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HomeMy WebLinkAboutRESPONSE - RFP - 7279 BENEFITS CONSULTANTRESPONSE TO: REQUEST FOR PROPOSAL #7279 BENEFITS CONSULTANT PREPARED FOR: City of Fort Collins ' PREPARED BY: HaVS ' "Finding a Way Together" ' September 23, 2011 ' Hays Companies 1 1125 17"' Street, Suite 1710 1 Denver, CO 80202 (720) 279-3400 1 www.hayscompanies.com IV. RESPONSE TO QUESTIONNAIRE Hays The following pages further outline the responsibilities, experience, and qualifications of the proposed service team for the City: Proposed Hays Companies Benefits Team Fort Collins Eric Rosales Lead Consultant erosales(a)hayscompan ies.com (720) 279-3412 Secondary daily contact Provide strategic direction Knowledge champion for all Hays resources Administration and outsourcing liaison Claim resolution ■ Jana Knox Consultant/Account Manager ' iknoxahayscompanies.com (720)279-3424 Primary daily contact Provide strategic direction along -side Lead Prepare and maintains benefits manual On-line communications maintenance Administration and outsourcing liaison ■ Claim resolution Whitney Bulterman Benefits Analyst wbulterman(a)hay scompanies.com (720)279-3404 Cody Purdy Technical Consultant cpu rdv(a) h ayscom pa n ies. corn (720) 279-3442 Responsible for all financial analysis Oversee all underwriting and marketing Monitoring of plan financials and budget Prepare plan benchmarking analysis Prepare cost driving analysis Responsible for financial reporting Prepares RFPs and marketing all insurances Prepares monthly reporting Prepares marketing summaries Joe Long Practice Leader ilong(a)hayscompanies.com (720)279-3418 Manager of Hays Denver Benefits Group Serve as a back-up for Lead Knowledge champion for Hays resources Erik Templin Senior Consultant/Producer etemplin(a)hayscompanies.com (720)279-3414 Assist in prospective client development Provide enrollment and communication support Liaison for strateaic market relationships RFP 7279 Benefits Consultant 9 r rl>c r ■r r r air Ilr r r r■ �r r r otal Costs for Members With Chronic Diseases osts Associated With Comorbidity for Chronic Members Cost of Chronic Condition Cost of Chronic Condition + morbidity Total Paid Total Paid for Members Chronic Members for Chronic with Chronic Average Paid Disease Treated Disease Disease Per Member Coronary Heart Disease 119 464,376.88 2,271,421.98 19,087.58 Obesity 47 15,473.47 145,4%58 3,094.88 High Blood Pressure 691 66,142.42 3,339,988.90 4,83356 Depression -Related Disorders 115 35,793 59 1,074,526.21 9,34371 Asthma 222 32,582.89 638,203.71 2,87479 Diabetes 89 92,285.89 1,556,276.99 5,38504 Highest Cost Member 249.570,64 31,984.83 274,002.36 274.002.36 107.078.29 184,658.86 Total Paid (Net of Highest Member 2,021,851 113,475 3,065,986 800,524 531,125 1,371,618 • The cost of comorbidities can be significantly higher than the cost of the actual chronic condition • The key to reduce these claims is to ensure that the members are well educated and part of a disease management program for their particular condition. • Again, XYZ is significantly above the norm, this is an area of the program that requires a deeper analysis with Carrier ABC and outside vendors. • Due to the nature of chronic conditions, these claims can be ongoing if not managed accordingly. The information contained in these documents is proprietary to Hays Companies and is not to be distributed to e d = parties without the express written permission of a representative of Hays Companies. I 1 XYZ Company ' Employee Pharmacy Benefit Program 1 1 Analysis of Prescription Claims for December 1, 2010 — December 31, 2010 Prepared by; Heys April 30, 2011 Introduction: This report is performed at the request of XYZ Company, on behalf of the XYZ Company Employee Pharmacy Benefits Program (the Plan). The goals of this investigation ' include an examination of the paid claims file provided to Hays Companies in order: 1) To evaluate the financial performance of the current pharmacy benefit manager (PBM), hired by the Plan to administer the prescription drug benefit for the employees and dependents of the organization, 2) To inform decision makers in the selection and monitoring of PBM providers in subsequent periods, and 3) To facilitate ideas to consider in isolated cost centers that could be addressed with plan design changes to maintain financial integrity and ' stability while restoring the health of the plan members. 1 t 1 t 1 1 Prescription drug pricing Typical prescription pricing terms are based on a discount off the drug product average wholesale price (AWP - % discount) plus a pharmacy filling fee minus the member co - payment. Many generic drug products are priced based on a Maximum Allowable Cost (MAC) plus a pharmacy filling fee. The MAC price is, generally, a much lower price than the AWP of the specific product. The MAC prices apply to the generic drugs and to the brands that have a generic alternative and do not typically apply to the single source brands that are protected with a U.S. patent. These MAC prices are controls used by Medicaid systems, Medicare programs and group health plans to control the generic prices and to cap the dollar amount a plan or member would be required to pay the pharmacy provider. Many of us are aware that when a generic drug is available, competitive prices drive the cost to the pharmacy down and then allow each pharmacy to lower costs to consumers and to health plans. It should be noted that MAC programs are not all the same and therefore, do not have the same prices. The incumbent program is unique to its clients only. Typical Pharmacy Benefit Pricing BRANDS AWP - % discount + pharmacy filling fee — co -payment GENERICS AWP - % discount + pharmacy filling fee — co -payment Or MAC + pharmacy filling fee — co- a ment This report examined 15,423 valid prescription claims for the Plan administered by the incumbent PBM for the time period December 1, 2010 — December 31, 2010. The valid claims are composed of 27% single -source brand -name drugs, 55% generic drugs and 18% brand -name drugs that have a generic equivalent available. Confidential & Proprietary for XYZ Company - Prepared by Hays Companies I ' This claims analysis has two components: 1) a global exam of all prescription claims on the basis of cost to the Plan (we call this comparison a claim -to -claim comparison) and 2) a focused exam investigating some business practices of PBMs that have been widely reported in business journals. These practices are alleged by some writers to enrich the PBM at the expense of the plan sponsor, pharmacy providers and the plan members. I I I I i 11 XYZ Company incumbent PBM is Walgreens Health Initiatives (the "incumbent") Transparent PBM prices supplied by Pharmaceutical Technologies, Inc. (the "transparent PBM") Objectives: 1) Global perspective: compare the prices of each claim administered by the incumbent PBM with a transparent PBM that would not take undisclosed cash flows from pharmacy providers. Some have contended that the PBM has already disclosed these revenue streams to the plan in its contract and this is the essence of the plan's desire to become involved with a transparent program in the future. Disclosure definition and the display of these monies are two separate issues in our opinion. This is the claim -to -claim comparison. 2) Focused perspective: investigate practices of PBMs that may work to the financial disadvantage of the plan sponsor. The practices we have investigated are: a) Zero -balance co -payment b) Sales tax charged to the plan sponsor c) Metric decimal quantities on drugs that potentially enrich the PBM d) Underutilized opportunities for OTC product use in the benefit e) Examination of Pricing Disparities Methodology and Results Global exam of claims in a claim -to -claim comparison: The global exam of the Plan's prescription claims for the time period December 1, 2010 — December 31, 2010 was performed using a claim -to -claim comparison with a transparent -model PBM. The purpose of this exam was to determine if there would have been a cost difference to the Plan based on the price structures of the two PBMs. A claim -to -claim comparison is possible because of the level of recordkeeping in the pharmacy benefit program. We were presented with 15,423 valid claims, 536 claims were excluded from the analysis because of invalid NDC numbers ("bar codes'), reversals, or inadequate information. Some claims, such as custom -prepared prescriptions ("compounded prescriptions') require detailed information on the initial transaction that is not captured on the electronic claims record. The 15,423 valid claims were billed for the time period December 2010 to the Plan for payment. Each claim records the total cost of the prescription to the plan before the member co -payment 1 Confidential & Proprietary for XYZ Company - Prepared by Hays Companies ' (AWP -% discount + pharmacy filling fee). Additionally, the date of the prescription, the drug's "bar code' (the National Drug Code), the drug name, drug strength and quantity dispensed are recorded as well. This allowed for an exact comparison of the total cost between the incumbent PBM and any alternative PBM program on the date of the ' prescription. An example of the claim -to -claim comparison for the Plan is presented in Table 1 below. J [1 1 1 1 I Table 1: Example of a Claim -to -Claim Comparison A B C D E o Duo O C =°C CA 0 ny iu m to °1 c �c +gy 33 °—' �<3 21 ' to 3 m 3 N m v to v N p '- ... y C A a N K W> ID+ > n N ti n 'm'" n o m v 3 H to v 3 m Mr m m a 0 o m 0 3 3 .. m m c 3 0 oy, o a m m 12/06/ Tramadol 60 $2.25 $45.57 $47.82 $33.60 $14.22 06 HCL The prescription for Tramadol HCL filled on 12/06/10 with a quantity of #60 shows in column "C" that the total amount $47.82 was billed to the Plan for the prescription before member co -payment. Thus, the total price of $47.82 represents the amount that would be paid by both the member (in the form of a co -payment) and by the Plan (by paying for the remainder). The "Total Transparent Price' in column "D" is the total prescription price that would have been charged for the same transaction on the date of filling. The "Total Transparent Price" for this same transaction would have been $33.60 (which includes ingredient cost and fee to the pharmacy). The plan member's level of cost - sharing remains the decision of the plan no matter the PBM. Therefore, it is the opinion of Hays Companies that the above information presents the most direct comparison for the plan sponsor. That is, the comparison prices between the incumbent and transparent PBMs represent the total amount the plan and the member must pay together —no matter how the costs are divided between the parties. Thus, the price difference between the "incumbent PBM" and the "transparent PBM Price" in one example, column "E" above, would have produced savings of $14.22 ($47.82 - $33.60) with the transparent PBM business model. ' Results of the claim -to -claim comparison: Positive Table 2 presents the results an analysis of the 15,423 prescriptions in a claim -to -claim comparison. Savings of $65,195 could have accrued to the Plan for December 2010 if the Plan had been using the business model of the transparent PBM rather than the ' incumbent PBM. This represents savings of $4.23 per prescription. The savings ' Confidential & Proprietary for XYZ Company - Prepared by Hays Companies described could be achieved from the pricing structure difference between PBMs and ' the plan could reasonably expect for these savings to take effect immediately upon changing to a PBM model that employed transparent pricing. 1 LJ C� Table 2 Results of Claim -to -Claim Prescription Comparison for XYZ Company for December 2010 n = 15,423 Total savings for December 2010 $65,195 with transparent model pricing Average savings per prescription claim $4.23 Total Annual Saving Projection $782,340 Gross Savings • Other savings opportunities exist. Additional savings with a transparent PBM could reasonably be expected over time due to pragmatic changes in plan design. Additional savings would be over and above the savings due to differences in PBM pricing structures as summarized above in Table 2. These additional savings opportunities are discussed in Section 4 of this report (Underutilized Opportunities for OTC Product Use in the Benefit). Methodology & Results of focused exam of common practices in the PBM industry: ' 1) Zero -balance co -payment The zero -balance co -payment occurs when the pharmacy benefit manager (PBM) allows for the artificial elevation of the cost of inexpensive drugs, brand or generic. In our experience, the PBMs that engage in this practice increase the ingredient cost such that the ingredient cost plus the dispensing fee equals the patient's co -payment. Examples ' of zero -balance co -payment from the Plan's claims file are presented in Table 3 where we see that the drug ingredient cost, shown in red, can be much lower than the ingredient cost billed when the PBM uses the "zero -balance co -payment" scheme. ' This is a confusing concept whereby the members of a health plan are having their prescription claims approved at the "lesser of the pharmacy's usual and customary 1 charge or the plan sponsor's co -pay. The plan hired a PBM because of its allowable ' Confidential & Proprietary for XYZ Company - Prepared by Hays Companies I charges. Yet, under "zero -balance" logic the PBM's allowable is then not considered in the "lesser of logic. This causes the members of a health plan to pay increased prices and may cause an erosion of plan generic utilization, thus leading to higher plan costs. lJ 1 When confronted with this gap in plan design logic, some PBMs have stated in their rebuttals that the plan sponsor approved of the concept in order to gain deeper claims cost savings from pharmacy providers. These assertions add more confusion to this industry. We are aware of the sensitivity of pharmacy owners and managers to this issue and understand their position. This "test" was conducted to determine if zero - balance co -payment was practiced on the Plan members in the prescription claims analyzed here. Table 3: Examples of the Zero -Balance Co -payment from Plan Prescription Claims A B C D E 't O m mM3 IC fG ` 3 (DG 7 d Q 7 C d o A Q vi rn o. Q m 3. (D m n m m f» m D rt .o tD 3 O 3 CL ' O n V c U3 G S S a y W O $7.75 Fluoxetine 30 $2.25 $10.00 $10.00 $0.00 Cap 10mg ($2.40) $7.75 Doxycycline 20 $2.25 $10.00 $10.00 $0.00 Cap 100mg ($2.00) $7.75 Lorazepam 30 $2.25 $10.00 $10.00 $0.00 Tab 1mg ($3.60 ) ' Results of the zero -balance co -pay examination: Positive We found 770 prescriptions (59/o) in which there were zero -balance co -payments to the plan sponsor. Table 3 presents three prescription transactions from Plan data that demonstrate the zero -balance co -payment. Column "E" in Table 3 shows the zero balance as the "Amount due to PBM from the Plan". ' Since the zero -balance co -payment prescriptions are relatively inexpensive generic drugs, the incumbent program was investigated for potentially allowing the increase of the ingredient cost that elevated the claim cost up to the patient's co -payment. The ' Confidential & Proprietary for XYZ Company - Prepared by Hays Companies three examples in Table 3 column "A" show the transparent PBM ingredient cost, in ' parentheses and red highlight, to compare to the incumbent ingredient cost. The difference in ingredient cost charges between the incumbent and transparent PBMs showed a saving of $5,615.00 with the transparent PBM on the 770 claims. This represents a potential overcharge on all the employee co -payments of $0.36 per prescription ($5,615.00/ 15,423 claims). ' 2) Sales tax charged to the plan sponsor ' Certain states, such as Massachusetts and Illinois, have been attempting to tax prescription benefits in order to fund programs unrelated to self -insured programs within ' these states. The claims file indicates the plan is not being billed for sales tax on the claims we examined. However, we respectfully suggest the plan review its plan summary ' documents and adopt provisions to protect plan assets from taxation. It seems appropriate that plan summary updates should protect the plan funds and that applicable tax be charged to the member at the point -of -sale, not billed by the PBM to the Plan. ' It is our opinion that plan assets should only be used to fund programs for its members and should not be taxed to pay for services for unrelated members such as the senior program that State of Massachusetts attempted to fund. ' Results of the examination for sales tax being charged to the plan: The incumbent did not include a data field for sales tax charged to the plan. Therefore, we were unable to investigate the file for sales tax charged to the plan. ' The concept of taxing prescription benefits in other states may lead to unforeseen claims costs should the plan not respond to this phenomenon. ' Recommended Sales Tax Language ' "Eligible plan participants shall be responsible for payment of any sales tax that may be due on pharmacy products and services provided under this plan, which sales tax shall be in addition to any co -payments payable by eligible plan ' participants." ' 3) Metric decimal quantities on drugs that potentially enrich the PBM Some medications on the market come in "fractionally -sized" unit -of -use. This means ' that certain products are not available in a "round" number metric quantity, but rather in quantities such as 2.5 ml. When these fractional quantities are processed by some PBMs, the plan sponsor could potentially be charged the "rounded up' whole number quantity, such 3ml for the 2.5ml size. When 'rounding up" occurs, the plan is charged for ' 0.5ml (3.0 — 2.5) too much drug. We tested for the metric decimal "errors" on three drugs: ' A. Xalatano, common eye drop ' Confidential & Proprietary for XYZ Company - Prepared by Hays Companies f B. Pulmozyme®, breathing medication