1. Proposed Benefit Design Changes Faculty and Staff Brown Bag Luncheon October 13, 2010

2. Timeline Spring 2010 – Subcommittee recommended the following goals: Spring 2010 – Subcommittee recommended the following goals: –0% cost increase for University paid benefits –Consider options for family-friendly medical plan designs Summer 2010 – Benefits Consultant (JW Terrill) Summer 2010 – Benefits Consultant (JW Terrill) –Summary of Findings:  Above average benefit plan designs compared to market  Very generous cafeteria plan funding  Very generous paid sick leave benefits

3. Benchmarking Employee Contribution Percentage

4. Timeline (continued) Summer 2010 – Benefits Consultant (JW Terrill) Summer 2010 – Benefits Consultant (JW Terrill) –Recommendations:  Consider family-friendly medical plan option  Implement employee contribution for the low deductible medical plan  Reduce paid leaves and include a paid time off leave bank  Reconfigure paid sick leave program and implement a short term disability plan August 2010 – Request for Proposals (RFP’s) August 2010 – Request for Proposals (RFP’s) –Medical/Rx, dental and vision insurance coverages –Medical/Rx RFP results:  Anthem: proposed cost increase  Two other bidders: proposed cost decreases

5. Recommendations: Medical Insurance Change to United Healthcare Change to United Healthcare –13% decrease in employee only premium –Reduces Pre-Medicare retiree premiums to the active employee premium - 43% decrease in premium United Healthcare proposal overview: United Healthcare proposal overview: –Same deductible/cost share levels –Rx copays –Good provider network –Health Savings Account (HSA) banking option

6. Recommendations: Medical Insurance Convert Medical Plan B into Base Plan Convert Medical Plan B into Base Plan –Employee premium 100% paid by University –$750 in cafeteria plan funding –After $1,500 deductible…$10/$30/$50 Rx copays –Implement University supplement for dependent premiums  Spouse = $75/month supplement  Child(ren) = $100/month supplement  Family = $200/month supplement

7. Recommendations: Medical Insurance Convert Medical Plan A into Accelerated Plan Convert Medical Plan A into Accelerated Plan –Employee contribution to employee only premium based on your previous year’s reported Form W-2 Medicare wages (box 5) –$250 cafeteria plan funding –$10/$30/$50 Rx copays, not subject to deductible or cost share –MRA will be available <$27,000$27,000 - $44,999 $45,000 - $69,999 $70,000 + $22/month$45/month$67/month$90/month

8. United Healthcare 2011 Employee Monthly Premiums Base Plan (Formerly Plan B) Accelerated Plan (Formerly Plan A) Monthly Premium Employee $0.00 *Employee $22.00 ** Spouse$331.13Spouse $527.00 ** Child(ren)$232.29Child(ren) $435.18 ** Family$501.50Family $894.27 ** * 100% Paid by University ** Employee only contribution will (Dependent rates are net of range from $22 to $90 per month University supplement.) based on salary.

9. Recommendations: Medical Insurance Base Plan: How University supplements and Cafeteria Plan Funding apply Base Plan: How University supplements and Cafeteria Plan Funding apply Spouse CoverageChildren CoverageFamily Coverage $406.13 premium - $75.00 Supplement - $62.50 Cafeteria Plan $268.63 Adjusted premium (34% premium savings) $332.29 premium -$100.00 Supplement - $62.50 Cafeteria Plan $169.79 Adjusted premium (49% premium savings) $701.50 premium - $200.00 Supplement - $62.50 Cafeteria Plan $439.00 Adjusted premium (38% premium savings)

10. United Healthcare 2011 Retiree Monthly Premiums Base Plan (Formerly Plan B Current Premium Base Plan (Formerly Plan B) New Premium Accelerated Plan (Formerly Plan A) Current Premium Accelerated Plan (Formerly Plan A) New Premium Pre-65 Retiree $683.42$369.22* $800.93$459.09 Spouse$683.46$406.13*$800.93$505.00 Children$512.63$332.29*$600.69$413.18 Family$1,196.07$701.50*$1,401.64$872.27 Post-65 Retiree n/a * $404.90$387.29 Spousen/a *$404.88$426.02 Childrenn/a *$303.67$348.56 Familyn/a *$708.57$735.85

11. Recommendations: Medical Insurance Due to significant cost decrease in UnitedHealthcare’s proposal, eliminate University subsidy for pre-Medicare retiree premiums. Due to significant cost decrease in UnitedHealthcare’s proposal, eliminate University subsidy for pre-Medicare retiree premiums. –Current retirees receiving these subsidies will be grandfathered

12. Recommendations: Dental and Vision Insurance Dental Insurance Dental Insurance –Continue with Delta Dental of Missouri –Same coverage levels –6.6% premium increase –One year rate guarantee Vision Insurance Vision Insurance –Continue with Vision Service Plan (VSP) –Same coverage levels –6% premium increase –Four year rate guarantee

13. Recommendations: Paid Leaves – Effective 1/1/2011 Implement Paid Time Off (PTO) System Implement Paid Time Off (PTO) System –Retain current paid energy conservation days –Retain current paid vacation accrual schedule –Combine energy conservation days and vacation days accrual into PTO –PTO accrual maximum at 240 hours –Provides employee flexibility No change in paid holidays No change in paid holidays Eliminate vacation buyback Eliminate vacation buyback

14. Recommendations: Paid Leaves – Effective 1/1/2011 Implement Paid Sick Leave Accrual System Implement Paid Sick Leave Accrual System –Starting banks based on past 10 years’ sick leave usage, up to 120 hours per year credit with 1,040 hours maximum –Unverified Sick Leave  Staff: Accrue 8 days annually  Faculty: Accrue 6.64 days annually  Unused leave each year to carry over into verified sick leave bank –Qualifies for up to 6 months of additional service credit under MOSERS

15. Recommendations: Paid Leaves – Effective 1/1/2011 Implement Short Term Disability Plan Implement Short Term Disability Plan –To be administered by a Third Party Administrator –30 Day Elimination Period (use Verified Sick Leave and PTO) –Followed by Short Term Disability Paid Sick Leave at 60% pay –Transition plan for current employees will apply Calendar Days 30 Days 60 Days 90 Days 120 Days 150 Days 180 Days Elimination Period Short Term Disability Paid Sick Leave @ 60% Pay

16. Projected Cost Savings ActionAmount Medical Insurance: Reduced Employee Medical Premiums$1,638,887 University Supplements($703,345) Approximate Medical Insurance Savings:$935,542 Paid Leaves: Short Term Disability program and administration cost $130,392 Eliminate Vacation Buyback$85,000 Approximate Paid Leaves Savings:$215,392 Less MOSERS increase for FY12($80,000) Approximate Total Net Savings:$1,070,934 Total Net Savings is equivalent to an approximate $6-$7 per hour incidental fee increase for students.

17. Next Steps DateAction October 22, 2010Board of Regents Meeting Week of October 25, 2010Award medical, dental and vision insurance contracts Weeks of November 1 and 8, 2010Employee and Retiree Benefits Open Enrollment Meetings November 15-30, 2010Benefits Open Enrollment Period December 2010Submit enrollment files to insurance carriers January 1, 2011Benefit plans effective date