Presentation to the Special Administrative Board 2017 Benefits Renewal Presentation to the Special Administrative Board Edmond T. Heatley, Ed.D., Chief Human Resources Officer & USI Insurance Services LLC June 26, 2016

2017 Benefits Renewal Renewal Process Summary 2017 District Costs for Benefits 2017 Benefit Renewal Overview Renewal Recommendations of Joint Benefit Committee (JBC) Next Steps

Renewal Process Summary SLPS Procurement and USI managed the RFP Process. 36 markets were notified of the Request for Proposal (RFP). 10 markets provided no response to the RFP. 15 markets declined to provide a quote. 1 market was disqualified due to late receipt of their quote. 10 markets provided quotes. Copies were provided to SLPS Procurement, HR/Benefits and USI USI provided summary findings from which finalists were selected. The Joint Benefit Committee participated in the selection process.

2017 District Cost for Benefits Based on previous strategy, the 2017 RFP process and negotiations heavily focused on providing our Employees a with competitive benefit package at the best cost to the District. Below is an overview of the District’s Calendar Year Annual cost for ACTIVE employees compared to the proposed scenario. This includes premiums paid for Medical, Wellness, Rx, Dental, Vision, Life, STD, LTD, and EAP. 2016 Current District Responsibility 2017 Renewal “As Is” Scenario* District Responsibility 2017 Renewal Option Scenario** District Responsibility District Premium $30,178,898 $31,616,549 $28,960,056 $ Increase N/A +$1,437,651 -$1,218,841 % Increase +4.8% -4.0% *Scenario: Renew All current carriers. **Scenario: Move Medical, EAP and Wellness to United Healthcare (UHC). Renew all other current carriers.

2017 Benefit Renewal Overview Coverage Carrier 2017 Proposed Renewal Rate Guarantee(s) Comments MEDICAL – Fully Insured CURRENT: Aetna (formerly Coventry) – incumbent +5.0% No rate guarantee Current wellness program would continue. Estimated annual cost to the District of $970,345 (for ACTIVES ONLY). OPTION: United Healthcare (UHC) -7.3% 2nd year rate cap of +9%; 3rd year rate cap of +12% Minimal provider disruption. Includes wellness fund and coordinator. Estimated annual savings to the District of $1,685,923 (for ACTIVES ONLY). RX – Self Funded Express Scripts - incumbent Est. +6.6% Participates as a member in Business Healthcare Coalition (BHC) No fee/administration increase. Increase is estimated claims based on current claim and payment data. Estimated annual cost to the District of $600,167 (not including rebates). DENTAL Delta Dental of Missouri - incumbent +0.0% or +2.5% + 0.0% for 1 year rate guarantee. +2.5% increase for 2 year rate guarantee. Includes Healthy Smiles program. 2.5% increase is an estimated annual cost to the District of $28,000 (with employee contributions). BASIC LIFE & ADD & VOLUNTARY LIFE CIGNA - incumbent +18.2% for Life 3 year rate guarantee No plan changes. Increase due to claim utilization. Estimated annual cost to the District of $52,000 for Life. Increase in rates for Voluntary Life due to claim utilization. SHORT TERM DISABILITY (STD) +7.4% No plan changes. Increase due to claim utilization. Estimated annual cost to the District of $53,000. LONG TERM DISABILITY (LTD) -10.0% No plan changes. Estimated annual decrease in cost to the District of $56,000. VISION VBA - incumbent +26.5% No plan changes. Estimated annual cost to the District of $4,300 (accounting for employee contributions). NOTE: Estimated annual premium increase to the District on the Life, STD and LTD = $49,000 for an overall increase of 3.1%.