fC. Copaxone®, an injection for multiple sclerosis fResults of the examination for "metric decimal' overcharges to the Plan: Negative. There were no pricing irregularities found in any claims we examined. Our examination included 18 claims for Xalatan® 1 claim for Pulmozyme® and 10 claims for Copaxonee. f 4) Underutilized Opportunities for OTC Product Use in the Benefit A. Proton Pump Inhibitors (PPIs) f A large number of prescriptions are for ulcer and acid reflux drugs called proton pump inhibitors or PPIs. These PPIs include drugs like Aciphex ° omeprazole, Nexium Prevacid,® Prilosec° and Protonix ° Of these brand names, Prilosec® is the only one that ' has been granted over-the-counter (OTC) status by the FDA. Compared to the rest of the drugs listed, over-the-counter Prilosec® is much less expensive. Omeprazole is the generic name for Prilosec and is sold as a generic prescription drug. i f f f f i f i f f f Meanwhile, Nexium ® the drug that replaced Prilosec® in the prescription drug market, costs about $4.50 per capsule. Other prescription -only drugs in this class are also quite expensive (including the supposedly less expensive generic, omeprazole). Because most prescription plans simply will not pay for OTC drugs, patients who were taking a drug that works for them but is no longer covered (like a Prilosec) will ask their doctor to switch them to something this is covered — especially in view of the many television ads that encourage the consumer to "Ask your doctor about...... These patients would likely be just as happy to stay with the drug that they were already using if their plan continued to cover it. A plan sponsor could save over $100 per month on each patient while offering lower co -payments on these prescriptions as an incentive to employees — a "win -win" situation. Results of check for underutilization of OTC PPI opportunities in the benefit: Positive Opportunities exist for covering OTC products and saving money for the plan. For example, we examined the opportunities for substituting and paying for the over-the- counter version of Prilosec on prescriptions for Aciphex 20mg, Nexium 20mg & 40mg, omeprazole 20mg, Prevacid 15mg & 30mg, Rx Prilosec 20mg & 40mg, and for Protonix & 40mg. We assumed that the physician would want to use 20mg of Prilosec as a substitute for each of these, except Prilosec 40mg which would require 2-20mg Prilosec tablets. We also roughly estimated the cost of Prilosec 20mg prescription to the Plan as follows. Pharmacies would be paid an ingredient cost of 75-cents per tablet plus a $7.50 dispensing fee. We would suggest that plan members have a $0.00 co -pay on Prilosec 20mg (OTC) prescriptions. While this design may seem a bit extreme, it provides strong incentives to both patient and pharmacist to ask the prescriber to change the prescription. Table 4-A presents a summary of these calculated potential savings on PPI prescriptions. NOTE: Prilosec 20mg became available OTC in September 2003. f Confidential & Proprietary for XYZ Company -Prepared by Hays Companies I To orient the reader to both Table 4-A (on the following page) and Table 4-8 on page 12, please examine the first entry in Table 4-A, Aciphex 20mg. The Plan's claims file revealed 51 claims for Aciphex 20mg, with an average prescription quantity of 33.4 ' tablets per claim. Likewise, the average total price for Aciphex 20mg for the average quantity (33.4) was $148.63. The price of Prilosec 20mg for a quantity of 33.4 is $32.55 ( ($0.75/tablet . 33.4 } + $7.50 pharmacy filling fee). tThe savings per claim would be $116.08 ($148.63 - $32.55). Therefore, for Aciphex 20mg, the total savings per claim times the total number of claims would yield a potential monthly savings of $5,920.08 ( Column "F.'). 1 1 I L I t I I IConfidential & Proprietary for XYZ Company - Prepared by Hays Companies 9 IV. RESPONSE TO QUESTIONNAIRE Hays ERIC ROSALES — LEAD CONSULTANT, EMPLOYEE BENEFITS Eric is a Senior Vice President for Hays Companies in Denver, Colorado. He is responsible for the internal operations of the benefits department as well as account management responsibilities. He specializes in providing consulting and financial analysis of the client's employee benefit programs. Eric has over 20 years of employee benefit experience. Prior to joining Hays in 2003, Eric worked for 6 1/2 years as a Benefit Analyst and then Senior Client Consultant for the world's largest insurance consulting firm. In 2002, as a Senior Client Consultant, Eric was responsible for 14 large accounts that generated nearly $1 million in revenue. Eric's responsibilities as a Consultant included establishing employer health plan philosophies and setting plan objectives to meet employer financial guidelines. As a Benefit Analyst, Eric's primary responsibilities were underwriting for self -funded employers, renewal negotiations, financial analysis, request for proposal preparation, marketing, monthly claim reporting, plan modeling, setting accrual rates, and IBNR analysis. Prior to joining the insurance consulting industry, Eric gained 7 years of experience working for a large regional third party claims administrator where he was manager of both the Stop -Loss and Funding departments. He was responsible for management of client funds including distribution of claim and premium payments, excess loss claims filing, and claim reimbursements from Stop - Loss carriers. Eric has completed various Continuing Education courses related specifically to consulting industry, and continues to pursue his education in the ever -evolving arena of employee benefits and employee benefit plan financial analysis. He also holds a Life and Health insurance license. JANA KNOX — CONSULTANTIACCOUNT MANAGER, EMPLOYEE BENEFITS Jana is a Senior Vice President for Hays Companies in Denver, Colorado. She specializes in strategic benefits consulting and financial analysis of the client's employee benefit programs. Jana has over 25 years of employee benefit experience. Prior to joining Hays in 2005, Jana worked for 11 years as a Senior Vice President and Unit Leader for the world's largest insurance consulting firm. In addition to managing a unit of 9 employees, she was responsible for 50 accounts that generated $3 million in revenue. Jana also maintained a personal book of business as a Senior Consultant and was instrumental in providing strategic and financial direction for her clients. She entered the consulting industry in 1994 as a Benefits Analyst where her primary responsibilities were self -funded plan underwriting, financial analysis, renewal negotiations, marketing, contribution strategy, and plan design modeling. Prior to joining the consulting industry, Jana gained 10 years of employee benefits experience working for a national insurance carrier as a client representative. She was responsible for account service, renewals, contracts, and general underwriting for accounts with 250 — 10,000 employees. Jana has completed various Continuing Education courses related specifically to consulting industry, and continues to pursue her education in the ever -evolving arena of employee benefits and employee benefit plan financial analysis. She also holds a Life and Health insurance license. RFP 7279 Benefits Consultant 10 Table 4-A: Savings Possible by Substituting OTC Prilosec 20mg on PPI Rxs 1 Claim dates of 12/01/10 - 12/31/10 (Calculated amounts may vary slightly due to rounding) 1 I 1 PPI Opportunities A B C D E F PPIs Examined RX Count Incumbent Avg Qty per Claim Incumbent Average Total Price per Claim Price of an equivalent quantity of OTC Prilosec 20mg (with Zero Co -pa a Total Avg Trans- parent Savings per Drug Claim C - D Overall Total Trans- parent Potential Savings per Drug A - E) Aciphex 20mg 51 33.4 $148.63 $32.55 $116.08 $5,920.08 Nexium 20mg 2 30 $135.42 $30.00 $105.42 $210.84 Nexium 40mg 89 42.5 $186.08 $39.38 $146.70 $13,056.30 Omeprazole 20mg 107 49.2 $92.41 $44.40 $48.01 $5,137.07 Prevacid 15mg 11 84.5 $357.14 $70.88 $286.26 $3,148.86 Prevacid 30mg 294 41.2 $181.29 $38.40 $142.89 $42,009.66 Prilosec 20mg Rx 1 90 $329.38 $75.00 $254.38 $254.38 Prilosec 40mg Rxe 5 60 $338.60 $97.50 $241.10 $1,205.50 Protonix 40mg 68 36.6 $133.69 $34.95 $98.74 $6,714.32 For the Average Claim: $211.40 $51.45 $159.95 Totals: 628 $77,657.01 a. Prilosec 20mg (OTC) prescriptions priced at $0.75/ tablet + $7.50 filling fee for each prescription. b. Prilosec 20mg (OTC) equivalent dosing-2 Prilosec 20mg = 1 Prilosec 40mg. ' Confidential & Proprietary for XYZ Company - Prepared by Hays Companies 10 ' Application of the Prilosec OTC strategy to the 628 PPI prescriptions presented above in Table 4-A has the potential to yield savings of up to $931,884 annually. This figure is based on total savings potential for 1 months data ($77,657.01) multiplied by 12 to yield the total for 12 months. Although the sample size is adequate, one must view this ' projection as only a rough estimate of the saving potential for PPI switches. Savings could be less or could be more. • The savings that could be generated through this PPI conversion plan design strategy are over and above the Gross Annual Savings of $782,340 (or $4.23 per claim) identified in Table 2. Further, the likelihood of converting 100% of patients on PPI therapy to OTC Prilosec is relatively low. However, patients are given a strong incentive to convert with the suggested zero co -payment. Additionally, a pharmacy filling fee of $7.50 on a relatively ' inexpensive medication provides a strong financial incentive for pharmacists to recommend the switch. Estimate for PPI Conversion: ' It is our opinion that converting one-fourth of the patients to OTC Prilosec 20mg within 18 months of the suggested PPI plan design change is quite reasonable. This ' conservative goal could yield savings to the plan of approximately $232,971 peryear on PPI switches alone ($931,884 yearly saving with 100% conversion ` 25%) ' B. Non -sedating Antihistamines There are currently four non -sedating antihistamines on the market: Allegrae, Claritin®, ' Clarinex®, and Zyrtee. Additionally, Allegrao, Claritin®, and Zyrtee have an antihistamine and decongestant combination, Allegra-Do, Claritin-Do, and Zyrtec-De. Only the Claritin products have been granted over-the-counter (OTC) status by the FDA. The prescription -only non -sedating antihistamine products range in price from $1.08 per tablet to as much as $3.22 per tablet depending on the strength and formulation. On the other hand, Claritin OTC is priced at approximately $0.60 per tablet and Claritin-D OTC at $1.09 per tablet. As with the prescription-on� PPI drugs above, we would recommend coverage of Claritin° OTC and Claritin-D OTC with a valid prescription to provide an opportunity for employees to use a less expensive alternative (and pay less ' out-of-pocket themselves). Table 4-13 below summarizes potential savings that the plan could have achieved for the claims in this analysis. 1 iConfidential & Proprietary for XYZ Company - Prepared by Hays Companies t t I I 11 1 1 1 0 I 0 I 0 e W D U U Table 4-B: Savings Possible by Substituting OTC Claritin Products on Non -sedating Antihistamine Rxs December 1, 2010 - December 31, 2010 (Calculated amounts may vary slightly due to rounding) Non -sedating Antihistamine A B C D E F Opportunities Summary Price of an Non -sedating # Incumbent equivalent quantity of Savings Total Potential Antihistamine Rx's Avg. PBM OTC per Claim Savings to examined (not all in the Qty Average Claritin a' the Plan meds are included) period per Total or (C - D) Claim Price per Claritin-D °' (A" E) Claim Allegra 60mg 2 180 $243.00 $139.00 $104.00 $208.00 Allegra 180mg 1 90 $204.57 $71.50 $133.07 $133.07 Allegra-D 12hr 15 60 $93.67 $76.00 $17.67 $265.05 Allegra-D 24hr 12 30 $96.38 $40.00 $56.38 $676.56 Clarinex 5mg 6 36.2 $106.72 $31.15 $75.57 $453.42 Zyrtec 5mg 2 60 $117.81 $49.00 $68.81 $137.62 Zyrtec 10mg 68 32.7 $66.12 $28.53 $37.59 $2,556.12 Zyrtec-D 16 45 $47.63 $58.00 10.37 $165.92 For the Average $121.99 $61.65 $60.34 Claim Totals 122 4 263.92 a. Claritin (OTC) prescriptions priced at $0.75 per tablet + $4.00 filling fee for each prescription. b. Claritin-D (OTC) prescriptions priced at $1.20 per tablet + $4.00 filling fee for each prescription. I Confidential & Proprietary for XYZ Company - Prepared by Hays Companies 12 Q 0 U R 1 1 1 11 Taken all together, application of the Claritin OTC strategy to the 122 prescriptions presented above in Table 4-13 has the potential to yield a savings of up to $51,167 annually. Although the sample size is adequate, one must view this projection as only a rough estimate of the saving potential for PPI switches. Savings could be less or could be more. Estimate for Claritin OTC Products Conversion: As is the case with our estimate for PPI conversions, it is our opinion that converting one-fourth of the patients to OTC Claritin products within 18 months of the suggested plan design change is quite reasonable. This conservative goal could yield savings to the plan of approximately $12,792 per year on non -sedating antihistamine switches alone ($51,167 yearly saving with 100% conversion ' 25%) 5) Examination of Pricing Disparities Found: Incumbent In -House Mail Service In this section we examine price differences found in a comparison of incumbent in- house mail service to incumbent retail network pricing and to transparent PBM pricing. We performed an examination of the prescription claims and selected all the exact matches for drug, drug strength and drug quantity between the incumbent mail order facility and the incumbent retail pharmacy network. We found disparities between the incumbent's retail pharmacy network prices and the incumbent mail order facility. Further, we found discrepancies between the transparent PBM, incumbent's retail and in-house mail service claims. These prices are presented in Table 5-A. To orient the reader, we suggest examining the first entry in Table 5-A for an illustration of this comparison. We scrolled the data set provided and the first "match" was Alprazolam 1 mg #180. A "match" is defined as the same drug, drug strength and drug quantity filled in both the incumbent's mail order facility and the incumbent's retail pharmacy network. An additional piece of information is the transparent PBM's retail network pricing. The Alprazolam 1mg #180 is shown to have three different total prices depending on how and by whom the claim was administered. (The entries are color - coded for the reader's convenience). So in our example the Alprazolam 1 mg #180 had a total price of $97.11 in mail order, $13.20 in the retail network with the incumbent pricing and $9.30 in the transparent retail network. Considering that providing employees with incentives to choose the mail service option is often promoted by PBMs as a cost - reduction strategy, it may come as a surprise that the incumbent in-house mail service price is the highest of the three prices. The transparent PBM's retail network price is the lowest of the three. 11 Confidential & Proprietary for XYZ Company - Prepared by Hays Companies 13 Table 5-A. Comparison of the Incumbent In -House Mail Service to: a) Prescriptions for the Same Drugs and Quantities Filled by Retail Pharmacies under the Existing Incumbent Contract, and ' b) Current Prices of the Transparent PBM in retail Key: ' • Incumbent In -House Mail Order (no highlight) • Retail Pharmacy under Incumbent Contract (Yellow highlight) • Transparent PBM (BluetY igl'light) 1 11 Table 5-A A comparison of total prescription price of the Incumbent PBM Mail Order, r__....-L._..L . 4-a ennfracf and Transparent PBM Drug and Strength Drug Incumbent Incumbent Transparent PBM Qty Mail order Retail Pricing fo r the pharmacy retail pharmacy contract network AI razolam 1mg 180 $97.11 $13.20 Amitript line 10mg 90 $11.99 $10.00 $1750 Amitri t line 25mg 90 $15.24 $7.01 $7pY50 Atenolol 25mg 90 $36.79 $10.00 $8®49 Biso rodolol/HCTZ 10/6.25 90 $51.30 $84.44 $a 2g00 Citalo ram 20mg 90 $114.68 $17.81 $17.40 Doxazosin 4mg 90 $44.98 $10.62 2111K110 Fluoxetine 20mg 90 $119.39 $20.43 $11.10 Gabapentin 300m 90 $59.90 $34.12 $30�90 Lisino ril 10mg 90 $43.85 $25.47 $9k2g000 Lovastatin 40mg 90 $192.07 $98.90 $+71050 Metformin 500m 90 $31.50 $14.77 $1 3r80 Metoprolol 50mg 90 $24.49 $8.08 Ome razole 20mg 90 $186.82 $221.97 $6i1 50 Paroxetine 20mg 90 $118.92 $84.40 $55 20 Pravastatin 40m 90 $215.75 $242.66 $;7g5°90 Sertraline 100m 90 $122.05 $124.44 $255Q Simvastin 20mg 90 $221.42 $376.99 $3450 Trazodone 100m 90 $25.96 $30.57 $1200 TOTALS $1,734.21 $1,435.88 $4a Results of examination for Incumbent Mail Service overcharges to the Plan: Positive. Our examination revealed that in many cases the costs for drugs were higher with the incumbent mail service option than with either of the retail alternatives. This trend was found predominantly among the generic drug claims. We have not exhaustively quantified the potential savings here because these savings have already been taken into account in Table 2 within this report. We do not wish to misrepresent total potential savings opportunities by "double counting" savings across categories. 1 Confidential & Proprietary for XYZ Company - Prepared by Hays Companies 14 Conclusion: 1 Our review of the Plan's claims data for the time frame December 1, 2010 — December 31, 2010 involved tests for claims processing integrity and comparisons of the claims file to an available transparent PBM model. Based on this review, it is the opinion of Hays Companies that the Plan and its members could save substantial money with the transparent PBM model. ' While the data likely is representative, any generalizations to subsequent yearly projections would have to be considered with caution. ' The opinions are limited to the data file reviewed. Our analysis assumes that the incumbent program continues to process claims in the same manner. We believe the essence of a transparent model is to allow plan administrators, employees and pharmacy providers to become part of the solution to escalating prescription costs. This is accomplished by letting all parties see the flow of plan dollars and the resultant impact on members' co -payments and Plan expenditures. If the Plan's claims had been processed utilizing the transparent model, we conservatively estimate there would have been a gross savings of over $700,000 per year. This estimate is based on the differences between the incumbent PBM pricing and a transparent PBM pricing structure. 