1. CSAIO6 / 09 - 2005 CERN Staff Association 1 CERN Long-Term Care Scheme Conference of the Staff Associations of Internationals Organizations 29-30 September 2005

2. CSAIO6 / 09 - 2005 CERN Staff Association 2 Contents l CERN Health Insurance Scheme n Nature of the CHIS n Basic principles of the CHIS n Scheme administration & responsibilities l Long-Term Care Scheme n Background of the LTC n Actuarial studies (scheme choice) n Nature of the LTC n Actuarial scenarios (no LTC; with LTC) n Financing of the LTC n Benefits of the LTC n Advantages of the LTC n Some LTC statistics from 2001 - 2005 n Some CHIS – LTC statistics from 1988 – 2004 n The future of the LTC l Conclusions

3. CSAIO6 / 09 - 2005 CERN Staff Association 3 CERN Health Insurance Scheme (1) l Nature of the CHIS n Funding of the CHIS u Contribution of active staff – share between Staff & Organisation : 4.02% & 6.35% of basic salary u Contribution of pensioners – share between pensioners & Organisation : 4.02% & 6.35% of the last indexed monthly basic salary u Contribution of spouses when they receive an income n External administrator (UNIQA) u Claims reimbursement u Daily administration of the CHIS services

4. CSAIO6 / 09 - 2005 CERN Staff Association 4 CERN Health Insurance Scheme (2) l Basic principles of the CHIS n Obligatory, everyone must participate n Contributions are based on salaries only, independent of age of beneficiaries and of number of beneficiaries in the household n All members of the family (spouse & dependent children are cover). It is obligatory It is a mutual scheme

5. CSAIO6 / 09 - 2005 CERN Staff Association 5 CERN Health Insurance Scheme (3) n Freedom of choice of health care providers & world-wide coverage n Responsibility of each CHIS member the level of reimbursement shall not exceed the level of contributions Freedom of choice Collective responsibility CHIS = Insurance

6. CSAIO6 / 09 - 2005 CERN Staff Association 6 CERN Health Insurance Scheme (5) l Scheme administration & responsibilities n CERN has the full control of the scheme n CERN monitors the scheme n CERN lays down the policies & proposes modifications as needed n UNIQA acts as a daily administrator of the scheme n UNIQA implements the policies & applies the CHIS rules n UNIQA produces statistics and gives feedback

7. CSAIO6 / 09 - 2005 CERN Staff Association 7 Long-Term Care scheme l Background of the LTC n Before 2001 the CERN Staff Association worked to elaborate a LTC scheme and studied several scheme types n Several actuarial reviews to obtain a forecast & foresee the future evolution n In 2001 CERN set up a Long-Term Care scheme, which is part of the CHIS n The LTC scheme was set up as a result of the 2000 five yearly review

8. CSAIO6 / 09 - 2005 CERN Staff Association 8 LTC : Actuarial studies l Technical basis n Use available mortality tables for (non)dependents n Do not include (big) safety margins the insurance companies include n Aim at ~60% of standard full-board Swiss cost (100 CHF) n Three levels of dependency n No adjustment foreseen for home care allowance

9. CSAIO6 / 09 - 2005 CERN Staff Association 9 LTC : Actuarial studies l Collective scheme versus individual commercial proposal CHF per month First year GuaranteeSolidaritytotalIndividual insurance > 65 Y. old1800-60018002400 to 4000 30 to 50 Y.075 475 to 1160 51 to 64 Y.77530010751200 to 2300 Regarding the CERN population this scheme is cheaper but the solidarity between the young and the old generations is not fully warranty

10. CSAIO6 / 09 - 2005 CERN Staff Association 10 Long-Term Care scheme (1) l Nature of the LTC n All CHIS members are insured, regardless of their age and medical history n Three levels of dependency u Low level u Medium level u High level According to the member’s degree of ability to perform some life essential actions  Getting up, sitting down, getting into bed  Mobility  Washing & grooming  Dressing & undressing  Taking food & drink  Going to the lavatory  Coherence & ability to communicate  Orientation in space & time Not 3 Not 4 Not 5

11. CSAIO6 / 09 - 2005 CERN Staff Association 1 LTC : Actuarial Scenarios l No LTC (only standard health coverage) n 52 CHF per day for home care with 2580 CHF per year for paramedical expenses n Hospitalization cost 1000 CHF per day n 100 days per year for dependant are spend in hospital l With LTC n 85 CHF per day for home care n Up to 2500 CHF per for paramedical expenses n LTC scheme eliminates hospitalization cost

12. CSAIO6 / 09 - 2005 CERN Staff Association 12 LTC : Actuarial Studies results No LTC (standard health coverage)With LTC 18 cases / YearMCHF Home care0.365.88 Paramedical0.050.54 Hospitalization1.8 Total for the first year2.216.42 231 cases after 20 Y - Total302.86186.80 Average / Year over 20 years 15.14Paramedical: 3.73 Home-care : 5.61 Total : 9.34 40% CHIS reduction cost with the LTC scheme

