" Slashing Health Care Costs Without Cutting Benefits"

1. "Slashing Health Care Costs Without Cutting Benefits" Presentation by: Chuck Biehn, CEO American Cutting Edge, Inc. & CB Manufacturing & Sales, Inc.

2. Who We Are We are a group of manufacturing and distributing companies whose main focus is cutting instruments for the B2B markets: CB Mfg & Sales Company, Inc.– Manufactures and distributes machine knives American Cutting Edge, Inc.– Distributes industrial razor blades Better Tools LLC– Distributes branded tools for the flooring, roofing and hardware markets Certified Tool & Grinding Corp.– Manufactures and distributes round cutting tools Certified Industrial Services– Heat Treating, Surface Grinding and Wire EDM Evolution Resources LLC– Sources products overseas for USA companies

3. Where we were in 2005: • 120 Employees and spending about • $600,000 per year on Health • Care Benefits Today in 2007: • 120 Employees and spending about $400,000 per year on Health Care Benefits For the last two (2) years we have saved about $200,000 NET on Health Care Costs Per Year, without reducing benefits!

4. The Blueprint! Design the Section 105 Employee Benefits Plan EXACTLY how you want • Hire brokerage company familiar with Section 105 to finalize your plan • Hire Third Party Administrator who can manage your plan the same as a carrier would • If healthcare cost or regulatory environment changes, you simply modify the Plan Document

5. MERP – Medical Expense Reimbursement Plan From the associates point of view, the benefit plan is typical: • $250 Deductible • Office Visit Co-Pay of $20 (Urgent Care $35 and ER $100) • Associate pays weekly contribution • Associate pays 20% of covered medical procedures Savings Note: 70% of our associates do NOT reach the $250 deductible!

6. MERP Payment Structure *After high-deductible has been paid by Associate and Company, Insurance Pays 100% including co-pays, prescriptions, etc.

7. The Mechanics of the Plan • Associates carry two insurance cards • INS – INSuranceCompany (UHC Insurance ) • TPA/DRUG - Third Party Administrator (Claimlinx) & DRUGS (PBM Plus) • Associates tell their medical providers that INS is Primary Coverage and TPA is Secondary Coverage • Medical Provider sends bill to INS – INS processes and applies charges to high-Deductible Plan • INS sends associate EOB – Explanation Of Benefits - forms by mail or online

8. The Mechanics of the Plan, Continued • Associate forwards information to TPA by mail, fax or email. (Most medical providers will also forward the EOB to the TPA as part of the billing process) • TPA processes claim, pays company-covered portion of medical bill, and sends EOB to to associate showing final associate balance for procedure. Q: Why send to INS if they are not going to pay? A: Before INS applies charge to company-paid deductible, they mark the price down to their negotiated network discount rate. Company and Associate realize that savings

9. Problems with the Plan • Culture Shock -- People Resist Change! • More work for Associates • Complicated – Can Create Confusion • Several associates have been upset that claims did not seem to be paid by the Insurance Company. In almost every case, it was associate processing error that caused non-payment or payment delay • Communications, Education and Associate Training are KEY! Education Can Be EASY: Your TPA is the expert Coordinate with them for Onsite Associate Training

10. Can My Company Use the Plan? • YES! Legal in all states • Ideal for smaller companies who are less likely to have associate training and culture-change issues Four out of five companies will save money on this plan • Exceptions: • The benefits you provide are sparse and not costly • The company is only paying 50% or less of the insurance cost for the employee and little or nothing for the dependent

11. Why Have I Not Heard Of This Plan Before? Or, when something doesn’t make sense… Follow The Money… Your Lower Premiums Mean: • less money for Government (Department of Insurance) • less money for Insurance Companies -- They can’t pre-bill you for associate premiums • Reduced revenue and bonuses for Insurance Brokers • Reduced commissions for Insurance Agents

12. If you would like additional information, for your organization, please contact Terry Weaver at CEBI

13. "Slashing Health Care Costs Without Cutting Benefits" Questions?Please Remember:I am not insurance expert, so please bear with me on some details and with some questions! Presentation by: Chuck Biehn, CEO American Cutting Edge, Inc. & CB Manufacturing & Sales, Inc.

14. "Slashing Health Care Costs Without Cutting Benefits" Presentation by: Chuck Biehn, CEO American Cutting Edge, Inc. & CB Manufacturing & Sales, Inc.