Community Briefing

1. Community Briefing WPI Health Insurance Update Jeff Solomon CFO & VP for Finance and Operations and Tracy Hassett AVP, Human Resources & Special Assistant to the President February 23, 2007

2. Health Care Environment • New Technologies (MRI, PET, etc.) • People Living Longer • Higher Utilization • Prescription Drugs • Underinsured Population • Consumer Driven Healthcare

3. History of Fallon Rate Increases

4. Considerations • Quality and Flexibility of Coverage • Cost to Employees • Physician Network • Long-Term Health Insurance Outlook • WPI Budget Impact

5. Demographics • Total Eligible For Health Insurance – 755 • Total Enrolled – 632 (84%) • Total Enrolled in Fallon – 540 • Total Enrolled in Tufts – 92

6. Demographics

7. FY08 Health Insurance Renewal Process • Office of Human Resources and CFO Issue Request For Quotes Using Health Insurance Consultant • Original Quotes Reviewed by HR and CFO and Negotiations Begin • Proposals Reviewed and Analyzed by FBC • Community Forum • FBC Makes Recommendation to the Administration • Administration Considers FBC Recommendation • Administration Makes Recommendation to Board of Trustees

8. Fringe Benefits Committee

9. Alternatives Considered • Colleges of Worcester Consortium • Self Insurance • “Buy-Out” Incentives • Tiered Employee Costs Based on Salary Ranges

10. Request For Quotes • Blue Cross – Blue Shield of MA • Cigna HealthCare • Fallon Community Health Plan • Harvard Pilgrim Health Care • Health New England • Neighborhood Health Plan • Tufts Health Plan • United HealthCare

11. Received Quotes • Blue Cross Blue Shield of MA • Cigna HealthCare (shares Tufts network) • Fallon Community Health Plan • Harvard Pilgrim Health Care • Health New England (service area) • Neighborhood Health Plan (service area) • Tufts Health Plan • United HealthCare (shares HPHC network)

13. # 1 Fallon And Tufts # 2 Blue Cross Blue Shield Total Replacement Viable Options

14. Option #1 – Fallon and Tufts • Fallon • 17.5% Rate Increase on All Plans • Significant Plan Design Changes • Tufts • 30.8% Rate Increase • No Plan Design Changes

15. Fallon Community Health Plan Major Plan Design Changes • Fallon Select and Direct

16. Tufts Health Plan No Plan Design Changes • Tufts HMO • Office Visits $25 (PCP or Specialist) • Outpatient Surgery $600 • Emergency Room $100 (if not admitted) • Inpatient Admission $600 • Prescription Drugs • 30 Day Supply - $10/$30/$45 • Mail Order 90 Day Supply - $20/$60/$90

17. Option #2 – Blue Cross Blue Shield Company Information • 90.3 million members nationwide • Over 32,000 providers in our region • 181 hospitals throughout New England

18. Blue Cross Blue Shield Plans Offered: • HMO Blue NE Value Plus • HMO Blue NE Premier • HMO Blue NE $1000 Deductible Plan

19. Blue Cross Blue Shield Plan Design Features • HMO Blue NE Value Plus (most similar to Fallon Select) • Office Visits $25 (PCP or Specialist) • Outpatient Surgery $250 • Emergency Room $100 (if not admitted) • Inpatient Admission $250 • Pediatric Dental Benefit • Prescription Drugs • 30 Day Supply - $15/$30/$50 • Mail Order 90 Day Supply - $30/$60/$100

20. Blue Cross Blue Shield Plan Design Features • HMO Blue NE Premier (their most popular plan) • Office Visits $25 (PCP or Specialist) • Outpatient Surgery $250 • Emergency Room $100 (if not admitted) • Inpatient Admission $1000 Ind/$2500 Fam • Pediatric Dental Benefit • Prescription Drugs • 30 Day Supply - $15/$30/$50 • Mail Order 90 Day Supply - $30/$60/$100

21. Blue Cross Blue Shield Plan Design Features • HMO Blue NE 1000 Deductible Plan • Deductible • $1000 Inpatient / $2000 Outpatient • Office Visits $25 (PCP or Specialist) • Outpatient Surgery 100% after deductible • Emergency Room $100 (if not admitted) • Inpatient Admission 100% after deductible • Pediatric Dental Benefit • Prescription Drugs • 30 Day Supply - $15/$30/$50 • Mail Order 90 Day Supply - $30/$60/$100

22. Employee Cost Comparison FY08

23. WPI Budget Impact

24. Fallon Pros 30+ Year Relationship Local Company Ability to Control Costs with Controlled Networks “Peace of Mind” Program Dental Benefit Fallon Cons No Boston PCPs Out of Network Coverage only Through PPO Lower Premiums Only If Offered With Tufts Stated Future Increases Will be At Least 17.5% Decisions, Decisions, Decisions

25. Blue Cross Pros Broad Network No Need to Switch Docs Coverage for All WPI Employees Without PPO Recruiting Tool Nationally Recognized Blue Cross Cons Does Not Offer a Small-Network Option Such as Fallon Direct Limited Dental Benefit Decisions, Decisions, Decisions

26. Questions?

27. Thank You!