2011 Health Insurance Benefit Plan Overview

1. 2011 Health Insurance Benefit Plan Overview Presented to the Employees of: Presented by: Scott M. Stevens, RHU,CDHC Employee Benefits/CDHC Specialist

2. INSANITY: “doing the same thing over and over again and expecting different results.” Albert Einstein US (German-born) physicist (1879 - 1955)

3. Introducing Douglas County’s 2011 Consumer Directed Health (CDH) Plan Option

4. “Consumer-Directed” Healthcare What’s the theory behind “Consumer-Directed" health care, a new trend in health benefits design? • Introduces people to the actual cost of medical care • Encourages shrewder purchases of medical services, diagnostic tests and prescription drugs • Helps hold down the rising cost of health insurance

5. Components of CDH…

6. Preventive Care Benefit • Covered services are paid at 100%. • no deductible or coinsurance for healthcare deemed and coded as preventive in nature, provided by a network provider • e.g., routine annual exam, mammogram, pap smear, colorectal cancer screening, cardiac stress tests, immunization, radiology/X-ray, pathology/lab,etc. • Vision and Hearing exams

7. Traditional Plan ($1000/$2000) Copays: Office Visit:$30 Prescription Drug: $15/$30/$60 Facility (ER/UC): $250/$50 Annual Deductible Individual: $1,000 Family: $2,000 (imbedded) Coinsurance Out of Pocket In/Out Network: 80%/60% Individual (PPO): $2,500 Family(PPO): $5,000 Total Out of Pocket Individual = $3,500 + copays Family = $7,000 + copays QHD/HSA Plan($3000/$6000) Copays: Office Visit: N/A Prescription Drug: N/A Facility (ER/UC): N/A Annual Deductible Individual: $3,000 Family: $6,000 (aggregate) Coinsurance Out of Pocket In/Out Network:100%/50% Individual (PPO): $0 Family (PPO): $0 Total Out of Pocket Individual = $3,000 - HSA Family = $6,000 - HSA Plan ComparisonTraditional vs. QHDHP/HSA

8. Comparison of Potential Annual Plan Costs After Douglas County’s HSA Contributions ($500 Employee/ $1,000 Employee + Dependent(s)) Employee: $3,500+ $2,500- Employee & Dependent(s): $7,000+ $5,000- Notes: *copays for Rx, Office Visits, ER, and UC continue to apply. ** Employee HSA deposits would reduce these amounts Traditional/PPO Plan* QHD/HSA Plan**

9. Douglas County’s CDH Plan Option Combines Health Insurance with a Bank/Spending Account HEALTH INSURANCE (Qualified High Deductible Health Plan) + SPENDING ACCOUNT (HSA)

10. Premium and HSA Contributions – (total cost, before Douglas County contribution) * IMPORTANT: Must elect the HSA Qualfied Plan in order to receive the tax free contribution to you bank account.

11. Premium and HSA Contributions – (using 93%/Employee Covg./85% Dependent Covg.) * IMPORTANT: Must elect the HSA Qualfied Plan in order to receive the tax free contribution to you bank account.

12. Your CDH Plan Option is Comprised of… United Healthcare Bank (to be determined) • Health Insurance provider • Processes medical care claims • Tracks eligibility/benefits • Billing • Decision support tools • Bank/HSA Custodian • Savings account to invest money used for healthcare • Provides debit card to pay qualified medical expenses • Tracks deposits, withdrawals, interest, etc.

13. Out of Pocket Costs - Defined • Premiums (What comes out of your paycheck) • Copays (Office visit, facility, Rx) • Deductibles (Ind., Family, Per confinement) • Coinsurance (20%, etc.) • Plan Penalties (Precertification, Non-PPO, etc.) Goal – REDUCE YOUR OUT OF POCKET EXPENSES!

14. Let’s Look at an Example of an Actual Claim(Using a 93% Employee/85% Dependent Premium Cost Share) Employee Only Coverage

15. Let’s Look at a Example of a Actual Claim(Using a 93% Employee/85% Dependent Premium Cost Share) Employee + 1/Employee + Family Coverage

16. The family in our previous example has a 2nd claim… Employee + 1/Employee + Family Coverage

17. What is a Health Savings Account (HSA)? • It is a tax-exempt savings account established to pay certain medical expenses in conjunction with a qualified high deductible health insurance plan.

