The document discusses options for reducing the high costs of health care in the United States. It proposes a "Simple Option Solution" (SOS) that involves raising deductibles on major medical plans and using Section 105 to buy back benefits, saving employers 10-80% on costs while providing the same or better benefits. Key aspects of the SOS include customizing finance and administration of benefits, providing ongoing member education, and services from ClaimLinx like claims analysis, consulting, and customer support.

1. Here’s How to Beat the High Cost of Health Care: The “Simple Option Solution” SOS

2. Health Care Spending Comparison $ 124.8 million $216 billion 2006 US Spending : www.kff.org – Prescription Drug Trends $400 billion 2005 Spending: U.S. Military Defense Budget $1.4 million 2005 Salary + Bonus: Insurance Carrier UHC CEO $2.2 trillion Total Health Spending 2007 (Centers for Medicaid & Medicare Services)

3. Family Premium Costs Source: Kaiser Employer Health Benefits

4. Americans Are Suffering 2005 USA Today, the Kaiser Family Foundation, and the Harvard School of Public Health 28% say there have been times in the past year where they didn’t have enough money to pay for medical care 19% say their strategy to lower costs is to resubmit a health care claim that hasn’t been paid the first time 71% believe the increase in cost is due to health profits by drug companies and insurance companies.

5. Employer- Provided Coverage Options Full Coverage (High Premiums, High Benefits) Cost-Share Coverage (High Premiums, minimal employee exposure to true cost of services) HSA – Health Savings accounts (Low premiums with Employer Prefunding)

6. Full Coverage – High Premiums Policy Lifetime Maximum $5,000,000 + Employee out of pocket $ 0.00 Very High Premiums Paid by Employer or split with Employee Carrier Pays cost of all Medical services

7. Cost-Share Coverage Carrier Pays cost of Medical services once deductible has been met and amount in excess of copays Employee Pays first up to deductible Policy Lifetime Maximum $5,000,000 + PPO Employee Deductible $1,500/$3,000 $20/$50 co-pays $10/$20/$40 prescriptions Premium Costs remain high But are lower than 100% coverage Plans

8. HSA – Health Savings Account Policy Lifetime Maximum $5,000,000 + HSA product Employer Pre-funded Max out of pocket $5,000/$10,000 Employee and Employer some or all out of pocket Lower Premium costs Carrier Pays From HSA deductible Up to Lifetime Maximum Employee Pays with Pre-funded dollars Employer Pre-funds a portion of the benefit

9. What is another Option?

10. SOS Program Raise Deductible on Major Medical Plan Buy Back Benefits with Section 105 – NOT Pre-funded Additional Options – even lower costs to employers Design your own plan!

11. 1. Raise Base Plan Deductible Old Plan – High Premiums $ 0 EE Deductible 20% EE coinsurance $ 20 EE Office Visits $5 Mil Policy Maximum New Plan – Low Premiums $ 0 EE Deductible 20% EE Coinsurance $ 20 EE Office Visits $5,000 – HSA Base Plan 35% Savings! Same Benefits

12. Define Eligible Employees Must be nondiscriminatory May use “classification” test: “ all participants in Employer’s group health plan” “ Safe harbor” exclusions: Less than 25 hours/week Less than 7 months/year Less than 3 years service Age 25 or under Define/Deliver Benefits Define eligible expenses Copays, deductibles, R x Diagnostic/testing Dental/vision/chiropractic “ Any eligible expense under IRC Section 213(d)” 2. Buy Back Benefits Add §105(b) to deliver benefits

13. 3. Additional Options  Alternate Funding – pull off spouses and dependents for lower individual rates Institute a “Spousal 105” – redefine eligibility to avoid double-coverage; reimburse with 105 (include Medicare) Implement self-funded dental and self-funded vision programs to decrease premium expenses

14. Client Example Before – per month $20,000 major medical $20,000 total After – per month $12,000 major medical $ 1,000 § 105 allowance (module) $13,000 total Manufacturer 10 Employees – single 20 Employees – with family $7,000/Month Savings

15. “SOS” Summary Keep the Same Carrier Provide the Same or Better Benefits Save 10% to 80% on Costs Restructure Finance of Benefits Create instant Cash Flow Personal Administration for Employees Customized Flexible Benefit Design Ongoing Member Education

16. §105 vs. HSA Limited to major-medical deductible Limited only by Employer Benefit? May be limited Defined by Employer Eligibility? Fully Vested And Portable Required HSA §105 Feature None Portable? Not required Pre-funding?

17. Reimbursement Process Same Employee pays balance ClaimLinx pays providers Employer pays 105 benefits to ClaimLinx ClaimLinx determines 105 benefit Provider or Employee submits EOB to ClaimLinx Same Insurer submits EOB to Employee Same Insurer reimburses Provider Same Insurer determines coverage Same Provider submits bill to Insurer Employee shows 2 cards at service Employee shows 1 card at service After Before

18. ClaimLinx Services 60+ years experience Refunds & Rebates In-House Consulting Live toll-free Customer Service Customized Benefit Designs Claims Analysis & Reporting

19. 60+ Years Experience Christy A. Quigley, President/Owner – prior employer Anthem Blue Cross & Blue Shield – 14 years, Marketing & Analysis Thomas J. Quigley, National Sales Consultant – owned agency – 14 years Edward Lyon, President Taxcoach – tax attorney & consultant – 20 years Erika DeStefano, National Sales Director – prior employer Deloitte Consulting and Assurant Health – 15 years

20. Refunds Double coverage (i.e Spousal, Military, Medicare) Provider billing errors Duplicate claims billing Subrogation funds on auto accidents, worker’s compensation or AD&D claims

21. Rebates Prescription Drugs for PBM Plus brand Checks issued quarterly Pays for most of administration costs

22. In-House Consulting Thomas J. Quigley, National Sales Consultant Savings Projections – 5 years Yearly Consulting Assistance Benefit Plan Design & Analysis Claims review Sonia Smith, Director Consulting/Client Services Personalized Account Management Service Coordination Erika DeStefano, National Sales Director National Sales Benefit Plan Design and Analysis Referral Generation

23. Live Toll-Free Customer Service Personal Account Assistance Claims processor relationship Secure web-portal for administrators Quick claims resolution 24-hour response time Hands on education

24. Customized Benefit Designs Keep same benefit design Provide same or “better” benefits Provides cash flow management No pre-funding required Easy renewal plan changes Free enrollment meetings

25. Claims Analysis & Reporting Employers can make informed decisions based on claims data Renewal negotiations made easy Data analysis from experienced professionals Industry comparisons

26. Questions and Answers Are you Ready to Start Saving Money?

27. Next Steps Installation Fee and Document Current Plan Design Base Plan Implementation Enrollment Census Enrollment Meetings Ongoing Member Education