MVP 50 Plus Plan Agent Training Webinar

Topics for Today Who is Allied National Pay or Play Mandates & Penalties MVP 50 Plus Plan Plan Design Limitations MediPay Reimbursement (no network) Guaranteed Pricing Underwriting Submissions – Documentation Underwriting Time Table Compensation 2

Allied National Operational Profile Underwriting Claims Administration Policy Service Actuarial Compliance Product Development Case Management Sales & Marketing Legal 3

4 4 Primary Risk Partner American Alternative Insurance Company A division of Munich Re $320.0B $28.4B AssetsEquity 4

5 5 Other Allied National Risk Partners 5

Pay or Play Rules ACA Pay or Play Regulations and Language: What is an applicable large employer? ALE What is an FTE? How to count FTEs? MEC Minimum Value Affordability Rules Penalties These are the high points -THIS IS NOT ALL!!!! Expect the rules to change 6

ACA Employer Reporting Requirements Insurers and self-funded group health plans are required under IRC section 6055 to file reports with the IRS to verify whether particular individuals had “minimum essential coverage” (MEC) during the prior calendar year, to satisfy the Individual Mandate. (1095 B) “Applicable large employers” (ALEs) are required under IRC section 6056 to file reports with the IRS showing whether they offered minimum value and affordable coverage to full-time employees and their dependents in the prior calendar year, to meet the Employer Mandate. These employers are also required to provide information to certain employees about the health coverage they offered using From 1095-C. 7

ACA Employer Failure to File Penalties Failure to file/furnish an annual IRS return or to provide individual statements to all full-time employees Penalty is $250 per return and $100 per statement Annual cap on penalties $3,000,000 Lower cap for entities with gross receipts of not more than $5,000,000 $1,000,000 $500,000 Failure to file return or furnish statement when corrected within 30 days of required filing date (penalty per return/statement) $50/$30 (see IRC Section 6055 for complete details) 8

For the Individual - Employee What does Pay or Play mean for an individual? 1.Individual Mandate says individuals must have MEC or pay a penalty $325/person, $162.50/child, max 2% of household income $695/person, $347.50/child, max 2.5% of household income 2017 and beyond – 2016 penalty adjusted for inflation 2.Insurance can be employer provided or an individual plan. 3.Penalties will be assessed as part of the income tax filing process. 9

For a Business – Employer What you need to know about Pay or Play for businesses... 10

Do I have to offer health insurance to my employees on January 1, 2016? less than or more Based on full-time equivalent employee counts. Part-timers count! 11 NAHU Quote “…whatever decisions that are made regarding the definition of small group in each state……there will be no change of the employer shared responsibility, employer reporting, or other compliance requirements for groups over 50 employees."

What type of coverage must I offer? Employer coverage must meet TWO levels of tests under Section 4980H “A” test – “The Sledgehammer” Must provide Minimum Essential Coverage to 95% of full-time eligible employees (70% in 2015) The Penalty? $2,000* for each full-time eligible employee less the first 30 (80 in 2015) Penalty triggered by employee going to the Exchange and receiving subsidy *Adjust each year for premium inflation 12

What type of coverage must I offer? Employer coverage must meet TWO levels of test under Section 4980h “B” test – “The Tackhammer” Must provide Minimum Value Coverage to 95% of employees Coverage must be Affordable (no more than 9.5% of household income). The Penalty? $3,000* per employee who receives subsidized coverage on the Exchange *Adjust each year for premium inflation 13

*Pay or Play Mandate Penalties For employers who fail to offer qualified plans - an annual escalation clause. Per IRC 4908H(c) (5) and PPACA 1302 (c) (4) the $2,000 “sledgehammer” and $3,000 “tackhammer” are subject to adjustment based on the national premium growth average. Currently HHS is using 4.2%. IRS has not updated penalty amounts yet but 2015 penalties would be $2,084 and 3,126.

