1. Allied™ Funding Advantage MEC Value Plan Webinar November 20, 2014 11402s1114 Edt.11.19.14

2. 2 Allied National Home Office - Overland Park, Ks. 2 nd generation family-owned business Founded 1970 Proprietary systems Company Culture Innovation Stability Service

3. Allied National has Solutions… 3 New

4. 4 Pay or Play Solutions are a financial discussion first! $ Plan Design Networks Compliance Participation

5. KEY Pay or Play Employer Questions: 1.What is your penalty exposure? 2.What is your current plan offering? 3.How much are you contributing? 4.What is the current total cost? 5.What is your ultimate objective? 6.How much are you willing to spend (per employee & in total)? 7. How do you want to classify your employees? 8. Which Allied National products fit?

6. Comments to brokers: 1.These are complex transactions with many possible solutions. 2.These transactions will take time to complete correctly. 3.Make sure you are dealing with the owner of company. 4.Make sure you know exactly what motivates the owner. 5.Most of these owners are facing the reality of the ACA for the first time. 6.Be prepared for denial, frustration and anger from the owners. 7.Be sure you understand our participation rules. 8.If you close these cases you will be very well paid.

7. Allied National “MEC Value Plan”- Features 7 Guaranteed issue – No medical underwriting Single plan design – no plan design variance Meets “Minimum Essential Coverage” Removes “A” penalty only Limited Indemnity Hospital and Surgery Benefit Self-funded chassis – 12/21 plan Standard Agent Compensation (5%) MediPay or Indemnity Reimbursement Employee subject to balance billing

8. 8 Maximum out-of-pocket – $2,500 per family member Preventive Care Office visit – $25 copay every visit Outpatient Lab – $50 copay every visit Professional charges, diagnostic – $50 copay per bill Complex Imaging – MRI, CT, PET scans $300 copay per bill Emergency Room – life threatening only, $250 per visit Outpatient Prescriptions – Generic only, $15 copay In Hospital – $500/day, $1,000/day ICU, max 30 days Surgery – Outpatient $750/3 max, Inpatient $1500/2 max Allied National “MEC Value Plan” Benefits

9. 9 Brand &Tier IV specialty drugs (discounts available) Mental & behavioral health Rehabilitative therapy Skilled nursing Infertility testing Durable medical equipment Charges in excess of allowed amounts (balance bills) Allied National “MEC Value Plan” Exclusions

10. Allied National “MEC Value Plan” Underwriting 10 Guaranteed Issue Current census Final rate within 2-4 days Aggregate only stop loss Standard self-funded proposal Costs Employee $140 - $260 Participation – 75% of eligible* Minimum group size – 10* * (more details on participation to follow)

11. 1.$50 per employee per month 2.Avoids the “sledge hammer” penalty ($2,000/FTE) 3.Does not avoid the “tack hammer” penalty ($3,000/FTE) 4.Preventive services only 5.Satisfies individual mandate penalty 6.Need a current census to offer proposal 7.Guaranteed issue 8.MediPay reimbursement 9.Self-funded chassis 12/21 plan Allied Pay or Play Solutions “PMEC” or Skinny Plans 11

12. MEC Value Plan & PMEC Jumbo Cases 12 1500 lives or less No direct HRIS interface available Bulk enrollments via spreadsheet Employer responsible for compliance documentation PMEC – Employer pays 100% MEC Value Plan – Employer contribution drives participation Program is list billed – no self reporting No online additions and deletions Monthly changes via excel spreadsheet No “skip billing” permitted ID Cards to employer not direct to employee

13. MEC Value Plan & PMEC Enrollment Process 13 Will offer proposals based on spreadsheet census. Spreadsheet census must include: Name, Gender, DOB All employees and covered dependents Executed non-medical enrollment forms required to issue English and Spanish enrollment forms available

14. Alternative to PPO reimbursement strategy Medicare based reimbursement 125% to 200% Facilities 125% Physicians Savings over PPO plans 10% to 40% Employee WILL be responsible for balance bills Advocacy benefit provided Allied National – “MediPay” Reference-Based Pricing 14

