Palmer College of Chiropractic - Florida 2010 Employee Benefit Meeting

1. Palmer College of Chiropractic - Florida 2010 Employee Benefit Meeting

2. Presented by • Palmer Human Resources • Gallagher Benefit Services • UMR Account Management

3. The Current Benefits Marketplace What’s Happening to Health Care Costs? • Industry Wide Increases Average 10 – 12% • Employers struggle to balance increasing costs and maintain benefit levels Why are our Health Care costs increasing? • Medical and Rx Inflation • Aging Population • Consumer Demand • Technological Advances in Medical Treatment You can help lower these costs by practicing healthy lifestyle behaviors and by being a wise consumer!

4. Cost Projections 2009 - 2012 Palmer College Health Plans Projected Costs • 2009 $960.72 PEPM • 2010 $1,035.25 PEPM • 2011$1,142.50 PEPM • 2012$1,279.32 PEPM Palmer College Expected 2010 Medical Programs Cost: $5,615,217

5. Average Employee Contribution Comparison * Mercer 2008 Survey of Employer Sponsored Health Plans

6. 2010 Update Changes in offering: • Increasing employee choice – New High Deductible Health Plan with lower premium • Ability to actively participate in healthcare decisions & research to save $ • Freedom to choose • Choose Providers & Facilities • Research & choose Rx • Research & choose options • Prepay for retirement healthcare • Wellness Program at no cost to employee • No increase to employee contributions (if participate in Wellness Program) • Current plan changes • Slight increase in Deductible to $400 in current Standard PPO option • Increase in Out of Pocket Max to $2,000 in current Standard PPO option • Increase chiropractic copay to $20 in current Standard PPO option • New voluntary Vision Plan offering coming in 2010

7. Wellness Program – Wellness Inc • Focus on prevention and early detection • Help you discover and change health risks • On-site screening and personal health website • Premium savings of $120 to $730 • Steps to participate: • Attend an on-site health screening (spouses can participate) • Participate in blood draw and Health Risk Assessment • Receive your Health Power Profile and access to your personal health website • Discount applied to your premiums

8. 2010 Monthly Employee Contributions

9. Consumer Driven Health @ Palmer College Changing Healthcare Together

10. Consumerism Approach 2009 Reasons for a change… • Palmer is launching into new healthcare adventure this year as an organization • Teaming up with UMR to change the healthcare experience together • Goals of 1) Impacting HEALTH outcomes and 2) Improving FINANCIAL wellness

11. HSA (High-Level Overview of the Plan) The Health Savings Account (HSA) Plan partners medical coverage with the ability to fund a Health Savings Account with pretax dollars to use for current or future medical expenses. * Bank account set-up required to receive company contribution.

12. Health Savings Accounts (HSA) • Created by the Medicare bill signed by President Bush on December 8, 2003 and are designed to help individuals pay for their financial liability on medical claims with pre-tax dollars or save for future qualified medical expenses. The tax advantages are great – money goes in tax free, earns interest tax free and can be spent tax free for qualified medical expenses. • To qualify for the tax advantages, you must be enrolled in a Qualified High Deductible Health Plan (HDHP). The Treasury Department and IRS regulate the contribution limits, minimum deductibles, maximum out-of-pocket limits and age 55 + catch up amounts. These amounts are subject to change each year. • The contributions, which can be employer and/or employee funded, are portable and remain with the employee even if they leave the College. • You are not eligible to participate in an HSA: • If you or a family member are covered by another non-qualified high deductible health plan

13. How does an HSA Plan work with the Pharmacy Plan? • In 2009, the HSA Pharmacy Plan is offered through Innoviant – transition of current prescriptions will be as seamless as possible • You pay 100% of prescription cost until your HSA deductible is met • You can use your Health Savings Account debit card or checkbook to pay for prescriptions • Once you’ve met your HSA deductible through the combination of your medical and pharmacy expenses, the basics of the pharmacy plan work the same as the pharmacy plan described earlier • You pay a percentage of the cost of prescriptions with minimum and maximum caps on the amount that comes out-of-pocket

14. HDHP/HSA Basics HDHP Medical Plan Coverage In/Out Network (Coinsurance Options) Preventive Care Coverage • Safety net coverage • Include coinsurance levels • In/Out Network Provisions • Annual exams • Immunizations • Essential Care • No impact to HDHP/HSA balances Deductible HSA • Member Share • OOP cost up to annual limit • Can be reduced through HDHP/HSA rollover • Must be met each plan year within guidelines • First Dollar Coverage • Non-Preventive care • Asset accumulation • Foundation for visibility to real cost of care • Full consumer control

