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The Benny ™ Prepaid Benefits Card Features & Benefits

The Benny ™ Prepaid Benefits Card Features & Benefits. 1. Today's Objective. Introduce the Evolution Benefits Card Program features and value proposition. Prove that EB’s Card program is the right choice for your employees. 2006 Gold Innovation Prize. 2. The Card Boosts Enrollment.

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The Benny ™ Prepaid Benefits Card Features & Benefits

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  1. The Benny™ Prepaid Benefits Card Features & Benefits 1

  2. Today's Objective • Introduce the Evolution Benefits Card Program features and value proposition. • Prove that EB’s Card program is the right choice for your employees. 2006 Gold Innovation Prize 2

  3. The Card Boosts Enrollment Evolution Benefits Renewal Clients 2007 Plan Year Enrollment Results +53% Increase with the Card +27% Increase with the Card +17% +35% +64% Increase with the Card +30% +9% +22% Cumulative Increases +96% +110% +113% Card Program Features & Benefits

  4. Card Program Features & Benefits How the Card works for the employer • Stored value card technology automates employee benefits reimbursements at point of service • Systematic 213 Adjudication Routines based on 17 Merchant Category Codes (MCCs) (e.g. pharmacies, clinics, dentists) • Compliant with IRS Revenue Rulings • Multiple account “stacking” capability to manage up to 35 simultaneous programs with one Card (e.g. FSA, HRA, HSA)

  5. Card Program Features & Benefits How the Card works for the cardholder • Simplicity…the Card is presented to the merchant and with one swipe, the reimbursable expense is automatically deducted at point of sale • Improved Cash Flow…helps the participant avoid the problem of “pay twice and wait” • Reduced Paperwork…uses a variety of auto-substantiation methods to electronically verify the transaction per IRS guidance • Convenience…participant account status and information is available 24/7 online • Compliance…Save all receipts using receipt envelope

  6. Card Substantiation Technologies Maximum Choices to Drive the Minimum Amount of Paper for the Cardholder 6

  7. Why Auto Substantiation Is Important Auto substantiation is the ability to electronically verify the eligibility of card swipe transactions • Required by IRS for FSA • The single biggest success factor for any program using cards for FSA • Higher auto-substantiation rate = higher participant satisfaction • Fewer “pay and chase” follow ups • Fewer phone calls from participants 7

  8. Auto Substantiation – How EB Does It Doctor/ Hospital/ Dental/ VisionTransactions Pharmacy Transactions 53-60% of all trans-actions 40-47% of all trans-actions 53-60% of all transactions In participating pharmacies, supermarkets, and discount stores • Inventory Information Approval Systems (100%) • Retrospective Third-Party Data Matching (60-80%) • Copayment Matching (40-65%) • Recurring Expense Logic (1-4%) • IIAS (for Vision products at 1-800 CONTACTS and VisionDirect.com ) (100%) • In freestanding and non-participating pharmacies until 12/31/08 • Patented Real-Time Data Matching at POS (100%) • Copayment Matching (40-65%) • Recurring Expense Logic (1-4%) The above represent the substantiation methods available for each of the major categories of transactions. Percentages in parentheses represent how many transactions can be electronically substantiated using that method.

  9. Auto Substantiation – How EB Does It Merchants Using Inventory Information Approval Systems (IIAS) – Participating merchants’ systems automatically recognize and separate FSA-eligible from non-eligible purchases using inventory information approval systems. Eligible purchases can be placed on the Card, and the consumer is asked for an alternative payment method for ineligible items. Method endorsed by IRS Notice 2006-69. 100% Match Rate

  10. Impact of IIAS • IIAS is mandated for supermarkets and discount stores effective 1/1/08; for pharmacies 1/1/09 • Will raise auto-substantiation rates, leading to greater adoption of cards • Will not be the “cure all” • Medical and dental card transactions will not be impacted by IIAS

  11. Participating Pharmacies, Discount Stores & Supermarkets The following stores* have been certified by SIGIS and have “Industry Standard” IIAS: You may also use your Card at Walgreens and drugstore.com, which have implemented similar systems. * List as of 1/14/08. More stores added constantly. Please see www.SIG-IS.org for most up-to-date list.

