1. Annual Meeting February 12 th 2015 Issues Facing Small Employers

2. Employer Attitudes Toward Health Insurance  Most companies with less than 50 employees will continue to offer health insurance.  68% strongly agree they will continue coverage, 28% most likely will offer coverage, 4% will stop all together.  Employer health insurance related concerns  77% how to control escalating cost  10% helping employees make best choices  8% avoiding ACA penalties * Source: NFIB Research Foundation

3. Employers Source of ACA Information  42% General News  15% Health Insurer  12% Trade Association  10% Business/Advisor/Broker  8% Healthcare Provider  5% Other  4% Government  4% No useful information

4. Employers Offering Coverage  84% of employers offer health insurance  14% of those not offering insurance provide some type of reimbursement for insurance  13% plan to cut hours of part-time next year, however only half of these cuts are associated with ACA

5. Employer Plan offerings & cost*  Average premium for single employees is $503 and $1,403 for family  Average employer contributions are $86 per month single, and $459 for family  Copays for office visits average $23 for PCP and $35 for specialist  Average prescription copays are $11 for 1 st tier, $31 2 nd tier, and $53 for 3 rd tier.  Average deductibles are now $1032 for single coverage, with the deductible increasing to $1,797 for employers less than 200. *Kaiser Family Foundation 2014

6. Employer Actions taken to contain cost  Took lower profit 66%  Became more efficient 48%  Delayed postpone business investment 40%  Wage freeze or reduction 37%  Raised prices 30%  Increase employee cost 30%  Reduced hours 17%  Took health tax credit 17%  Reduced non-health employee benefits 12%

7. Where do Employers go from here Current ER Sponsored Group Plans High employer engagement Less employee choice Group based model Single or limited multi-carrier models Employer subsidies with Defined Benefit approach Private Exchanges 3 rd party or insurer host Insured or self insured Employer subsidizes through Defined Contribution Employer determined plan offering but less involved Public Exchanges Governmental subsidies included Various attributes/types which differ by state model Employer has no control Insured individual products Low High

8. Advantages of Private Exchanges  Employer still maintains programs which helps attract and retain employees  Defined contribution model provides employees with fixed pre-tax dollar amount so that they choose how much to spend  Employer decides the defined contribution amount  Reduces Administration, eliminates paperwork  Allows Employer to set budget and control annual cost increases  Distances employer from plan design selection

9. Advantages (cont)  Promote employee choice, engagement, and consumerism.  Employees select plan designs that are customized to individual needs  Consumers are going to trade off benefits and consider  Higher deductibles  Less network flexibility  Create cost sharing  Ancillary products

10. Disadvantage Of Private exchanges  Does nothing to contain costs, future costs shift to employee

11. What does a Private Exchange look like?

12. Employee Log In Main Page

13. Employee Open Enrollment – Employee Information

14. Employee Open Enrollment – Medical Selection

15. Employee Open Enrollment – Decision Support

17. Employee Open Enrollment – Enrollment Summary

18. Overview of Public Exchanges  IRS/DOL/HHS prohibits employer arrangements that reimburse employees for individual insurance.  Must be integrated with group health coverage to comply with ACA  Rules apply to pre and post tax arrangements  Guidance does not prohibit increasing raises or salary  Increase can not be conditioned on obtaining individual coverage  Public Exchange, Employer no longer provides insurances  Compliance and administrative costs eliminated

24. John Smith

26. Employer Concerns ACA  Determining if they are an applicable large employer  Aggregation  Waiting Periods  6055/6056 reporting  Under 50 carrier responsibility  Over 50 employer must file 1094c/1095c General Compliance  Summary plan documents  Premium only plan documents  Medicare Part D Notice  Marketplace Notice