What Health Care Reform Means for You – And Your Business, December 14, 2010

1. What Health Reform Means
For You And Your Business
Clint Jones, CEO Norvax : Jessica Waltman Senior VP, NAHU

2. Panelists
Clint Jones Jessica Waltman
– CEO, Co-Founder Norvax – Sr. VP of Gov. Affairs, NAHU
– I 500 C
Inc Company – 24 000 M b
24,000 Members

3. Implementing
Health Care Reform
Where We Are
National Association of Health Underwriters
N ti lA i ti f H lth U d it

4. Recap on Legislation
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• President signed Patient Protection and Affordable
Care Act (PPACA) on March 23
• Makes significant statutory changes affecting the
regulation of and p y
g payment for many types of p
y yp private
health insurance – many insurance market reforms
• Will require almost all private sector employers to
evaluate the health benefits they currently offer and
consider whether they are compliant
• For those without access to employer coverage, new
individual mandate to purchase and maintain
minimum coverage
i i

5. “September 23 Reforms
September 23”
All individual and group plans, including self-funded
and grandfathered plans
• Prohibition on lifetime limits and strict annual limit
requirements through January 1, 2014
• Strict limits on health coverage rescissions
• Coverage of dependents to Age 26
• Coverage of preexisting conditions for children under
age 19 (individual plans only—grandfather status
applies for group plans)

6. “September 23” Reforms
Non Grandfathered Plans
• Preventive care without cost sharing
– Very specific benefits
• Nondiscrimination rules under IRS Code 105(h) applies to
fully-insured plans
• Pre-Ex Restrictions (group plans)
– Plans may not impose any preexisting condition restriction on children
under the age of 19.
– After January 1, 2014, plans may not impose preexisting condition
restrictions on anyone
• For all group and individual plans, including self-insured
plans self insured
plans, emergency services covered in-network regardless of
provider

7. Recent Regulations
• Most 2010 regulations have been issued:
– Dependent to Age 26
– Retiree Reinsurance Program
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– Insurance Plan “Grandfathering”
– Annual and Lifetime Limits for “Essential Benefits”
– Small Business Tax Credit
– Preventive Services
– Medical L
M di l Loss Ratios
R ti

8. Medical Loss Ratio Requirement
• 85% Large Group and 80% Small Group/Individual
• NAIC was charged with d
h d i h determining definitions, rebate
i i d fi i i b
process
– Passed resolution in support of Agents in August and sent multiple letters to DHHS
– Attempt to amend NAIC MLR regulation definition of earned premium to exclude agent
commissions was withdrawn
– DHHS and NAIC agreed to a taskforce to resolve this issue
• DHHS charged with governing regulation, certification,
h d ith i l ti tifi ti
enforcement, regulatory authority, waiver process
– IFR issued on December 1 does not provide adequate compensation relief
– Individual market waiver with agent/broker access and compensation a market disruption
criteria
– DHHS still meeting regularly with the NAIC

9. MLR
• NAHU pursuing a multi-faceted strategy
• MLR is our #1 Legislative/Regulatory Priority
• Avenues we are working on include:
– working with state legislators, insurance regulators, and governors on
state-related action
– providing media outreach about the impact the requirements will have
on consumer access to agents and brokers and private-sector insurance
j
jobs
– helping states with MLR waiver applications
– continuing talks with DHHS
– working with members of Congress on a permanent legislative
solution

10. Exchanges
• NAHU h f
has formal recommendations f exchanges
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– Developed Exchange Working Group
• NAIC issued basic framework of a model
– NAHU submitted comments on model
– NAHU has a modified model with a governance structure that
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allows for a very specific role of the agent
• HHS requested comments relating to specific
questions
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– NAHU met with HHS during the last few weeks
– NAHU submitted formal comments
– Also discussed relationship of portal and exchange and how
agents and brokers could be used

11. Key Exchange Issues
• State-based exchange, not federal intervention
exchange
• Role of the agent/broker and role of navigators
• Preservation of an outside market
i f id k
• Reasonable governance structure
• Separation of Risk Pools
• Subsidies
• Assessments

12. Moving Ahead
• Election Results—Changes to Congress
– Factors to Consider:
• Historic number of new legislators
• Tremendous turn-over in staff and committees
• Need to off-set repeal changes with other spending cuts
• House actions will be tempered by tight Democratic majority in the Senate and
H ti ill b t d b ti ht D ti j it i th S t d
President Obama
• GOP will need to balance delivering on promises now and goals for 2012
– NAHU has already engaged in multiple conversations with party
leadership about what realistic improvements can be made to PPACA
in the short-term, and what may need to wait until 2012 and beyond.
• Election Results—Changes to States
– New Governors will have a tremendous impact on PPACA implementation
– Potential change for 20 + state insurance commissioners
– Historic number of new state legislators
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– Enormous education and policymaking opportunity for agents and brokers

