SUSTAINABILITY: MIGRATION TO THE 2600 HDHP PLAN Navajo County Health Plan year 2016 We Are Navajo County

A National Dilemma: Healthcare National average increase in premiums is 8.3% APEHP had a rate increase of 9% for the 14/15 plan year and 7% increase for the 15/16 plan year Navajo County has not had a rate increase since July 2014 Our rate increase for January 2016 is 3.4% 2015 Arizona Counties Insurance survey – 12 of the 15 responded Average percentage the County pays for Employee only coverage – 91.77% Average percentage the County pays for Family coverage – 73.46% Navajo County pays 90% for Employee only and 80% for Family 2 We Are Navajo County

HEALTH PLAN CHECK-UP Medical and Prescription Costs 3 FY15 SILVER Projected Expenses - $1,172,042 Actual Expenses - $1,440,648 FY HDHP Projected Expenses - $1,013,228 Actual Expenses - $1,225,670 FY HDHP Projected Expenses - $2,484,077 Actual Expenses - $1,053,685 We Are Navajo County

PLAN YEAR 2016 FACTORS 4 Managing Costs COST SHARE - PARTNERSHIP County & employee share burden of plan costs Employee Only 90/10% Employee/Family80/20% $2600 PLAN – PARTNERSHIP Proven best performing plan Employee is consumer of healthcare Benefit to You $600 HSA JANUARY DEPOSIT Lump sum provides cash to employee debit card day one of plan. $50 PPP begins in July $500 ONE-TIME PAYMENT (Jan) Option to deposit to HSA Account Pre-tax - $500 will be available before taxes to deposit to HSA account (debit card) EMBEDDED DEDUCTIBLE $2600 HDHP will offer an embedded deductible Allows the deductions limits to be met both at the individual level and the family level for: Deductible Maximum Out of Pocket

Premium Employee CategoryPer Pay Period Premium Employee Only$26.40 Employee+SP$ Employee+CH$86.75 Employee+Family$ We Are Navajo County

Premium Change Employee CategoryChange from SilverChange from 1500Change from 2500HSA Contribution Employee Only $1.02$5.65$12.19 $50.00 Employee+SP $4.58$13.79$23.95 $50.00 Employee+CH $3.69$12.93$19.05 $50.00 Employee+Family $5.97$14.85$32.49 $ Increase/Decrease Per Pay Period We Are Navajo County

Average Cost and Expenditures for Employee Only 7 We Are Navajo County Employee Pays $26.40 Per Pay Period

HSA Contributions 8 $2600 Deductible $600 January Contribution (One-time lump sum) $500 One Time Employee Contribution $600 July-December Contribution ($50 PPP) * $900 Optional HSA Employee Contribution $ – Average Member Medical+Rx Deductible Costs for Navajo County January July *Additional HSA contributions permitted

HSA MAX & TAX BENEFITS 9 We Are Navajo County Plan Year 2016 HSA Contribution Limits IndividualFamily Age 55 or Older Annual Limit $ 3, $ 4, $ 6, $ 7, Subtract Employer Contribution $ 1, Subtract $500 one-time payment (if EE elects to deposit into HSA) $ Total Employee Eligible Contribution $ 1, $ 2, $ 5, $ 6, Approximate Annual Tax Savings $ (335.78) $ (539.26) $ (1,027.71) $ (1,231.18) Per Pay Period Employee Eligible Contribution $ $ $ $ Approximate Per Pay Period Tax Savings $ (13.99) $ (22.47) $ (42.82) $ (51.30)

HSA MAX & TAX BENEFITS 10 Plan Year 2016 HSA Contribution Limits IndividualFamily Age 55 or Older Annual Limit $ 3, $ 4, $ 6, $ 7, Subtract Employer Contribution $ 1, Total Employee Eligible Contribution $ 2, $ 3, $ 5, $ 6, Approximate Annual Tax Savings $ (437.51) $ (641.04) $ (1,129.44) $ (1,332.91) Per Pay Period Employee Eligible Contribution $ $ $ $ Approximate Per Pay Period Tax Savings $ (18.23) $ (26.71) $ (47.06) $ (55.54) We Are Navajo County

$500 ONE-TIME PAYMENT HSA DEPOSIT VS BANK DEPOSIT 11

Not Eligible for HSA? If you have other insurance coverage that is not a QHDHP, then you are not eligible to receive contributions, or contribute, to a Health Savings Account If you are not eligible for an HSA, we will contribute money into an FSA for you to utilize The County will contribute $500 to an FSA without the employee making any contribution A Flexible Savings Account has different rules than an HSA Does not roll over Set contribution schedule If you would like more than $500, the County will match any contribution up to $1200 ; however it will require: Minimum employee contribution of $500 Example: Employee elects to contribute$1200 then County will match and Employee will have $2,400 in the FSA account. 12