15. Allied National – Pay or Play Options 15 Funding Advantage – Traditional Network (Underwritten) EE Rate $250 - $500 Funding Advantage – Provider Freedom (Underwritten) EE Rate $250 - $500 Funding Advantage – MediPay (Underwritten) EE Rate $180 - $350 MEC Value Plan – MediPay (Guaranteed Issue) EE Rate $140 - $260 PMEC – MediPay (Guaranteed Issue) EE Rate $50

16. Pay or Play Participation Requirements Summary: All participation % are after valid waivers Employer establishes classes by title, occupation, wage or contribution Employer determines product offering by class Employer determines contribution* by class Required PMEC employer contribution is 100% of costs Single Product Per Class Major Med – 75% Min. 2 MEC Value Plan – 75% Min. 10 PMEC – 75% Min. 25 Multiple Products Per Class Major Med + MEC Value Plan Major Med Min. 60%; MEC Value Plan balance to at least 75% MEC Value Plan & PMEC MEC Value Plan Min 40%; PMEC balance to at least 75% Experience suggests that the employer should contribute at least 75% of the employee-only cost to achieve desired participation.

17. 17 Recommended* Contribution Strategy (to meet participation) Major Med – All products Employer should contribute 75% of EE rate MEC Value Plan Employee costs should not exceed $15 per paycheck PMEC Employer required to contribute 100% of EE costs * Based on Allied National’s experience, our recommendation does not guarantee participation will be achieved.

18. 18 Participation Requirements – Combinations Major Med + MEC Value Plan Single Class 75% of all eligible after waivers Minimum of 60% of the group after waivers must be in MM Sample Single Class – 200-life case 20 Valid Waivers 27 MEC Value Plan 15% 108 Major Med 60%

19. 19 Participation Requirements – Combinations Major Med + MEC Value Plan Dual Class Class I-75% of all eligible after waivers in Major Med Class II - Minimum 75% after waivers in MEC Value Plan Sample Dual Class – 200-life case Class 1 Major Med – 60 employees 15 Valid Waivers 34 Major Med 75% Class I I- MEC Value Plan - 140 90 MEC Value Plan 75% 20 Valid Waivers

20. 20 Participation Requirements – Combinations Major Med + PMEC Dual Class Class I -75% of all eligible after waivers in Majore Med Class II - Minimum 75% of eligible after waivers in PMEC Sample Dual Class – 200-life case Class 1 Major Med – FA - 50 15 Valid Waivers 26 Major Med 75% Class 2 - PMEC - 150 90 PMEC 75% 30 Valid Waivers

21. 21 Participation Requirements – Combinations Class I(Major Med + MEC Value Plan) and Class II (PMEC) Dual Option and Dual Class Class I -60% of all eligible after valid waivers with Major Med 15% of remaining eligible with MEC Value Plan Class II - Minimum 75% of Class 2 in PMEC Sample Dual Class – 200-life case Class 1 Major Med + MEC Value Plan - 50 15 Valid Waivers 21 Major Med (60%) Class 2 - PMEC - 150 90 PMEC 75% 30 Valid Waivers 5 MEC Value Plan (15%)

22. 22 Participation Requirements – Combinations Class I(Major Med) +Class II (MECVP +PMEC) Dual Option and Dual Class Class I -75% of all eligible after valid waivers with MM Class II – Minimum 40% in MECVP Balance in PMEC up to 75% total Sample Dual Class – 200-life case Class 1 Major Med 50 15 Valid Waivers 26 Major Med (75%) Class 2 – MECVP + PMEC - 150 45 PMEC (32%) 10 Valid Waivers 60 MECVP (43%)

