Internal Revenue Code Section 79 Imputed Income and the Straddle Rule

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1 Internal Revenue Code Section 79 Imputed Income and the Straddle Rule InsurancePoint.com Phone: Fax: East 5600 South, Suite 240 Salt Lake City, UT 84107

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3 Table of Contents Introduction... 1 Basic Requirements of IRS Section Tax Implications for Non-Discriminatory Employer-Paid Life Insurance Coverage that Exceeds $50, Imputing Income on Group-Term Life Insurance Coverage over $50, Table I Rates... 3 Determining Cost of Coverage... 4 Imputing Income on Employee-Paid Coverage... 4 Carried Directly or Indirectly by the Employer; the Straddle Rule... 5 Avoiding Employer-Carried Policies... 6 Impact of Insurers Rate Changes... 7 Plan Design to Avoid Loss of $50,000 Exemption... 7 Calculating the Tax Consequences of Discriminatory Policies... 9 Section 79 Exceptions...10 IRC Section 61 and Dependent Group Life...10 Conclusion...11 How Insurance Point Can Help...11 Introduction This paper reviews Section 79 and the potential challenges facing employers regarding the structure of their employee benefit plans. Without a properly structured plan, employees may be responsible for paying federal taxes on imputed income, and employers may be faced with substantial additional administrative work and costs in calculating imputed income. IRS regulations require that imputed income be reported as it is incurred through the year. Therefore, it must be incorporated in payroll during the course of the year. Imputed income may not simply be included in the year-end W-2. Imputed income is also subject to regular payroll taxes including FICA. insurance on employees and voluntary life insurance on dependents. It is common knowledge that imputed income under Section 79 of the Internal Revenue Code must be calculated on employer-paid basic life insurance in excess of $50, However, employers may not know that under certain circumstances, imputed income calculations must also consider voluntary life insurance on employees. Employers also may not realize that under certain circumstances imputed income must be calculated for voluntary life insurance on dependents. For the reasons outlined previously, most employers do not wish to calculate imputed income on voluntary life insurance on employees or dependents and careful forward planning is therefore essential. Many large employers offer a group life insurance plan to employees that include basic and voluntary life 1 Internal Revenue Code, Title 26, Subtitle A, Chapter 1, Subchapter B, Part II, Section 79 Page 1

4 Basic Requirements of IRS Section 79 Section 79 of the Internal Revenue Code (IRC) governs imputed income on group term life insurance for employees. Section 61 of the Code governs the taxation of life insurance on dependents. We will first address the Section 79 employee life concerns and then the Section 61 dependent life concerns. Section 79 details the tax implications for employersponsored group term life insurance. It does not apply to employer-sponsored whole life insurance or accidental death and dismemberment coverage. The following situations involving employer-sponsored group term life insurance may have tax consequences: Employer-paid group term life benefits that exceed $50,000. Discriminatory employer-paid term life plans. Employer-sponsored voluntary life coverage. Employer-sponsored voluntary life insurance paid for with pretax dollars under a Section 125 plan. In order to qualify for the Section 79 tax exclusion, a life insurance plan must meet all of the following requirements: The plan must provide life insurance benefits that are excludable from beneficiaries income under IRC Section 101(a). (IRC Section 101(a) provides that life insurance benefits are excluded if paid because of death; this encompasses term life products, including those with viatical benefits). The plan must cover a group of employees or former employees. The plan may be set up for a limited group of employees (such as those covered by a collective-bargaining agreement), but eligibility criteria are subject to the nondiscrimination rules. Special rules apply to groups of less than 10 employees. In addition, it is possible to create a group arrangement by purchasing individual policies for employees. The coverage must be provided under a policy carried directly or indirectly by the employer. Section 79 defines group of employees as: All employees or a controlled group of employees. Employees considered to be in a covered group because of one of the following factors: Age (subject to ADEA requirements 2 ). Employment-related factors, including union membership, job duties, length of employment, compensation or participation in a company retirement, stock bonus or group insurance plan. If an employee is eligible for benefits under more than one group-term life plan, the coverages generally are aggregated for purposes of the Section 79 exclusion. This means that an individual employee generally can exclude only the cost of $50,000 in coverage regardless of the number of plans providing the coverage. The life insurance must be term coverage. Plans cannot take advantage of Section 79 to the extent that they provide permanent benefits - such as a cash surrender value - to employees. The IRS has said, however, that individual policies providing permanent benefits may qualify as group-term life insurance that is subject to Section 79. If such a policy is subject to an agreement between the insured employee and the employer under which the only benefit that the employee receives under the policy is life insurance coverage, the coverage provided to the employee may be subject to Section Internal Revenue Code, Title 26, Subtitle A, Chapter 1, Subchapter B, Part II, Section 79 Page 2

