Assurant Health Group Markets

Thomas Coffey, District Manager

Assurant® Self-Funded Health Plans is a program of services developed by Assurant Health for self-funding small group employers. Stop-loss insurance for these self-funded plans is underwritten and issued by Time Insurance Company and John Alden Life Insurance Company.

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• Assurant Health and its commitment to you

• Equip you to capitalize on an opportunity to help your clients and grow your block of business

– Health Care Reform Brief

– Fully Insured Product Update

– New Self Funded Small Group Product Introduction

Today’s focus:

Assurant Health

Small group market

Big market, great opportunities• Nearly 20 million Americans work in groups with

10-49 employees*• 60% of the U.S. population (approximately 187

million people) have employment-based health insurance**

• Over 70% of businesses with 10-49 workers offer health benefits to their employees**

*U.S. Census Bureau, Survey of Small Business Owners (2011)**Kaiser Family Foundation Employer Health Benefits 2011 Annual

Survey

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Patient Protection and Affordable Care Act (PPACA)

• Signed into law on March 23, 2010, with the goal of decreasing the number of uninsured Americans

• Some tenets of the law have already been enacted with the remainder going into effect on the first plan year on or after January 1, 2014

• Policies issued before March 23, 2010, are considered grandfathered and are exempt from most of the provisions

• Currently rules that implement the provisions of PPACA are still being drafted and released. We are still awaiting final rules of many PPACA requirements

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PPACA benefit changes – already implemented• Unlimited lifetime maximum

• Dependents covered up to age 26– Regardless of school enrollment

• Women’s health coverage

• Preventive services

• Medical loss ratio (MLR)– Insurers must spend at least 80% of premium on claims

and improving health care quality, and if not they have to return the difference to the employers in the form of a rebate

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PPACA benefit changes coming in 2014• Individual mandate

– All individuals must have minimum essential coverage in order to avoid being subject to a tax penalty (some exceptions)

• Guarantee issue• Deductibles

– Small group fully insured deductibles are capped (individual/family) • The deductible caps may be reasonably increased in order to meet the metal levels’

actuarial level

• Elimination of pre-existing condition coverage restrictions• Maximum waiting period for employees

– 90 days• Elimination of rating for:

– Health status, gender, size loads & industry• Essential health benefits• Metallic levels

– Bronze, Silver, Gold, Platinum

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Employer reactions in 2014

Three potential employer reactions

• Continue to provide group fully insured coverage– On public Exchange

– On private Exchange

– Off Exchange

• Move to self funded

• Drop employer sponsored coverage

Fully Insured Update

• 4/1 Effective Date and Later– No Plan Change and No Rate Change until December 2014

• Start Moving Groups– Assurant is a High Deductible/HSA Rate Leader

– HB2015 Underwriting

– Management Carve Outs/1099s

– What Happens 1/1/2014• I. New benefits (pediatric dental/vision, mental parity, etc.)

• II. Rate Compression

• III. Minimum Deductible

• IV. Trend

Very good reasons to lock in the rates or go self funded!

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Plan year—how it works

• Assurant Health’s small group fully insured plan year begins the policy effective day in December.

• This means that the policy's effective day of the month is the date in December 2014 that health care reform benefits and associated rates will be applied to the plan.

• For example, if your client's plan effective date is April 15, 2013, the plan year will begin on December 15 and the original benefits and rates will apply until December 14, 2014. The plan will receive full health care reform benefits and any applicable rate changes on the first day of the client’s new plan year—December 15, 2014.

Many key components of health care reform (including covering essential health benefits and moving to new rating parameters) apply to policies beginning their first plan year on or after January 1, 2014.

Great for clients—great for you

• Sales efforts will be worth it all year—with greater client retention.

• Clients have certainty of knowing benefits, and what they pay for them, won’t change until end of next year.

• Puts the choice in the employers’ hands—if they want to offer coverage that includes the new health care reform benefits earlier, they can get a new plan with effective dates beginning January 1, 2014; the choice is theirs.

Other Fully Insured Differentiators

• 1099 Groups

• Carve Outs *

• PatientCare

• Underwriting– Gateway

– Certainty Credits

– Tolerance

• HDHP Leader– HRA!!!!!

