This filing is for the 1-50 small group market, with an effective date of 1/1/2015.

Company Legal Name: Humana Insurance Company

State: MO Primary Contact Name: Jacob Epp

HIOS Issuer ID: 30613 Primary Contact Telephone Number: 920-337-5330

Market: Small Group Primary Contact Email Address: jepp@humana.com

Effective Date: 1/1/2015

Purpose:

The January rate action includes a 7.3% increase and changes for additional benefits displayed below.

0.3%

0.17%

General Information

the methodology used to calculate the AV Metal Value for each plan

The purpose of the actuarial memorandum is to provide certain information related to the submission, including support for

the values entered into the Part I Unified Rate Review Template, which supports compliance with the market rating rules and

reasonableness of applicable rate increases.

Company Identifying Information:

Part III Actuarial Memorandum and Certification

Company Contact Information:

This filing should be used for no other purposes.

This increase is not applied uniformly to all plans as combining our medical and Rx factors introduced volatility at a plan level,

but overall has no impact. See the rate manual for the plan-by-plan impact of combining our medical and Rx factors.

The proposed overall annual rate increase from 1/1/2014 to 1/1/2015 associated with this filing is 17.0% and will range from

15.2% to 18.6% throughout 2015.

This was derived by using the projected premium weighted average of 12-month accumulated rate actions throughout 2015.

For example, the January 12-month accumulated rate action is 11 months of trend in 2014 plus the January 2015 rate action.

The July 2015 12-month accumulated rate action is 5 months of trend in 2014 plus the January rate action plus the April and

July trend rate actions.

New State Mandates

Embed 24 Hour Coverage Rider

This memorandum was prepared by a qualified actuary, and is intended to be reviewed by a qualified actuary.

Proposed Rate Increase(s)

Please note that, to the best of our knowledge, this filing complies with the current regulations and guidance. However, to

the extent that laws, rules or guidance change after the submission of this filing, amending this filing may be necessary.

the index rate is developed in accordance with federal regulations and the index rate along with allowable modifiers are

used in the development of plan specific premium rates

In addition, this actuarial memorandum provides required actuarial certifications related to:

Actuarial Memo 1

Experienced Period Premium and ClaimsExperience Period: From 1/1/2013 to 12/31/2013

Paid Through Date: 4/30/2014

Premiums (net of MLR Rebate) in Experience Period:

Premiums net of MLR rebate: $36,541,700

MLR Rebates: $563,236

Allowed and Incurred Claims Incurred During the Experience Period:

Allowed Claims Incurred Claims37,112,450 29,253,397

0 0

492,541 388,239

The basis for the Humana Small Business rebate forecast is forecasted membership, premium, claims (including quality

improvement expenditures), and expenses at the state and legal entity level. These forecasted metrics are run through a

simulated rebate model, where the various components of rebate legislation are applied. The most impactful adjustments

include the credibility adjustment (based on forecasted member months) and the adjustment to remove taxes and licensing

fees from premium. These items are combined to estimate the Minimum Loss Ratio (MLR), which is then compared against

the 80% threshold for the Small Business segment to calculate final expected rebates.

Claims that were processed through the issuer's claim system

Claims that were processed outside the issuer's claim system

To estimate incurred claims, all commercial claims experience is segregated by legal entity, processing platform, product,

geography and claim category so that appropriate balance of homogeneity and credible size is maintained. The segmentation

logic is reviewed at least annually or when significant changes in the block occur (e.g. acquisitions). The paid-to-incurred claim

triangles for each block are used to develop completion factors that are applied to each incurred month to estimate ultimate

incurred amounts. Estimated ultimate incurred claims for the most recent twelve months are then adjusted for pended

claims if there is a material variance from historical levels. Finally, the completion factors and estimated ultimate incurred

claims are reviewed and may be changed to account for known anomalies in the data that may have distorted the calculation.

