1. UNC Improved Health Care Initiative

2. Highest priority of UNC HR Directors Highest priority of UNC HR Directors Hewitt Health Value Initiative Study Hewitt Health Value Initiative Study Health Care Consultant and Actuary retained Health Care Consultant and Actuary retained Establishment of Steering Committee Establishment of Steering Committee Employee Customer Satisfaction Survey Employee Customer Satisfaction Survey Campus Community Meetings Campus Community Meetings

3. How the University Compares UNC pays the full cost of employees’ premiums compared to 91% by other universities. UNC pays the full cost of employees’ premiums compared to 91% by other universities. UNC pays nothing toward dependent coverage. On average, other universities pay 64% of dependent costs. UNC pays nothing toward dependent coverage. On average, other universities pay 64% of dependent costs. UNC lags behind other universities on the number of dependents enrolled in the plan. UNC lags behind other universities on the number of dependents enrolled in the plan. The overall percentage subsidy of 76% is lower than other universities (81%). The overall percentage subsidy of 76% is lower than other universities (81%). UNC requires employees to cover a higher percentage of out- of-pocket costs in terms of deductibles, coinsurance and copays (20% of total costs), compared to other universities (14%). UNC requires employees to cover a higher percentage of out- of-pocket costs in terms of deductibles, coinsurance and copays (20% of total costs), compared to other universities (14%). UNC is the only university to offer only a straight indemnity plan design. UNC is the only university to offer only a straight indemnity plan design.

4. Steering Committee Committee appointed by the UNC President to develop a State Health Plan pilot plan that would be offered in lieu of the current plan for UNC employees and their dependents. Committee appointed by the UNC President to develop a State Health Plan pilot plan that would be offered in lieu of the current plan for UNC employees and their dependents. Steering Committee Members include representatives from the State Health Plan, Office of State Personnel, UNC Faculty Assembly, UNC Staff Forum, SEANC, UNC Health Care System, and UNC campus representation. Steering Committee Members include representatives from the State Health Plan, Office of State Personnel, UNC Faculty Assembly, UNC Staff Forum, SEANC, UNC Health Care System, and UNC campus representation. Consultant and actuary retained. Consultant and actuary retained.

5. UNC Employee Satisfaction Survey Results Compared to other employers: 57.8% of employees are satisfied with their health plan overall (compared to 81.4% at other employers). 57.8% of employees are satisfied with their health plan overall (compared to 81.4% at other employers). 92.2% are satisfied with the overall quality of medical care (94.2%). 92.2% are satisfied with the overall quality of medical care (94.2%). 70.2% are satisfied with the services covered by the plan (84.4%). 70.2% are satisfied with the services covered by the plan (84.4%). 35.4% are satisfied with the employee contribution costs (68.2%). 35.4% are satisfied with the employee contribution costs (68.2%). 26.1% are satisfied with out-of-pocket costs (59.7%). 26.1% are satisfied with out-of-pocket costs (59.7%).

6. Drivers Cost of Dependent Coverage Cost of Dependent Coverage More Plan Choices More Plan Choices Emphasis on Wellness and Prevention Emphasis on Wellness and Prevention

7. Cost of Dependent Coverage Expansion of dependent coverage tiers: Employee/Only, Employee/Spouse, Employee/Children, and Employee/Family. Expansion of dependent coverage tiers: Employee/Only, Employee/Spouse, Employee/Children, and Employee/Family. Employee contributions to vary by salary band, e.g., $40,000, $40,000-$60,000, $60,000- $100,000, $100,000+. Employee contributions to vary by salary band, e.g., $40,000, $40,000-$60,000, $60,000- $100,000, $100,000+. Family coverage under the basic plan to cost no more than family coverage provided under the State Health Plan. Family coverage under the basic plan to cost no more than family coverage provided under the State Health Plan.

8. Plan Choices Multiple plan options (3-4) to be offered from which employees may choose. Multiple plan options (3-4) to be offered from which employees may choose. Basic (core) PPO option at no cost to the employee that would be similar in value to the State Health Plan. Basic (core) PPO option at no cost to the employee that would be similar in value to the State Health Plan. Additional options that would allow an employee to buy up improved benefits. Additional options that would allow an employee to buy up improved benefits. Alternatives may include a “network only” option using deeper discounted networks and a “consumer- driven” option featuring a higher deductible with a first dollar spending account (Health Reimbursement Account). Alternatives may include a “network only” option using deeper discounted networks and a “consumer- driven” option featuring a higher deductible with a first dollar spending account (Health Reimbursement Account).

9. Wellness and Prevention Improve preventive care benefit. Improve preventive care benefit. Have office visits only subject to copay (not the deductible and coinsurance). Have office visits only subject to copay (not the deductible and coinsurance). Make available additional options that would allow an employee to buy up coverage. Make available additional options that would allow an employee to buy up coverage. Provide comprehensive disease/condition management and wellness program. Provide comprehensive disease/condition management and wellness program.

10. Approval Process Approved by UNC Board of Governors on February 11, 2005, for inclusion on the University’s 2005 Non-Budget Legislative Agenda Approved by UNC Board of Governors on February 11, 2005, for inclusion on the University’s 2005 Non-Budget Legislative Agenda General Assembly General Assembly Governor Governor