15. Key points about the Health Savings Account • Contributions to the Health Savings Account go into a bank account with our banking partner – HSA Bank • The maximum annual contribution is $3,050 single, or $6,150 family • Interest is earned on the funds in the account • You select investment options once your balance reaches $1,000 • You can request a checkbook or debit card • If you incur medical expenses that exceed the dollars in your Health Savings Account, the remaining dollars must be paid out-of-pocket • If you are 55 or older, the catch-up provision allows for an additional contribution of $1,000

16. Health Savings Account Estimated Pretax savings for future medical expenses – single coverage • Additional advantages: • Pre-tax advantage on all contributions (savings varies based on individual tax situation) • Tax free interest

17. Let’s look at an example…Meet Jan and Steve • Jan and Steve – daughter Liz (8) and son Willie (3) • Been a staff member for 9 years • Reasons for interest in HDHP/HSA plan: • Challenged by continuing to pay for care that didn’t get used • Liked the idea of fully covered preventive care • Would like to have more decision making about how they purchase care

18. Example: Jan & Steve – family planYear 1 HDHP/HSA experience HDHP Medical Plan Coverage In/Out Network Coins 90% / 60% OOP Max $6,000 Care Experience (Year 1) Preventive Care Coverage - 100% • Preventive Care (in network) • Annual Exams $300.00 • Immunizations $55.00 • Paid by HDHP Plan $355.00 • Non-Preventive (in network) • Urgent Care $425.00 • Rx Expenses $75.00 • Office Visit $80.00 • Lab Tests $265.00 • Paid by HSA $845.00 • Remaining HDHP/HSA Balance = $1,155 (Rolled over to year 2) • Member OOP Cost = $0.00 Deductible $3,000 Member Responsibility HSA $ $1,000 Employer $1,000 Employee

19. Example: Jan & Steve – family planYear 2 HDHP/HSA experience Care Experience (Year 2) HDHP Medical Plan Coverage In/Out Network Coins 90% / 60% OOP Max $6,000 Preventive Care Coverage - 100% • Preventive Care (in network) • Annual Exams $300.00 • Mammogram $105.00 • Paid by HDHP Plan $405.00 • Non-Preventive • Urgent Care Co-pays $345.00 • Rx Co-pay Expenses $185.00 • Office Visit Co-pays $60.00 • Out-Patient Services $115.00 • Lab Tests $85.00 • Paid by HSA $790.00 • Remaining HDHP/HSA Balance = $2365.00 ($1155+$2000-$790) • (Rolled over to year 3) • Member OOP Cost = $0.00 Deductible $3000 Member Responsibility Yr 1 Rollover $ HSA $ $1,000 Employer $1,000 Employee

20. Let’s look at an example…Meet Trent • Trent – age 54, wife Stacy is on her employer’s plan • Been a staff member for 23 years • Reasons for interest in HDHP/HSA plan: • Liked the safety net concept • Healthy and interested in the idea of building an asset/account for post retirement. • Web savvy and likes to research before making decisions

21. Example: Trent – employee only planYear 1 HDHP/HSA experience HDHP Medical Plan Coverage In/Out Network Coins 90% / 60% OOP Max $3,000 Preventive Care Coverage - 100% Care Experience (Year 1) • Preventive Care (in network) • Annual Exams $120.00 • Paid by HDHP Plan $120.00 • Non-Preventive • Rx Co-pay Expenses $75.00 • X-Rays (knee) $195.00 • Office Visit Co-Pays $80.00 • Paid by HSA $350.00 • Remaining HDHP/HSA Balance = $1150.00 • (Rolled over to year 2) • Member OOP Cost = $0.00 Deductible $1500 Member Responsibility HSA $ $500 Employer $1,000 Employee

22. Example: Trent – employee only planYear 2 HDHP/HSA experience Care Experience (Year 2) HDHP Medical Plan Coverage In/Out Network Coins 90% / 60% OOP Max $3,000 Preventive Care Coverage - 100% • Preventive Care (in network) • Annual Exams $120.00 • Colonoscopy $225.00 • Paid by HDHP Plan $345.00 • Non-Preventive • Emergency Room Co-pay $50.00 • Rx Co-pay Expenses $345.00 • In-Patient Surgery $11,900.00 • Lab Tests $400.00 • TOTAL Non-Prev $12,695.00 • Member Paid/Deductible $1,500.00 • Member Paid/Coinsurance $1,500.00 • HSA Paid($1,155 + 1,500) $2,655.00 • HDHP Plan Paid $9,695.00 • Remaining HDHP/HSA Balance = $0.00 • Member OOP Cost = $345.00 Deductible $1500 Member Responsibility Yr 1 Rollover $ HSA $ $500 Employer $1,000 Employee

