1. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 11 2013 and Beyond… For Individual & Family Plans Brokers

2. 22 Preparing for Health Care Reform Transitioning Your Business Defined Contribution How Cigna is Positioned to Partner with You AGENDA Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

3. 33 Preparing for Health Care Reform Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

4. Preparing for Health Care Reform Understanding our current environment - HCR is being aggressively communicated – Facebook, Twitter, Etc… - HCR is still confusing to the general population - HCR will require everyone to reevaluate their current benefits and needs Confusion = Opportunity 4 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 Cigna Consultants - Get registered with the Federal Marketplace (Early July) - Start identifying clients needs now - Be their only source - Become a Consultant - Offer tailored solutions Customer - Increased awareness of “Marketplace” - Receiving information from many sources - Unsure of how they’ll be impacted by HCR

5. 5 Health Care Reform Individual Mandate Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

6. 6 Health Care Reform Penalties Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

7. Health Care Reform Qualified Plan Levels

8. Subsidy will be based on income as it relates to Federal Poverty Level Premium Tax Credits (Subsidy) Health Care Reform Subsidy will be based on SILVER plans Focus on Eligible or Not Eligible; not as much on the specific calculations $730.00 /month 2013

9. 9 Health Care Reform Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

10. Commissions Role of Agents, Brokers and Web-Brokers in Health Insurance Marketplaces - As defined by the Department of Health & Human Services Preparing our Workflow HIGHLIGHTS Agents will need to become ‘registered’ to sell on the exchange 1) Confirm his or her identity by answering a number of simple questions online 2) Complete a Marketplace-specific online training course 3) Agree to comply with federal and state laws, rules, standards and policies, including those related to privacy and security policies, as a condition of working with consumers in the Marketplace Commissions must be the same for like policies sold on or off the exchange Customer will only have to pay their portion of the premium; subsidy will be paid to carrier on their behalf Individual subsidies will be trued up on their tax return for that year Introduction of Issuer-based Pathway and Marketplace Pathway 10

11. Commissions Issuer-based Pathway Preparing our Workflow What is an Issuer-based Pathway? 11

12. Not Too Different From Today… 12 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna www.CignaForBrokers.com

13. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 Cigna 13 Transitioning Your Business

14. Understand options that will be available to your customers 14 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 Cigna - Every Customer is Different: No One Solution Fits All - Begin having discussions today with your clients - Gather Financial Information for their Household - Gather Employer Offering Information www.healthcare.gov

15. Transitioning Your Business 15 Option #1 - Lock-In 2013 Benefits Cigna will be revising all policies to have a 12/31/13 effective date What does this mean? - Lock-in existing plan and pricing methodology - Bypass initial open enrollment - Ensures all customers have a choice Who does this benefit? - Non-Subsidy Eligible facing premium increases - Subsidy Eligible but new premiums may still be higher - Younger Demographic in some situations Offer Tailored Solutions for your Clients and Prospects Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

16. Transitioning Your Business 16 Option #2 – Enroll in a QHP for 2014 Cigna will be offering QHP’s on and off the Marketplace What does this mean? - All plans offered are compliant with Essential Benefits - New Rating Methodology – 1:3, Geographical Area and Smoker - Guarantee Issue, No Pre-X Who does this benefit? - Uninsured or stuck due to medical conditions - Subsidy Eligible and will see reduced premiums - Currently Rated and will see reduced premiums Tailored Solutions for your Clients and Prospects Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

17. Which Solution Works Best? 17 23 Year Old Male - No Dependants – $30,000 a year - Subsidy Eligible – 260% FPL – 8% of his income is still $209 a month Choices to evaluate when quoting is available 10/1: - Lock-In 2013 Benefits – You can find a plan for less than $200 today - Enroll in QHP for 1/1 - Buy Down to Bronze for further reduced premiums If this were a Female, consider new maternity benefits If the income is higher, Lock-In is more beneficial If the income is lower, Subsidy is more significant Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

18. Which Solution Works Best? 18 55 Year Old Male - No Dependants – $60,000 a year - Not Subsidy Eligible – 522% FPL Choices to evaluate when quoting is available 10/1: - Lock-In 2013 Benefits – - Lock in lower premium for another year - Enroll in QHP for 1/1 – -May be more affordable if there was a medical rate up If this were a Female, maternity benefit should not be an issue Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

