1.  December 4, 2013

2. 10/21/20152

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4.  Let’s have a constructive conversation! o If you have a personal complaint, please table it for post-discussion, and we’re happy to discuss later  Rice is self-funded, meaning we pay for the claims directly out of our bank account, and only pay Aetna an administrative fee o This fee plus reinsurance premiums total only 6.3% of total premiums o Going with another insurance carrier will not necessarily save us money on these fees o Nor will changing carriers lead to less administrative hassles  We are constrained by budget issues, and cannot offer free coverage, etc. o Fringe rates are affected by Rice contributions toward premiums 10/21/20154

5.  Medicaid (Texas opted-out of expansion)  Medicare uncertainty (2026?)  Aging population (Rice avg. age = 45.6)  Increasing overall health care costs  Access to latest medical tests (proximity to TMC)  Affordable Care Act (ACA), or “Obamacare” o 2014 = Individual mandate and automatic enrollment for new hires o 2018 = “Cadillac Tax” that will require richer plans to pay a 40% tax/penalty for amounts in excess of the upper limits set by ACA 10/21/20155

6.  Rice moved to Aetna for self-funded coverage effective July 1, 2002 o We’ve now been with Aetna, with the same plan designs, for over 11 years! o Very minimal plan design changes o Increasing premium costs (but below market) Really? Let’s see… 10/21/20156

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9.  Rice continues to pay for 84.4% to 62.9% of premiums: 10/21/20159 EE % FY14 RatesEmployeeRiceTotalPremium HMO EE Only$83$449$53215.6% EE + Sp$314$830$1,14427.4% EE + Ch$273$733$1,00627.1% EE + Fam$534$1,117$1,65132.3% POS EE Only$132$572$70418.8% EE + Sp$467$1,064$1,53130.5% EE + Ch$412$937$1,34930.5% EE + Fam$793$1,413$2,20635.9% PPO EE Only$224$902$1,12619.9% EE + Sp$678$1,532$2,21030.7% EE + Ch$656$1,484$2,14030.7% EE + Fam$1,164$2,089$3,25335.8% Catastrophic EE Only$59$275$33417.7% EE + Sp$198$448$64630.7% EE + Ch$196$443$63930.7% EE + Fam$355$603$95837.1%

10. 10/21/201510

11.  What is our “secret sauce” for keeping the plans affordable? o Managing our health care expenses well HMO model works Keeping you healthy and productive Wellness programs Emergency rooms versus urgent care (know where to go) More drugs moving to generic (but specialty drugs on the rise) EnvisionRx Options (and Orchard) Luck! 10/21/201511

12.  We regularly benchmark our benefits against our peers o Private, peer universities o Texas Medical Center institutions  We remain very competitive  Fewer institutions focused on HMOs  High-deductible health plans are becoming more common in higher ed. (14% currently offer and 23% seriously considering in the future)  Narrow network option?  People are inherently inefficient when making health care choices (30%+) 10/21/201512

13.  How would you describe our needs? o Lower paid faculty/staff (want lower premiums and OOP expenses) o Freedom of choice (fewer restrictions, and willing to pay for freedom) o High utilizers (ill, children, etc.) The top 5% of our enrollment drives over 80% of our costs o Young invincible (low premiums, no use) o Network needs (MD Anderson, Kelsey-Seybold) o Retirees (both pre- and post-65) o Anyone else? 10/21/201513

14.  What do we want for the next 5 to 10 years? o Insurance company? Benefits Committee endorsed remaining with Aetna o Providers? o Plan designs? o Cadillac Tax impacts  What is most important to you? o Understand we have to follow the law o Understand we have a limited budget o Total compensation picture (benefits = 26-28% of your total pay package) 10/21/201514

15. 10/21/201515 Happy with Aetna Concern about network? Concern about changing carriers and approvals of services already authorized Premiums on a sliding income scale? We should make people more accountable for their care/costs?

16. 10/21/201516 Thank you!