1 This estimate does not take into account any further savings that would result from plan design changes (e.g., the possible savings in excess of $225,000 per year from PPI ($232,OOOsavings/yr. estimated ) and non -sedating antihistamine ($12,000 savings/yr. estimated) conversions). The gross savings assumes NO CHANGE in pharmacist -related issues such as the appropriate filling fee, co -pay assignment and day supply rules and makes no assumptions for other plan design changes. Confidential & Proprietary for XYZ Company - Prepared by Hays Companies 15 a Y■ ;ma y��is..�� m �■ey .�� 'm 4 y - do T Employee Benefits Summary Falcctive October 1, 2010 ' INTRODUCTION ABC Company recognizes the importance of providing a comprehensive benefits program to our regular full-time benefit eligible employees. In order to be eligible employees must ' work 36 hours per week. These benefits help provide employees and their family members opportunities to maintain their health and welfare. In this"Benefits Summary" employees ' will be able to review: ' A description of the ABCs Employee Benefit Program Important phone numbers and websites to help employees manage their benefits I 1 1 For complete details of each benefit plan refer to the full text of the official Summary Plan Descriptions available through ABC's Human Resources Department. Please review this to understand your benefit enrollment options, and please retain this Benefits Summary for reference throughout the year. if you need further assistance, contact the Human Resources Department: Phone: 970.470.0001 - Jane Doe 970A70.0002 - Mary Smith Fax: 970,470.0003 Email: hradmin@abc.com Written inquiries: ABC Road, Denver, Co 80202 Office hours, Monday through Friday: 8:00 a.m. to 5:00 p.m. / Saturday: 9:00 a.m to 6:00 p.rr A Company MEDICAL BENEFIT SUMMARY N C KINA $500 $1,000 $2,000 $4,000 $1,000 $2,000 $4,000 $8,000 $2,500 $10,000 $4,500 $4,500 $5,000 $20,000 $9,000 $9,000 10% 40% 0% 50% Unlimited $20/$30 copay 40% after deductible 0% after deductible 50% after deductible 10% after deductible 0% after deductible 50%afterdeductible $30 copay 40% after deductible Not Covered Not Covered $200 copay, then UCR charges 0% after deductible and UCR charges 10%after deductible 0% after deductible and UCR charges 10% after deductible; 40% after deductible; 0% after deductible; 50% after deductible; 20 visit max 20 visit max 20 visit max 20 visit max 10% after deductible 40% after deductible 0% after deductible 50% after deductible 0%; no copay or 40% after deductible 0%; no copay or 50% after deductible deductible deductible 10% after deductible; 40% after deductible; 0% after deductible; 50% after deductible; 40 visit max 40 visit max 40 visit max 40 visit max 10% after deductible; 40% after deductible; 0% after deductible; 50% after deductible; 40 visit max 40 visit max 40 visit max 40 visit max 10% after deductible 10% after deductible 40% after deductible 40% after deductible 10%no deductible 10%no deductible 10% after deductible 10% after deductible 40% after deductible 40% after deductible Copay: Appropriate co- $10 Generic pay level +50% $30 Tier 2 Brand of full cost of the $60Tier 3 Non -Brand prescription Appropriate co- 2x Retail Copay pay level +50% for a 90 day supply of full cost of the prescription 0% after deductible 0% after deductible Coinsurance % Coinsurance % after deductible after deductible This is a summary of benefits, please see Human Resources for detailed plan description. Employee pays %of service after deductible is met, unless otherwise noted. A C Company DENTAL BIENERT SUMMARY CRINA ABC offers employees access to affordable dental care. You may go to any licensed provider for your dental needs. Your dental insurance is self -funded and is administered by Cigna. This is an indemnity dental plan, so you have the freedom to see any dentist. There is no PPO network or provider restrictions. Benefits will be paid based on Usual Customary and Reasonable (UCR) for the zip code where services are rendered. Listed below are the coverage amounts and limits for your CIGNA Dental Plan: Calendar Year Deductible $50 (2x family) Preventive Care 100% Basic Care 80% Major Care 50% Orthodontics (minor dependent only) I 50%to $1,000 - Lifetime Maximum Calendar Year Maximum $1,500 A C Company 1 IV. RESPONSE TO QUESTIONNAIRE CODY PURDY— TECHNICAL CONSULTANT, EMPLOYEE BENEFITS Hays Cody is a Benefits Analyst for the Hays Companies in Denver, Colorado. Cody specializes in benefit and financial analysis. He is responsible for claims reporting and plan budgeting, as well as assisting in contribution strategy, marketing, renewal negotiations, and vendor relations. Prior to joining the insurance industry for Hays in 2008, Cody facilitated the opening, and was General Manager, of a restaurant in Columbia Missouri. During his time with the restaurant, he gained technical knowledge of management techniques and small business operations. His experience has given him a personal perspective on insurance products from an employer's point of view. His responsibilities included daily, quarterly, and annual bookkeeping and budgeting; personnel management; cost and sales analysis; and strategic planning and implementation. Prior to his restaurant experience, Cody worked as a Political and Legislative Director for a State Senator in Missouri. During that time he was responsible for the grassroots activities in an election that covered 16 counties. As the Legislative Director, he was responsible for helping to create legislative priorities and worked to ensure that these were met. This required the constant gathering and analysis of information from numerous sources. Cody served as a liaison between the Senator and those with direct interests in legislation -related issues. Cody received his Bachelor of Arts in Political Science from the University of Missouri Columbia. He also holds a Life and Health insurance license. WHITNEY BULTERMAN — BENEFITS ANALYST, EMPLOYEE BENEFITS Whitney is a Benefits Analyst for the Hays Companies in Denver, Colorado. Whitney specializes in benefit and financial analysis. She is responsible for claims reporting and plan budgeting, as well as assisting in contribution strategy, marketing, renewal negotiations, and vendor relations. Prior to joining Hays in 2010, Whitney worked as an Employee Benefits intern for Willis of Colorado. At Willis, Whitney gained experience by assisting in marketing and renewal analysis, creating employee communication packages for open enrollment, and assembling contract binders for clients. Whitney received her Bachelor of Science in Psychology from the University of Georgia. She also holds a Life, Accident and Health insurance license. JOE LONG — PRACTICE LEADER, EMPLOYEE BENEFITS Joe is a Senior Vice President for Hays Companies in Denver, Colorado. He is responsible for the sales, development, and internal operations of the benefits department. He specializes in providing consulting and financial analysis of the client's employee benefit programs. Joe has over 20 years of employee benefit experience. Prior to joining Hays in 2003, Joe led the Employee Benefits Department as a Senior Vice President and Unit Leader for the world's largest insurance consulting firm. In addition to managing a unit of 8 employees, he was responsible for 45 accounts that generated $2.5 million in revenue. From 1998, Joe worked as a Consultant establishing employer health plan philosophies and setting plan objectives to meet employer financial guidelines. In the three years prior to that position, he was a Benefit Analyst, whose primary responsibilities were underwriting for self- RFP 7279 Benefits Consultant 11 1 � C [ I N A MuTWI LOJOMill LIFE AND AD&D INSURANCE SUMMARY ' Life insurance and accidental death and dismemberment (AD&D) insurance help financially protect you and your family in the case of death or serious injury. imp deductions. ABC provides all employees with a Basic Life Insurance policy of $20,000. Accidental death and dismemberment (AD&D) of $20,000 is also provided. This coverage is available through CIGNA and is paid for by ABC. Employees who wish to supplement their group life insurance benefit may purchase additional coverage through Mutual of Omaha Life Insurance Company. When you enroll yourself and or your dependents in this benefit, you pay the full cost through payroll ' During your initial enrollment period, Mutual of Omaha will issue up to $100,000 in employee coverage with NO medical information required and up to $50,000 for your spouse and up to $10,000 for child(ren). If you elect amounts above the guarantee issue ' limits or if you decide to add or increase your coverage mid -year, you will need to complete a Health Statement. Voluntary life insurance coverage guidelines are as follows: ' VOLUNTARY LIFE INSURANCE SUMMARY I I Minimum 1 $1 $5,000 $2,000 S times annual salary, 50%of employee's benefit, 50%of employee's benefit, Maximum up to $500,00( 1 up to $100,000 1 up to $10,000 Guarantee Issue 5 times annual salary, 50% of employee's Amount I up to $100,000 1 benefit, up to $50,000 A (" Company 50% of employee's benefit, up to $10,000 1 DISABILITY INSURANCE SUMMARY MuruaufOmaNa ' How do you see yourself five years from now? Or maybe ten? Chances are, you don't see yourself disabled. But a surprising number of people do find themselves hurt or sick and unable to work even if only for a short time. I 1 1 1 II ABC offers Voluntary Short -Term Disability (STD) and (LTD) Long Term - Disability coverage through Mutual of Omaha. All Class 1 Executives and Managers are eligible. Class 2 & Class 3 hourly employees must meet minimum requirements to be eligible for disability benefits (Classes 2 & 3 are only eligible for short-term disability). If you become disabled and cannot work, STD or LTD disability benefits will pay the following: Ac Company VSP VISION BENEFIT SUMMARY Vision Service Plan (VSP) allows you to choose an ophthalmologist or optometrist from VSP's national network, or you may use any licensed provider of your choice. Regardless of who you choose, the vision plan will cover a portion of the benefits. • One eye exam and one pair of either eyeglasses OR contact lenses every 12 months • Frames every 24 months Listed below are additional benefits covered under your voluntary VSP vision plan: Examinations Once every 12 months Lenses Once every 12 months Frames Once every 24 months Examination $20 co -pay Up to $35 $130 allowance for the frame of your choice U to $45 Frames 20% off the amount over your allowance p Contact Lenses $130 allowance for contacts and the contact Up to $105 lens exam A C Company I I I 1 Colonial Life Making benefits count. VOLUNTARY BENEFITS(EmployeePaid) Choosing the right benefits at the right time of your life can be critical. That's why Colonial Life is committed to making benefits count by helping people better understand their options. Our menu of personal insurance products offers choices for individual to better protect themselves and their family members from life's unexpected turns. Disability Insurance- Replaces a portion of your income to help make ends meet if you become disabled from a covered accident or covered sickness. 23.2 million disabling injuries were reported in 2004. Accident Insurance- Helps offset the unexpected medical expenses, such as 1 emergency room fees, deductibles and copayments, that can result from a fracture, dislocation or other covered accidental injury. There were about 27 million visits to hospital emergency departments for injuries in 2003. Cancer Insurance- Helps offset the out-of-pocket medical and indirect, non -medical expenses related to cancer that most medical plans don't cover. This coverage also ' provides a benefit for specified cancer -screening tests. In the U.S., men have a one -in - two lifetime risk of develping cancer, and forwomen the risk is one in three. ' C itical !'ness Insurance- Complements your major medical coverage by providing a lump -sum benefit that you can use to pay the direct and indirect costs related to a covered critical illness, which can often be expensive and lengthy. On average, every 45 ' seconds, someone in the U.S., has a stroke. Hospital Confinement Insurance- Provides a lump -sum benefit for a covered ' hospital confinement and a covered outpatient surgery to help offset the gaps caused by copayments and deductibles that are not covered by most major medical plans. Hospital spending, nearly one-third of total national health expenditures, increased 8.6 ' percent in 2004. ' Please see the Human Resources department for further information or if you are interested in enrolling in COLONIAL LIFE voluntary benefits. 1 I Company I 1 11 [1 1 1 1 ADDITIONAL EMPLOYEE BENEFITS SUMMARY EMPLOYEE ASSISTANCE PROGRAM HEALTH CLUB MEMBERSHIP • 3 free confidential visits per calendar year at Aurora Club and Spa, $100/mo single, Coalition of 3Therapists $145/mofamily, payroll deductions • Denver Racquet Club, $65/month HOTEL DISCOUNTS Restaurants 25% Retail Shops 25% Hotel Rooms 50% Golf Pro Shop 20% Tee Times 50% Spa 25-50% (Circle of Excellence discount is 35%for some items) PAID TIME OFF Please refer to the employee handbook for accrual schedule SICK PAY* 1.667 hours per pay period • Approximately 5 days/year SKI/SNOWBOARD MERCHANT PASS • Financed through payroll deductions 401 k PROFIT SHARING PLAN Eligibility: 1 year of service & 1000 hrs. Quarterly open enrollment • Contribute pre-tax dollars (no max.) • Over 30 investment choices PARKING winter season only • On property parking while on duty • First come/first serve basis • Must live outside of Denver BUS PASSES • Discounted monthly bus passes Payroll deductions EMPLOYEE HOUSING • Contact Jane at 970-470-0001 or Mary at 970-470-0002 for info. EMPLOYEE MEALS • One free shift meal at the Cantina Denver HOLIDAY PAY** 11/2 times regular rate • New Year's Day, Memorial Day, 4th of July, Labor Day, Thanksgiving, & Christmas UNIFORMS PROVIDED * Full time employees only (36 hours/week) ** Hourly employees only Eight Month Bridge: If an employee terminates from the ABC but is rehired within 8 months, previous service applies towards all accruals and benefits except for 401 k. A C Company I 1] 1 I 1 I I 1 I I I 1 Notes ' A (' Company I 1 1 1 I 1 Important Notices Federal regulations require ABC to provide benefits -eligible employees with the following notices: Private Health Information A portion of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) addresses the protection of confidential health information. It applies to all health benefit plans. In short, the idea is to make sure that confidential health information that identifies (or could be used to identify) you is kept completely confidential. This individually identifiable health information is known as "protected health information" (PHI), and it will not be used or disclosed without your written authorization, except as described in the Plans HIPAA Privacy Notice or as otherwise permitted by federal and state health information privacy laws, A copy of the Plan's Notice of Privacy Practices that describes the Plan's policies, practices and your rights with respect to your PHI under HIPM is available from your medical plan provider. For more information regarding this Notice, please contact Human Resources or the medical plan directly. Women's Health and Cancer Rights Act ABC's medical plans, as required by the Women's Health and Cancer Rights Act of 1998, provide benefits for mastectomy -related services. These services include: • All stages of reconstruction of the breast on which the mastectomy was performed • Surgery and reconstruction of the other breast to produce asymmetrical appearance • Prostheses and treatment of physical complications resulting from mastectomy (including • lymphedema) This coverage will be provided in consultation with the attending physician and the patient, and will be subject to the same annual deductibles and coinsurance provisions that apply to the mastectomy. For more information, contact your medical plan provider. Special Enrollment Rights If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance coverage, you may be able to enroll yourself and your dependents in a ABC health plan if you or your dependents lose eligibility for that other coverage (or if the employee stops contributing towards your or your dependents' other coverage.) However, you must request enrollment within 30 days after your or your dependent's other coverage ends (or after the employer stops contributing toward the other coverage.) In addition, if you have a new dependent as a result of marriage, birth, adoption, or placement for adoption, you may be able to enroll yourself and your dependents, provided that your request enrollment within 30 days after the marriage, birth, adoptions, or placement for adoption. For more information, contact Human Resources. Notice of Prescription Drug Creditable Coverage ABC provides a "Notice of Prescription Drug Creditable Coverage"to all Medicare -eligible participants on an annual basis. This notice states that under the ABC medical plan, you have prescription drug coverage that is, on average, as generous as the standard Medicare prescription Drug Coverage. If you or an enrolled dependent becomes eligible for Medicare, you will receive this notice for your records. A copy is available upon request from Human Resources. A C Company Important Notices Continued.... ' Dependent Coverage