1. Medical Plan Dependent Audit September 14, 2010

2. Presentation Outline   Background   Audit Process   Audit Results   Summary   Board Action Requested

3. Presentation Outline   Background   Audit Process   Audit Results   Summary   Board Action Requested

4.  BCC  Comptroller  Tax Collector  Supervisor of Elections  Expressway Authority  Housing Finance Authority  OBT Development Board  Metroplan Orlando  Property Appraiser  Lynx  Clerk of Courts  Research and Development  I-Ride Trolley Background 8,835 Covered Employees Total Plan Members: 18,314

5. Background   County’s Medical Plan expenses for 2009 reached over $85 million   Despite cost saving initiatives, healthcare costs are still trending at 10.9%   Beginning January 1, 2011 the County’s medical plan will become a Consumer Driven Health Plan

6. Background  A rising number of employers nationwide have conducted dependent eligibility audits as a way to contain healthcare costs  As of March 2008, 55% of surveyed employers planned to conduct an audit, and 74% planned to do so for 2009  Chapman Kelly eligibility audits often find between 5-12% of dependents are ineligible  Removing ineligible dependents could save between 4% and 6% of annual healthcare costs

7. Background  Beginning Fall 2008 employees were notified of the upcoming audit through:  Spiel Email Announcements  Live for Today, Plan for Tomorrow Newsletter Articles  HR In the Loop (video)  Department HR Representatives  Last opportunity to remove ineligible dependents was Open Enrollment for 2009

8. Background  In mid 2009, a Request for Proposal process was conducted to select an audit vendor  Audit firm Chapman Kelly was selected in September of 2009 to conduct a full Dependent Audit

9. Presentation Outline   Background   Audit Process   Audit Results   Summary   Board Action Requested

10. Audit Process   The audit was conducted for 5,073 employees, COBRA participants and retirees   These plan members covered 10,277 dependents as of January 1, 2009   Plan members were required to provide adequate documentation of eligibility

11. Audit Process  Human Resources sent a letter providing formal notification of the audit to plan members covering dependents on January 4, 2010  Chapman Kelly notified plan members of required documentation and instructions for compliance  Continual communication was provided throughout the audit

12. Audit Process  Employees were given until March 31, 2010 to provide documentation  On April 5 th, Chapman Kelly sent a letter to employees who failed to respond by the March 31st deadline  HR reached out to plan members notifying of non-compliance and asking for signed acknowledgment  A last chance date of April 30, 2010 was given to comply with the audit

13. Audit Process As documentation was collected:  Confirmation postcards were sent to plan members in compliance with the audit  Custom letters were sent to those who provided partial or insufficient documentation advising them to comply, or dependents would be removed from the plan

14. Presentation Outline   Background   Audit Process   Audit Results   Summary   Board Action Requested

15. Audit Results Results can be separated into four broad categories: 1.Eligible/Complete 2.Ineligible 3.Partial/Incomplete Response 4.Non-Response

16. Audit Results Eligible/Complete  97% were complete and eligible  Includes plan members with dependents who complied within the timeframe and provided sufficient documentation proving eligibility  Includes dropped dependents who were eligible until date of drop

17. Audit Results Ineligible  <1% of audited dependents were found to be ineligible  BCC: 42  Non-BCC: 21  Includes plan members with ineligible dependents who were not dropped within 30 days of becoming ineligible  Dependents removed from plan through 1/1/2011

18. Audit Results Partial/Incomplete Response  2% were partial responses  BCC: 131  Non-BCC: 66  Includes plan members with dependents who did not provide sufficient or complete documentation  Dependents removed from plan through 1/1/2011

19. Audit Results Non-Response  <1% did not respond  BCC: 25  Non-BCC: 16  Includes plan members with dependents who did not comply with the audit within the timeframe or at all  Remove dependents through 1/1/2012

20. Audit Results January 2007 – June 2010 Claims $262,129,949 Ineligible Claims: $240,734 0.09%

21. Audit Results Ineligible Claims: $240,734 0.09% Partial Response Claims: $1,091,049 0.42% January 2007 – June 2010 Claims $262,129,949

22. Audit Results Ineligible Claims: $240,734 0.09% Partial Response Claims: $1,091,049 0.42% Non-Response Claims: $899,674 0.34% January 2007 – June 2010 Claims $262,129,949

23. Audit Results Ineligible Claims: $240,734 0.09% Partial Response Claims: $1,091,049 0.42% Non-Response Claims: $899,674 0.34% Total of questionable claims represents <1% of total claims since 2007 January 2007 – June 2010 Claims $262,129,949

24. Audit Results Questionable Dependent Claim Costs (Since 2007) 76% of dependent claims were $5,000 or below Number of Dependents $

25. Audit Results 50% of dependent claims were $1,000 or below $ Questionable Dependent Claim Costs (Since 2007)

26. $ Audit Results The one claim over $500,000 was technically from an eligible dependent Number of Dependents Questionable Dependent Claim Costs (Since 2007)

27. Audit Results During the course of the audit, over 3.1% of dependents were removed from the plan producing a theoretical savings of just under $1 million annually

28. Presentation Outline   Background   Audit Process   Audit Results   Summary   Board Action Requested

29. Summary  97% of audited employees had eligible dependents and were compliant  50% of ineligible, partial or non- response claims were under $1,000  Chapman Kelly and other auditors recommend removing ineligibles and cleaning up the plan going forward  Continue to require sufficient documentation when adding dependents (Implemented 1/1/09)

30. Presentation Outline   Background   Audit Process   Audit Results   Summary   Board Action Requested

31. Board Action Requested BCC ratification of the implementation plan: Require sufficient documentation at time of enrollment (Implemented 1/1/09) Require sufficient documentation at time of enrollment (Implemented 1/1/09) Non-recoupment of dependent claims Non-recoupment of dependent claims Removal of partial and ineligible dependents through 1/1/2011 Removal of partial and ineligible dependents through 1/1/2011 Removal of non-response dependents through 1/1/2012 Removal of non-response dependents through 1/1/2012

32. Medical Plan Dependent Audit September 14, 2010