Preserving Our Health Benefits: Changes to Sustain Comprehensive, Affordable and Dependable Coverage

1 Agenda Why are our health insurance options changing? What’s being done? What’s my role in the new options? Questions and answers

2 Financial Challenges Sources: State of Tennessee paid claim reports. State of Tennessee Aggregate Health Care Costs (All Plans) $646,334,552 $779,950,258 $858,482,304 $907,430,204 $990,280,191 $1,120,653,456 $1,199,869,826 $1,328,808,590 $1,376,582,473 $578,284,299 $748,033,379 $893,977,889 $962,691,295 $1,068,890,199 $1,103,512,331 $1,199,755,275 $1,302,416,825 $1,348,497,826 $- $200,000,000 $400,000,000 $600,000,000 $800,000,000 $1,000,000,000 $1,200,000,000 $1,400,000,000 $1,600,000, Proj. Total Expenses Premium

3 Funding Health Benefits State is financially responsible for plan expenses State Group Insurance Program bank accounts contain premiums collected each month Those premiums pay member claims and plan administrative expenses

4 ParTNers for Health Preserve comprehensive, affordable, dependable benefits Members take a more active role in their health Reduce health care costs in the long term Members are rewarded with immediate savings Our approach is based on the idea that our members, the State and our plans can partner to improve member health and manage costs. We all have a stake in this new approach.

5 New Health Insurance Options Choose between Two Preferred Provider Organization (PPO) Options  Partnership PPO  Standard PPO Choose between Four Premium Levels Employee Employee + child(ren) Employee + spouse Employee + spouse + children All members will have the same choices and will make their choices during the Annual Enrollment Transfer Period in the fall. Choose an Insurance Carrier BlueCross BlueShield of Tennessee CIGNA 

6 PPO Options Partnership PPO Standard PPO Limited PPO (Local Government only)

7 How a PPO Works PPO – Preferred Provider Organization Visit any doctor or hospital you want A “preferred” network of providers agrees to lower fees You pay less when you use a network provider

8 How You Pay for Health Care Services Co-pays Co-insurance Annual Deductible Annual Out-of-Pocket Maximum

9 Co-Pays Benefits Effective January 1, 2011 Partnership PPOStandard PPO In-NetworkOut-of-Network*In-NetworkOut-of-Network* Preventive CareNo charge$45 co-payNo charge$50 co-pay Well Baby or Well Child Visits No charge$45 co-payNo charge$50 co-pay Primary Care$25 co-pay$45 co-pay$30 co-pay$50 co-pay Specialty Care$40 co-pay$65 co-pay$45 co-pay$70 co-pay Prescription Drugs (At Retail Pharmacy) $5 co-pay generic $30 co-pay preferred brand $80 co-pay non-preferred brand Co-pay for applicable tier plus amount over maximum allowable charge $10 co-pay generic $40 co-pay preferred brand $90 co-pay non-preferred brand Co-pay for applicable tier plus amount over maximum allowable charge *Members are responsible for 100% of all out-of-network provider charges above the maximum allowable charge (MAC).

10 Free Preventive Care Annual preventive care check-up offered to members at no cost Lab work covered at 100% after co-pay You need to visit an in-network provider for all preventive care services Regular preventive care is one of the most important things you can do to stay healthy.

11 Co-Insurance Benefits Effective January 1, 2011 Partnership PPOStandard PPO In-NetworkOut-of-Network*In-NetworkOut-of-Network* Inpatient Care (Including Mental Health and Substance Abuse) You pay 10%You pay 40%You pay 20%You pay 40% Advanced X-ray, Scans and Imaging You pay 10%You pay 40%You pay 20%You pay 40% Occupational Therapy, Physical Therapy, Speech Therapy You pay 10%You pay 40%You pay 20%You pay 40% *Members are responsible for 100% of all out-of-network provider charges above the maximum allowable charge (MAC).

12 Maximum Allowable Charge (MAC) All services have a maximum allowable charge (MAC) Your share of co-insurance is based on the MAC If a provider charges more than the MAC, you pay the additional amount due When you visit an in-network provider, you don’t have to worry about exceeding the MAC. In-network providers agree in advance to fees that don’t exceed the maximum.

13 Annual Deductibles Benefits Effective January 1, 2011 Partnership PPOStandard PPO Annual DeductibleIn-NetworkOut-of-Network*In-NetworkOut-of-Network* Employee only$350$700 $1,400 Employee + Child(ren)$700$1,400 $2,800 Employee + Spouse$700$1,400 $2,800 Employee + Spouse + Child(ren) $900$1,800 $3,600 You pay the annual deductible before co-insurance benefits kick in. *Members are responsible for 100% of all out-of-network provider charges above the maximum allowable charge (MAC).

14 Examples: Co-insurance and Deductibles You PayPPO Pays 1. Your annual deductible$350$0 2. Co-insurance$125 (10% of $1,250)$1,125 (90% of $1,250) Total$475$1,125 Scenario 1: $1,600 charge for in-network inpatient hospital stay Charges do not exceed MAC Scenario 2: $1,700 charge for out-of-network inpatient hospital stay Charges exceed MAC by $100 You PayPPO Pays 1. Your annual deductible$700$0 2. Co-insurance$360 (40% of $900)$540 (60% of $900) 3. Amount that exceeds MAC$100$0 Total$1,160$540

15 Out-of-Pocket Maximums The maximums limit how much co-insurance you’ll pay in any given year if you or a covered family member have a serious illness or injury. Benefits Effective January 1, 2011 Partnership PPOStandard PPO Out-of-Pocket MaximumIn-NetworkOut-of-Network*In-NetworkOut-of-Network* Employee Only$1,350$2,700$1,700$3,400 Employee + Child(ren)$2,700$5,400$3,400$6,800 Employee + Spouse$2,700$5,400$3,400$6,800 Employee + Spouse + Child(ren) $3,500$7,000$4,500$9,000 *Members are responsible for 100% of all out-of-network provider charges above the maximum allowable charge (MAC).

