Active Medical and Dental Benchmarking Retirement Related Benefits (Excludes Federal Government) November, 2016 Prepared by Aon Hewitt Health & Benefits Consulting

2017 Medical/ Rx Recommendations Dental Benchmarking About the Study Current State Medical Benchmarking 2017 Medical/ Rx Recommendations Dental Benchmarking Retirement Related Benefits

Current Medical/ Dental State - Offerings Two medical/prescription vendors (prescription is carved in) CIGNA Kaiser Three medical plans offered to Actives One dental plan offered to Actives – Delta Dental Enrollees Plans Offered Actives CIGNA High Plan 1,016 CIGNA Low Plan 734 Kaiser HMO 1,695 Enrollees Plans Offered Actives Delta Dental PPO Premier 3,176 2

Active Medical Benchmarking

Active Healthcare Plan – Current Medical Plan Offerings Benchmarked Arlington Public School’s medical and Rx plans against 14 local employers: Medical Vendors Low Option High Option HMO Option CDHP Arlington Public Schools CIGNA Kaiser √ Alexandria City Public Schools United Healthcare Anne Arundel County Public Schools CareFirst √-2 √-3 Arlington County Government √- 3 Baltimore City Public Schools √ - √ - 3 Baltimore County Public Schools Anthem √ - 2 D.C. Public Schools Aetna Fairfax County Public Schools

Active Healthcare Plan – Current Medical Plan Offerings Benchmarked Arlington Public School’s medical and Rx plans against 14 local employers: Medical Vendors Low Option High Option HMO Option CDHP Arlington Public Schools CIGNA Kaiser √ Falls Church Public Schools Anthem √-2 Frederick County Public Schools UHC Howard County Public Schools Aetna CareFirst Loudoun County Public Schools Montgomery County Public Schools √-3 Prince George’s County Public Schools Prince William County Public Schools

Assessment of APS’ In-Network Active Medical Health Program Design – Cigna High Option APS’ primary benefit features compared to local employers Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools Cigna High Option (In-Network) VA Schools   MD /DC Schools Deductible Individual / Family $300/ $600 $0-$500/ $0-$1,000 $0- $750/ $0-$1,500 Out of Pocket Maximum Individual/Family $3,000/ $6,000  $1,500-$4,000/ $3,000-$8,000 $500-$6,350/  $1,500-$12,700 PCP $20 $20-$25 $5- $20 Specialists $40 $35-$50  $10-$30 Coinsurance 10% 0%-20%  0%-15%  Inpatient Hospital $250 copay + coinsurance $0-$400 $0 Outpatient Facility $100 copay+ coinsurance $0-$200 Emergency $200  $25-$100 Urgent Care $50 $0-$50 Note: VA Schools range includes Arlington County Government APS is not as rich APS is within range APS is richer

Assessment of APS’ Out-of-Network Medical Active Health Program Design – Cigna High Option APS’ primary benefit features compared to local employers Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools Cigna High Option (Out-of-Network) VA Schools   MD/DC Schools Deductible Individual / Family $750/ $1,500 $300-$1,000/ $600-$2,000 $100-$1,500/ $300-$3,000 Out of Pocket Maximum Individual/Family $3,750/ $7,500  $2,500-$7,000/ $5,000-$14,000 $500-$3,000/ $1,000-$6,000   PCP 30% 30%-40% 20%-25% Specialists 30%-40%  20%-25%  Coinsurance 10%-25%  Inpatient Hospital $250 copay + coinsurance $0-$400 $0 Outpatient Facility $100 copay+ coinsurance  $0-$200  $0 Emergency $200 $0-$200   $25-$100 Urgent Care $50 $0-$50 $10-$30 Note: VA Schools range includes Arlington County Government APS is not as rich APS is within range APS is richer

Assessment of APS’ In-Network Active Medical Health Program Design – Cigna Low Option APS’ primary benefit features compared to local employers Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools Cigna Low Option (In-Network) VA Schools   MD Schools Deductible Individual / Family $400/ $800 $0-$250/ $0-$500 $0  Out of Pocket Maximum Individual/Family $3,000/ $6,000  $1,000- $3,000/ $2,000- $6,000 $1,000- Unlimited/ $2,000- Unlimited  PCP $40 $20 $5-$20 Specialists $80  $20-$40  $10-$30 Coinsurance 20% 0%-10%   0% Inpatient Hospital $250 copay + coinsurance $0-$250 copay  $0-$100 Outpatient Facility $100 copay+ coinsurance $0-$200 copay $0-$20 copay Emergency $250 $125-$200 copay $50-$100 copay Urgent Care $50 $20-$50 copay $0-$20 copay Note: DC Public Schools does not have this plan option APS is not as rich APS is within range APS is richer

