The Affordable Care Act An Opportunity for Response

1. If The Image Is Primarily Light, Use The Black Aon Logo. Never Use The Red Logo Over A Photo. Subtitle, Arial, 20pt., .75 Line Spacing, .5 Before Paragraph Aon Orientation The Affordable Care ActAn Opportunity for Response February 25, 2014

2. Agenda • Aon/Aon Hewitt Overview • ACA Overview and Heath Care Reform • What’s changing and when? • What is an Exchange? • Aon Hewitt Corporate Exchange overview • Q&A

3. AON OVERVIEW

4. About Aon Aon Vision: Aon is universally recognized as the premier global professional services firm focused on risk advice and human capital management Aon plc Aon Risk Solutions Aon Benfield Aon Hewitt Aon Service Corp. • Treaty Reinsurance • Facultative Reinsurance • Investment Banking • Analytics • Client Services • Health & Benefits Consulting • Retirement and Actuarial Consulting • Investment Consulting • M&A Solutions • Talent and Rewards • Benefits Administration • HR Business Process Outsourcing • Global Benefits • Retail Brokerage • Captive Management • Affinity Programs • Select Personal Lines • Premium Finance • Claims advocacy & Claims Administration • Risk Assessment & Advisory • Finance • Marketing • Human Resources • Technology

5. Aon plc The leading global provider of risk management services, insurance and re-insurance brokerage, and human resource solutions Aon plc FY12 Revenue $11.5 billion Aon Revenue Aon Risk Solutions Aon Benfield Aon Hewitt Greg Case President & CEO HR Solutions 34% Aon Risk Solutions Aon Hewitt 65,000 colleagues 120 countries 500 global offices Aon Benfield (Reinsurance) Risk Solutions 66% Empowering results for clients on two of the most important issuesin today’s global economy; risk and people

6. Aon Overview | History in the Making

7. Aon Overview | Serving Many of the World’s Best Organizations of top Fortune 500 firms of top P&C insurance firms of top Technology firms of top Healthcare firms of top Consumer firms of top Financial firms of top Energy firms of top Telecom firms 10/10 10/10 10/10 …are Aon Clients 10/10 10/10 9/10 8/10 8/10

8. AON HEWITT OVERVIEW

9. The Expansive Reach of Aon Hewitt 30,000colleagues around the world 330 offices in 90countries More than 20,000 clients globally Serve 80%of the Fortune 500

10. An Established, Industry-Leading Focus on HR Solutions Most named Top Consultants on Human Resource Executive and Risk and Insurance magazine’s annual list of Top Employee Benefit Consultants for the past five years Honored with an Outsourcing Excellence Award by the Outsourcing Center in 2012 and 2013 Named one of 20 Institutional Leaders of the Past 20 Years by PLANSPONSOR magazine

11. Solutions With Scale, Depth and Breadth

12. Three Focused Solution Lines Talent Retirement Health • Consulting • Health and Benefits Brokerage and Consulting • Absence and Productivity • Elective Benefits • Global Benefits • Consulting • Broad-Based Compensation • Executive Compensation • Sales Force Effectiveness • Leadership & Assessment • Employee Engagement • HR Effectiveness • Consulting • Retirement Consulting and Administration • Investment Consulting and Delegated Investment Mgmt. • Executive Benefits • Outsourcing • Talent Acquisition & Recruitment Outsourcing • HR BPO • Global Workforce & Payroll • Talent Administration Support • Total Rewards + Online Communications • Outsourcing • Defined Benefit Administration • Defined Contribution Administration • Financial Services • AH as Advisor • Self-Directed Brokerage and Personal Financial Center • Compliance Services • Outsourcing • Health and Welfare Administration • Absence Management • Dependent Verification • Advocacy Services • Reimbursement Account Admin • Compliance Services • Active Health Care Exchange • Retiree Health Care Exchange Communication, Merger & Acquisition Solutions, Customer Experience 11

13. The Industry Leadership to Deliver: Retirement Navigate retirement risk while providing new levels of financial security • Macroeconomic Trends • Companies facing huge pension liabilities and need to de-risk • Move to fixed income • Focus on volatility vs. short term returns • Settle pension liability through the insurance markets and lump sums • Pressure on defined contribution systems to do more • Focus on financial wellness and adequacy • Fiduciary rigor and governance • Shift to institutional from retail approaches • Market-leading Capabilities • #1 DB and #2 DC administrator • $2 billion in DC payments monthly; $25 billion in pension payments for 2.7M retirees monthly; $667 million in lump-sum pension checks monthly • Investment advice for $4.2 trillion in assets globally; delegated investment management for ~$37 billion in assets for >130 clients • Experienced leader in all major de-risking trends and consultant on largest pension de-risking action • Only firm with integrated and comprehensive solutions across actuarial (~$1 trillion in global pension liabilities), plan administration, investments and insurance 12

