TEXAS HOUSING ASSOCIATION

1. TEXAS HOUSING ASSOCIATION

2. Historical Overview of Benefit Plans & Health System • Indemnity • Preferred Provider Organizations (PPO) • Health Maintenance Organization (HMO) • Consumer Driven Health Plans • HRA, HSA, RRA • Improved Provider Cost Transparency • Wellness programs • Healthy Initiative Programs

3. Uninsured Population in large States Location Percent Population in Millions Texas 24.6% 22.9 Florida 19.6% 17.8 California 18.8% 36.1 Georgia 17.5% 9.1 New Jersey 14.5% 300.4 US 15.7% 8.7 Illinois 14.2% 12.8 New York 13.9% 19.3 Ohio 12.0% 11.5 Michigan 11.3% 10.1 Pennsylvania 11.2% 12.4 Source: Wall Street Journal Politics & Economics December 21, 2006

4. Understanding Insurance • What Affects Cost? • Plan Design • Utilization • Group Demographics

5. Who is enrolled in what plan?

7. Plan Design • Plan Design/Utilization • Deductible • Co-pay • Coinsurance • Out-of-pocket Maximum • Prescription Drugs • Network Steerage

8. Utilization • Utilization & Review • Large Case Management • Disease Management • Hospital Surgical Utilization Review • Clinical Treatment Protocols • Health Coaches • Web Based Self Help Educational Tools

9. Health Care/Cost Management Components 2005-2007

10. Large Claims • Effect of Large Claims • 2007 • 20% Of Claimants Account For 80% Of All Claims Cost • Often <2% of Claimants Account For 25-30% Of All Claims

11. How Does A Consumer Driven Health Plan work with an HSA or HRA? Insurance Protection • Insurance Protection (PPO) Insurance Protection provides comprehensive coverage and security • Higher Deductible Coverage starts above higher “deductible” to encourage prudent spending • Integrated Savings Account Integrated Savings Accounts are for member to “use or keep” how they see fit Insurance Protection Insurance Protection HRA

12. One Plan • Unlike Flex Dollars, HRA monies are owned by the employer and roll from year to year • Debit Card procedures will be established for HRA balances that may be accessed for time of service eligible healthcare services $750 Deductible $4,000 OOP 80/50 MAC A 10/35 Plan D • Money can be used to offset the cost of dependent care coverage $300 $$$$ Health Reimbursement Account RRA

13. Two Plans • Unlike Flex Dollars, HRA monies are owned by the employer and roll from year to year $750 Deductible $4,000 OOP 80/50 MAC A 10/35 $300 Deductible $2,500 OOP 80/50 MAC A 10/35 Plan A Plan D • Money can be used to offset the cost of dependent care coverage $300 $350 $$$$ • Debit Card procedures will be established for HRA balances that may be accessed for time of service eligible healthcare services • Payroll Deductions would need to be established for buy up plans Health Reimbursement Account RRA

14. Group Individual Choice Health Plan $0 Deductible $3,000 OOP 90/10 Hospital 80/50 MAC A 10/35 $500 Deductible $2,500 OOP 80/50 MAC A 10/35 $750 Deductible $4,000 OOP 80/50 MAC A 10/35 Plan A Plan B Plan C $325 $265 $200 • Payroll Deductions would need to be established for buy up plans • Debit Card procedures will be established for HRA balances that may be accessed for time of service eligible healthcare services $$$$ Health Reimbursement Account Retiree Reimbursement Account

15. Section 125 Flex & HRA • Flexible Spending Accounts • Direct Management of Flex • Medical and Dependent • Debit Card & Paper • Direct Deposit • Recurring Expense • Grace Period Coordination • Health Reimbursement Account • Direct Management of HRA • Medical Contributions • Eligible Medical Services • Dental Contributions • Eligible Dental Services • Vision Contributions • Eligible Vision Services • Medicare Part B Premiums • Medicare Supplement/Advantage Premiums

16. Health Savings Account • Health Savings Account • Exante is Bank Trustee • Medical Contributions • Eligible Medical Services • Dental Contributions • Eligible Dental Services • Vision Contributions • Eligible Vision Services • Medicare Part B Premiums • Medicare Supplement/Advantage Premiums

17. Prescription Drugs

18. Prescription Metrics Prescription 2007 % Retail Prescriptions 91.6% % Mail Prescriptions 8.4% Biotech Specialty 14.8% Member Cost Share 30.5% % Generic Filled 54.07% % Brand Filled 45.26% % Biotech Specialty Filled .34% % of Specialty $ to Total Rx $12.51%