The difference between the estimated ultimate incurred claims and the current paid-to-date amounts is the estimate of the

incurred but not paid claims for each incurred month. In the calculation process, completion factors, per typical actuarial

practice, are not permitted to be greater than 1.00. That is, no coverage month is permitted to have an incurred claim

estimate less than the amount of claims paid to date even though historical experience may indicate that this is likely due to

future claim recoveries.

Allowed claims come directly from an issuer's claims system after eligibility and network discounts are applied, allowed

medical claims, allowed Rx claims, and member capitation payments are combined to populate the experience period data

above. Member cost sharing is removed from the allowed claims to report the incurred claims entered above.

Claims incurred but not paid as of paid through date

Actuarial Memo 2

The Benefit Categories are defined as follows:

Capitation: Includes all services provided under one or more capitated arrangements.

Benefit Categories

For each month of incurred, the incurred but not reported amount equals the incurred claims estimate minus claims paid to

date. Follow-up studies, including monthly historical reserve restatement analyses, are regularly performed to test the

accuracy of the reserving methodology and suggest possible improvements.

Inpatient Hospital: Includes non-capitated services for medical, surgical, maternity, mental health and substance abuse, skilled nursing, and other services provided in an inpatient facility setting and billed by the facility.

Professional: Includes non-capitated primary care, specialist, therapy, laboratory, radiology, and other professional services not billed by the facility. The Professional benefit category uses a combination of both visits and services to determine the

utilization per 1,000. For items such as Primary Care or Specialist Office visits, where multiple services are rendered and can

be billed together, visits are used for the measurement units. For single items that can be billed separately, such as Therapy

or MRI, services are used for the measurement units.

Other Medical: Includes non-capitated ambulance, home health care, DME, prosthetics, supplies, vision exams, dental services and other services. The Other Medical benefit category uses a combination of both visits and services to determine

the utilization per 1,000. For items such as Home Health visits, where multiple services are rendered and can be billed

together, visits are used for the measurement units. For single items that can be billed separately, such as DME, services are

used for the measurement units.

Outpatient Hospital: Includes non-capitated services for surgery, emergency room, lab, radiology, therapy, observation and other services provided in an outpatient facility setting and billed by the facility. The Outpatient Hospital benefit

category uses a combination of both visits and services to determine the utilization per 1,000. For items such as Outpatient

Surgery and Emergency Room, where multiple services are rendered and can be billed together, visits are used for the

measurement units. For single items that can be billed separately, such as Outpatient Therapy or MRI, services are used for

the measurement units.

Allowed but not reported estimates are developed utilizing the combination of the incurred but not reported estimate and

the incurred to allowed ratio of historical claims. [Allowed Claims not paid as of paid through date] = [Allowed Claims

processed through the claim system] / [Incurred Claims processed through the claim system] * [Incurred Claims not paid as

of paid through date].

Other was selected for utilization description under the prescription drugs benefit category. In this case, the Other

represents Days Supply.

Prescription Drug: Includes drugs dispensed by a pharmacy. This amount should be net of rebates received from drug manufacturers.

Actuarial Memo 3

Claims Projection Factors - from 2013 to 2015

15.54% Changes in the Morbidity of the Population Insured:

5.82%

0.92%

0.18%

0.30%

0.26%

0.17%

3.91%

1.00% Changes in Demographics:

2.78%

2.78%

Anticipated changes in the average utilization of services due to differences in average cost sharing

requirements during the experience period and average cost sharing requirements in the projection period.

This adjustment is intended to capture the change in underlying morbidity for the risk pool in 2015 compared

to the experience period risk pool. Reasons for this change include groups moving to individual coverage,

groups remaining on their current plan allowable by the Transitional Extension, the risk of projected new sales,

and the impact from groups moving to an early renewal date.

Changes in Benefits:

workers' compensation policy with a disability insurance policy or other

New State Mandates

Addition of any benefits that must be covered under the essential health benefit package.

