OPEN ENROLLMENT 2017 McLaren Health Plan MOTT COMMUNITY COLLEGE Logan Suttmann SET SEG Employee Benefit Services Account Executive Christine Morse McLaren Health Plan Account Manager

The content in this presentation is informational The content in this presentation is informational. Each employee should review the benefit summary and network information specific to their plan and discuss specific circumstances and questions with their carrier. Health savings accounts (HSAs) and flexible spending arrangements (FSAs) are IRS-regulated accounts. Nothing in this presentation represents tax advice. Discuss HSA/FSA questions with a tax advisor.

TOPICS OF DISCUSSION Insurance terms & the ‘pick two’ concept Traditional plan(s) vs. high deductible health plan Flexible spending arrangements Health savings accounts McLaren network McLaren coverage BCBSM Options

BASIC INSURANCE TERMS This usually sets what is covered and the amount we have to spend out of pocket for services received Covered services List of medical procedures and prescription drugs that are covered under the plan Deductible What employee owes before insurance plan pays Copayment or “Copay” A fixed amount paid for a particular service Coinsurance Employee’s % share of health care costs after deductible is met Out of pocket maximum Maximum amount we will spend on deductibles, coinsurance and copays

PA 152 Public Act 152 of 2011 limits the amount that public employers can pay toward employees’ health insurance (medical coverage). For Mott CC ‘Staff’ Employees, starting January 1, 2017, the annual hard cap limits are: • Single Coverage: $6,344.80 • Two Person Coverage: $13,268.93 • Family Coverage: $17,304.02 The difference between the plan cost and the hard cap amount the employer can contribute is the premium cost share for the employee.

THE PICK TWO CONCEPT Coverage Level Flexibility Premium Cost Share What benefits and prescriptions are covered; out of pocket costs under the plan (deductible, copays, etc.) Flexibility The degree of employee discretion when choosing facilities and providers Premium Cost Share The amount the employee has deducted from their check each pay period to be enrolled in the plan

TRADITIONAL PLAN – Plans 1 & 2 Copays generally apply on day one of plan Deductibles generally only apply to certain services (e.g. in-patient hospital stays, out patient surgical procedures, diagnostic testing, etc. – see benefit summary for details) Copays generally cover standard services (e.g. office visits, urgent care visits, emergency room visits, prescription drugs, etc.) and do not apply to deductible Compatible with a flexible spending arrangement (FSA)

HIGH DEDUCTIBLE HEALTH PLAN (HDHP) Deductible of at least $1,300 for a single person and $2,600 for two-person or family coverage Employee pays 100% (except for preventive care) of medical and prescription drug costs (less any carrier discounts) until deductible is met Rx copays do not apply until deductible is met Generally lower coverage level and lower cost Compatible with a health savings account (HSA)

FLEXIBLE SPENDING ARRANGEMENT (FSA) BASICS (works with plans 1 & 2) Tax sheltered account that can be used to reimburse approved medical expenses on a pre-tax basis Employee’s FSA is funded with employee-elected, pre-tax, payroll deductions. The employee sets the contribution amount. Money goes in tax free and comes out tax free (if spent on approved medical expenses) IRS allows contributions up to $2,600 for 2017 (discuss maximum contribution specifics with college HR department) Account is use it or lose it, but employees may carryover $500 into each new plan year The entire elected amount is available on day 1 of the FSA plan year, even though money will be deducted over the course of the year Talk to HR for more details

HEALTH SAVINGS ACCOUNT (HSA) BASICS Pairs only with Plan 3 (HDHP) The account and its contents belong to you Money goes in tax free, can grow tax free and comes out tax free (if spent on approved medical expenses) Rolls over year after year (no use it or lose it) Fully portable if you leave the high deductible plan or the district Accessible in retirement

HSA Limitations Only available with tax qualified high deductible health plan (HDHP) May not contribute (or receive contributions) to an HSA if enrolled in other coverage that is not a tax-qualified HDHP (including Medicare or a medical FSA) May not contribute (or receive contributions) to an HSA if claimed as a dependent on someone else’s tax return or if a beneficiary of someone else’s general purpose FSA Discuss other limitations that apply to HSAs and/or FSAs with a tax advisor

McLaren NETWORK All McLaren plans function on the McLaren (HMO) network Employees who live outside the service area (Midland, Gratiot, Livingston counties) have access to additional providers through GlobalCare.