5 Tax Implications for Non- Discriminatory Employer- Paid Life Insurance Coverage that Exceeds $50,000 The Internal Revenue Service discusses circumstances under which some portion of Group Term Life Insurance premiums may be taxable. 3 Section 79 permits up to $50,000 of group term life insurance coverage paid for by an employer (carried directly or indirectly) to be considered tax-free if the plan is non-discriminatory (i.e. does not favor key employees). Every year, employers must calculate the tax consequences of offering employees more than $50,000 in employer-paid term life coverage. Employers must also test the plan to make sure it does not favor key employees. If it does, those key employees have to pay additional taxes. Employers also need to review their voluntary life coverage to determine whether any income needs to be imputed on the voluntary plan because of the voluntary rate table. Finally, organizations allowing employees to pay for life insurance with pretax dollars will likely need to impute income for that coverage as well. There are no tax consequences if the total amount of such policies does not exceed $50,000. The imputed cost of coverage in excess of $50,000 must be included in income, using the IRS Premium Table, and are subject to social security and Medicare taxes. Table I Rates The Table I rates 4 are set out in IRS regulations, and the IRS cannot revise them without issuing new regulations. The Table I rates are not revised annually. The IRS last revised the Table I rates in 1999, generally making the new rates lower than previous rates. The current Table I rates are set out in the following table: Group-Term Life Insurance Table I Rates Monthly Costs/$1,000 of Coverage Age* Rate Under 25 $ and over 2.06 *Employee s age on the last day of the calendar year. Imputing Income on Group-Term Life Insurance Coverage over $50,000 Under IRC Section 79, if a policy carried directly or indirectly by an employer provides coverage to an employee that exceeds $50,000, the employee must pay federal income tax on the cost of coverage amounts in excess of $50,000, to the extent that such cost exceeds the employee s after-tax contributions. Cost for this purpose generally is not the premium the insurer charges for the coverage, but, instead, is determined by Table I rates set by the IRS. Most states follow federal rules for taxing group-term life insurance coverage; however, each State s insurance regulations should be reviewed and confirmed Page 3

6 Determining Cost of Coverage To calculate the monthly cost of insurance amounts over $50,000, multiply the applicable Table I rate by the number of $1,000 increments of coverage in excess of $50,000. If this cost exceeds any amount paid on an after-tax basis by the employee for the coverage, the difference is included in an employee s gross income. This means that even employees who contribute the full premium charged by the insurer may have to pay tax on any amount by which the Table I cost of coverage over $50,000 exceeds the premium charged by the insurer. This result may be avoided in some cases based on the relationship among multiple policies and the premiums under those policies. Imputing Income on Employee-Paid Coverage As noted previously, if an employee s after-tax payments for life insurance are less than the full Table I cost of the employee s employer-carried coverage exceeding $50,000, the employee generally will have tax liability on the difference. Under a nondiscriminatory group-term life insurance plan that provides over $50,000 of coverage on an employee, the includable cost equals the Table I rate for coverage exceeding $50,000, reduced by any after-tax employee contributions made for the entire coverage amount. Under this formula, an employee may have tax liability on coverage for which the employee pays the full premium charged by the insurer because the applicable Table I rate may be higher than the insurer s rate. Example ABC Company provides Ms. X with group-term life insurance equal to two-times her base salary of $45,000. ABC pays the premium for the first $45,000 of coverage and Ms. X pays on an after-tax basis $.20 per $1,000 of coverage per month (the full premium charged by the insurer) for her coverage over $45,000. Ms. X is 51 years old. Total Coverage Amount ($45,000 $ 90,000 x 2) Less $50,000 Exclusion $ 50,000 Equals Coverage over $50,000 $ 40,000 Monthly Cost of Coverage over $ 9.20 $50,000 Table 1 Rate (40,000 $1,000 x $0.23) Less Employee s Monthly $ (9.00) Contribution (40,000 $1,000 x $0.20) Equals Employee s Monthly Taxable Amount $ 0.20 Page 4