Embed 24 Hour Coverage Rider - Twenty-four-hour coverage can be defined as the joint issuance of a

Pediatric Dental and Pediatric Vision

Women's Preventive

FMH Parity

Other Adjustments

Pooling Charge - In 2013 we experienced a lower than expected shock claim amount. A shock claim is

defined as any claims in excess of $60,000 per member per month. For 2015, we're adjusting the claims 2.78%

to account for the expected level of shock claims.

This is intended to capture the change in age and gender from the experience period to the projected period.

This adjustment is based on historical nationwide grandfathered age/gender rating factors to calculate the

average change in claims factor. This impact was 0.5% annually and we are expecting this not to change.

Actuarial Memo 4

12.49% Trend Factors (Cost/Utilization)

9.83%

2.35%

Cost TrendThe cost trend captures pure unit cost changes from 2013 to 2015, calculated using the same basket of services

each period, due to price/contract negotiations and provider distribution changes.

Inpatient Hospital, Outpatient Hospital, Professional, Capitation and Other Medical cost trends are developed

based on historical area specific cost trends from Humanas Small Commercial block of business data. Future

cost trends are developed based on expected changes in Humanas Commercial contracts.

Pharmacy cost trends are developed based on historical brand, generic, and specialty drug trends from

Humanas Commercial data. Future cost trends are developed based on expected changes in these pharmacy

contracts.

These contractual impacts will be applicable to all members regardless of risk class.

Utilization Trend

A midpoint to midpoint methodology is applied to determine the applicable baseline utilization trend, which

incorporates 2013q3 and 2013q4 actual results at the state and legal entity level with the block of business

baseline utilization trend for 2014 and 2015. This results in baseline utilization trends that vary at the state and

legal entity level.

Other components are added to the baseline utilization trend to develop the total utilization trend provided.

These include the following:

Pertinent days Captures changes in the calendar, recognizing that health care utilization varies by day of the

week and reporting periods contain varying weekday mix and count. This impact is developed through the use

of an external consultants model which is uploaded with Humanas Commercial claims data.

New Health Technologies Captures the impact of new health technologies and procedures. An external

consulting firm researches new technologies and develops per member per month impacts. These impacts are

customized to Humanas Commercial business based on membership and coverage policy.

Management Initiatives Captures savings for Humana initiatives designed to bend trend by managing

utilization, such as case management, disease management, and nurse programs. These initiatives are

evaluated by an internal actuarial organization tasked with evaluating the effectiveness of the initiatives.

Evaluations are done through a collaborative effort involving clinical and other operational areas. Projected

savings are calculated by determining prospective changes to impacted metric values, which are determined by

analyzing historical metric values as well as through discussions with clinical and operational areas. Savings are

reviewed with leadership to ensure appropriateness of assumptions.

This describes the development of the core utilization trend. All impacts from healthcare reform have been

removed and are included in the Population Risk/Morbidity and Other adjustments from Worksheet 1 to

prevent double counting of any impacts.

Actuarial Memo 5

Source and Appropriateness of Experience Data Used:

Adjustments Made to the Data:

Changes in the Morbidity of the Population Insured:

Changes in Benefits:

Changes in Demographics:

Other Adjustments:

Trend Factors:

Inclusion of Capitation Payments:

Description of the Credibility Methodology Used:

The source data is not fully credible and there is not other fully credible legal entity in the same state, so the Nationwide

manual was used to blend with the source data.

The following adjustments were made to the credibility manual. Please see the previous section for the description of

the impact.

No adjustments were made to the data. The source data already includes capitated payments.

-4.3%

13.3%

12.1%

1.0%

Credibility of Experience

5.8%

Credibility Rate Manual Development

A value of 120,000 member-months of experience is assumed to be fully credible, this value was derived based on

analyzing historical experience. Our credibility weight methodology utilizes the following equation:

Resulting Credibility Level Assigned to Base Period Experience when applying the proposed credibility

methodology:

96%

Actuarial Memo 6

Once calculated, projected member month weights for each plan tier were applied to these paid to allowed factors to produce

an overall anticipated paid to allowed average factor of 72.8%.

