1. Connecticuts Value Based Insurance Design The Health Enhancement Program for Connecticut State Employees (Covers Active State Employees and Retirees After October 1, 2011

2. A Product of Public Sector Bargaining The States fiscal crisis presented the opportunity to propose and negotiate the VBID plan The plan was a compromise between the employers proposals to shift costs and the union coalitions proposals to restrain costs by increasing use of services that had value

3. Health Enhancement Overview The Union proposal stressed preventive care and screening for certain chronic conditions The Employer proposal stressed higher employee premium co-shares; higher co-pays for a variety of services; higher deductibles. The eventual program required each enrollee and their dependents to sign a contract that they would access a specific schedule of periodic preventive physical examinations according to their age, e.g. an annual physical every year for those 50 and older. It also required that if an enrollee or dependent was diagnosed with any of the following chronic conditions: – Asthma; diabetes; heart failure; coronary artery disease; chronic obstructive pulmonary disease; hyperlipidemia; hypertension the member would also participate in a Disease Counseling and education programs available through the two carriers, Anthem and United. The member would also have to schedule two dental cleanings a year and a vision exam every two years Clinical breast exams and cervical screenings and colorectal screenings are also required according to a schedule, e.g., colorectal screenings at age 50

4. The Carrots If you join HEP, your premiums stayed essentially flat for the upcoming year Prescription co-payments for diabetes were waived and prescription co-pays for drugs prescribed for all other chronic conditions reduced to $0 generics;$5 brand;$12.50 for non preferred brand drugs No office visit co-pays for treatment and/or monitoring of the chronic conditions Two free dental cleanings per plan year Lifting of the cap on periodontal services

5. The Sticks Those who do not join pay an extra $100 per month in premiums They also pay an annual $350 deductible for services not subject to a co-pay with a $1400 annual limit for families

6. Plan Design Changes The former plan design was changed regardless of choosing the HEP program A $35 emergency room co-pay was set,previously $0 The pharmacy program for maintenance medications became a mandatory mail order program for actives and retirees under 65;90 day supply,one co-payment of $5/$10/$25 Voluntary mail order for those retirees 65 and over and those who participate have no co-pays Employees, at their option, may choose to receive mandatory mail order at any local pharmacy that agrees to participate in the program(CVS,Stop & Shop,Walmart, some independents) Increase pharmacy co-pays for actives and retirees after October 1, 2011 for non-maintenance drugs from $5-$10-$25 to $5-$20-$35 Statewide Labor-Management Committee known as Health Care Cost Containment Committee to maximize use of patient centered medical homes

7. Implementation Issues-Now What The costing of the agreement for submission to the Connecticut legislature assumed a 50% enrollment of the 53,000 eligibles When open enrollment ended on Sept. 15 th, over 51,000 signed up, about 97% The challenge going forward is to have the carriers track the data of the enrollees to assess compliance with the program requirements at the end of the first plan year(June 30,2012) Also, to track health care utilization and costs from previous year base lines to program year experience To evaluate changes in screenings and drug adherence to determine real and projected health care costs To appreciate the indirect savings from healthy employees such as reduced absenteeism; presenteeism; reduction in short term disability; reduction in disability retirements Provide employees with tools to track compliance Establish worksite champions consisting of rank and file to engage the workforce