Access the full provider directory at: McLaren NETWORK Access the full provider directory at: http://www.mclarenhealthplan.org/community-member/SearchForaProviderMHP.aspx

McLaren NETWORK What services are covered outside of the McLaren Network? On all plans, Urgent and emergency care are covered at the in network benefit level (subject to deductible/copays) Plan 1 & 2 have an out of network benefit level which extends some additional coverage outside of the McLaren Network Members could be balanced billed for services received under the out of network benefit

McLaren NETWORK What if you have a dependent living outside of the service area? Plans 1 & 2 provide coverage for emergency and urgent care and additional out of network coverage for a higher deductible & coinsurance Plan 3 only provides coverage for emergency and urgent care

McLaren PLANS

McLaren COVERAGE – Plan 1 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 1 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 1 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 1 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 1 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 1 Prescription Coverage

McLaren COVERAGE: How the Traditional Plan 1 works The Bucket Concept HMO Traditional plan 1 Out of pocket max (bucket) Caps total possible costs including: Deductible Coinsurance costs Office visit copays $20 Primary Care $20 Specialist $50 Urgent Care $150 Emergency Room Rx copays $10 Generic $30 Brand Name $60 Non-preferred brand name $7,150 indiv. $14,300 fam. Deductible (bucket) Caps total costs for medical services that are not covered by a copay. Once the deductible is met, most medical services (not subject to flat dollar copay) are covered at 100% $500 indiv. $1,000 fam.

McLaren COVERAGE – Plan 2

McLaren COVERAGE – Plan 2 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 2 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 2 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 2 IN NETWORK OUT OF NETWORK

McLaren COVERAGE – Plan 2 Prescription Coverage

McLaren COVERAGE: How the Traditional Plan 2 works The Bucket Concept HMO Traditional plan 2 Out of pocket max (bucket) Caps total possible costs including: Deductible Coinsurance costs Office visit copays $20 Primary Care $20 Specialist $50 Urgent Care $150 Emergency Room Rx copays $10 Generic $30 Brand Name $50 Non-preferred brand name $ 7,150 indiv. $ 14,300 fam. Deductible (bucket) Caps total costs for medical services that are not covered by a copay. Once the deductible is met, most medical services (not subject to flat dollar copay) are covered at 100% $1,000 indiv. $2,000 fam.

McLaren COVERAGE – Plan 3 IN NETWORK

McLaren COVERAGE – Plan 3 IN NETWORK

McLaren COVERAGE – Plan 3 IN NETWORK

McLaren COVERAGE – Plan 3 IN NETWORK

McLaren COVERAGE – Plan 3 Prescription

Deductible Bucket (you pay): Rx Copay Bucket (you pay): McLaren COVERAGE: How the HDHP Plan 3 works The Bucket Concept HMO HDHP Plan 3 If you use your entire deductible and Rx copay max up, both medical and Rx are covered at 100% Once you’ve reached your deductible, you only pay Rx copays HSA 1st 2nd You use money from your HSA account to pay for qualified medical/Rx expenses $2,000 ind. / $4,000 FF $2,000 ind. / $4,000 FF Deductible Bucket (you pay): Full cost of all medical services Full cost of all Rx Rx Copay Bucket (you pay): Rx copays only @ $10/$25/$40

McLaren PLAN YEAR McLaren’s benefit year (deductible year) runs on the Calendar year (1/1 through 12/31) Your deductible will ‘reset’ 1/1/17 The HBTF decided to move McLaren’s ‘rate year’ from 7/1 – 6/30 to 1/1 – 12/31. This means: the rates we are presenting will be good through 12/31/17 There will be one open enrollment each fall

Employee Costs per pay (26 pays) McLaren COST Plan 1 (NOW) Plan 2 (NOW) Plan 1 (1/1/17) Plan 2 (1/1/17) *NEW* Plan 3 (1/1/17) HMO Traditional HMO HDHP HMO HDHP w/ HSA Deductible $500/$1000 $2,000/$4,000 $1000/$2000 Coinsurance 0% Coinsurance Max $0 Rx Copay $10/$30/$60 $10/$25/$40 $10/$30/$50 OV Copay/Spec ER/Urgent Care $20/$20 $50/$150 NA Chiropractic Covered at 100% up to $1,000 per person Out of Pocket Max $6,350/12,700 $4,000/$8,000 $7,150/14,300 Employee Costs per pay (26 pays) Single (1P) $9.79 None $397.02 into HSA $24.25 $9.55 $976.82 into HSA Double (2P) $20.17 $833.56 into HSA $50.37 $19.64 $2,049.84 into HSA Family (FF) $24.93 $1102.01 into HSA $64.19 $24.20 $2,702.96 into HSA

