Affordable Group Health Plan Solution for Cost Savings

1. Cost Saver An Affordable Group Health Plan Solution 11984s1118

2. Cost Saver Topics • Affordability • Our goals • Target market • Benefit outline • PPO networks • Non-medical underwriting • Sample rates • Q&A

3. What is “Affordable” Health Care? How do we achieve “Affordable” Health Care?

4. Projected Family Cost by 2022 = $33,319 $33,319 (2022)

5. Health Care Cost Drivers Business Practices–Marginal business practices of government, insurance companies, providers and medical vendors and suppliers Drug Costs –Mercenary pricing Transparency–Lack of transparency with actual costs and appropriate profit margins Litigation–Threat of litigation drives costs through redundant “defensive” medical practices and malpractice insurance costs Wellness–Unhealthy lifestyles choices Media Distortions–Promoting an entitlement mentality… “Free” is not “Free” Consumer Education–Lack of informed medical consumers Technology–State-of-the-art medical technology prolongs life Aging Population–Baby boomer generation experiencing deteriorating health Government–Cost of Compliance ACA, EHR and additional taxes Politics–Marketplace volatility driven by political uncertainty Catastrophic Claims–Unlimited lifetime benefits driving cost increases

6. Increase in $1,000,000+ Claims 2012 - 2016 ? Source: Allied National Claims Data Base 2017

7. Increase in $5,000,000+ Claims 2012 - 2016 Source: Allied National Claims Data Base 2017

8. Group Health Plans: The Real Competitor? • Affordability!!! • At what point does the employer say “No more plan?” • At what point does the employee say: “Take me off the plan?” • At what point will the brokerrun out of affordable solutions for employers implementing group health solutions.

9. Allied National Operational Profile • Underwriting • Claims Administration • Policy Service • Actuarial • Compliance • Product Development • Case Management • Sales & Marketing • Legal

10. Allied National Risk Partners Combined Equity = $40.9B Aetna = $15.8B Cigna = $13.7B

11. New Allied Cost Saver - Goals • To offer an affordable, group health plan for employers priced out of the traditional major medical market • Meet ACA MEC requirements • Provide REAL benefits • Be affordable • Be easy to sell and install

12. Why Cost Saver – Who is the Target Market? • ACA mandates and regs have bent the cost curve up • Small employers (<50) can’t afford ACA plans • Large employers (>50) need a MEC solution that offers real benefits

13. Cost Saver Satisfies the Employer Mandate Penalties for Minimum Essential Coverage • Employer Shared Responsibility Payment (ESRP) created by the ACA • Applies to “Applicable Large Employers” (ALE) • An ALE is an employer with 50 or more FTEs • Employers who did NOT comply with the Employer Mandate starting in 2015 may be subject to Employer Mandate Penalty for each year they did not comply • Employer Mandate will be the law for the foreseeable future

14. ACA Employer Mandate Penalties • “A” Penalty Amounts – Minimum Essential Coverage • Penalty is payable on total FTEs minus 30 multiplied by the applicable annual penalty • For calendar year 2018, the adjusted $2,000 amount is $2,320 • “B” Penalty Amounts – Affordable Minimum Value Coverage • The penalty is payable for each employee who goes to the exchange and receives a subsidy • For calendar year 2018, the adjusted $3,000 amount is $3,480

15. Our Target • Employers who are unable to afford a full major medical plan. • Employers with 2 or more full-time employees. • No cap on number of lives. Large employers need this plan too! • Carve outs or dual option plans available in conjunction with major medical plans.

16. Cost Saver – Plan Design • Small group level-funded health plan – part of Funding Advantage • Unlimited outpatient care • Fixed indemnity payments for surgery and hospitalization • Generic drug card • Teladoc benefit – no charge for use

17. Deductible and Coinsurance

18. Outpatient

19. Indemnity

20. PPO Networks • This is a PPO network plan • Can select from First Health or PHCS • Networks are indemnity plan networks contracted to accept this type of plan • Provides PPO discounts, even on indemnity reimbursed benefits

21. Our Underwriting No medical underwriting! • Rates based on gender, age and group demographics • 9 or fewer – age banded rates • 10 or more – composite rates • Standard Funding Advantage participation • When doing as part of a dual class strategy – talk to us to help design a plan that is easy and works for your client

22. Rate Samples Sample rate comparison here…Funding Advantage rates vs. Cost Saver (sample) (sample)

23. Compensation Default Compensation Since this is a level-funded program – agents can request any reasonable compensation needed (higher or lower) Agent 10%

24. Marketing & Sales • Product available immediately for new business • Allied quoting now • WINAllied quoting software available online • Marketing material available online • Recorded webinars available online

25. Allied Products Orange: Allied Products Blue: Adverse Stop-Loss Regulations

26. www.alliednational.com

27. Questions And AnswersCall Your Local General Agent or Allied Sales Support at 888-767-7133