1. Health Care Reform 401: A New Jersey-Oriented Review of the ACA & Its Impact on the Small Group Marketplace

2. 2013 24 Products –Collapsed 16 HMO/Adv. EPO into 11 Advantage EPO products, with simpler administration –Cut back on DA and PPO options to further reduce complexity –Issues around limited out-of-state access remained 2013 24 Products –Collapsed 16 HMO/Adv. EPO into 11 Advantage EPO products, with simpler administration –Cut back on DA and PPO options to further reduce complexity –Issues around limited out-of-state access remained 2012 37 products –Simpler line-up focused on 80% of membership –Emphasis on more products –Less complexity and service issues More logical incentives aligned to desired behavior and utilization –Lower total medical costs 2012 37 products –Simpler line-up focused on 80% of membership –Emphasis on more products –Less complexity and service issues More logical incentives aligned to desired behavior and utilization –Lower total medical costs Horizon Has Made Significant Changes to Its Small Group Portfolio In Advance of ACA 2011 278 products with enrollment –80% of members enrolled in only 37 products –Unnecessary complexity in product selection and service/support Incentives not aligned to drive cost-effective behaviors and health outcomes –Out-of-date features 2011 278 products with enrollment –80% of members enrolled in only 37 products –Unnecessary complexity in product selection and service/support Incentives not aligned to drive cost-effective behaviors and health outcomes –Out-of-date features 2

3. New Portfolio Complies with Complex ACA & NJDOBI Mandates, as well as Marketplace Needs—Yet Simplifies the Selling Story ACA Product Mandates 10 Essential Health Benefits Metallic tiers Rx, vision & medical cost share applied towards MOOP ACA Product Mandates 10 Essential Health Benefits Metallic tiers Rx, vision & medical cost share applied towards MOOP 3 Horizon Enhancements More BlueCard flexibility for better out-of-state access PCMH feature to deliver better coordinated care and health outcomes Horizon Enhancements More BlueCard flexibility for better out-of-state access PCMH feature to deliver better coordinated care and health outcomes 2014 Portfolio 10 Products* – 7 Advantage EPO, 3 Direct Access – Blue Card available/ optional on 7 products – HSA products still available – PCMH Advantage EPO available 2014 Portfolio 10 Products* – 7 Advantage EPO, 3 Direct Access – Blue Card available/ optional on 7 products – HSA products still available – PCMH Advantage EPO available

4. Advantage EPO and Direct Access Plans –PCP selection is optional –BlueCard ® options available ON/OFF SHOP HSA Plans –Direct Access or Advantage EPO available –BlueCard options available OFF SHOP –HSA Compatible All plans include: –Horizon’s broad managed-care network including high quality primary care, specialists, and hospitals –Integrated medical and pharmacy benefits –In-network benefits only for Advantage EPO products 4 Key Features of the 2014 Portfolio Offerings for Small Employers

5. New products offered on and off Exchange must meet metallic tier / actuarial value requirements Required to offer 1 Silver and 1 Gold plan on Exchange 5 ACA Requires all Products Offered to Small Group to Comply with Metallic Tiers

6. 6 Purchasing off-exchange Purchasing through SHOP Access to full Horizon product offering (10 plans) Group required to offer SAPD (employees not required to purchase SAPD) Application process remains same as today Similar systems and processes as today Access to limited product offering (only 5 plans) Groups not required to offer SAPD (employees not required to purchase SAPD) Application process handled by CMS New systems and processes, including CMS registration and recommended CMS training Small Employers Can Purchase Products Through SHOP or “Off-Exchange” SHOP Delayed Until Nov 1

7. 7 …And Five Small Group Products Offered ON Exchange 2014 Small Group Products Metallic Tier Blue Card INN Coin PCP/SPC Copay Rx Card Copay INN MOOP Advantage Direct Access 100 / 80 / 60 Gold100% / 80%$20 / $40$15/$40/$75$3,000 Advantage EPO 100% Gold100%$20 / $40$15/$40/$75$5,000 Advantage EPO 100 / 80 Gold100% / 80%$20 / $40$10/$25/$50$4,000 Advantage EPO 100 / 70 Silver100% / 70%$30 / $50$15/$40/$75$5,000 Advantage EPO (HSA) 100% Bronze100%$30 / $5050% CDHRx$6,350 Bronze Gold Silver BlueCard is included BlueCard Not Available

