TEXAS BusinessFlex for Small Groups Offering Employer Options & Value This summary of benefits...

TEXASBusinessFlex for Small Groups

TEXASBusinessFlex for Small Groups

Offering Employer Options & Value

This summary of benefits provides a very brief description of the important features of our plans. This is not the insurance contract and only the actual Certificate of Coverage provisions will apply. The Certificate set forth, in detail, the benefits, limitations, and exclusions. If there are any conflicts between the terms of the Certificate of Coverage and the information in this presentation, the terms of the Certificate of Coverage will prevail. Offered by Unicare Life and Health Insurance Company.

Today’s Agenda

• Introduction to BusinessFlex• Why BusinessFlex?• What we’ve learned• Product strategy• BusinessFlex Core Features• BusinessFlex Plan Details

Texas BusinessFlexfor Small Groups

Texas BusinessFlexfor Small Groups

Introduction to

BusinessFlex

Introduction to

BusinessFlex

Introducing BusinessFlex Introducing BusinessFlex

Taking innovation to a higher level:

Defined Contribution options for both medical and dental coverage

Section 125 Premium-Only Plan administered by Ceridian Benefits Services

Member Flex options with Twelve (12) PPO Plans.

Why BusinessFlex?

Why BusinessFlex?

Premiums

Medical Inflation

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1990 1992 1994 1996 1998

I. II. III. IV.

Source: Bureau of Labor Statistics, 1999

The Underwriting Cycle

Why BusinessFlex?Why BusinessFlex?

Small Group Average Price per Member

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

$180

1992 1994 1996 1998 2000 2002 Future

AV

G P

RE

MIU

M P

MP M

?

Why BusinessFlex?Why BusinessFlex?

What We’ve Learned?

What We’ve Learned?

Growing demand for choice by employees

Increasing Costs

What We’ve LearnedWhat We’ve Learned

Price/Cost vs Creative Plan Structures

Price/Cost vs Creative Plan Structures

Allow for financial risk sharing with members

Allow for financial risk sharing with members

Focus on Direct Access (PPO)

plans vs. Managed Care

Focus on Direct Access (PPO)

plans vs. Managed Care

Successful Health Plans


How to continue our recent rate of success as the

economy slows.

How to continue our recent rate of success as the

economy slows.

How to better meet the needs of Texas

businesses and employees.

How to better meet the needs of Texas

businesses and employees.

The Challenges We Face


Product StrategyProduct Strategy

Objectives:

• Help Employers successfully manage the current challenges of today’s business climate

• Ensure that Employees have improved choices and options

Product Strategy

Objectives:

• Expand opportunities for Uninsured Groups to acquire coverage

• Contribute to WellPoint vision of market redefinition

Product Strategy

BusinessFlex

Core Features

BusinessFlex

Core Features

ConsumerChoice

1000, 2000,2500 &

Saver 2000

HSA’sPlan APlan BPlan C

Performance Choice

500, 1000,2000, 2500 &Saver 1000

Broad Range of Products and Premium Options

BusinessFlex Core Features BusinessFlex Core Features

DO NOT COMBINE PERFORMANCE CHOICE WITH CONSUMER CHOICE


Premium Only Plan (POP)

Defined Contribution

MemberFlex

Enables employers to empower employees withcontrol of their own medical and dental needs

Enables employers to empower employees withcontrol of their own medical and dental needs

What is MemberFlex?

Allows the employer the flexibility to offer one, several or all plans to his/her employees

Allows the employer the flexibility to offer one, several or all plans to his/her employees

Employees control their costs by choosing

from plans of varying costs

Employees control their costs by choosing

from plans of varying costs





MemberFlex

Four financing options for Medical plans:

• Defined Contribution 100: Limits employer’s monthly contribution to no more than $100 per covered employee.

• Defined Contribution 80: Limits employer’s monthly contribution to no more than $80 per covered employee. Employer may choose from the low and medium medical plan options?

Defined Contribution Options


Four financing options for Medical plans:

• Defined Contribution Select: Allows employer to pay any fixed monthly amount in excess of $100 per covered employee.

• Traditional Contribution: Enables employers to contribute a minimum of 50% of employee’s monthly premium.



Options for Dental plans:

Defined Contribution options are also available for dental.

