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CIGNA Consumer-Driven Health Care

HSA-qualified HDHP Program OverviewFor employers with 50 or fewer employees

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Today’s Discussion

Growth of Consumer-Driven Health Plans

The CIGNA Approach To Consumer-Driven Health Care

HSA Overview

Engagement and Advocacy

Service Experience and Employee Education

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Currently Offer* Offer by 2007

All employers (>1,000) 16% 38%

Large employers 20 - 25% 50%

Mid-size employers 5 – 8% 33%

Small employers Under 3% 33%

* end of 2004Forrester Research. Employers Sound Off on CDHPs, May 2005.

Consumer-Driven Health Momentum Has Reached All Segments Optional Slide

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Approach To Consumer-Driven Health Care

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Improve health.

It’s our single focus.

It means we stand for care that is effectiveand personal choices that matter.

It means we connect the health of your employeesto the health of your business.

What We Stand For Optional Slide

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Our Approach

Improve Health – Control Costs

Consumerism: personal choices that matter

Enabling informed healthcare decisions

Health Advocacy: care that’s effective

Delivering integrated care for superior clinical outcomes

Actionable Information: connecting employee health to the health of your business

Providing consumers with the tools they need to make informed decisions about their health

HSA Overview

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Definitions

Health Savings Account

A tax-exempt trust or custodial account created exclusively to pay for the qualified medical expenses of the account holder and his or her spouse or dependents.

Covers all medical expenses listed in IRC section 213(d)

Can be used only in conjunction with a qualified high-deductible health plan

Funded with actual dollars

Remains the property of the account holder; no “use it or lose it” rules

High-Deductible Health Plan

A medical plan that meets certain criteria set by the federal government

Minimum Deductible* $1,100 single / $2,200 family

Out-of-Pocket Maximum* $5,500 single / $11,000 family

* These are 2007 limits. Limits for future years will be set by the IRS.

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Working Together

A high deductible health plan (HDHP) is required for an HSA

100

% P

reve

nti

ve C

are

The Health Plan

100%Coverage

High-Deductible Health Plan

(coinsurance)

Deductible

$Health Savings Account

Minimum Deductible*:

$1,100 Single / $2,200 Family

Maximum Out of Pocket*:

$5,500 Single / $11,000 Family

Deductible and covered expenses apply to out-of-pocket maximum

100% Preventive coverage recommended

One deductible amount for Medical and Pharmacy

*2007 Federal Limits

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Funding Employer and/or Employee

Maximum: Lesser of in-network deductible or annual limit set by IRS (For 2007, $2,850 for

individuals/$5,650 for families)

Tax Advantages Account balances & Investment earnings grow tax-free

Withdrawals for qualified expenses are tax-free

Account Ownership Employee

Flexibility Employee chooses to use or save $

Portability Yes. Employee owns the fund

Annual Rollover Yes

Qualifying Expenses 213(d) medical expenses not covered by HDHP, long-term care, COBRA

HSA Overview

CIGNA Advantages

•HSA banking option powered by JPMorgan Chase

•Industry-leading consumer decision support tools, including WebMD® suite of tools

•Leading clinical resources

…Helping create more engaged consumers and lower medical costs.

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CIGNA Plan Design Options

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Tax Advantages of an HSA*

Tax-Free Contributions Employee contributions: income tax-free Employer contributions (optional): Deductible for employer;

not taxable for employee

Tax-Free Interest and Investment Gains Interest and gains accrue tax free while they remain in the

HSA

Tax-Free Withdrawals Withdrawals for a qualified medical expense are not taxed Other withdrawals incur income taxes plus 10% penalty (<65)

*In Alabama, California, New Jersey, and Wisconsin, contributions are prior to federal taxes but after state income taxes. Employer contributions, earned interest and investment income are taxable as gross income for state income tax purposes.

Engagement and Advocacy

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CIGNA Resources Address the Continuum of Consumer Health Needs

Health advocacy services to engage, navigate and facilitate services across the continuum of care

He

lp

As

se

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Ta

rge

t

Acute

Cost of medical care per memberNumber of members impacted

Care ManagementDisease ManagementLifestyle ManagementHealth Promotion

7% of cost; 43% of members

48% of cost; 17% of members

35% of cost; 18% of members

10% of cost; 22% of members

Chronic

Healthy

At Risk

Goal: Keep everyone well

Goal: Prevent from migrating to more chronic/acute condition

Goal: Minimize impact of illness

Goal: Resolve acute illness impact as quickly and effectively as possible

CIGNA Programs

Cancer

High Risk Maternity

Neonatal Intensive Care

Transplant

Extended care

Cardiac

Depression

Diabetes

Obesity

Tobacco Cessation

Weight Loss

Stress Management

Substance Abuse

Health Risk Assessment Physician report card and member reminder mailings Prenatal/Maternal Care Work/Life Balance Preventative Care Programs Discounts on Health & Wellness services

