Calendar ’08 Health ProgramsFaculty Council

October 2007

A Season of Change for 2008

• New CustomChoices for a healthy U and Idaho – Three or more choices in each benefit– New medical, dental/vision plans and disability benefit

choices, enhanced life and accident options– A high-deductible medical Plan option linked to a health

savings account – Fitness benefits included for those who elect medical– A benefits budget, called ChoiceDollars, to help you

create your own personal benefits package– Ability to waive medical have ChoiceDollars to redirect

A Change of Seasons 2008 (continued)

• Changes in employee contributions– Elimination of tiered contribution rates – Higher rates for medical benefits for most – Lower rates for non-tobacco users– Opportunities for all employees to reduce cost

• New healthy lifestyle benefits linked to medical– UI covered fitness programs– Tools to assess your health status– Incentives for employees who make healthy choices– Health coaches for managing health conditions

A Change of Seasonsfor 2008 (continued)

New Tools• AVS web-based employee portal and

enrollment process• e-learning tools for learning more about your benefits

- Decision support modeling tools

- Interactive digital brochures

Why Flexible Benefits? A Cafeteria Style – “CustomChoices” Approach

• Supports our Strategic Plan of empowerment, diversity and employee accountability

• Enables the addition of voluntary benefits to be expanded at no added University cost

• Helps address inequities– Example: Disability benefit caps prevent employees earning more than

$60,000/yr from 60% income replacement

Why Flexible Benefits? (continued)A Cafeteria Style – “CustomChoices” Approach

• Our employee population is very diverse– More choices to better match needs– Creates recruiting and retention advantages– Positions employee to have only the benefits they need

• Increases employee commitment and involvement– Creates ownership and accountability for decisions– “Choice Dollars” represents employer funding,

engages understanding of benefits and cost

Empower Changes that Control CostsWhy “CustomChoices” for a healthy U and Idaho ?

• Flexibility increases the ability to contain costs– Overall cost will slow when coverage in costly areas are

exchanged for less costly areas– Easier to add than to force consumer-directed plans

• “Choice Dollars” can motive behaviors that influence cost– Non-Tobacco use or cessation– Use of fitness programs to address sedentary lifestyles– Completion of a health risk assessment to identify and

address health risks before they become claims

Health Care Costs are Influenced by Behaviors

50% of health plan costs are attributed to:

- Obesity

- Tobacco use

- Sedentary lifestyle

- Failure to seek preventive care

$10.5 million of our $21 million medical cost could be avoided through changes in lifestyle behaviors

Integration of Behavior Changes

• Non-tobacco users – more ChoiceDollars so pay less for healthcare

• Fitness programs included with medical – addresses sedentary lifestyles and aerobic exercise

• Health risk assessment – identification of potential health risks (individual and plan)

• Preventive wellness and cancer screening – Offered at no-cost or after a small pre-deductible co-payment

• Disease management programs – Available to employees and families for specified diseases

• High-risk pregnancy programs – encourage early prenatal care and intervention

• $100 savings bond reward is offered for participation

A Walk Through the Cafeteria

The cafeteria allows:

– Purchase of a full meal at a set price. – Some desserts and extras at an extra charge. – Substitution of some items. – A choice of portion size.– No choice of ingredients, the food is pre-made. – You to make the decisions and required to walk

through the line.

Medical Plan HHealth & Wealth Builder Option

Medical Plan Features

• Has the highest deductible $1500/$3000• Offers one of most favorable out-of-pocket limits $2500 / $5,000• Pays preventive care at 100% pre-deductible – no co-payment• Does not have separate Rx or Behavioral Health or out-of-network

deductibles– All expenses accumulate toward the $1500– Benefits in and out-of-network are paid at the same level

• Features the lowest per paycheck cost– Provides every employee the opportunity to decrease employee

cost sharing

Medical Plan HHealth & Wealth Builder Option

Health Savings Account• Employee costs saved or avoided should be deposited in the HSA.• The University matches 50 cents for every $1 up to $19.23 per pay

to a maximum of $500 per year.• Funds otherwise spent on unreimbursed expenses or deposited to a

health care spending account should be deposited.• The account earns interest. After balances reach $3000 diversified

investments are available.• Reimbursement does not require receipts and can be accessed

through debit cards, ATM or checks.• Money always belongs to the employee and is never forfeited.• Balances roll over from year to year.• Expenses do not have to be reimbursed in the year the expense

was incurred.