7 Carried Directly or Indirectly by the Employer; the Straddle Rule Section 79 s rules apply only to coverage that is provided under a policy that is carried directly or indirectly by an employer. Those rules include the requirement to impute income at Table I rates on coverage amounts exceeding $50,000, as well as the exclusion of the value of coverage up to $50,000. Consequently, employers generally want to provide coverage up to $50,000 under an employercarried policy (to make the first $50,000 of coverage nontaxable). At the same time, they generally want to provide employee-paid coverage exceeding $50,000 under a policy that is not employer-carried (to avoid imputing income based on Table I rates). A policy is considered employer-carried (directly or indirectly) if: 1. The employer pays any cost of the life insurance, or 2. Employees pay for coverage under the policy on a pre-tax basis, or 3. The employer arranges for the premium payments and the premiums paid by at least one employee subsidizes those paid by at least one other employee (the straddle rule). This means that any policy providing any employerpaid coverage (or coverage paid on a pre-tax basis) will always be employer-carried. The employer cannot avoid imputing income on employee-paid coverage under such a policy and must arrange a separate policy to provide employee-paid coverage to avoid imputing. In addition, the employer must ensure that the policy providing the employee-paid coverage has a rate structure that does not straddle Table I. Such straddling occurs when the life insurance rates of one age group of employees are less than the Table I rates, while the insurance rates of another group of employees are equal to or greater than the Table I rates. The rates charged under that policy must be at or below corresponding Table I rates, or all such rates must be at or above corresponding Table I rates. In these cases, imputed income creates a taxable event. This generally occurs when there is a composite rate for all participants in a voluntary or supplemental life plan. As a result, some employees pay more than their actual coverage cost (a rate that would be based upon their age) and others pay less. The determination of whether the premium charges straddle the costs is based on the IRS Premium Table rates, not the actual cost. Because the employer is affecting the premium cost through its subsidizing and/or redistributing role, there is a benefit to employees. This benefit is taxable even if the employees are paying the full cost they are charged. Page 5

8 Avoiding Employer-Carried Policies If an employer provides employer-paid basic coverage up to $50,000 under a policy that is separate, as previously described, from a policy providing excess coverage for which employees pay the entire cost on an after-tax basis, the employer may avoid imputing income altogether. The employer s paying for the basic coverage means that all coverage will be considered employer-carried if it is provided under the same policy as the basic coverage. With respect to coverage under that policy up to $50,000, employees will have the Section 79 exclusion, and the employer will not be required to impute income. If a separate policy provides only coverage for which employees pay all required premiums with after-tax income then, provided that premiums under that policy do not straddle Table 1, that policy will not be employer-carried and may not be subject to Section 79 imputing requirements. A policy whose rates straddle Table I will be deemed employer-carried. An employer avoids these straddle situations by making sure that either: None of the rates charged under the excess policy are above the rates set by Table I (stated differently, each of the rates are at or below the corresponding Table I rate), or None of the rates charged under the excess policy are below the rates set by Table I (stated differently, each of the rates are at or above the corresponding Table I rate). Example ABC Company maintains two group-term life insurance policies under which it provides group-term life insurance to its employees. ABC pays the premium for coverage equal to one-times base salary, and this basic coverage is provided under a policy issued by Insurer Y (the Basic Policy). Coverage of an additional one-times base salary amount is voluntary. Employees electing this additional coverage pay the full premium charged by the insurer for it out of after-tax pay. The extra coverage is provided under a policy also issued by Insurer Y (the Excess Policy). The Basic Policy and the Excess Policy are not crosssubsidized in any way, and the premiums charged under each are properly allocated for purposes of Section 79. ABC elects to treat the two policies as separate from one another. Ms. X is 51 years old, has annual base salary of $45,000 and elects both coverages. Premiums under the Excess Policy are as shown in the following chart in contrast to Table I rates. Group-Term Life Insurance Table I Rates Monthly Costs/$1,000 of Coverage Age* Excess Policy Rates Rate Under 25 $0.06 $ and over *Employee s age on the last day of the calendar year. Result under the Basic Policy: The Basic Policy will be deemed carried by ABC for Section 79 purposes because ABC pays for coverage provided under the Basic Policy. Accordingly, assuming that coverage under the Basic Policy meets the other Section 79 requirements, coverage provided to an employee under the Basic Policy up to $50,000 of coverage is excluded from the employee s income. Ms. X has only $45,000 coverage under the Basic Policy and the value of that coverage is fully excluded from her income. (The Table I cost of coverage under the Basic Policy exceeding $50,000 would be included in the taxable income of employees receiving that coverage.) Result under the Excess Policy: ABC elected to treat the Basic Policy and the Excess Policy as separate policies, and ABC does not contribute to, or allow employee pre-tax contributions to, coverage under the Excess Policy. In addition, the rates charged to employees for coverage under the Excess Policy are at or above (in other words, they do not straddle ) the Table I rates. Therefore, the Excess Policy is not carried directly or indirectly by ABC for purposes of Section 79, and ABC does not have to determine how much, if any, imputed income Ms. X might have because of her coverage under the Excess Policy. Page 6

