Company Name4/1/2013

O.C.A. Benefit Services HRA/FSA/COBRA Proposal

O.C.A. Executive Summary

For more than 20 years, O.C.A. Benefit Services, LLC (O.C.A.) has been a leader in the employee benefits arena with a commitment to customer service through creative and cost efficient benefit plan designs. We are not just an administration company, but rather an “Employee Benefits Delivery Organization” established to provide employers, agents, brokers, and plan participants with the most cost efficient and effective benefit packages available.

We believe that quality healthcare is actually less expensive to deliver than poor quality healthcare.

While we recognize the very nature of human behavior is to resist change, we also need to embrace the reality that Consumer Empowered Health Plans (CEHP) are the cure to rising health care costs and poor quality health care delivery. Our approach is candid, open, and honest. We believe in setting fair and reasonable expectations with all the parties involved.

We understand that keeping the process easy is critical to the implementation of the program, but we also understand that sacrificing compliance will eventually catch up with a client in direct or hidden costs. Our role is more than just a Third Party Administrator, but as a portal of reliable information and education. The Plan Participant will once again seek the rewards of being a consumer of health care.

O.C.A. Benefit Services offers a complete suite of Administrative Services including the following:

Plan Design Consultation Cafeteria Plan Administration (POP/FSA/DCAP) Transportation & Parking Administration HRA Administration HSA Administration COBRA Administration Electronic Payment Cards (MySource Card) Wellness 24/7 Secure Web Portal and I.V.R. Phone System Employer Compliance Reporting

HRA/FSA/COBRA Administration

Proposal for:

Address:

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Number of Eligible Employees:

Company Info:

Plan Design Consultation

Plan design is the first, and probably most important, step in creating an effective employee benefit program. Each worksite situation is unique, so the key is to design a plan to achieve your specific goals.

The options can seem endless, and understanding your needs is the best place to start. Whether you choose plans that are fully-insured, self-insured, company provided, traditional, or consumer-driven, O.C.A. representatives have proven and effective skills to develop an ''employee benefit strategy'' that reflects your organizational objectives.

For instance, you may want to offer an FSA, HRA, or HSA as a standalone plan. Or you may see the benefit of stacking the plans to include a combination of the three. You may even offer a ''menu'' of plans from which your employees can choose.

O.C.A. Plan Design Services include:

1. Complete analysis of your benefit program2. Establish a goal for the plan, ex: benefit coverage, cost savings3. Plan formulation to provide a variety of options for your employees4. Final Plan Design5. Provide customized on site education to all employees

What is a Health Reimbursement Arrangement?

A Health Reimbursement Arrangement (HRA) is an employee benefit plan designed to help offset unreimbursed medical expenses incurred by the employee (and dependents). The employer provides the funds to reimburse the employee by contributing funds to an HRA. After the expenses are incurred, the employee can submit a claim or use a health debit card for reimbursement.

HRAs can vary greatly in design, but are developed basically for the same purpose—to reimburse the employee for expenses not covered by any other health plan. For example, one HRA can be designed to cover all or a portion of the deductible on a High Deductible Health Plan (HDHP), while another is designed to reimburse the employee for dental and vision expenses. It just depends on the employer's goals for providing employee benefits.

An HRA can be "linked" or "unlinked." A linked HRA is tied to a health plan; you have to participate in the health plan to be eligible for the HRA. An unlinked (or stand-alone) HRA is set up to pay certain expenses, such as dental or vision expenses, without any connection to an insurance policy.

Advantages of HRAs for employers:

Qualified reimbursement claims are tax deductible for the employer. Employers know their maximum expense and cost to their health care benefit.

Advantages of HRAs for employees:

If the employee pays for a qualified medical expense, the reimbursements may be tax free. Unused funds in the HRA can be rolled over to the next year for reimbursement. HRAs can be offered with another employer-based health plan like a Flexible Spending Account. Employees do not have to be covered under any other health care plan like a High Deductible

Health Plan to participate. Contributions made by the employer can be excluded from employees' gross income. HRAs can be tailored to meet the employees' needs or to their families' specific needs, as

opposed to a standard company-wide plan.

An HRA gives employees additional choices and greater control over health care expenses, and provides them with financial assistance when they incur an eligible medical expense. Also, HRAs give the employee the option of selecting the health plan that is right for them. Health Reimbursement Arrangements do not limit your access to healthcare or prevent you from going to the doctor in anyway.

Who can/cannot participant in an HRA/FSA?