– HSA

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Fully Insured Hot Markets

• Dallas, TX

• Houston, TX

• Columbus, OH

• Cincinnati, OH

• Alaska

• Wyoming

• Montana

• North Dakota

• Milwaukee, WI

• Michigan

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Assurant® Self-Funded Health Plans ProgramA health care financing

solution

We offer a complete package

All the products and services needed to make self funding work:

• Tools to build a self-funded health benefit plan

• Stop loss insurance• Plan administration

– All the details are taken care of – Employer is free to focus on his or her business

Available in the following States:

• Today: AZ, CO, CT, GA, IL, MA, MD, ME, MO, NE, NJ, OH, TX, WA, WI

• For 8/1 Release: SC, LA, VA, TN, (ID, AK, MS, AL)

• For 1/1/14 Release: NV, IN, FL, KS, WY, MI

• Several more slated for release within 2014!!

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Self-Funded - ideal for• Small businesses with 15

to 49 employees who are:– Tired of paying high premiums

for benefits they seldom use– Looking for a way to get

something back for what they pay into their health plan

– Sick of seeing the same spreadsheet from most brokers

– Ready to take control over health care costs now and for years to come

Up-front savings• Most groups pay less for a

self-funded plan because self-funded plans:‐ are medically underwritten‐ follow federal

ERISA guidelines

• And year after year employers have ‐ greater control over health

care costs‐ potential cash back each year

Pre-determined costs• The maximum self-funding cost for the year is

determined up front — and it’s guaranteed, subject to enrollment and benefit changes• Even if a group’s claims become larger than

projected, the employer’s financial risk does not increase

• Employers pay a flat monthly bill — typically less than what they’d pay for a comparable traditional plan

The monthly payment includes:• Contribution to the group’s claims fund

–Covers the group’s expected claims for the year

• Premium for stop loss insurance– Insurance protection for the employer

covers larger-than-expected claims• Plan Administration

– Covers services such as customer service, case management, paying claims, accounting, agent compensation, and others.

Benefit plan design options

• Plan options– PPO, HRA and HSA

• Deductible options– $500 to $10,000

• Benefit/coinsurance percentage options– 100%, 90%, 80%, 70% and 50%

• Coinsurance out-of-pocket maximums– $0 to $10,000

• Multiple office visit and Rx copay options

Available benefits vary by state

Other benefit highlights

• Preventive and women's health care recommended by the Affordable Care Act (health care reform) is paid at 100% for services by network providers

• Urgent care visits– $50 urgent care copay for plans with

an office visit copay

• No referrals necessary to see a specialist

Stop loss insurance• Specific stop loss benefit

– Protects when the claims for a single group member exceed a pre-selected limit - the specific deductible

– Limit options are $10,000, $15,000, $20,000 and $25,000

– If the specific deductible is reached, we cover the all remaining covered claims for the group member for the year

• Aggregate stop loss benefit– Protects when the total claims for the group exceed a

pre-determined limit - the aggregate deductible– Aggregate deductible is based on expected claims– If the aggregate deductible is reached, the stop loss

insurance covers the remaining covered claims for the group for the plan year

Stop loss insurance protects the employers’ assets• AGGREGATE STOP LOSS BENEFIT

If the group’s overall claims exceed the aggregate deductible, Assurant Health stop loss insurance covers those claims, protecting the business’ assets.

• SPECIFIC STOP LOSS BENEFITIf an individual group member’sclaims exceed a preselected level called the specific deductible, Assurant Health stop loss insurance covers that member’s claims.

Claims payment

• Initial claims are paid from the employer’s claims fund for the group, funded by portions of the monthly premium payments

• If claims exceed the aggregate deductible, the stop loss insurance reimburses the employer for the additional claims for the rest of the plan year

• If claims fall below expected – or the aggregate deductible - the unused funds are returned to the employer

Cash advances

• Occur when claims submitted total more than the amount currently in the claims fund

• Interest free • “Paid back” automatically by subsequent

contributions to the claims fund• Helps alleviate concerns about cash flow

Potential for cash back

• If a group’s actual claims expenses for the year are less than the aggregate deductible - the money set aside in the claims fund - the employer gets money back

• More than 60% of Assurant Health groups receive a refund at the end of their plan year

SOURCE: Assurant Health customer experience, 2012

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* Assurant Health is not engaged in rendering tax advise. Please see a qualified tax professional for tax advice.

