Services provided by Mercer Health and Benefits LLC Employee Cost Sharing Medical, Dental, and Vision July 15, 2008 Mikel Gray, Seattle Sheree Swanson, Seattle

1 Mercer Overview Member Cost Share  Employee Share of Benefit Cost is defined as: – Deductibles – Coinsurance – Copayments – Non-covered benefits – Benefits above maximum allowed – Coordination of Benefits savings is excluded  With no deductibles, fixed copayments, and low maximum out-of-pocket (OOP) expenses, PEBB’s benefit provisions are more generous than for other state governments 1 – The PPO individual maximum OOP of $1,000 for the PEBB PPO is lower than for other state government PPOs – PEBB HMO copayments are lower than for other state government HMOs – Prescription drug copayments for 1 st and 2 nd tiers are lower than other State government plans 1 Mercer National Survey of Employer-Sponsored Health Plans; 2007 Survey Report; included 31 state government employers.

2 Mercer Overview Member Cost Share  As the PEBB requires no premium contributions for full-time employees, coinsurance and copayments are the only place where members pay for their medical expenses – Under the current plan design, PEBB members incur cost-sharing for their medical care in the form of copayments and coinsurance – Other employers typically require premium contributions as an additional form of employee cost-sharing  88% of state governments in the Mercer Survey of Employer- Sponsored Health Plans 1 require a contribution for their PPO for individual coverage (100% for family coverage) - Average individual coverage contribution is $83 or 16% of premium (25% for family coverage)  86% of states require premium contributions for HMO for individual coverage (95% for family coverage) - Average individual coverage contribution is $65 or 15% of premium (25% for family coverage) 1 Mercer National Survey of Employer-Sponsored Health Plans; 2007 Survey Report; included 31 state government employers.

3 Mercer Medical Plan Design Comparison Full-Time Plans Kaiser HMO Kaiser Added ChoiceProvidenceRegenceSamaritan State Governments PPO Median 2 State Governments HMO Median 2 Individual Deductible 1 $0$0/$0/$0$0/$0 $275/$500$0 Individual Maximum OOP 1 $600 $600/$1,500/ $2,500 $1,000/ $2,000 $1,000/ $2,000 $1,000/ $2,000 $2,000/ $3,000N/A In-Network Office Visit $5 Copay$10 Copay$5 Copay15% Coinsurance $10 Copay$15 Copay$15 Copay PCP $25 Specialist In-Network Hospital $50 per day, $250 max per Admit 15% Coinsurance $50 per day, $250 max per Admit 15% Coinsurance $100 per day, $500 max per Year 15% Coinsurance $250 per Admit Retail Rx$1/$15/Not covered $5/$15 Kaiser $20/$20 other $5/$15/50% ($50 Min) $9/$22/$44 Mail Order Rx $1/$15/Not Covered $10/$30$12.50/$37. 50/50% ($125 Min) $16/$42/$77 1 Kaiser Added Choice Plan’s three benefit tiers are Kaiser providers/network providers/out-of-network providers; Providence, Regence, Samaritan and State Government benefit tiers are network providers/out-of-network providers 2 State Government plans are from the 2007 Mercer Survey of Employer-Sponsored Health Plans

4 Mercer Employee Share of Benefit Cost - Regence  The average number of members enrolled in Regence in 2007 was 37,989  10,559 Regence members paid at least $1,000 in coinsurance in 2007 Average Member Cost Share PEPM Average Member Cost Share % of Paid YTD YTD Medical $100.53$97.50$ %15.5% Prescription Drug $30.05$29.26$ %26.0%24.9% Total $130.58$126.76$ %17.1%16.9%

5 Mercer  The average number of members enrolled in Providence in 2007 was 835  31 Providence members paid at least $1,000 in coinsurance in 2007 Employee Share of Benefit Cost – Providence Average Member Cost Share PEPM Average Member Cost Share % of Paid Medical $22.36$ %4.8% Prescription Drug $17.91$ %20.8% Total $40.28$ %6.9%

6 Mercer  The average number of members enrolled in the Samaritan plan in 2007 was 1,098  32 Samaritan members paid at least $1,000 in coinsurance in 2007 Employee Share of Benefit Cost – Samaritan Average Member Cost Share PEPM Average Member Cost Share % of Paid Medical $34.09$ %5.2% Prescription Drug N/A Total N/A

7 Mercer Employee Share of Benefit Cost – PEBB Compared to Other Employers Average Member Cost Share % of Paid (2007) PEBB Regence PEBB Providence State Gov. PPO Est. 1 State Gov. HMO Est. 1 Other State Gov Major Oregon Employer Medical 15.5%4.8%18.7%6.9%13.4%12.4% Prescription Drug 26.0%20.8%24.0% 22.8%29.9% Total 17.1%6.9%19.7%10.0%15.0%15.3% 1 State Government plans are the median plan provisions from the 2007 Mercer Survey of Employer-Sponsored Health Plans

8 Mercer Employee Share of Benefit Cost – ODS and VSP  ODS – The average number of members enrolled in ODS in 2007 was 36,707 – 2,716 members hit the benefit maximum of $1,500 in 2007 – 2,287 members reached the maximum in 2006 – Dental cost sharing excludes orthodontia claims  VSP – The average number of members enrolled in VSP in 2007 was 37,775 – Member cost share includes $10 copay plus amounts above the benefit maximums Average Member Cost Share PEPM Average Member Cost Share % of Paid ODS – Dental $21.50$ %32.3% VSP – Vision $3.94$ %41.2%

Services provided by Mercer Health and Benefits LLC