Under an HRA/FSA, self-employed individuals (e.g., sole proprietors, LLC, partners in a partnership, and greater-than-2% Subchapter S corporation shareholders) may not receive tax-free benefits.

Self-employed individuals, including partners in a partnership and more-than-2% shareholders in an S corporation cannot participate in an HRA/FSA on a tax-favored basis. Further, certain family members of more-than-2% S Corporation shareholder may not participate in an HRA/FSA. To further explain, an S-corporation can have an HRA/FSA for its common-law employees, but unlike in a sole proprietorship or a partnership neither the employee-spouse of the more than-2% shareholder (in an S corporation) nor the more-than-2% shareholder's children, parents, and grandparents can participate in the HRA/FSA. This is because of the ownership attribution rules contained in Code §318.

What is a Flexible Spending Account?

At O.C.A. Benefit Services, we strive to create an environment for you to successfully create and implement this unique win/win benefit program. Created under Section 125 of the Internal Revenue Code, Cafeteria Plans allow employees to pay for certain qualified insurance premiums and uninsured expenses with pre-tax dollars. Employees do not pay FICA, federal, or state income tax (except NJ) on their portion of premiums or uninsured expenses. Employers save on their portion of FICA taxes and in many states, FUTA premiums.

An employee, employer or both may contribute to an FSA. There are no limits to contributions. However, employers typically set the limit. Effective 01/01/2013 though, the maximum contributions will be limited to $2,500. The maximum annual contribution for Dependent Care Accounts is $5,000 for individuals with dependents or for individuals filing taxes jointly.

O.C.A. FSA Administration includes:

1. Premium only Plan (POP) - A POP allows employees to pay their premiums for employer sponsored insurance such as health, dental, or vision on a tax free basis.

2. Flexible Spending Account (FSA) – Employees use payroll withholding of pretax dollars to pay for an out-of- pocket medical, dental, or vision expenses.

3. Dependent Care Flexible Spending Accounts – Employees use payroll withholding of pretax dollars to pay for work-related expenses associated with care of a live-in dependent, such as a child or elderly relative.

O.C.A. FSA/HRA Administrative Services:

Preparation of plan documents

O.C.A. will create a customized legal document outlining the provisions of an employee benefit plan.

Annual discrimination testing and necessary information provided for employers to complete their 5500 forms

Annual discrimination tests are designed to show that eligibility and plan benefits are applied fairly and consistently, which in turn allows the plan sponsor to avoid unfavorable tax consequences.

Customized employee communication material

Whether it’s a group of two or a group of five hundred, O.C.A. will create customized employee communication material based upon the groups plan design. O.C.A. provides industry expertise with top of the line representation. We represent our clients by educating and assisting employers, employees and their families.

Client Customer ServiceAt O.C.A. Benefit Services, we don’t just process claims, we work towards educating individuals on the impact they can have on the cost and quality of health care. We are committed to our client relationships and it shows from the effort we put forth that our clients’ needs are professionally, courteously and personably satisfied. The member service department is open from 9:00 am to 5:00 pm Eastern time Monday through Thursday and until 4:30 pm Eastern time on Friday. O.C.A. also provides members 24/7 access to account balances through our website as well as our 24/7 access thru our Interactive Voice Recognition Phone System (IVR).

Daily claim adjudication processing

With O.C.A. Benefit Services, claims are typically processed within 48 hours of receipt. All claims are 100% manually audited.

Direct Deposit of claim payments

Direct deposit of employee claims is efficient, environmentally friendly, and saves money. Imagine submitting a claim in to O.C.A. Benefit Services at 9:00 a.m. and having that claim processed either the same day or at the latest, the next business day. Once processed, the funds hit the Federal Clearing House which typically clears in two to three business days. Once cleared, it will then hit your bank to clear for deposit. You are then free to access those funds to pay your provider for the services that were rendered. For an additional small fee, O.C.A. will pay providers directly on the employee’s behalf.

Electronic Payment Card (mySource Card) for HRA/FSA plan design

Electronic payment cards are becoming more prevalent and vital in a successful benefit plan offering. Introducing an electronic payment card into a reimbursement account plan empowers employees and gives them an option to avoid inconvenient out-of-pocket expenses.

Card Services provided:

Initial card enrollment and account set up Initial delivery of cards to employer by overnight mail Transaction monitoring and reconciliation Customer service to employees

Health Debit Card Regulations (mySource Card)The Federal government requires certain debit card transactions be substantiated via the submission of necessary supporting documentation that supports the charge. If supporting documents are not provided (typically within 30 days of the swipe), these regulations require the card be “timed-out” (temporarily suspending the use of the card) until said documents have been provided to O.C.A. Benefit Services. There are claims that will “auto substantiate” without the need for submitting documentation and want to identify those rules to eliminate confusion and frustration.

