1. Benefit Choices in a Changing Environment Pat Haines SVP, Benefits

2. 2013: A Year of Difficult Choices The World in Which We Live: The Context for Making Choices The Choices Facing Each of Us 2 Topical Overview

3. Retirement Plan Modify Apportionment Policy Disability Plan Increase Benefit Medical Plan Increase Dues Change Pharmacy Benefit Management (PBM) partner Increase Rx Copay for Generic Drugs Design Health Accountability Program 3 2013: A Year of Difficult Choices

4. Retirement Plan Rationale Maintain plan solvency Provide generational equity Protect benefits against inflation Impact 1% apportionment = $57.7 mil 4 Choices: Rationale and Impact

5. Disability Plan Rationale Protect benefits against inflation Impact The increase in liability = $714,000 5 Choices: Rationale and Impact

6. Medical Plan Rationale Provide some limited flexibility Provide quality coverage Continue support of Community Nature Ensure financial solvency 6 Choices: Rationale and Impact

7. Medical Plan Impact (2014) Cost Savings New pharmacy benefit partner = $2.9 mil Dues action (21% → 23%) = $13.6 mil Rx copay change ($8 → $10) = $400,000 Call to Health = improved member health 7 Choices: Rationale and Impact

8. Declining enrollment Aging population Healthcare Reform Inherent volatility 8 Medical Plan: Other Factors Affecting Costs

9. 9 Medical Plan Before and After: Forecasts 2013 Forecast As of:June 2013February 2014 Total Revenue$174,538$174,200 Total Expenses (claims & admin)$180,759$184,079 Net Income($6,222)($9,878) Fund Balance (reserve) $58,258 (32.2%) $52,111 (28.3%) $ in 1000s

10. 10 2014 Forecast As of:June 2013February 2014 Total Revenue$167,689$182,492 Total Expenses (claims & admin)$182,940$186,430 Net Income($15,251)($3,938) Fund Balance (reserve) $40,929 (22.4%) $46,058 (24.7%) $ in 1000s Medical Plan Before and After: Forecasts

11. 11 Medical Plan Before and After: Forecasts 2015 Forecast As of:June 2013February 2014 Total Revenue$166,321$190,872 Total Expenses (claims & admin) $189,241$193,310 Net Income($22,920)($2,438) Fund Balance (reserve) $16,916 (8.9%) $42,493 (22.0%) $ in 1000s

12. Exchanges: Public and Private Partner Coverage: no subsidy; surcharge; none High Deductible Health Plans High Performing, More Restricted Networks Health Accountability and Responsibility: more carrots and sticks Reference-Based Pricing 12 Choices by Other Large Employer Plans

13. Online store or marketplace Public (government) or Private (industry) Single or multi-carrier Health only or other coverage options Decision support 13 Exchanges: Expanded Choices for Individuals and Employers

14. Members in transition Seminary students Early retirees Part-time church workers (< 20 hours) Non-mandated emerging ministries 14 Public Exchanges: Who Might Benefit

15. 2015 Dues Model Mid councils: Terms of Call Employing organizations: Share or not; pre-tax or post-tax Members: enroll or not 15 Choices That YOU Have

16. Be a responsible consumer Understand your benefits Seek care at the right time and at the right place Look for value (cost and quality) 16 Choices That YOU Have

17. Answer the Call to Health Preventive care Telephonic coaching Health assessment Know your numbers Vision exam Tobacco cessation CREDO myactivehealth.com/pcusa 17 Choices That YOU Have