The 2014 plan factors were developed using an internal pricing model and were priced relative to our prior product generation

of plan factors. The resulting premium rates were appropriate; however, the plan factors were not relative to cost sharing. As

a result, the plan factors have been modified to more closely resemble a paid to allowed ratio. The impact to the premium

rates of each is rate neutral. This neutrality is yielded by offsetting the increase in the plan factors in the area factors.

Each plan paid to allowed factor was developed based on an internal pricing model with underlying utilization and costs

reflective of a standard population equal to that of the anticipated membership in the overall projected risk pool. By using a

standard population (rather than the demographics of the projected population), we ensure that selection and health status

do not affect the calculation of this factor. These values were developed in accordance with generally accepted actuarial

principles and methodologies.

The anticipated paid to allowed average factor over the projection period was developed by separately considering the

anticipated paid to allowed factors by each plan.

Paid to Allowed Ratio

Actuarial Memo 7

Projected Risk Adjustments PMPM:

Projected ACA Reinsurance Recoveries Net of Reinsurance Premium:

The adjustment factor to account for Humanas expected transfer amount due to the risk adjustment process was derived

from our participation in a study by Wakely Consulting, an actuarial consulting firm. Wakely generated an analysis of

carrier risk scores in several states based on the carriers small group experience. Wakely generated the analysis in states

where at least 80% of the insured membership in a states small group market was included through carrier participation in

the study. For the carriers that participated in the study, Wakely received a summary of their membership and de-

identified claim experience so that Wakely could generate HCC risk scores for all of the carriers small group membership

based on the risk adjuster scoring methodology outlined by HHS. Each carrier was supplied a summary exhibit that showed

the average risk score, expected risk score, average actuarial value, average rate factor, and induced demand factor for

their small group block of business. Wakely generated the expected transfer amount for each carrier based on this study.

Humana then applied an expected transfer amount based on the difference in our average premium per member to the

state average small group premium per member taken from the 2012 MLR rate filing experience supplied by CCIIO.

Risk Adjustment and Reinsurance

From the Federal Register - Vol. 79, No. 47 published on Tuesday, March 11, 2014, the uniform reinsurance contribution

rate will be charged at $44 PMPY or $03.67 PMPM.

The projected risk adjustment is $ -0.08 PMPM for this state and legal entity. This includes the Risk Adjuster Fee that will

be charged at $.96 PMPY or $.08 PMPM as stated in the Federal Register - Vol. 79, No. 47 published on Tuesday, March 11,

2014.

Actuarial Memo 8

13.82% Administrative Expense Load

1.78%

0.89%

1.79%

5.10% Profit (or Contribution to Surplus) & Risk Margin

2.78% Taxes and Fees

1.05%

2.35% Clinical & Network Operations: non-quality clinical costs, provider contracting, and network maintenance & development

Corporate Administration: shared functions that are not exclusive to small group medical segment,

including corporate finance, legal, human resources, etc.

Customer Service & Account Installation: call center, customer service, and account management

3.80%

5.44% Broker & Sales Commissions: Compensation expenses associated with business issued through an agent or agency

-2.23% Quality Expenses: Expenses associated with quality that are allowed adjustments under the Medical Loss Ratio standards

IT Expenses: costs associated with maintenance and development of systems

Non-Benefit Expenses and Profit & Risk

Expenses are based on our internal forecast for 2015. Expenses are estimated based off of current costs, projected

volume changes and estimated changes in department workload. These expenses are simply loaded as a flat

percentage of premium at this point in time and do not vary by product or plan.

Since taxes (including any federal income tax) are captured separately in the Taxes & Fees input, the profit

and risk load reflects after-tax amounts. The margin shown does not vary by product or plan.

State Premium Tax: state premium tax; charged on a percentage of premium

1.73%Federal Insurer Annual Fee: assessment created in 2014 by PPACA. Not income tax deductible.