to Age 26 Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are ' eligible to enroll in The ABC health plan, if no other employer sponsored plan is available. Individuals may request enrollment for such children for 30 days from the date of the notice. Enrollment will be effective ret- roactively to October 1, 2010. ' Grandfathered Plan Status The ABC group health plan believes this plan is a "grandfathered health plan' under the Patient Protection ' and Affordable Care Act (the Affordable Care Act). As permitted by the Affordable Care Act, a grandfathered health plan can preserve certain basic health coverage that is already in effect when that law was enacted. Being a grandfathered health plan means that the ABC group health plan may not include certain consumer protections of the Affordable Care Act that apply to other plans, for example, the requirement for the pro- vision of preventive health services without any cost sharing. However, grandfathered health plans must comply with certain other consumer protections in the Affordable Care Act, for example, the elimination of lifetime limits on benefits. You can contact the Employee Benefits Security Administration, U.S. Department of Labor at 1-866-444-3272 or www.dol.gov/ebsa/healthform. This website has a table summarizing which protections do and do not apply to a grandfathered health plans. Lifetime Limits t The lifetime limit on the dollar value of benefits under the ABC health plan no longer applies. Individuals whose coverage ended by reason of reaching a lifetime limit under the plan are eligible to enroll in the plan. Individuals have 30 days from the date of this notice to request enrollment. J I ' A (" Company i Important Notices Continued.... Medicaid and the Children's Health Insurance Program (CHIP) (Offer free or low-cost health coverage to children and families) ' If you are eligible for health coverage from your employer, but are unable to afford the premiums, some states have premium assistance programs that can help pay for coverage. These states use funds from their Medicaid or CHIP programs to help people who are eligible for employer -sponsored health coverage, ' but need assistance in paying their health premiums. If you or your dependents are already enrolled in Medicaid or CHIP and you live in a state listed below, you ' can contact your state Medicaid or CHIP office to find out if premium assistance is available. If you or your dependents are NOT currently enrolled in Medicaid or CHIP, and you think you or any of your dependents might be eligible for either of these programs, you can contact your State Medicaid or CHIP office or dial 1-877-KIDS NOW or www.insurekidsnow.gov to find out how to apply. If you qualify, you can ask the state if it has a program that might help you pay the premiums for an employer -sponsored plan. ' Once it is determined that you or your dependents are eligible for premium assistance under Medicaid or CHIP, your employer's health plan is required to permit you and your dependents to enroll in the plan - as long as you and your dependents are eligible, but not already enrolled in the employer's plan. This is called a "special enrollment" opportunity, and you must request coverage within 60 days of being deter- mined eligible for premium assistance. ' If you live in one of the following states, you may be eligible for assistance paying your employer health plan premiums. The following list of states as of September 1, 2010. You should contact your State for further information on eligibility. 1 iJ 1 CALIFORNIA - Medicaid COLORADO - Medicaid CHIP Website: http://www.dhcs.ca.gov/services/ Medicaid Website: http://www.colorado.gov/ Pages/TPLRD—CAU_cont.aspx Medicaid Phone: 1-800-866-3513 Phone: 1-866-298-8443 CHIP Website: http:// www.CHPplus.org CHIP Phone:303-866-3243 GEORGIA - Medicaid NEW YORK - Medicaid Website: http://dch.georgia.gov/ Website: http://www.nyhealth.gov/health_ Click on Programs, then Medicaid care/medicaid/ Phone:1-800-869-1150 Phone:1-800-541-2831 PENNSYLVANIA - Medicaid TEXAS- Medicaid CHIP Website: http://www.dpw.state.pa.us/part- Website: https://www.gethipptexas.com/ nersproviders/medicalassistance/doingbusi- Phone:1-800-440-0493 ness/003670053.htm Phone:1-800-644-7730 SOUTH CAROLINA- Medicaid WEST VIRGINIA- Medicaid Website: http://www.scdhhs.gov Website: http://www.wvrecovery.com/hipp. Phone:1-888-549-0820 htm Phone: 304-342-1604 A C Company I L I I I I I I I A Company IV. RESPONSE TO QUESTIONNAIRE Hays funded employers, renewal negotiations, financial analysis, request for proposal preparation, marketing, monthly claim reporting, plan modeling, setting accrual rates, and IBNR analysis. Prior to joining the insurance consulting industry, Joe had five years of experience working for a national insurance carrier as an underwriter. He was responsible for reviewing, analyzing, and underwriting self -funded accounts with 100 to 10,000 employees. Joe graduated from Regis University with a major in Finance and minor in Economics. He also holds a Life and Health insurance license. ERIK TEMPLIN — SENIOR CONSULTANT & PRODUCER, EMPLOYEE BENEFITS Erik is a Senior Consultant and Sales Producer for Hays Companies in Denver, Colorado. He is responsible for marketing Hays' Consulting Services as well providing account management for his clients. He specializes in providing strategic benefits consulting and financial analysis of employee benefit programs. He Erik has over 12 years of healthcare industry experience and eight years of employee benefit experience. During this time, Erik has consulted for over 20 public sector clients and currently serves as a Lead Consultant for several municipalities out of the Denver office. Prior to joining Hays, Erik was a Senior Vice President, Sales for one of the nation's largest third - party administrators. He was responsible for marketing partially self -funded health plans and administration direct to brokers and client groups. Erik also managed 35 accounts that generated over $1.2 million in annual revenue and was instrumental in providing strategic and financial direction for his clients. Additionally, during his tenure, he worked as a Benefits Consultant establishing employer health plan philosophies and setting plan objectives to meet employer financial guidelines. Some of Erik's additional responsibilities were self -funded plan underwriting, financial analysis, renewal negotiations, marketing, contribution strategy, and plan design modeling. Prior to joining the insurance consulting industry, Erik spent five years working in the healthcare industry. He spent three years working for a provider of healthcare information services and two years in the pharmaceutical industry as a Diabetes Specialist. Erik graduated from Brigham Young University (BYU) with a major in Business Marketing and minor in Communications. He also holds a Life and Health insurance license. 4) If the principal consultant were to leave your firm, how would service be provided? How soon would a new principal consultant be assigned to the City's account? Hays Companies provides each client with a dedicated service team that includes a Lead Consultant, Consultant/Account Manager, Technical Consultant, and Benefits Analyst. Back-ups at each of these positions are formally assigned and available in the event of absence or departure from the organization. In the event Eric Rosales as the Lead Consultant were to leave Hays, the City would be assigned a new Lead Consultant immediately and there would be no lapse in service provided. This new Lead Consultant would be Jana Knox. Jana Knox serves as the Lead Consultant several of her current clients. She has vast experience working with self -funded municipalities and brings the strategic leadership to carry out all responsibilities and ensure the proper service is being provided. Jana will also be well -versed in the City's benefit plan already being a member of the team. A new Consultant/Account Manager from Hays would be assigned and be introduced to the RFP 7279 Benefits Consultant 12 I 11 1 1 Company Your medical benefits include coverage for preventive care services from network physicians and other health care professionals, to help you stay healthy and detect problems early. Disease prevention and early detection are important to living a healthy life. The better your health, the less your health care costs. Preventive services include wellness examinations and diagnostic tests such as cancer screening. Please discuss with your physician the importance of preventive care and the types of services you should consider. What services are considered Preventive Services? The recommendations in the Guide to Clinical Preventive Services, by the U.S. Preventive Services Task Force (USPSTF) www.preventiveservices.ahrq.gov is an excellent guide in determining what services are considered to be preventive care. However, coverage for preventive care is not limited to the services found on the USPSTF list. Ultimately, we look to the physician to determine the appropriate combination of test and screenings during a Preventive care visit. Common services that fall under your Preventive Care Benefit include, but are not limited to: • Routine physical examinations -Well Adult Care • Comprehensive lab panels/testing • Well baby and well child care • Immunizations • Vision and Hearing screenings • Chest X-Rays • Blood Pressure Testing • Screening mammography • Screening colonoscopy or sigmoidoscopy • Cervical cancer screening (PAP Smears) • Prostate cancer screening • Bone mineral density tests • Osteoporosis screening • Chlamydia screening • Cholesterol screening • Colorectal Cancer Screening - blood and fecal -occult testing (also see • screening colonoscopy above) • Diabetes screening • Lead screening • Newborn screening (for metabolic disorders) • TSH screening (thyroid stimulating hormone screening How can I make sure that my Preventive services are paid for at 100%? CIGNA can only identify Preventive care services based on the coding your physician notes on his/her claim. To ensure proper coding, please discuss the following with your physician. When making your appointment, tell the physician office you want to schedule your annual, routine Preventive care visit. ' At the end of your office visit, confirm with your physician/office assistant that the claim submission to CIGNA will have a Preventive diagnosis code. Refer to your Benefit Summaries at www.mycigna.com or call CIGNA Customer Services @ 1-866-494-2111 for more information about Preventive Care Benefits and how these services are covered. I 1 1 1 1 C Cl 1 I I 1 1 t AllC# Company Only a $20 copay... Routine care and physicals. We make sure our children are taken care of, we may even press our spouse to go every year, but are taking care of ourselves? This information piece is designed to bring awareness to the comprehensive preventive care and wellness benefits that the ABC Medical Plan offers. Based on the statistics below, we are concerned that our employees may not be utilizing these benefits to their full potential , and eventually, for your full health potential. Here are the facts: There are 125 female participants over the age of 40 on our plan. Of the 125 females over 40, only Bhad an annual mammogram in 2009. There are 144 male participants over the age of 40 on our plan. Of the 114 males, only Ghave had an annual prostate exam in 2009. There are 447 males and females on our plan over the age of 20. Of the 447 males and females, only 21 % have had Lipid tests to determine cholesterol levels in 2009. What we don't know can hurt us The ABC Medical Plan pays hundreds of thousands of dollars each year for medical expenses that could have been avoided with prevention and early detection. Prevention and early detection is key to your long-term health. At ABC we believe in preventive and routine care and this is why we continue to encourage your wellness participation through plan design. The ABC Medical Plan covers most preventive testing, routine physicals, prostate screenings, mammograms, pap smears and immunizations at 100% after your $20 copay. The following are general guidelines published by the AMA of just some of the adult preventive testing you should consider, and the appropriate age to have them: Lipid Screening Every 5 years beginning at age 20 Cervical Cancer Screening Mammogram Prostate Screening Colorectal Cancer Screening Annually beginning at age 18 Annually beginning at age 40 Annually beginning at age 40 Every 5-10 years beginning at age 50 Immunizations — they're notjust for kids anymore! The ABC Medical Plan also covers adult immunizations as directed by your physician and the AMA. Again, immunizations are paid at 100% after a $20 copay. Being compliant with your routine preventive exams and testing can save so much. Your Health, Your Finances, Your Life! 1 I 1 1 1 1 1 1 1 L 11 1 1 Fj 1 i 1 1 1 1 AlK/ Company Emergency Room vs. Urgent Care vs. Physicians Office Visit This information piece is a simple reminder that you may have alternatives other than thee mergencyroom aIlowing you to save significant dollars out of your own pocket. Did you know that the average cost of an emergency room visit is 817 while the average cost of an urgent care visit is 250? he average cost of a physician's office visit is 114. These are the actual average costs to ABCs Medical Plan in 2010. ' Why is this Important? Emergency care is subject to your deductible and then coinsurance. These are out-of-pocket expenses for you! ' Urgent care and physician office visits are subject only to a small copay of $20 or $40, saving you significant dollars out of your own pocket. Obtaining medical services in the appropriate setting can provide you a more favorable treatment experience, save you money, and keep Medial Plan costs lower, potentially translating to maintaining lower premiums for our employees. Certainly, emergency room services are indeed appropriate for certain illnesses or injuries. When is it appropriate to visit the emergency room? "Emergency care" is appropriate when immediate care is needed in order to save a life or prevent a permanent ' impairment. Emergency care is typically sought for an accidental injury resulting in severe bleeding or pain -OR - the sudden onset of an acute medical condition such as chest pain, difficulty breathing, or sudden loss of limb use or speech ability. ' If your treatment need is not life threatening, but still one that is unforeseen and may cause serious medical problems if not promptly treated, then an "urgent care"visit may be more appropriate. 1 Urgent care centers offer the same treatment as your regular doctor — only during extended hours and on a first - come -first serve basis. Urgent care is most suitable when treatment forthe illness or injury can be postponed; for example, a sprained ankle or an earache. ' 6 ' 1 M M M M M M M = M = = M = M HaVs" E�RI�SA Re oritin and Disclosures ActionCompliance Item Requirement Annual Report (5500 series) DOL required information about plan type, administration, participation, funding, and finances. Submit to DOL by the last day of 7' month after close of plan year (deadline for 2009 calendar year plans — 7/31/10). 2 ''/2-month extension granted if Form 5558 filed by normal due date. If over 100 participants at beginning of plan year, must file annual reports with Department of Labor (DOL) for pension Date Completed: or and welfare benefit plans subject to ERISA. Action Plan: Summary Annual Report (SAR) Provides summary of financial information in annual report If over 100 participants at beginning of plan year, must Provide to participants 2 months after the due date for filing plan's annual report (including extensions). Example: if 500 due July 31, SARs are due by September 30. distribute SARs for ERISA-covered pension and welfare Date Completed: or plans to participants and certain beneficiaries. Action Plan: Summary Plan Description (SPD) Contains summary of benefits provided by one or more plans, including eligibility requirements, funding arrangements, claims procedures, and ERISA rights. Provide to new participant: 90 days after employee becomes a participant. For new plans: distribute 120 days after plan becomes subject to SPD requirements. Must be updated every 5 years plus 210 days after end of plan year SPD was last updated to incorporate SMM (see below) (10 years plus 210 Must distribute SPDs to participants and certain beneficiaries days if, during 5-year period, changes to plan did not affect information in in ERISA-covered plans. SPD). Date Completed: or No filing with DOL, but must provide to DOL upon request. Action Plan: ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. Summary of Material Provides summary of changes to SPD information or Modifications (SMM) plan terms considered important to plan participants. Must distribute SMMs to participants and certain beneficiaries in ERISA-covered plans. No filing with DOL, but must provide to DOL upon request. Medicare Part D Medicare Part D Advises plan participants of the plan's creditable or non - Notice of Creditable or creditable prescription program. Non -Creditable Coverage Must distribute to newly covered plan participants; or when plan's status changes; or once yearly. Medicare Part D Provides information on the plan's creditable status to the Disclosure Notice to Centers for Medicare and Medicaid Studies (CMS). CMS Must be done initially and then if plan status changes and, regardless, within 60 days of the plan renewal date. Must be provided to participants within 210 days after close of plan year during which change is adopted. For a reduction in covered services or benefits under a group health plan, 60 days after modification is adopted (or at regular intervals of not more than 90 days, for instance in an employee newsletter). Date Completed: Action Plan: or Annual Notice to participants is required no later than 11/15 of any