Your guide to understanding your Small Group renewal packet. Table of contents

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1 Your guide to understanding your Small Group renewal packet Table of contents 38844OHEENABS 11/13 How can this guide help me? What s in my renewal packet? What s changing because of the ACA? The essentials of essential health benefits How does the ACA affect my rates? Tools and resources Still have questions? What else is changing?

2 How can this guide help me? It s time to renew your health coverage with us. But this year is different. Employers, consumers, health insurers and politicians are all focused on the Affordable Care Act (ACA), or health care reform. Everyone has questions. Will it be easier to get coverage? Will it help control my health care costs? Will my rates change? On January 1, 2014, many of the biggest changes go into effect. You may have questions about how the ACA will affect your coverage with us. We ll explain what s changing and how to get the most from your renewal packet. What s in my renewal packet? It might seem like you have a lot of paper work to go over. To make things easier, here s a breakdown of what s in your renewal packet and what you need to do: Cover letter: Includes contact information and highlights key changes and next steps as a result of health care reform. Healthy Options Renewal Kit Cover Page: Contains information that is important to your group such as company name, group number, agent/broker name and effective date of the renewal. Your New Affordable Care Act (ACA) Medical Renewal Plan(s): Includes a high-level benefit summary with deductibles and copays. Your New Affordable Care Act (ACA) Pediatric Dental and/or Vision Coverage: Gives a review of your pediatric dental and vision plans. If your group is not enrolled in a vision plan at this time, this page will not be included in your renewal packet. Monthly Premium: Displays each covered employee in the group. It will supply information about the employee s age, spouse s age (if applicable) and number of dependent children (if applicable). Also displayed is the subscriber s new premiums for medical, coverage (if applicable). Monthly Premium Rate and Product(s) Selected: Contains the rate tables for each of your group s medical plans. Also listed on this page will be any added fees or charges outside of the premium that applies to your group. Monthly Premium Rate and Product(s) Selected (Dental, Vision: Includes the rates for your pediatric dental, and vision plans. For non-prime and Complete dental, disability and life, your premium rates are not changing with this renewal. If your group is currently enrolled with these coverages, your coverage will renew automatically. Additional content Important Information page: A consolidated list of important topics like state and federal legislation that may apply to you. Important Information about Dental and Vision Benefits: Includes information about pediatric dental and vision benefits, as well as changes to dental and vision plans. Inserts/Fliers: You may see more information in the back of the renewal packet with specific announcements or product brochures.

3 What s changing because of the ACA? You ve been hearing a lot about the ACA. Here s a snapshot of what s changing starting January 1, 2014: What s new Every American must have a certain amount of health insurance coverage or pay a tax. If you offer health coverage, the plans must cover a certain level of benefits and costs. This includes essential health benefits. Nongrandfathered plans must cover at least 60% of the cost of benefits paid by the plan. Plans offered by employers: Must have certain out-of-pocket dollar limits on essential health benefits. Cannot have yearly or lifetime dollar limits on essential health benefits. Must be at a cost so employees can afford to pay their part of the premium. For a self-only plan, this would be no more than 9.5% of the worker s income. Plans cannot exclude people who have a health condition or had one in the past (pre-existing), regardless of their age. Plans cannot have a waiting period of coverage more than 90 days. All plans, regardless of size or funding type, must apply all member cost sharing for in-network services and out-of-network emergency services under the in-network out-of-pocket maximum. This cannot be higher than these limits under the ACA: Yearly limit on cost sharing starting in 2014: $6,350 for self-only and $12,700 for other than self-only The maximum employee incentive on most wellness programs goes up to 30% of the cost for health coverage. For programs to prevent or lower tobacco use, the incentive goes up to 50% of the cost of coverage.