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Lessen the impact on employees with the tax-advantage services

Health Saving Accounts (HSAs) or Health Reimbursement Accounts (HRAs)*

•With an HSA:

• Contributions are tax deductible or can be made with pretax dollars

• Both the employer and employee can contribute

•With an HRA:

• Employers can reimburse for qualified medical expenses

• Reimbursements are tax deductible

Unique features of a self-funded plan• 1099 employees are eligible• Full time can be 20 to 40 hours per

week• Can cover employees at multiple

locations• Four tier rates• Number of children impacts rates

Plan administration

• Customer service• Claims processing• COBRA and HIPAA

administration and compliance• Easy access to reporting for you, the

employer and plan members

Our third-party administrator (TPA) handles all the details

• More than 30 years of experience in benefit management and administration

• Managed over 2 billion dollars of health care expenses on behalf of clients

• Comprehensive Web-based plan management:

– Answers about benefits, plan costs and billing

– Quick claims processing and payments

– ID cards, summary plan descriptions, summary of benefits and coverage (SBC’s)

– Make plan changes

– COBRA and HIPAA administration

– HRA administration

– Refund of unused claim funds

Allied Benefit Systems, Inc. (Allied)

A national health care solutions company dedicated to taking care of your clients and their employees

• Allied Member Service Team888.292.0272

Mon.–Thur. 7:30 a.m. to 7:00 p.m.

Fri. 8:00 a.m. to 5:00 p.m.

Sat. 9:00 a.m. to 12:00 p.m.

• Employer/Employee Websiteassurantselffunded.com

• Agent Websiteassuranthealthsales.com

Dedicated customer careAllied Benefit Systems, Inc. (Allied)

• Signed Proposal - Indicates selected plan design and rates• Census Form - Verifies employee eligibility and participation

• Employer and Employee Application/Waiver

• Administrative Services Agreement - Agreement between employer and Allied, authorizing Allied to handle administration duties and claims for employer

• Risk Management Services Agreement - Agreement between employer and Assurant Health, which provides access to PPO Networks, Pharmacy Benefit Manager, claims negotiation, eligibility validation, risk funding and case management services

• Quarterly Wage and Tax Statement • Prior Carrier Bill - Verifies prior group coverage,

pre-existing credit and eligibility for deductible credit

Paperwork and applications

Underwriting and reissue process

• Medically underwritten(not guaranteed issue)

• Retention Specialists available to assist with plan options

• Rates are based on future risk

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• Part of Assurant, Inc., a Fortune 500 company– More than $27 billion in assets and $8 billion in

annual revenue

• Rated A- (Excellent) by A.M. Best Company*• 120 years of experience**• Health insurance solutions for small

businesses and individuals nationwide

*Source A.M. Best Ratings and Analysis of Time Insurance and John Alden Life Insurance Company (December 2012)**Assurant Health is the brand name for products underwritten and issued by Time Insurance Company (est. 1892) and John Alden Life Insurance Company (est. 1961)

Experience matters

Assurant Health

Did you know...When you write Assurant Health through Stephens-Matthews, you are not only eligible for Bonuses offered by Assurant Health, but you also get...

•Top Contracts•Available Lead Programs•Exciting Incentive trips•And more!

For more information about how you can become a part of our team, contact Dave Russell at

1-800-544-8250 ext. 221Or visit us online at

http://www.stephens-matthews.com/group.html

Thank youFor more information about Assurant Health, contact

Stephens-Matthews Marketing

1-800-544-8250www.stephens-matthews.com

For agent use only. Not for distribution to consumers. Assurant Self-Funded Health Plans is a program of services developed by Assurant Health for self-funding small group employers. Stop loss insurance for these self-funded plans is underwritten and issued by Time Insurance Company and John Alden Life Insurance Company.J-71968 (Rev. 2/2013) © 2013 Assurant, Inc. All rights reserved.

This presentation provides summary information. Please refer to the summary plan description or ask your agent for a complete listing of employee health benefits, exclusions and terms of coverage. Please refer to the stop-loss policy or ask your agent for a complete listing of employer stop-loss benefits, exclusions and terms of coverage. In the event that there are discrepancies with the information in this brochure, the terms and conditions of the coverage documents will govern.