Health Care Coverage for You and Your Family!

1. Health Care Coverage for You and Your Family! Welcome

2. Agenda • What’s new this year • Who is eligible to enroll • Plan options • Cost of health coverage • How to enroll • Enrollment support • Questions

3. What’s New for 2007-2008? • ActiveCare 1: • Plan year deductible increased from $1,050 to $1,100 per individual • ActiveCare 2: • $100 inpatient hospital copay per day ($500 maximum copay per admission, $1,500 maximum copay per plan year) • $100 outpatient surgery copay per visit • $100 emergency room copay per visit (copay waived if admitted) • Copays are in addition to deductible and coinsurance • ActiveCare 3: • No plan changes • Premium increase (approximately 7%)

4. What’s New for 2007-2008? HMOs: • New rates for all HMO plan options • Rate decrease for Valley Baptist Health Plan • Minor benefit changes to • FirstCare Health Plans • Scott and White Health Plan

5. Employees Eligible to Enroll Active contributing TRS member? You may be eligible If Yes If No Regularly work 10 or more hours per week? You may be eligible If Yes If No You are not eligible

6. Employees NOT Eligible to Enroll • State of Texas employees or retirees • Higher education employees or retirees • Most TRS retirees, including those back at work • These individuals are not eligible to enroll for TRS-ActiveCare coverage as employees, but they can be covered as a dependent of an eligible employee

7. Eligible Dependents • Spouse (including a common law spouse) • Unmarried (including divorced) children under age 25 • Natural child • Adopted child • Stepchild • Foster child

8. More Eligible Children • An unmarried child under the legal guardianship of the employee • An unmarried child in a regular parent-child relationshipwith the employee: • The child's primary residence is the household ofthe employee • The employee provides at least 50% of the child's support • Neither of the child's natural parents resides in that household • The employee has the legal right to make decisions regarding the child's medical care • An unmarried grandchild whose primary residence is the household of the employee and who is a dependent of the employee for federal income tax purposes

9. More Eligible Dependents • Unmarried children (any age) mentally retardedor physically incapacitated • Siblings over age 25 or parents are not the children of an employee and do not meet the definition of an eligible dependent • Any other dependents required to be covered under applicable law

10. Newborns • Covered the first 31 days if employee has coverage • To continue coverage, employee must add newborn within 60 days after the date of birth • However, an employee has up to one year after the newborn’s date of birth if: • Employee has “employee and family” or “employee and child(ren)” coverage at the time of birth and at the time of enrollment

11. PPO Plan Options ActiveCare 1, 2 and 3

12. PPO Features ActiveCare 1, ActiveCare 2 and ActiveCare 3 • Administered by Blue Cross and Blue Shield of Texas and Medco • No primary care physician (PCP) required; no referrals required to see a specialist • Select any provider for care within the PPO network or outside the network • When you receive care inside the network, you receive the highest level of benefits • When you receive care outside the network, you still have coverage but you may pay more of the cost • Worldwide coverage for emergency and non-emergency care

13. Network vs. Non-Network Providers Network Providers • Receive highest level of benefits • No claims to file • No balance billing Non-Network Providers • Receive non-network level of benefits • Must file own claims • May be billed for charges exceeding allowable amount

14. Non-Network Providers ParPlan Providers • Receive non-network level of benefits • No claims to file in most cases (ParPlan provider will usually file the claims) • No balance billing; ParPlan providers cannot bill for costs exceeding the allowable amount

15. Coverage Outside Texas BlueCard PPO Program (for enrollees living or traveling outside of Texas) • More than 85 percent of all doctors and hospitals contract with Blue Cross and Blue Shield Plans • Outside of the U.S., you have access to doctors and hospitals in more than 200 countries • Network level of benefits • Claims filed by providers • No balance billing

16. Deductibles (Plan Year) Deductible: The amount of out-of-pocket expense that must be paid for health care services before becoming payable by the health care plan

17. Coinsurance Coinsurance:The percentage of medical expenses that you and the health plan share

18. Office Visit Copay Copayment (Copay): The amount paid at the time of service for certain medical services and prescription drugs; copays depend on whether the doctor is primary or a specialist Specialist: Any physician other than a family practitioner, internist, OB/GYN, and pediatricians

19. Preventive Care Copayment (Copay): The amount paid at the time of service for certain medical services and prescription drugs; copays depend on whether the doctor is primary or a specialist Specialist: Any physician other than a family practitioner, internist, OB/GYN or pediatrician

20. Out-of-Pocket Maximum(excludes copays and deductibles) Out-of-Pocket Maximum: When you reach your plan’s of out-of-pocket maximum, the plan then pays 100% of any eligible expenses for the rest of the plan year.

21. Preauthorization Required • All inpatient hospital stays • Treatment of all serious mental illness, mental health care and chemical dependency • Home health care • Hospice • Skilled nursing facility • Home infusion therapy

22. Special BeginningsPrenatal Program • Available now to ActiveCare 1, 2 and 3 plan participants—at no cost • Program is available from pregnancy through six weeks after delivery • Helps mothers take better care of themselves and their babies • Assesses pregnancy risk level and provides close monitoring through a series of calls from an experienced obstetrical nurse • Call 1-800-462-3275 to enroll or ask questions about the program

23. Disease Management ProgramsActiveCare 1, 2 and 3 PPO Plans • Voluntary programs available now to ActiveCare 1, 2 and 3 plan participants—at no out-of-pocket cost • Designed for those diagnosed with: • Asthma • Diabetes • Congestive heart failure • Coronary artery disease • Metabolic syndrome (high blood pressure, high cholesterol) • Lower back pain • End stage renal disease

24. Disease Management Programs (Cont.) • Enrolling in a program can help: • Decrease the intensity and frequency of symptoms • Enhance self-management skills • Minimize missed days at work • Enrich quality of life • Claims and pharmacy data review, preauthorization prior to a hospitalization or a physician referral are some of the factors that help determine if a disease management program is right for the plan participant • Blue Cross and Blue Shield of Texas will notify doctor by letter if it finds that the plan participant would benefit by enrolling in a program • Call 1-800-462-3275 to enroll

25. Disease Management Programs What You will Receive If a representative from Blue Cross and Blue Shield of Texas or LifeMasters calls or leaves a message for you, talk to them! They are calling to help improve your health and well being.