4 The essentials of essential health benefits To follow the ACA s rules, we re rolling out new plans to meet your needs. A big part of the ACA is providing essential health benefits for your employees. Starting January 1, 2014, new and renewing plans must include essential health benefits in these 10 areas: Outpatient services Emergency services Hospitalization Maternity and newborn care Mental health and substance use disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Lab services Preventive and wellness services, and chronic disease management Pediatric services, including oral and vision care Matching your coverage To comply with the new ACA rules, we re rolling out new ACA plans, so the 2014 plan we re offering you may not be exactly the same as your current coverage. For example, certain copays and deductibles may change or be removed. Our new plans are designed from the ground up to fully meet the ACA s rules and still be affordable. While some things are changing, you can still count on our: Network value: We work with our network of doctors, hospitals and pharmacies so your employees get quality care at a lower cost. Pharmacy coverage: Our options and features help you and your workers control costs. Comprehensive health and wellness solution: Includes free preventive care, free access to the 24/7 NurseLine and integrated clinical and wellness programs. Stability: Our companies have been providing health care benefits to millions of Americans, and we use that experience to your advantage every day. If you would like to talk about your coverage choices, contact your agent/broker or your account representative.

5 Comparing coverage If you want to compare your new plan with your current coverage, we have an online Plan Comparison Tool. You can see if your copays, deductible or out-of-pocket maximums are changing. How to get a Summary of Benefits and Coverage (SBC) To get more details on your 2014 benefits, you can see your SBC. To get a copy: go to sbc.anthem.com Just go to anthemplancomparison.com/oh and follow the steps to get a side-by-side comparison. How does the ACA affect my rates? This is likely one of your biggest concerns about the ACA. The above changes are likely to affect your rates. This is because people with higher health costs will have health insurance and this cost will be shared by all members. 1 Also, covering essential health benefits may contribute to higher rates. Will my rates change? Because all of our plans cover essential health benefits and other health care services, your rates may go up. For more details about your rates, see Monthly Premium Rate and Product(s) Selected and, if it applies to you, Monthly Premium Rate Product(s) Selected (Specialty) in your renewal package. We re doing everything we can to keep rates as low as possible. This includes working with those doctors, hospitals and pharmacies who offer the best care possible at the lowest cost. Also, we have new drug list options. The drug list is a list of FDA-approved generic and brand-name medications. The list is divided into three or four tiers. Tier 1 drugs have the lowest cost share and the cost will increase with each tier. Each of our products includes one of two different drug lists. To see which drugs we cover, you can see our drug list at: anthem.com > Customer Support > Forms Library > Anthem Select Drug List All of this means your workers get access to quality care and medicine at the lowest possible cost. Community rating Along with guaranteed issue, health care reform requires health insurance companies to move to modified community rating for small businesses. Instead of basing a small employer s premiums on its employees health, insurance companies must base rates on the cost of care for the pool of small group employers. By pooling a group of people together, the risk and cost is shared among everyone in the pool. As a result, those small groups who are healthier may see their premiums go up, while those who are not healthy may end up paying less for coverage than before. Health care reform also requires that modified community rating be used for small business plans. For any particular benefit design, an insurance company can only vary rates based on age, tobacco use 2, family size and location. Anthem National Drug List is a broad list of our covered drugs. Anthem Select Drug List is a list of covered drugs that includes a select number of medications in all therapeutic categories and classes. When evaluating plan options, it is important to look at the drug list to understand which drugs are covered. 1 National Association of Insurance Commissioners & The Center for Insurance Policy & Research website: Health Care Reform Frequently Asked Questions (FAQ) (Accessed August 30, 2013): naic.org/index_health_reform_faq.htm 2 Tobacco use may not affect the rates in all states.

6 ACA taxes and fees To help cover the ACA s costs and expanding coverage, all health insurers must pay certain taxes and fees to the federal government. These fees and taxes are included in premiums paid by employers. Tax or fee What it does Amount Effective Insurer fee Issuers of fully funded plans (including dental and vision plans) must pay a yearly fee to fund premium subsidies and expand Medicaid coverage. The fee does not apply to ASO plans, including ASO dental and vision plans. About 2.46% of premium.1 It starts at $8 billion in 2014 and goes up to $14.3 billion in After 2018, the fee will go up each year based on premium growth. 1/1/14 Reinsurance fee Fully insured and self-insured plans pay this fee to help support the transitional reinsurance program. This program aims to stabilize premiums in the individual market. This fee does not apply to dental or vision plans. In 2014, the fee is estimated to be $5.25 per member per month. The fee will go down over three years and then be removed. 1/1/14 Comparative Effectiveness Research Plan fee $1 multiplied by the average number of covered Supports the Patient-Centered Outcomes Research Institute to explore how well health treatments work and members for plan years that end October 1, 2012, through September 30, The fee goes up to their risks and benefits. $2 multiplied by the average number of covered This fee is paid by issuers of fully insured plans and members for plan years that end October 1, 2013, sponsors of self-funded plans. through September 30, The cost will then be adjusted for medical inflation. 1 This is an estimate and may change. 2 Fees to be collected for plan years and policy years that end after 9/30/12 and before 10/1/19. See note below2