Small Group Administration: functional areas & personnel that solely work on small group medical segment

Actuarial Memo 9

Projected Loss Ratio

Claims $331.86 Premiums $428.65+ Payment for Risk Adjuster $0.08 - Taxes and Fees $11.93

+ Payment for Reinsurance $3.67 $416.72

+ Payment for Risk Corridor $0.00

- Receipt for Risk Adjuster $0.00

- Receipt for Reinsurance $0.00

- Receipt for Risk Corridor $0.00

$335.61

$335.61

$416.7280.5%

The Single Risk Pool is established according to the requirements in 45 CFR part 156.80(d) which includes all enrollees in

all health plans (other than grandfathered health plans) subject to section 2701 of the Public Health Service Act. The

Single Risk Pool is specific to the legal entity and the state of this filing.

The projected loss ratio using the Federally prescribed MLR methodology is:

If the realized loss ratio is less than 80%, then the company will comply with the Federal MLR requirements outlined in

PHSA 2718.

Single Risk Pool

=

Actuarial Memo 10

Index Rate

Projected Allowed claims 456.03 = Wkst1 V32

non-EHB covered in projection period 1.000

1Q15 Index Rate 456.03

1Q15 2Q15 3Q15 4Q15 Weighted Average

Members by Quarter 2,454 1,042 1,239 1,559 6,294

Quarterly Allowed Core Trend 1.75% 1.75% 1.75%

Index Rate $456.03 $463.99 $472.08 $480.32 $466.52

Quarterly Core Trend 2.33% 2.33% 2.33%

1 1.0233 1.04714289 1.071541319 1.030854208

Base Rate $319.81 $327.26 $334.89 $342.69 $329.68

Projected Index Rate $466.52

+ Risk Adjuster 0.08$

+ Reinsurance 3.67$

+ Exchange Fees -$

Market Adjusted Index Rate $470.27

There are no state mandated covered benefits that are included in allowed claims but excluded from the index rate.

The Experience Period is for coverage months between January 2013 and December 2013, over which time the covered

benefits offered by the company were leaner than The Essential Health benefits required by the Affordable Care Act.

Therefore, the index rate for the Experience Period is set equal to the total Allowed Claims PMPM in the Experience Period,

with EHB pricing assumptions used to approximate the portion of the rate which covers EHB requirements in the projected

period.

Adjustments for the net impacts of both risk adjustment and reinsurance. See "Risk Adjustment and Reinsurance" earlier

section for more details of this market-wide adjustment.

Market Adjusted Index Rate

Actuarial Memo 11

Plan Adjusted Index RatesMarket Adjusted Index Rate

$470.27Admin and Fees

= 1 / (1 - Admin)

