Health Insurance Changes Information Session

Health Insurance Changes Information SessionFacilitator:John Mueller, Executive Director of Human Resources

Presenters:Tina Petrie, Director of Salary Administration and BenefitsKathy Eghoian, Senior Specialist - Benefits1Information Session GoalsDescribe why changes are necessaryExplanation of current benefitsDiscuss proposed changesDescribe what remains unknownQ & APublic Employees Benefits Program (PEBP) BudgetPEBP is required by the State Budget office to keep their subsidy level flat over the biennium.Total revenue of $500 Million for the bienniumAmount required to keep current plan over the biennium - $611.2 million (medical inflation, utilization, and Federal Health Care Reform)Resulted in a shortfall of $111.2 MillionPlease be advised that the 2011 Legislature could decide to take no action on the changes, which would result in the implementation of the changes on July 1, 2011, OR they could take up the proposed changes in budget discussions during the 2011 Legislative Session. Current Health InsurancePlan OptionsTwo choices:

The Public Employees Benefits Program (PEBP) benefit-eligible State of Nevada and NSHE employees are offered the option to choose from the Preferred Provider Organization Plan (PPO) or the Health Maintenance Organization Plan (HMO).What is a PPO PlanA network of doctors and healthcare facilities that provides medical services at discounted rates.The PPO plan allows participants the choice of using contracted (in-network) or non-contracted (out-of-network) medical providers, both in-state (Nevada) and out-of-state. The PPO plan offers access to services worldwide.PPO Plan Annual DeductibleSingle coverage individuals $800.00Two or more persons $1,600.00 family deductible.The family deductible could be met by any combination of eligible medical expenses from two or more members of the same family coverage tier. No one single family member would be required to contribute more than the equivalent of the individual deductible toward the family deductible.

Deductible AmountsPlan Year 2011Deductible TypeIndividualFamilyAnnual Medical (PPO)$800.00$1,600Annual Dental (PPO and HMO)$50.00$150.00Annual Prescription (PPO)$50.00Not ApplicableCoinsuranceA coinsurance is the portion of the expense the employee is responsible for paying after the deductible.The maximum coinsurance amount you pay during the year excluding copayments is called the out-of-pocket expense ($3,700 individual/$7,400 family per plan year).Note: Standard amounts charged by non-contracted healthcare providers are referred to as Usual and Customary charges.

PPO Plan CopaymentMembers pay a copayment for visits such as doctor office visits, specialist visits, and urgent care visits.Copayments range from $20.00 to $105.00.Copayments are not applied to meet the deductible.

General Overall Lifetime Maximum Plan Benefit

A General Overall Lifetime Maximum Plan Benefit is the maximum amount of benefits payable by the plan (for PPO and non-PPO expenses combined) during the entire time a plan participant is covered under this plan, including expenses paid by all current and previous PEBP plan administrators.The General Overall Lifetime Maximum Plan Benefit is $2 million for you and $2 million for each of your covered dependents.

The Health Maintenance Organization (HMO Plan)Name of Plan for Southern Nevada is Health Plan of Nevada (HPN)Fully insured plan which uses a pre-defined group of doctors, facilities, and other health care professionals. (Note: out -of -pocket maximum is $6,800 per person per calendar year).Participants choose a Primary Care Physician who coordinates their medical treatment .The HMO Plan is limited to a specific service area (Southern Nevada only)The plan is not portable for those traveling out of the Southern Nevada area. (Exceptions will be made for out of area medical emergencies only)Scope of Dental CoverageRegardless of the medical plan chosen all employees participate ina self-funded PPO dental plan (Diversified Dental Services).Coverage is offered for preventive services (routine exams and up to 4 cleanings per year). In-network provider service is paid at 100%.Coverage is offered for basic services (full mouth x-rays, fillings, simple extractions, root canals). The plan pays for in-network service 80% (after deductible). Coverage is offered for major services (single crown, bridgework, dentures, tooth implants). The plan pays for in-network service 50% (after deductible).

Prescription/PharmacyPrescription Drug Plan for the Self-Funded PPO Plan

The annual prescription deductible is $50 and is applied to each covered person (no family deductible).The annual deductible does not apply to generic drugs.