26. Blue Access for Members(Registration required) • Available to ActiveCare 1, 2 and 3 enrollees • Blue Access for Members link on TRS-ActiveCare Web site and www.bcbstx.com/trs • Check the status of a claim • Confirm who is covered under the plan • View and print detailed claim information (Explanation of Benefits) • Opt-out of receiving paper copies of their Explanation of Benefits • Sign up to receive email notifications of new claim activity • Request a new or replacement ID card or print a temporary member ID card • Access to health and wellness information

27. Take a Health Risk Assessment • Confidential online survey to help you learn more about your individual health risks • Takes 10-15 minutes to complete • Individualized report provided with guidance and suggestions for next steps to improving your health • Available through Blue Access for Members • Click on My Health tab, then select the Health & Wellness icon to Take a Health Risk Assessment • Your information is kept confidential • Information will not be released to your employer

28. Prescription Drug Benefits ActiveCare 1, 2 and 3

29. Prescription Drug BenefitsWhat’s New • No plan changes, no copay changes • Retail Pharmacy ProgramActiveCare 2 and ActiveCare 3—No changes • Retail copays for maintenance medications • First two fills of maintenance medication at retail = short-term copay • Third (3rd) fill of maintenance medication at retail = copay increase • Retail copays for short-term medications did not change • Mail order copays did not change • Separate $50 drug deductible per family member for ActiveCare 2 and ActiveCare 3 did not change

30. Prescription Drug Benefits

31. Prescription Drug Benefits Note: When using a non-network pharmacy, you must pay the entire cost and submit a claim form to Medco. You will be reimbursed the amount that would have been charged by a network pharmacy, less the required copayment.

32. Prescription Drug Benefits Note: When using a non-network pharmacy, you must pay the entire cost and submit a claim form to Medco. You will be reimbursed the amount that would have been charged by a network pharmacy, less the required copayment.

33. Prescription Drug Benefits • Once the deductible is satisfied, the member pays the applicable copay • Member-paid cost differences between a brand-name drug and a generic equivalent do not apply to the deductible

34. Prescription Drug Benefits • Once the deductible is satisfied, the member pays the applicable copay • Member-paid cost differences between a brand-name drug and a generic equivalent do not apply to the deductible

35. Prescription Drug Benefits ActiveCare 2 and 3: Member pays the difference • You pay the difference if a brand-name prescription is dispensed when a generic is available • You pay the generic copay plus the difference in cost between the brand-name prescription and what the cost would be if the generic drug had been purchased, regardless of doctor DAW (Dispense As Written)

36. Prescription Drug Benefits Drug Formulary • Preferred and Non-Preferred Medications • Copays • Preferred Prescriptions Drug List • Generic Medications

37. Prescription Drug Benefits Prior Authorization • Program designed to ensure the safety of participants and help contain costs • May review some or all of the following information to assure an appropriate coverage decision: • Patient diagnosis • Indications for prescribed drug use • Dosing • Duration of therapy • Patient drug profile • Potentially dangerous drug interactions

38. Prescription Drug Benefits

39. My Rx Choices (Pilot Program: replaced Savings Advisor) • Pilot Participant • Initiated 12/1/2006; goes through 2/28/2007 • Features include: • Personal assessment of cost-saving opportunities based on the member’s prescription plan • Best-value alternatives based upon greatest cost savings to the member presented in order from highest value to member • Brand-to-generic and retail-to-mail compare options available • Explanation of complicated concepts in easy-to-understand terms

40. My Rx ChoicesAvailable through 800 # or on www.medco.com As of 3/1/2007: • 8,813 registered TRS-ActiveCare members • 17,129 wizard starts • 1,694 forms downloaded • 12% of the time members switched to cost saving alternatives

41. My Rx Choices Medco can facilitate on generic equivalents received through mail order

42. My Rx Choices Members may print a kit to discusslower-cost alternatives with their doctor

43. Cost for Health Coverage 2007-2008 Plan Year

44. Coverage Categories • Employee Only • Employee and Spouse • Employee and Child(ren) • Employee and Family

45. Choosing a Coverage Category • If employee and spouse both work for a participating entity: • A spouse may be covered as an employee or as a dependent of an employee • Only one parent can cover dependent children

46. Choosing a Coverage Category • A child (under age 25) employed by a participating entity and a contributing TRS member cannot be covered as a dependent • The child must be covered as an employee of the participating entity • If the child is not a contributing TRS member, the child may be covered as a dependent

47. Monthly Costof Coverage Page 33 of the Enrollment Guide

48. Total Monthly Cost of Coverage for PPO Plans for Administrators & Teachers

49. Total Monthly Cost of Coverage for PPO Plans for Paraprofessional & Auxiliary Employees

50. Application to Split Premium • Married couples working for different participating entities may “pool” funds • Optional • Requires an Application to Split Premium form to be completed by both employees and employers