1. Health Care Reform Implementation Update Steve Peebles Staff Vice President Account Management

2. 2 Implementation Responding to guidance Guidance issued How do we put this into place with the least disruption for customers and members? How might the rules affect customers and members? Implement and communicateSubmit comments Key terms ▪Guidance – Proposed rules, final rules, clarifications, etc., issued by HHS and other federal agencies ▪HHS – Department of Health and Human Services 2

3. 3 Summary of Benefits & Coverage Final Rule (issued on 2/9/12): ▪Compliance Date = Required for open enrollments beginning on or after September 23, 2012 ▪Format = Issuers must use template developed by NAIC ▪Delivery = Electronic is acceptable and can be used for “pre-enrollees” ▪Premium field = Requirement has been omitted ▪Coverage examples = Reduced from 3 to 2

4. 4 Summary of Benefits & Coverage – Format 75 data elements Automatically generated Systematically running process

5. 5 Merrill Solution – Creates Electronic Workflow

6. 6 Notice of material modification At least 60 days’ notice of material modifications to the plan: ▪Does not apply to renewals of coverage ▪Can be satisfied with an updated SBC if the change is reflected on the SBC ▪If self-insured, provide a notice or updated SBC at least 60 days before making off-cycle changes. Employer to-do list 6

7. 7 Women’s Preventive Guidelines New guidelines take effect for policies (non-grandfathered) with plan years beginning on or after August 1, 2012 100% covered in-network per ACA Preventive requirement There are 4 types of preventive care services (out of the total of 8) required by HHS, including new coverage: ▪Screening for Gestational Diabetes (new coverage – 3 codes) ▪HPV Testing (new coverage – 3 codes) ▪Contraceptives and Counseling females only (new medical and Rx coverage) ▪Breastfeeding Support, Supplies, Counseling (new equipment coverage)

8. 8 Spending account changes ▪Make sure your employee benefit materials reflect the new spending account rules. Health savings account (HSA) Health care flexible spending account (FSA) Health reimbursement arrangement (HRA) Prescription required for OTC reimbursement (2011) Higher penalty for nonqualified distributions (2011) Cap on contributions (2013) Employer to-do list 8

9. 9 W-2 reporting Required dates ▪Employers who issue 250 or more W-2s: 2012 tax year (forms issued January 2013) ▪Make sure your payroll department or vendor is prepared for W-2 reporting. 9 Employer to-do list

10. 10 Comparative effectiveness research plan fees To be paid by plan sponsor (for self-insured) or plan issuer (for fully insured) $2 multiplied by the average number of covered lives $1 multiplied by the average number of covered lives FeePlan/policy year ending during … Fiscal year 2013 Fiscal year 2014 Fiscal year 2015 – 2019 $2 (adjusted for inflation) multiplied by the average number of covered lives Employer to-do list ▪If self-insured, pay these fees starting with your first renewal after October 1, 2012. 10

11. 11 Employer to-do list All employers: Make sure your employee benefit materials reflect the new spending account rules, if you offer such plans (FSA, HRA, HSA) All employers with 100% preventive benefits: Coverage for additional women’s health services should be added at your first renewal on or after August 1, 2012. Self-insured groups: Provide a material modification notice or updated SBC at least 60 days before making off-cycle changes. All employers: Make sure your payroll department or vendor is prepared for W-2 reporting. Self-insured groups: Pay comparative effective research (PCORI) fees starting with your first renewal after October 1, 2012. 11 Now20122012 or 2013