Enhancements to the Broker Compensation Program for 2014 · Associate Vice President, Broker Sales CareFirst BlueCross BlueShield is the shared business name of CareFirst of Maryland,

CareFirst BlueCross BlueShield is the shared business name of CareFirst of Maryland, Inc. and Group Hospitalization and Medical Services, Inc. CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc. are both independent licensees of the Blue Cross and Blue Shield Association.

® Registered trademark of the Blue Cross and Blue Shield Association. ®’ Registered trademark of CareFirst of Maryland, Inc.

Date: November 11, 2013 Market: All

Enhancements to the Broker Compensation Program for 2014 CareFirst BlueCross BlueShield (CareFirst) is extremely pleased to announce the following enhancements to our Broker compensation program for 2014.

Persistency Threshold In 2013, we created the new 90-94.99% persistency threshold due to market conditions. To help many of you make the persistency numbers, we are offering this threshold again for 2014.

Additional Retention Program (1-50 Market) We have always valued you as our prime distributor for CareFirst products and are instituting an additional retention program for the 1-50 market. Not only do you have the opportunity to make your regular persistency bonus for 2014, but you will have the opportunity to make a retention bonus as well.

For all accounts active as of December 31, 2013, we will pay you $20/contract for persistency if you end 2014 at 92% retention. As a reminder, new business does not count towards retention.

There are no caps attached to this bonus program so it benefits you to keep most - if not all - of your groups with us in 2014. For example, if you had 2,000 contracts and you retain 92% in 2014 (1,840 contracts) you will be paid an additional $36,800 ($20 X 1,840).

Persistency Bonus Cap We are also increasing the persistency bonus cap from $1.5M to $2.0M in 2014. As a broker/agency, you will need to maintain 98% persistency in 2014 to be eligible. If you come in below 98%, the $1.5M cap will apply. Please note that any agency acquisitions in 2014 will not count towards this persistency bonus and any applicable bonus on the acquired block will be paid separately - if that block becomes bonus-eligible.

Contract Credit We realize that 2014 will be a challenging year. As a result, we are also increasing the contract credit from 25 to 40 contracts on each $100K of annualized USAble life premium sold. How will this work? If you sell $500K annualized of USAble life, you will get a credit of 200 contracts (40 X 5) towards your persistency bonus. This gives you an extra cushion to meet the persistency bonus. Additionally, in recognition of your increased efforts to sell new HealthyBlue 2.0 group contracts in 2013, we have decided to reward you again with a new business payout of $125 per contract in 2014 for all HealthyBlue 2.0 sales.

Commission in the 51+ Market At the request of the broker community, the commission in the 51+ market will increase to 5% in 2014. For example, if you are getting paid 3.5% ($70K) on a $2M renewal, going forward you will receive 5% or $100K.



Consumer Direct For the Consumer Direct Market, we will pay you $19.75 for a HealthyBlue Individual contract and $15.75 for other products you sell for Consumer Direct in 2014. This is in line with what the market pays and is still competitive. We look forward to working with you in 2014 and are here to help you sell – and keep – CareFirst business. If you have any questions about compensation, please feel free to contact your Broker Sales Representative or anyone from our Broker Sales Management Team.

Shekar Subramaniam Associate Vice President, Broker Sales

CareFirst BlueCross BlueShield is the shared business name of CareFirst of Maryland, Inc. and Group Hospitalization and Medical Services, Inc.

CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc. are both independent licensees of the Blue Cross and Blue Shield Association.


November 12, 2013

2014 Consumer Direct Compensation changes

A broker flash was sent out from the group market on November 11 outlining compensation changes for both the group and Consumer Direct market segments. Below is additional clarification for the Consumer Direct market. In 2014, the Consumer Direct Market, we will pay $19.75 for a Healthy Blue Individual contract and $15.75 for all other under 65 products you sell in Consumer Direct (On and Off Exchange). This new rate will apply to both current and new business. Medigap commission will remain at $17.00. The new sales bonus will remain the same and will only apply to business sold off exchange. Current override levels will remain in place for contracted General Agent’s.

Sincerely,

Vickie S. Cosby Senior Director, Consumer Direct Sales

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Broker/Agent Fees will be earned by qualified Broker/Agents for Insurer Group business as follows: Fees are based on paid enrolled Group Market Contracts; amounts are per Contract, per Month (PCPM).

GROUP MARKET SCHEDULE OF BROKER/AGENT FEES

Medical & RX 1-50 Fee MD Indemnity $13.00 BluePreferred PPO $25.00 HMO $23.00 HealthyBlue 2.0 & HRA/HSA (BlueFund)

$27.00

HealthyBlue 2.0 & HRA/HSA(Compatible)

$25.00

CDH $21.00 NON-Medical

Vision $2.00 Dental $6.00

51+ = Add on Fee

Notes:

1. Broker/Agent Fees shall not be payable for any Insurer discounted dental or discounted vision plans and products. 2. For 51+ business: Any Broker/Agent Fee paid by Insurer for Risk Business Only, not ASO, cannot exceed 3.5%. Any

Broker/Agent Fee paid by Insurer equal to or less than 1% must be approved in writing, in advance, by the Insurer’s Senior Vice President of Sales. Dental Fee cannot Exceed 5.0%.