Assessment of APS’ Out-of-Network Active Medical Health Program Design- Cigna Low Option APS’ primary benefit features compared to local employers Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools Cigna Low Option (Out-of-Network) VA Schools   MD Schools Deductible Individual / Family $800/ $1,600 $500-$750/ $1,000-$1,800 $100-$300/ $100-$600  Out of Pocket Maximum Individual/Family $5,000/ $10,000  $2,000-$4,000/ $4,000-$9,000 $1,000-$1,250/ $2,000-  $2,500 PCP 40% 20%-40% 20%-30% Specialists 20%-40%  20%-30%  Coinsurance  20%-50% Inpatient Hospital $250 copay + coinsurance $0-$150 copay $0 copay Outpatient Facility $100 copay+ coinsurance Emergency $250 $0-$150 copay  $0-$100 Urgent Care $50 $0-$25 copay $0-$20 Note: DC Public Schools does not have this plan option APS is not as rich APS is within range APS is richer

Assessment of APS’ Active Medical Health Program Design – Kaiser HMO Option APS’ primary benefit features compared to local employers Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools VA Schools   MD/ DC Schools Out of Pocket Maximum Individual/Family $3,500/ $9,400 $2,250-$6,600/ $4,500- $13,200  $1,000- $6,350/ $2,000- $12,700 PCP $10 $15-$20 $5-$30 Specialists  $15-$60  $5-$40 Coinsurance 0% 0%-10%   0%-30% Inpatient Hospital copay $0 copay $150-$500  $0-$10  Outpatient Surgery copay $10 copay $50-$250  $0-$25  Emergency copay $50 copay $100-$200 $35-$300 Urgent Care copay $15-$75 $5-$100 Note: VA Schools range includes Arlington County Government APS is not as rich APS is within range APS is richer

Assessment of APS’ Active Medical Health Cost Share APS’ cost share (as a % of total premium) compared to those of benchmark group Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools VA Schools   MD / DC Schools Cigna High Option Individual 68% 55%-98% 70%-90% Individual + Child(ren) 64% 50%-91% Individual + Spouse 52%-85% Family 57% 52%- 82% Cigna Low Option 72% 77%-95% 75%-97% 67% 70% -79% 90%-96% 70%-77% 75%-96% 62% Kaiser HMO Option 77% 77%-85% 73% 75%-77% 75%-80% APS is not as rich APS is within range APS is richer DC Public Schools does not have a low option plan. Premiums for Falls Church not provided Arlington County Government included in VA Schools Some Public Schools does not have a EE+ Child tier

Recommendations Continue to increase plan differential between Cigna High and Low Plans. Changes may include: Change network co-pays Change out-of-pocket maximum amounts Move to coinsurance on certain prescription drug Change the cost-sharing formula: Larger School Board subsidy on the Cigna Low plan Reduce School Board subsidy on Cigna High Plan. These changes better align with industry benchmarks. For 2017, APS reduced the co-pays on the Cigna Low Plan to better align with benchmarks, and moved to the Standard Rx Formulary on both Cigna plans.

Active Dental Benchmarking

Assessment of APS’ In-Network Active Dental Design – Delta Dental PPO APS’ primary dental benefit features compared to local employers Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools Delta Dental PPO Premier VA Schools   MD/DC Schools Deductible Individual $50 $0-$55 $0-$50 Family $0-$150 Annual Benefit Max $1,500 $1,200-$2,000 $1,000-$4,000 Orthodontics Lifetime Max $1,000-$1,500 $1,000- unlimited Diagnostic/ Preventative Basic 20% 0%-20% Major 35% 40%-50% 20%-50% Orthodontics 50% Periodontics and Endodontics Covered under Basic or Major Services? 75% Basic 50% Major APS is not as rich APS is within range APS is richer

Assessment of APS’ Active Dental Cost Share APS’ cost share (as a % of total premium) compared to those of benchmark group Richness of benefits from employees’ standpoint relative to the benchmark employers with same type of plan Arlington Public Schools Delta Dental PPO VA Schools   MD Schools1 Individual 35% 57%-98% 48%-77% Individual + Child(ren) 70%-97% 48%-65% Individual + Spouse 27%-85% 48%-83% Family 24%-82% 1Howard county public school dental program is 100% Employee paid APS is not as rich APS is within range APS is richer

Retirement Related Benefits

Retirement Related Benefits APS Sick Leave Payout features compared to local employers Sick Leave Pay Out APS Sick Leave Payout Policy Competitor Summary   Employed before 7/1/11: Paid 50%(accrued without limit) at daily rate upon retirement. Employed Post 7/11: Paid 25% of all sick days 3 out of 9 employers do not pay out for unused sick days Of the employers who payout (6), the majority pay 20%-40% Of the employers who payout, Some include caps i.e., $10,000 lifetime maximum or the maximum dollar value changes annually and is equivalent to 25% of the previous year’s average salary. Defined Contribution APS Defined Contribution features compared to local employers APS Policy Competitor Summary   Greater of .4% of salary or $240 per year 4 out of 9 employers do not offer a company match Of the employers who match (5), the percent is based on gross or base pay Two employers offer $20 per pay period ($520 annually) APS is not as rich APS is within range APS is richer