WelcomeIowa Bankers Benefit Plan

Administered by

Iowa Bankers Insurance & Services, Inc.

• Iowa Bankers Benefit Plan– Established in 1978 through the

Employees Retirement Income Security Act (ERISA)

– Organized as a tax exempt trust under Section 501.C.9 of the Internal Revenue Code

• Do not pay income tax on trust income if we stay within safe harbor limits

Iowa Bankers Benefit Plan• Classifed as a Multiple Employer Welfare

Arrangement (MEWA)• Definition – Arrangement providing health and

welfare benefits to two or more unrelated employers. MEWAS are designed to give small employers access to low cost health coverage on terms similar to those available for large employers. MEWA’s are most often found among employer groups belonging to a common trade or industry association. i.e. Iowa Bankers Association

Iowa Bankers Benefit Plan• 1980 – 2000 – States receive the right to

regulate MEWA’s. 1983 ERISA amended.• Several MEWA’s in other states become

insolvent.• Iowa Bankers Benefit Plan in 1997 work’s with

Iowa legislature to pass a bill authorizing MEWA’s to operate in Iowa for limited period of time.

• In 2003, Iowa Bankers Benefit Plan is granted Certificate of Authority to operate a MEWA in state of Iowa subject to annual renewal requirements.

Iowa Bankers Benefit Plan• Today IBBP is the largest non-public

employee trust in the state of Iowa. We presently insure approximately 11,000 employees and more than 27,000 total lives. Over 95% of the banks chartered in the state of Iowa participate in the Plan.

IBIS and the Iowa Bankers Benefit Plan

• IBIS is fiduciary administrator of the Benefit Plan. Administrative decisions made by:

– IBBP Trustees– IBIS Directors– IBIS Management

IBIS – Fiduciary AdministratorServices Provided:

• Accounting• Asset Management• Billing and Premium Collection• Claims Auditing• Customer Service – Claims Monitoring• Benefit Plan Design• Plan Management including contracting claims

administrator• Compliance with State and Federal Regulations.

– (TEFRA, ERISA, COBRA, Filing Form 5500)

2006 Administrative Expense Ratio• 2006 Total Premiums

$89,322,482• Wellmark Administrative

Fees -$4,108,329• Plus IBIS Administrative

Expense -$4,342,745• Other Expense - Audit

Expense -$21,290, Legal Expense - $15,635,Misc $39,842

• Total Administrative Expense $8,435,810 or

• 9.5% Administrative Expense Ratio

Wellmark Adm Fees

4.6%

2006 health claims90.5%

IBIS Adm. Expense

4.82% Other Expense

.08%

Comparison of Administrative ExpenseIowa IBBP

IBIS Adm. Expense

4.9%

2006 Health claims90.5%

Wellmark Adm Fees4.6%

Operating Margin1.9%

Health Claims83.3%

Adm.Exp14.8%

September 2007 FinancialsRevenue

• Premium Contributions $66,079,695• Interest Income $ 622,578• Total Revenue $66,707,273

Expenses

• Claims Paid $55,376,284• Other Trust Expenses $ 5,948,264• Total Expense $61,324,548

Net Increase* $ 5,377,725

* Direct Addition to our Trust Reserve

IBBP Trust Reserve

$5,649,419

$8,488,586

$7,078,950

$3,361,253

$6,332,830

$9,910,486$9,301,531

$5,539,729

$12,426,176

$17,027,712

$0

$3,000,000

$6,000,000

$9,000,000

$12,000,000

$15,000,000

$18,000,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 8/31/2007

Actual Reserve Certified IBNR Reserve Level

7.4

Iowa Bankers Benefit PlanOctober 2007

Overview of Presentation

• Detailed information on claims paid by the Plan

• Wellness – member health support

• Changes to our website

• Answer questions on our move from 2 tier to 4 tier premium rating

IBBP Claims Billed $107,820,427Total Claims Paid $56,600,206 April 1, 2006 to April 30, 2007

1%

10%

32%

49%

8%

Provider Savings

COB

Member liability

Services Not Covered

Claims Paid

Top Diagnoses -Inpatient

The Plan paid $16.7 million dollars in inpatient claims. The top three diagnosis categories are:

– Muscular/Skeletal cases accounted for 17% of covered charges –osteoarthritis, disc and back problems top diagnoses

– Obstetrical cases accounted for 15.7% of covered charges – newborns and normal deliveries were the most costly diagnoses

– Heart/Vessels cases accounted for 15.5% - chronic heart disease, brain hemorrhage, and arrhythmias the top diagnoses

Overall, covered inpatient charges per member increased less than

1%

Top Diagnoses - Outpatient The Plan paid $18.8 million dollars in outpatient claims. The top

three diagnosis categories are:

– Bones, muscles, ligament conditions accounted for 15% of covered charges – knees, disc and back problems top diagnoses

– Digestive conditions accounted for 10.4% of covered charges – gall bladder, esophagus, and appendicitis were the most costly diagnoses

– Benign/cancerous tumor cases accounted for 10.3% - breast, prostate, and benign digestive tumors the top diagnoses

Overall, covered outpatient charges per member increased 6%.