23. 23 Participation Requirements – Combinations Major Med + MEC Value Plan +PMEC Triple Class Class I -75% of all eligible after valid waivers for Funding Advantage Class II - Minimum 75% of Class 2 in MEC Value Plan Class III – Minimum 75% in PMEC Sample Triple Class – 200-life case Class 1 Major Med –40 10 Valid Waivers 23 Major Med (75%) Class 2 – MEC Value Plan- 60 45 MEC Value Plan 75% 0 Valid Waivers Class 3 – PMEC - 100 75 PMEC (75%)

24. 24 Sample Case EMPLOYER PROFILE: Franchise Restaurant – 12 locations 321 FT Employees 110 PT Employees 395 FT Equivalents (Penalty Calculation) Class I - 11 Home Office Staff, 5 Operations Managers, 30 Supervisors, 4 Officers Class II - 271 FT Workers (no current plan) 2015 Penalty Exposure $630,000 (pre-tax) $819,000 (after tax) Current Major Medical Plan - 41 FT Employees only Employer Contribution - $350/mo Employer Annual Costs - $172,700 Employee Costs - $61,500 Dependents - $76,700 Total Plan Costs - $310,900

25. 25 Sample Case ALLIED NATIONAL SOLUTION OFFERED: Class I Home Office Staff, Operations Managers, Officers, Supervisors Offered Major Medical to 50 FT Employees Employer contributes $350/month Major Medical – Funding Advantage - Provider Freedom 75% participation required Class II Workers – Offered to 271 FT workers MEC Value Plan – Employer Contributes $125/month PMEC Plan – Employer Pays 100% 75% participation required

26. 26 Sample Case OUTCOME: Class I 50 Offered Major Medical - 4 valid waivers, 39 enrolled (85% participation) Employers Cost $163,800 Employee Cost $ 46,800 Dependents $ 100,800 Class I Total Cost $ 311,400 Class II 271Offered MEC Value Plan - 121 accepted (45%), 85 in PMEC (31%) Employer Cost $ 181,500 Employee Cost$ 65,340 MEC Value Plan Total Cost $ 246,840 Employer Cost$ 51,000 Class II Total Cost$ 609,240 Total Employer Cost$ 396,300

27. 27 Sample Case OUTCOME: Total Cost$ 609,240 Employers Cost$ 396,300 Net Increase in Employer Cost$ 212,940 After Tax Penalty Exposure$ 819,000 Savings ($ 606.060) Producers Comp $ 32,982 Class I Major Med – FA - 50 4 Valid Waivers Major Med 39 Enrolled (85%) Class II – MEC Value Plan + PMEC - 245 85 PMEC 35% 121 MEC Value Plan 49%

28. Pay or Play Participation Requirements Summary: All participation % are after valid waivers Employer establishes classes by title, occupation, wage or contribution Employer determines product offering by class Employer determines contribution* by class Required PMEC employer contribution is 100% of costs Single Product Per Class Major Med – 75% Min. 2 MEC Value Plan – 75% Min. 10 PMEC – 75% Min. 25 Multiple Products Per Class Major Med + MEC Value Plan Major Med Min 60%; MEC Value Plan balance to at least 75% MEC Value Plan & PMEC MEC Value Plan Min. 40%; PMEC balance to at least 75% Experience suggests that an employer should contribute at least 75% of the employee-only cost to achieve desired participation.

29. Sample MEC Value Plan Proposal and Enrollment Forms

30. Allied Sales Team Email or fax data to “Sales” sales@alliednational.com 888-767-7133 Fax: 913-945-4390 Our Team Dan Meylan: National Sales Director; 913-945-4253 Bill Ringhofer:Regional Sales Manager; 913-945-4266 Randy Wehner: Sales Manager; 913-945-4267 Matthew Bryon: Account Executive; 913-945-4255 Cheryl Knight: Account executive; 913-945-4261 30

31. Thank you! Allied Sales Support 888-767-7133 www.alliednational.com sales@alliednational.com twitter.com/alliednational Fax: 913-945-4396 Allied National, Inc. 4551 W. 107 th St. #100 Overland Park, KS 66207 31