1. Health Insurance Update November 2010

2. Goals of Franciscan University’s Health Insurance Program Protect University employees and their families from the financial consequences of catastrophic health care claims Provide reasonable access for routine family health care Provide health care services that are compatible with Catholic moral teaching Encourage employees to participate as good stewards of their own health care

3. Franciscan University’s health insurance program should balance the following objectives with the overall goals: Manage health care costs and cost increases Provide employees with a quality health care provider network Encourage employees to participate in the control of health care costs Recognize and support the health care needs of large families Recognize and support the health care needs of individuals on the lower end of the pay scale

4. Benchmarking Milliman (MMMS) –2010 plan designs –4,054 companies –2.2 million employees Milliman Western PA –2010 plan designs –140 organizations

11. Self-funded Health Insurance Fully insured vs. self-insured –University responsible for claims Pay Third Party Administrator (TPA) to pay claims and use network Pay for stop-loss insurance (high deductible) Assumes risk for claims Admin fees + stop loss insurance + claims =TOTAL COST

12. PCUC Consortium Private College and University Consortium 7 private schools in western PA Highmark BC/BS Greater leverage in negotiating admin fees and stop loss insurance (1700 members) Level out self-insured risks by sharing in claims risk with other members Maintain control over plan design Additional administrative fee

13. Health Care Reform Act: Changes for 2011 Adult children up to age 26 are allowed to be enrolled in the plan as long as the child is not eligible for insurance through his/her employer. Affidavit required. No lifetime maximum on individual claims costs Flexible spending accounts, health reimbursement accounts, and health savings accounts cannot be used to pay for over the counter drugs, purchased without a prescription, except for insulin. Additional mandates will roll out over next several years. Overall impact is still not clear, even on 2011 changes.

14. 2010 272 Employees on health insurance coverage Over 900 lives Project to spend about $1.9 million on doctors and facilities Project to spend about $450,000 on drugs No large claims Consortium members also had a good year

15. 2011 NO INCREASE in BC/BS deductibles, copays, out-of-pocket maximums, and co-insurance levels for medical on either plan PPO access to BC/BS network (Pittsburgh & nationwide) continues for both plans HRA maintained at same funding schedule for both plans Maintain vision benefit for employees on both plans; option for dependent vision coverage requires additional contribution of $18

16. 2011 Total Cost Increases due to HCRA Zero net increase in projected total cost Single Coverage: $5,220 annually –employees contribute $516 or 9.8% Family Coverage: $13,944 annually –employees contribute $936 or 6.7%

17. 2011 Monthly Employee Contributions PPO Core Single: $43/month: no increase PPO Core Family: $78/month: no increase PPO Buyup Single: $115/month: no increase PPO Buyup Family: $281/month: no increase Dependent vision coverage may be added for a contribution of $18/month Employee contributions will be pre-tax payroll deductions

18. 7 Year Comparisons Core Monthly Contributions 2005: $24 sgl / $46 family2006: $18 sgl / $34 family 2007: $28 sgl /$63 family2008: $15 sgl/ $45 family 2009: $37 sgl/ $74 family2010: $43 sgl/ $78 family 2011: $43 sgl/ $78 family Deductibles 2005: $02006: $250/$500 2007: $350/$7002008: $500/$1,000 2009: $500/$1,0002010: $500/$1,000 2011: $500/$1,000

19. Voluntary Dental Completely Voluntary (University acts as a conduit) Claims costs since implementation have exceeded insurers expectation (pent up demand & larger families) 19% increase for 2011 (negotiated down from 30%) In 2010 we negotiated down to 12% increase (United Concordia wanted a 15% increase) Monthly rates: –Core $16.67/$43.06 –Buyup $34.93/$90.06

20. David SchmiesingChair Janine StasiulewiczSecretary Sue DukichRobert Filby Catherine HeckJohn Herrmann Patrick Lee Mary Lynn Lewis Don MaterniakAdam Mitchell Brenan PergiAdam Scurti Mary SalterPatti Scheel Dave Skiviat Committee Membership