30613MO0500001 0.9672 1.000 1.2772 $580.92 2.92%

30613MO0500002 0.9063 1.000 1.2772 $544.40 1.33%

30613MO0500003 0.8135 1.000 1.2772 $488.65 3.10%

30613MO0500004 0.7865 1.000 1.2772 $472.40 9.77%

30613MO0500005 0.7656 1.000 1.2772 $459.83 8.52%

30613MO0500006 0.7388 1.000 1.2772 $443.77 7.35%

30613MO0500007 0.7249 1.000 1.2772 $435.39 5.78%

30613MO0500008 0.8697 1.000 1.2772 $522.41 4.65%

30613MO0500009 0.8226 1.000 1.2772 $494.11 5.18%

30613MO0500010 0.7253 1.000 1.2772 $435.65 4.36%

30613MO0500011 0.7038 1.000 1.2772 $422.72 3.87%

30613MO0500012 0.6862 1.000 1.2772 $412.19 12.74%

30613MO0500013 0.7138 1.000 1.2772 $428.75 0.08%

30613MO0500014 0.7913 1.000 1.2772 $475.31 0.85%

30613MO0500015 0.6618 1.000 1.2772 $397.50 5.98%

30613MO0500016 0.6546 1.000 1.2772 $393.16 5.56%30613MO0500017 0.6376 1.000 1.2772 $382.96 3.54%

30613MO0500018 0.6524 1.000 1.2772 $391.89 0.32%

30613MO0500019 0.6199 1.000 1.2772 $372.35 1.29%

30613MO0500020 0.6095 1.000 1.2772 $366.10 1.22%

30613MO0500021 0.5976 1.000 1.2772 $358.97 0.77%

30613MO0500022 0.5845 1.000 1.2772 $351.07 0.42%

30613MO0500023 0.5703 1.000 1.2772 $342.54 0.16%

30613MO0500024 0.8833 1.000 1.2772 $530.57 0.08%

30613MO0500025 0.6711 1.000 1.2772 $403.12 1.08%

30613MO0500026 0.6003 1.000 1.2772 $360.59 0.60%

30613MO0500027 0.8740 1.000 1.2772 $524.94 1.39%

30613MO0500029 0.5594 1.000 1.2772 $335.97 0.85%

30613MO0500030 0.5634 1.000 1.2772 $338.43 3.54%

30613MO0500031 0.6780 1.000 1.2772 $407.24 0.89%

30613MO0500032 0.7040 1.000 1.2772 $422.86 0.00%

30613MO0500034 0.4965 1.000 1.2772 $298.21 0.23%

30613MO0500035 0.5186 1.000 1.2772 $311.47 0.74%

30613MO0500036 0.4844 1.000 1.2772 $290.94 0.00%

30613MO0500037 0.6993 1.000 1.2772 $420.01 0.00%

30613MO0500039 0.5098 1.000 1.2772 $306.21 0.18%

30613MO0500040 0.5462 1.000 1.2772 $328.09 0.67%

30613MO0510001 1.0581 1.000 1.2772 $635.54 0.00%

$437.51 100.00%

Cost Sharing

Adjustment

Plan Adjusted

Index RatePlan

Member

Distribution

Addition to

EHB

Weighted Plan Adjusted Index Rates

Actuarial Memo 12

Cost Sharing Adjustment:

Network:

Each of the cost sharing adjustment components were developed based on an internal pricing model with underlying

utilization and costs reflective of a standard population equal to that of the anticipated membership in the overall 2015 risk

pool. The data used to produce the small group pricing AVs was based on a standard population of commercially insured

membership purchased from a third party vendor. Then, the 2015 plan design parameters were applied to those allowed

claims to produce paid claims and cost sharing factors. The company did not use the experience of the terminating products

when determining the pricing adjustment due to the low membership on any particular plan which makes the experience not

credible. These values were developed in accordance with generally accepted actuarial principles and methodologies.

The development of the index rate includes the anticipated average unit costs derived from the provider networks that will

be available on this legal entity in this state. These average unit costs are the result of charge levels, network discounts,

delivery system characteristics and utilization management practices across the entire state, for this legal entity.

Actuarial Memo 13

Addition to EHB:

Admin and Fees:

An adjustment for the addition of non-EHB benefits (additional benefits we provide at our own discretion, as well as any state

mandated benefits not reflected in the benchmark plan). It is assumed that the addition of such benefits increases costs to

all plans uniformly, hence it is essentially handled as a market-wide adjustment. See "Changes in Benefits" earlier section for

more details.

Administrative and Fees estimates were based on our internal forecast for 2015. They were estimated based on current

costs, modified to accommodate projected volume changes and changes in department workload. These are presented as a

flat percentage of premium at this point in time and do not vary by product or plan, and thus are essentially another market-

wide adjustment applied to the projected index rate. See "Non-Benefit Expenses and Profit & Risk" earlier section for more

details.

