2018 Annual Report-6-4 Pages

2018 Annual Report 1

A letter from Board Chairman, William Douglas Smith 2018 BOARD OF DIRECTORS Dr. Fred Craigie Since its inception, the mission at Community Health Options has been to partner locally with Michael DeLorenzo Members, businesses, and health professionals to provide affordable, high-quality benefits Tonua Fedusenko that promote health and wellbeing. Each day, we strive to improve the lives of Mainers and Sarah Hines positively impact our local economies. These aspirations are as pertinent today, as when they Joal Kallich were established in 2011. Robert Lorenzo, MD Heidi Lukas Our organization’s roots are in Maine, our orientation is nonprofit, and our mandate is to be a Rocell Marcellino Consumer Operated and Oriented Plan . Collectively, these attributes have made Community Felicity Myers Health Options unique in the marketplace from the outset. Jeff Norris David Shipman We are leveraging this uniqueness with disciplined, smart, and quality teamwork guided by David Shultz strong and able leadership and strengthened by our key partnerships. The 2018 report shares W. Douglas Smith the most recent chapter in this story by highlighting the positive impact we are having on our Mitchell Stein (not on new list) Members, providers, and employer groups. It also describes our work environment, how we Lisa Tapert value our team members, and their enduring commitment to our mission. Ronnie Weston Douglas Wilson The 2018 report shares the most recent chapter in this story by highlighting the positive impact we are having on our Members, providers, and employer groups. Another key element of this story is represented by the organization’s Board of Directors who selflessly volunteer their time and talent. Community Health Options Members elect the majority of the Board - many of whom are Members. In addition to providing strategic oversight, this governance model ensures that the Member perspective is present and heard during Board discussions and decision making. I encourage you to read through this report and listen to some of the many voices that have shaped and advanced our organization this year. On behalf of the Board of Directors, management team and our business partners, thank you for your continued support of Community Health Options. 2

In 2011, Kevin Lewis and Rob Hillman IN THIS REPORT 2 quietly began to build something 4 remarkable: a nonprofit health insurer that From the Board helps people obtain quality healthcare Commitment To Members 6 coverage while reducing the cost of care. Helping Maine 8 “Our intention from the beginning was to Businesses Succeed 10 leverage relationships to build a health Provider Relations 13 plan that our Members could afford,” Workplace Culture 15 said Kevin Lewis, President and CEO of 2018 Financial Summary Health Options. “And we’ve always had From the CEO a keen interest in improving the health and wellbeing of our Members and our communities. Today Health Options is the state’s largest carrier for the individual market and has a growing portion of group business within the state.” 3

A Simple, Reliable Commitment To Members Expanding access to high-quality insurance helps improve Members’ health and wellbeing. In 2011, Kevin Lewis and Rob Hillman quietly began to build something remarkable: a nonprofit health insurer that helps people obtain quality healthcare coverage while reducing the cost of care. “Our intention from the beginning was to leverage relationships to build a health plan that our Members could afford,” said Kevin Lewis, President and CEO of Health Options. “And we’ve always had a keen interest in improving the health and wellbeing of our Members and our communities. “Today Health Options is the state’s largest carrier for the individual market and has a growing portion of group business within the state.” Neighborhood kids in North Yarmouth enjoy the springtime. 4

Expanding Access to Care Through the health exchange, Children’s Hospital. “Working Working I was able to become a with Health Options has been with Health Our Members’ healthcare Health Options Member in easy,” he said. “I’m looking Options has needs are diverse, ranging 2016. Shortly afterward, I been easy... from preventive screening to was diagnosed with Celiac forward to playing music I’m looking diagnostic services to lifestyle Disease. Living in rural again with my band after forward to improvements such as weight Maine can make getting care my surgery.” playing music loss and smoking cessation. difficult, but Health Options’ again with my Some of our Members face Extending the Service band after my chronic and life-threatening Care Managers helped me Spectrum surgery. diseases and require access find the care I need close to to additional care; fortunately, home,” Jeanette explains. Our healthcare provider –Brian, they can focus on recovery network extends beyond Member since 2016 knowing that they have Connecting to Highly physicians and surgeons. health insurance coverage. Skilled Specialists Talented registered nurses, occupational therapists, “I didn’t think I needed health When our Members have licensed social workers, insurance, but when I was specialized medical needs registered dieticians, and diagnosed with breast that can’t be met locally, they others support Members cancer, I was glad I had it,” can rely on our extensive through a wide spectrum of says Sue, a Health Options provider network that services. Our insurance plan Member since 2015. “I includes New Hampshire features, like the Chronic received the treatment I and many of the major Illness Support Program, needed and had access to research hospitals in Boston. have helped Members some fantastic providers.” Our healthcare partners save over 85% on routine understand the importance of healthcare and more than Helping the Uninsured delivering specialized care to 50% on the medications that our Members and they work help manage their chronic As the only local, Member-led diligently to make it easy for conditions. This collaborative nonprofit health plan, we are them to access the care they approach with our provider proud to offer insurance to need, when they need it. network, and the ability to Mainers who were previously access benefits that support uninsured, like Jeanette. Brian, a Member since health and wellbeing, help 2016, needed corrective differentiate Health Options “I left my job in 2014 and jaw surgery that was not as more than a typical insurer. was uninsured for a while. available in Maine. Health Options was able to connect him with a surgeon at Boston 5

