Retiree Health Access Program SM

An Innovative New Solution for Your

Pre-65 and Post-65 Retiree Health Benefits

Aetna Proprietary and Confidential 1

 Today’s Discussion

 Retiree health care and Aetna’s leadership

 Retiree Health AccessSM program
– Value proposition and features
– Results
– 2009 enhancements

Aetna Proprietary and Confidential 2

 Chief Human Resource Officer’s View

85% Health care costs are unsustainable

Health care costs place U.S. companies at a

75%
competitive disadvantage

Retirees will pay more for health care in the future

95%
as caps are met

Plan sponsors will offer subsidized retiree coverage

36%
in 2012

Source: 2006/2007 HR Policy Association member surveys

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 Declining Prevalence of Retiree Health Care

The rapid reduction in prevalence and employer subsidies

is driving the market to provide cost effective alternatives

Overall Prevalence of Retiree Medical Prevalence of Subsidized Retiree Medical

Offered coverage to
Offered coverage to pre-Medicare eligible retirees pre-Medicare eligible
Offered coverage to Medicare eligible retirees retirees
Offered coverage to
46% Medicare eligible
46%
retirees
40% Percentage of total who
40% 41%
38% subsidized their retiree
benefits
35% 35%
30% 29%
31% 29% 28% 29% 29% 29%
28%
23%
21%
21% 21% 18%
19%
14%

1993 1995 1997 1999 2001 2003 2005 2006 1993 2005

Based on employers with 500+ employees offering retiree health care to new hires
Source: 2006 Mercer National Survey of Employer-Sponsored Health Plans
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 Leadership and Innovation
The Aetna Way

2003 2004 2005 2006 2007 2008

Rolled Out Aexcel® Introduced PFFS nationally

Launched Aetna Performance Network Selected as national
and Price Transparency in carrier for Retiree Health
HealthFund® (HRA)
select markets AccessSM program
Introduced PDP
nationally

The first national company to introduce a fully insured, consumer-directed

Consumerism health plan – Aetna HealthFund®

An industry leading innovator, introduced a performance specialty network –

Performance Networks Aexcel®

The first health plan to provide actual health care information to consumers and
Price Transparency commit to the "Four Cornerstones of Value-Driven Health Care"

The first national health plan to develop coordinated multi-dimensional

Disparities in Health Care
programs aimed at helping to reduce racial and ethnic disparities in health care

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 Aetna’s Investment in Retiree Solutions

We are passionate
about serving the Strategic alliance with
health benefits AARP for individual
needs of retirees… 50-64 year olds

Individual pre-65 and Group pre-65 and

post-65 solutions post-65 solutions

Group-based partnerships
with HR Policy Association
and Emeriti® Retirement
Health Solutions

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 Retiree Health AccessSM Program
Value Proposition

The HR Policy Association’s innovative program is a first-of-its-

kind national solution for comprehensive non-Medicare eligible
(pre-65) and Medicare eligible (post-65) retiree health benefits:

 Fully insured, guaranteed issue, group coverage for pre-65

retirees with no subsidy requirement
– No medical underwriting
– Offers access regardless of health status and subsidy level

 Pooled employer group renewal methodology for pre-65 retirees

– Addresses self-insured volatility

 Ensures retiree focus and continuity from pre-65 to post-65

– Retiree choice, clinical continuity and patient safety

 Accenture – comprehensive administrative platform

– Can include cost in the premium

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 Retiree Health AccessSM Program
Features

 Plan options compatible with your existing offering

– Total replacement, side-by-side or future-retirees-only

 Choice of four standardized pre-65 plan designs* (five for 2009)

 Choice of flexible post-65 plan designs
– Medicare Advantage PFFS and HMO, PDP and Medicare Integration

 Accenture administration included in cost

– Flexibility to use current administrator

 Three year employer contracts

– Employer-specific rates
– Renewals tied to pooled experience for pre-65 plans

 ERISA plans

* Post-65 plan required

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 Retiree Health AccessSM Program
Eligibility

 Exclusive for retirees of HR Policy Association and

Pacific Business Group on Health member employers
– Member employers’ acquired companies will be eligible