O.C.A’s mySource Debit card will work and auto-substantiate at vendors (i.e. CVS, Walgreens, RiteAid, etc) that have gone through a certification process (referred as I.I.A.S.). This certification process itemizes expense as deemed eligible under IRS Code 213(d), which is the complete list of FSA approved expenses.

It is also important to know that mySource Debit Cards are also able to be used at merchants such as doctor’s office, dentist, optometrist, hospital, and others. However, these approved locations (merchants) were exempt from the same requirements that govern the certification process that the vendors went through (IIAS). That said, using the mySource Debit Card at these locations will almost (with few exception) always require supporting documentation be submitted.

Employer and employee access to a 24/7 secure web portal

Employers and their employees will have 24/7 access to our secure web portal called Myrsc (My Resource Center). Myrsc provides each user a customizable view based on whether the user is the employee, manager, employer, human resource administrator, payroll processor, benefit consultant, plan service provider, insurance carrier or any person with appropriate access permissions and role authority. As an example, employees will have the ability to enter/submit claim forms online, view benefit history, access debit card activity, and much more! Employer will have the ability to distribution/contribution reports, employee account balances, COBRA elections, and much more! The single most distinctive characteristic of the site is its adaptability and its ability to fit the purpose of any user.

Mobile myRSCWhat You Can Do with Mobile my RSC View Accounts — including detailed account andbalance information

Card Activity — Account information

SnapClaim — File a claim and upload receipt photos directly from your Smartphone

Manage Subscriptions — Set up emailNotifications to keep you up-to-date on all account and health debit card activity

Logging InUse the same username and password you use to log in to the full myRSC website. After logging in, you will be on the home page which will list your options

Getting HelpClick the Help button at the bottom right of all pages to access contact information for your administrator who will be able to provide assistance.

Going HomePress the Home button on the bottom left corner of any page to return to the home page and start over.

What is COBRA?

COBRA stands for the Consolidated Omnibus Budget Reconciliation Act, which became law in 1986. COBRA allows individuals the right to keep the group health insurance benefits that would otherwise be lost by either a reduction of work hours, or lose of employment. COBRA only applies to employers with 20 or more employees.

O.C.A. COBRA

Compliance with COBRA and state laws is a challenging task, and errors or omissions may result in fines, tax penalties and lawsuits. Therefore, many employers are following the trend and are turning to professional administrators for their COBRA continuation services. When selecting an administration firm to handle your COBRA compliance, it is vitally important to understand exactly the breadth and depth of services provided. You will find the service of a COBRA Outsourcing Company solves your administration headaches associated with these complex federal regulations.

O.C.A. Benefit Services offers employers complete administration and management services for benefits mandated under Federal COBRA laws. Administration through O.C.A. Benefit Services saves your organization time, money, in-house training and potential costly errors.

COBRA Administration Services include:

Transfer of liability from your organization Full internet-based service capabilities through 24/7 secure online portal Initial Notices Qualifying Event notification to Qualified Beneficiaries and their Qualifying

Dependents COBRA election processing COBRA payment invoicing and collection by issuing payment coupons to participants COBRA premium reimbursements to employers Conversion & Termination Letters Rate Change Notices & Open enrollment support Standard monthly reporting for ARRA Subsidy premium reduction reimbursement Handling of all employer and ex-employee questions related to COBRA

(XXX Lives)Requested Quote for HRA/FSA/COBRA Administration

Services Set Up/Takeover

Annual Fee

Rate PerPar/Per Month

Total Monthly

Cost

Total Annual

Cost

HRA FSA Debit Cards Direct Deposit

Reimbursement

N/A $500 $8.00 per/par($50 Monthly

Minimum)

$XX.00Est.@ XX

Participants

$X,XXX.00(Includes $500

Annual Fee)

COBRA

(O.C.A. bills & retains the 2% administrative fee to all COBRA

participants)

N/A N/A $0.30 PEPM

$ XX.XX (Est. @ XX

eligible)

*$ XXX.XX

(Does not include $2.25

COBRA Notices)

Additional Service Fees May ApplyPaper Check Reimbursement $1 Per Check Issued

Pay Provider Option $2 Per Check Issued

For additional information please contact:O.C.A. Benefit Services Sales Department

(609) 514-0777 or sales@oca125.com3705 Quakerbridge Road, Suite 216

Mercerville, NJ 08610