14. The Industry Leadership to Deliver: Talent Cultivate talent to drive organizational and personal performance and growth • Macroeconomic Trends • 4 out of 10 employees worldwide are not engaged • Focus required on culture and engagement to attract next-gen talent • Emerging economies are growing faster than available leadership talent • Increasing need to build global talent pools • New pay philosophies need to align to long-term results • Growing interest in SaaS • Market-leading Capabilities • 12 global HR BPO centers; support in 11 languages • Large scale transaction capability: 15M payroll transactions, assess 8M candidates and hire 59,000 client positions annually • 5,000 talent clients with 17M employees in 40 countries • 50 unique comp & performance surveys • 17M+ responses in our engagement database • Supported ~30% of PE transactions over last 3 years and 25% of corporate M&A deals over $15B in 2011 13

15. Macroeconomic Trends Health care costs have risen 52% in past 6 years – similar trend expected to continue Health Care Reform actions driving major change and new options Companies searching for global benefit solutions New strategies needed to improve population health The Industry Leadership to Deliver: Health Redefine health & benefits solutions for greater choice, affordability, and wellness • Market-leading Capabilities • Largest provider of health & welfare admin • 10k unique health plan designs • Serve more than 9.5 million health and welfare participants • Direct $8B in health premiums annually • Pioneer in health care exchanges • 100,000 employees and their families in our corporate exchange • 200,000 retirees in our retiree exchange • Provide Health & Benefits consulting covering the health benefits management spectrum • 90 locations worldwide • 5,000 large and mid-market clients in both public and private sectors • Help 108,000 employees return to work annually 14

16. Affordable Care Act

17. Why Are We Talking About This? • Health Care $2.5 trillion • Food $0.9 trillion • National Defense $0.8 trillion • Clothing $0.3 trillion • Total Pre-tax Corporate Profits $1.3 trillion Spending by Category (2009) Sources: CMS, Bureau of Economic Analysis, 2009

18. About Health Care Reform On March 23, 2010, the Patient Protection and Affordable Care Act(PPACA) was signed into law. The law puts in place comprehensive health insurance reforms that will roll out over four years and beyond. On March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (HCERA) was signed into law. This act contains significant modifications to PPACA. The combined laws are referred to as the “Affordable Care Act” or more commonly as “Health Care Reform”. These two laws together make sweeping changes to existing laws governing employer-sponsored group health plans, individual health coverage, and governmental health programs.

19. Health Reform: Keeping it in the Forefront The Headlines What’s Ahead for Health Reform? • 2012 saw the Supreme Court confirmation of the Health Care Reform Mandate • Congressional repeal remains unlikely • Major implications for • State Governments • Federal Government • Employers • Employees • Providers

20. Health Care Reform Timeline • Notice to inform employees of coverage options in exchange • Limit of Health Care Flexible Spending Account contributions • Medicare Part D subsidy to employer no longer tax-free • Tax on high-income individuals • Comparative effectiveness fee* • Excise tax on high-cost coverage • Over-the-counter medication not reimbursable through Flexible Spending Account • Health Savings Account excise tax increased • Medicare Part D discounts for certain drugs in the “doughnut hole” • Medicare Annual Enrollment period changes • Employer distribution of summary of benefits and coverage to participants • Employer quality of care report • Employer reporting of health coverage on W-2 • Comparative effectiveness fee* • Individual mandate to purchase insurance or pay penalty • State/Federal insurance exchanges • Employer to provide minimum health coverage • Preexisting condition exclusions prohibited • Annual limits prohibited • Automatic enrollment (delayed) • Limit of 90 days on waiting periods for coverage • Employer reporting of health insurance information to participants & Government • Increased cap on rewards for wellness programs • Transition Reinsurance Program • Lifetime limits prohibited • Only restricted annual limits permitted • Consumer protections • >Preexisting • condition exclusions • prohibited for children • under 19 • >Rescission of • Coverage • >Other protections • Coverage for preventive health services • Extension of dependent coverage up to age 26 • Effective appeals process • Early Retiree Reimbursement Program • Expansion of adoption assistance program credit • Additional reporting to State & Federal governments and Public

21. Business Opportunity & Drivers The Facts: • 122 million+ active employees with employer-sponsored group coverage • 94% of employers plan to continue offering health benefits to active employees • Retiree market poised to grow at 4.5 millionper year • Around 48 million people qualify for Medicare today. 26% of those have employer-sponsored coverage • 28% of employers plan to move to a corporate exchange model in the future. • 66% of employers use or plan to move to an individual market strategy for retiree health care Note: • Aon Hewitt’s 2013 Health Care Trends survey of more than 800 employers • Aon Hewitt’s 2013 Retiree Health Care Trends survey of more than 500 employers