3. Any Direct Business with Insurer will not be eligible for any Broker/Agent Fee unless Broker/Agent Fee has been included in the rates or administrative fees quoted to and accepted by Group.

4. PCPM rate for all CDH Groups (new and existing) that elect to use our integrated administrative services, the rate is at the BlueChoice or BluePreferred level, respectively.

5. Parity Groups are paid under the 1-50 schedule. 6. Medicare Advantage commission paid at 51+ rates. Must be trained and certified to sell this product.

GROUP MARKET SCHEDULE OF FEES

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CONSUMER DIRECT MARKET SCHEDULE OF FEES & BONUSES & REQUEST FOR STATUTORY

APPOINTMENT

For Consumer Direct Market Benefit Contracts Any premiums generated under this schedule shall not be counted or credited towards any existing commission or bonus schedule the Contractor may have under any other applicable agreement with Insurer or any of its divisions, affiliates or subsidiaries.

Contractor must indicate desired lines of business by checking the applicable box(es) below. The Contractor will be authorized to solicit applications on behalf of Insurer for the Products below after the appropriate Appointment(s) has/have been made by Insurer and only after Insurer has confirmed to Contractor such in-force Appointments.

Over 65 Products

MediGap – 65

Supplemental-65 DC

Supplement -65 VA

Affordable Care Act Medical

BluePreferred

BluePreferred HSA

Blue Choice

Blue Choice HSA

BlueChoice Plus

HealthyBlue

BlueChoice Young Adult

Dental

BlueDental Plus

Individual Select Preferred Dental Plus

The availability of Consumer Direct Market products is subject to change by Insurer. Please contact Insurer’s Consumer Direct Sales department with any questions regarding the solicitation of Consumer Direct Market business.

Broker/Agent Fees will be paid on new benefit contracts (as authorized above) sold by Contractor, to individuals who have not been an Consumer Direct Market Benefit Contract holder with Insurer for a one (1) year period immediately preceding the contracts for which the Contractor seeks Broker/Agent Fees under this schedule. Broker/Agent Fees will be paid at a per Contract, per Month (PCPM) amount for contracts associated with premium that Insurer has received and determined as paid. Broker/Agent may earn Broker/Agent Fees as long as the Subscriber’s Benefit Contract remains in force, on all Benefit Contracts entered into pursuant to this schedule, except in the case of termination due to cause as set forth by this Agreement. Broker/Agent Fees will be earned by qualified Broker/Agent for Insurer Consumer Direct Market business for Medical accounts as follows. Fees are based on paid enrolled Consumer Direct Market contracts; amounts are per Contract, per Month (PCPM).

Note: Any Direct Insurer business (Indemnity

and HMO) is not eligible for any bonus

programs and will not be eligible for

any Broker/Agent Fees.

*Broker/Agent Fees payable as Consumer Direct Market business shall not be payable as Group Market business and will not be eligible for fees other than Insurer

PCPM Rate*†

Medical accounts ONLY Product Type:

Over 65 Under 65

$17.00 $15.75

HealthyBlue 2.0 Under 65

$19.75

Select Preferred Dental Plus/Blue Preferred $4.50



Date: February 20, 2014 Market: All

2014 Specialty Products Compensation Schedule Selling Specialty Products gives you an opportunity to increase your compensation, maintain clients and offer better customer service. Additionally, by offering Specialty Products as a complement to group medical benefits, CareFirst can help your accounts:

Retain employees—a comprehensive benefits portfolio can attract and retain quality employees

Satisfy employees—providing the coverage that employees need for various life events can lead to greater satisfaction in the workplace.

Overall compensation for Brokers - Specialty Products This chart provides an example of how the commissions for these products can increase your income.

Product Compensation

Dental $6 PCPM (2-50)

Add on: %/$$ (51+)

Vision $2 PCPM (2-50)

Add on: %/$$ (51+)

Life/Disability Graded From 5% to 0.5%

GeoBlue $5 PCPM

Worksite 8-20%

Paid First Year Premium

Tax Prep $2 PCPM

Payroll Revenue Share

Specialty Products follow the rules of the existing Sales Incentive Plan. More information will be made available at the Broker Forum in May.

Should you have any questions, please contact your Broker Sales Representative.

C. Shekar Subramaniam Associate Vice President, Broker Sales

Documents

Enhancements to the Broker Compensation Program for 2014 · Associate Vice President, Broker Sales CareFirst BlueCross BlueShield is the shared business name of CareFirst of Maryland,