- Defined Contribution 15

- Defined Contribution Select

- Traditional Contribution






MemberFlex

Employers can:• Generate company tax savings through a

reduction in taxable payroll

• Receive P.O.P. for only $125 per year

• Apply tax savings toward the purchase of enhanced employee benefits, increasing employee satisfaction

The Premium Only Plan (P.O.P.)


Employees can:• Increase take-home pay

• Defray part of the cost of their premium with associated tax savings

• Reduce FICA, federal or, where applicable, state or local taxes on their portion of employer-sponsored plan insurance premiums


The Premium Only Plan (P.O.P.)

Made possible through provisions of Section 125 of the Internal Revenue Code

Total taxable payroll of company is reduced by amount of employees’ premium contributions

Savings to employer depend on total company payroll and dollars that employees contribute

Employees use pre-tax dollars to pay their share of monthly premiums, reducing their taxable income

How P.O.P. Works


BusinessFlex

Plan Details

BusinessFlex

Plan Details

Next Generation

Small Group Plans

Introduces.........

Next Generation Small Group Plans

Performance Choice Plans

Consumer Choice Plans

Health Savings Accounts (HSA)

BusinessFlex Plan Details BusinessFlex Plan Details

Performance Choice (Tier A)

Enhanced preventive care benefits Increased ambulance benefit Unlimited office visits on three (3) plans

Three-tier pharmacy benefit

Performance Choice PPO plans consist of five (5) plans with selected deductibles and varying co-insurance offering rich, valuable benefits that are competitively priced.


500 1000 2000 2500 Saver 1000

Member $500 $1,000 $2,000 $2,500 $1,000Family 2x Separate 2x Separate 2x Separate 2x Separate 2x Separate

Member $2,000 $2,000 $2,000 $3,000 $3,000Family $4,000 $4,000 $4,000 $6,000 $6,000

Co-pay $35 $35 $35 $35 $35# of Visits

per memberUnlimited Unlimited Unlimited 10 per year 4 per year

Per Covered Expense 80% 80% 80% 70% 70%

Max Per Memberper year

80% 80% 80% 70% 70%

80% 80% 80% 70% 70%

GroundAir

RX Ded. $100 $100 $100 $100 $500Generic $10 $10 $10 $10 $10*

Brand (formulary) $25 $25 $25 $25 $25*Brand (non-form) $50 $50 $50 $50 $50*

Other PreventiveCare $200 par and non-par combined w ith deductible w aived

Not Covered

of Negotiated Fee After Ded

Up to Max of $1,000 per trip


PrescriptionDrug

Benefit*Maximum payment of $500 by UNICARE for Generic, brand Formulary and Non-formulary Combined

Professional SvcsLab & XrayMaternity &

Out & Inpatient Careof the Negotiated Fee after Deductible

Physical Therapy, Occupational Therapy, Acupuncture

$30 for 20 visits per member per year

AmbulanceServices

Office Visits &Preventive Care

(Deductible Waived)

Lifetime Maximum


MaximumOut of Pocket

$5,000,000

Annual Deductible

General Inflation (CPI)Drugs, Medical Devices

& other Medical Advances

Rising Provider

Expenses

Government Mandates & Government Mandates & Regulation, Litigation & Risk MgmtRegulation, Litigation & Risk Mgmt

IncreasedConsumer Demand

Other

Source: PricewaterhouseCoopers, 2002

The Factors Driving Premium Costs

Studies show that mandated benefits are responsiblefor an estimated 15% of the increases in premiums in 2002Studies show that mandated benefits are responsiblefor an estimated 15% of the increases in premiums in 2002

ARKANSAS

INDIANA

ILLINOIS

NEVADA

TEXAS

VIRGINIA

27

29

33

46

50

53

Number of mandated benefits by State


Consumer Choice (Tier B)

Mandated benefits excluded from Consumer Choice Plan:

Chemical Dependency TelemedicinesComplications of Pregnancy Speech and HearingOral Contraceptives and Devices Chiropractic

BenefitsSerious Mental Illness

Mandate-Lite Plan. Developed to makesmall group benefits more affordable.


