper based world when it comes to health benefits ACA compliance tool Educate and assist in fulfilling the requirements of ACA for small businesses (Health reform is the #1 concern for small business owners today) Reduce future expenses related to providing health benefits to employees Ability to more effectively shift to a defined contribution model for health benefits (e.g., much like the pension plan to 401K shift) Offer employees better options and more choice regarding health benefits Allow the employer to allow his or her employees to make the best benefit choices for themselves and their families Small Business Owner Value Proposition 4

Private Exchange Overview Better benefit coverage for employees and their families (more choice) Wider selection of benefit plans and access to other types of benefit products Ability to customize total benefit offering to more directly fit one’s need Better assistance in selecting benefits (better choice) Education and decision support tools embedded in the platform's shopping experience Helps employees make appropriate choices Better experience Familiar, retail-like experience that is easy for employees to use Better ongoing maintenance Ability to manage account info for themselves and their dependents throughout the year 5 Employee Value Proposition

Defined Contribution Model 1.Employers want to fix costs and reduce risk 2.Employee contributes a ‘Fixed Amount’ based on level of coverage 3.Employers can trend ‘Fixed Amounts’ lower than healthcare trends 6 NASH & POWERS INSURANCE SERVICES Experts in Insurance

Self-Funding …for small employers NASH & POWERS INSURANCE SERVICES Experts in Insurance

Self-Funding Advantages & Solutions The Kaiser Family Foundation Employer Health Benefits Survey reports that health insurance premiums have risen 131% over the past ten years, while wages have grown 38% and inflation is up 68%. 8 NASH & POWERS INSURANCE SERVICES Experts in Insurance

Advantages of Self-Funding  Avoid PPACA cost increases for fully insured: A Milliman study predicts that the cost of minimum essential coverage will increase premiums for the fully insured by 3 to 17%. Health Insurance Industry Fee is up to 2.5% of premiums for Pricing and community rating rules will cause the cost of insuring healthier workers to rise.  Avoid State premium taxes of up to 1.75%  Avoid Cost of state-mandated benefits  Access utilization and claims data to provide transparency and control costs: Low-cost providers can be identified and overcharges contained High-risk members can be targeted to improve their health and manage their conditions Employers capture the savings 9 NASH & POWERS INSURANCE SERVICES Experts in Insurance

Underwriting -Carriers may medically underwrite using any of the following Underwriting -Demographics -Location (Zip Code) -Tobacco Use Fully-Insured 1 Level Funded 2 Vs. Insurance Co. sets rates for 12 months—at renewal, rates will reflect overal performance of the pool No Health Questions No Pre-Existing Conditions Clause Age Banded Rates 1.Individual Medical Application 2.Group Medical Application 3. Group Claims Information (for larger groups) 10

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