Cape Girardeau Public School District No. 63

November 1, 2010

Presented by:

David J. Johnson, CEBS, Senior Benefits ConsultantCBIZ Benefits & Insurance Services, Inc.

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CBIZ is:

• One of the nation’s leading providers of outsourced business services

• Offices in most major cities in the U.S.• 9th largest Accounting Firm• 13th largest Business Insurance Firm• 2nd largest Benefits Specialist in the U.S.

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Cape Girardeau Public School District #63has contracted with CBIZ to provide:

• Long Range Planning• Ongoing Consulting Activities• Plan Design and Rate Negotiations• Ongoing Administrative Services• Employee Communications• Benefits Technology• Health and Productivity Management• Legal and Regulatory Affairs

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Cape Girardeau Public School District #63Annual Healthcare Premium Per Employee (includes retirees)

$5,879

$7,982

$6,113

$8,676

$6,738

$8,863

$7,321

$9,120

$8,060

$9,821

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

9-06 to 8-07 9-07 to 8-08 9-08 to 8-09 9-09 to 8-10 9-10 to 8-11

School District Nat'l Avg.**Hewitt Associates

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Health Insurance Realities1. The rates for a group of your size are determined by your claims or

“loss ratio”.

2. Loss ratio is the percentage of premium dollars used to pay for claims. The loss ratio does not include the costs for administration, pooling, reserve adjustment or trend.

Cape Girardeau Public School District #63 Loss Ratios

1/1/06 Loss Ratio

1/1/07Loss Ratio

1/1/08 Renewal

1/1/09Loss Ratio

1/1/10Loss Ratio

1/1/11Loss Ratio

80% 89% 72% 94% 89% 96%

1/1/01 Renewal

1/1/06 Renewal

1/1/07 Renewal

1/1/08 Renewal

1/1/09 Renewal

1/1/10 Renewal

1/1/11 Renewal

Moved from MCHCP to

MEHP

Request for Proposal

+15%

+17.2% Added Intermediate

plan

+4%/+2% Moved from

MEHP to Anthem Direct

+12.65% +17.09% +19.79%

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Sample Medical Plan RatingEffective January 1, 2011

Loss Ratio 96%

Reserve Adjustment 5%

Administration 15%

Pooling ($175,000) 9%

Trend 20%

Expected Loss Ratio 145%

Calculated Increase in Premium 45%

Proposed Increase 19.79%

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What Research Tells Us

• 15% of a plan’s members incur 85% of paid claims• 5% of a plan’s members incur 45% of paid claims• 85% of members use the plan sparingly

Cape Girardeau Public School District #63 Claims History

• Eighteen claims over $50,000• Six claims over $100,000 • Those eighteen claims total $1,806,318 or 34%

of all claims on less than 2% of membership

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Large Claims•) Leukemia $302,298

•) Malignant Neoplasm Esophagus $148,737

•) Encounter for Other & Unspecified Aftercare $146,365

•) Encounter for Other & Unspecified Aftercare $142,246

•) Other and Unspecified Disorders of Back $138,386

•) Diabetes Mellitus $100,461

•) No matching description $90,032

•) Regional Enteritis $86,142

•) Other Venous Embolism and Thrombosis $79,178

•) Spondylosis and Allied Disorders $77,359

•) Fracture of Metacarpal Bones $75,476

•) Complication Peculiar to Certain Specified Procedures $72,986

•) General Symptoms $63,397

•) Fracture of Vertebral Column w/out mention of spinal cord injury $60,390

•) Osteoarthrosis and Allied Disorders $59,049

•) Coagulation Defects $57,113

•) Atherosclerosis $56,701

•) Osteoarthrosis and Allied Disorders $50,003

Total $1,806,318

Current Plan (Effective January 1, 2010)

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Benefits QHDHCP/HSA Base PPO Buy-up PPO

Deductible $2,500/5,000 $2,000/$6,000 $1,500/$4,500

Coinsurance 100% 80%/20% 90%/10%

Out-of-Pocket* $2,500/$5,000 $4,000/$8,000 $2,500/$5,000

Office Visit Ded./Coinsurance $30 $30

Rx Drug Ded./Coinsurance $10/$30/$60 $10/$30/$60

Preventive Care 100%, No Ded. Office Visit Copay

or

Ded./Coinsurance

Office Visit Copay

or

Ded./Coinsurance

*Out-of-pocket Includes Deductible.

Current Rates (Effective January 1, 2010)

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Base PPO Buy-up PPO

Total District Cost EE Cost Total District Cost EE Cost

EE Only $509.54 $509.54 $0 $576.94 $509.54 $67.40

EE + Spouse $1,120.96 $509.54 $611.42 $1,269,24 $509.54 $759.70

EE + Child(ren) $968.10 $509.54 $458.56 $1,096.18 $509.54 $586.64

Family $1,477.62 $509.54 $968.08 $1,673.08 $509.54 $1,163.54

QHDHCP/HSA HSA Contribution

Total District Cost EE Cost

EE Only $462.94 $509.54 $0 $46.60

EE + One $1,018.48 $509.54 $508.94 $0

EE + Child(ren) $879.60 $509.54 $370.06 $0

Family $1,342.54 $509.54 $833.00 $0

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Proposed Plan Changes Effective January 1, 2010

Base PPO Plan1. Change Office Visit Copay from $30 to $30/$502. Increase Rx Copays from $10/$30/$60 to $15/$40/$603. Increase Deductible to $2,5004. Increase Out of Pocket to $5,0005. Change ER copay to $200 then 20% and Urgent Care to $75

Resulting Increase: +10.00% (Credit of – 9.79%)

Buy-Up PPO Plan1. Leave as Current

Resulting increase: +19.79%

QHDHCP1. Increase Deductible to $3,000

Resulting Increase: +9%

Proposed Rates (Effective January 1, 2011)

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Base PPO Buy-up PPO

Total District Cost EE Cost Total District Cost EE Cost

EE Only $560.59 $560.59 $0 $691.12 $560.59 $130.43

EE + Spouse $1,233.29 $560.59 $672.70 $1,520.44 $560.59 $959.85

EE + Child(ren) $1,065.11 $560.59 $504.52 $1,313.12 $560.59 $752.63

Family $1,625.67 $560.59 $1,065.08 $2,004.20 $560.59 $1,443.61

QHDHCP/HSA HSA Contribution

Total District Cost EE Cost

EE Only $502.99 $560.59 $0 $57.60

EE + One $1,106.59 $560.59 $546.00 $0

EE + Child(ren) $955.69 $560.59 $395.10 $0

Family $1,458.67 $560.59 $898.08 $0

Health Care ReformIf preceding changes are made, the Cape Girardeau School District’s Health Plans will no longer be grandfathered for healthcare reform purposes. As such, the following changes will occur effective January 1, 2011:

1. Ban on pre-existing condition exclusions for children under age 19. (already receive credit for other coverage)

2. Dependent Age limit raised to 26

3. Ban on lifetime or annual limits (already in place)

4. 100% coverage for preventive services

5. Ban on discrimination based on salary

Please also note, the IRS has determined that the reporting of the cost of employer sponsored health plans on W-2’s will be voluntary in 2011.

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Questions / Discussion

Thank You!!