This presentation is intended for communication purposes only, it is not a guarantee of benefits.

2. This presentation is intended for communication purposes only, it is not a guarantee of benefits. Please see insurance plan documents and http://atyourservice.ucop.edu/oe/ for complete information.

3. Agenda for DBR Briefing • Open Enrollment Basics • Medical Plan Changes • Medical Plan Design 101 • 2014 Medical Plans • Medical Plan Rates • Other Plans • Administrative Actions • Open Enrollment Communication

4. Open Enrollment Dates Start: Monday, October 28 at 8:00 AM End: Tuesday, November 26 at 5:00 PM All changes effective on January 1, 2014 Booklets mailed October 21 Website up on October 21 http://atyourservice.ucop.edu/oe

5. Actions • Change medical or dental plans • Enroll eligible family members in medical, dental or vision plans • Enroll in Health or Dependent Care Flexible Spending Account (reenroll each year) • ARAG Legal is not open for new enrollments

6. How to make changes? • Go to Open Enrollment website • http://atyourservice.ucop.edu • Select “Sign In” • Sign-in using your ID and password • Select “Open Enrollment” link • Select the tab for the change you desire • Confirm your selection • Print your confirmation

7. Resetting Passwords on AYSO https://atyourserviceonline.ucop.edu/ayso/ • Encourage employees to use the “forgot password” and “forgot username” options on At Your Service Online • If that doesn’t work, call or email:Edna Arellanoedna.arellano@hr.ucsb.edux4048

8. Big Changes, New Choices • Comprehensive review of UC's medical plan portfolio • Ensure good benefits while limiting cost increases for employees and the university • Maintain choices to address individual needs • Opportunity to leverage UC's medical centers • Respond to health care reform and a changing medical-insurance marketplace

9. 2014 Medical Plans

10. Impacted Employees at UCSB • 4,171 employees enrolled in medical plans • 1254 employees in discontinued plans • 521 Anthem Plus • 270 Anthem PPO • 324 Anthem HRA • 139 Health Net HMO (full network) July 2013 enrollments, UC Quarterly Statistical Report

11. Default Medical Plans If you do nothing during Open Enrollment OR don’t confirm an Open Enrollment transaction:

12. Medical Plan Design 101 HMO PPO POS

13. HMO – Health Maintenance Organization • Care is delivered by physicians in a “medical group” (e.g. Sansum, SB Select IPA) • Care is coordinated by Primary Care Physician and medical group • Member selects PCP, PCP refers to specialists • Set copay for most services, no deductibles • Emergency and urgently needed care when away Health Net Blue & Gold HMOKaiser HMO

14. PPO – Preferred Provider Organization • You direct your own care, you decide where to receive services • You pay annual deductibles before plan pays • After deductible, you share the cost of each service with the plan - coinsurance • Your costs are lower if you select preferred providers • “Out-of-pocket Maximum” limits your financial liability UC Care Blue Shield Health Savings Plan

15. Deductibles & Out-of-Pocket Maximum Deductible • $ amount you pay annually before the plan starts paying • Individual – amount an individual pays • Family – the limit on the amount that a family pays Out of Pocket Maximum • The most you pay for care in a year • Once you have paid this amount for medical services, the plan pays 100% of future services • Includes deductible, copay, coinsurance for medical services. Some plans also include drug expenses.

16. Learn more about PPOs Fair Health Consumer http://www.fairhealthconsumer.org/ • Estimate cost of medical procedures • “LEARN” tab – print and video resources • How plans work • Cost Sharing, know what you may owe Good Rx • http://www.goodrx.com • Estimate cost of drugs (for Blue Shield HSP)

17. POS - Point of Service • Combines HMO and PPO plan designs • Limit costs by using HMO providers • Can use providers outside HMO group, but cost for service will be higher Anthem PLUS in 2013 - discontinued

18. Anthem PLUS Dilemma – PPO or HMO Physician • Specific physician • More choice of physicians and facilities What is your priority? Cost • Monthly cost • Predictable copays

19. 2014 Medical Plans UC CareBlue Shield Health Savings Plan Health Net Blue & Gold HMO Kaiser HMO Core