13. CSAIO6 / 09 - 2005 CERN Staff Association 13 Long-Term Care scheme (2) l Financing of the LTC n Affiliation and contribution are compulsory for CHIS members n Increase by 0.6% of the CHIS rate contribution for all staff contributors n Enlargement of the basis of contribution for the pensioners (0.6% corresponds to 1.2% of pension) n Creation of a capitalized LTC Fund to pay the home care allowance Staff members of the scheme are the single contributors But the Organization is paying a contribution for pensioners

14. CSAIO6 / 09 - 2005 CERN Staff Association 14 Long-Term Care scheme (3) l Benefits Low levelMedium levelHigh level Medical treatment No change Paramedical treatment Up to 1’000 CHF per month Up to 1’500 CHF per month Up to 2’500 CHF per month Home care* allowance 34 CHF per day 51 CHF per day 85 CHF per day * Not paid during hospitalization 50% of standard full-board Swiss cost 70% of standard full-board French cost

15. CSAIO6 / 09 - 2005 CERN Staff Association 15 Long-Term Care scheme (4) l Advantages of the LTC n Cost reduction of increase in hospital bills n Authorize the improvement of the long-term financial balance of the Organization’s health insurance scheme n Better cover for dependent persons n Keep the CHIS equivalent to the LAMAL scheme

16. CSAIO6 / 09 - 2005 CERN Staff Association 16 Long-Term Care scheme (5) l Some LTC Statistics from 2001 – 2004 Number of cases Low level Medium level High level TotalActuarial forecasts before 200116 12-200132~60 12-200213181647~88 12-200321231963~95 12-200429202271~106 37 cases evaluated in 2003 / 20 cases evaluated in 2004 2026 : 243 cases foreseen (3.1% of CHIS members)

17. CSAIO6 / 09 - 2005 CERN Staff Association 17 Long-Term Care scheme (6) l Some LTC Statistics from 2001 – 2004 MCHFContributionsPaymentFund before 2001 00.650 12-2001 5.600.804.80 12-2002 5.901.4011.70 12-2003 6.101.5015.50 12-2004 6.201.6422.10 Actuarial study 20 MCHF foreseen end of 2004

18. CSAIO6 / 09 - 2005 CERN Staff Association 18 Long-Term Care scheme (7) l Some LTC Statistics in 2004 by age & sex

19. CSAIO6 / 09 - 2005 CERN Staff Association 19 Long-Term Care scheme (8) l Some CHIS – LTC statistics from 1988 -2004 Evolution cost Large increase for hospitalization in 15 years

20. CSAIO6 / 09 - 2005 CERN Staff Association 20 Long-Term Care scheme (9) l The future of the LTC n Actuarial study in 2006 to review the scheme and take a decision on adapting the daily allowance n Looking for preferential providers in the field of nursing & home help in France

21. CSAIO6 / 09 - 2005 CERN Staff Association 21 Conclusions l The number of cases is in line with the forecast l The LTC scheme meets needs. Some difficulties reported in the assessment of low dependency level l The current financing of the LTC scheme is sound from an actuarial point of view. l Adapt continuously the scheme to the future evolution of society, also to keep the LTC and CHIS equivalent to the LAMAL Swiss health scheme

22. CSAIO6 / 09 - 2005 CERN Staff Association 2 END I am at your disposal for questions Joel LAHAYE CERN Staff Association Joel.lahaye@cern.ch

23. CSAIO6 / 09 - 2005 CERN Staff Association 23 LTC : predicted number of dependants l Hypothesis n Present age distribution n Expected numbers of staff and pensioners n Mortality rates n Statistics on dependency as function of age l Projections n 1999 : 18 known cases n 2026 : 243 cases ( peak 3.1% of CHIS members) n 2045 : 155 cases

24. CSAIO6 / 09 - 2005 CERN Staff Association 24 LTC : Actuarial studies l most efficient cost n V1 : 0%, V2 : 100%, V3 : 175% Regarding the CERN population this scheme is the more efficient but the solidarity between the young and the old generations is not fully warranty Age304050607080 Paid collective contributions / individual contribution (insurance) -4%-3%0%-24%-48%-69%

25. CSAIO6 / 09 - 2005 CERN Staff Association 25 CERN Health Insurance Scheme l Nature of the CHIS n Set up its own scheme u CHISBoard monitors the scheme & proposes modifications u Proposals are discussed at the SCC before decision by the DG u Sometimes TREF, FC and Council if proposals concern benefits CERN has to protect its staff against the financial consequences of illness, accident and maternity CERN Health Insurance Scheme must be globally equivalent to the Swiss national scheme LAMAL

26. CSAIO6 / 09 - 2005 CERN Staff Association 26 CERN Health Insurance Scheme (6) l Financial balance of the CHIS 2004: ~5800 Contributors 11868 Beneficiaries