Plan year 2016 County & employee shared PREMIUM costs 13 We Are Navajo County $910,565 Employee Cost Share $4,380,447 County Cost Share $606,000 County Contribution to HSA 15% 10% 75% $5,897,012 – Total Cost

COUNTY PARTNERSHIP WITH OUR EMPLOYEES 14 We Are Navajo County Plan Increase is 3.4% based on medical claims vs. National Average of 8.3% Plan includes last quarter (Oct-Dec) Deductible Carryover $600 HSA Advanced to Employees on January 1st Monthly deposits to start in July for remaining $600 Individual & Family Deductible Limits and Maximum Out of Pocket Benefits (Embedded Deductible) $500 one-time salary payment Payment to be made January 1 Employees encouraged to deposit all or part into their HSA

Dental/vision (Voluntary) 15 DEDUCTIBLE $50 Single $150 Family $1,500 Orthodontia DENTAL ORTHODONTIA $1,500 Deductible NO CHANGE Preventive Care – Deductibles Waived CO-INSURANCE Basic 80% Major 50% Orthodontia 50% VISION DEDUCTIBLE $0 IN-NETWORK FOR SERVICES FRAMES $50 Wholesale Allowance PLAN INCREASE 13% NEW PROVIDER AVESIS

Consumer healthcare tool kit 16 We Are Navajo County EDUCATION/ OPEN ENROLLMENT /MIGRATION MTGS PRESCRIPTION OPTIONS TELADOC HSA ACCOUNT MANAGEMENT TIPS COMPARATIVE PROCEDURE COSTS COMPARATIVE DRUG COST BY PHARMACY HEALTHCARE TOOLKIT

How to Enroll Enrollment site You must log on and enroll or waive coverage ACA requirement – log on to the HR portal and input dependents Deadline to enroll – Friday the 20th 17 We Are Navajo County

How an HSA works 18 We Are Navajo County

What a Navajo County employee who opts out of our insurance can expect to find in the marketplace 19 We Are Navajo County *Based on a married individual with 3 dependents making $35,000 annual salary.

Navajo County Challenge Current year county sales tax at same level as last year Current fiscal year projection has the end year at $30,000 in the black on a $45 million budget State of our County Economy Pulp Mill Closed Tomato Plant Closed Aircraft Plant Closed Winslow Four Forest Restoration Initiative Annulled Apache Railroad in jeopardy Pig Farm long term outlook tied to Apache RR No news on Potash Mine No news on Egg Farm Authorization of 2016 Payment In Lieu of Taxes ($1.3 M) unknown Navajo County is challenged to sustain services and our employee workforce and employee benefits with stagnant and possible reduced revenues. 20

Drivers – Affordability and Sustainability 2016 Silver Plan based on consultant recommendations : Deductible increased to 2,000/4,000 MOOP increased to 4,000/8,0000 Copays increased $5 and $10 per visit Co-insurance increased from 20% to 30% Overall premium Increased 23% Increase to County cost share -$900,000–not affordable nor sustainable Employee would have to carry the cost of the total increase and employee share would increase 200 to 300% based on plan type 21

Conclusion Fiscal year 2015 Calendar Year SILVER AND $1500 HDHP DID NOT PERFORM AS EXPECTED 71% OF OUR EMPLOYEES ARE CURRENTLY ON A HDHP MIGRATE ALL TO $2600 HDHP in Plan Year 2016 MIGRATE TO 90/10 & 80/20 Cost Share

$2,600 High Deductible Health Plan Has an individual $2,600 deductible and a $5,000 family deductible Family deductible can be met by any combination of deductible payments A deductible is an amount of money that you must pay before coinsurance will kick in Coinsurance is the split amount that both the plan and you pay for after your deductible has been reached Our coinsurance is an 80/20 split for most procedures, but can be as rich as 100% covered by the plan after your deductible Once out of pocket is met, plan pays 100% 23 We Are Navajo County

HEALTH PLAN YEAR 2016 $2600 HDHP individual-centric deductible structure $2,600 Deductible After which 20% Co-Insurance in Effect $2,600 Deductible* *Each Member has $2,600 Deductible After which 20% Co-Insurance in Effect Family maximum deductible $5,000 $2,600 Deductible* Each Member has $2,600 Deductible After which 20% Co-Insurance in Effect Family maximum deductible $5, Employee Only Employee + Spouse Employee+ Spouse+ Children