1. © 2004 SHRM SHRM Weekly Online Survey: October 2, 2004 Health Care Cost Reductions in 2004 Sample comprised of 239 randomly selected HR professionals. Analyzing 239 out of 1996 emails sent; 1827 emails received (response rate = 13%). Survey fielded November 2 – 8, 2004; presentation generated on November 9, 2004. Margin of error is 6%.

2. © 2004 SHRM SHRM Weekly Online Survey: October 2, 2004 1. Has your organization been successful at lowering its health care costs in the 2004 fiscal year?

3. © 2004 SHRM SHRM Weekly Online Survey: October 2, 2004 1. Has your organization been successful at lowering its health care costs in the 2004 fiscal year? ChoiceCountPercentage Answered No13656.9% Yes8234.3% Not sure218.8%

4. © 2004 SHRM SHRM Weekly Online Survey: October 2, 2004 2. If yes, which of the following has your organization used to lower its health care costs in the 2004 fiscal year? (Check all that apply.) Note: Percentages are based on respondents who indicated that their organizations had been successful at lowering health care costs in the 2004 fiscal year.

5. © 2004 SHRM SHRM Weekly Online Survey: October 2, 2004 2. If yes, which of the following has your organization used to lower its health care costs in the 2004 fiscal year? (Check all that apply.) ChoiceCountPercent of Sample Increased employee coinsurance/copays/deductibles5871% Increased dependent coinsurance/copays/deductibles4757% Introduced tiered networks for providers1923% Offered preventative care programs, wellness programs, or disease management programs 1923% Decreased the scope of benefits offered1417% Offered a consumer-driven health plan (personal account with a high deductible plan) 1113% Partnered with other organizations to purchase health care coverage 79% Eliminated health care coverage completely11% Limited or eliminated retiree health insurance coverage 11% Restricted coverage to employees only (i.e., no coverage for family members) 00% Other2227% Note: Percentages are based on respondents who indicated that their organizations had been successful at lowering health care costs in the 2004 fiscal year.

6. © 2004 SHRM SHRM Weekly Online Survey: October 2, 2004 Open-ended responses to Question 2’s “Other” option: Changed contribution schedule We have a partially-self funded plan...employees have been healthier this year. We have incurred no increase at all. Educated employees on the use of mail-in pharmacy program to reduce their costs. Educated employees in the options available so they could make a more informed choice. Provided in depth education on benefit plan choices resulting in about 1/3 of covered employees choosing a plan with a higher deductible and lower premium Hired more part time employees Our claims were down significantly so rates were lower for us this year. Went to a dual plan option. The core plan had more employer contribution and higher co-pays/deductibles Educate population on cost of healthcare allowing them to make informed decision on when and how to use. Changed co-pays for infrequently used procedures Removed spouse if spouse is eligible for participation with their own employer Changed carriers Increased prescription copays and lowered percentages paid....Went from 90/10 PPO and 80/20 Non-PPO to 80/20 PPO and 70/30 Non-PPO Use broker to leverage recent company expansion Changed eligibility criteria; changed spouse coverage to secondary if access to coverage available through spouse's employer Went to a self insured plan Changed carriers with the help of a pro-active broker; we are considering a consumer driven plan for next year For some reason, we seem to have had a particularly good year claims-wise. Our lower health-care costs has more to do with that, I believe, than with the changes we've made to our plans. The changes did help, but I believe the majority of the lower costs Implemented spousal surcharge for spouses which could be covered elsewhere. Offered group medical provider our STD business as an incentive to lower our group medical rates and in turn they picked up a segment of our business they didn't previously handle, namely, the STD. Switched to an HRA account Intense broker negotiations