16 Take Note! Deductibles and out-of-pocket maximums for in-network and out-of- network services add up separately Expenses over the MAC don’t count toward deductibles and out-of-pocket maximums Co-pays don’t count toward deductibles and out-of-pocket maximums

17 Comparing Your PPO Options Partnership PPO  Rewards members for taking steps to get or stay healthy  Commitment to Partnership Promise is required Standard PPO  No incentives for healthy behaviors  Members pay a greater share of costs Both options cover the same services, treatments and products. However, under the Partnership PPO, when you take an active role in your health, you will pay less.

18 Who’s Eligible for the Partnership PPO? Anyone… …willing to make the Partnership Promise

19 The Partnership Promise Know your health history Know your health risks Take steps to get and stay healthy Sign the State’s Partnership Promise In return for making the Partnership Promise, your health insurance costs will be lower.

20 What’s Involved Health Questionnaire – age, diet, exercise and tobacco and alcohol use Health Screening – height, weight, blood sugar, blood pressure and cholesterol Routine preventive care – most in-network services covered at no cost Next steps depend on results – health coaching and programs to manage health risks APS Healthcare will serve as the State’s health and wellness manager.

21 Completing Your Health Screening Based on any tests or screenings (e.g., through your regular annual physical) conducted after July 1, 2010 You have until June 2011 to complete your health screening

22 Managing Your Health Risks APS Healthcare works with you Evaluates health and health risks Recommends actions to reduce risks Provides individual coaching

23 Keeping Your Promise Make the effort Follow recommendations of health and wellness manager Complete prescribed program We encourage you to think about how your commitment to the Partnership Promise can improve your health. The ParTNers for Health program is designed to support you.

24 Your Privacy Members’ personal health information is strictly confidential Written permission required in order for the State or employers to see any individual’s: »Health risk questionnaire responses »Health screening results »Participation in health and lifestyle management programs Your health privacy rights are protected through a federal law called “HIPAA.”

25 If You Cover Your Spouse Same PPO Option Your spouse must also sign a Partnership Promise Exception: If you and your spouse both work for a Participating Employer No Partnership Promise is required for covered children

26 Seeking Care Through Your PPO Partnership PPOStandard PPO Provider Network ✔✔ Choose any doctor ✔✔ No PCP selection required ✔✔ No PCP referrals ✔✔

27 Choosing An Insurance Carrier BlueCross BlueShield of Tennessee CIGNA

28 Finding Your Doctor and Other Health Care Providers Network of preferred doctors and hospitals Provider directories available Insurance Carriers Agency Benefit Coordinators ParTNers for Health Call Center Research providers online Online Insurance carrier websites Link through ParTNers for Health website

29 Your Insurance Carrier Choice Affects Your Monthly Premium Carrier costs vary by grand division BlueCross BlueShield of Tennessee is the highest cost carrier in the West grand division. CIGNA is the highest cost carrier in East and Middle grand divisions If you select the highest cost carrier in your grand division, you pay a higher monthly premium Employee Only: $10 more Employee + Child(ren): $20 more Employee + Spouse: $20 more Employee + Spouse + Child(ren): $20 more

30 Choosing Your Premium Level (Tiers) Employee Only Employee + Child(ren) Employee + Spouse Employee + Spouse + Child(ren) Bottom line: The Partnership PPO premiums are lower than the premiums for the Standard PPO.

31 If Your Spouse Works for a Participating Employer Choose your Premium Level separately Choose your PPO option and insurance carrier separately

32 Pharmacy Benefits Caremark is now our Pharmacy Benefits Manager Customer Service: TNRX (8679) Web:

33 Enrolling for Benefits It’s an “Open Enrollment” this year All benefits-eligible employees can enroll themselves and their dependents to age 26 The Open Enrollment period runs from September 15 through October 15, The choices you make go into effect on January 1, 2011.

34 Special Considerations for Dependents Cover dependent child(ren) up to age 26 Enroll eligible dependents for 2011 during the Open Enrollment period Dependents turning age 24 between July 1 and December 31, 2010, will not be disenrolled; current coverage continues through year-end

35 Verifying Your Dependents Information about verifying documentation will be in the Enrollment Kit.

36 12-Month Pre-Existing Condition Exclusion May apply for any employee or employee spouse who enrolls for the first time during Open Enrollment A pre-existing condition is a health problem that existed before your enrollment in a State-sponsored health insurance option Applies to conditions you sought treatment for in the past six months Coverage is not provided for services related to these conditions “Creditable coverage” from another health insurance plan can offset the length of the exclusion period

37 Completing Your Enrollment Your Enrollment Kit – includes Decision Guide, information DVD, premium sheet and enrollment forms Mailed to current members in late August Available to all eligible employees on request ParTNers for Health Call Center – available 24 hours, 7 days a week to answer questions

38 Take Note! Employees must meet the enrollment deadline: October 1, 2010 turn in to Central Office – Benefits Dept. No changes until the next Annual Enrollment Transfer Period Current members who do not complete enrollment will be enrolled in the Standard PPO.

39 Questions? Call ParTNers for Health Call Center Go online to