Presentation for:

Broker or Consultant

Our Market - Government Contractors The Boon Group’s clients are private companies performing contracts issued by a government agency (federal, state, or local). We do not market benefit plans to government employees, instead we market plans to private employers performing a government contract.

Companies performing federal, state, or city contracts are typically required to pay their hourly employees according to a “prevailing wage” or a local “wage determination”. These contracts set minimum pay rates employers must pay as well as the required Health & Welfare (H&W) Fringe Rate.

The H&W Fringe Rate is an hourly dollar amount earmarked by the government to provide employer sponsored benefits for all employees working on the contract. The company performing the federal, state, or city contract must either allocate the H&W Fringe towards the cost of employee benefits or in lieu of benefits provide the H&W Fringe in the employee’s paycheck as extra cash payroll.

Most companies performing the government contract prefer to allocate the H&W Fringe towards employee benefits as health benefits are pre-tax as opposed to cash payroll which is subject to payroll taxes. For example federal service contracts currently mandate a $3.35 per hour H&W Fringe Rate. Contractors paying that $3.35 H&W in the form of pre-tax health benefits instead of as cash payroll save thousands of dollars in reduced taxes. The savings factor is detailed on slide 4.

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

Our Market (Continued)

The following types of companies often perform government contracts. These are great industries for The Boon Group’s products and services:

Facility maintenance companies Staffing firms Security guard companies Janitorial companies Language translation & interpretation companies Non profit organizations with jobs programs for the disabled Construction Companies Mechanical engineering companies Environmental services companies

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

Advantages of The Boon Group’s Tailored Benefit Plans

Annual CostsCompanies performing government contracts tie their employee benefit budgets to the H&W Fringe Rate. The H&W Fringe Rate is typically increased annually, however there is no guarantee by how much. Federal, state, and city governments tend to increase the H&W Fringe amount by 3% per year, far below the double digit trend of traditional medical plans. As a result government contractors should look to implement non traditional benefit plans with lower annual increases. This way the contractor can be confident in the costs of benefits over the multi year life of the government contract.

The Per Hour Paid BudgetContractors face a challenge funding a benefit program with a “per hour” H&W Rate, as hours worked by employees tend to fluctuate from month to month. As a result traditional medical plans with stable monthly premiums are not a good fit. Instead contractors are better off with a tailored benefit plan with premium tied to a “per hour” budget.

Affordability Employees working on government contracts tend to be modestly paid hourly workers. The high costs of family coverage in traditional medical plans discourages them from covering dependants. As a result contractors should look to implement tailored benefit programs with affordable dependant coverage.

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

The Savings Factor

The following slide details how contractors save money by paying the H&W Fringe

rate in the form of benefits rather then as cash payroll. The savings are generated

by decreasing total taxable payroll.

Keep in mind the employer must pay taxes and worker’s compensation premiums

on each payroll dollar. Consequently after the taxes are considered, a payroll dollar

actually costs the employer approximately $1.17 in total cost ($1 in payroll plus

$0.17 in taxes and workers compensation premiums).

Employer provided benefits are pre-tax costs. So a dollar spent to provide health

coverage is not taxed, and therefore only costs the employer $1.00.

Government contracts give the employer the option of allocating the hourly H&W

Fringe Rate either towards the cost of benefits or extra cash payroll. As a result

employers providing the H&W Fringe Rate in the form of non taxable benefits' are at

a competitive advantage.

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

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Cash Wages

H&W Fringe

Paid In Cash

H&W Fringe

Paid

to Benefit Plan

TOTAL CASH WAGES $18.35 $15.00

FRINGE PAID TO BENEFIT PLAN $0.00 $3.35

PAYROLL BURDEN

FICA (Social Security Taxes) 7.65%

Worker’s Compensation Premiums 8.35%

+ Federal & State Unemployment Taxes 1%

Total 17% (assumed) $3.12 $2.55

HOURLY PAYROLL TAX SAVINGS PER EMPLOYEE

N/A $0.57

MONTHLY PAYROLL TAX SAVINGS PER EMPLOYEE 

N/A $98.61

ANNUAL SAVINGS BASED ON 2080 HOURS N/A $1,185.60

  Annual Employer Savings

10 employees

50 employees

$11,856

$59,280

Cost Savings Analysis

Hourly Rate $15.00(base) + $3.35(H&W Fringe) = $18.35 per hour

The Boon Group's Experience

For more than 20 years, The Boon Group® has been the bridge that enables government contractors to:

Remain competitive

Reduce costs

Maintain robust flexible benefit plans

Ensure compliance

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

Experience (continued)

The Boon Group® ― Provides unique products and administrative services to over 500 clients and more than 100,000 members

Administers tailored benefit plans designed to meet the unique needs of federal, state and city contractors. Markets its products and services through brokers and consultants c o n

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

Experience (continued)

The Boon Group® has the knowledge and expertise that is required to help contractors create benefit plans and solutions that comply with

Service Contract Act (Federal Contracts) Davis Bacon & Related Acts (Federal Contracts) Collectively Bargained Agreements (Union Contracts) Prevailing Wage Laws (State & City contracts) Living Wage Ordinances (City Contracts)

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

Compliance & Competitivenessre

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Generally, government contractors have three goals in common:

Compliance with governmental regulations

Competitiveness within the industry

Robust employee benefits

By outsourcing benefits administration to The Boon Group®, government contractors achieve each of these goals.

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

Compliance & Competitiveness

The Boon Group’s fees can be built into the cost of most benefit plans. As a result, the fees are paid by the insurance providers rather than from your client’s profits.