19. Why Generics? With health care costs on the rise, the use of generic medicines is an easy and effective way to save money. Here’s why: ·Generics are reviewed by the U.S. Food and Drug Administration (FDA) for safety and efficacy and are manufactured under the strict standards that apply to brand-name drugs · Generic drugs create competition, which keeps prices down Research shows that plan participants can save an average of 30% to 80% when they fill their prescriptions with a generic instead of a brand-name medicine

20. Prescription Transparency • Quantity Dispensed • Administrative Fee • Dispensing Fee • Rebate • Formulary • Extended Release Medications costing more than standard version (anti-depressants, anti-cholesterol, calcium channel blockers, hypertensive agents and sedative hypnotics)

21. Copay Steerage Generic $10 Name Brand $38 MAC A If a brand name drug is dispensed and a generic equivalent drug exists, the Covered Person pays the difference between the brand name and generic price in addition to the appropriate copayment for the brand name. Mail Order 2 or 2.5 of retail copay Biotech $80

22. Wellness

24. Investing in the Health and Well-being of employees Focus on Wellness is rapidly becoming part of the employer, group health plan and community landscape. Major benefit of a healthier workforce is reduced healthcare cost Other benefits include enhanced workforce productivity, reduce absenteeism and fewer work-related injuries.

25. Integration of Healthcare Components • Claim Cost Management • Health / Wellness Promotion • Consumer Education (Mail-Outs) • E-Tools Early Diagnosis and Intervention Medical Management Disease Management Large Case Management Treatment Compliance

26. Personal Health Record $150 Incentive

27. Medical Management Resource Tool D2Hawkeye Medical Claims Prescription Claims Lab Values Healthy Population Acute Chronic Catastrophic HRA

28. Wellness Materials Wellness Materials Wellness Material Wellness Material HEALTHY INITIATIVES INTERVENTION Healthy Population Acute Chronic Catastrophic 3 Health Coach Calls 36 Health Coach Calls 52 Health Coach Calls 5 Health Coach Calls Provider Provider Provider Reinsurance Reinsurance

30. BeWellat TML

31. BeWellatTML Maintenance Program

32. Wellness in the Workplace 1.  Create a Wellness Committee & Establish a worksite Mission Statement recognizing employee health and wellness as being important to the long-term success and well being of the organization. 2.Pre- and post-surveying of employees, suggestion/comments box on wellness, ideas/contests. Wellness on the worksite is best when it is fun! 3.Establish a physical activity program at the worksite (map and measure walking paths in and around the area surrounding the worksite). 4.Encourage healthy foods at worksite meetings and in vending machines. 5.Research and post local wellness initiatives that are occurring in the community. 6.Create a wellness calendar that highlights organized activities for the month. Events must be planned in advance and should tie into community programs, physical activity sponsored by programs, and national programs.

33. F I N I S H Start Slow; Stay Steady- You WIN!

34. Employee Education

35. Education is Key…. Health Fairs: Onsite lab services, Contests Employee Communication: Assist with payroll stuffers, posters, etc. Open Enrollment Education Meetings: Conduct presentations and provide education to employee population New Hire Enrollment Wellness Committee • Brown Bag Lunch: Employee Assistance Program or other resource • Stress • Finances • Depression • Nutrition • Exercise • Nutrition

36. PEBA

37. Leverage for Political Entities AGRIP

38. Retirees

39. Retiree Solutions Retiree concerns are one of the biggest challenges faced by Employers • Baby Boomers are retiring and living longer • Generation X’s retiring earlier and starting second career • Benefit Options [ For under 65 and over 65] • Employer Definition of Retiree • Accordance with Existing Retirement Program (TMRS) • Under 65 & Over 65, Time of Service, Definitions • Develop Sample Employer Policy and Procedures/or Ordinances • GASB • Support • Actuarial Service • Strategies

40. Retiree Benefits • Comprehensive Medical Plan Option • Medical Plan Option • Plan Subsidy / Employer Funding • Voluntary • Contributory • Mandatory • Under 65 and over 65Retiree Benefits • Dental • Vision • Life • Retiree Reimbursement Accounts

41. TML IEBP Mission Statement Not-for-Profit Member Equity Operational Efficiency Exclusive to Public Sector To provide excellent service and administrative services to eligible municipalities in Texas by utilizing innovative, affordable alternatives while maintaining financial integrity.

42. Questions? “May I be excused? My brain is full.”

43. Thank You!