ILLINOIS BusinessFlex for Small Groups  Offering Employer Options & Value This summary of benefits provides a very brief description of the important features of our plans. This is not the insurance contract and only the actual Certificate of Coverage provisions will apply. The Certificate set forth, in detail, the benefits, limitations, and exclusions. If there are any conflicts between the terms of the Certificate of Coverage and the information in this presentation, the terms of the Certificate of Coverage will prevail. Offered by Unicare Health Insurance Company of the Midwest.

Today’s Agenda Introduction to BusinessFlex Why BusinessFlex? What we’ve learned Product strategy BusinessFlex Core Features BusinessFlex Plan Details Illinois BusinessFlex for Small Groups

Introduction to BusinessFlex

Introducing BusinessFlex Taking innovation to a higher level: Defined Contribution options for both medical and dental coverage Section 125 Premium-Only Plan administered by Ceridian Benefits Services Member Flex options with Twelve (12) PPO Plans.

Why BusinessFlex?

Premiums Medical Inflation -2% 0% 2% 4% 6% 8% 10% 12% 14% I.II. III. IV. Source: Bureau of Labor Statistics, 1999 The Underwriting Cycle Why BusinessFlex?

Small Group Average Price per Member AVG PREMIUM PMPM Why BusinessFlex?

What We’ve Learned?

Growing demand for choice by employees Increasing Costs What We’ve Learned

Price/Cost vs Creative Plan Structures Allow for financial risk sharing with members Focus on Direct Access (PPO) plans vs. Managed Care Successful Health Plans What We’ve Learned

How to continue our recent rate of success as the economy slows. How to better meet the needs of Illinois businesses and employees. The Challenges We Face What We’ve Learned

Product Strategy

Objectives: Help Employers successfully manage the current challenges of today’s business climate Ensure that Employees have improved choices and options Product Strategy

Objectives: Expand opportunities for Uninsured Groups to acquire coverage Contribute to WellPoint vision of market redefinition Product Strategy

BusinessFlex Core Features BusinessFlex Core Features

Flex Advantage 1000, 2000, 2500 & Saver 2000 HSA’s Plan A Plan B Plan C Premier Flex 500, 1000, 2000, 2500 & Saver 1000 Broad Range of Products and Premium Options BusinessFlex Core Features

Premium Only Plan (POP) Defined Contribution MemberFlex

Enables employers to empower employees with control of their own medical and dental needs Enables employers to empower employees with control of their own medical and dental needs What is MemberFlex? Allows the employer the flexibility to offer one, several or all plans to his/her employees Employees control their costs by choosing from plans of varying costs Employees control their costs by choosing from plans of varying costs BusinessFlex Core Features

Premium Only Plan (POP) Defined Contribution MemberFlex

Four financing options for Medical plans: Defined Contribution 100: Limits employer’s monthly contribution to no more than $100 per covered employee. Defined Contribution 80: Limits employer’s monthly contribution to no more than $80 per covered employee. Employer may choose from the low and medium medical plan options? Defined Contribution Options BusinessFlex Core Features

Four financing options for Medical plans: Defined Contribution Select: Allows employer to pay any fixed monthly amount in excess of $100 per covered employee. Traditional Contribution: Enables employers to contribute a minimum of 50% of employee’s monthly premium. BusinessFlex Core Features Defined Contribution Options

Options for Dental plans: Defined Contribution options are also available for dental. - Defined Contribution 15 - Defined Contribution Select - Traditional Contribution BusinessFlex Core Features Defined Contribution Options

BusinessFlex Core Features Premium Only Plan (POP) Defined Contribution MemberFlex

Employers can: Generate company tax savings through a reduction in taxable payroll Receive P.O.P. for only $125 per year Apply tax savings toward the purchase of enhanced employee benefits, increasing employee satisfaction The Premium Only Plan (P.O.P.) BusinessFlex Core Features

Employees can: Increase take-home pay Defray part of the cost of their premium with associated tax savings Reduce FICA, federal or, where applicable, state or local taxes on their portion of employer-sponsored plan insurance premiums BusinessFlex Core Features The Premium Only Plan (P.O.P.)

 Made possible through provisions of Section 125 of the Internal Revenue Code  Total taxable payroll of company is reduced by amount of employees’ premium contributions  Savings to employer depend on total company payroll and dollars that employees contribute  Employees use pre-tax dollars to pay their share of monthly premiums, reducing their taxable income How P.O.P. Works BusinessFlex Core Features

BusinessFlex Plan Details BusinessFlex Plan Details

Next Generation Small Group Plans Introduces

 Premier Flex Plans for groups of 2-99 Lives Premier Flex PPO plans consist of five (5) plans with selected deductibles and varying co-insurance offering rich, valuable benefits that are competitively priced.  Enhanced preventive care benefits  Increased ambulance benefit  Three-tier pharmacy benefit  Unlimited office visits on three (3) plans BusinessFlex Plan Details

 Flex Advantage plans for groups of 2-99 Lives  Flex Advantage PPO plans consist of four (4) plans with selected deductibles and varying co-insurance; all offering important core benefits that are affordably priced to meet the growing demands of employees and employers in today’s rising health care market.  Enhanced preventive care benefits  Increased ambulance benefit  Three-tier pharmacy benefit  Maternity benefits available as a rider for groups of employees  Unlimited office visits on two (2) plans BusinessFlex Plan Details

 President Bush signed into law on December 8 th as part of the Medicare RX bill (Eff. 1/1/2004)  Who is eligible to open an HSA?  Anyone who is covered under a High Deductible Health Plan (HDHP)  Generally anyone under the age of 65 (not Medicare eligible)  Cannot be claimed as dependent on another person’s tax return  Not covered by any other health plan  Injury or Illness specific plans are allowed Health Savings Accounts (HSA’s) BusinessFlex Plan Details

Money Spent on Medical Care Annually Percentage of U.S. Population No Medical Expenses 33% $1 - $50040% $501 - $1,0009% $1,001 - $2,0007% $2,001 - $5,0005% $5,001 - $10,0003% $10,001 - $25, % $25,001 - $50, % $50,001 - $100, % $100,001 - And Up0.05% Copyright , American Health Value, SM, LLC, All rights reserved BusinessFlex Plan Details

Health Savings Account (Funds) Established at a financial Institution High Deductible Heath Plan (HDHP) Purchased from UNICARE BusinessFlex Plan Details What are the Elements of a HSA?

 Annual Deductible of at least $1,000 ($2,000 family)  Annual Out of Pocket not in excess of $5,000 ($10,000 family)  No first dollar benefits-Deductible must apply to all benefits with the exception of preventive care (Rx Card allowed until 2006) BusinessFlex Plan Details What is considered a HDHP?

What are the contribution rules and tax treatment of an HSA?  An HSA is generally exempt from tax (like an IRA or MSA) as long as a HDHP exists  Contributions may be made annually up to the lesser of the HDHP deductible amount or $2600 single ($5150 family).  Individuals, employees or employers may contribute to the HSA account  The HSA account is owned by the individual, not an employer  Withdrawals may be made without tax consequences to pay for qualified medical expenses and in some instances for insurance premiums (COBRA and LTC)  Un-used account balances will carry over from year to year BusinessFlex Plan Details

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