WHICH PLAN IS RIGHT FOR ME? Plan 1, HMO Traditional Plan $500/$1,000, assume family coverage Best Case Worst Case Actual – How much will you spend in each category? Deductible $0 $1,000 ? Coinsurance Copays $13,300 12 month premium Cost Share $1,668.94 Annual Total $15,968.94 *Example assumes member accesses approved, in-network services only. Numbers rounded for simplicity.

WHICH PLAN IS RIGHT FOR ME? Plan 2, HMO Traditional Plan $1000/$2,000, assume family coverage Best Case Worst Case Actual – How much will you spend in each category? Deductible $0 $2,000 ? Coinsurance Copays $12,300 12 month premium Cost Share $629.20 Annual Total $14,929.20 *Example assumes member accesses approved, in-network services only. Numbers rounded for simplicity.

HOW TO CHOOSE A MEDICAL PLAN Plans 1 & 2 – McLaren HMO Traditional Higher coverage level, higher flexibility, higher cost What tax leveraged accounts are available? FSA compatible Is this plan compatible with my level of risk tolerance? Fits an individual with a lower risk tolerance

WHICH PLAN IS RIGHT FOR ME? Plan 3 HMO HDHP $2,000/$4,000 0% – Assume Family Coverage Best Case Worst Case Actual – How much will you spend in each category? Deductible $0 $4,000 ? Coinsurance Copays 1/1 HSA Contribution $2,702.96 - Annual Total ($2,702.96) HSA balance $5,297.04 *Example assumes member accesses approved, in-network services only. Numbers rounded for simplicity.

HOW TO CHOOSE A MEDICAL PLAN Plan 3 – HMO HDHP $2,000/$4,000 0% Lower coverage level, lower flexibility, lower cost What tax leveraged accounts are available? HSA compatible Is this plan compatible with my level of risk tolerance? Fits an individual with a moderate risk tolerance

HOW TO CHOOSE A MEDICAL PLAN Some questions to consider during open enrollment: What is the “actual” situation likely to be for you and your family in the coming year? What medical and prescription services were accessed in the last year? Was last year “typical”? What assumptions are you comfortable making regarding medical and prescription services you are likely to need in the next year? Which of the “pick two” factors are most important to you? Is there an opportunity to pay for medical expenses on a pre-tax basis using an FSA or HSA? What is your risk tolerance?

BCBSM Plan offering(s) BCBSM agreed to keep in place their 3 plan offering alongside McLaren for July 1st 2016 through June 30th 2017 This was a decision made after open enrollment meetings in the spring Employees will still have the option to move to any one of the same 3 BCBSM plans 1/1/17 BUT…. BCBSM will no longer be offered effective 7/1/17 Any employees remaining on BCBSM will have the opportunity to move to one of the McLaren plans effective 7/1/17

BCBSM Plan offering(s) Things to note on BCBSM Deductible runs 7/1 – 6/30 (moving to BCBSM 1/1/17 would result in a short deductible year) For anyone who stays/moves to BCBSM now, for 7/1/17 McLaren will allow deductible credits to transfer for any credits earned between 1/1/17 and 6/30/17

Employee Costs per pay (26 pays) BCBSM Plan offering(s) BCBSM PLAN 1 Plan 2 Plan 3 PPO Traditional PPO HDHP Deductible $500/$1,000 $1,300/$2,600 Coinsurance 20% 0% Coinsurance Max $1,500/$3,000 $950/$1,900 Rx Copay $10/$40/$80 $10/$60 $15/$50/50% Chiropractic 12/$30 12/0% after ded 12/20% after ded Out of Pocket Max $6,350/12,700 $2,250/$4,500 Employee Costs per pay (26 pays) Single (1P) $156.76 $64.00 $54.64 Double (2P) $449.11 $226.53 $204.06 Family (FF) $534.67 $256.43 $228.34

DECISIONS Choose which McLaren plan fits your scenario best If BCBSM Remember that the deductible AND rate are good for 12 months Next open enrollment for McLaren will be fall 2017 If BCBSM Plans will sunset on 7/1/17 People still enrolled with BCBSM can move to McLaren 7/1/17

QUESTIONS?