9 Impact of Insurers Rate Changes Even a very small rate change can cause an employee-pay-all policy to become employer-carried. An employer that wants to provide an employeepay-all policy without that policy becoming employercarried should review the rates under that policy against Table I each time the policy s rates change and each time Table I changes. Example Same facts as in the previous example except that the rate under the Excess Policy in 2011 for those under age 25 is $0.02 lower than the rate charged in Result under the Basic Policy: Same as noted in the previous example. Result under the Excess Policy: One of the Excess Policy s 2011 rates is now lower than the Table I rate, while the other rates remain above the Table I rates, causing a straddle relative to the Table I rates. Therefore, ABC is deemed to carry the Excess Policy for purposes of Section 79 during ABC must impute income to Ms. X during 2011 as described in the first example above. Calculating Group Term Life Insurance Imputed Income 1. Determine the amount of Basic Life Coverage provided by the employer 2. Add any supplemental, optional or voluntary life coverage which is paid for with pre-tax contribution 3. Subtract $50, Divide the balance by 1, Multiply the result in #4 above by the IRS Table I rate, based on age at the end of the calendar year 6. Multiply the total by the number of months covered during the year Imputed income can be offset by contributions made by employees for all or a portion of group term life insurance coverage. Plan Design to Avoid Loss of $50,000 Exemption Non-discriminatory Plan The IRS only permits the first $50,000 in term life insurance coverage to be exempt from imputed income in cases where the coverage is provided on a non-discriminatory basis. A plan is considered to be discriminatory if it provides benefits that favor highly compensated employees (HCEs). As presently defined under IRC Section 414(q)(1)(B), this would include all employees earning over $115,000 in A discriminatory plan would provide coverage that either excludes certain employee classes while covering HCEs or provides benefits for HCEs that are greater than those provided to non-hces. The regulations do allow for benefits to differ in proportion to salary (i.e. a plan providing coverage in multiples of salary to all employees) but otherwise require consistency in order to meet the non-discrimination requirements. For plans that fail the non-discrimination test, imputed income must also be applied to the first $50,000 in group term coverage for HCEs only (not for non- HCEs). Tax Implications for Discriminatory Employer-Paid Life Insurance Plans Under some circumstances, key employees may not be allowed the tax exemption for $50,000 of employerpaid life insurance. For the tax exemption to apply to key employees, an employer s term life plan must meet the Section 79 non-discrimination requirements. Section 79 does not allow plans to favor key employees in either eligibility or benefits. If the plan design favors key employees, the value of the entire amount of life insurance coverage the employer provides becomes taxable for those employees only. Separate non-discrimination tests consider eligibility and benefits. The first step in non-discrimination testing should be to identify key employees covered by the life insurance plan. One can then conduct the eligibility and benefits test to determine whether the plan favors those employees. Key Employees and Benefits Eligibility Test The benefits eligibility test is designed to determine whether the plan favors key employees when it chooses who may participate in the employer-paid group life plan. Page 7