7 Tools and resources We hope this guide has helped you better understand the renewal process and how you can comply with the ACA. After reviewing this guide and renewal packet, you may have some questions about your plan or health care reform. Here are some tools and resources to help answer your questions: Resource Your agent or broker makinghealthcarereformwork.com EmployerAccess Health care reform checklist for small employers He or she can advise you on how to meet your health coverage needs. Decision support tool Offers suggestions for your health coverage needs. Outlines which ACA rules apply to you. Helps you see if you re eligible for the health care tax credit. ACA financial calculator Online interview gathers plan and employee information. Provides a customized report showing ACA s financial impact on plans. Other ACA resources Fact sheets and FAQs. Audio and video recordings of our webinars. This features an easy-to-use online benefits management system that allows you to: Manage online enrollment. See or change subscriber information, including all types of coverage. Do contract maintenance. Handle benefit questions. Access reports. Review and pay bills online. How to sign up 1. Go to anthem.com and select Employers. 2. Choose your state and hit Enter. 3. Look in the Self-Service and Support area for details. You can find this checklist on our health care reform site makinghealthcarereformwork.com. Look for it under the Library tab. Other websites In addition to makinghealthcarereformwork.com, these websites are good sources of health care reform information: healthcarereformforyou.com: This is our site to help consumers learn how the ACA affects them. Visitors answer several questions and get information tailored to their health and family situation. Still have questions? We know this is a lot of information to take in. If you want to talk about your coverage or the ACA, just call your agent/broker or account representative. Healthcare.gov: Managed by the Centers for Medicare & Medicaid Services (CMS), this site has information about the ACA for consumers and employers. Timeforaffordability.org: Sponsored by the America s Health Insurance Plans (AHIP), this site explains changes to health insurance under the ACA.

8 What else is changing in Ohio? Important changes about your plan You should also know about these other important changes starting in January 2014: What s changing Group number Member ID cards Billing statements Explanation of Benefits (EOBs) Product changes Pediatric dental and vision essential health benefits Bundled or standalone dental or vision Contract change Small Group fully insured contract Disclosure What do I need to do? If this is changing, you will see notification in your cover letter and on the front page of the renewal. Nothing. We ll mail new ID cards to your employees. There will be changes, so keep an eye open for a new billing statement. The format of our Explanation of Benefits will look very different, but the information will essentially be the same as it is today. Beginning January 1, 2014, all health benefit plans are required to include coverage for 10 essential health benefits, including pediatric dental and vision benefits. Information on pediatric dental and vision benefits is included in Important Information about Dental and Vision included in this renewal package. If you have a dental or vision plan with us, please see the Important Information about Dental and Vision included in this renewal package for any changes to these plans. As part of your renewal, you will be getting a new group contract. This new agreement provides an update to the terms of our relationship and ensures the contract terms match our current processes, some of which have been changed to comply with health care reform requirements. Your fully executed contract will be sent to you on completion of your renewal and will be effective with your renewal. If you would like to review a sample copy of the new contract, go to anthem.com/sgcontractoh. The Schedule B referenced in the contract is included in this package. For questions or a written sample copy, please contact your agent/broker or Anthem account representative. Occasionally, it may be necessary for Anthem, in accordance with your Group Contract, state or federal law, to change your Group s premium rates. For detailed information regarding Anthem s right to change premiums and factors that may affect those changes, please see your Group Contract under: Article 5, Changes to Contract and Booklet Article 6, Premium and Grace Period Schedule B, Monthly Premium Rates and Products Elected For information about renewability of this plan, see your Group Contract in Article 7, Termination. If you would like information regarding all other Anthem health benefit plans and premiums for which your group is eligible, please contact your agent/broker or account representative. Anthem Blue Cross and Blue Shield is the trade name of Community Insurance Company. Independent licensee of the Blue Cross and Blue Shield Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.