Pharmacy Plan ComparisonRetail Pharmacy - 30 day supply Category Self-Funded PPO PlanHealth Plan of Nevada Preferred Generic (Tier 1) $5 copayment (no deductible) $7 copayment Preferred Brand (Tier 2) $40 copayment, after deductible $35 copayment Non-Preferred (Tier 3) 100% of contracted price $55 copayment Specialty Drugs Greater of $50 copayment or 25% of drug cost (max $100 per prescription, after deductible)Applicable retail pharmacy copayment will apply Pharmacy Plan ComparisonMail Order - 90 day supply Category Self-Funded PPO PlanHealth Plan of Nevada Preferred Generic (Tier 1) $15 copayment (no deductible) $14 copayment Preferred Brand (Tier 2) $120 copayment, after deductible $70 copayment Non-formulary (Tier 3) 100% of contracted price Not available through mail order Specialty Drugs Not available through mail order Applicable retail pharmacy copayment applies Vision Plan ComparisonCategory Self-Funded PPO PlanHealth Plan of Nevada (Must use provider on EyeMed Vision Care list)Vision exam One exam every 12 months, paid at 80% Usual & Customary (U&C) $10 copayment every 12 calendar monthsHardware (frames, lenses, contacts) $125 allowance every 24 months $10 copayment/lenses frames - $100 allowance, contacts $115 in lieu of glasses Self-funded PPO Wellness/Preventive Care Benefit (Only for the PPO Plan) The PPO Wellness Benefit provides a $2,500 (per person, per plan year) benefit to participants and their covered dependents. Preventive care benefits are not subject to the plan year deductible or copayment. The Wellness Benefit is available only when using in-network PPO providers. ( Note: Wellness benefits are healthcare services that are not provided as a result of illness, injury or congenital defect.)Self-funded PPO Wellness/Preventive Care Benefit (Only for the PPO Plan) For example, the following preventive screenings are covered under the PPO Wellness Benefit: Physical Exam, Screening Lab and X-rays Well-child Examinations and Immunizations Prostate Screening (e.g., PSA blood test) Hypertension ScreeningScreening Mammogram Pelvic Exam and Pap Smear Skin Cancer Screening

Life InsuranceThrough The Standard Insurance Company, the Employee has a $20,000 basic life insurance policy, Spouse/Domestic Partner has a $2,000 life insurance policy, and child(ren) from birth to age 19 (or 24 if a full-time student) has a $2,000 life insurance policy.

Long Term DisabilityThrough The Standard Insurance Company, the employee, as part of the benefits package has eligibility for Long Term Disability.The monthly LTD benefit amount is 60% of monthly earnings up to a maximum of $7,500 per month (less any deductible sources of income and disability earnings).The minimum monthly payment after subtracting deductible sources of income is $100.00Medical Plan Comparison Benefit Category Self-funded PPO Plan Health Plan of Nevada Medical deductibleAmount You Pay In-Network$800 individual $1,600 family (per plan year) Amount You Pay In-NetworkNo deductible Out-of-pocket maximum $3,700 person $7,400 family (per plan year) $6,800 person (per calendar year) Hospital inpatient $105 admission copayment, plus 20% after deductible $200 copayment per admission Outpatient Same Day Surgery 20% coinsurance after deductible

Amount You Pay In-NetworkNo deductible Medical Plan Comparison (continued) Benefit Category Self-funded PPO Plan Health Plan of Nevada Primary care visit $20 copayment $15 copayment Specialist visit $30 copayment $15 copayment Urgent Care visit $45 copayment $15 copayment Emergency room visit $70 copayment, 20% coinsurance after deductible $50 copayment, plus $25 physician copayment General laboratory services 20% coinsurance after deductible No charge Monthly Premiums for Plan Year2010-2011COVERAGEPPO Deductible$800HMOEMPLOYEE$43.73$54.81EMPLOYEE + SPOUSE$278.84$172.52EMPLOYEE + CHILD(REN)$81.53$138.26EMPLOYEE + FAMILY$195.14$255.07Monthly Premiums for Plan Year 2010-2011Domestic PartnersEMPLOYEE/DOMESTIC PARTNER (DP) COVERAGEPPODeductible $800HMOEMPLOYEE + DP$921.43$411.50EMPLOYEE + DPS CHILD(REN)$184.84$307.68EMPLOYEE + CHILDREN OF BOTH$81.53$138.26EMPLOYEE + DP + EMPLOYEES CHILD(REN)$505.68$492.24EMPLOYEE + DP + DPS CHILD(REN)$608.99$661.66EMPLOYEE + DP + CHILDREN OF BOTH$505.68$492.24Proposed Health Insurance ChangesNew Program to Replace Self-Funded PPO: High Deductible Consumer Driven Health PlanWhat is the Consumer Driven Health PPO Plan? High deductible health plan that works in conjunction with a Health Savings Account .All benefits (excluding preventive care) will be subject to the medical plan deductible.The plan will no longer have fixed copayments for things such as prescription drugs and doctors visits.Participants will pay 100% of the cost for all eligible medical and prescription drug expenses up to the plan year deductible. Key Points of High Deductible Consumer Driven Health Plan Increase deductible from $800/$1,600 to $2,000/$4,000 (Individual/Family)Increase Out-of-Pocket Maximums from $3,700/$7,400 to $3,900/$7,800 (Individual/Family)Change Coinsurance from 80% to 75%Add Health Savings Account (HSA)Provide Plan contributions (seed money)to the HSA in the amount of $600 for the primary participant and $200 per dependent to a maximum of $1,200 per plan year.

