Political Contributions & Related Activity Report 2010 CARTER BECK JOHN JESSER DAVID KRETSCHMER SVP & Counsel VP, Provider Engagement & COC SVP, Treasurer & Chief Investment Officer ANDREW LANG LISA LATTS SVP, Chief Information Officer Staff VP, Public Health Policy MIKE MELLOH VP, Human Resources DEB MOESSNER ANDREW MORRISON 2010 WellPAC President & General Manager KY SVP, Public Affairs BRIAN SASSI WellPAC Chairman EVP, Strategy & Marketing, Board of Directors BRIAN SWEET President & CEO Consumer VP, Chief Clinical Pharmacy Officer JOHN WILLEY Director, Government Relations TRACY WINN ALAN ALBRIGHT WellPAC Treasurer Manager, Public Affairs Legal Counsel to WellPAC WellPAC Assistant Treasurer & Executive Director 1 from the Chairman Recognizing the impact that public policy decisions have on our stakeholders, WellPoint has made a commitment to be involved in the political process. Our efforts include policy development, direct advocacy, lawful corporate contributions and the sponsorship of WellPAC, the non- partisan political action committee of WellPoint associates. WellPAC’s purpose is to help elect candidates for federal and state office who share our mission of making health care reform work for our customers, our associates, our investors and the communities we serve. WellPoint pays the PAC’s administrative costs as allowed by law, but all WellPAC contributions are funded through the voluntary support of eligible WellPoint associates. In 2010, WellPAC contributed $596,999 to federal candidates, political parties and committees, and $192,581 to candidates and committees at the state and local levels. In total, WellPoint made more than $2.8 million in corporate political contributions. Additionally, our public affairs team actively engaged with lawmakers and candidates at the federal level, and in our 14 core business states. Further details about these political contributions and lobbying activities are contained within this report. The passage of the Patient Protection and Affordable Care Act in 2010 didn’t signal an end to health care reform for WellPoint. It created an opportunity for us to help positively shape how reform is implemented so that it works for all consumers. Participating in the political process helps us deliver on that commitment. Andrew Morrison SVP, Public Affairs, WellPAC Chairman 2 Political Contributions Policy and Procedure As one of the nation’s leading health benefits company, WellPoint can play a key role advocating national health care policy and practices to benefit our customers and the general public. Health care is an increasingly regulated and legislated industry both at the federal and state level. Elected and appointed officials make decisions that directly affect our ability to make quality health care coverage affordable and to improve the health of the communities we serve. Our active participation in the political process is essential to ensure that we have a voice in those decisions. At WellPoint, we are committed to advocating public policy solutions that best serve our customers, our stakeholders, our associates and our communities. CORPORATE CONTRIBUTIONS WellPoint’s corporate political WellPAC disbursement of funds are contributions, both direct and made in accordance with a budget, While federal law prohibits WellPoint indirect, are included in its total and the same contribution criteria from making corporate contributions annual fiscal budget, which is subject identified for corporate contributions to federal candidates, WellPoint to the approval and oversight of is used in determining WellPAC makes direct contributions to WellPoint’s Board of Directors. In contributions. support state candidates in those addition, a copy of this report is states where such corporate made available to WellPoint’s Board Throughout the year, members of contributions are allowed by law and of Directors. WellPoint’s public affairs organization may make indirect contributions, and associate PAC members offer such as hosting a reception and Throughout the year, members of recommendations for WellPAC paying expenses associated with WellPoint’s public affairs organization contributions. WellPAC contributions an event. Certain criteria are used make recommendations for are approved by the senior vice in making corporate contributions, corporate contributions. The senior president of Public Affairs of the including the following which have vice president of Public Affairs of company. WellPAC operates pursuant been endorsed by WellPoint’s Board the company must approve each to all relevant state and federal of Directors: corporate contribution. Other laws, and complies with all public members of the public affairs disclosure requirements. Information @@ Does the candidate support