Renewal Recommendations of the Joint Benefits Committee (JBC) The Committee is comprised of representatives from Local 420 Active and Retiree groups; Local 148; Local 44; the PSRSSTL Retirement office, Finance and Human Resources. The Committee met on July 20, 2016. Recommendations Medical – Move the coverage to United Healthcare (UHC). There is a -7.3% decrease in the rates for 2017. There is a rate cap of 9% for the January 1, 2018 renewal and 12% rate cap for the January 1, 2019 renewal. The Affordable Care Act fees are included. Pharmacy - Renew with Express Scripts. There is an estimated increase of +6.6% due to an escalation in Specialty Utilization and Costs and overall rise in prescription utilization. Dental – Renew with Delta Dental of Missouri with the +2.5% increase for 2 years with a 3rd year rate cap based on the loss ratio. An option is a 1 year renewal with a +0.0% increase. These options were negotiated down from the initial 5.5% increase. Vision – Renew with Vision Benefits of America (VBA). VBA, in error, quoted lower rates for the Buy-up plan in 2014 and honored them for 3 years. There were no competitive markets. The rates are guaranteed for 3 years.

Renewal Recommendations of the Joint Benefits Committee (JBC) continued The Committee is comprised of representatives from Local 420 Active and Retiree groups; Local 148; Local 44; the PSRSSTL Retirement office, Finance and Human Resources. The Committee met on July 20, 2016. Recommendations Life, AD&D, Voluntary Life – Renew with Cigna for 3 years. The District has had high claim utilization. There were no competitive markets. STD - Renew with Cigna for 3 years. The District has had high claim utilization. There were no competitive markets. LTD – Renew with Cigna for 3 years. The District has a rate decrease due to market competition and moderate claim utilization.

District Responsibility Renewal Scenario Move Medical to UHC, renewal all other Lines. Continue integrated Rx OOP max with UHC/ESI. TOTAL Estimated Annual Premium Employee Responsibility District Responsibility Coverage Carrier Current Proposed % Change Medical UHC $22,042,323 $20,401,700 -7.4% $2,635,436 $2,680,736 1.7% $19,406,887 $17,720,964 -8.7% Pharmacy Express Scripts $10,086,256 $10,750,863 6.6% $976,639 $1,041,020 $9,109,616 $9,709,843 Rx Rebates -$1,093,118 -$1,278,535 -17.0% $0 0.0% Wellness Included above Dental Delta of MO $1,605,817 $488,289 $1,117,528 Vision VBA $109,656 $138,734 26.5% $46,686 $71,421 53.0% $62,971 $67,313 6.9% Basic Life and AD&D CIGNA $284,140 $335,802 18.2% Voluntary EE & Dep Life $215,256 $327,896 52.3% Short Term Disability $723,055 $776,286 7.4% Long Term Disability $566,406 $509,911 -10.0% EAP $1,413 $945 -33.1% Total Premium   $34,541,204 $33,569,419 $4,362,306 $4,609,362 $30,178,898 $28,960,056 Total Savings/Cost -$971,785 $247,056 -$1,218,841 Percent of Change -2.8% 5.7% -4.0% NOTE: The Dental coverage is shown with the 0.0% increase for a 1 year renewal. The 2.5% increase for 2 years would be an increase in premium to the District of approximately $27,786 (accounting for employee contributions).

District Responsibility Per Employee Per Month 2010 through 2017 Proposed For All Coverages District Responsibility Per Employee Per Month 2010 through 2017 Proposed - All Coverages   2010 2011 2012 2013 2014 2015 2016 2017 Proposed* District Responsibility $28,509,576 $27,822,986 $27,249,754 $28,260,446 $27,583,817 $30,799,608 $31,927,961 $28,960,056 Active Employee Headcount 3,751 3,639 3,227 3,393 3,602 3,618 3,641 3,555 Per Employee Per Month (pepm) $633.38 $637.15 $703.69 $694.09 $638.16 $709.41 $730.75 $678.86 % Change From Prior Year 0.6% 10.4% -1.4% -8.1% 11.2% 3.0% -7.1% *Move Medical to UHC, renewal current carriers all other Lines

Next Steps SAB Consideration of Recommendations

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