Top Diagnosis – Office Visits • The Plan paid $17.8 million dollars for office visits.

The top three diagnosis categories are:

– Bones/muscle/ligaments conditions accounted for 13% of covered charges – disorders of joints, backs, and sprains top diagnoses

– Preventive care - Routine/diagnostic diagnoses accounted for 10% of covered charges –general exam, well-child care and special cancer screening tests were the most costly diagnoses

– Benign/cancerous tumor cases accounted for 9.5.% - breast, colon, and prostate the top diagnoses

• Overall, covered office visit charges per member increased 4.1%

Drugs• Pharmacy Claims paid were $10,295,534 –

slightly lower than the previous year

• Generic utilization – 52.8%

• Top drug classes – cholesterol-reducing 13%, antidepressants 9.7%, Proton Pump Inhibitors 7.5%

• 26% of our members had no prescriptions

• 36% of our members has less than $100 in prescriptions

• 10% had prescriptions in excess of $1,000 and accounted for 42% of all prescriptions filled and 66% of all prescription dollars paid.

Dental IBBP was billed $8,906,647 in dental claims – Paid $5,539,920

43.5% of paid claims were for preventive and diagnostic procedures

80.6 % of those members who purchase dental coverage use it

94.1% of members receive their coverage in-network

Plan Overall

• Health care claims per member decreased by 1%

• Pharmacy claims increased by 2%

• Overall, total claims paid decreased by 0 .7%, well below the expected rate

Member Health Support

Our goal is to

• Better support our members in their relationship with their physician

• Seen as adding value• Result in better health outcomes• Optimize benefit cost

Iowa Bankers Health Continuum-2006HealthyHealthy Worried WellWorried Well Chronic Chronic

ConditionsConditionsDisease Disease

ProgressionProgressionSevere Illness Severe Illness

& Complex & Complex DiseaseDisease

67% of members

20% of members

7% of members

5% of members

1% of members

21.9% of dollars

24.5% of dollars

17.0% of dollars

23.5% of dollars

13.1% of dollars

$18,361,368$18,361,368 $20,479,912$20,479,912 $14,239,069$14,239,069 $19,700,453$19,700,453 $10,988,699$10,988,699

Total = $83,769,501 IBBP Incurred 2006 and paid through First Quarter 2007

Member Health Support• Preventive Care – Annual physical, well child checks – 10%

of total office charges • Disease management – COPD, asthma, heart failure,

coronary heart disease, diabetes – very successful

• Pharmacy Management – mandatory generic fill, step therapy, cost management

• Case management

• Pregnancy program – Better Beginnings

Prenatal Program• Current Better Beginnings Program – low enrollment - less

than 14% of eligible members have enrolled

• 2005 – highest number of high risk pregnancies/ neonatal claims

• $1.4 million claim paid on one baby

• One of the top three diagnoses paid for by the Plan

Program Goals» Voluntary program

» Support clinician’s care plan

» Prolong pregnancy and reduce antenatal hospitalizations

» Improve normal birth weight rates

» Improve quality of life for mother, newborn and family

» Reduce health care cost

» Mailed Graduation Gift

Pregnancy Care

Intervention Highlights

» Assessment results shared with member and clinician

» Assessment results determine if member participates in low risk track or high risk track

» High risk members receive primary nurse case manager and ongoing telephonic support

» Risk level assessment at program admission and mid-pregnancy

Pregnancy Care

Whole Health DimensionsHealthy/Worried Well

ChronicConditionsDiseaseProgressionAcute Episodes

Severe Illness & Complex Cases

Preventive Care, Well-child Check-ups, Health Education Materials Annual Physicals, Well-Child Check-ups Covered to Age 13

Pharmacy Management Mandatory Generic Fill, Step Therapy, Drug Cost Management Pre-natal ProgramBetter Beginnings/Pregnancy Care

1/1/08

Disease ManagementDisease Management Program – Asthma, COPD, Heart Failure, Coronary Heart Disease, Diabetes

Case Management/End of Life Care

Measuring Customer Value/Employee Health & Productivity

What type of information can be accessed off the IBBP/Wellmark BC/BS website?