10 A key employee is any employee who at any time during the plan year is: A more than 5% owner. An employee owning more than a 1% interest in the company and whose compensation or income from the employer exceeds $150,000 a year. An officer of the employer whose compensation exceeds $165,000 for A group life plan is considered discriminatory if it cannot pass at least one of these tests: 1. The plan benefits at least 70% of all employees. 2. At least 85% of all participants are not considered key employees. 3. The plan covers a nondiscriminatory class of employees as determined by the Internal Revenue Service. 4. If premiums are deducted pretax via a cafeteria plan, the plan must satisfy the Section 125 nondiscrimination requirements. An employer may disregard the following employees when trying to determine whether the plan meets the non-discrimination requirements: Workers employed for less than three years. Part-time or seasonal employees. Employees covered by a good faith collective bargaining agreement between the employer and union. Non-resident aliens who receive no earned income from the employer. Non-discrimination standards apply to current, disabled, former or retired employees. Employers must test life benefits for these classes separately from active employees. Many organizations offer employerpaid life insurance to all full-time employees. Key Employees and Benefit Amount Test Group life plans cannot offer key employees higher benefits. A plan will automatically pass this test if: 1. The plan provides the same amount of employer-paid life insurance to all employees; for example, a flat $20,000 life benefit to all employees; or 2. The plan determines the benefit amount on a percentage of income and uses the same percentage of earnings for all covered employees. For example, all eligible employees are covered for an amount equal to their annual earnings. However, even if a plan does not offer the same coverage amount or percentage for all employees, it still may not automatically favor key employees. If employers offer different benefits for different classes of employees, in order to pass the benefit amount test, the organization must determine whether each class can pass any of the eligibility tests described in the previous section. This is confusing but the following example should help. Example ABC Company has 500 employees and offers two classes of employer-paid group term life coverage. It offers all 400 of its hourly employees a life benefit equal to their annual earnings. At the same time, it offers 100 salaried employees a life benefit equal to double their annual earnings. No key employees are hourly, and 10 key employees are salaried. Only salaried employees must meet benefits eligibility standards because that benefit class covers all key employees. Of the 100 salaried participants, only 10 are considered key employees. Since fewer than 15% of the salaried employees are key employees, this plan design would not be considered discriminatory with the current headcounts. The benefit design passes the second eligibility test described in the previous section: at least 85% of all participants are not considered key employees. If the company adds a third class of employer-paid group term life coverage with benefits equal to triple annual earnings but offers it only to key employees, then this class would not meet the eligibility test. The plan would be considered discriminatory, and key employees would face tax consequences. 5 Page 8

11 The Internal Revenue Code lists two exceptions to the non-discrimination rules: 1. A church group life insurance plan for church employees. This exception does not apply to church supported institutions of higher learning (other than a school for religious training) or a church supported non-profit medical or hospital facility. 2. Any additional life insurance that employees pay for out-of pocket is not included in the nondiscrimination determination. If this additional life insurance coverage is available only for key employees, however, then the plan is considered discriminatory. Employers need to review their life coverage annually to make sure the plan doesn t favor key employees. Calculating the Tax Consequences of Discriminatory Policies If an employer-provided group term life plan favors key employees, calculating their imputed income is different in two ways: 1. Key employees do not get the $50,000 benefit exemption; the employer must calculate imputed income based on the full amount of their life insurance coverage. 2. Employers must use the greater of Table I rates or the actual rate the insurer charges when you calculate imputed income. Unfortunately, the IRS does not clearly define the term actual rate. In general, an employer should not use the composite rate charged for a thousand dollars of life coverage. To determine a composite rate, the insurance carrier melds age-banded rates representing employee demographics. Employers will need to ask their life insurance insurer for the actual cost (or age banded rates) for key employees. It could be argued that the actual cost can also take into account any effective discounts the carrier has applied to the composite rate. For example, if the insurer took a 15% discount off the composite rate during the quoting process, one could take that discount off the key employee age rate before determining the actual cost for imputed income purposes. Additional imputed income needs to be assessed on key employees only when the life plan is considered discriminatory. Page 9