What If I Don’t Play? PENALTY EXAMPLES Employer with 180 full-time eligible employees (A) Failure to provide MEC: $2,000 ( *) = $300,000 non-tax deductible penalty (B) Failure to provide Minimum Value affordable coverage: $3,000 per employee who obtain subsidized coverage * less 80 in 2015….less 30 in

What are an Employer’s Options? 1. Pay the penalty? 2. Find the cheapest way to avoid penalties? 3. Provide an expensive major medical health plan to everyone? 4. Provide an affordable alternative in the middle? IMPORTANT: This will cost the employer money, either in penalties or premiums! 16

Purpose: 1.To offer minimum value coverage that is affordable to employer and employee 2.To keep employer cost at or below the penalty cost Allied National – MVP 50 Plus For ALE’s 17

Available now Affordable Pay or Play Solution for ALE’s Avoids both “A” and “B” penalty Guaranteed Rate – 1.20 Medical Load NOT Guaranteed Issue Adverse risks will be declined Allied National – MVP 50 Plus For ALE’s Life Cases 18

Referenced based pricing solution Pays a % of Medicare allowable reimbursement 150% Facilities 125% Physicians Employee MAY be subject to balance bills Plan includes patient advocacy services “MediPay” Reimbursement Solution for MVP 50 Plus 19

Minimum $3000 deductible Generic Rx only – No specialty drugs 60% participation – after valid waivers Employer must pay enough so “affordable” AND get participation Dependent children only – NO SPOUSES!! Level Funded self insurance program 12/21 contract Allied National – MVP 50 Plus 20

May be offered as a dual option in conjunction with the Allied National Funding Advantage plan Dual option can include other network reimbursements such as Provider Freedom, Cigna, etc. If offered as a dual option participation for the entire group, must be 75% after valid waivers Allied National – MVP 50 Plus 21

Provide an accurate spread sheet census Provide a plan design that meets the MVP 50 Plus requirements Allied will prepare a proposal that includes the 1.20 rate load This rate is guaranteed….IF……the group meets underwriting requirements To obtain underwriting approval each employee must complete an Allied enrollment form Accepted cases will be issued at the guaranteed rate, unacceptable cases will be declined The MVP 50 Plus guaranteed rate process 22

Enrollment Forms Based on number of employees enrolling: 2 to 49 use long form 50 Plus use short form Forms are located on our website on the Funding Advantage Resources page under the “Enrollment” section: 23

New Case Transmittal Form Must be filled out with submission This form is located on our website on the Funding Advantage Resources page under the “Enrollment” section:

Underwriting Time Frame Recommended timeline for submissions: Complete submissions should arrive in Allied National’s underwriting department not less than 15 working days prior to the desired effective date. Complete Submissions receive priority consideration. 25

Duration of underwriting determined by: Size of the account Quality and completeness of submission Availability and cooperation of the employer & employees Firm rates in 7-10 days From submission to case delivered – 14 to 20 days Shelf life of enrollment form is 60 days – up to 90 days with recertification 26 Time Frame: MVP 50 Plus Cases

27 Jan 1, 2016 Effective Date (FOR ILLUSTRATIVE PURPOSES) Group Size – 340 (Average Age – 31) Restaurant Chain Employee: 221 (= 60% participation) Office visit copay: $30 (unlimited) Deductible: $5,000 Coinsurance: 80% ACA Max OOP: $6,850 Prescriptions: Generic only MEDIPAY Reimbursement Eliminates Both “A” & “B” Penalty Employee rate (with 1.20 load): $221 Employer Contribution: $155 per month or 1,860 a year Estimated Penalty (2016): $2175 per employee Employer Annual Cost at 70% of EE $411,000 Employer Penalty (340-30) x 2000 = $620,000 non-tax deductible MVP 50 Plus Sample Case

28 MVP 50 Plus Sales Flyer Available at

29 Retail Agent’s Default Compensation Structure <25 lives 6% >26<50 lives 5% > lives 4% > lives 3% 151+ lives 2.5% 29 You may request any level of compensation. Must be requested at time of quote AND on case transmittal at time of submission

30 Contact your local GA 30 Contact your local General Agent or call Allied to find one. CA ID NE KS OK TX FL GA SC TN MO IL IA IN OH Boise Sacramento Omaha Kansas City Davenport Chicago St. Louis Indianapolis Columbus Oklahoma City Dallas Austin Nashville Columbia Atlanta Tampa Wichita

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Our Sales Team Contact Us or fax data to “Sales” Fax: Our Team Dan Meylan: National Sales Director; Bill Ringhofer: Regional Sales Manager; Randy Wehner: Sales Manager; Jill Carroll: Account Executive;

Questions? Allied Sales Support twitter.com/alliednational Fax: Allied National, Inc W. 107 th St. #100 Overland Park, KS