 Retirees eligible at age 55 with 5 years of service

– Dependents eligible at retiree’s retirement (spouse, dependents, domestic partners)
– 90 day enrollment window upon retirement

 Auto enrollment from any pre-65 plan to Aetna post-65 plan

 Re-entry:
– Allowed with proof of continuous coverage in another group plan (including COBRA)
– Not allowed if opted out for an individual policy

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 Retiree Health AccessSM Program
Underwriting

 Pre-65 plans: guaranteed issue with no employer subsidy required

 Post-65 plans: individuals must only be Medicare eligible
 Legacy plan must be richest offering
 Initial rates based on employer-specific experience
 Employer-specific renewal rates for group policies:
– Annual rate increases based on aggregate coalition experience
– Employer’s annual renewal increase is equal to overall program renewal increase +/- an
adjustment based on employer-specific experience and the combined percent of eligible
retirees enrolled in the Retiree Health Access program and legacy plans:
Enrollment Adjustment
≥50% +/- 7.5%
≥25% and <50% +/- 15%
<25% +/- 25%
 Mid-year adjustments and premium stabilization fund establishment
allowed

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 Retiree Health AccessSM Program
Administration

A global leader with a proven

track record in administrative
outsourcing
 Expert administrative services through Accenture
– Turnkey administrative solution
– Can include administration cost in premium rates (maximum allowance applies)
 Option to use your existing administration vendor

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 Retiree Health AccessSM Program
Administrative Overview

Pre-Enrollment Open Enrollment Ongoing Operations

 Accept and process  Flexible enrollment  Retiree bills

eligibles’ files to strategies (individual/household)
support open
enrollment  Data exchange to  Plan sponsor bills
support CMS
 Personalized open requirements  Billing and payment
enrollment kits methods
 Carrier
 Call center and acknowledgement  Payment receipt and
web portal letters and ID cards reconciliation

 Seamless service with

carrier

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 Retiree Health AccessSM Program
Pre-Enrollment Communications

 Employer tools
– Announcement letter
– Presentation for Human Resources staff
– Presentation for retiree meetings

 Retiree materials
– Cover letter
– Personalized enrollment worksheet
– Brochures: pre-65 and post-65
– Educational DVD
– Dedicated web site: www.rhagroup.net

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 Retiree Health AccessSM Program
Post-Enrollment Communications

Comprehensive program to help you effectively manage change

Benefits confirmation statements

ID cards

CMS required communications

Retiree plan documents

– Pre-65: Booklet Certificate and Summary of Coverage

– Post-65: Evidence of Coverage

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 Retiree Health AccessSM Program
Comprehensive Retiree Care Management

 Medical management programs with

enhancements based on the needs of
this age group

 Design provides consistency and

clinical continuity from pre-65 to
post-65

 Offers retirees personal support and

coordination of care
– Population will benefit from increased outreach

 Anticipate potentially higher enrollment

in Case Management Program
– Enhances member health and reduces cost

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 Retiree Health AccessSM Program
2008 Implementations

166 employers expressed interest

– 83 proposals

22 employers signed on with 230,000 eligible lives

– 32% pre-65; 68% post-65; 80% with subsidy
– 10 already offered a retiree plan
– 12 offering benefit for the first time
– pre-65 single premiums range from $400 to $1,200

3 key employer strategies

– 9 offering program as a total replacement
– 7 offering program as an additional option
– 6 offering program to future retirees only

17 using Accenture; 5 using current administrator

50k enrolled members

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 2009 Retiree Health AccessSM Program
Changes and Enhancements

 Available January 1, 2009

 Pre-65
– Lower cost pre-65 network
– Plan E – a new lower-cost alternative

 Post-65
– Medicare Integration plan choices

 Group custom option

– Based on plan sponsor’s existing relationships, the Retiree Health Access program
will allow existing or other pre-65 and post-65 health plans in a total replacement
scenario

 Ancillary benefits
 Administrative improvements

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 2009 Retiree Health AccessSM Program
Pre-65 Network and Plan Enhancements