Offering More To Help Businesses Succeed Maine businesses are as unique as the state’s history, and our diverse health insurance options can meet the needs of all types of employers. With a strong entrepreneurial spirit and determination to succeed, Mainers value hard work and are committed to the state, their communities, and one another. From “The County” to the beaches of York, and from heavy-duty industrial employers to small professional firms, Maine businesses are as varied and diverse as the state’s geography. Bruns Bros. Established in 1985 as a two-man sanitary welding company focusing on process design and installation in the dairy, food and beverage, and pharmaceutical industries, Bruns Bros. has since grown into a multi-state corporation with over 60 employees. The company’s experience with other health insurers over the years led to the switch to Health Options in 2014. Co-owner, Mike Bruns, collaborates with a team member. 6

“As a Maine business, we globe, understands the “Our employees have Health were looking to support importance of quality and taken advantage of Health Options’ another local Maine business. commitment. “I like that I Options’ partnership with competitive Health Options has been can pick up the phone and Express Scripts to get their pricing makes great to work with and we get a local person on the medications delivered right it easy to like the new automated other end,” said Boulet. “Our to their door at affordable dismiss claims feed. It allows our company is a bit old school. A prices,” said Rhonda. the other employees to better manage handshake goes a long way companies. their plans,” said Mike Bruns, for me and my employees. Expanding Benefits co-owner of Bruns Bros. When we need something, –Steve Boulet, we call Health Options and As a local Maine company, Auburn Manufacturing Auburn Manufacturing they are willing to meet with Health Options is committed Group Member since 2016 us face-to-face.” to supporting Maine With a desire to partner with businesses across the state 7 a local company that knows Gerald Pelletier, Inc. with health plans that fit Maine and its workforce, their needs. That’s why in Auburn Manufacturing Well before being featured 2018, we partnered with made the switch to Health on the television show Northeast Delta Dental, Options in 2016 and “it’s American Loggers, Gerald northern New England’s been nothing but positive,” Pelletier Inc. was harvesting leading dental carrier, to according to Steve Boulet, and hauling timber on ice- combine dental coverage Human Resources Manager covered logging routes in the with large group plans. at Auburn Manufacturing. rugged and remote woods of “Health Options is competitive northern Maine. As a three- with both pricing and plan generation, family-owned benefits. Every year, I look and operated business, the at over 120 different health Pelletiers can tell you that plans. Health Options’ this type of work is not for competitive pricing makes the fainthearted. It can be it easy to dismiss the other dangerous, and the company companies.” knows how important it is to offer its employees health Auburn Manufacturing, insurance. an industry leader in the manufacturing of advanced “We made the switch to textiles for extreme-heat Health Options due to its environments across the competitive pricing,” said Rhonda Powers, the Office Supervisor. “Our employees are glad to have health insurance, as it’s hard to come by these days.” Many Gerald Pelletier, Inc. employees spend weeks in the remote wilderness, so it’s essential for them to have their medications prefilled.

Relationships Make A Difference in Healthcare Dr. Wilkins closely checks a Partnerships patient’s eyes for injury. with providers ensure that our Members receive the timely, quality care they need. At Health Options, we recognize that providers, and the care they deliver, are essential in our ability to meet our mission. The relationships we establish with our more than 21,000 in-network providers are at the heart of what we do. We continue to partner with a broad range of providers to ensure that our Members receive the care they need. Meet Dr. Wilkins Dr. Richard Wilkins is a family medicine specialist who has practiced all over the world and worked for Fortune 100 companies. He originally came to Maine to retire, relax, and enjoy the many activities the state has to offer, but his retirement didn’t last long. The community encouraged him to open a practice that offers Mainers the kind of patient care that seems novel and innovative today. Now, located in a small, nondescript building in Raymond, Maine, Dr. Wilkins has taken his worldly experiences and created an approach to healthcare that is streamlined, efficient, and affordable. 8