year. Date Completed: Action Plan: or Must be disclosed electronically via CMS website within 60 days of the date of inception or renewal date of the plan Date Completed: Action Plan: or ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and Gmeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. HIPAA Privac & Security Compliance HIPAA — Privacy Required Notice to Plan Participants regarding their rights First required for large plans on 4/14/2003 and for small plans on 4/14/2004. Notice under HIPAA Privacy. Ongoing, Notice should be distributed to all new participants upon plan enrollment or as part of the enrollment materials. Must distribute to all plan participants. Needs to be re -issued once in every three year period or sooner if major changes Notice must be provided to new plan participants upon plan occur. enrollment. Must be re -issued if information contained changes Date Completed: or substantially. Action Plan: HIPAA — Reminder of Notice to Plan Participants advising them that they can obtain For plans whose Notice was required on 4/14/2003; this reminder must be done Privacy Notice a copy of the Privacy Notice. by 4/14/2006. Availability Must be done every three years. For plans whose Notice was required on 4/14/2004; the reminder must be done by 4/14/2007, then by 4/14/2010. Date Completed: or Action Plan: ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. A M i M M r i M M M M M i M i M M A M HIPAA — Notice of Required notice if unsecured PHI is used, disclosed or Breach notice must include the following information: Breach otherwise breached by unauthorized individual or entity. I . A brief description of what happened, including the date of the breach and the date of the discovery of the breach, if known; Covered entity must provide a notice of breach of unsecured 2. A description of the types of unsecured protected health information that PHI to each affected individual. were involved in the breach (such as whether full name, social security number, date of birth, home address, account number, diagnosis, disability code, or other types of information were involved); 3. Any steps individuals should take to protect themselves from potential harm resulting from the breach; 4. A brief description of what the covered entity involved is doing to investigate the breach, to mitigate harm to individuals, and to protect against any further breaches; and 5. Contact procedures for individuals to ask questions or learn additional information, which shall include a toll- free telephone number, an e-mail address, Web site, or postal address. Date Completed: or Action Plan: HIPAA— Notice of Notice to media and HHS required if breach affects more than Breach notice must include the following information: Breach affecting more 500 individuals in a state or jurisdiction. I . A brief description of what happened, including the date of the breach and than 500 individuals the date of the discovery of the breach, if known; In addition to notice to affected individuals, covered entity 2. A description of the types of unsecured protected health information that must notify prominent media outlets in the impacted state or were involved in the breach (such as whether full name, social security jurisdiction and HHS. number, date of birth, home address, account number, diagnosis, disability code, or other types of information were involved); 3. Any steps individuals should take to protect themselves from potential harm resulting from the breach; 4. A brief description of what the covered entity involved is doing to investigate the breach, to mitigate harm to individuals, and to protect against any further breaches; and 5. Contact procedures for individuals to ask questions or learn additional information, which shall include a toll- free telephone number, an e-mail address, Web site, or postal address. ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or lax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M M M M M M M M s M M M M M M M M= w Date Completed: or Action Plan: HIPAA hilitiz Compliance' HIPAA -Certification Certifies individual's period of creditable coverage and the Provide certificate at time of COBRA notice (if practicable) or, if individual not of Group Health Plan waiting period (if any) imposed. covered by COBRA, within a reasonable time after coverage ends; Coverage Must distribute certificate to each individual who loses When COBRA coverage ceases - Employee may request copies within 24 coverage under the plan. month of losing coverage. Date Completed: or Action Plan: HIPAA - Group Health Explains HIPAA's special enrollment rules that apply when Provide notice with enrollment materials at or before the time employee is Plan Notice of employee, spouse, or dependents may enroll in plan. eligible to enroll in plan. Enrollment Rights Must distribute notice to each employee eligible for coverage. Date Completed: or Action Plan: HIPAA - General Pre- Explains existence and terms of pre-existing condition Provide notice with enrollment materials before pre-existing condition existing Condition exclusion period in group health plan. limitation may be imposed. Notice Must distribute notice to each participant. Date Completed: or Action Plan: @2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor conceming any legal or tax questions they may have. IV. RESPONSE TO QUESTIONNAIRE Hays City's benefit team as soon as possible. Joe Long and Erik Templin would also have a working knowledge of the City's benefits and be able to provide assistance during the transition. 5) What is the principal consultant's experience with self -funded benefit plans (specifically, medical and dental)? Over 70% of Hays Companies of Denver's clients currently self -fund their medical plans. Our data analysis tools are designed to bring our clients the control they need in managing their self -funded medical and dental plans to 100% efficiency, no longer relying on the insurance company, third - party administrator, or pharmacy benefit manager to manage plan costs. This is the main reason Eric Rosales and Joe Long decided to join Hays and open the Denver office in 2003. Prior to joining Hays, Eric had experience working for the largest brokerage firm in the world, servicing and underwriting large self -funded employer groups. He has extensive experience with partially self -funded clients and providing strategic guidance on long-term solutions. He also had experience working as an underwriter for a local TPA. This experience along with the tools and resources offered by Hays has allowed him to contribute to the success of our Denver office in building a book of business in Colorado of over 70 clients and $4 million in revenues in just eight years. 6) For how many clients does the principal consultant provide services? List the five (5) largest clients in which principal consultant is involved on an ongoing basis and which the firm can provide as a reference. Provide name of client, contact name, address, telephone number and number of employees. Eric Rosales currently services ten clients as the Principal Consultant. His five largest clients are: 1. Center Partners Gordon Jones Chief Financial Officer 4401 Innovative Drive Fort Collins, CO 80525 (970)206-8467 (Self -funded, 3,000 employees) 2. Cheyenne Regional Medical Center Mark Winger Human Resources Manager 214 East 23`d Street Cheyenne, WY 82001 (307) 633-7763 (Self -funded, 1,700 employees) 3. Baxa Corporation Laurel Ditson VP, Organizational Development 9540 S. Maroon Circle, Suite 400 Englewood, CO 80112 (303)617-2111 (Self -funded, 500 employees) 4. City of Westminster Debbie Mitchell Human Resources Manager 4800 West 92nd Avenue Westminster, CO 80031 (303)658-2155 (Self -funded, 1,000 employees) 5. Group Publishing Troy Stromme Vice President Human Resources 1515 Cascade Avenue Loveland, CO 80539 (970) 292-4431 (Fully Insured, 400 employees) RFP 7279 Benefits Consultant li M M r M M= M M HIPAA - Individual Explains length of pre-existing condition exclusion period Provide upon receipt (or non -receipt) of individuals prior Certificate of Pre-existing Condition after applying credit for previous health plan coverage. Creditable Coverage after receiving a certificate of creditable prior coverage Notice and before pre-existing exclusion may be imposed. Must distribute notice to participants who have any pre- existing condition exclusion period remaining after applying credit for prior coverage. Dale Completedi - or: Action Plan: j„ Group.Health Plans Compliance' Women's Hea t7a—n= Explains to participants or beneficiaries rights related to At initial enrollment; and then annually, but usually during enrollment for the Cancer Rights Act of mastectomy benefits provided through the plan. new plan year. 1998 (WHCRA) Must distribute once someone enrolls in the plan; and then Annually Date Completed.. or a.^ Action Plan Mothers & Newborn Requires that hospital stays for normal newborns be no less Distribute in SPD for newly enrolled employees/dependents Act than 48 hours and for caesarean section no less than 96 hours. Must be included in plan document -Datee Compl�e[ed Action Plan r•a;;,- Michelle's Law - Requires almost all group health plans to extend coverage Review plan documents, summary plan descriptions and other plan materials applicable to plan when a dependent child loses eligibility as a student because describing eligibility for group health plan benefits. years beginning on or of a medically necessary leave of absence. after Oct. 9, 2009 (Jan. Make any necessary changes to comply with the new law. 1, 2010, for calendar- Coverage must continue for up to one year, unless the child's year plans). plan eligibility would end earlier for another reason. Enrollment materials or other employee communications should be reviewed as If the plan requires employees to certify a child's student well, including communications requesting certification of student status. status to verify the child's eligibility for coverage, the notice 02010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M r M M M M M M M M M M M M M M M M M about this requirement must also describe the right to extended coverage during medical leave and the timing of any Date Completed: or required physician certifications Action Plan: Mental Health Parity and Addiction equity If a plan offers both mental and medical benefits, the plans must have the same level of financial requirements for both Review current plan designs that provide covered services for mental health treatment and/or addiction treatment. Act of 2008 plans. Update covered services as necessary. It prohibits more restrictive financial requirements (such as co -pays or deductibles). Date Completed: or It prohibits treatment limitations (such as day or visit limits). Action Plan: Coverage for Non- Some states require fully -insured health plans (may include Review current plan definition of dependent. qualified Dependents Imputed Income dental and vision coverage) to cover children up to an age beyond the normal dependent -qualifying age for federal income tax purposes. Determine whether to allow for non -tax -qualified dependents under the plan. Set imputed income amounts. Inform plan participants. Update plan documents. Date Completed: or Action Plan: Children's Health The Act has several areas which will affect employer Review current plan documents. Insurance Program Reauthorization Act of sponsored benefit plans. These areas are: Include new Special Enrollments. Review pre-tax plans. 2009 Premium Assistance Subsidies • Additional Special Enrollment Rights Update status changes. • Employee Notice Requirements • Disclosure to States Date Completed: or • Penalties for Non-compliance Action Plan: ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. = M = = = M= M s M= IM= M= M = = M Uniformed Services Explains reemployment rights and employer -provided Employment and benefits offered to veterans. Reemployment Rights Act (USERRA) of Employers must post a notice of affected employee's rights 1994 (Rev. 12/10/04) and obligations. Note — the length of group health coverage extension under USERAA is 24 months. K11111aw. COBRA - General Provides notice of continuation rights under the plan. Notice Plan must provide written, understandable notice to each covered employee and spouse, if any. COBRA - Employer Employer provides notice to plan administrator of certain Notice qualifying events. Plan must provide who, what, when and why of qualifying event to plan administrator. Post notice where other employee notices are customarily posted in the workplace by March 10, 2005. Review plan documents and SPDs — update length of health care continuation to 24 months. Review plan documents and/or SPDs for USERRA notice information Date Completed: Action Plan: or Within 90 days after the date the individual's coverage commences. Date Completed: Action Plan: No later than 30 days after the date on which a qualified coverage under the plan due to the qualifying event. Date Completed: Action Plan: or or ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M = = M M = r M M = = M = = = = = = M COBRA - Employee Employer provides notice to the plan administrator of certain Minimum of 60 days from the later of the qualifying event or the date the QB Notice qualifying or 2nd qualifying events. loses coverage or the date the QB receives the general COBRA notice or SPD; Plan may establish reasonable procedures for the furnishing of Minimum of 60 days for notice regarding Social Security Determination of notices by covered employees and qualified beneficiaries. disability; Minimum of 30 days for notice that the QB is no longer disabled as defined by the SSA. wa < rt' DaWCotnpleted , 3 fy r ^.I. Y �M Yt. �iC f •J ... A Action Plan: COBRA - Election Provides information to each qualified beneficiary. Plan administrator - No later than 14 days after receipt of notice of the Notice qualifying event; or Must include sufficient information to each qualified beneficiary so they can make decision; some requirements are If the employer is also plan administrator — no later than 44 days after the date specified by law. or loss of coverage, or date on which QB loses coverage or the date on which the qualifying event occurs. Date Completed: or Action Plan - COBRA - Provides information to employees that COBRA is not No later than 14 days after receipt of notice from employee/QB. Unavailability Notice available. Must provide reason why not entitled to continuation in a manner understood by the average plan participant; and Date Completed: or administrator contact information. - - - Action Plan: ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. COBRA - Termination Provides reasons why COBRA continuation will terminate. As soon as reasonably practicable following the determination that the QB is no Notice longer entitled to COBRA. Must notify QBs if COBRA coverage will be terminated earlier than the maximum period applicable to the qualifying event. Date Completed: or - - Action Plan:. COBRA —ARRA- Employer provides notice to plan administrator of involuntary Plan must provide status of these individuals, whether COBRA was elected, waived, Employer Notice* terminations between 9/ 1 /08 and 2/28/2010. continued then stopped. Date Completed: or Action Plan: COBRA —ARRA Plan administrator/contract COBRA administrator provide this Plan administrator must advise these individuals of the extension of the premium Premium Assistance notice to: assistance period from 9 months to 15 months. Extension Notice* 1 Individuals already receiving the ARRA subsidy 2. Individuals that become assistance eligible or experience a qualifying event on or after October 31, 2009 but were provided a Date Completed: or - notice prior to enactment of the law (12/19/09). Action Plan: COBRA — ARRA* For individuals that exhausted the original 9-month subsidy before Must provide a notice of the availability of the extended premium subsidy, including the Transition Period the subsidy period was extended to 15 months. to make retroactive premium payments, to both groups, within the first 60 days of the Premium Assistance individual's transition period. Extension Notice Group 1: Those who dropped COBRA after their original 9-month subsidy period ended. Date Completed: or Group 2: Eligible QBs that paid an unsubsidized premium for December. Action Plan: ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M M M M = = M M M M M M M M= s M M M COBRA—ARRA* The General Election Notice contains the required COBRA election Must provide this notice to all QBs with qualifying event dates occurring after December General Election Notice information and the new ARRA subsidy extension information. 2009 (the date the law was enacted). Date Compfeted: or Action,Plan: COBRA — ARRA* Plan administrator/contract COBRA administrator must send Election Notice must address availability of subsidy and the process for election. The Election Notice for use Election Packet to affected individuals. subsidy is available for a full 15 months following COBRA Qualifying Event occurring by group health plans for by 2/28/10. qualified beneficiaries The General Election Notice contains the required COBRA election information the new ARRA subsidy extension information. Must provide this notice to all QBs with qualifying event dates occurring after December who have not yet received an election and 2009 the date the law was enacted). notice and with qualifying events Date Compl'eted:' occurring during the ' period that begins with Action Plan: September I, 2008 and ends with February 29, - .. 2010. *The COBRA ARRA information is current as of January 1, 2010 and is subject to change if extended or modified by Congress. ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M M M M M M M M M = M M M M = M M=1 ii FMLA Compliancet FMLA —Revised Incorporates requirements from the National Defense Authorization Post a poster in prominent places. The new rules also require an additional poster Regulations Issued Act for 2008 allowing eligible employees to take leave to care for a explaining these new rights available to eligible employees. 