Key Points of Consumer Driven Health Plan (continued)After meeting the deductible, plan pays 75% (as opposed to the current 80%) until the OOP maximum is metStill uses the existing doctor and provider networks and discountsStill has same coverage for wellness/preventive careNot subject to deductible or coinsuranceHealth Care Reform Act eliminates the current $2,500 wellness cap

Key Points of Consumer Driven Health Plan (continued)Deductible and OOP maximum can be met by a single family member or a combination of family members (different than current plan where single individuals are not required to meet the entire family deductible or OOP maximum)Accumulates separately for in and out of network providers (same as current plan)OOP Maximum includes the deductible (different than the current plan where copayments and deductible do not count towards OOP Maximum.

What is a Health Savings Account? (HSA) A Health Savings Account (HSA) is an account owned by the employee that is used to pay for eligible health care expenses. The employer can contribute funds to the HSA and the employee may also contribute money to the account on a pre-tax basis. Contributions, investment earnings and distributions are tax free as long as the money is used only for eligible healthcare expenses. Funds deposited in the HSA can be carried over from year to year.Eligibility for Health Savings Account (HSA) Must be covered under a high deductible plan (also for secondary insurance, if applicable)You are not enrolled in MedicareYou cannot be claimed as a dependent on someone elses tax returnHealth Savings Account Summary for Active EmployeesAccounts are owned by the employeeAnnual contribution limits to the HSA (combination of employer and employee). For example, the following limits are for 2010:$3,050 for Employee$6,150 for Family(Note: The limits for 2011 have not been determined yet.)Income tax reporting requirementsPortable If you leave, the money is yours to take with youOnly used for medical related costs without incurring tax and/or penaltySpecific Plan Design ChangesMedical Plan ChangesEliminate lab tests performed at hospitals except for pre-admit, urgent care, emergency room and in-patient admissionsReduce TMJ coverage from 80% to 50%Allow for 90 day supply of certain retail drugsEliminate vision coverage except for annual eye examEliminate coverage for spouse/domestic partner with other employer based coverageRemove or as needed from Wellness/Preventive guidelines

Specific Plan Design Changes(continued)Dental Plan ChangesEliminate dental benefits except routine preventive services.Only the following services will continue to be provided:Up to 4 routine cleanings per yearAnnual exam and bitewing x-raysFluoride and sealant treatments (age appropriate)Maintain existing dental network and preferred provider discounts

Specific Plan Design Changes(continued)Life Insurance Plan ChangesReduce Basic Life Insurance payouts by 50% Actives from $20,000 to $10,000 Retirees from $10,000 to $5,000Eliminate Dependent Life InsuranceEliminate Accidental Death & Dismemberment

Specific Plan Design Changes(continued)Long-Term Disability Changes

Reduce benefit from 60% of base pay to 40%Allow employee to buy back up to the 60% at group policy rates

Plan Offerings That Will ContinueWill continue to offer a Northern and Southern HMO plan to active and non-Medicare retireesLive Well, Be Well Prevention Plan for CDHP PPO participants onlyWill continue to offer the existing PPO wellness program for CDHP PPO participants onlyFlexible Spending Accounts (FSA)Medical FSA only for HMO participantsDependent Care FSA for both medical plan participantsOther Benefit ChangesFederal Healthcare Reform ActCoverage will be available for dependent children to age 26 regardless of full time student statusLifetime limits removed

What Remains UnknownSubsidy PercentagesMonthly PremiumsHMO Plan ChangesHSA vendor and details on the planLegislative Action

Questions?PEBP Website (www.pebp.state.nv.us)Frequently Asked QuestionsBoard Meeting InformationLegislative UpdatesIf you have any questions after this session, please contact the Office of Human Resources at x7543 or HRcustomerservice@csn.edu.Thank you.