Employer Group Retiree Proposal

1. Columbus Consolidated Government Employer Group Retiree Proposal

2. Agenda • Examine changing Retiree Health plan from self-funded to fully insured with enhanced benefits • Discuss the OPEB liability faced by City • Explain how the program will benefit both retirees and the City • Explore how enhanced benefits, reduced paperwork and easier administration can actually cost less • Review proposed new benefits • Review the cost to Retirees and the City • Q & A

3. Snapshot of Changes • 1/1/08 $100 Premium returns to current $90 monthly • $300 City plan deductible eliminated • $124 Medicare Part B deductible eliminated • Same basic benefits • Reduced paperwork • Enhanced Services

4. Retiree Coverage Retiree Coverage • Retired Members Under Age 65 (Not Medicare Eligible) • Retired Members Under Age 65 (Medicare Eligible due to Disability) • Retired Members Over Age 65 (Medicare Eligible) • *(Under Age 65 Dependents) Three Classes Of Coverage

5. Revised Accounting Requirements • Revised Accounting Requirements • FASB 106 – Private Sector • GASB 45/46 – Public Sector • SOP 92-6 – Taft-Hartley Trusts -IMPACT- • Requires employers, during the years the employee works, to recognize the expected cost of providing future benefits to employees, beneficiaries and covered dependents rather than the traditional pay-as-you-go annual expense.

6. Who / What is GASB? Who / What is GASB • GASB stands for the Governmental Accounting Standards Board. • Operating from the same facilities as the FASB, this independent (nongovernmental) authority establishes accounting principals in the United States for Local, County, State and Federal Government organizations.

7. GASB 45 Issues for Public Employers • Significant, current balance sheet liability • Undefined and changing future costs of benefits • “Risk” for retiree coverage if self-funded • Inability to generate funds to match obligations and continue funding of retiree health care benefit • Impact on Bond ratings • Misunderstood, sometimes unappreciated but anticipated retiree medical benefits

8. Questions you might have • Are my basic benefits changing? NO • Can I still use my current Doctors? YES • Can I still go to my chosen Hospital? YES • Can I still get Prescription Drugs from my Pharmacy? YES • Is this new coverage from a reputable company? YES • Will I have someone to call if I have Questions? YES • Is there a “network” that I have to use? NO • Is there anything that Medicare now covers that will not be covered by this plan? NO

9. What kind of Plan is this? • This Plan is called a “PFFS” or Private Fee for Service or Medicare Advantage Plan • This is a Medicare Intermediary program- • you only work with one entity • This is a hybrid between a Medigap plan and • an HMO, offering the best of both products • Lower Premiums with more coverage relative to Medigap Plans • No network – members see any “willing Medicare Provider” (deemed contracting)

10. SmartValue SM A Medicare Advantage Private Fee For Service Plan ONE M JOHNSON ID Number: XDV445525252 Group: TBD Effective Date: 01/01/2007 PROVIDERS: DO NOT BILL MEDICARE. Submit claims to local Blue Plan. Customer Service/Pre Notification: (877) 326-2201 TDD: (800) 425-5705 Monday – Friday: 7:00am to 8:00pm CT Copay: $XX ER: $XX Nurse Phone Line: (800) 700-0197 Providers: Eligibility – Call: (800) 676-BLUE (2583) Providers: Submit paper and electronic claims to your local Blue Cross/Blue Shield Plan. Include the 3-digit alpha prefix that precedes the patient ID number listed on the front of this card. Medicare charge limitations may apply Send Mail To: P.O. Box 795180 San Antonio, TX 78279 Blue Cross Blue Shield of Georgia is an independent licensee of the Blue Cross and Blue Shield Association. CMS H1689 – PBP #

11. Member Gains • What the PFFS Fully Insured Product Will Do for the Member • Offers the same providers as original Medicare • Uniform Benefits throughout the U.S. • Benefit and service stability with dedicated Retiree/Senior Services staffing • Single source vendor removing need for Member to file with Primary Medicare and Supplementing Plan. • No increase in current monthly premium costs • Elimination of deductibles • Prescription copayment reductions

12. Employer Gains • What the PFFS Fully Insured Product Will Do for the Employer • Offers the same providers as original Medicare • Uniform Benefits throughout the U.S. • Supplements the employer premium by the reimbursement amount WellPoint receives from CMS for the enrollee • Single source vendor to cover entire employer population • Potential reduction in OPEB liability

13. Self Funded Risk for all claims Direct Admin cost Full Internal Admin GASB liability requires annual calculation and disclosure Interface required for CMS reimbursements Potential for restrictive networks for hospital, Dr. and RX Fully Insured No Risk for Claims No direct Admin cost Limited Internal Admin. Reduce GASB Liability if Defined Contribution Approach utilized No interface with CMS required for reimbursements No geographically restrictive provider limitations Employer Saving Potential

