1. Proposed 2011 Medical Plan Design June 8, 2010

2.  Background  Recommended Strategy  Summary  Next Steps  Action Requested Presentation Outline

3.  Background  Recommended Strategy  Summary  Next Steps  Action Requested Presentation Outline

4.  BCC  Comptroller  Tax Collector  Supervisor of Elections  Expressway Authority  Housing Finance Authority  OBT Development Board  Metroplan Orlando  Property Appraiser  Lynx  Clerk of Courts  Research and Development  I-Ride Trolley Background 8,344 Covered Employees Total Plan Members: 18,536

5. Background  Claim and administrative expenses for 2010 are expected to reach $96 million  Overall cost of claims is trending at 10.4% and is expected to increase without major plan design changes  Unable to sustain funding for large increases year after year  Need to address total cost of plan and increase share of cost paid by employees

6. Background Keep Current Plan Major Plan Restructure

7. Background $17.3 Million Deficit Revenues / Expenditures If current plan is kept… Millions $107.8M $90.5M

8. Background  Premiums will increase by at least 50%  Bi-weekly premium increase as much as $100 for family coverage  Coinsurance and deductibles would need to be added  Financial challenges will continue to compound If current plan is kept…

9. Background Implementing a Major Plan Restructure will…  Lessen premium increases  Focus on Wellness and Preventive care  Create informed consumers  Begin to reverse the trend

10.  Background  Recommended Strategy  Summary  Next Steps  Action Requested Presentation Outline

11. Recommended Strategy Implement a Consumer Driven Health Plan for 2011  Preventive Care at 100%  Preventive Medications outside of deductible  Individual Health Savings Account (HSA)  High-Deductible Health Plan

12. Recommended Strategy  Nationally there are over 9 million individuals participating in Consumer Driven Health Care  Within the first year, the trend generally decreases 4-5%  Savings after the first year indicates trend rates lower than traditional plans by 3-5%  Cost savings are not generated by avoidance of appropriate care

13. Recommended Strategy A recent survey of HSA account holders by Buck Consultants found:  52% of respondents more closely monitor their health care costs since becoming HSA account holders  46% better understand costs before using services, and 25% choose less costly services  20% are better monitoring their diet and engaging in fitness and exercise  83% completed doctor recommended surgeries at the same rate as before, and 6% completed surgeries more than before

14. Recommended Strategy Two Major Plan Components  HSA Account  Funding Vehicle/Partially Funded  $750/$1,250 County contribution  High Deductible Health Plan  Deductible: $1,500/$3,000  20% Coinsurance  Out of Pocket Max: $3,000/$6,000

15. Recommended Strategy Deductible  $1,500 Employee Only  $3,000 Family  Amount paid by covered member before plan begins  Member pays full cost of the negotiated rate, until deductible  Can be paid from the HSA

16. Recommended Strategy 20% Co-Insurance  Starts after deductible is met  20% to be paid by member each time a medical service is accessed  80% remaining is paid by the Medical Plan  Can be paid from the HSA

17. Recommended Strategy Out of Pocket Maximum  $3,000 for Employee only  $6,000 for Family  Designed to protect member in the event of a catastrophic illness (safety net)  Once the out of pocket max is met, all services are covered at 100% by the Plan

18. Recommended Strategy Proposed 2011 Premium Schedule CoverageTotal $ Orange County $ Employee $ Bi-Weekly Employee $ Employee Only 5,490 00 Employee + Child(ren) 11,2909,4701,82070 Employee + Spouse 12,24610,2442,00277 Full Family 16,73912,7094,030155 Premium Schedule

19. Percent of Premium Paid by Employer AgencyEmployee OnlyFull Family Broward County 95%80% Orange County Sheriff’s Office 100%79% Pinellas County 97%78% Orange County (Proposed) 100%76% City of Orlando 100%73% Orange County Public Schools 100%55% Miami-Dade County 100%48% Recommended Strategy Premium Comparison

20. Bi-Weekly Premiums Paid by Employee AgencyEmployee OnlyFull Family Miami-Dade County $0$245.80 City of Orlando $0$236.11 Orange County Public Schools $0$216.69 Orange County (Proposed) $0$155.00 Pinellas County $5.90$128.18 Broward County $10.15$126.00 Orange County Sheriff’s Office $0$122.10 Recommended Strategy Premium Comparison

21.  Background  Recommended Strategy  Summary  Next Steps  Action Requested Presentation Outline

22. Summary  10.4% annual increase in healthcare cost is not sustainable  Fundamental changes to the health plan are needed  Recommend fully funding employee only coverage  Recommend transitioning to a Consumer Driven Health Plan to control costs, change behavior, and begin to reverse the trend

23.  Background  Recommended Strategy  Summary  Next Steps  Action Requested Presentation Outline

24. Next Steps  Communication campaign beginning in June  Open Enrollment in October 2010  Implement health plan changes and fund HSA accounts in January 2011  Evaluate plan success going forward and make further adjustments annually

25.  Background  Recommended Strategy  Summary  Next Steps  Action Requested Presentation Outline

26. Action Requested Approval of the 2011 Employee Health Plan and Premium Schedule as outlined in the staff report to include: Consumer Driven High-Deductible Health Plan Health Savings Accounts Bi-Weekly Premium Schedule

27. Proposed 2011 Medical Plan Design June 8, 2010

28. Recommended Strategy Coverage Covered Employees* Current Premium Proposed Premium $ Change Employee Only 3,187$0 Employee + Child(ren) 1,187$54.09$70.00$15.91 Employee + Spouse 1,387$60.21$77.00$16.79 Employee + Family 1,754$138.61$155.00$16.39 Premium Changes *Excludes Lynx

29. Full v. Self Insurance Full Self Insurance Insurance Claims Expense Same Same Administration/Profit 20.7%* 5.7% * Based on FY 06 when county was fully insured