imple, stable, secure, Level control, Funding predictability, flexib

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1 ontrol, predictability, flexibility, transpare ngagement, tax advantages, ERISA, utilizat ward, economical, simple, stable, secure, con redictability, flexibility, transparency, engagement dvantages, ERISA, utilization, reward, econom imple, stable, secure, control, predictability, flexib ansparency, engagement, tax advantages, ER tilization, reward, economical, simple, sta ecure, control, predictability, flexibility, transpare ngagement, tax advantages, ERISA, utilizat ward, economical, simple, stable, secure, con redictability, flexibility, transparency, engagement dvantages, ERISA, utilization, reward, econom imple, stable, secure, Level control, Funding predictability, flexib ansparency, engagement, A new and improved tax advantages, way to address ER issues of cost, access and quality to tilization, reward, economical, simple, sta improve the health and lives of our ecure, control, predictability, members flexibility, transpare ngagement, tax advantages, ERISA, utilizat ward, economical, simple, stable, secure, con redictability, flexibility, transparency, engagement dvantages, ERISA, utilization, reward, econom imple, stable, secure, control, predictability, flexib

2 Healthy, productive employees are every company s most valuable asset. But the rising cost of health care makes providing health benefits challenging.

3 Self funding is one of the many ways Priority Health has been helping employers control their health care costs for nearly 30 years. In fact, we do self funding better than anyone. Our integrated plans save employers, on average, 4.3% on medical claims. 1 Our award-winning case and disease management programs keep your employees healthy and productive at work by helping to identify a member s likelihood of needing services before an episode of care occurs. Innovative tools including Healthcare Blue Book and HealthInSite provide transparency into health care spending so employers and their employees can see the financial impact of care decisions. National experts project that pricing transparency has the potential to reduce overall medical spending by 3.5% and save employers $365 billion annually. 2 We provide clear, concise data so employers can see the ROI of their health care investment. Fully-informed consumers are more likely to choose more conservative and potentially less costly care than their doctors would if acting alone on their behalf. 3 All administrative services are included in the administrative fee. In other words, no hidden fees. 3

4 Our administration fees include more services than other carriers in the market. COBRA administration HIPAA certificates Network administration with 100% pass-through of discounts Assist America (global emergency medical services for members and their dependents)* Plan documents / summary plan description (SPD) / summary of benefit coverage (SBC) Fully transparent reporting available in print, electronic and data share formats, including utilization analysis reporting Disease and case management services Utilization review Employer and member mailings Open enrollment materials and on-going support ID cards including a mobile ID card app Online administration tools and services employer and employee Employer web portal Welcome calls to new members Physician incentive programs Exceptional customer service (walk-in, call-in and ) Anti-fraud investigations Health care reform advisory services Illustrative rates for employee contributions No start-up fees Nationwide, electronic claim processing 4 priorityhealth.com

5 For some employers, traditional self funding carries too much financial risk and unpredictability. Level Funding offers all of the benefits of traditional self funding with the added feature of stable monthly costs so groups can reap the financial rewards of being self-insured. Level Funding is ideal for employers with 25 or more healthy employees who have cultivated a culture of wellness and engagement. Due to benefit changes mandated by the Affordable Care Act (ACA), employers with young, healthy employees may experience large rate increases beginning in 2014 to offset the cost of older, less-healthy groups. Level Funding is an affordable option for employers looking to maintain employer-sponsored benefits. More reasons to self fund In addition to the potential cost savings groups can experience by self insuring, self-funded plans are not subject to state premium taxes, and are exempt from many of the provisions of health care reform. 5

6 6 What is Level Funding and how does it work?

7 Level Funding is a type of self-funding that is unique in the marketplace. With traditional self funding, employers fund claims as they are billed. While this can provide cash flow advantages for employers in times when their claims experience is good, traditional self funding also has the potential to create financial instability for groups who experience higher-than-projected claims. With Level Funding, employers fund a fixed amount of money each month based on their enrollment, giving the employer more financial stability. Priority Health uses the money as needed to pay claims. At the end of the year, if claims paid by Priority Health are less than the funds paid by the employer, Priority Health will send a check to the employer for the overage. If claims paid by Priority Health exceed the monthly amount funded by the employer, Priority Health will pay the claims as incurred and the employer will reimburse the advanced funds at the end of the year. We provide monthly claims utilization reports so employers have a financial picture of their health care costs throughout the year. priorityhealth.com 7

8 Level funding is an affordable option for employers looking to maintain employersponsored benefits. Level Funding with Priority Health is simple, stable, secure Employers fund the same per-member amount every month based on enrollment. Payments do not fluctuate monthly due to claims experience. Employers fund only their own claims and the costs of administering them, rather than the average community rate of similarly-sized groups (who might have less-healthy employees). Monthly claim funding level is set at 105% of expected claims. If claims are less than anticipated, the balance is returned to the employer at the end of the contract year. Per-individual (specific) and group-level (aggregate) stop-loss insurance is available to limit the employer s overall financial exposure. Level Funding is a long-term strategy. That s why we offer a two year fixed-cost pricing strategy. In year two, the Level Funding monthly amount will be adjusted to reflect the projected claims amount for the next contract year. Monthly claims utilization reports and year-end reporting show employers their key cost drivers and keep them informed of claims funding balances. A terminal liability provision limits the group s exposure at termination to six months. The group is charged two months stop-loss premium, two months administrative fees and would fund two months of claims at their current level. Final settlement occurs after six months. Additional underwriting requirements may apply to employers with enrolled employees. Level Funding is available with PPO, EPO and POS plans and can be combined with FSA, HSA and HRA spending accounts. 8 priorityhealth.com

9 All insurance companies are not created equal 9

10 Most insurance companies only pay claims. We help our members manage their health by ensuring they receive the right care, at the right time, in the right place. We are part of an integrated health system that is willing to be held clinically and financially accountable for the outcomes and health status of the populations we serve. We keep your employees healthy and productive at work. Our nationallyrecognized, award-winning case and disease management programs identify a member s likelihood of needing services before an episode of care occurs, which improves health outcomes and lowers your costs related to absenteeism, as well as medical and disability expenditures. Chronic disease alone costs employers up to $93 billion per year in health insurance claims. CDC, Workplace Health Promotion We re setting the standard (and raising the bar). Priority Health received excellent accreditation from NCQA in all products. Plans with a higher NCQA accreditation status provide better care and service than plans with lower accreditation statuses. 10

11 Learn more Contact your independent agent or Priority Health sales representative to see how Level Funding can maximize the value of your health care investment. Footnotes 1 HealthPartners Pharmacy Integration Study, Kelly, B. & Fabius, R. A Path to Eliminating $3.6 Trillion in Wasteful HealthCare Spending. Truven Health Analytics, James, S. How Much Will Surgery Cost? Good Luck Finding Out. NBC News, Feb. 11, 2013 *Excludes Medicare and Medicaid members 11

12 2013 Priority Health PH /13