12 Section 79 Exceptions Section 79 requirements apply only to group term life plans. Group term life plans do not include: 1. Accidental Death and Disability coverage, travel accident insurance, or accident and health coverage. 2. Any permanent life insurance coverage that includes additional paid-up options or cash surrender values. 3. Minimal fringe benefits, up to $2,000 of employer-paid dependent life insurance. These benefits are considered minimal (de minimis) and, therefore, tax-free. As can be seen, there are very few exceptions to the Section 79 rules. IRC Section 61 and Dependent Group Life IRC Section 61 discusses taxation of fringe benefits. 6 The Section 79 rules do not apply directly to dependent life insurance (insurance that is on the lives of an employee s spouse and/or dependent children). In general, an employer can provide up to $2,000 of dependent life insurance coverage without creating any additional federal income tax liability for the employee. This exclusion is separate and distinct from the Section 79 provisions and requirements. However, dependent life insurance may create additional federal income tax liability in certain circumstances, pursuant to Section 61. paid by the employee on an after-tax basis. Thus, the amount includible in income is the cost (as determined under Table I) less the amount paid for the insurance by the employee. There is an exception for cases in which the dependent coverage constitutes a de minimus fringe benefit. 7 If the face amount of employer provided group-term life insurance payable on the death of a spouse or dependent of an employee does not exceed $2,000, such insurance shall be deemed to be a de minimis fringe benefit under that Code section. 8 However, dependent term life coverage amounts exceeding $2,000 may have tax consequences. Common dependent life coverage may include $5,000 per child and either $15,000, $30,000, or $45,000 for spousal coverage, and employees all pay the same flat rate for such coverage, regardless of the number of children or age of the spouse covered. Those employees who pay more than the uniform rates in Table I will have no income. However, for those employees who pay less than the uniform rates, imputed income may ensue. Dependent life insurance coverage cannot be offered through a cafeteria plan. Many employers offer a dependent life insurance benefit as an after-tax benefit that employees can elect on the same form they use to elect cafeteria plan benefits. In these cases, however, the dependent life coverage should not be included in the formal cafeteria plan document and the materials distributed to employees should make clear that the dependent life insurance coverage is not part of the cafeteria plan. Under Section 61, an employee must include in gross income the amount by which the fair market value of the fringe benefit exceeds the sum of (i) the amount, if any, paid for the benefit by or on behalf of the recipient, and (ii) the amount, if any, specifically excluded from gross income by some other section of the Code. Special rules apply when the fringe benefit provided to the employee is group-term life insurance. In that case, applicable Treasury regulations state that the cost of the insurance determined under Table I of Section 79 is includible in the gross income of the employee, except to the extent that such cost is 6 Federal Tax Regulations under Section 61 of the Internal Revenue Code 7 Internal Revenue Code Section 132(e) 8 Notice , C.B. 447 Page 10

13 Conclusion IRC Section 79 can pose real challenges for employers offering life insurance and voluntary benefits. Unless properly structured, employers may be required to calculate imputed income on employerpaid basic life insurance in excess of $50,000 and voluntary life insurance on employees or dependents. Employers must also be careful to design benefit plans that are non-discriminatory and do not favor key employees. Because of the Straddle Rule, employers must be careful to design benefit plans that make sure no employee pays more than the Table I rate for coverage while another employee pays less than the Table I rate. The cost to the employer of calculating imputed income and making sure the benefits package remains in compliance with IRS requirements can be substantial. As a result, careful planning and design of an employee benefits package is vital. Insurance Point will be happy to assist your organization in planning for your employee benefits to ensure that you and your employees avoid the pitfalls of the straddle rule. How Insurance Point Can Help Securing competitive Life and Disability benefits for your employees is more complex and challenging than ever. Insurance Point is an expert in Life and Disability products for organizations in the healthcare industry. We only work with hospitals and healthcare organizations, saving them 10% to 20% over current in-force rates. Working with our carrier partner, we aggregate risk components through collaboration with many other member hospitals and healthcare organizations to ensure greater purchasing strength and create a larger risk pool to help keep rates low and stable. Doing business with Insurance Point ensures that your organization benefits from our expertise while enjoying low and stable premium rates for your employee Life and Disability coverage. We invite you to learn more about how Insurance Point can help your organization cope with the complexities of employee Life and Disability Insurance benefits. To learn more or to schedule a meeting about benefits for your organization, please contact Jim Hall or visit the Insurance Point website at InsurancePoint.com. James L. Hall II Jim Hall is the Executive Director of the Centre for Entrepreneurship and Innovation at the University of Oxford s Saïd Business School. Additionally Jim serves as the Executive Chairman of Insurance Point. Jim has enjoyed a long and successful career as an entrepreneur, principal investor, strategic advisor and business philanthropist. Throughout his career, he has been very active on various boards. Jim founded and led several organizations including Insurance Point, which provides insurance benefits to healthcare employees at hundreds of hospitals across the United States; Ebenefits.com, a successful webbased human resource benefits administration system; and Versa Ventures, a management consulting and investment firm. He was the former CEO of Children s Miracle Network, an organization dedicated to saving and improving the lives of children by raising threequarters of a billion dollars for children s hospitals. Jim received a Bachelor of Science degree from Westminster College, his MBA from the University of Oxford, and is currently undertaking a DPhil at the University of Oxford. He is the Chairman of the London-Westminster chapter of the Young Presidents Organization (YPO). Contact Insurance Point Jim Hall Executive Chairman Mobile: Michael D. Greco Principal and Chief Sales Officer Office: Nick Westbye Vice President Client Support & Services Office: Page 11

14 Notes Page 12

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16 InsurancePoint.com Phone: Fax: East 5600 South, Suite 240 Salt Lake City, UT July 2012, 500

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