1 1 /2008 close relative who has an injury or illness sustained in the line of duty OR to resolve issues when a covered service member is on or called up to active duty— termed a qualifying exigency. For a qualifying exigency, eligible employees may take up to 12 weeks of leave to resolve issues. Date Completed: or For care of a covered service person recovering from an injury or illness, eligible employee may take up to 26 weeks in a single 12- month period — this is combined with all other FMLA leave taken by the eligible employee. Action Plan: Employers must post notice of FMLA rights Four Certifications of For employees own serious health condition — WH380E May requires certification of health care provider— ensure correct certification is used. Health Care provider For a family member's serious health condition — WH380F Certification of Military -related injury or illness — WH-385 Date Completed: or Certification of Exigency— WH-384 Action Plan: ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M M M M r M M M M M M M M M M M = = M Notice of Eligibility W H-382 To be used to notify employees if eligible (or not) for Provide notice of eligibility within 5 day of employer learning of need for leave FMLA leave. Date Completed: or May be combined with Designation Notice Action Plan: Designation Notice W H-381 To be used to designate employee's leave as FM LA — Provide Designation Notice within 5 days of leave determination.. qualifying May be combined with Notice of Eligibility Date Completed: or Action Plan: Americans With Disabilities Act Compliancet ADA Any condition that substantially limits a major life activity will be Review any covered plans and employment policies to Amendments considered a disability, even if the individual can offset or determine whether definitions need to be changed Expand compensate for the disability with mitigating measures. Review current ADA requests Disability January 1, 2009 Prohibits consideration of mitigating measures such as medication, medical supplies, etc., but not eyeglasses and corrective lenses, in the determination of whether an impairment substantially limits a major life activity Date Completed: or Employers are required to make reasonable accommodations to the Action Plan: known disability of a qualified individual with a disability. ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M M M M M M M r M M M M M M M M M M M States Children's Health Insurance Pro ram Conipliance Item Requirement Action Children's Health This Act extends and expands the State Children's Health Amend cafeteria plan to include this change of status event upon 60 days notice. Insurance Program Reauthorization Insurance Program (SCHIP or CHIP). The Act has several areas which will affect employer sponsored benefit plans. Revise special enrollment procedures to accommodate change Act of 2009 April I, 2009 These areas are: Consider adding additional information to group health plan with regard to new special • Premium Assistance Subsidies enrollment rights. • Additional Special Enrollment Rights • Employee Notice Requirements Date Completed: or • Disclosure to States • Penalties for Non-compliance Action Plan: Premium Assistance In states that adopt the premium assistance subsidy program, A notice to employees explaining the changes on the first day of the plan year employers who maintain plans in those states will be required on/after the date model notices are issued by the DOL and the DHHS, scheduled to provide a written notice to employees. to be completed on/before February 4, 2010. This notice will tell employees of the potential opportunities for premium assistance by the state in which they reside. The employer may provide the notice with other plan eligibility materials, with open enrollment materials, or when furnishing the SPD. The Department of Health and Human Services Department (DHHS) has been directed to develop national and state specific model notices. The Act directed that this is to be done by February 4, 2010. However, as of this date, there has been no communication on this or advice published on the websites. Date Completed:. or The Act further requires that employers must comply for plan Action Plan: years beginning after the date the model notices are actually first issued. ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and Unneframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. New Special Enrollment Group health plans must permit employees and dependents who are "eligible but not enrolled for coverage" under an employer plan to enroll if. the employee's or dependent's Medicaid or CHIP coverage is terminated as a result of loss of eligibility; or the employee or dependent becomes eligible for a Medicaid or CHIP subsidy Notice of event required within 60 days of special enrollment Cafeteria Plans 2007 Proposed The new regulations retain much of the previous proposed Cafeteria Plan Rules regulations as well as much of the IRS guidance that has been released over the years. The proposed effective date for the new regulations is for elan years beginning on or after January 1, 2009. This effective date has been delayed. However, existing guidance (such as debit card guidance) should still be relied upon and as with most proposed regulations, in the absence of final regulations, good faith reliance on reasonable interpretation of the proposed regulations is recommended. The proposed rules did not affect the final rules for the PMLA and cafeteria plan elections (Treas. Reg. § 1.125-3) or the final status change rules (Treas. Reg. § 1.125-4). The proposed rules include the following sections: § 1.125-1 general rules on qualified and nonqualified benefits in cafeteria plans § 1.125-2 general rules on elections cafeteria plan to include this change of status event upon 60 days notice. Revise special enrollment procedures to accommodate change Consider adding additional information to group health plan with regard to new special enrollment rights. Date Completed: Action Plan: Review existing or compare to the proposed rules. Consider amending and restating cafeteria plan documents in order to show a good faith effort at compliance with the proposed rules. 02010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This than is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. IV. RESPONSE TO QUESTIONNAIRE 7) Explain what steps you have taken to become HIPAA compliant. Hays Hays Companies takes Privacy Policies very seriously and we are fully compliant with all HIPAA rules and regulations. We enter into a Business Associate Agreement (BAA) with all clients as well as Confidentiality Agreements as needed for data transfer(s) between our clients and their carriers/vendors. Furthermore, we have implemented a Secure Email system to meet HIPAA requirements for submitting electronic documentation. This system ensures that any emails exchanged or sent by Hays employees containing possible PHI or HIPAA information are encrypted with a digital security certificate to safeguard the data of our clients. Also, our HPI reporting tool, as well as all claim reporting, are also fully HIPAA compliant and PHI protected. All client data and reports are kept in secure electronic files. 8) Explain how your firm stays current with change in federal and state laws and how this information will be communicated to the City. Hays Companies employs a full -service compliance and research staff located in our home office in Minneapolis. The City will have access to our Compliance and Research staff through one of your Consultants. Anytime there are benefit related legislative or legal questions, our Consultants rely on our compliance and research staff to provide fact -based answers and then communicate them back to our clients. Updates on changes in federal and state laws, including employee benefit related compliance issues and Health Care Reform are communicated to our clients on a regular basis. These updates are generally provided by email. We also discuss these items and the impact on benefit plans in regularly held meetings with our clients. This is especially important as it relates to Health Care Reform. With the help our Compliance and Legislation team, we will keep the City compliant and be ready to discuss the upcoming impact of 2014 and 2018 Health Care Reform, as well as the changes which must be implemented. All Hays' clients also have 24/7 access to the Hays' Client Community online service which provides up-to-date information on changes in federal and state regulations. As developments and updates occur our clients receive direct emails linking them to the update in Client Community. The Client Community service is outlined below: Client Community This unique resource explains and simplifies complicated information about a host of key benefits and related areas. You will also find other resources such as recent and proposed regulations, an e-magazine of over 180 articles that you can use for employee communications ideas and more. • Recent and Proposed Regulations o Practical summaries of the latest benefit regulations that you should be tracking. Proposed legislation is also included. • HIPAA Privacy Manual o A HIPAA Privacy Manual for employers is provided to you through a partnership between Benergy and HIPAA Rx Solutions. This publication is designed to provide accurate and authoritative information. RFP 7279 Benefits Consultant 14 ® ® ® ® = ® = w A = = = = IM § 1.125-5 general rules on flexible spending arrangements § 1.125-6, general rules on substantiation of expenses for qualified benefits § 1.125-7 nondiscrimination rules Benefit Plan Treas. Reg. § 1.132-9 As part of the American Reinvestment and Recovery Act Qualified (ARRA) the monthly limit for qualified mass transit and transportation fringes vanpooling has been increased to $230. The previous 2009 limit for transit and vanpooling was $120. The monthly parking limit for 2009 remains at $230. This change is effective March I, 2009, and amends Code Section 132(f)(2). The increase in the monthly limit will expire on December 31, 2010 unless it is extended in future legislation. Date Completed: Action Plan: or Review existing transportation plan materials. Revise as necessary. Date Completed: Action Plan: or IRC Sec. 211. Amended IRC 132(t) to allow employers to reimburse employees Review existing transportation plan. Transportation Fringe who commute to work by bicycle for certain bicycle expenses. Benefit to Bicycle Determine if employer will provide bicycle commuting expenses. Commuters. Employee may be reimbursed for reasonable expenses incurred by the employee during the calendar year on a tax-free basis. Inform potential participants. _ Reasonable expenses include the purchase of a bicycle, bicycle improvements, repair, and storage. Date Completed: or The bicycle must be regularly used to travel between the employee's Action Plan: residence and the place of employment. Employer funds only— no employee contributions ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. M M M M M M M M M M M M M M M M M M a Medicare SecondaryPa er (MSP Re ortin — Grotte Health Plans ActionCompliance Item Requirement Medicare Secondary Most employer health plans that coordinate benefits with Determine if an insurance carrier will initiate required reporting or if the entity must Payer Mandatory Medicare are subject to special ordering rules known as the report. Reporting Provisions Medicare secondary payer rules. Identify all active covered individuals. in Section 1 I l of the Medicare, Medicaid, CMS will require Responsible Reporting Entities (includes provide required reporting to CMS as of 10/1/2009. and SCHIP Extension TPAs) to report at least 23 data elements for each active Act of 2007 covered individual. An entity serving as an insurer or third party administrator for a group health plan... and, in the case of a group health plan that is self -insured and self-administered, a plan administrator or fiduciary must report certain information to CMS. The active covered individuals for whom reporting is required will be all individuals covered in a GHP who: Are age 45 through 64 and have coverage based on their own or a family member's current employment status; Are age 65 or older and have coverage based on their own or a spouse's current employment status; Have been receiving kidney dialysis or who have received a kidney transplant, regardless of their own or a family member's current employment status; or Date Completed: Are under age 45, are known to be entitled to Medicare, and Action Plan: have coverage in the plan based on their own or a family member's current employment status. or ©2010 Hays Companies. Generally the topics mentioned in this table are federal requirements. For a complete review of legal and regulatory requirements and timeframes, please consult appropriate state laws. This chart is intended for general informational purposes only and should not be considered legal or tax advice or legal or tax opinion. Readers are encouraged to consult their legal counsel or tax advisor concerning any legal or tax questions they may have. IV. RESPONSE TO QUESTIONNAIRE Hays • Benefit Essentials o A comprehensive, authoritative explanation of relevant laws, trends and developments in human resources, employee benefits and more. Benefits Essentials is a vast database comprised of numerous resources, including forms, checklists, policies, and model documents. The Reference Desk tab contains numerous resources and links to hard -to -find State and Federal Government sites, forms and information. • AnswerSource o Supplemental federal and state information on HR, benefits, compensation and employment issues from BNA - a leading publisher of HR information. HR AnswerSource, winner of Forbes' 'Best of the Web', is a software system delivering up-to-date human resource, employee benefits, compensation, employment and regulatory information directly to the desktop. Information is easy to access using an Internet browser to search for and obtain relevant HR information. The Client Community service can be found on our website and a demo login and password have been provided below: Our website address is www.hayscompanies.com Benefits Client Community Login on Hays Companies website: Username: belewis@hayscompanies.com Password: haysco Additionally, our compliance and research staff provides regular legislative and compliance memos and updates to our clients. Our Consultants then discuss the impact of these changes with our clients. Below are the brief resumes of the Hays Companies Research & Compliance Department which totals over 75 years of benefit experience: • Barbara J. Heinonen, Director of Research & Compliance. Ms. Heinonen has over forty years experience in the benefits field. Many of those years were with third party benefit administrators (TPAs) where she specialized in self -funded health plans and public employer plans. From this experience, she has developed a broad understanding of all aspects of plan management and communication. She has been with Hays since 1998. • Ben C. Graves, Associate Director of Research & Compliance. Mr. Graves recently joined Hays Companies in 2009. He brings with him his experience as the Compliance Director for Administration Resources Corporation, a national administrator of cafeteria plans and COBRA. In this role, he conducted web casts on various topics that were intrinsic to these areas. He has extensive experience as well as a degree in law. His fifteen years of benefits and law background adds another facet to our Department. • Cindy Niesen, Research & Compliance Coordinator. Ms. Niesen brings Hays over twenty years of experience in the insurance industry. She has worked for a national brokerage firm, an insurance company and a third party administrator. She is also a trained paralegal. She specializes in document preparation/review and assisting clients with 5500 filings. She has been with Hays since 2004. Also, our Consultants review all plan documents using a comprehensive Compliance Checklist ensuring that all documents are in compliance with appropriate laws and regulations and contain RFP 7279 Benefits Consultant 15 IV. RESPONSE TO QUESTIONNAIRE Hays the language required. A sample Compliance Checklist can be found in the Appendix section. Lastly, we prepare all governmental filings on behalf of our clients. Our compliance department in Minneapolis prepares all documents required for filing with assistance from our Consultants. Documents are delivered to our client's signature ready on the new IRS e-file system. 