Actuarial Memo 14

Calibration

Age Range Age Factor Distribution 0-20 0.635 25.3%

21-24 1.000 5.9%

25 1.004 1.8%

26 1.024 1.4%

27 1.048 1.6%

28 1.087 1.6%

29 1.119 1.7%

30 1.135 1.8%

31 1.159 1.8%

32 1.183 1.8%

33 1.198 1.7%

34 1.214 1.9%

35 1.222 1.6%

36 1.230 1.7%

37 1.238 1.6% 1.385

38 1.246 1.7%

39 1.262 1.5%

40 1.278 1.7% 1.39741 1.302 1.8%

42 1.325 1.8%

43 1.357 1.8% 44

44 1.397 1.7%

45 1.444 1.6%

46 1.500 1.6%

47 1.563 1.8%

48 1.635 1.6%

49 1.706 2.0%

50 1.786 2.1%

51 1.865 2.2%

52 1.952 1.9%

53 2.040 2.2%

54 2.135 1.8%

55 2.230 1.9%

56 2.333 2.0%

57 2.437 1.7%

58 2.548 1.6%

59 2.603 1.6%

60 2.714 1.5%

61 2.810 1.4%

62 2.873 1.1%

63 2.952 1.1%

64+ 3.000 2.2%

Age Curve Calibration

The average age factor is calculated as the member

weighted age rating factor, using the projected age

distribution assumptions in the pricing model. The

average age factor is then compared to the standard

age rating curve; the age factor closest to the

calculated weighted age rating factor is used to select

the whole number calibration age.

Weighted Average Age Factor

Whole Number Calibration Age

Closest Age Factor on Standard Curve

Actuarial Memo 15

Calibration ContinuedGeographic Factor Calibration

Rating Area Geo Factor Distribution

MO - Rating Area 1 1.5%

MO - Rating Area 2 0.0%

MO - Rating Area 3 81.3%

MO - Rating Area 4 2.7%

MO - Rating Area 6 0.0%

MO - Rating Area 7 0.5%

MO - Rating Area 8 13.9%

Weighted Average Geographic Factor:

Tobacco Calibration

The average geographic factor is calculated as the member weighted geographic rating factor, using the

projected geographic distribution assumptions in the pricing model. Only regions with projected membership

Humana will not rate for tobacco use during the effective period.

Actuarial Memo 16

Consumer Adjusted Premium Rate Development

Member 1 Member 2 Member 3 Member 4

Plan 30613MO050000130613MO050000130613MO050000130613MO0500001

Rating Area MO - Rating Area 1 MO - Rating Area 1 MO - Rating Area 1 MO - Rating Area 1

Age 21 35 48 61

Plan Adjusted Index Rate

Calibrated Area factor

Calibrated Age factor

x Actual Area factor

x Actual Age factor

Consumer Adjusted Premium Rate

Small Group Plan Premium Rates

Please see "Index Rate" section to view the pricing trend taken throughout 2015.

The Consumer Adjusted Premium Rate is developed by multiplying the Plan Adjusted Index Rate by the appropriate age

and area factors for the member and dividing by the allowable calibration factors shown in the "Calibration" section. For

Example

AV Metal Values

The AV Pricing Values are calculated as the ratio of each Plan Adjusted Index Rate and the Market Adjusted Index Rate.

Please see "Plan Adjusted Index Rates" section for the breakouts of the allowable modifiers. Our product pricing is

developed based on a nationwide 3rd party model calibrated to Small Business that incorporates expected utilization

based on different cost sharing components. The methodology does not include differences due to health status in these

adjustments.

AV Pricing Values

The AV Metal Values entered in Worksheet 2 of the Part I Unified Rate Review Template were entirely based on the AV

calculator.

Actuarial Memo 17

Membership Projections

List of Terminated Products:

30613MO041 30613MO042 30613MO046

30613MO015 30613MO019 30613MO023 30613MO030 30613MO037

30613MO016 30613MO020 30613MO024 30613MO032 30613MO038

30613MO017 30613MO021 30613MO028 30613MO033 30613MO03930613MO018 30613MO022 30613MO029 30613MO034 30613MO040

Align Paid to Allowed ratios more closely with plan factors

0.10%

This impact is: 0.01%

This impact is: 2.30%

This impact is: 0.00%

This impact is: -0.31%

This impact is: 0.0%

The product names being terminated prior to the effective date have been listed below. The list encompasses both products

that have experience included in the single risk pool during the experience period and any products that were not in effect

during the experience but were made available thereafter.