Medical Plan HHealth & Wealth Builder Option

Health Bridge and Unexpected Events• Funds that are not on deposit cannot be reimbursed• A “Health Bridge“ line-of-credit up to $1500/$3000 is available to

ALL Plan H employee members– No application - Guaranteed to all– Works like an overdraft protection to advance funds not in the account– 1% advance fee, plus 1% on unpaid monthly balance– Repaid through payroll deduction like a 401(k) loan

• Employees can change the amount elected each quarter– Allows employee to retrench when the unexpected occurs

Fact or Fiction?The HSA is only for people with fewer health care needs.

Total Medical Expenses

$ 18,720.00

Medical Plan B Medical Plan H

Medical Deductible

Rx Deductible

$175.00

$125.00

$1500

included w/medical

Co-insurance $ 1,000 $2500

10-Office Visits $ 350.00 specialist n/a

20-Office Visits $300.00 general n/a

1- Admission/Surgery $ 35.00 n/a

Rx – (2) Brand

$250 each ($6000)

$1500 retail

$ 600 mail-order

included in deductible and coinsurance

Annual Premium $ 2,144.74 ( $ 123.24)

Employee Net Cost $ 4,729.74 $ 3876.76

Medical Plan Choices

A . Basic B. Plus H. Health & Wealth Builder

Primary differences PPO in-network PPO in-network PPO – open access

Deductible*

$350/$1,050 Does not apply to

office visits or preventive

$175/$525Before all service except preventive

$1,500/$3,000

Out-of-pocket maximum* $3,500/ $10,500 $2,500/$7,500 $2,500/$5,000

Preventive care $25 co-pay/100% $15 co-pay/100% No co-pay/100%

Doctor’s Office VisitLab, imaging, other

services

$25 co-payment 20%

10% after$15 GP10% after $35 Spec

10%

30% after deductible Includes Rx, behavioral

health

Hospital/Surgery 20% 10% after $35 admission co-pay 30%

Employee/UI funded spending account No No UI match: 50¢ for each

$1 up to $500

Dental / Vision Plan ChoicesA . Preventive B. Basic C. Plus with Orthodontia

All Plans include the same vision benefit: exam / 12 month $10: lenses / 12 months; frames / 24 month $25 for complete pair of glasses. Allowance for contacts and out-of-network services

Deductible* None $25/ $75 $50 / $150

Annual maximum*2 exams/cleaning and bite-wing x-

rays$1000 / individual $1,250 / individual

Preventive care 100% 100% 100%

Basic Services No coverage 75% 80%

Major Services No coverage 45% 55%

OrthodontiaChildren Only

No coverage No coverage50% to $1000 in addition to $1250 for dental services

Short and Long-term Disability Choices

What will help you make your decision?

50% of pay STD maximum $500 per weekLTD maximum to $2000 per month

60% of paySTD maximum $700 per weekLTD maximum $3000 per month

66.667 of paySTD maximum $1250 per weekLTD maximum $5000 per month

What should you consider?

Sick and annual leave balances. Integration (offsets) of social security and/or retirement disability benefits (if any).

What Will Help

Make Your Decision?

Is my current choice a good value?

Compare your cost for coverage/paycheck with the actual cost of usage – deductible, co-pays and out-of-pocket maximum. Do you have too much coverage or not enough?

Review last year’s medical expenses?

What are my leave balances?

Available at www.bcidaho.com for medical. For Flexible Spending Accounts:

wwwcreativebenefits.com Prescription drug expenses Vandweb.edu

Availability of other medical benefits

Spouse’s plan, Medicare, Tri-care

Choice includes “Cash or Credit Back” Cash Back:

Is possible when:• Employee-only and lowest options are chosen in all categories• Medical coverage is waived and employee-only and low options are chosen

Does not force employees off our plan: • Employee may waive medical with proof of other coverage - UI Plan may gain spouse and children in favor of richer options

Addresses equity:• If $$$ spent for one employee; should another receive nothing?