9) Do you have an in-house benefits attorney? If yes, please provide his/her credentials and the number of years he/she has provided counsel on benefit issues. If no, do you use an external benefits attorney? Which firm do you use? Hays Companies has an in-house compliance and research department and three general attorneys on staff. We do not have an in-house benefits attorney on staff, but we maintain on retainer two benefits attorneys in Colorado. We have partnered with these firms in particular because both bring unique expertise related to ERISA, Health Care Reform, state and federal regulations. We provide our local ERISA counsel services for ERISA related questions and documentations at no additional charge to our clients. Below are the names and credentials of the two external benefit attorneys we use out of our Denver office: Renee W. O'Rourke GreenbergTraurig Law Credentials LL.M., University of Denver, 1985 J.D., University of Denver Sturm College of Law, 1984 B.S., Business Administration, University of Southern Colorado, 1981 Renee O'Rourke focuses her practice on employee benefits and ERISA, including retirement plans, executive and stock compensation and health, welfare and fringe benefit plans. Her experience in employee benefits includes representation of clients before the Internal Revenue Service (at both the audit and appellate levels) and the Department of Labor and includes designing, drafting and amending profit sharing plans, money purchase pension plans, target benefit plans, defined benefit plans, 401(k) plans, 457(b) and (f) plans, 457 trusts and custodial agreements, 403(b) plans and group trusts. She also has assisted numerous clients in the implementation and financing of leveraged employee stock ownership plans (ESOPs). Renee has experience in redesigning executive and stock compensation plans and employment, severance and change -in -control agreements to comply with 409A. She has designed and implemented stock option plans, restricted stock plans, performance share and unit plans, employee stock purchase plans, deferred compensation arrangements, nonqualified deferred compensation plans, excess benefit plans, rabbi trusts and bonus plans and agreements. Her experience in the health, welfare and fringe benefits area includes designing, drafting and implementing cafeteria plans, medical expense reimbursement plans (medical FSAs), dependent care assistance plans (dependent care FSAs), self -insured medical plans, wellness programs, HSAs, HRAs, retiree medical plans, disability plans, severance pay plans and voluntary employees' beneficiary associations (VEBAs). Renee has negotiated and documented the employee benefit provisions in numerous mergers, acquisitions and dispositions in stock and asset transactions and joint ventures, and has assisted RFP 7279 Benefits Consultant 16 IV. RESPONSE TO QUESTIONNAIRE Hays 1 clients in restructuring benefits following corporate transactions. She has advised clients on many aspects of employee benefit matters including affiliated service group, controlled group and separate line of business issues, prohibited transactions, complex distribution matters and discrimination testing. She has also advised clients on ERISA fiduciary duties, COBRA, plan ' terminations, workforce downsizing, $1 million compensation deduction limitation, golden parachutes, Medicare secondary payer rules, Colorado health insurance rules and benefits provisions in the Family and Medical Leave Act (FMLA), Americans With Disabilities Act (ADA) and Age Discrimination in Employment Act of 1967 (ADEA). In addition, she has served as an expert witness in fiduciary duty litigation and litigation involving an ESOP. Mark W. Major Law Offices of Mark W. Major Credentials Juris Doctor, magna cum laude, Creighton University Law School, Omaha, NE Bachelor of Arts, summa cum laude, Sociology, Creighton University, Omaha, NE Mark has practiced as an employee benefits attorney for over thirty years in private practice as well as being in-house ERISA counsel for corporations in the cable, telecommunications, and oil and gas industries, and as a U.S. compliance team leader for a worldwide human resources consulting firm where he serviced employers of all sizes. Working closely with officers, managers and staff across human resources, labor, finance, trust investment and corporate development departments, as well as dealing with numerous vendors from the consulting side, has given Mark a unique and broad perspective on the legal challenges faced by sponsors of employee benefits programs. Throughout his career, Mark has focused on balancing an attention to detail and technical excellence with the ability to focus on the big picture in order to effectively relate compliance essentials to his clients and colleagues and develop solutions that fit their specific needs. 10) Describe any audit services that you provide for claim audits or dependent eligibility audits. Hays Companies believes it is important to annually audit vendors and providers to assure consistent and accurate delivery of service. There are several types of audits available. Some of these can be performed by Hays internally and others would require us to solicit proposals from vendors for various audits. First, we are unique in our ability to integrate several in-house auditing resources. We will provide the City with a sophisticated claims data analysis and auditing tool called Health Plan Intelligence (HPI). Annually (and at the outset of this relationship), we will collect a complete data file from the City's claims administrators, health insurance providers, and/or pharmacy benefit manager (PBM). While we also obtain paper reports from the vendors, the electronic file process eliminates interpretation issues and allows us to analyze health plan information and specifically claims down to the CPT and ICD-9 level in an efficient and consistent manner. The information becomes "portable" and consistent regardless of the administrator. Our in depth HPI report evaluates your claims experience and provides valuable information to help us make intelligent decisions on how we can control your claim costs when it comes to high dollar claims, network discounts, and plan designs. This report also provides us with demographic data, comparative and normative data, benchmarking data, and lifestyle related RFP 7279 Benefits Consultant 17 IV. RESPONSE TO QUESTIONNAIRE Hays claims data. Our HPI analysis and audit will be described further under question 14 and a sample HPI report can be found in the Appendix. Second, our prescription drug consulting services evaluates the competitiveness of your contract with your Pharmacy Benefit Manager (PBM). Through years of experience we have gained knowledge of the moving pieces within a PBM contract. We partner with vendors who have software that allows us to measure contract pricing from all angles. The prescription drug report pulls raw data on every script filled by a client's employee and their family members. This process usually uncovers hidden costs within the contract that affects both the employer and employee costs. We are able to create transparent contracts with PBM's that eliminate these hidden costs, and ultimately save the employer and employee money. The entire process allows us to negotiate better pricing on behalf of our clients and also helps the employer communicate, educate and control future prescription costs. This report will be run on an annual basis for the City and Hays will absorb the costs for the prescription drug audit. A sample of Prescription Drug Audit can be found in the Appendix. Third, contingency audits are generally designed to look for specific claims overpayments and usually focus on larger claims only. Contingency auditors are generally paid as a percentage of the savings. Procedural audits are generally designed to look at how claims are processed and paid and will generally expose errors in the claim payment and process. The costs for procedural audits vary greatly and are primarily dependent upon the scope of the audit. Hays will commit to at least sharing in the cost of this type of audit, and, in most instances, we have found that we can absorb 100% of the audit cost on behalf of our clients. Lastly, we also work with many dependent eligibility vendors which can perform these types of audits. Dependent eligibility auditors are generally paid a flat fee for their services or can be paid as a percentage of the savings. There are also arrangements in which dependent eligibility audits are provided at no charge if the client agrees to certain voluntary insurance services to be offered to employees. As part of our services, Hays will solicit proposals for a dependent eligibility audit and work with the City to find a cost-effective auditor. 11) Submit a sample of annual and periodic reports you provide similar clients. Please refer to the Appendix for detailed samples of monthly and financial reporting. 12) Describe any customized or ad hoc reporting capabilities including Internet capabilities. Hays Companies works closely with our carrier partners to deliver customized ad hoc reports to our clients. However, we take the effort, cost, and the guess work out of trying to get the proper report from the carrier with our own reporting tool, Health Plan Intelligence (HPI). Our HPI report is described in great detail below in question 14. HPI provides us with the data needed to deliver customized and ad hoc reports. We extract a raw data file directly from your claims administrator which includes every claim down to the CPT and ICD-9 level. As a result, we have the ability to run many degrees of ad hoc reports. These ad hoc reports are an online extension of the HPI report called HPI Analytics and provide unlimited drill down capabilities. As a client, we can provide you with access to this report to run your own reports. Below are a few screenshots of ad hoc reports extracted from our online HPI Analytics tool: RFP 7279 Benefits Consultant 18 Hays September 21, 2011 Hays Companies of Denver 1125 17f6 Street, Suite 1710 City of Fort Collins Denver, co 80202 Purchasing Division 720.279.3400 phone Attn: David Carey 720.279.3401 fax 215 North Mason St., 2"d floor www.hayscompanies.com Fort Collins, CO 80524 Re: Request for Proposal — 7279 Benefit Consultant Dear Mr. Carey: Thank you for giving Hays Companies the opportunity to propose Benefit Consulting Services for the City of Fort Collins. Enclosed you will find five (5) written copies of our response to RFP # 7279 Benefits Consultant. Our business philosophy is to assist clients in the development, implementation, and maintenance of benefit plans that meet both employer and employee needs, and control plan costs. Hays Companies has developed a comprehensive service package that has been outlined in the attached proposal including but not limited to, our Health Plan Intelligence reporting, monthly financial reporting, employee communications and core services. Hays Companies takes pride in the fact we are an innovative and aggressive firm that works hard to provide our clients with quality services at a reasonable cost. We look forward to the opportunity to meet with your Compensation and Benefits team to discuss our capabilities and resources in more detail. Sincerely, Eric Ros I Senior Vice President Hays Companies of Denver Cc: Jana Knox, Senior Vice President, Hays Companies Erik Templin, Senior Consultant, Hays Companies IV. RESPONSE TO QUESTIONNAIRE nHPI-ANALY71CS Powered by Hehi Plan Inlelbgenca Nome Rep 9m BcoNm ad¢ GxpvR Full Bu esn Rehash Undo X91p Filters XYZ Inoorperated January2008thr9ugh Daoelill 2008, tr191Pratl Cqi cos- Medtoal S"Ms MPIy Madosel 9erVlolse Inp4tlent Hospital Admission Outpatient H6spAal Enoeunter Emergency Room Visit - Inpatient Surgery Cute all Surgery Physician OMce UsN Mental Health, Visit ON seem Category Blood Diseases C,roulatory System Diseases Candrdo1N During the Palinatal 1 - Congenital Anomalies Digestive System Diseases Endonin4 Metabolic and Il Report Propartlas Medical Services sell MadoM Sal IDT6LI 01. Inpatient Hospital Ad million 02. Outpatient Hospital Eneountel 03, Emergency Room Visit 04. Inpatle rX Surgery 03. Outpatient Su aery 08, Physician Office Visit 07. Mental Health Visit 08. Chi ropradld E noo untel 09. Physical Therapy 10. WellnesdRoutlna Visit Hays Services %Services Mbrs %Mbrs SVCi2Mbr Billed Charge PIanF 19,002 100MIA 1,318 100.00% 1443 $0,981.231.35 14,500,41, 119 0.02% 91 6,18% 1.46 $2.204.96771 61.635,3N 995 6.26% 381 27,43% 2,78 $1.377.9132.137 $1.111.391 378 1.0014 2511 10.50% 1.40 3328,488.40 $223.1N 107 0154A 40 3.724A 2.1a $263,872L2 1163121 538 2.e2% 283 21 50% 1 so $440.435.81 $245,5a 3202 16.85% 1.005 80.93% 3.00 $302,999.22 $133,2T.. 283 1.49% 51 3, 88% 5.54 $42.00141 S22,50: 611 3.22% 104 7.90% 5.87 $30.57721 $11.79( 443 2.33% 70 5.32% 0.32 $80.384.00 $32.2M 409 2.15% 317 24.09% 129 $81,374.88 M.601 Procedure Detail PrxNe. 0eleF Santo %Sa on %We S-OW filed PWPatel %Prig Ayg Choy Paleh TCMI 113M IW% 755 IW% 14,96 S2192,564W $1.14151732 ,DO% $193.42 $1505.96 90213-0FFICE OUTFT EST15 Met 12M 10.64% 507 669P% 238 $15677&71 79327969 8,17% $130.004 31" U214ORKE of EST 25 MN 4W 403% 250 3^.9816 In se6139 3r0660.91 446% SIBB.494 S2W.52 SWg60B CARE ANTEDARTLU VAG OLVR&POSWARTUM 11 l l% 11 145% 1 WOTLW 53073541 269% $40D6553 52794.13 9B061CMT BPI 3.4 FE KSd t8D I-%% 40 5�% 45 544.790-M =E2453 190% S218.88 ]SIM7 3565.61 0W98POIC COMPRE PREV M®RffiL EST PT4044 161 lA2% III Ill 1,13 $34.746-98 SMSM49 imle $215.824 $14573 971/&YL THEN TOS 1. FEGIM EA 15 MIN M 030% 17 224% 2.9 S4I193.m $19,640.M 1.12% 236.m8 31,155Z 9MII1OFFICE OUTVf NEW 30 MN 176 155% 145 19.13% 121 $31005 n 0" 15M $176.173 $12492 OIB67a1115.1 L LABOR ANALCaARES PVIOVAG CIYR 12 011% 12 1.58% 1 441IJ3 17 85 152% Ai $1.447AS 902444OFFICE CCN&TJ m MN 67 D59% BD 792% 112 =,=61 616=111 141% SM40 S23915 SM7.72 IM43OFFCE CONSLTJ 40 MN 97 Offi%, M 1198% 1,15 326,067.39 $t 318.71 134% sm 94 S157.92 Val SMOSLVL NSURG PATH CFOS56YCRSCPXL 97 DM% 75 989% Il9 $27,904.46 114 123% 128767 5145.m $18754 9115104111 ANTEPARTIMCIAE C OL`AWOOSTPARTW 3 003% 3 0.4% 1 116533011 116W.0 1.M% $6,177s $3,88911 $3,11l 9a715-0FFICEOUTPr ESTvm e, o.n% % 7.3954 145 $21,601s.10 11303.4z 1% SM.79 140.54 4MSCOPE OF COLCU WITH If10PSY 14 012% u IM% 1 $06325 110029.25 088% $1259.23 vlam s71638 MRS41 C COMPRE PREV a® REEIM EST PT l&N 81 071% 78 1029% 104 s16631m 396529t am% S265.35 SI19.17 512176 951PREPJLGRV AGS Fill Will IALT AG6 Fi5W+J 45 04% It 1.45% 4.09 S13464.33 $6563.33 a64% S29921 32122 s869.3p 9112t24)FFlCE ouTPT EST 10 W ,07 115% 111 171614 143 Sit,M.a3 116A7123 ll SIDI.m SSO.IS 91IM%Char SPI 1-2 REGIONS 105 093% 26 3.6BY 375 St6^776 BE65 077% S154741 SMZ1 S31SID 4979SCOPE OF CCLON FOR DIAuGhl IS 013% 15 190% 1 st1,637M 3tl 14 079% $1.1380 s590.0 swu 9At4CR1aH1Cx t0i2JK CaP1E EST K I. VST 85 075% 81 IO.WK 1.05 312mv Sill 0.75% 5143.M 511111 $10595 99A40R1[EOUTPTtEW45MM S7 05% M 699% 108 1135--159 9,14252 071% $237.76 sl2s5 sis3m 15925 q DAQfK 69 0E1% 65 856% I98 113M4.W $7341C O64% 320036 310640 11295 97MT791 P-A 1. AREAS EA 15 Mile Tr8t XERSS 45 04% 28 369% 161 V721327 $73m 94 064% Svn o^ 516291 WGIM 73TS1J/tl ANY JT L%7R C Tli 22 019% % lam 1.57 519547.1110 $7,120A 062% smm s1.1' 65 SSOl59 99393AlIC COMPRE PREI WED REEM E57PT SII 60 OW% 51 673% 1,18 sit SX97 56.838.30 0.6% S191.75 $113.94 S134A5 99791J= COMPRE PREY IED REEIM EST PT OFT. I YR 76 067%; 27 356% 281 sli'mm sel m 3145M 5t691. i�7m 9W -OIC COMPRE PIE, tom REEM EST PT IA 63 0.51% 4S 594% 1.4 Sibil M. SS745.14 05919 $17253 Vol $14989 9928498t DEPT IF SPER17)(9111K8aT EVAL 33 029% 31 499% IDS 3117110.19 56119279 059% M551 SM2.81 s21S90 A04.11ASI4B6K84CY 5 094% 3 0.4% L67 70 W50618 as?% 1301.64 3016t 169.39 072A.YPACTTOOTH REMP/ COMPBONY 5 0.04% 5 0-66% 1 17.8l 5&42928 057% S1.57440 51 86 57 56 993944R3C COIFRE PREY ME) REEM EST Pr 12-17 51 06% 46 6.07% t11 $9,850.76 S6,42756 &56% S19315 SI26m $139.73 17110-0S7R.I 89 SK TGSCUrAN VASCW 14. 48 O.C% 30 390% 14 111792.97 395.69 0.56% 5224.85 S13324 i1119 A04298LS1IUtGENCY 9 0.08% 7 0.92% 129 $647657 $637727 0.56% $719.62 $7M 59 $911 D4 9XIOAPPL MOOAL71Y 1. AREAS HOTICOID PACKS 21 019% 10 1.32% 21 Wromm $6 341.89 056% S746.48 5301.99 $634.19 9928MUM DEFT M00ERATESEVERITY 49 043% 42 5,54% 117 $10778.84 SS,Ill 051% $211.77 S11&40 5138.13 96245 OFFICE CONSLTJ W MN 20 0.16% 17 224% 1.16 $10.997,47 $5,671,16 0.5% $549.87 SM..59 S33363 97W5.WPL MODALITY I. AREAS US EA 15 MN 22 0.19% 9 lA9% 2M 570.804.E Kit 0A1He $W16 M-321 S62411 tq-aussi lol OX10 PIat4T.Incorporated .$,e4aJ W the Tema or Use. NI rotes ere riMwel Pap1 RFP 7279 Benefits Consultant 19 IV. RESPONSE TO Hays QUESTIONNAIRE Viewer OptionsExecutive - File Edit View Action Tools Settings Navigation About D controls - " A - e 3 HPI-O/ltIAPes Iq/Musures R Reset ApDl7 Incidems PR [ncid Mbrs Billed Change Plan Paid Avq Chq Avq Paid m a Al Disease Categories n H All Disease Categoric 174 100.00% 125 $78,447.25 $60,066.83 5430B5 $345.21 e Medical SBrviCEs INvry and Poisoning 68 39,08% 61 $31,004.32 $25,579.74 $455.95 $376,17 �iChiro reNc�" __ t Symptoms and lll-Defined C4ndieans 21 12.07% 19 Y19,338.07 Y:5,169,14 Y920.86 $723.29 Inpatient Hospital Admission Respiratory Systam Disusas 27 1352% IB $7,004.85 $5486.58 $269.07 $206.91 Inpatient Surgery Laboratory Services -. Nvvous System Diseases 22 12.64% 19 $3,953.20 $2.763.93 $179.69 $125.63 Mental Health Visit Other Services 382.9 -UNS OTITIS MEDIA 19 10.92% 17 $3,683.40 $2,627.77 $193.86 $138,30 Outpatient Hospital Enooullter As - - --- 381.OI,ACUTE 6EROUS OTTT[6 MEDIA 1 0.57% t $92.15 $73.71 $92.15 $73.71 Relationship 386.60-OTORRHEA UNSPEC 1 0.57% 1 $69,39 $62.45 $6%39 $62.45 - 384.20-UNS PERFORATION TYMPANIC MEMBRANE 1 0.57% 1 $108.26 $0.00 $108.26 $0.00m -0 Dependent ❑Employee E,Meal Duorden 4 2.30% 4 $21466A0 $Z366.72 $616,60 $591.68 a. aMinim - Endocrine, Metabolic and Nutritional 1 0.57% 1 $2,426.57 fZ183.93 Y2_426.57 $2,183.93 w - Clrulatary Syn.. Diseases 1 0.57% 1 $L990.20 $1,592.77 $1,990.20 $1,592.17 Gender Y Digestive System Disuse 5 2,87% 5 $3,456.56 $1,379.90 $691.31 $275.98 DFenMle H Oenitaurinary System Diseases 4 2.30% 2 YL067.81 Y1,015.96 $266.95 $25399 - ❑Male T_ Infectious and Parasitic Diseases 6 3.45% 6 $2,070.97 $929.59 $345.16 $154.95 - 4:Skin Diseases 8 4.60% 7 $1,669,90 $889.96 $208.74 $111.23 - Age Band - C6umnset Pagel 1 Ro.v:et Paae l;l Done - Lb il1tocaliltranat __- Unhealthy Behaviors Costs and Number of Members with Conditions ,1Pytiical is,-.�.,-, Poor Nunrncn Tabacm Use hubs:arcr Abusc 10�01- o`lo'al _ Lo.- 1. 'ICic Lin: I.acc: Cos: ileace Co:: INe❑ .nDliNer laic Menbers wo C,:ruri,r, bC=r'Eeeea. ._ i . _ __ _,=b/L' 23 554,67E 13 SSa.b78 23 _.. Obesity 53,406 9 53,406 9 $3.406 '9 Colon_ccal-3rccr ,_._;U 2 524.970 3 Diabetes $44A033 72 $46.033 72 1% H,1, 6loou Pie4. ur.. S3' Lam,: _3Y. SSa.6E.1 128 -. High Cholesterol SIZ372 49 SIZ372 49 6-roic '.d_' __ y2'•-03_ __ 121.41: 12 Lung Canter 517 1 S17 1 .23.210 LL. 523,2ti0 2, _. Cancer of the Oral Cavity/Pharynx s3, iT7 1 53,277 1 lobacm _. >_ --it i. y_. L.to L. Alcohol Abuse 52.8% 3 SZ896 3 AI o)r nl rci.1, 1 L.x ¢,:ior-. __.