• IBBP Summary Plan Descriptions

• Enrollment Guides

• HSA Calculator

• Provider Directories (Doctor or Hospital)

• Blue Card( outside of Iowa) providers

• Disease management information

• Healthy Living/Decision Counts

• Myhealth@wellmark.com – member access to on-line EOB’s

• WebMD

Coming to our website in 2008

• On line Health risk assessments

• Additional web based educational materials

• More to come!

IBBP change from 2 tier premium rating to 4 tier premium rating effective 1-1-2008

• Employee • Employee and spouse• Employee plus child(ren)• Family

Questions?

• Eligibility

• Qualifying events

• Certificates of Creditable Coverage

• COBRA

• Identification Cards

Administration

• New Health/Dental Application

• New Change Form

• Life/Disability Form

• Instruction Sheet in Packet

Employee BenefitWorkshop - 2007

Sponsored by:Iowa Bankers Insurance and Services

Iowa Bankers Insurance and Services, Inc

• VISION STATEMENT:– Be the leader in providing resources and

expertise to empower the financial services industry.

• MISSION STATEMENT:– Contribute to the success of our customers

and shareholders by providing superior products and service at a competitive price.

What Iowa Banks are offering.• There are 417 chartered banks in the State

of Iowa.• Just over half of the banks in the state offer

the 105 (HRA), the 125(FSA), or both.– 3850 employees in the 105– 2525 employees in the 125– Total of 6375 in the two plans

• Do you?

Topics of Discussion• Review of Forms/Reports for 2008• Review of Web Tools• Section 125 Summary of Regulation

changes• Section 125 Enhancements for 2008• High Deductible Health Plans and Health

Savings Accounts

Review of Forms/Reports

• See handouts where necessary

Direct Deposit Notification- 125• See handouts:

– Look at claim # (same as Wellmark #)– Plan is listed– Plan year listed– Service date: from – to– Requested amount – Amount paid– Notes: reason for denial or non-payment– Year to date history at the bottom

125 Claim Denial Codes• 1. IBIS will receive and process the claims

electronically.• 2. This claim was paid on __________________• 3. Not a covered

item______________________• 4. Additional informational

needed_____________• 5. No coverage at time of service• 6. Other_____________________________

Claim processed in error• For 105 and 125 plans, the following will occur.

– Wellmark may reprocess a claim due to an error.– This may cause an overpayment to the employee

from either/ both the 105 and 125 plans. – Letter will be sent to the employee and HR person

within 30 days of event.– Follow-up letter sent at 90 day interval– IBIS will request a correction debit to the employees

account, you must notify us which date to do the reversal.

• See sample letters attached.

Direct Deposit Notification- 105• See handouts

– Plan limits listed at the top right– Participant– ICN # (same as Wellmark claims #)– Billed amount/Provider savings/Wellmark paid– Deductible: applied to the employee 105 level– Co-insurance credited to the employee level– Employees responsibility– Employer Paid– Year to date totals by insured

2008 Forms

• Employee Election Form• Employee Change of Status Form• Coordination of Benefits Form• Company Data Gathering Form

• Please refer to handouts

Must be returned by 11-30

Return ASAP— Deadline 11-30

Review of Web Site

• Where to find forms

• Where to find reports

• Where to find PowerPoint presentations

125 Proposed Reg Changes• IBIS will take care of the document

changes and form changes

• IBIS will adjudicate claims accordingly

• IBIS will take care of the necessary issues for compliance

125 Plan Updates• Must have a written document to include

– How the plan is administered– How contributions are made– Participant eligibility defined– Benefits defined; which ones allowed– Define how elections are made– Outline change of status– Outline COBRA– Uniform coverage rule, etc– IBIS will update all documents and mail to you for

your use and implementation.

125 Plan Updates• Plan Documents: (2)

– Premium Payment/HealthFSA/DCAP • To obtain the “Grace Period” option, you must sign

an amendment for your plan.

– Premium Payment/HealthFSA/DCAP/HSA

– All new documents must be signed for the 2008 plan year!