22. Four Paths for Employers

23. House Money, House Rules—Rising Cost and Worsening Health Risk Chronic illness accounts for 60% - 65% of all health care spending Source: 2010 World Economic Forum

24. Changing Health Behavior Source: Aon Hewitt 2012 Health Care Survey, available at aon.com/betterhealthresults

25. Play on a New Field

26. Play on a New Field

27. Aon Hewitt Corporate Exchange Survey Results 44% of companies believe they will adopt a Corporate Exchange form of health benefits delivery over the next 3-5 years Employer Responsibility for Health Care Coverage Source: Aon Hewitt, 2011 (n=562)

28. It Is About Managing Through Reform The Situation: • Employers with modest impact will see costs rise 2% to 5% in 2014 • Employers with low-paid workers, long waiting periods, 30+ hour employees with no coverage or low value coverage could see costs increase 20% to 60% in 2014 • Some employers will continue to make incremental changes to health care programs and will offer more traditional decision-making tools and resources to employees • For other employers, 2014 will mean radically redefining their health care offerings and helping employees optimize their coverage and cost through: Employer plan, Exchanges, Medicaid • These choices will be heavily influenced by federal subsidies and state Medicaid entitlement rules as well as the influx of fully insured lives into state and federal exchanges • Employers need to continue to monitor legislative and regulatory changes

29. What is an Exchange? An exchange is a competitive marketplace that consists of suppliers and buyers Exchange

30. Exchange Benefits to Employers, Enrollees, and Carriers Employers • Trend mitigation through competition, efficiency and best-in-market contracting • Cost predictability • Risk transfer • Focus on health and productivity Enrollees • Greater choice of plans and carriers • Flexibility to tailor benefit/contribution trade-offs • Superior customer experience Carriers • Market share opportunity • Earnings potential (full premiums vs. administrative fees) • Product innovation and control • Attractive risk pool

31. Corporate/Private Exchange Goals • Create a competitive marketin health care benefits at a retail/consumer level • Will drive efficiency and mitigate trend through competitive forces • Facilitate the movement to a defined contribution modelfor those employers who are aligned with this philosophy • Jump off the health care trend curve to a compensation-like rate of increase • Treat health benefits as an element of total rewards • Expand choice, drive efficiency and simplicity, but allow consumer selections that could not be driven unilaterally at the employer level • For example, narrow networks, select formularies • Provide an alternativeto state exchanges for large employers before 2017, and transition to an individual model when the market is ready • Consolidate purchasing power in the private sector to drive systemic reforms of the health care delivery system

32. Aon Hewitt Health Care Exchanges Public Exchange Private Exchange Now Now Future Now Future Future

33. Aon Hewitt Health Care Exchange Initiatives In development Aon Hewitt Health Care Exchange Portfolio Individual Exchange Group Exchange State/Federal Exchange Post-65 RetireesAon Hewitt Navigators Active + / or Pre-65 RetireesH&B Consulting Active + / or Pre-65 RetireesAon Hewitt Corporate Exchange Pre-65 RetireesAon Hewitt Navigators ActivesAon Hewitt Navigators

34. Navigators – We Make it Easy With Aon Hewitt Navigators, employers can realize significant cost savings by seamlessly transitioning retirees to the individual market while still providing the support they need to navigate the complex Medicare market. ADVOCACY EDUCATION CHOICE ENROLLMENT Over 240,000 retirees served with over 92% satisfaction

35. Corporate Exchange: How It Works

36. Value Proposition—Making This Work for All Stakeholders • Clients • Risk transfer and predictability • Trend mitigation through competition, efficiency, and best-in-market contracting • Focus on health and productivity • Employees • Greater choice of plans and carriers • Superior customer experience • Flexibility to tailor benefit/contribution trade-offs • Carriers • Market share opportunity • Earnings potential • Product innovation and control • Attractive risk pool

37. Corporate Exchange Shopping Experience

38. Gain Predictability and Risk Transfer without Cost Increases Insurers will have accountability for managingcare; price becomes critically important With competition mitigating trend, plan sponsors can move to a DC approach without long-term cost-shifting to associates Insured Plans In every consumer market, competition reduces cost Defined ContributionSubsidy Competition Reduce Trend Remove Volatility Ensure Employee Sustainability Choice and Flexibility Best-in-MarketEfficiencies Consumerism Freedom of movement across insurers will keep costs low and service levels high generating more control and increased satisfaction Regional rating bands allows market-specific insurer strengths to emerge Consumers will make economic choices if they can reap the full economic benefit No “Silver Bullet”: Six Key Levers Working in Concert

39. Q&A

40. 1) Who is the CEO of Aon? 2) What does Aon mean? 3) How many people do we administer benefits for? 4) How many colleagues do we have globally? 5) What is an Exchange? 6) Which company did Aon Hewitt contract for the Corporate Exchange for benefits in 2014? Aon and ACA: Trivia