1000 2500 Saver 2000

Member $1,000 $2,500 $2,000Family 2x Separate 2x Separate 2x Separate

Member $3,000 $3,000 $3,000Family $6,000 $6,000 $6,000Co-pay $35 $35 $35

# of Visits per member p/yr

Unlimited 10 per year 4 per year

Per Covered Expense 80% 70% 70%

Max Per Memberper year

80% 70% 70%

80% 70% 70%

GroundAir

RX Ded. $500 $500 $500Generic $15 $15 $15*

Brand (formulary) $35 $35 $35*Brand (non-form) $60 $60 $60*

Other PreventiveCare $200 par and non-par combined w ith Ded w aived

Not Covered

of the Negotiated Fee after Deductible

Up to Maximum of $1,000 per trip

Up to Maximum of $5,000 per trip

PrescriptionDrug

Benefit*Maximum payment of $500 by UNICARE for Generic, brand Formulary and Non-formulary Combined

Professional Svcs Lab & XrayMaternity, Out & Inpatient Care Maternity Benefit included for groups of 15-99 lives

optional (rider) for groups of 2-14 lives


Up to $30 for 20 visitsper member per year

AmbulanceServices

Office Visits &Preventive Care

(Deductible Waived)

Lifetime Maximum


MaximumOut of Pocket

$5,000,000

Annual Deductible

President Bush signed into law on December 8th as part of the Medicare RX bill (Eff. 1/1/2004)

Who is eligible to open an HSA? Anyone who is covered under a High Deductible Health

Plan (HDHP) Generally anyone under the age of 65 (not Medicare

eligible) Cannot be claimed as dependent on another person’s tax

return Not covered by any other health plan Injury or Illness specific plans are allowed

Health Savings Accounts (HSA’s)


Money Spent on Medical Care Annually

Percentage of U.S. Population

No Medical Expenses 33%

$1 - $500 40%

$501 - $1,000 9%

$1,001 - $2,000 7%

$2,001 - $5,000 5%

$5,001 - $10,000 3%

$10,001 - $25,000 2.25%

$25,001 - $50,000 0.50%

$50,001 - $100,000 0.20%

$100,001 - And Up 0.05%

Copyright 1995-2004, American Health Value, SM, LLC, All rights reserved


Health SavingsAccount(Funds)

Established at a financial Institution

High DeductibleHeath Plan

(HDHP)

Purchased from UNICARE


What are the Elements of a HSA?

Annual Deductible of at least $1,000 ($2,000 family)

Annual Out of Pocket not in excess of $5,000 ($10,000 family)

No first dollar benefits-Deductible must apply to all benefits with the exception of preventive care (Rx Card allowed until 2006)


What is considered a HDHP?

What are the contribution rules and tax treatment of an HSA?

An HSA is generally exempt from tax (like an IRA or MSA) as long as a HDHP exists

Contributions may be made annually up to the lesser of the HDHP deductible amount or $2600 single ($5150 family).

Individuals, employees or employers may contribute to the HSA account

The HSA account is owned by the individual, not an employer

Withdrawals may be made without tax consequences to pay for qualified medical expenses and in some instances for insurance premiums (COBRA and LTC)

Un-used account balances will carry over from year to year


Single Family Single Family Single Family

$1,000 $2,000 $2,600 $5,200 $5,000 $10,000

$2,000 $4,000 $2,000 $4,000

80%Max $200 per

member per year 80%Max $200 per

member per year 100%Max $200 per

member per year

GroundAir

RX Ded.Generic

Brand (formulary)

Brand (non-form)

$5,000,000 per member

$25*

100%

$30 for 20 visits per member per year, par and non-par combined

After Plan Ded

You pay nothing after deductible is met

$50*

After Plan Ded

Maternity included for groups of 15-99; Optional (rider) for groups of 2-14

80%

HSA-Compatible

$10*




80% 100%

Plan B Plan C

You pay nothing after ded is met

Plan A

80%Ambulance

Services

Annual Deductible

Maximum Out of P ocket

80%

For Small GroupsLifetime Maximum

Professional Svcs, Lab & XrayMaternity, Out & Inpatient Care

and Office Visits

Other Preventive Care

After Plan Ded$10*$25*$50*

PrescriptionDrug

Benefit* Copay applies to the out of pocket maximum, then paid at 100%

Preventive Care 80% 80% 100%

Thank you for Participating!

TEXAS BusinessFlex for Small Groups Offering Employer Options & Value This summary of benefits...

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