organization involved with political about WellPAC’s contributions may public policy that promotes contributions include the vice be found on the Federal Election private competition, choice and president of State Affairs, the vice Commission’s web site at free markets in the delivery and president of Federal Affairs and their www.fec.gov. financing of health care? direct reports. In making corporate @@ Has the candidate voted or contributions, WellPoint complies When participating in the political announced positions on issues with all disclosure requirements as process, WellPoint associates must important to WellPoint and its prescribed by state and federal law. comply with the company’s ethics customers? and compliance requirements identified in the “Standards of @@ Has the candidate demonstrated WELLPOINT POLITICAL ACTION Ethical Business Conduct,” which leadership on key committees of COMMITTEE CONTRIBUTIONS is available on our website. This importance to our business? WellPoint provides an opportunity document sets forth appropriate @@ Does the candidate represent a for eligible WellPoint associates, as associate conduct relating to political state or district where WellPoint defined by federal law, to participate activity and contributions, as well as has a large concentration of in the political process by sponsoring interaction with government officials customers and/or employees? the nonpartisan WellPoint Political and agencies. @@ Would WellPoint’s contribution Action Committee (“WellPAC”), which have an impact on the allows them to voluntarily combine candidate’s campaign? their personal funds to support federal and state candidates. 3 Lobbying Activity WellPoint engages in lobbying activity to advocate our positions on public policy issues with elected officials and others in federal and state government. These are issues that affect our company, our associates and, most importantly, our customers. In 2010, WellPoint spent $5.7 million on state lobbying activities* and $4 million for federal lobbying activities.** In 2010, WellPoint paid dues to national and state business and trade associations of which a portion may be allocated to non-deductible lobbying activity. Below is a list of the national and state business and trade associations whose dues were $50,000 or more for 2010, including the portion allocated to non-deductible lobbying activity. PORTION ALLOCATED TO NON-DEDUCTIBLE ASSOCIATION TOTAL DUES*** LOBBYING*** America’s Health Insurance Plans $1,037,400 $487,578 Association of California Life & Health Insurance Companies**** $270,400 $27,040 Blue Cross and Blue Shield Association $13,746,132 $1,869,474 California Association of Health Plans**** $559,583 $251,961 Indiana Chamber of Commerce $90,000 $11,700 Indianapolis Chamber of Commerce Foundation $100,000 $10,000 Maine Association of Health Plans $53,177 $425 Maine State Chamber of Commerce $50,000 $17,500 The Business Roundtable $235,560 $179,026 U.S. Chamber of Commerce $250,000 $125,000 Virginia Association of Health Plans $89,944 $26,983 Wisconsin Association of Health Plans $54,640 $13,660 *State laws vary on how they define lobbying activity, expenses and what is reportable. For purposes of this report, state lobbying expenses include applicable percents of associate compensation and overhead and outside lobbying consultant fees. ** Federal lobbing expenses are reported as required by the Lobbying Disclosure Act of 1995 and the Honest Leadership and Open Government Act of 2007. Visit http://soprweb.senate.gov/index.cfm?event=selectfields to search for copies of WellPoint’s Lobbying Disclosure Reports filed with the U.S. Congress. ***The annual dues are reported based on the calendar year in which they are paid. The portion of annual dues allocated to non-deductible lobbying is based on the percent or amount provided on the annual dues invoice by the organization listed. ****Both 2010 and 2011 dues were paid in calendar year 2010. 4 2010 Statements of Cash Receipts & Expenditures HEALTHCARE WORKS EMPIRE HEALTH PAC IN WI CONDUIT WELLPAC CASH BALANCE January 1, 2010 $0 $10,327 $446,635.24 RECEIPTS Associate Contributions $0 $13,013 $658,747.09 Corporate Contributions* $35,000 $0 $0.00 Refunds from Candidates $0 $0 $304.44 Total Receipts $35,000 $13,013 $659,051.53 EXPENDITURES Federal Contributions $0 $0 $596,999.61 State Contributions $15,500 $12,350 $192,581.00 Operating Expenses $1,000 $0 $ 777.83 Other Expenses $0 $0 $0.00 Refund of Associate Contribution $0 $250 $131.99 Total Expenditures $16,500 $12,600 $790,490.43 CASH BALANCE December 31, 2010 $18,500 $10,740 $315,196.34 *Multiple corporate entities contributed up to $5,000 per corporation per year as allowed by New York law. 5 WellPAC Contributions to Federal Candidates by State