- Cash back is enough to provide a benefit of “comparable” value

Encourages choice:• Use it or lose it forces selection of costly plans and lack of attention to cost

What will CustomChoices Look Like? “ChoiceDollar” Formula

The same “ChoiceDollar” formula is used for all employees. ChoiceDollars represent the University contribution.

The budgeted cost otherwise spent by the employer in each area defines the formula.

$ 268.90 If medical is elected, otherwise $23.07$ 18.86 Dental $ 5.63 1 times life salary, using smoker rates$ 6.75 Short term disability$ 1.92 Long term disability$ 5.50 Fitness if medical elected$ 4.50 If not a tobacco user and medical is elected

* $ 312.06 ChoiceDollar Allowance with Medical

* Example assumes life insurance salary of $37,000, declaration as a non-tobacco user and election of medical

* $60.73 without Medical

CustomChoices Medical OptionsJoe Vandal’s Tailored Benefit Choices

MEDICAL

CHOICES

Employee

Only

Employee

Spouse

Employee

Child

Employee

Children

Family

Plan A$350 Deductible

$ 297.74 $ 403.17 $ 357.43 $ 397.56 $ 502.99

Plan B$175 Deductible

$ 351.39 $ 513.62 $ 435.75 $ 506.12 $ 663.10

Plan HHSA Qualified

$1500 Deductible

$ 264.16 $ 324.57 $ 303.87 $ 320.28 $ 346.81

Waive – Other Plan Required

$ .00 $ .00 $ .00 $ .00 $ .00

Beginning ChoiceDollars $ 312.06

Medical Election $ 264.16

Ending ChoiceDollars $ 47.90

If waived ending balance is $60.73

CustomChoices Fitness OptionsJoe Vandal’s Tailored Benefit Choices

CAMPUS

FITNESS

Employee

OnlyWellness Classes $ 5.50Wellness Classes and SRC Membership

$ 16.00

SRC Membership $ 11.93 Beginning ChoiceDollars $ 47.90

Fitness Election $ 5.50

Ending ChoiceDollars $ 42.40

Fitness is included with medical. Some level must be elected, unless medical is waived. You have enough ChoiceDollars to cover off campus reimbursement or on campus wellness classes. Family members may enroll outside of this system.

OFF-CAMPUS

FITNESS

Employee

OnlyReimbursement $ 5.50

If medical is waived ending balance is $55.23

CustomChoices Dental/Vision OptionsJoe Vandal’s Tailored Benefit Choices

DENTAL /

VISION

Employee

Only

Employee

Spouse

Employee

Child

Employee

Children

Family

Plan APreventive Only

$ 10.90 $ 16.65 $ 15.76 $ 16.59 $ 17.65

Plan B$1000 maximum

$ 18.86 $ 20.21 $ 19.93 $ 20.51 $ 21.51

Plan C$1250 maximum

Orthodontia

$ 22.16 $ 27.84 $ 26.98 $ 30.36 $ 34.12

Beginning ChoiceDollars $ 42.40

Medical Election $ 10.90

Ending ChoiceDollars $ 31.50

The same comprehensive vision plan is combined with each dental choice. You must stay in the dental plan you choose for (2) Plan Years.

If medical is waived ending balance is $44.33

CustomChoicesBasic and Supplemental Life Options

Joe Vandal’s Tailored Benefit Choices

BASIC EMPLOYEE

LIFE CHOICES

Non –Tobacco User

Tobacco User

½ Annual Salary $18,500 $ 2.31 $ 2.82

Annual Salary $37,000 $ 4.62 $ 5.63

Beginning ChoiceDollars $ 31.50

Medical Election $ 2.31

Ending ChoiceDollars $ 29.19

SUPPLEMENTAL

EMPLOYEE

LIFE OPTIONS

Non –Tobacco User

Tobacco User

Annual Salary $ 1.20 $ 2.05

Twice Annual Salary $ 2.40 $ 4.10

Three x’s Annual Salary $ 3.60 $ 6.15

Four x’s Annual Salary $ 4.80 $ 8.20

Waived $ .00 $ .00

Some level of Basic Life must be elected. Supplemental Life requires at least annual salary in basic life.