4.172 Meeting requirements for particular fringe benefits in general.

…No deduction from the specified amount may be made to cover any administrative costs which may be incurred by the contractor in providing the benefits, as such costs are properly a business expense of the employer…

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

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Robust Benefit Solutions

The Boon Group® offers a wide range of customized products and benefit solutions which include ―

Affordable fully insured or self insured proprietary medical plans: Tailored specifically to the applicable health & welfare (H&W) fringe rate.

Aetna Net Premier Plan: Offered exclusively through The Boon Group. This Aetna plan can be designed to meet the designated H&W fringe rate and offers robust medical coverage along with access to the national Aetna PPO Network.

Products with “Class Level” Benefits: accommodates employees who work fluctuating hours (ex. part-time or temporary employees)

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Robust Benefit Solutions

Additional customized products and benefit solutions may include ―

401k Plans: uniquely designed to absorb the fringe obligation at varying levels based on job site and/or job classification

Funded Sick Leave Accounts: allows fringe dollars to go further towards covering the cost of paid sick leave benefits

Trust Services: ensures that a self-funded plan complies with the SCA regulations

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Robust Benefit Solutions s

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Your client may choose to: Offer one of The Boon Group’s unique fringe benefit products to its employees;

Utilize only The Boon Group’s specialized benefits administrative services (Administrative Services Only); or

Select a combination of the products and services.

s e r v i c e sbenefits administrative

Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.

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Servicess

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nThe Boon Group® provides a wide range of high quality benefits administrative services which include ―

Benefit Implementation Management Services:

An Implementation Manager is assigned to the project and is responsible for:

Serving as the single point of contact throughout the implementation process;

Developing a customized Implementation Plan and timeline;

Scheduling Implementation kickoff meeting and ongoing weekly status calls;

Monitoring the status of all tasks and milestones on the Implementation Timeline to ensure all target dates are met;

Remaining involved in the process 60 days following the effective date of the benefits program; and

Implementing new contracts/sites throughout the year.

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Services (continued)

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Client Services

Overall responsibility for the Boon/Client relationship

Serves as a single point of contact for you and your clients

Provides experience reports and fringe reports

Facilitates the benefits renewal process

Enrollment Services

Customized benefits enrollment guides and customized enrollment forms mailed to employees’ homes

Web Enrollment Site ― employees can access benefit information, enroll and make changes

Telephonic Enrollment Services using licensed benefit counselors

On-site benefit briefing meetings

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Services (continued)

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Post Enrollment Services

Process enrollment data (new hires, terminations and changes)

Distribute post enrollment collateral materials (ID cards, Certificates of Insurance, Schedule of Benefits, Summary Plan Descriptions, etc.)

Transmit electronic file with payroll deduction amounts

Employee Benefits Assistance

Toll-free customer service help line for employees:

― inquiring about their benefit options and plan details

― requiring assistance with benefit questions or claim payment issues ― requesting their Sick Leave Account balances ― needing to change elections due to a life status change

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Services (continued)

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Benefits Administration Services

Transmit eligibility data to benefit providers in HIPAA EDI compliant format

Premium billing and collection services

Claims processing and payment for a variety of fully insured products and self insured plans

Verification of eligibility and benefits

COBRA Notification and billing services

HIPAA notices and certificates of creditable coverage

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Services (continued)

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Legal and Compliance Services

Responds to Department of Labor inquiries regarding fringe benefit plans

Prepares customized documents and assists Plan Sponsor with Summary Plan Descriptions

Establishes Trust arrangements, develops Trust documents and agreements, and works with Trustee (a financial institution)

Tracks federal legislation governing ERISA plans and state legislation to ensure Plans are in compliance with required regulations

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Services (continued)

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Fringe Accounting and Tracking Services

Average Cost and Individual Cost Accounting

Allocations to multiple benefit plans

Monthly Fringe Reporting

Sick Leave Accounting

Fringe Compliance Testing

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Service ― Quality AssuranceAn integrated quality assurance program for both Member Services and Claims Processing:

– Every 50th claim is automatically routed for internal audit.

– Errors that are identified through our Quality Assurance process are corrected by the auditors at that time. 

– Audit Results are logged to determine overall quality results and to detect trends used to identify needs for additional training.

– Errors identified through calls to our member service department are routed to a claim processor for resolution via a call action.

– Processor corrects the problem, sends call action back to the member service representative, member or provider is contacted and the call action is closed. 

– All phone calls are recorded for quality assurance. – Managers and Supervisors have the ability to listen in on phone calls

and recordings for quality auditing and training purposes.

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Current Service Metric Performance Standard Actual Performance*

Time Period: 2008

Time To Process  

     % Claims w/in 21 Calendar Days 90% 99.3%

     % Claims w/in 30 Calendar Days 98% 99.7%

Accuracy  

     %  Financial Accuracy 99% 99.8%

     %  Processing Accuracy 90% 95.7%

     %  Payment Accuracy 95% 99.3%

Telephone Responsiveness  

     Average Speed of Answer 100% of all calls answered within <45 seconds

100% of all calls answered within

34 seconds

     % of Abandonment Rate <5% 2.1%

Service ― Performance Results

Why The Boon Group?

Tie benefit plan costs directly to the designated H&W Fringe rate; maintain those expenditures on a pre-tax basis.

Offer your client’s employees robust benefits at an

affordable cost.

Ensure your client’s maintain compliance with

applicable government contracting laws: Service Contract

Act, Davis Bacon Act, Prevailing Wage Laws, Living

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Products are marketed through The Boon Insurance Agency, Inc., and Third Party Administrative Services are provided by Contractors Employee Benefits Administration, Inc. (CEBA®), wholly owned subsidiaries of The Boon Group, Inc.