20. UC Care – New PPO • New self-funded PPO plan • Created for UC employees and non-Medicare retirees • Can get care from UC physicians and medical centers and Blue Shield Preferred and non-preferred providers • No PCP, no referral required for specialist

21. UC Care: Networks & Plan Design Blue Shield of California – claims administrator & network

22. UC Care - In-Network Providers • UC Select • All UC medical centers, facilities and physicians • Additional select Blue Shield providers in areas where UC medical centers and physicians are not accessible • Blue Shield Preferred PPO in California • 97% of Anthem PPO are also Blue Shield Preferred • BlueCard Coverage outside of CA and US • Blue Cross Blue Shield Network

23. UC Select Network at UCSB • UC Select providers in • Santa Maria • Lompoc • Ventura • Currently, there are no UC Select providers in Santa Barbara area • High cost hospital and medical groups • Still negotiating

24. Blue Shield Preferred at UCSB • Most Anthem Plus and PPO providers are also in the Blue Shield Preferred network • Cottage Hospital and Sansum Clinic are Blue Shield Preferred providers Provider directory: blueshieldca.com/uccareppo or link from http://uc-care.org/

25. UC Care – Cost of Care • Your costs depend on the service and the network status of the provider • UC Select – no deductible, copays for most servicesbut not all • Blue Cross Preferred – deductible and you pay 20% coinsurance for most services • Non-Preferred – deductible and plan pays 50% of allowed rate

26. UC Care – Emergency Room Visit • There are two charges for emergency care with a PPO plan design: • “Facility” – billed by the hospital • “Professional” – billed by the ER physicians • Emergency Room Visit (not admitted) • Emergency room: $100 per visit • Emergency physician services: 20% • Same coverage across all provider networks

27. UC Care - Prescription Drugs • Three Tier Design – 30 day supply • $5 Generic • $25 Brand • $40 Non-formulary • 90 day supply is available for a reduced cost through mail order pharmacy - PrimeMail

28. More information about UC Care Shield Concierge Blue Shield/UC dedicated line 1-855-201-2087 M-F, 7 to 7 http://uc-care.org/

29. Questions?

30. Blue Shield Health Savings Plan • New PPO plan – high deductible • Health Savings Account (HSA) – pretax account to help pay out-of-pocket health expenses • Low premium – higher cost for care NOT the same as Lumenos HRA

31. Blue Shield HSP – Plan Design • High deductible medical plan paired with a Health Savings Account Health Savings Plan Blue Shield PPO Special tax advantaged account to pay health expenses UC funds: $500 individual $1000 family You may contribute pre-tax $ Belongs to you, you can take it with you if you separate from UC Medical and drug expenses apply to deductible and OOPMs Family members share same deductibles and OOPMs Networks: Blue Shield Preferred Non-Preferred Providers +

32. Health Savings Account • Health Equity manages the HSA • UC makes annual contribution for plans that start on January 1. • UC contribution is pro-rated for mid-year enrollments • You may contribute through payroll deductions • NO use it or lose it - you keep money

33. Employees can maximize savings • 2014 Maximum Contributions allowed by IRS • Single-coverage: $3,300 • Family-coverage: $6,550 • Catch-up contribution, age 55+: $1,000 • Tip: Consider contributing money that you would have put in a Health FSA.

34. Lumenos and Blue Shield HSP • Remaining Lumenos HRA money will roll-over into the Health Savings Account • Lumenos HRA $ are treated differently than HSA $ by IRS • Lumenos HRA $ becomes a “Post Deductible Health Reimbursement Account” = PDHRA • You must pay the Blue Shield HSP deductible with other funds BEFORE you can use the PDHRA to pay eligible expenses.

