Understanding Allied National's Level-Funded Small Group Health Plans

1. An Introduction to Allied National Level-Funded Small Group Health Plans 11419s0117

2. Topics for today: • Who is Allied National? • What is “Level Funding?” • Why Level-Funded Plans Now? • Funding Advantage – The Product • Network Options • Pay or Play Solutions • Allied National Website • Sales Contacts

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

4. Allied National Risk Partners AM Best A or better

5. What is Level Funding?

6. Stop Loss Insurance Employer’s risk is contained

7. Our Culture and Business Model “Underwriting Trumps Sales” Since our core product offering is small group self-funded plans, our ability to continue to offer these products over the long-term is driven by the underwriting profitability of our overall pool of business. We follow a very disciplined approach to underwriting every risk, both as a new business and at renewal. Good risks receive favorable rates, poor risks are declined; the best risks will have an opportunity to participate in the underwriting profits on their account.

8. Why Level Funding Now? “Employee Only” Rate Illustration Repeal of ACA?? $700 Fully Insured $600 2015-2016 Rate Shocks “Employee Only” Rate Level-Funded Costs $500 Level-Funded Costs After refunds $400 $300 2014 2015 2016 2017 2018 2019 Year This sample chart illustration is provided for educational purposes only. Actual results may vary and are not indicative of future performance. Allied National, Inc. l 4551 W. 107th St. Suite 100 l Overland Park, KS 66207 l 888-767-7133 l sales@alliednational.com l www.alliednational.com l twitter.com/alliednational

9. 2016 Milliman Study of Health Care Costs Projected Family Cost by 2020 = $31,267

10. What is the difference between self funding and level funding?

11. Why Level Funding

12. ERISA and Level-Funded Plans

13. What is Funding Advantage? • Alternative Funded Small Group Medical Plan • Level Funding “on training wheels” • 2 or more lives – ACA compliant • Level funding made “SIMPLE” • Prepackaged plan docs and specific and aggregate stop-loss • Level-funded plan • Terminal liability coverage included • Medically underwritten • Full accommodation

14. A Level-Funded Solution

15. A Level-Funded Solution (No Refund)

16. Funding Advantage Features

17. Sample Monthly ReportSelf Funding Client Accounting Report

18. The value proposition of Allied National small group level-funded health plans: ERISA and ACA compliantLower costs over timeFlexible benefit structuresDetailed claims dataBroad network choicesRefunds for favorable claims experience 100% refunds – no admin back charges

19. Ineligible Risks Sales • Municipalities, public institutions and religious organizations = ERISA exempt • Law firms • No husband-wife groups (not ERISA qualified) • No owner-only groups (not ERISA qualified) Prospect

20. Allied™ Funding Advantage Life Cycle “Vocabulary” “Street Rate” Based on initial census and benefit plan design. • No underwriting load • Rate will increase based on underwriting conditions • NOT A FINAL RATE!

21. Allied™ Funding Advantage Life Cycle “Vocabulary” “Submission” Account submitted for a full underwriting review Required underwriting documents: • Accurately completed Allied enrollment forms • Paper or Online Enrollment Forms acceptable • Allied employer statement • All applicable waivers executed • Current wage and tax statement • All Cobra-eligible must complete enrollment • Allied account transmittal form • Current or renewal rates • Current Allied proposal showing benefits proposed

22. Allied™ Funding Advantage Electronic Enrollment Options • Allied National Call Jill Carroll at 800-825-7531 • sales@alliednational.com • Form Fire www.formfire.com • EasyAppswww.easyappsonline.com • Ehealthwww.easyappsonline.com • EaseCentralwww.easecentral.com

23. Underwriting Reviews Our Underwriting team will contact the employer to get permission to talk to selected employees to determine the status of current medical conditions.

24. Sample Underwriting Data Sheet

25. Allied™ Funding Advantage Life Cycle “Vocabulary” “Offer of Firm Rate” Proposed rate after all medical underwritingis completed. This may or may not be the final rate. Final rate could be affected by employer requested plan design or census changes made after underwriting is complete.

26. Allied™ Funding Advantage Life Cycle “Vocabulary” “Accepted Final Rate” This is the rate at which the contract will be issued. May differ from “Offered Final Rate” because of changes made after “Offered Final Rate” was issued. Including: • Demographic group make up • Disclosed medical conditions • Final plan design This IS the final rate!

27. Allied™ Funding Advantage Specific Attachment Levels

28. Funding Advantage Rating Methods Group 2-9 Groups 10-100 Group 100+ • Age-Banded Rates • Medical Underwriting • Composite Rates • Medical Underwriting • Composite Rates • Experience Rating

29. Retail Agent’s Default Compensation Structure <25 lives 6% >26<50 lives 5% >51-100 lives 4% >100-151 lives 3% 151+ lives 2.5% Agent’s comp is not impacted by GA involvement

30. Allied National Network Options Traditional PPO PHCS, Cigna, Healthlink and more Narrow Networks by region – Oklahoma - Texas Open Network Freedom Plan Direct Primary Care compatible plans

31. “Freedom Plan” Rate Comparisons

32. Will the “Freedom Plan” be accepted? By 2020, 23% of the U.S. population will be receiving medical services at a “Medicare-based” reimbursement rate.

33. Allied NationalRenewal Retention 2016 Service Renewal Cases Retained – 83% Billings Retained – 86% Average rate increase on retained cases 14.4%

34. Claims • Claims are processed internally,not outsourced • 10-day turn-around time • Financial accuracy greater than 99.5%

35. Allied Pay or Play Solutions “PMEC” or Skinny Plans $48 per employee per month Avoids the “sledge hammer” penalty ($2,000/FTE) Does not avoid the “tack hammer” penalty ($3,000/FTE) Preventive services only Satisfies individual mandate penalty Need census count ONLY to offer a proposal Guaranteed issue Employer pays 100% MediPay reimbursement Self-funded chassis 12/21 plan Requires 75% participation after valid waivers

36. Service Access Service Online sites accessed via www.alliednational.com • Employer Self-Service Site • Member Self-Service Site • Agent Self-Service Site

37. Short Term Medical PLUS • What are you offering your clients now that the marketplaces have closed? Coverage available for up to 12 months (364 days)!http://tempmedsales.alliednational.com/

38. www.alliednational.com

39. Thank you! Allied Sales Support Phone: 888-767-7133 Fax: 913-945-4390 www.alliednational.com • sales@alliednational.comtwitter.com/alliednational

40. Allied National Sales Team Contact Us by: Phone: 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 • Jill Carroll: Account Executive; 913-945-4255 • Josh Campfield: Account Executive; 913-945-4261