Proposed 2011 Medical Plan Design June 8, 2010

1. Proposed 2011 Medical Plan Design June 8, 2010

2. Background Recommended Strategy Summary Next Steps Action Requested Presentation Outline

3. Background Recommended Strategy Summary Next Steps Action Requested Presentation Outline

4. Background • 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 8,344 Covered Employees Total Plan Members: 18,536

5. Background • Claim and administrative expenses for 2010 are expected to reach $96 million • Overall cost of claims is trending at 10.4% and is expected to increase without major plan design changes • Unable to sustain funding for large increases year after year • Need to address total cost of plan and increase share of cost paid by employees

6. Background Keep Current Plan Major Plan Restructure

7. Background If current plan is kept… Revenues / Expenditures $107.8M $17.3 Million Deficit Millions $90.5M

8. Premiums will increase by at least 50% Bi-weekly premium increase as much as $100 for family coverage Coinsurance and deductibles would need to be added Financial challenges will continue to compound Background If current plan is kept…

9. Background Implementing a Major Plan Restructure will… • Lessen premium increases • Focus on Wellness and Preventive care • Create informed consumers • Begin to reverse the trend

10. Background Recommended Strategy Summary Next Steps Action Requested Presentation Outline

11. Recommended Strategy Implement a Consumer Driven Health Plan for 2011 • Preventive Care at 100% • Preventive Medications outside of deductible • Individual Health Savings Account (HSA) • High-Deductible Health Plan

12. Recommended Strategy • Nationally there are over 9 million individuals participating in Consumer Driven Health Care • Within the first year, the trend generally decreases 4-5% • Savings after the first year indicates trend rates lower than traditional plans by 3-5% • Cost savings are not generated by avoidance of appropriate care

13. Recommended Strategy A recent survey of HSA account holders by Buck Consultants found: • 52% of respondents more closely monitor their health care costs since becoming HSA account holders • 46% better understand costs before using services, and 25% choose less costly services • 20% are better monitoring their diet and engaging in fitness and exercise • 83% completed doctor recommended surgeries at the same rate as before, and 6% completed surgeries more than before

14. Recommended Strategy Two Major Plan Components • HSA Account • Funding Vehicle/Partially Funded • $750/$1,250 County contribution • High Deductible Health Plan • Deductible: $1,500/$3,000 • 20% Coinsurance • Out of Pocket Max: $3,000/$6,000

15. Recommended Strategy Deductible $1,500 Employee Only $3,000 Family Amount paid by covered member before plan begins Member pays full cost of the negotiated rate, until deductible Can be paid from the HSA

16. Recommended Strategy 20% Co-Insurance • Starts after deductible is met • 20% to be paid by member each time a medical service is accessed • 80% remaining is paid by the Medical Plan • Can be paid from the HSA

17. Recommended Strategy Out of Pocket Maximum • $3,000 for Employee only • $6,000 for Family • Designed to protect member in the event of a catastrophic illness (safety net) • Once the out of pocket max is met, all services are covered at 100% by the Plan

18. Recommended Strategy Premium Schedule

19. Recommended Strategy Premium Comparison

20. Recommended Strategy Premium Comparison

21. Background Recommended Strategy Summary Next Steps Action Requested Presentation Outline

22. Summary • 10.4% annual increase in healthcare cost is not sustainable • Fundamental changes to the health plan are needed • Recommend fully funding employee only coverage • Recommend transitioning to a Consumer Driven Health Plan to control costs, change behavior, and begin to reverse the trend

23. Background Recommended Strategy Summary Next Steps Action Requested Presentation Outline

24. Next Steps • Communication campaign beginning in June • Open Enrollment in October 2010 • Implement health plan changes and fund HSA accounts in January 2011 • Evaluate plan success going forward and make further adjustments annually

25. Background Recommended Strategy Summary Next Steps Action Requested Presentation Outline

26. Action Requested Approval of the 2011 Employee Health Plan and Premium Schedule as outlined in the staff report to include: • Consumer Driven High-Deductible Health Plan • Health Savings Accounts • Bi-Weekly Premium Schedule

27. Proposed 2011 Medical Plan Design June 8, 2010