125 Plan Updates• Summary Plan Documents: SPD (3)

– Premium/HealthFSA/DCAP – Premium/HealthFSA/DCAP/

• with Grace Period– Premium/HealthFSA/DCAP/

• HSA/with Grace Period– All new documents must be signed for the 2008

plan year!• These must be given/made available to the

employees

125 Plan Updates

• COBRA– COBRA is offered only to FSAMed and

Premium participants (not DCAP)

– COBRA is offered ONLY to those FSAMed participants with a (+)positive balance

125 Plan Updates

• Change of Status– Must have a qualifying event to make a

change of status

– Must complete a Change of Status form within 30 days of event

Contribution PaymentsIf a change is necessary

• Contribution changes can be made up in 3 ways:– 1. Pre-pay from last check– 2. Pay as you go with after tax dollar– 3. Pay in “catch-up” contributions upon return

125 Plan Updates• DCAP changes as of –01-01-2008

– When an employee terminates:• They have until end of the plan year to incur claims• End of run out period to submit the claim• Request to the amount that has been funded and

remains in the plan at termination. • Must remain eligible and follow all the rules for

submission. • Can in no event, every use more than they have

deposited into the account.

125 Plan Updates• Claims adjudication

– Must be medically necessary, not for daily use.

• Treatment vs. maintenance• Medications vs. lotions and cleansers

• Please refer to the Health Care Expense Table on our website.

Enhancements for 2008• Plans “restated” according to IRS regs

– Must sign all new documents– New forms posted on web

• @ www.bankers-ins.com

• After the first quarter of 2008– Telephone account balances for Flex– Web site access to view account totals– Direct Deposit Notifications/EOB will be sent

electronically

HDHP/HSA

• IBIS High Deductible Health Plan

• Information on the IRS regulations for the Health Savings Account

IBIS High Deductible Health Plan Qualified Plan for HSA• Deductible =

– $2000 single $4000 family– $5000 single $10000 family

• Maximum out of pocket = – $2000 single $4000 family– $5000 single $10000 family

Family Deductible

• The family deductible

– Must be met before any payments are made– Can be met by one person ….or– The entire family

Deductible Waived for:• Well child care

– Immunizations

• Specific Preventive Services– One routine physical and related lab, x-rays

• Newborn Initial hospitalization –– Practitioners Services

Covered Services… Apply to deductible

• Prescriptions• Vision..one eye exam per year• Office Visits• Inpatient/Outpatient Hospital and Physician• Emergency Services• Maternity Care / Chiropractic Care• Mental Health / Infertility• **Please refer to the IBIS SPD for the complete description of

coverages

Make sure to Remember!

• No 4th Quarter Deductible Carryover

Same IBBP Coverages

• Blue Card coverage to follow you• Disease Management Program• Better Beginnings Program• Member Reminder Programs• Private Member Online Services found at:

– myhealth@wellmark.com– www.bankers-ins.com

What is an HSA?• A tax exempt trust or custodial account

established exclusively for the purpose of paying or reimbursing qualified medical expenses for you, your spouse, and your dependents

• Must be administered by an insurance company, a bank or a TPA

• Must have a qualifying high deductible health plan the first of the month to open the account

2007 Allowable Limits• IRS Maximum Contribution to HSA

– $ 2850 for individual coverage ($2900 for 2008)– $5650 for family coverage ($5800 for 2008)– Plus an additional $800 for eligible individuals for

“catch-up” contributions. Must be 55 or older ($900 for 2008)

• IRS Maximum Out of Pocket on HDHP– $5500 for individual coverage– $11000 for family coverage

• IRS Minimum Deductible for HDHP– $1100 for individual coverage– $2200 for family coverage

Qualifications to open HSA• Must be covered by a qualifying HDHP• Must be under age 65• Must not be listed as a dependent on anyone’s

tax return• Must not be receiving Medicare or Social

Security benefits• You or your spouse must not participate in a

FSAMed plan (flex medical)• Must not have other qualifying insurance

coverage

Other acceptable coverage• Dental, vision or limited scope FSA• Disease Management or Preventative care• Employee Assistance Programs• Worker’s Comp, Disability, Auto coverage

for medical, Travel ins, etc• Supplemental Insurance such as accident

and cancer• Business liability

Benefits of an HSA• Contributions are:

– Tax deductible or – Pre –tax

• Can change this election amount any time during the year with proper documentation

• Distributions are:– Tax free, if used for medical expenses

• Earnings grow:– Tax Deferred

• Tax free if spent on qualifying items

Contributions:• Who may contribute?

– You, the account owner– Your spouse or family member– Your Employer

• Limits… 2008?– $2900 maximum for individual– $5800 maximum for family– $900 additional for those 55 or older

• If both account owner and spouse are over 55, then both may contribute $900, but spouse must open an account

First Contribution Date:• The first contribution must be made after

your qualifying coverage begins. Coverage must be in place the first of the month in which a contribution is made. It is important to open your HSA as soon as possible. You can not claim any medical expenses before the date the account is open. The HSA becomes effective the date the account is open AND FUNDED.

