Consumer Driven Health & Wellness Plans (CDHP’s): An Educational Overview for the Employees of

1. Consumer Driven Health & Wellness Plans (CDHP’s): An Educational Overview for the Employees of

2. The current rate of health insurance cost increases is unsustainable • Cost shifting shares the burden without solving the problem • Market forces must be introduced to break the cycle in health insurance cost increases • Providing information and incentives is the most effective way to engage employees and their families to make “real” change The challenge you are facing: 9 – 11% compounded trend is the real challenge

3. Tactics to Reduce Healthcare Costs • Absorb cost increases • Shift contribution strategy • Reduce benefits SHORT-TERM Strategies

4. Health Insurance Product Spectrum Consumer Choice and Responsibility • HMO • PCP • Referrals • In-network only • POS • PCP • Referrals • Both In/Out • PPO • Tiered/Limited Networks • No PCP • Both In/Out • Front-end Deductible • Higher premiums • HDHP/HMO • Tiered/Limited Networks • PCP • In Network Only • Non-qualified deductible • 15% Lower Premiums • Paired with HRA • CDHP/HRA/HSA • No PCP • Both In/Out • Qualified deductible • Co-insurance • 25% Lower Premiums • Paired with HRA/HSA • Builds Value/Equity Broad range of health plan selections

5. Premium Costs Employee Benefits Budget Benefits Finding the right balance is a significant challenge

6. The Consumer-Driven Health Plan Value Proposition • Designed to give employees a stronger voice in their own health care by encouraging and rewarding more well-informed decision-making and healthy behavior – Transparency • Allow employees to choose where dollars are spent, depending on their own risk tolerance and personal needs – Responsibility • Provide financial incentives to use care appropriately, become better educated and use decision-support tools wherever possible – Opportunity Engage, Educate and Empower

7. Insurance Protection Insurance Protection Insurance Protection Wellness Programs Wellness Programs Insurance Protection Healthcare Account Healthcare Account Wellness Programs Healthcare Account is for member to “use or keep” as they see fit Insurance protection provides comprehensive coverage and security Coverage starts above “deductible” to encourage prudent spending for sustainability Wellness programs provide tools and rewards to encourage healthier lifestyles, preventive care and healthy behavior 1. Insurance Protection 2. “Deductible” 3. Healthcare Account 4. Health incentives and decision-support CDHP/Wellness is a shared responsibility solution to rising costs

8. The Healthcare Account“Engine of Change”

9. Flexible Spending Account Flexible Spending Account (FSA) • Use it or lose it • Lowers taxes • Purchasing power Usually the 1st step in CDHP adoption

10. Health Reimbursement Arrangement Health Reimbursement Arrangement (HRA) • “Use it or keep it” • Credit line Often, the 2nd step in CDHP adoption

11. Health Savings Account Health Savings Account (HSA) • Use it or keep it • Bank Account

12. Health Savings Account Health Savings Account • Triple Crown Tax Effect • 2013 IRS Maximums are: • $3,250 individual • $6,450 family • $1,000 catch-up for 55+ • One-time transfer from HRA, FSA or IRA The “purest” form of CDHP

13. Health & Wellnessis an Investment

14. The Cause Behind the Cause Employeerelated expenses Unhealthybehaviors Healthrisks Chronicdisease Improving the health and wellness of your employees and their families is essential to long-term cost control

15. Most Common Healthcare Strategy:Wait for health issues, then treat.“wait for defects and then fix the defects” Reactive approach to improving health

16. New Healthcare StrategyIntegrate health into theenvironment and the culture“fix the systems that lead to the defects” Pro-active approach to improving health

17. A practical roadmap filled with best practices and proven results