“Although the healthcare want to provide them the documentation for their This is the paradigms may shift from best care you can. Health patients. Without these teams first time in one culture to the next, all Options provides a good and their partnerships with Maine that patients experience the conduit of care. The staff is Health Options, there would a health same emotions and want easy to deal with and there is be challenges for all involved. insurance to be heard. I believe in no second-guessing.” company has creating relationships with “We value the relationship been looking my patients to get to the Dr. Parker is driven to we have with Health out for the root cause of their health provide exceptional care Options,” said Julie patient. problems,” said Dr. Wilkins. to his patients. At times he Card, Patient Financial “Rather than send my is frustrated by the way Services Representative at –Dr. Michael Parker, patients to another facility national insurance carriers MaineHealth. “When Health St. Mary’s Hospital for routine diagnostic tests, run their businesses. “This is Options brought its claims like an x-ray or slit lamp the first time in Maine that a system in-house as part of its eye exam, we aim to reach health insurance company strategy to integrate systems the source of the issue by has been looking out for the across the board, there were a performing many procedures patient. I’ve watched Health few hiccups that caused some right here in my office.” Options weather the storms delays, but Health Options’ and they have beaten the leadership worked with us Dr. Wilkins has partnered odds. I believe all insurance to overcome the challenges. with Health Options since companies should follow the Our relationship with the 2015 and is a prime same model,” said Dr. Parker. organization’s Provider . . . a provider who embodies the Health Options mission of delivering high-quality healthcare at a reasonable cost. example of a provider who As a member of the Health Relations team is great. We embodies the Health Options Options Quality Assurance now have monthly onsite mission of delivering high- Committee and the meetings at our offices. We quality healthcare at a Credentialing Committee, don’t get this type of treatment reasonable cost. Dr. Parker has been a strong with the other insurance advocate for the organization companies,” Julie said. Meet Dr. Parker and its Members and says he is “thrilled to be involved Health Options has made Dr. Michael Parker delivers with this unique healthcare more than $1 billion care at St. Mary’s Center approach.” in payments to Maine for Family Urology and has providers since 2014. We’re worked with many insurance Our Behind-the-Scenes proud of the role we play companies during his more Partners in strengthening the local than 40 years of practice. and state economies by “When you work at a At each provider’s office partnering with skilled hospital, you don’t select your across the state, staff is at professionals who care for insurance partners. Patients the core of submitting and Mainers every day. come through the Emergency processing timely healthcare Department and you just 9

Cultivating a Productive Workplace By creating a work environment that fosters health and wellbeing, employees are motivated to do their best and t he organization can thrive. Tina and Carrie visit our weekly farmer’s market. 10

Health Options occupies two intellectual, and physical organization’s leadership: Not only floors in a refurbished textile wellbeing of the LA region. “We are pleased and is Health mill along the Androscoggin humbled to accept this Options River in Lewiston. Many of Our Talented Staff award on behalf of our invested our nearly 200 employees employees and Board in making choose to support local It would be impossible to members, whose focus is on a positive businesses by shopping, advance the organization’s advancing the health and impact on exercising, dining, and mission without the wellbeing of Maine people its Members, volunteering nearby, helping while also cultivating a they are truly to fuel the resurgence of the positive work environment. invested in Lewiston-Auburn area. We take tremendous pride me as an in developing the talent employee. In the warmer months, the of our team. This award organization has arranged for speaks to the high value –Carrie Bolduc, Jillson’s, a local farm, to set up we place in our productive Health Options Employee and collaborative work commitment of our environment which then, in employees. The leadership turn, benefits our Members.” team at Health Options places a high value on a productive and collaborative work environment that keeps employees happy and healthy. a farmer’s market at the Bates Recently, we were honored Mill complex. Our employees to receive the national and community members Psychologically Healthy enjoy the fresh, healthy Workplace Award from the produce and the convenience American Psychological of the weekly event. Association. The award recognizes employers Community Recognition who implement workplace practices, backed by Health Options was psychological science, honored to receive the 2018 that support employee Business Leadership Award health and wellbeing while from the Lewiston Auburn increasing performance and Metropolitan Chamber of productivity. Commerce for invigorating the economic health of the At the award ceremony area, while also contributing Kevin Lewis conveyed to the social, cultural, the sentiment of the Other Health Options employees shown (left to right): Grayson Stuntz, Tom Ringle, 11 and Eric Rider

Demonstrated Stability and Staying Power Our fifth year of operations in 2018, showcased the positive impacts of meticulous planning, service model improvements, strategic partnerships and the resiliency of our team. Natalie Morse, RN, Care Manager, helping Members since 2014 12