Asthma

Low Back Pain

COPD

10 Secondary “targeted conditions”

Musculoskeletal

Inpatient Management

Intensive Behavioral

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Criteria Diagnostic Lab Drug Outpatient Surgery

Opportunity to plan

MRI Prozac Arthroscopic Joint surgery

Price variation Hospital vs. Stand-alone

imaging centers

Brand vs. Generic

Retail vs. Mail

Hospital vs. Stand-alone

surgery center

Consumers, Armed With The Right Information, Can Take Action

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The Key: myCIGNA.com

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Review benefit coverage levels

Track account balance, claims and payments

Support important health decisions

Cost and quality information

Read personalized messages

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15-minute questionnaire helps determine accurate personal health status

Employs 5,000+ calculations that screen for over 21 clinical risk factors

Results are integrated with CIGNA’s Disease Management Programs

Health Risk Assessment

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Procedure Pricing Tool

Saint Hospital

Community Hospital

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• Members select pharmacy and drug

• Receive actual price they’ll pay

Prescription Pricing Tool

LOCAL PHARMACY 123 MAIN STREETHOMETOWN, ST 00000(555) 123-4567

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Hospital Quality Information

Saint Hospital

Community Central Hospital

123 Main StreetHometown, ST 00000(123) 555-1234

123 Center StreetHometown, ST 00000(123) 555-5678

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Hospital information tool allows members to compare hospitals based on data for 164 surgical and medical procedures

Personalized with In/Out of Network indicators to help members understand financial implications of decisions

Physician Surgical Volume results will be included in limited areas

Hospital Quality Information

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Service Experience and Employee Education

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CIGNA■ HDHP claim adjudication■ JD Power certified customer service ■ Large National Network■ Medical management■ Decision support tools■ Enrollment and communication support

JPMorgan Chase■ Debit card/checkbook processing■ Financial service specialists■ Interest crediting ■ Scheduled and unscheduled

deposits■ Investment options

CIGNA HSA-qualified HDHPwhen powered by JPMorgan Chase

CIGNA Advantages

We have capitalized on the strengths of both organizations to deliver an empowered HSA

Employer An affordable alternative to health care Provides employees with savings

opportunity Potential for reduced claim costs

Consumer One toll-free member services

number Combined web experience via

myCIGNA.com and link to JPMC Online bank application and

signature 100% Preventive Care coverage

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Two Ways to Access HSA Dollarsif account is established through JPMorgan Chase…

HSA Debit Card Visa® branded, issued by Chase

Can be used at ATM as well

Checkbook

Two Ways to Track Utilizationif account is established through JPMorgan Chase…

myCIGNA.com

Access to claim transactions and history

Link to JPMC member website

JPMorgan Chase Member Website

Access to Health Savings Account transaction and balance information

General Information (including investment options) available

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Improve Health – The CIGNA Advantage

CIGNA Health Advocacy & Clinical Resources

Outreach triggers:• Health risk assessment• Predictive model• Integrated data• Referrals

myCIGNA.com,WebMD,

800.CIGNA24Education

A more aware health care consumer

Member Education

Personalized Media

Open Enrollment

Provider Outreach

CIGNAactivities

Member activities

Clinical Programs:• Health promotion• Disease Management• Care Management

24-Hour

Nurse LineClinical guidance

and caresupport

Behavior Change

LifestyleManagement

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Simplifying Your Communication Needs

Access to communication materials

Newsletters

Business activities

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Using Communications To Build Active, Engaged Members

POST-ENROLLMENTENROLLMENT

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“CIGNA has catapulted itself into the top ranks” - Consumer Driven Market Report, September 2004

#1 in Health Sector IT

- 2006 InformationWeek 500

Best Technology & Communications Introduced by a Health Plan Organization for Employee/Consumer Choice

– 2005 Consumer Directed Health Care Conference & Expo

2005 Health Plan/Managed Care Organization Disease Management Leadership Award

– Disease Management Association of America

America’s Best Health Plans NCQA

– 2005 CIGNA Plans Recognized

Awards And Recognition Demonstrate CIGNA’s Commitment To The Consumer

Top 100 IT Innovators 2005for technology

NCQA

Highest Effectiveness of Care Measures

5 years in a row(2001 – 2005)

Optional Slide