13. Moving Ahead
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• Legislation to fix MLR problem by excluding commissions from the
calculation completely—technical correction
• New Congress Targeted health reform legislation centered on
Congress—Targeted
business friendly adjustments/low-hanging fruit
– 1099 requirements
– 105 (h) non discrimination
( )
– MLR requirements
– Small business affordability requirements
– Grandfathered plans
– Exchange provision adjustments
– Transition and changes to rating requirements
– CLASS ACT
• L t of interest in making adjustments—depends whether or not
Lots f i t ti ki dj t t d d h th t
Congress and Obama are serious about making reasonable changes
or if they will just play politics

14. Moving Ahead
• NAHU visibility is high
• Broker role in the spotlight
• MLR i our top priority
is i i
• Press initiatives
• Grassroots efforts
• Public Relations initiatives
• Community service highlights
• Business friendly initiatives
B i f i dl i i i i

15. Don t
Don’t Just Survive…Thrive!
How to Position Your Business
• Efficiencies – Find Them!
• Cross-Selling
• Product/Market Diversification
• Commission Changes – How Do You Grow?
• How Can Norvax Help?

16. Create a More Efficient Model
What Areas Can You Improve On?
• Marketing / Lead Generation
• Quoting / Product Comparison
• Education
• Enrollment
• Customer Service
• Client Retention

17. Cross Selling
How Effective Are You?
• Product Education – What do your carriers
offer?
• Dental, Vision, Critical Illness, Accident, Life
• Client Education and Consultation
• Are you asking the right questions? Are you
determining additional needs through a consultative
sa es p ocess
sales process?
• Set Goals – 30% Cross Sale Target

18. Product/Market Diversification
Do You Have Blinders On?
• Too Much Focus – Are you missing
opportunities?
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• 8,000 Boomers Turning 65 Daily in 2011
• Are you helping them navigate a complicated
system?
• Internet Traffic – Medicare searches
growing…
growing
• Referrals – Can I help your parents?

19. Commission Changes
Before Commission Changes
• Average Premium = $3,000
(
(individuals/families)
)
• Average Commission = 20%
• Annualized Commission = $600
• 12 App’s Per Month (3/week) = $7,200
• Annual Income = $86,400 (before renewals)
( )

20. Commission Changes
After Commission Changes
• Average Premium = $3,000
(
(individuals/families)
)
• Average Commission = 12% (10% + Bonus)
• Annualized Commission = $360
• 12 App’s Per Month (3/week) = $4,320
• Annual Income = $51,840 (before renewals)
( )

21. How to Make the Same -
Ancillary
A ill
4 Additional Major Med + Ancillary
• $ 51,840 from $ 86,400 ($34,560)
• Increase App Count from 3 per week to 4
• 16 Major Medical Apps Per Month = $69,120
• Identify additional client needs through
analysis
• Set a Goal of 30% for Cross Selling g
• 4 Ancillary Sales Per Month = $1,100
• Total Income = $82,320 (before renewals)

22. How to Make the Same -
Medicare
M di
Expand Your Reach into Medicare
• $51,840 from $ 86,400 ($34,560)
• Continue Selling 3 Major Medical Policies
Weekly
• Start Offering Medicare Supplements
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• Sell 2 Medicare Supplements Per Week
• 8 Medicare Supplements Per Month =
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$34,560
• Total Income = $86,400 (before renewals)

23. How to Thrive?
Expand Markets and Cross Sell
• 4 Major Medical Policies Per Week
• 30% Cross Sell Strategy
• 2 Medicare Supplements Per Week
• Total Income = $119 520 (before renewals)
$119,520

24. How Can Norvax Help?
Technology & Lead Generation
Solutions
• Quoting and Online Enrollment
• Major Medical
• Ancillary
• Medicare
• Cross Selling Technology
• Product Bundle Presentation
• Virtual Training Classes
• Weekly Webinars
• Top Producer Forum

25. How Can Norvax Help?
Technology & Lead Generation
Solutions
• Quality Lead Generation
• Individual & Family
• Medicare
• Carrier Sponsored Marketing Programs
• Earn Marketing Credits for Production

26. Thank You
Questions?
reformsuccess@norvax.com
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