18. 2 Components of an HSA • A tax- free interest bearing or investment transaction account (HSA); and • A qualified, high deductible health plan (QHDHP) HSA HSA QHDHP

19. HSA Eligible Individuals (who can have an HSA)… • Must have a QUALIFIED HIGH DEDUCTIBLE PLAN • Must NOT be enrolled in Medicare • Cannot be claimed as a dependent on another’s income tax return • Have not used VA benefits for past 90 days • May not be covered by any other insurance, except what is permitted: • Specific disease or illness • Hospital Daily Income • Accident • Dental/Vision • Disability • Qualified Long-Term Care

20. Qualified High Deductible Plan (QHDHP) Must have (for 2011) • Individual annual deductible of at least $1,200 and no more than $5,950 with an out of pocket maximum of no more than $5,950 (Douglas County’s CDH Plan has a $3,000 deductible for Individual/Employee Only) • Family annual deductible of at least $2,400 and no more than $11,900 with an out of pocket maximum of no more than $11,900 (Douglas County’s CDH Plan has a $6,000 deductible for family coverage) IMPORTANT: QHDHP’s have aggregate rather than imbedded deductibles, meaning the entire deductible amount must be satisfied by 1 or more family members before benefits are paid. • Generally NO copays

21. HSA Contributions - 2011 • Individual contribution is limited to $3,050 in ’11 • Family contribution is limited to $6,150 in ’11 • Excess contributions are subject to a 6% excise tax plus ordinary income tax. • Contribution limits may increase each year according to federal law. • Contributions can me made by Employer (pre-tax) Employee (tax deductible), or both. • Age 55 and older can make “catch up” contributions of an additional $1,000 per year

22. Why Contribute to an HSA? The Triple Tax Benefit • Contributions are pre-tax or tax deductible • Interest accumulates tax free • Distributions for qualified expenses are tax free NO OTHER SAVINGS PROGRAM ALLOWS THIS! Remember to include Douglas County’s contribution to your HSA (i.e., $500 or $1,000 annually) when computing your own maximum allowable contribution amount. Employee Only Coverage: $3,050 - $500 = $2,550 Employee + Dependent(s) Coverage: $6,150 - $1,000 = $5,150 (+ $1,000 Catch Up Contribution if 55 or older)

23. HSA Distributions • No tax or penalty on distributions used for qualified expenses (Note: starting in 2011, non-prescription/over the counter drugs NOT qualified) • Penalty of 20% plus ordinary income tax, if distributions used for non-qualified expenses • Penalty goes away at age 65 or the death of the account holder (tax may still apply) • If distributions continue to be used for qualified expenses, YOU NEVER PAY TAXES

24. YOUR decision support tools… • www.myuhc.com • Estimate treatment costs for conditions • Plan cost estimator • Rx comparisons • Personal health record • Health and Wellness information

25. Login / Registration page Simply go to myuhc.com, log in. Or if it’s your first time visiting the site, click the Register Now button.

26. UHC’s Plan Cost Estimator

27. Milliman’s Plan Cost Estimator (link to follow)

28. Milliman’s Plan Cost Estimator (link to follow)

29. Quality & Cost Relationship Hospital Comparison Tool

30. Estimate Costs of Future Treatments • Plan for future expenses for various tests and treatments • Calculate approximate costs in a geographical area • See estimated account balances • Compare in-network and out-of-network costs

31. Estimate Costs of Future Treatments

33. Shopping Around For HealthcareIn Omaha, NE Total Knee Replacement (DRG 302)

34. Shopping Around For HealthcareIn Omaha, NE Lumbar Spine Fusion (DRG 304)

35. Maximizing your CDH experience…or…KEEPING MORE MONEY IN YOUR POCKET!

37. Generic Prescription Drugs Save

38. Reduce your Prescription Drug Costs!

40. $4 Generic Prescription Drugs Over 400 Rx available for $4!

43. NE Rx Discount Card at work…

45. Retail Healthcare (i.e. “grocery store” healthcare)($25 - $79 each) • Screenings • Cholesterol/Blood Sugar • Daycare Provider Physicals • Pregnancy Tests • Sports Physicals • Tuberculosis Treatments • Bladder Infection • Bronchitis • Colds • Ear Infection • Ear Wax Removal • Flu Screening/Treatment • Minor Skin Irritations • Mono • Pink Eye • Seasonal Allergies • Sinus Infection • Sore Throat • Strep Throat Free Blood Pressure Checks • Adult Immunizations • Hepatitis A/B • Measles/Mumps/Rubella • Pneumonia • Tetanus • Tetanus/Pertussis

46. www.Alegent.com/QuickCare

48. Traditional Health plan with a co-payment works as follows: EOB Claim • Insurance Carrier • re-prices claim as part • of PPO (Preferred Provider • Organization) arrangement • Service $ 80 • PPO Disc $ 15 • Applied to $ 65 • Deductible • Insurance Carrier • sends EOB and payment • to Doctor and patient • Go to healthcare provider • Present ID card • Pay co-pay (e.g. $30) • Service performed • Claim submitted to • Insurance Carrier EOB Explanation of benefit

49. CDH Plan works as follows: • Doctor bills patient • for amount due after • receiving EOB • Pay using HSA or other EOB Claim • Insurance Carrier • re-prices claim as part • of PPO arrangement • Service $ 80 • PPO Disc $ 15 • Applied to $ 65 • Deductible • Insurance Carrier • sends EOB to Doctor • and patient • Service performed • Claim submitted to • Insurance Carrier • Go to healthcare provider • Present ID card EOB Explanation of benefit

50. QUESTIONS ?