Total Contributions:• IRA rollovers/transfers count towards your total

contribution amount for the year.• Items that DO NOT count towards your total

annual contribution limits.– Rollovers from other HSA accounts– Direct trustee-to-trustee transfer– Rollovers from Archer MSAs– Direct rollovers from Health FSAs or HRA

• Your flex plan must have the “grace period” to allow for a rollover of unused FSAMed dollars to an HSA account.

Excess Contributions:• Excess contributions subject to 6% excise

tax. • Correction can be made before April 15th

of tax year.• Check with custodian for procedures. • Excess contribution plus the earnings

must be removed. • If not, earnings will be taxed as income.

Distributions are:• Tax Free

– If made for qualified medical expenses

• Taxable– If made for non-qualified medical expenses– Non-qualified distributions carry a 10%

penalty….unless after death or age 65

Qualifying Medical Expenses:• COBRA Premiums, Long Term Care (expenses & premiums)

• Medicare Part A, B, C, and D• Medical Doctors, Nursing Services• Dental and optical• Physical Therapy, Chiropractic Care• Emergency Care• Acupuncture, Alcohol or drug treatment• Prescribed weight loss, birth control• Prescription Drugs, Medical equipment• Costs associated when seeking treatment• Others as listed on the IRS web site, including OTC

Non-Qualifying Expenses:• Cosmetic surgery, teeth whitening• Maternity Clothes, diaper services• Health Club dues• Electrolysis, hair transplant• Household help, babysitting• Marijuana or other controlled substance for glaucoma

treatment• Food supplements, vitamins, sleep aids if not prescribed

by a Doctor• Swimming lessons or weight loss programs• Funeral expenses and other non-medical expenses

Distributions may be used for:

• You • Your Spouse and• Your Dependents

– Regardless of whether you carry self only (individual) or family coverage.

MistakenContributions/Distributions

• Mistaken contributions should be removed from the HSA, along with any earnings, before April 15, Federal tax filing deadline of the relevant tax year. Check with Custodian on procedures

• Distributions may be returned with proof of the mistake only if the Custodian allows the transaction. The custodian must be notified when doing so.

Tax Reporting:• W-2 from employer, if contributions made

through a cafeteria plan• Custodian will prepare and send to you and the

IRS copies of:– 5498-SA (contributions)– 1099-SA (distributions)

• You must complete form 8889-HSA and file with your Federal Tax Return.– (a simple reporting of account activity, balance,

contributions and distributions)

As HSA Account Owner:• You must be insured under a qualified HDHP• You choose custodian or trustee• Your account is portable• You must keep records of your transactions• You must report activity when filing taxes• You choose what you save and what you pay for

medical care• You must follow the rules for contributions and

distributions set by the IRS

Presented by:• Iowa Bankers Insurance and Services

– 8800 NW 62nd Ave– PO Box 6210– Johnston IA 50131-6210– 1-800-258-1415– www.bankers-insurance.com

– Marketing Representatives» Don Easter ext. 4345» James Johnston ext. 4239» Jolene Mennenga ext. 4328

IBBP On Line Enrollment

Process Overview

1. Employer Benefit Administrator “Sets Up” new employee

– Enter Information that needs to come from Employer– print instructions for Employee

2. Employee completes on-line application3. Employee prints & signs confirmation sheet and faxes

or mails to IBIS4. Benefit Administrator approves application5. Coverage is added when IBIS has received signed

confirmation AND Employer has approved application

Benefit Administrator

Administrator Role• Set Up Employee

Administrator Role• Print Instruction Sheet and Give to

Employee• Wait for Employee to complete application• You will receive an e-mail when

application is complete• Approve application

Application Approval Screen• Displays a list of requested coverage• If employee is eligible for Flex Spending

Account employee elections will be displayed.

• Flex Spending Employer Contributions can be entered.

Employee

Employee Application• Secure Web Application• Can be done from home• Work is saved at each screen• Can be completed in multiple sessions • And previously entered information is

easily correctible

Employee Application Process• Employee should have received

instruction sheet from You with:– Instructions– Password– List of items they will need to know to

complete application• Dependents SSN & Birthdates• Other Insurance Information (Spouses Employer,

Carrier, Policy Number, etc)• Prior Coverage Information

Employee Confirmation Screen• Screen is still in development• Will guide the employee through any

missing pieces of data• Show the user a summary of the

application• Guide the user to print a confirmation

report, sign it, and fax the report to IBIS.