Aax monthly report.8.10

2010-2011 Committee Attendance

Committee Mbr 8/1 9/1 2/1 3/1 5/1 6/1
Name, HO Name, GA 0 0 10/10 11/10 12/10 1/11 1 1 4/11 1 1 7/11
Name
Committee Chair
Jeffrey H. Duncan Y
Committee Members
Sean Gooden Y
Brock Jolly Y
Bob Langan Y
Ed Lebold Y
Caren Levine Y
Arkady Milgram Y
Brian Pitaniello Y
Howie Soltoff Y
Mitchell Starr Y
Andrew Todd Y

Home Office Liaisons
Angela Otis E
Rich Goldstein Y
Steve Alibozek Y
Frank Merblum Y
Vito Rubino Y

GAX Liaison
Harris Fishman-Comp Y

Y= Present
N = Not Present
E= Excused with Notice
OFF = No longer going to be part of calls

AAX COMPENSATION/BENEFITS MONTHLY COMMITTEE REPORT

ISSUE: KEY POINTS ISSUE #1

CHAIR: Jeffrey H. Duncan, CLU, CFBS, AEP, CLTC

POINT PERSON: Jeffrey H. Duncan, CLU, CFBS, AEP, CLTC

HO LIAISON: Angela Otis, Rich Goldstein
GAX: Harris Fishman, CLU, ChFC (Compensation)

DATE: ACTIVITY:
08/10 TELECONFERENCE: The committee met in Orlando where members had the
opportunity to introduce themselves and Jeff assigned Point Persons to each of 12 initial issues.
It was determined that the annual fly-in will be 10/3-10/4 at the Sheraton Bradley. The
committee started off on a positive note with 100% attendance from the field at the first
conference call. Angela Otis could not attend as her daughter was having surgery at the same
time as the call (after much contemplation, I granted her an excused absence!!). This month’s
call concentrated on just a single issue, that being the Agents Health & Wellness Plan
Changes/Consolidation, and the associated communications strategy to the field for the
significant changes taking place on 1/1/2011 and in 2012.


ISSUE: AGENTS’ HEALTH PLAN CHANGES/ ISSUE #2
CONSOLIDATION


POINT PERSON: Ed Lebold & Bob Langan

HO LIAISON: Rich Goldstein

DATE: ACTIVITY:
08/10 TELECONFERENCE: Rich Goldstein and Vito Rubino from Mass Mutual
Benefits gave a detailed explanation of the reasons for the changes which center mainly on the
Obama Health Care Reform and the impact to the costs, administration and complexity of our
health plans. The first step will be a consolidation of the medical, dental and vision care plans
under Cigna. Express Scripts will be the new RX provider as this was not Cigna’s core
competency and there will be a marked savings with this change. Beginning in 2011 the only
medical plans that will be available to the field will be two, Account-Based Health Plans/Health
Savings Accounts (HSA’s), referred to as Options 1 &2 and the current EPO/HMO plan. The
HSA plans will be administered by JP Morgan Chase. Then in 2012, the only choice will be
Options 1 & 2. The primary differentiating factor between Option 1 and 2 is that Option 1 has a
deductible of $1,300/single, $2,600/family and Option 2 has a $2,500 deductible/single and
$5,000/family. The Maximum Out-of Pocket (MOOP) is $3,000/single,$5,000/family for Option
1 and $4,500/single,$9,000/family for Option 2.

To make the transition more palatable, the company will put “seed” money into the HSA account
of $300/single and $600 family, as well as $200/single and $400/family for completion of a
health assessment and Exercise/Other Vendor Programs credit of $300/single and $600/family.
This potentially could mean total seeding of $880/single and $1,600 family. Therefore, most of
the deductible would be covered by this seed money in the initial roll-out year. The committee
got to view the new premiums which are dramatically reduced for the two HAS plans, but the
EPO premiums will experience a rate increase in 2011, forcing many agents to gravitate to the
HAS options. For example: Single premiums for Option 1 are $197/month and Option 2 is $74.
Family premium for Option 1 is $611 and Option 2 is $229.

A substantial amount of time was devoted to the communications plan and it was decided that in
early September there will be a John Vaccaro video released, several short WebEx’s and a
printed brochure mailed to all agent’s homes. The WebEx’s will be structured so that agents
watch them during the day or evening, along with spouses and significant others. It was decided
that Rich Goldstein’s staff will design talking points that Agency reps, committee members can
use in the local agencies. All agreed that QB kickoffs would not be the venue for the rollout to
agencies as wee do not want to announce what we believe will initially be a negative perception
at a gathering that should be positive to inspire sales. Rich will also put together a side-by-side

AGENTS’ HEALTH PLAN CHANGES/CONSOLIDATION Page 2

comparison comparing the current offerings and the proposed ones. The committee suggested
that each agency conduct “Town Meetings” so that the message can be heard collectively. We
realize that the key to an effective transition will be the effective education of the nuances of an
HSA. The hope of the HO, GAX and the committee is that agents will have a paradigm shift and
realize that this is the future path of healthcare and that once agents and their families work with
the new plans, that they will have “skin in the game” and play a bigger role in controlling health
care utilization, and both the company and they will realize a savings.


ISSUE: COLLABORATIVE PRACTICES ISSUE #3


POINT PERSON: Howie Soltoff

HO LIAISON: Angela Otis

DATE: ACTIVITY:
08/10 TELECONFERENCE: No activity or discussion.


ISSUE: ANNUITY COMPENSATION ISSUE #4


POINT PERSON: Mitchell Starr


DATE: ACTIVITY:


ISSUE: THRIFT PLAN INVESTMENT ISSUE #5
METHODOLOGY/CHOICES


POINT PERSON: Howie Soltoff


DATE: ACTIVITY:


ISSUE: DEPENDENT BENEFIT ELIGIBILITY ISSUE #6
VERIFICATION AUDIT


POINT PERSON: Sean Gooden


DATE: ACTIVITY:


ISSUE: RETIREMENT PLANS CONSOLIDATED ISSUE #7
BENEFITS STATEMENT


POINT PERSON: Caren Levine


DATE: ACTIVITY:


ISSUE: HEALTH & WELLNESS CAMPAIGN/ ISSUE #8
INITIATIVE


POINT PERSON: Andrew Todd & Arkady Milgram


DATE: ACTIVITY:


ISSUE: FIELDNET SCORECARD EXPANSION ISSUE #9


POINT PERSON: Brock Jolly


DATE: ACTIVITY:

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