1. HealthFlex Exchange Considerations for 2017

2. 2 Strategic Considerations Affordable Care Act — Avoid Cadillac tax while continuing to offer minimum value of coverage Migration toward “consumer” plans — Individual accountability and behavior change — Cost sustainability for plan sponsors/ less rich plan value over time (avoid Cadillac tax) Greater participant empowerment and choice Availability of qualified high-deductible health plans (HDHPs) with health savings account (HSA)

3. 3 Why Offer HealthFlex Exchange Fix annual conference/church health care contribution via defined contribution (DC) Maintain control over annual cost increases absorbed by conference Offer choice to participants to select their own “best fit” Align with industry trends (both public and private exchanges) Set a course for maintaining group health coverage for the “near to mid-term” while shifting some costs to participants and preparing for Cadillac Tax

4. 4 HealthFlex Exchange Offering Introduction of defined contribution (DC) — Appearing as a “credit” toward plan purchase DC is the minimum amount plan sponsor is billed for an individual Plan premium exceeding “credit” must be deducted from individual’s pay — At salary-paying unit Leftover “credit” (prorated monthly) deposited into HRA* or HSA* account * HRA: Health reimbursement account HSA: Health savings account

5. 5 HealthFlex Exchange Timeline January – February Receive Feedback from Local Churches and Pastors February – March Board meeting to Determine: Defined Contribution (DC). Split between Apportionment & Direct Billing to Church Default Plan April – May Pre-conference introductory meetings, if desired JuneFinal Design presented at Annual Conference SeptemberParticipant workshops NovemberAnnual Election period

6. 6 Premium Funding 100% of premium for plans selected will be billed to plan sponsor (conference) Conference bills local church for DC + any participant contribution DC can be blended or passed through directly to local church Conference bills local church for DC + any participant contribution DC can be blended or passed through directly to local church

7. 7 Defined contribution (prorated monthly) appears as a credit toward plan purchase Represents church/employer commitment Defined contribution (prorated monthly) appears as a credit toward plan purchase Represents church/employer commitment Plan costs transparent to participant Participant Experience More costly plan selected: Participant commits to paycheck deductionsParticipant commits to paycheck deductions More costly plan selected: Participant commits to paycheck deductionsParticipant commits to paycheck deductions Less costly plan selected: Participant receives HRA or HSA funding with unused DC from plan sponsor (prorated monthly amount )Participant receives HRA or HSA funding with unused DC from plan sponsor (prorated monthly amount ) Less costly plan selected: Participant receives HRA or HSA funding with unused DC from plan sponsor (prorated monthly amount )Participant receives HRA or HSA funding with unused DC from plan sponsor (prorated monthly amount )

8. 8 Frequently Asked Questions Q.Will HealthFlex Exchange save the conference/employer money? Maybe—will depend on the DC amount selected. Q.Will HealthFlex Exchange save participants money? Maybe for some, but depends upon the level of the Direct Contribution and on participant’s plan election

9. 9 Frequently Asked Questions Q.How are health reimbursement account (HRA) and health savings account (HSA) different? Many differences—future communications will explain. Key HSA features: HSA is portable and allows participant contributions. HSA is paired with HDHP plan—has a high pharmacy deductible.

10. 10 Frequently Asked Questions Q.Are HealthFlex Exchange participants eligible for subsidies/premium tax credits (PTCs)? No—not as long as the lowest-cost option is “affordable.” Q.How does continuation/COBRA coverage work? Same as today (perhaps no DC, but that is conference choice).

11. 11 Major Design Considerations  What will be the Direct Contribution (DC)?  How will the cost of the Direct Contribution be funded?  Direct Bill?  Apportionment?  Blended?  Will there be a policy decision on whether the local church can fund “out of salary” contributions over and above the Direct Contribution?  What will be the “Default Plan”?

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