1. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 ConnectiCare HSA Solution Presentation The health of your business is at the heart of everything we do

2. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HDHP/HSA Program Overview Health insurance costs are rising HDHP/HSA programs may be part of the solution by: –Offering potentially lower health premiums –Encouraging healthier lifestyles –Promoting health consumerism 2

3. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Answers to Your Questions What is an HDHP/HSA program? Why are HDHP/HSA programs important? How does an HDHP/HSA program work? How does an HSA work? What are the employee benefits? What are the employer benefits? 3

4. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 What is an HDHP/HSA program? 4

5. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. A New Kind of Healthcare Program HDHP/HSA programs were created as part of the Medicare Modernization Act of 2003 Part of the Consumer-Directed Healthcare (CDH) trend CDH programs share some of the cost and responsibility for healthcare expenses with the employee 5

6. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 Why are HDHP/HSA programs important? 6

7. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Health Premiums Keep Rising 7 Average Annual Health Insurance Premiums 2008 to 2012 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2012. Chart compiled by Finity Communications.

8. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HDHPs Can Lower Costs 8 HDHP vs. Non-HDHP Health Insurance Premiums Estimated average annual premium of $4,713 for HDHP individual coverage and $13,446 for HDHP family coverage vs. $5,777 for non-HDHP individual coverage and $16,128 for non-HDHP family coverage. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2012. Chart compiled by Finity Communications.

9. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 How does an HDHP/HSA work? 9

10. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Two Components Working Together High Deductible Health Plan (HDHP) –Health plan offered by a health insurance company or an employer Health Savings Account (HSA) –An individual custodial account 10

11. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. High Deductible Health Plan An HDHP is a health plan designed with a higher deductible than many traditional health plans Employees pay for most medical expenses before the deductible is reached In exchange for higher deductibles, HDHPs often have lower premiums Any premium savings can be put into an HSA to pay for healthcare expenses Money in an HSA rolls over each year 11

12. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HDHP Deductible Requirements 12 Single deductible that applies to all covered medical expenses Minimum annual deductible: Maximum annual out-of-pocket: Coverage Type20132014 Self-Only$1,250 Family$2,500 Coverage Type20132014 Self-Only$6,250$6,350 Family$12,500$12,700

13. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 How does the HSA work? 13

14. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Health Savings Account Provided by an HSA custodian Owned by employees Not part of a qualified benefit plan (i.e., ERISA does not generally apply) 14

15. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Health Savings Account Tax-advantaged account Used to pay for medical expenses before HDHP benefits apply Employees may be able to use HSA money for expenses not covered under a traditional plan Employees should check their HDHP to see what counts toward the deductible 15

16. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HSA Contribution Limits 16 Maximum contribution limits are: Limits subject to cost-of-living adjustments Employees age 55 and older can make catch-up contributions 20132014 Individual$3,250$3,300 Family$6,450$6,550

17. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Employer HSA Contributions Matching contributions motivate employees to save in their HSAs Employees with no savings risk being financially vulnerable Contributions show our commitment to the HDHP/HSA program 17

18. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Employer Contribution Requirements Contributions can vary each year Contributions don’t have to be equal, but they must be “comparable” Larger contributions can be made for lower- compensated employees Combined contributions must not exceed contribution limits Vesting requirements are simple 18

19. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Our HSA Custodian A leading financial institution Interest paid on deposit account balances Deposit accounts are FDIC-insured Provides all recordkeeping Provides all administration 19

20. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HSA Services for Employees HSA welcome kit HSA debit card Access to online tools and education Monthly HSA statements 24/7 account access online or by telephone 20

21. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 What are the benefits of an HDHP/HSA for employees? 21

22. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HDHP/HSAs Offer Choice, Flexibility and Control Potentially lower health insurance premiums Tax-advantaged savings in HSAs Funded with direct deposits, payroll deduction, or an IRA rollover Promote increased health consumerism Reward healthier lifestyles 22

23. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HSAs Pay for Medical Expenses Before HDHP Benefits Apply Employees control their HSAs No “use it or lose it” provisions Funds roll over year after year HSAs are portable 23

24. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. HSAs Provide Significant Tax Advantages Tax-deductible Earnings accumulate without tax Funds used for qualified medical expenses are tax-free State taxes may vary Employers not responsible for monitoring HSA spending 24

25. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 What are the benefits to employers? 25

26. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. More Sustainable Healthcare Rising health insurance costs may create an unsustainable healthcare system HDHPs share some of the responsibility with the employee HSAs may motivate health consumerism Sustainability may be achievable by motivating employees to become part of the solution 26

27. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Healthy Lifestyles and Awareness Healthy lifestyles can be rewarded with tangible financial benefits Conscious health consumerism May help health experience ratings HSAs may help empower employees 27

28. Copyright © 2013 Finity, Inc. All Rights Reserved. Copyright © 2013 Finity, Inc. All Rights Reserved. Higher Corporate Profitability Higher deductibles may lower health insurance premiums Less spent on health insurance means higher company profitability Higher profitability means a more secure future for employees 28

29. Copyright © 2013 Finity, Inc. All Rights Reserved. 20130503 HDHP/HSA programs can help create a healthy future 29