8. 8 Horizon BCBSNJ will Offer 10 Small Group Products OFF Exchange… 2014 Small Group Products Metallic Tier Blue Card INN Coin PCP/SPC Copay Rx Card Copay INN MOOP Advantage Direct Access 100 / 70 Platinum100%$20 / $40$10/$25/$50$3,000 Advantage Direct Access 100 / 80 / 60 Gold100% / 80%$20 / $40$15/$40/$75$3,000 Advantage EPO 100% GoldOption100%$20 /$40$15/$40/$75$5,000 Advantage EPO 100% GoldOption100%$30 / $50$15/60%/50%$5,000 Advantage EPO 100 / 80 GoldOption100% / 80%$20 / $40$10/$25/$50$4,000 Advantage EPO 100 / 70 SilverOption100% / 70%$30 / $50$15/$40/$75$5,000 Advantage EPO 100 / 50 SilverOption100% / 50%$30 / $50$15/60%/50%$6,000 Advantage EPO (PCMH) 100 / 50 Silver100% / 50% $10/30 / $50 $15/60%/50%$6,000 Advantage Direct Access (HSA) 100 / 80 / 60 Silver100% / 80%$30 / $5060% CDHRx$6,000 Advantage EPO (HSA) 100% BronzeOption100%$30 / $5050% CDHRx$6,350

9. The Essential Health Benefits provision of the ACA contains 10 mandated categories of benefits, one of which includes Pediatric Oral Services Requirements for Medical carriers offering medical off exchange under the ACA Horizon’s Medical Plan offerings will not have pediatric oral services embedded Stand Alone Pediatric Dental

10. Two products offered to satisfy pediatric dental requirements for Small Group Products mirror the State Medicaid plan as chosen by the state as the benchmark plan Horizon Young Grins –PPO –In network benefits only Horizon Young Grins Plus –DOP –In network and out of network benefits Stand Alone Pediatric Dental

11. Horizon BCBSNJ Provides the Best Network Access in New Jersey Horizon maintains its traditionally strong network position for primary care, specialists, and hospitals. New small group products offer more options for out-of- state network access with BlueCard ®. Customers with BlueCard have access top New York City and Philadelphia hospitals and providers. 11 Source: June 2013 Strenuus Network Data; competitive average is for Aetna and AmeriHealth. Number of Providers in NJ: Horizon vs. Competition

12. Clients with 51+ Employees or FTEs Must Provide Coverage with Minimum Essential Value or Face Penalties “Full-time employee” means 30 hours per week Full-time equivalent employees means hourly workers.

13. ACA Requires all Products Offered to Small Employers On and Off Exchange Include Essential Health Benefits Overview of Essential Health Benefits Requirements The ACA defines 10 broad categories of services that must be covered: –Ambulatory patient services. –Emergency services. –Hospitalization. –Maternity and newborn care. –Mental health and substance use disorder services, including behavioral health treatment. –Prescription drug. –Rehabilitative and habilitative services and devices. –Lab services. –Preventive/wellness services and chronic disease management. –Pediatric services, including oral and vision care.

14. Summary of Key Take-Aways Tax Credits Employee Notification Waiting Periods Businesses with 25 employees or fewer may be eligible for a small business healthcare tax credit. The tax credit, which is in effect today, can cover up to 35% of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50%. SHOP Exchange Small Business Health Options Plan (SHOP) is the exchange where small groups can compare and purchase health insurance plans. In NJ, SHOP will be available to groups with fewer than 50 employees in 2014 and 2015, expanding to groups with up to 100 employees beginning in 2016. Employers subject to FLSA must provide a notice by Oct 1, 2013, telling employees about: – The existence of the exchange, a description of available services, and contact information – Potential eligibility for a premium tax credits and/or cost sharing reductions – Losing employer contributions to any ESI plans if they purchase an individual market QHP Eligible employees (or dependents) are prevented from waiting more than 90 days for effective coverage under a group plan. Other eligibility conditions under plan terms are generally permissible, unless the condition is designed to avoid compliance with the 90-day waiting period limitation.

15. Summary Confusion and disruption caused by ACA presents new opportunity for brokers and sub-producers to deliver more value to clients Horizon BCBSNJ is committed to providing brokers and sub-producers with new training, sales and marketing support to help you drive your business The 2014 Small Group portfolio is the best at delivering on your clients’ needs: is simpler, easier to understand, and offers more comprehensive benefits 15

16. 16 Horizon Blue Cross Blue Shield of New Jersey is an independent licensee of the Blue Cross and Blue Shield Association. The Blue Cross® and Blue Shield® names and symbols are registered marks of the Blue Cross and Blue Shield Association. The Horizon® name, symbols and Making Healthcare Work® are registered marks of Horizon Blue Cross Blue Shield of New Jersey. © 2013 Horizon Blue Cross Blue Shield of New Jersey. Three Penn Plaza East, Newark, New Jersey 07105. Ask Horizon