35. Who is eligible for HSA? To own an HSA you need to: • Be covered ONLY by an HSA-qualified health plan • Other health coverage may disqualify you, including Health FSA, Medicare or traditional health plan • Health FSA must have a $0 balance on Dec. 31, 2013 (complete any claims reimbursement by Dec. 31, 2013) • Not be claimed as a dependent on someone else’s tax return

36. “Seamless” Consumer Experience • Blue Shield and Health Equity share information • Employee receives welcome kit and live debit card • Use the “smart card” to pay for eligible health expenses • Can track and pay claims on Blue Shield website • Invest HSA dollars when account balance reaches $2000 – no fees to invest

37. Health Savings Accounts make sense Easy win in today’s complex health care system: • Save now: • HSA deposits aren’t taxed • Typically lowers income tax liability • Save for the future: • HSA funds roll over from year to year • Tax-free interest earned • You keep the money even if you changejobs or insurance plans • “Best-in-class” investment options

38. For more information Health Equity Member Services is available every hour of every day: Call the Blue Shield/UC dedicated line 1.855.201.8375 say “Health Savings Account” www.blueshieldca.com/uc (select "go" in the health savings plan section)

39. Health Net • Full Network HMO is being discontinued • In Ventura County, some medical groups will no longer be available to Health Net members • Employees should consider UC Care or Kaiser HMO • Health Net Blue & Gold HMO will continue with few benefit changes • In Santa Barbara County, all HMO medical groups participate in Blue & Gold • In Ventura County, not all HMO groups participate

40. Kaiser HMO • Kaiser will continue in 2014 • Changes include enhanced preventive care benfits

41. Optum – Behavioral Health All medical plans, except CORE, use Optum therapists, psychologists and psychiatrists for in-network care. • Health Net Blue & Gold and Kaiser • In-network benefit • UC Care, Blue Shield Health Savings Plan • In-network and out-of-network benefit • Core • In-network with Blue Shield clinicians and out-of-network benefit

42. Transition / Continuity of Care • All plans provide temporary transition or continuity of care service so members may complete a course of treatment and arrange for a safe transfer from a non-plan provider. • Members, who lost their current coverage due to plan disruption and were requiredto enroll in another health plan, AND are currently receiving services may be eligible for transition of care assistance. • Please call member services to discuss your situation.

43. Other Medical Plan Changes CORE • Out-of-pocket Maximum decreased 2013: $7,600 per individual 2014: $6,350 individual / $12,700 family Transgender Benefit • Lifetime Maximum removed 2013: $75,000 2014: Unlimited

44. Rx – Mandatory Generic DrugsHealth Net and UC Care • Generic drugs will automatically be dispensed • Brand name drugs when generic is available will cost the member more • $5 generic copay + (brand price – generic price) • Brand name is available if “medically necessary” • e.g. Allergic to inactive ingredient • Requires prior authorization from plan • DAW, DNS does not = medical necessity

45. Rx – Mandatory Generic DrugsCore and Blue Shield Health Savings Plan • Generic drugs will automatically be dispensed • Brand name drugs when generic is available will cost the member more • Generic coinsurance + (brand price – generic price) • Brand name is available if “medically necessary” • e.g. Allergic to inactive ingredient • Requires prior authorization from plan • DAW, DNS does not = medical necessity

46. Nicotine Replacement Therapy • All UC Medical Plans continue to provide RX for smoking cessation at $0 cost (e.g., Chantix, Zyban) • Over the Counter NRT covered at $5 (generic copay) • OTC = Gum – Patch – Lozenge • Doctor’s Prescription Required • Kaiser Only - $0 Copay for both RX and OTC products

47. Medical Plan Ratesfor 2014

48. Definition of Covered Salary Life, Disability and MCB • UC will make changes to the definition of covered salary for Life Insurance, Disability Insurance, and Medical Contribution Base (MCB) effective 1/1/2014.  • All definitions will be simplified to “base salary” only • “Extra” pay such as stipends, shift differentials, overtime, etc. will be excluded from all salary base calculations • Multiple appointments with different rates will receive pro-rated salary base (instead of highest rate)

49. Medical Contribution Base • The Medical Contribution Base (MCB) used to determine your salary band for 2014, is based on your full time annual equivalent salary in effect on Jan 1, 2013 • The change in the definition of MCB will impact current employees in 2015 and employees hired in 2014.

50. Pay Bands Increase in 2014 • Pay bands are subject to collective bargaining • Pay bands are adjusted annually, based on the change in the California consumer price index from February of the prior year to February of the current year (determined by the California Department of Finance).