19. Which Solution Works Best? 19 50 Year Old Family of 4 (older children) - $90,000 a year - Subsidy Eligible – 382% FPL – 9.5% of his income is $712 a month Choices to evaluate when quoting is available 10/1: - Lock-In 2013 Benefits – You can find a plan for less than $700 today - Enroll in QHP for 1/1 – May want enhanced benefits - Buy Down to Bronze for further reduced premiums Consider breaking our adult children to lock-in now If the income is higher, Lock-In is more viable If the income is lower, Subsidy is more significant Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna Kaiser Family Foundation – Subsidy Calculator

20. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 20 Defined Contribution A Solution for Small Businesses

21. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 Cigna 21 Defined Contribution The Opportunity Defined Contribution What is a Section 105 and Section 125 How your Clients Benefit

22. The Opportunity Over 2 million small businesses DO NOT offer group health Cost is too high - 61% Firm is too small – 13% Turnover is too great – 6% Other – 20% Those that DO offer group health (less than 50% of small business) Annual Renewal increases Limited plan options Overall cost of group benefits to a companies bottom line The Small Group market will contract as Employer Groups under 50 lives are not subject to any penalties Current Small Group Market Conditions 22

23. What is Defined Contribution? An employer determines that rather than offer a group health plan, they will define an amount to contribute towards an employees health expenses each month giving their employees the freedom to purchase their own policy and be reimbursed tax-free Premium Reimbursement Arrangement (Defined Contribution) No Minimum Contribution Business determines its own contribution strategy No Minimum Participation Business sets its own eligibility requirements No Administrative Hassle Spend leas than 5 minutes per month Traditional Group Health Plan (Defined Benefits) Requires Minimum Contribution Employers must contribute 50-75% of premium Requires Minimum Participation 50-75% of employees must participate in the plan Requires Additional Admin Requires paperwork and annual renewals Enjoy the same tax benefits of a Group Plan without the administrative burden 23

24. What is a Section 105? Premium Reimbursement Arrangement (PRA) An IRS regulated “arrangement” between Employer and Employee for tax- free reimbursement of employees premiums PRA’s function like business expense accounts Unlike HSA’s and FSA’s, money made available through a PRA is owned by the employer until reimbursed Employer determines what expenses will be eligible for reimbursement ex. Premium Only by Class of Employees Section 105 of the Internal Revenue Service (IRS) regulations allows for reimbursement of medical expenses on a tax-free basis. There are various types of Section 105 plans including: Health Reimbursement Arrangements, Medical Expense and more… 24

25. What is a Section 125? The Section 125 Plan provides tax savings by reducing employee medical premiums from gross salary prior to calculation of federal income and Social Security taxes, as allowed under Internal Revenue Code (IRC) Section 125 Premium Only Plan (POP) Benefits are free from federal and state income tax Employee’s taxable income is reduced which increases take-home pay The Section 125 reduces employee gross income for purposes of income tax so the employer also enjoys a reduction in their payroll tax liability by eliminating matching FICA taxes of 7.65% Employees eligible for a federal subsidy will not be eligible to use the Section 125 for their portion of the premium 25

26. Overall Benefits of Defined Contribution Defined Contribution helps employers… Reduce the amount a company’s FICA tax Recruit new employees with a health benefit contribution Increase employee retention by providing pre-tax savings for increased employee compensation Defined Contribution helps employees… Save 20-40% on medical expenses by using pre-tax rather than after-tax dollars Choose the individual health insurance plan best for them Cover the cost of supplemental coverage like dental or vision insurance with pre-tax dollars Q & A 26

27. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 Cigna 27 Cigna’s Partnering with YOU

28. How Cigna is Positioned to Partner With You NEW Website to drive Customer Awareness and Education www.CignaReformHelp.com Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 28 Mid-July: Direct Mail which includes a magnet with key dates August and September: Email reminders on HCR impacts October: Customer renewal letter for 2014 Health Care Reform For You Customized Report for your Clients

29. How Cigna is Positioned to Partner With You Learn about Cigna Plans, products and processes What we offer you What we offer your clients Contacts 29 We’ve Got Your Back! Bottom Line… We Need You! Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

30. A Timeline of Events – Mark Your Calendar 30 Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2011 Cigna

31. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 31 Q & A

32. Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna 32 Thank You!!