Terminated Products

Warning Alerts

The company is terminating all non-grandfathered plans issued before 1/1/2014 and is projecting that groups will renew on

similar plans throughout 2014 and 2015. The membership projections found in Worksheet 2 of the Part I Unified Rate Review

Template are based on mapping membership from non-ACA compliant plans to 2014 ACA compliant plans. The overall

membership volume is adjusted for anticipated market growth, in-force persistency, and relative competitiveness via our

internal market level projection models. There is also an adjustment on plans with zero mapped members due to Part I

Unified Rate Review Template Instructions not allowing projected membership on any plan to be zero. If a plan originally had

zero mapped member months, the projected member months on Worksheet II will show 2, thus increasing the total member

months by 8.

There may be warnings due to the member months not allowed to equal zero.

There may be warnings due to the Plan Adjusted Index Rate and Allowed Claims on Worksheet 2 have the average network

adjustment embedded while Worksheet 1 does not.

There may be warnings due to the Plan Adjusted Index Rate on Worksheet 2 are using the 2015 weighted PMPM while

Worksheet 1 uses a non-weighted PMPM.

There may be warnings due to the Plan Adjusted Index Rate on Worksheet 2 are using the index rate which has non-EHB

excluded from the calculation while Worksheet 1 has non-EHB included.

There may be warnings due to the Plan Adjusted Index Rate on Worksheet 2 are using a different order of operations than on

Worksheet 1.

Plan Type

The plan types selected in the drop-down boxes in Worksheet 2, Section I of the Part I Unified Rate Review Template for each

of the company's plans do not require further explanation. The company's plan types align with the definitions found on the

Healthcare.gov website.

Actuarial Memo 18

Reliance

1. The projected index rate is:

Date: 07/29/2014

Brian Kist, FSA, MAAA

Managing Actuary

I, Brian Kist, am a Managing Actuary employed by Humana Insurance Company. I am a member of the American Academy of

Actuaries and I meet the Qualification Standards of the American Academy of Actuaries to render the Statement of Actuarial

Opinion contained herein.

3. That the percent of total premium that represents essential health benefits included in Worksheet 2, Sections III and IV

were calculated in accordance with actuarial standards of practice.

I, Brian Kist, relied on information and underlying assumptions provided by internally developed pricing and modeling as

well as third party consultant data in the establishment of these rates.

Actuarial Certification

d. neither excessive nor deficient.

2. That the index rate and only the allowable modifiers as described in 45 CFR 156.80(d)(1) and 45 CFR 156.80(d)(2) were

used to generate plan level rates.

I hereby certify that to the best of my knowledge and judgment and based upon the information presented to me:

a. in compliance with all applicable State and Federal Statutes and Regulations (45 CFR 156.80(d)(1)).

b. developed in compliance with the applicable Actuarial Standards of Practice.

4. That the AV Calculator was used to determine the AV Metal Values shown in Worksheet 2 of the Part I Unified Rate

Review Template for all plans except those specified in the certification. For plans where an alternate methodology was

used to calculate the AV Metal Value, a copy of the actuarial certification required by 45 CFR Part 156, 156.135 has been

included. That certification was signed by a member of the American Academy of Actuaries, where he or she indicated that

the values were developed in accordance with generally accepted actuarial principles and methodologies. That certification

also includes a reason and a description of the alternate methodology that was used for each applicable plan.

c. reasonable in relation to the benefits provided and the population anticipated to be covered.

This opinion is qualified, in that the Part I Unified Rate Review Template does not demonstrate the process used by the

issuer to develop the rates. Rather, it represents information required by Federal regulation to be provided in support of the

review of premium impacts, for certification of qualified health plans for Federally facilitated exchanges and for certification

that the index rate is developed in accordance with Federal regulation and used consistently and only adjusted by the

allowable modifiers.

Actuarial Memo 19