1 Valley Schools Management Group Study Session December 3, 2013 Ken Hicks, CFO

Valley Schools Insurance Trust and Workers Compensation Pool – Financial Summary – Operational Summary Valley Schools Employee Benefit Trust – Financial Summary – Operational Summary – Summary of FY2014 Plan Changes Valley Schools Management Group – Financials 2 Overview

3 VSIT-Financials

4 VSWCP-Financials

When things go wrong Why self insurance Services provided Insurance market overview Excess insurance premiums 5 VSIT and VSWCP

VSIT loss run Cost of risk General and auto liability Workers compensation Student injuries 6 VSIT and VSWCP

QUESTIONS AND DISCUSSION VSIT AND VSWCP 7

8 VSEBT-Financials

9

Self Insured Claims = Medical + Pharmacy 85% - 90% Fixed Expenses 10% - 15% Background/Overview VSEBT Contribution (Premium) Breakdown 10

Compare like programs to accurately evaluate fixed expenses. – Self-Insured – School Districts – UnitedHealthcare – NOT participating in a Trust or Pool Fixed Expenses Medical Administration Prescription Drug Administration Stop Loss Coverage EAP/Managed Care COBRA Services Consulting Background/Overview VSEBT Fixed Expense Fee Comparison 11

District 1 & 2 Monthly Average $57.49 PUSD Rate $53.04 PEPM Savings $ 4.45 PUSD Average Monthly Enrollment Count 2,874 Total Annual Savings on Fixed Expenses $153,471 The above PEPM rates have not been adjusted for differences in stop loss levels, pharmacy rebates or other contractual terms The above do not include dental, vision and life insurance savings The two Districts identified above is data from the FY Background/Overview FY Fixed Expense Comparison/Annual Savings 12

Peoria Unified - $389 Deer Valley Unified - $444 Paradise Valley Unified - $362 AVG of 15 Self Funded Members - $ Per Member Per Month (PMPM) Comparisons

In 2013, the District had 28% reduction in total costs Fixed expenses were reduced 23% to $1.8 million from $2.4; result of reduction in monthly average of employees on the plan Plan changes last year shifted enrollment to CDHP plans 14 Summary of Plan Changes

Bring parity to different health care plan design options Reduce Health Savings Account (HSA) contributions Modest increase to Traditional Plan buy up All retirees moved to the ASRS retiree health care program Adding an additional dental plan and moving Delta Dental to a dental buy-up option Voluntary: – Short Term Disability – Life Insurance for all Staff 15 Summary of Plan Changes

QUESTIONS AND DISCUSSIONS Valley Schools Employee Benefit Trust 16

17 Valley Schools Management Group

QUESTIONS AND DISCUSSION Valley Schools Management Group 18