Employee Cost Sharing Medical, Dental, and Vision

1. July 15, 2008 Employee Cost Sharing Medical, Dental, and Vision Mikel Gray, Seattle Sheree Swanson, Seattle

2. OverviewMember Cost Share • Employee Share of Benefit Cost is defined as: • Deductibles • Coinsurance • Copayments • Non-covered benefits • Benefits above maximum allowed • Coordination of Benefits savings is excluded • With no deductibles, fixed copayments, and low maximum out-of-pocket (OOP) expenses, PEBB’s benefit provisions are more generous than for other state governments1 • The PPO individual maximum OOP of $1,000 for the PEBB PPO is lower than for other state government PPOs • PEBB HMO copayments are lower than for other state government HMOs • Prescription drug copayments for 1st and 2nd tiers are lower than other State government plans 1Mercer National Survey of Employer-Sponsored Health Plans; 2007 Survey Report; included 31 state government employers.

3. OverviewMember Cost Share • As the PEBB requires no premium contributions for full-time employees, coinsurance and copayments are the only place where members pay for their medical expenses • Under the current plan design, PEBB members incur cost-sharing for their medical care in the form of copayments and coinsurance • Other employers typically require premium contributions as an additional form of employee cost-sharing • 88% of state governments in the Mercer Survey of Employer-Sponsored Health Plans1 require a contribution for their PPO for individual coverage (100% for family coverage) • Average individual coverage contribution is $83 or 16% of premium (25% for family coverage) • 86% of states require premium contributions for HMO for individual coverage (95% for family coverage) • Average individual coverage contribution is $65 or 15% of premium (25% for family coverage) 1Mercer National Survey of Employer-Sponsored Health Plans; 2007 Survey Report; included 31 state government employers.

4. Medical Plan Design ComparisonFull-Time Plans 1Kaiser Added Choice Plan’s three benefit tiers are Kaiser providers/network providers/out-of-network providers; Providence, Regence, Samaritan and State Government benefit tiers are network providers/out-of-network providers 2State Government plans are from the 2007 Mercer Survey of Employer-Sponsored Health Plans

5. Employee Share of Benefit Cost - Regence • The average number of members enrolled in Regence in 2007 was 37,989 • 10,559 Regence members paid at least $1,000 in coinsurance in 2007

6. Employee Share of Benefit Cost – Providence • The average number of members enrolled in Providence in 2007 was 835 • 31 Providence members paid at least $1,000 in coinsurance in 2007

7. Employee Share of Benefit Cost – Samaritan • The average number of members enrolled in the Samaritan plan in 2007 was 1,098 • 32 Samaritan members paid at least $1,000 in coinsurance in 2007

8. Employee Share of Benefit Cost – PEBB Compared to Other Employers 1State Government plans are the median plan provisions from the 2007 Mercer Survey of Employer-Sponsored Health Plans

9. Employee Share of Benefit Cost – ODS and VSP • ODS • The average number of members enrolled in ODS in 2007 was 36,707 • 2,716 members hit the benefit maximum of $1,500 in 2007 • 2,287 members reached the maximum in 2006 • Dental cost sharing excludes orthodontia claims • VSP • The average number of members enrolled in VSP in 2007 was 37,775 • Member cost share includes $10 copay plus amounts above the benefit maximums

10. Services provided by Mercer Health and Benefits LLC