14. PFFS Non-Network Plan • Provider Deeming: • A provider or supplier is “deemed” to have a contract with a PFFS plan if the provider or supplier knows, before furnishing service that 1.) the beneficiary is a PFFS plan member • and 2.) the provider or supplier must know either the terms and conditions of plan payment or has reasonable access to the terms and conditions of plan payment. • All Providers, deemed or non-deemed are paid at Medicare Allowable amounts

15. Wellness/Medical Management BC/BS of GA believes that Health Maintenance and active Medical Case Management are essential • Includes incentives to notify Medical Case Management upon diagnosis of certain classes of illness • Includes 24 Hour Nurseline • Includes Silver & Fit a structured program to encourage exercise and overall fitness (Health Club Memberships) • Includes SeniorLink an Elder Care Advisory and Care Management program.

16. Chronic Diseases with co-morbidities 10 Prevention 20 Prevention Frail Elderly Tiered Management ADVANCED CARE MANAGEMENT and SPECIALIZED MONITORING CARE MANAGEMENT DISEASE MANAGEMENT PREVENTION, HEALTHY REWARDS Healthy Population POPULATION MANAGEMENT

17. Pharmacy Community Resources Home Care Providers Rehab Member Caregiver Skilled Nursing Facility Social Services Medicare Acute Inpatient Facility SeniorCentric 360° Health Program Member Identification Predictive Risk Analysis Re- assessment Needs Assessment Interventions

18. WellPoint Rating Process • PFFS Fully Insured • Premium Calculation Actuary calculates “Risk” based Premium CMS Reimbursements derived by Zip Code Group Retiree Data received Risk Premium offset by CMS Reimbursements Final Employer/Retiree premium calculated

19. Savings and Rates • HR projects this program will save retirees • $112,440 annually in premiums • $397,288 annually in deductibles • Total Retiree Savings $509,728 • The City will save an additional $800,000 annually • City savings earmarked to help fund GASB 45 liabilities • Total costs: $120.50 per month per member

20. Cost Comparison Note: Total current plan retiree cost for CY2008 $1,124,400

21. Retiree Premiums & Cost Sharing Formula

22. Smart Value Benefits

23. Smart Value Benefits

24. Smart Value Benefits

25. Smart Value Benefits

26. Smart Value RX Benefits

27. For General Information Customer Service • Before January 1, 2008 • Blue Cross/Blue Shield “1st Impressions” Call Center • For assistance prior to the plans effective date • 1-866-657-4970

28. Ongoing Customer Service Service • Dedicated Customer Service Number • (after January 1, 2008 • 1-877-326-2201

29. Claims Filing Process • Present you new BC/BS MA Card to your provider • Physician • Pharmacy • Hospital • 2. Provider will enter new numbers into their system • 3. Claims will be filed by the provider to BC/BS • 4. Pay your co-pay to the provider • 5. No need to file with Medicare first, BC/BS will act as intermediary with Medicare on your behalf • 6. If you have questions, you will have dedicated numbers to call

30. BC/BS of GA-WellPoint Facts • BC/BS of GA-WellPoint’s 42,000 associates serve 34.9 million members • one in nine Americans has health coverage through WellPoint • In 2006, we handled: • more than 245million medical claims • more than 350 million pharmacy claims • answered more than 62.7 million customer calls • In 2006, operating revenue exceeded $61 billion

31. SERVICE • All operations, including Claims and Customer Service, are handled • by a dedicated unit in Fond-du-Lac, WI. • Medical Management will be handled by a dedicated unit located in • Atlanta, GA. • Members must be enrolled in both Medicare • Part A and Part B to receive full coverage. • Medicare eligible Retirees must enroll in plan. • All plans include Foreign Travel coverage, • 24 hour Nurseline, Silver & Fit and SeniorLink.

32. Summary • GASB Liability directly affects an organizations ability to manage long term financial obligations (ie. Bond ratings, etc.) • GASB Liability can directly affect the City’s ability continue to provide Retiree Benefits • Utilization of a fully insured approach to Retiree Medical coverage will positively affect the organizations GASB 45 liability. • BC/BS of GA/WellPoint has a dedicated Senior Support unit to facilitate cost effective and efficient implementation and ongoing support.

33. Contacts • Preston Harris, Account Executive • Blue Cross-Blue Shield of GA • Richard H. (Rick) Smith, Account Executive • Employer Group Retiree • phone: (O) 706-569-9357 • (C) 706-984-3218 • richard.smith2@wellpoint.com

34. Questions?