23. Health Savings Accounts (HSAs)Recap of how they work… • HSAs are simply personalized accounts that each employee has access to when they sign up for their Palmer College high deductible health plan • How are they funded?Participating employees contribute pre-tax payroll deductions to the account along with employer contributions. • How can I use the funds in my HSA? Funds can be used to pay for medical out of pocket expenses including dental, vision and pharmacy. • What happens when my HSA funds are used up? If the plan year deductible is not met, you may have additional out of pocket expenses until it is satisfied.

24. Health Savings Accounts (HSAs)Recap of how they work… • What if I have dollars left over in my HSA at the end of the year?Unused dollars at the end of a plan year ARE NOTforfeited and can be rolled over from year to year – accumulating a balance for when you need the benefit dollars. • Do I have to submit a claim to use my HSA dollars? Members should always show their health plan Member ID card and have their provider submit a claim first – so they can get the best discounts and so the true out of pocket amount is calculated. THEN an easy to use debit card or check book can be used for most payments on the remaining patient responsibility. • Where can I find out more about how it works? Our plan administrator is UMR and they offer a variety of resources and tools either on their website: www.umr.com or through customer care representatives @ 1.866.868.7241

25. health What to do next? • Look through and review all materials • Check out the UMR site for more infomation, call UMR or Human Resources • Utilize available tools to start mapping our your expected expenses and get a feel for how your HDHP/HSA will help with out of pocket expenses. • Talk with family members about how the plan will work differently than previous years. • Get ready to become a healthcare consumer!

26. Qualifying Events and Deadlines • Qualifying Events allow you to make changes to your health plan enrollment & flexible spending plans within 30 days of the event for the following reasons: • Legal Marital Change • Number of Dependents • Employment Status • Work Schedule (Reduction in hours) • Change in Eligibility of a Dependent • Loss of Health Plan Coverage of a dependent

27. Flexible Spending Accounts • Flexible spending accounts • These accounts allow employees to pay for certain expenses—medical, dental, vision, or dependent care expenses—with pretax dollars. • Limited Scope FSA (for HSA participants) • These accounts allow employees to pay for certain vision, dental, or dependent care expenses—with pretax dollars. • Annual elections • Before the start of this plan year, employees must choose the amount of money they wish to set aside on a pre-tax basis for eligible expenses incurred between January 1 and December 31, 2009 (up to $5,000 for medical expenses and $5,000 for dependent care expenses). • Direct Deposit option • Refer to your handout or plan document for a list of eligible expenses (or view online at www.fhs.umr.com then click on “forms”)

28. Flexible Spending Accounts • Plan Carefully - Any unused balance at the end of the plan year is forfeited. • Employees can change benefit elections during the plan year ONLY under certain circumstances, such as a change in the employee's family or lifestyle event. • Fill out your election form by November 30, 2009 to participate.

29. Coordination of Benefits • Each year employees enrolled in family coverage will receive a form letter from UMR(the claims administrator) asking if the dependents are enrolled in other health insurance coverage. • Please be sure to complete this form, even if your dependents are not enrolled in any other insurance • If your dependents are enrolled in another health insurance plan, please provide all specifics requested and return the letter to UMR • Compliance with this request ensures that claim payments will not be delayed. * Student status verification is confirmed by URM twice annually

30. Retirement Plan • IRS employee contribution limits effective January 1, 2010 • Under age 50 - $16,500 • Age 50 and over - $22,000 Consider increasing your contribution if you are currently contributing. If you are not currently contributing, consider enrolling.

31. Medicare Part D For all Medicare Eligible Employees… • This year Palmer posted the Part D Certificates of Creditable Coverage (COCC) to all employees on the internal website at w3.palmer.edu. • Those eligible to join Part D can do so without penalty. • Please note that if you drop Palmer’s Coverage you will not be able to re-enroll at a later date.

32. Reminders • Forms to complete by November 30, 2009 • Health Plan Election Form • Flexible Spending enrollment/waiver form • Keep Human Resources informed of any personal information changes to ensure accurate records.

33. Questions? Remember the Deadline for forms to be submitted to Human Resources is: November 30, 2009