  12. Auto Substantiation – How EB Does It Retrospective Third-Party Data Matching – Card transactions are compared to adjudicated pharmacy and health plans and vision and dental providers. If they match, the card swipe transaction is considered 100% substantiated and requires no further action. Method endorsed by IRS Notice 2006-69. 60-80% Match Rate 12

  13. Auto Substantiation – How EB Does It Copayment Matching –Employee copayment information is collected from employer and matched retrospectively against Card transactions for both pharmacy and non-pharmacy expenses. EB’s system automatically calculates multiple and combination copayments (up to 5) consistent with IRS Notice 2006-69. No receipt submission is required. (The IRS prohibits employee self-certification of copayments.) 40-65% Match Rate 13

  14. Auto Substantiation – How EB Does It Automated Recurring Expense Logic – After a transaction has been substantiated once, transactions for the same amount in the same setting do not require another review. EB substantiates these transactions electronically. Method endorsed by IRS Revenue Ruling 2003-43. 1-4% Match Rate 14

  15. Auto Substantiation Measurement • Auto-substantiation rate– number of card swipes electronically verified, divided by the total number of card transactions • Around 8 out of 10 transactions don’t need receipt follow-up! • Auto-substantiation rate expected to rise even further with IIAS

  16. When Card Transactions Can’t Be Verified Automatically • IRS requires substantiation of 100% of transactions • Some Card transactions may not be automatically substantiated using EB auto-substantiation methods • What is the process to achieve 100% IRS compliance? • Cardholder will receive a letter/e-mail from NCAS asking to furnish an itemized receipt(s) or other proof that the card was used for eligible expense(s). • Cardholder sends receipt within requested timeframe and NCAS will review and manually substantiate. • If cardholder does not send in requested information after multiple requests, transaction is considered ineligible. Card is suspended and overpayment notification is sent to cardholder. • Card may be reinstated when receipts are produced or payment is received for overpayment. 16

  17. Customer Support 17

  18. Customer Support Fast, Integrated Implementation • Cardintegrates with existing benefits • Evolution Benefits uses employer's standard eligibility from NCAS • Employer’s role • Communicate to employees: promotion and education • Support substantiation – provide list of carrier plan copays, and identify employees by plan • Engage finance/treasury for banking and funding

  19. Bancorp Bancorp CardBanking/Funding/Settlement 1.Card transactions initiated at the point of service are processed by Master Card on the same day. 2.On the next day, Master Card is reimbursed from the Bank’s Settlement Account. 6. Daily settlements are reported to the client via weekly e-mail, by Evolution Benefits. 3. Based on EB’s Daily Balance Summary Report, the Bank executes an internal transfer of the prior day’s Card settlements from the collateral account to the settlement account. 4. The collateral account is prefunded with a nominal percentage of the aggregate annual election amount. Debits to this account must be replenished so funds are available to settle ongoing transactions. 5. NCAS or Employer Account replenishes collateral account weekly, via sponsor bank-initiated ACH (automated clearing house) or by client-initiated ACH credit or wire.

  20. Communications Touchpoint Continuum

  21. Enrollment Support Materials Card Enrollment Support A full complement of standard materials available for pre- and post-enrollment communication • Letters • Posters • Brochure • Postcard • Newsletters • Flash Commercial

  22. Cardholder Materials Cardholder Education Materials Comprehensive educational communications designed to drive the best participant experience.

  23. The Evolution Benefits Difference Why Evolution Benefits is the best choice for your company • Product innovation and market leadership • Multi-account “stacking” capability on a single card • Comprehensive communications strategy to increase enrollment

  24. A GREAT COMBINATION!

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