 Lower cost network

– Custom designed network
– Improved discounts through Aetna Open
Access® Managed Choice® product and
PPO fill-in
– Includes Aetna’s high performance Aexcel®
network
– Estimated discount improvement of 5 to 7
percent compared to 2008

 New lower cost plan design option

(Plan E)

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 2009 Retiree Health AccessSM Program
Post-65 Plan Enhancements

Aetna Traditional Medicare Integration Plan Design

 Pays secondary to Medicare

 Government Exclusion is the form of Medicare Integration

 Fully insured high and low plan designs patterned after the
most popular Medicare Supplement plans (A and F)

 Can be offered:
– In addition to Medicare Advantage plans
– On a standalone basis

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 2009 Retiree Health AccessSM Program
New Ancillary Benefits

 Insured dental
– PPO

 Vital SavingsSM on Dental program

– Optional by plan sponsor
– Discounts ranging from 15 to 50 percent
– Approximate cost: $4 single and $7 family

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 2009 Retiree Health AccessSM Program
Administrative Improvements

 “Notional” fund account (HRA or RRA) coordination and support

– Eases the administrative burden on retirees

 Outbound call program

– Supports open enrollment and on-going related inquiries

 Unique side-by-side administration with legacy administrator

and Accenture

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 HR Policy Association and
Retiree Health AccessSM Program Fees
HR Policy Association or Pacific Business Group on Health member companies
with 2,000+ employees worldwide and $750+ million annual revenues

 Employer must be a member in good standing of HRPA or PBGH

Fees paid directly to Health One time Annual program Total first
Care Policy Roundtable coalition entry fee maintenance fee year fees
New member $30,000 $30,000 $60,000
Feasibility study participant $30,000 $20,000 $50,000
Affordable Solutions member $5,000 $25,000 $30,000
 Retiree Health Access program $0.75 pmpm administrative fee included in premiums

Employer with less than 2,000 employees worldwide or less than $750 million
annual revenues, but with at least 1,000 employees
Employers do not need to join HRPA or PBGH
Fees paid directly to Health Care Policy Roundtable:
– Annual program maintenance fee: $15,000
– Total first year fees: $30,000 Qualifying Employer fee
(includes one time $15,000 coalition entry fee plus $15,000 annual program maintenance fee)
Retiree Health Access program $1.50 pmpm administrative fee included in premiums
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 Retiree Health AccessSM Program
Key Dates

1/1/08 Coverage available

1/31/08 Program enhancements completed

– Plan designs
– New low cost network and ancillary benefits

2/1/08 – 7/31/08 Preliminary 2009 rates

6/30/08 – 8/31/08 Current and new plan sponsors confirm 2009 decisions
– Plan designs
– Eligible populations
– Rates subsidies
– Administration
– Enrollment dates

9/30/08 Standard communication and enrollment materials complete

10/1/08 – 11/30/08 Enrollment period

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 Retiree Health AccessSM Program
Conclusion

 A unique combination of access, quality and cost management

for pre-65 and post-65 retirees
– Fully insured, guaranteed issue group coverage for pre-65 retirees with no employer
contribution required; for post-65 plans, individuals must only be Medicare eligible
– Variety of plan designs
– Special retiree care management features
– Comprehensive program administration
 Helps you attain your strategic goals to:
– Provide a robust offering of cost-effective retiree health benefits
– Create no additional cost, liability or administrative burden
– Attract and/or retain mid-career employees
– Promote overall retiree health and wellness
 A long-term sustainable solution for both
current and future retirees

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  Plans are offered by Aetna Health, Inc., Aetna Health of California, Inc.,
Aetna Health of Illinois, Inc., and/or Aetna Life Insurance Company.
For Post-65 Plans: Coverage is provided through a Medicare
Advantage organization or a Medicare Prescription Drug Plan Sponsor
with the Medicare contract. Individuals must be entitled to Medicare
Part A and continue to pay their Part B premium and Part A, if
applicable. This communication is for informational purposes only.
State mandates may apply.
 Retiree Health Access is a service mark of the Health Care Policy
Roundtable, LLC. Used under license with Health Care Policy
Roundtable. All rights reserved.

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