Financial Summary 64,177,338 Our financial success 97,227,688 in 2018 allowed us Balance Sheet as of December 31, 2018 161,405,026 to nearly double our Assets reserves, and our net Cash and Invested Assets: 430,334 earnings have produced Bonds 3,288,838 a level of surplus that Cash, cash equivalents, and short-term investments demonstrates stability Total cash and invested assets 558,485 and staying power. 755,661 We continue to invest Investment Income Due And Accrued 3,978,503 in developing our Premiums receivable 242,520 infrastructure with a Amounts recoverable from reinsurers 170,659,367 focus on improving our Electronic data processing equipment and software Member experience Healthcare and other amounts receivable 46,232,599 and enhancing our Other assets 317,328 relationships with Total admitted assets Maine businesses. We 56,400,000 are proud to partner Liabilities, Capital, and Surplus 5,488,975 with nearly 1,200 Liabilities: 3,552,598 businesses and 21,000 Unpaid claims and claims adjustment expenses 580,288 healthcare providers Accrued medical incentive pool and bonus amounts 658,971 to bring our Members Aggregate health policy reserves 95,052 high-quality, affordable Premiums received in advance healthcare options. General expenses due or accrued 113,325,811 Amounts withheld or retained for the account of others Borrowed money and interest thereon 132,316,124 Other liabilities (74,982,568) Total Liabilities — Capital and Surplus: 57,333,556 Surplus notes 170,659,367 Unassigned deficit Special surplus funds Total Capital And Surplus Total Liabilities, Capital, and Surplus 13

A letter from Board Chairman, Doug Smith 2018 BOARD OF DIRECTORS Dana Baldwin Improving MemberCommunity Health Options’ mission is to partner locally with David Shipman Members, businesses and health professionals to provide affordable, high-quality benefits that promote health and David Shultz wellbeing. How we have and will continue to accomplish this is by committing ourselves to be a leader in transforming and Douglas Wilson Felicity Myers experience, financialimproving individual and community health and positively affecting local economies. These mission and vision statements are as fitting today as when they and the organization were Fred Craigie, PhD conceived, over five years ago. The organization’s roots are in Maine, our orientation is non-profit Jim Davis Mike Woodard performance, providerand, as enacted by the Accountable Care Act, our mandate is to be a Consumer Operated and Oriented Plan (CO-OP). Taken Rocell Marcellino together this makes Community Health Options unique from the outset. Ronnie Weston partnerships, andAnother key part of the story can be told by the Community Health Options Board made up of 17 Directors who volunteer their time. What isn’t unique is how with hard, smart, and quality work Sarah Hines Tonua Fedusenko adding more newguided by strong and able leadership and leveraged and Trish Riley W. Douglas Smith strengthened by partnerships we have succeeded where many have not. We are proud to share that Community Health Options is in the strongest financial and operational position ever. small businessesThis report tells this story by highlighting our business approach, sharing the experiences of our member, provider and employer partners, and describing the workplace we created and how we value our team members. Another key part of the story can be told by the Community highlights anHealth Options Board made up of 17 Directors who volunteer their time. By law the majority of the Directors are also Community Health Options members. In addition to providing governance oversight and member perspective is always present exceptional year.and heard during Board discussions and decision making. I encourage you to read this report and listen for the voices of all who join together to make Community Health Options a success. On behalf of the Board of Directors, management and our business partners, thank you for your continued support of Community Health Options. 14

A letter from CEO, Kevin Lewis LEADERSHIP TEAM In essence, 2018 came to be our proving grounds for initiatives Kevin Lewis, President, CEO and investments in processes that have been in the making since Robert Hillman, SVP, COO our first enrollment period. Our fifth year of operations produced Will Kilbreth, SVP, CIO long-anticipated results that demonstrate Community Health Ed Vozzo, SVP, CFO Options’ resilience and commitment to our Maine communities, Edward Yoon MD, MBA, SVP, businesses and neighbors. CMO We’ve put considerable effort into building greater efficiencies. Rather than outsource various operations, we’ve taken many in house, thereby reducing expenses and maximizing the value of our administrative costs. We started the year by initiating operations on our new claims platform, resulting in a far more reliable and efficient system that has increased processing rates by 50%. Our fifth year of operations produced long-anticipated results. Throughout the year, we surpassed call center performance goals with an answer rate of greater than 99%, and most calls answered within thirty seconds. Today, our average speed of answer is less than ten seconds. We also nearly doubled our reserves, which demonstrates our financial strength. For only the second time since our launch, Health Options was solidly in the black in 2018. The net earnings have produced a level of surplus that demonstrates stability and staying power. Our investments and infrastructure development continue with the sole focus of improving our Member experience and enhancing the relationships we have with Maine businesses and our provider network. We appreciate your valued commitment and feedback, and we look forward to many more great years ahead. 15

ABOUT US Community Health Options (Health Options) is a Maine- based, nonprofit, Member- directed health plan providing comprehensive, Member- focused health insurance benefits for individuals, families, and businesses. As a Consumer Operated and Oriented Plan, we believe that healthcare can be both better and more affordable when providers, patients, health insurers, and employers all work together. OUR MISSION To partner locally with Members, businesses and health professionals to provide affordable, high-quality benefits that promote health and wellbeing. OUR VISION To be a leader in transforming and improving individual and community health and positively affecting the local economy. HealthOptions.org 16