Coverage is in addition to Basic Life. The total basic and supplemental cannot exceed 3 x’s salary without health evidence and may not exceed $500,000.

If medical is waived ending balance is $42.02

CustomChoices Disability OptionsJoe Vandal’s Tailored Benefit Choices

SHORT TERM

DISABILITY CHOICES

50% of salary to $500 / wk $ 5.41

60% of salary to $700 / wk $ 6.75

66.67% of salary to $1250/ wk

$ 17.31

Beginning ChoiceDollars $ 29.19

Short-Term Disability $ 5.41

Long-Term Disability $ 1.37

Ending ChoiceDollars $ 22.41

LONG TERM

DISABILITY CHOICES

50% of salary to $2000 / mo $ 1.37

60% of salary to $3000 / mo $ 1.92

66.67% of salary to $5000 / mo

$ 2.88

Sick leave must be exhausted before disability benefits begin.

If your salary is $60,000 or greater, benefit caps reduce coverage below 60%.

If medical is waived ending balance is $35.24

If Joe Vandal chooses no further benefits the amount added to his pay as taxable income is $22.41 for the plans selected or $35.24 if medical coverage had been waived.

CustomChoices Tax-Favored OptionsJoe Vandal’s Tailored Benefit Choices

Tax Free Spending Accounts Annual Bi-Week

Health Care Spending n/a n/a

Dependent Care Spending $.00 $ .00

Transportation Spending $ .00 $ .00

Beginning ChoiceDollars $ 22.41

Health Savings Account $ 92.31

Joe’s Pre-Tax Deduction ($ 69.90)

Health Savings Account Annual Bi-Week Employer Match

Employee Election and Match $ 2,400 $ 92.31 $ 19.23 / pay - $500 max / yr.

IRS prohibits a health care spending election. The health saving account is used for spending and saving.

Joe reinvested $2190 captured from Medical Plan B cost avoidance and $210 otherwise directed to a health spending account.

The University match is 50 cents to each $1. Maximum $19.23 per pay / $500 per year.

Joe’s $2900 earns interest and rolls over year-to-year and can cover the higher deductible.

$ 2190 Joe’s Plan B cost difference $ 210 $ otherwise deposited to HCSA $ 500 UI match $ 2900 Joe’s Health Savings Account

CustomChoices Bottom LineJoe Vandal’s Tailored Benefit Choices

Current Programs $ 2190 Medical Plan B Dental with vision exam 1 x’s salary in life 1 x’s salary in AD&D 60% STD 60% LTDHealth Spending $ 210Total Costs $ 2400

CY08 Programs ($582.66) Plan H Preventive dental/vision ½ x’s salary in life Waived AD&D 50% STD 50% LTD

Health Savings Account 2400.00

UI Health Savings Match 500.00Health Savings Value $ 2900.00

Joe’s HSA Funds 2400.00Joe’s Program Costs ( 582.66) Net Cost to Joe $ 1817.34

• Joe reduces current cost by $583. • Of the $2400 deposited to health savings; $583 are unspent ChoiceDollars.• The University match is $500. • Joe’s financial gain is $1083.• Joe has $2900 in the bank, but spent only $1817 of his own money. He earns interest, and owns 100% of this account – always!

Communication Delivery Systems

• Internal constituent groups• State-wide focus groups• Email, websites, interactive e-tools

and modelers• Register, today@idaho, enrollment kits to homes• State-wide health and enrollment fair events• State-wide individual enrollment appointments and face-

to-face informational meetings

Sample Materials

• Interactive e-learning

Your Role ofLeadership Support

• Encourage faculty, staff and administrators to all invest the time to understand these changes and involve family members

• Schedule informational meeting at your college• Be an example, attend the Health and Enrollment events• Be there to introduce the program to the University• Focus on the opportunities. There are changes and

understanding them is the key to making the most of them

As always, your continued support is greatly appreciated.Thank you!