1. HEALTH INSURANCE UPDATE September 25, 2012

2. HEALTH INSURANCE UPDATE • History of Health Insurance Cost • Components of Health Insurance Costs • Plan Benefits – Self-insured plan • Contributions • Employer • Employee • Active • Pre-65 Retirees • Develop Cost Sharing Proposal

3. Health Insurance Fund – Expenditures FY 2002-2016 *Projected

4. HEALTH INSURANCE PLAN • Self-insured for active and pre-65 retirees • BC/BS of GA is the Third Party Administrator • $3 million projected deficit for 2013 based on claims through 06/30/2012 • City increased the contribution per budgeted FT position effective July 1, 2012 by $250

5. HEALTH INSURANCE PLAN • OFFICE VISIT COSTS • Average cost of primary care office visit = $110-$115 • Employee pays = $15 • Plan pays = $85-$100

6. HEALTH INSURANCE PLAN • Rx COSTS • Average Generic = $17.84 • Employee pays up to $20.00 • Average Brand = $234.58 • Employee pays = $30.00 • Average Non-formulary = $184.42 • Employee pays = $50.00 • Plan pays the remainder

7. HEALTH INSURANCE PLAN • Average cost of all plans = $8,000+ • City’s contribution per FT position = $5,650 • Average employee’s contribution = $2,300 - $2,600

8. PLAN PARTICIPANTS – includes Active & Pre-65 Retirees

9. PLAN BENEFITS All other plan options remain the same.

10. DEFICIT REDUCED WITH PLAN BENEFIT CHANGES • $200 Deductible to HMO = $1 million • $150 Emergency Room Copay = $250,000 • $20 / $30 Office Copay = $250,000 • TOTAL DEFICIT REDUCED BY $1.5 million

11. BI-WEEKLY RATE CHANGE – Active Employees

12. MONTHLY RATE CHANGE – Pre-65 Retirees

13. MONTHLY TOBACCO AND SPOUSAL SURCHARGE

14. DEFICIT REDUCED WITH RATE CHANGES • City Contributions = $650,000 • $5,400 to $5,650 per FT position • Employee Contributions = $660,000 • Tobacco = $60,000 • Spousal Surcharge = $75,000 • TOTAL = $1,445,000

15. ?? QUESTIONS ??