___ _ ..._.. _ 0 Alcohol Dependence 5242 2 5242 2 CirrYo.. _262W ,. .,_,260 .. Drug Abuse $1.091 1 51,091 1 +n.g rcLac Lor ci]iorL Drug Dependence RFP 7279 Benefits Consultant IV. RESPONSE TO QUESTIONNAIRE Hays Not only does the HPI report evaluate the efficiency of all aspects of your medical plan performance, it also gives us a database to perform plan design modeling based on your actual claims (versus underwriter assumptions). This is performed through our online HPI BeneCalc tool. BeneCalc looks at what a plan design change will save, how many participants it will affect, and the potential savings or cost. It will essentially predict the financial impact from an employer and member perspective. Quantification of member impact is particularly useful during labor negotiations and for employee communications in general. This report also provides us with demographic data, comparative and normative data, benchmarking data, and lifestyle related claims data. This report is available online and our clients can also be given assess to run various scenarios. Clients can run "what if' scenarios on inpatient, outpatient, physician office, wellness, and chronic disease data to identify the cost drivers behind their healthcare costs. Below are a few examples of BeneCalc reports: Sample BeneCalc Reports PHPI-BENECALc Powered by Health Plan Intelligence H,me Basic Inf,rmatl,ri Begin Modeling Calendar Year Parameters JeouCrble.Cornsurance arc Our-0i-rocker Inpatient Hospital Capay ! Aooe!:rig Outpatient Hospital cooay Afo x1r Emergene; Room •visits copay WooE W , PhJsician Office �:isits Copay U60 1mi; Llental Health ',isits Cooey blomvr'nf Ph;sicall,Iedicine isits CooEj lf�jce!h7g ;`rellnesstRcutine isits Oxay !:?ooe!, ag CALENDAR YEAR PARAMETERS XYZ Incorporated ExCludes'. Physician Office Visd. Ydellnesa•Reutire Visit ChccseldedicalSeraices ChccseSuhgrcups Inputs + Plan Membership + Faeo Costs - Monthly SCE_ `- Stop LosS - M cnth ly re Contribution - Monthh; _==scrInfo :.al Ceductible, Family Dedudible ?enefir Percemi age ktdrtisual Rut-cf-Picket 6tsaumum Farrahr Cut-cf-Pccuet Vaximum - Trend Info Tread Fader for Underlvir..g Cara Ememyees ;�er•�c_�s Per Employee Single Family Single Family ln-hen%ork Cut-Nerv:crk S 7-IC S 1ECC s tECC S 2CCC 5C % 7C 4 S 1Ecc S 2ccc S '-CCC S MC Log Out Per Empicvee Single Farrel Single Family f-i'12t1VCri: CLt-'let:, cr.' S 1soc s 3CDC S 3DDC S 6CCC eC 011% EC 5 3CCC S ECDC S SDDC s 12CCC ArnualRate 6lcrths s.CC etv:crkPerfcr^arce. Ccc,eragc Ciscc„rts Ce,erage Cisccur:s RFP 7279 Benefits Consultant 21 IV. RESPONSE TO QUESTIONNAIRE E�RlfERC7EIVCY FtoOm VISITS XYZ Incorporated Chccae Subgroups Plan Design Info Ccpayment Per Visit Coinsurance Rate Net. -,ark. Perfermance Irfc Reported in Untiertying Data Used in Modeling Expected Change in Utilization Expected Medical Inflation Rate Member Impact An _ _. :ed Percent Co- =r. -_s. in Category An, _.ed Percent C o - _ .. : s to TCtal Paid :-.ed total Dollar -5 t..r --eel Cos. --a. -ys. permember Annual Expected Ccat;fSavings, per Employee Chccse Gutgrcups Hays In -Network Out-rtet.•iork - 9C % 7C % EC % 2C Coverage Cisccunts Coverage 8� 4t % 14 % �r =� :/ i4 -12 CC % 1C CC % (24.600a) (1.36'e) ($61.331) ($40.89 ) ($94.36 ) WELLNESS/F c3 JTINE VISITS XYZ Incorporated Plan Design Infc Ccpayment Per Vat Coinsurance Rate I letYr ark Performance Ir's Reperted in underlying Cats Used in Modeling Expected Change m Utilization Expected Medical Inflation Rate 1.lernter Impact Annual Expected Percent Ccavi Savings: in Categcr; + nnual Expected Percent CosViSavirrgs; tc -ctal Paid :annual Expected total Collar C d 3L••i Savings; Annual Expected Coavi.savingsi per 1.temt=r Annual Expected .:daVfSavings, Per Empla;. se fo -/ In-Net.vark out-tletv:prk In -Network Out-Net✓:Crk $3C $2C C. $c 9C % 70 % 100 % 7C % Ce:erape Clsccunts Coverage Cisccur.ts 99.7 .% 9.66% ;c CC % S c.t. olo y 96 CC % 2C. CC % 2E.CC % e.oc % :17 i 21.12°6 70. car, 0.61 • : $27.339 $18.23 $42.06 RFP 7279 Benefits Consultant 22 IV. RESPONSE TO QUESTIONNAIRE Nays We also offer our clients additional Internet capabilities. We develop and facilitate the implementation of a custom online employee benefits portal. This employee web portal will be provided a no additional cost to the City. Benergy makes it easier to bring HR online and will serve as a flexible, comprehensive employee benefits portal for the City. Benergy empowers employees to manage their benefit needs with the following: 7 • Plan eligibility rules and contributions • Benefit summaries designed to focus on important plan provisions • Pre -written frequently asked questions • Forms, contacts, Internet addresses • News items that can be published to your site via the web in minutes • E-mail to HR • Connectivity to any online employee self-service site • Legal summaries that can be added as part of our e-compliance upgrade • Web MD Benergy provides the essential elements of your benefits communication program so you can improve efficiency by redirecting time from routine HR administration to more strategic work and eliminate costly printing, copying and distribution of benefit materials. This allows you to gain all the advantages of sophisticated online benefits communication without the significant time and expense of developing it in-house. If the City is interested in taking a tour of the Benergy employee benefits Web portal, please feel free to use the demo and login information listed below: Benergy Demo https://secure.benergy.com/login.aspx?x=&URLmatch=hayscodemo Username: avacation1971 Password: benefits Benergy also offers the ability to serve as an enrollment site for employees. ReadyEnroll is an enrollment system that delivers the feature -rich tools found in large corporate enrollment systems. ReadyEnroll through Benergy can be set-up to prepare employees for paper or electronic benefits enrollment and then automate open enrollment and other qualifying life events transactions. Benergy also captures and manages all benefits election data and provides standard and ad hoc reports and gives you tools to help you administer the plans. There is a PEPM additional cost for the ReadyEnroll enrollment module that is not included in our flat fee. Bottom line, we can deliver a benefits management application to enroll the City's employees by paper or electronically, give the City the reports needed to administer your plans, and all this comes in a system that your employees are already using and is easy to use. 13) One area of interest for the City is improving its management reporting and analysis of the self -funded healthcare plan. Provide a description of how your firm assists clients in this area, along with a sample report you would offer the City as part of this contract. A core differentiator separating Hays from our competitors is the information we bring our clients to empower decision making. We believe that better information leads to more informed decisions which will leads to a more cost-effective and efficient self -funded healthcare plan. We are confident we can improve the City's plan management reporting and analysis in several ways. RFP 7279 Benefits Consultant 23 IV. RESPONSE TO QUESTIONNAIRE Hays First, we analyze your risk pool. Your risk pool (the employees and dependents enrolled in your health plan) must be first priority! Your risk pool is dictated by the choice you offer your employees, how they choose, and then how they utilize the health plan. We have found that most employers are actually inviting the less healthy individuals to be on their health plan and as a result are increasing their risk and claims costs. We thoroughly evaluate your plan designs, benefit plan values, employee/employer premium and contribution structures, and employee tier structures. We then help you effectively align these items to ensure your risk pool is optimal and efficient. In doing so, you can reduce the level of "bad risk" while attracting "good risk" to the health pool of participants. This is one of the reasons why many of our clients are running well below standard medical trend nationally. Hays performed a risk pool analysis for the City of Fort Collins in May of 2011. We provided a conservative estimate of savings that could be achieved with no change to benefit plan design and simply aligning the City's employee contribution and premium structures. The savings analysis portion of the Risk Pool Management report can be found in the Appendix section. Second, Hays will provide the City with a customized reporting package on a monthly basis. We compile claims, enrollment data and financial accounting reports from all carriers and vendors on a monthly basis. This monthly reporting package provides a detailed analysis on your self -funded plans, including large claim tracking, year-to-date comparison data, projected expenses vs. actual expenses, and employee/employer contribution tracking. This report can be broken down by location, departments, and plan options as requested. We will also have this report readily available at any time upon the City's request. The next page provides a snapshot of one of the plan management reports we can customize for the City. Please refer to the Appendix for a detailed sample of our monthly financial report package. RFP 7279 Benefits Consultant 24 IV. RESPONSE TO QUESTIONNAIRE Hays ,iDD;J00 1X0= f:DD= uIY:J TA I: ]4[-iJ Apc-t'i ]6n1: �m-(D ,'z11D hv�IC iq-:J ^x. 10 f..n Yp lui 14 1'•! 'du Px \:w Nur { I•.I lu 1w Irl +11+ {r. Ih• 1 5�rvnux ..A:rtn (lrrs M.rr W'Ju J, lau- tl_11,=V fl ll'x+ 4'••11110 Mer)r A+Lnnrt {_�1r• Y+,IJ" 3_nr f, l'rn ii,Il•, H51 �F {:,b� i'::-: Z'�1 f:!F+r Wtlunn T4 flr. flxi fln k' Y' YI I'x 4�: Sbl fll MIME! 1 NrrrbJrlr�rx fl l?tt fl4 tvl fJ/4Y 47M15 L:..'rl_ YUAcr' {�F,•--N 11SI\Ve _ 1xYa�:: fY56p11 fM1/n+: /w19 H:lr {:,4W. Hbw. Y+PYk /11:• f: Nl 3\I.Pi_ Hnx. 1•oxi {]wx TIfS•Kl f1I114t1'r A911r4]I Ht1101 {51{ly p}4j4 SYIyP(M 1^SR•'ltP fLVt41YM 1.ISIyn':• (yµjlyl (NI],YM Ifw+a l'rn rlau vn: .N 114 P. u..I frnlll: 11 {lu,]'I f454+• fl.l 111 .4p, I15_e"'i 'ry l N.u. Hr; [_'w. (.� w. L•.nar. f_'I � L'.5'n v l w 1: 1 11'+�Y 11'1,�4 lMf' ILLMII'M {nl irll 41ni_ •nW Ml v" 115n1 h;x51 Y.51 Mr+:'ll Hw�r;l Hmf01) W_.] TrII 01.Yi mfJR] CII,fY R @I !r I�IY {n{. •yy {.� Wrrn 'I'. .r rtr . I... .FY. I,ni x, II`�'. I I.1 •u' 13Nw►lrT•Yls 1 . _.I Vl l•rn.. IJ'1 I11 1:1 il'. 111 \J1 11u I1: t1 P1u Mnnuur- Pln IYIr WNIY F i'•INx Pramun• IIN+bILr IIMIr Wr' YWI Yunrrn ILLNIY Arrrrxrxu Yerrr Irn Y.u.. Pr.nunrx 1.. Wm- frn Yrn.. 'r,lp ('rn��rrn lur Wn. 4'eryMnx' Malll :rrr+ {Y'r.14: I<U nrl IMl {L V• Ilrli ryAr.ym - M"nr {°IbA4 :. ['• { I 1iit,11 :.1'" 11. i. :.11 f 1- it it,, In+IW n L+PPeni. WIn,.S .rur Y'•x15 ..r 11.1.. -+in Yr, -Irn fI CIF. fll St. ,, l: f; it .9lelw a1:bm.. it�lYrp..1Y(4rlta.�a.:an�wlwn.m.---_.—r.wnr.1.�..:..r.rlMryl.rlort rl.r.. Lr flnlr!r}f� 4.� neerYi W �brxCawtsr.wt 6 F4r �+« i Nn+sYF.Yw n • . . m YmiICC.�Jr .II{r/Rlw Ys rYC•IsreMao YL'rY �Yti r.: Cryare'Yg4m r+ ]!r/la ar /Y. r�'arl•f.�...w�' nal. swre.sr.rew{.sIF�...- az'+4 •[fit+r.rfn0>m.a�4 swf. ne.r�.e,m„� r ry.Y.rl�� m>.1'xrH YDYfIt wr..n. aP. nr'xnFY. PrvFx+'14 P��.ala. wYfu.w wr/ IY. pr rYs ..o:uellwP EM -rr�wnal.m.x.m.e.l{1.rdrYYY. fsw Another manner in which we will provide enhanced management reporting to the City is through our suite of Health Plan Intelligence (HPI) analytic tools. HPI consists of three components: • Data Reporting and Analysis — provides a detailed breakdown and benchmark for eleven major categories of your health plan expenses (inpatient, outpatient, ER, physician, mental health, etc.) in terms of utilization, unit cost and plan efficiency. The analysis also indicates how lifestyle factors (tobacco use, physical activity and poor nutrition) and how members with chronic diseases (cardiac conditions, diabetes, etc.) impact your plan. • HPI Analytics — an online extension of the Data Reporting and Analysis report which provides unlimited drill down capability to identify exact costs drivers when the Data Reporting and Analysis expense and or utilization measures exceed benchmarks. • HPI BeneCalc — provides real-time benefit modeling on the effect of trend, plan design adjustments (e.g. deductibles, out-of-pocket maximums and co -payments), network UP 7279 Benefits Consultant 25 IV. RESPONSE TO QUESTIONNAIRE Hays changes (e.g. discount levels and penetration) and stop -loss modifications to determine both the financial and membership impact. We rely heavily on the HPI reporting analysis to help us identify areas where we can help our clients minimize costs. HPI takes the raw utilization data from your health plan and provides powerful insight into the underlying issues and factors truly driving your healthcare costs. In fact, we extract a data file directly from your claims administrator which includes every claim down to the CPT and ICD-9 level. This analysis is much more robust than your standard health plan reports. We then implement real health strategies, wellness plans, and steer employee communications to focus on the factors that are truly driving your health plan costs. This report will be provided to the City on an annual basis. The following describes the key components of the 100+ page HPI which is prepared for each of clients: • Executive summary with utilization rates and comparisons to our normative database • Inpatient hospital • Outpatient hospital • Emergency room • Inpatient surgery • Outpatient surgery • Physician office visits • Mental health visits • Chiropractic encounters • Wellness/routine visits • Radiology services • Laboratory services • A one -page summary on lifestyle related claims • A one- page summary on claims that can be affected through prevention and early detection Detailed supporting documentation is provided for each utilization subcategory including breakdowns by: • Claimant relationship • Claimant age and gender • Major diagnostic category • Top providers • Network penetration • Dollar amount of claim The following pages provide snapshots of our standard HPI reports we provide our clients: RFP 7279 Benefits Consultant 26 IV. RESPONSE TO QUESTIONNAIRE Overall Experience and Membership & Plan Cost Utilization Hays Overall Experience XYZ Incorporated During this reporting period, annualized gross medical claims totaled 53,459,799 . Of this total, $1,371,410 (40%) was related to inpatient hospital claims. Inpatient services are associated with an overnight stay in a hospital or other facility. Outpatient hospital and Physician Office services represent 31% and 20c/o of all paid claims respectively. rnpatiem Hospaal Outpaber# Hospital Emevgency Room urgem Care mwsloan Ofl4oe Su. gxai Center Parnent Hoene .4rr;&dance Independent Lab High Cost Claimants Percentage of Total Paid f 12a,a 411ho 88 Sao ■Large Claims ■RII Other Claims Claims by Place of Service (thousands) Soo 1000 1580 200D $ $1,062,6 .371,41C 0 $163.4 0 $679, 2- $ 75.509 $63,060 1j7-' 14 I During this reporting period, XYZ Incorporated had 5 claimants who represented $402,056 of all paid claims. These large claims can have a dramatic effect on overall plan performance. The financial impact of these high cost claimants is listed below. High Cost Claimants Claimant Cross Paid Limit Net Paid Membe- -' S 105,718 100,000 $ 1C0,000 Membe- -2 s 8"693 100,000 $ 82,693 Member -3 S 75,233 100,000 $ 75,2-33 Membe+=4 S 69,394 100,000 $ 69,394 Membe =5 69,018 100,10100 $ 69,018 Top Five Claimants 5 402,056 $ 396,338 Other Claimants S 3,OS7,743 $ 3,057,743 Total S 3,459,799 $ 3,454,081 Approximate Reimbursement 5 5,718 5 - 5 - S - S - $ 5,718 $ 5,718 RFP 7279 Benefits Consultant IV. RESPONSE TO QUESTIONNAIRE Hays Membership and Plan Cost XYZ Incorporated Overall, XYZ Incorporated had 1,477 total plan participants. By allocating the annual net medical claim cost among all plan members; we can determine the approximate claim cost associated with providing health coverage for employees, spouses, and dependents. This Health Plan Intelligence analysis shows that approximately $3,058 of net medical claims were for employees, while $1,673 and $1,055 were for spouses and children respectively. Coverage Type XYZ Incor o -ated Pan Darticipants Employee Spouse Dependent Total Single 157 ria 67 Family 430 367 513 1,310 Total 597 367 513 1,477 Gross Medical Claims $1,831,136 $998,976 $629,688 s3,459,799 Net Medical Claims' $1,825,418 $998,976 $629,688 $3,454,081 Net Per Member S3,058 $2,722 $1.227 $2,339 Net Per Employee S31058 $1,673 $1,055 $5,786 Net medical claims are approximate; actual amount and/or reimbursement(s) may vary. AMW Cast Per Bmpfoyee $10,000 $7,500 $7,377 . ' $6,162 O $690 $769 $1. $1, SGG XYZ Incorporated HPI Norma KC Noun ■Em^c;y ■spouse ■Dependent 13 Admi n/Stop- Loss ■ Prese-iption Total During this reporting period, the XYZ Incorporated health plan cost was $7,377 per employee. This compares unfavorably with the normal health plan cost of $7,162 per employee. This normal health plan cost is based on the aggregate experience of the Health Plan Intelligence client base during the same approximate time period. Adjustments have been made to reflect similar membership ratios. RFP 7279 Benefits Consultant 28 TABLE OF CONTENTS Hays I. Introduction.....................................................................................................3 II. Acceptance of Addendum and Agreement...........................................4 III.Qualifications..................................................................................5 IV. Response to Questionnaire..........................................................6-45 V. Appendix A. 2011 Business Insurance Rankings B. Local and National Client Lists C. 2012 Sample Service Calendar D. Strategic Readiness Assessment E. Risk Pool Management Savings Summary F. Sample Financials and Monthly Plan Cost Report G. Sample Health Plan Intelligence (HPI) Summary H. Sample Pharmacy Benefit Management (PBM) Audit I. Sample Communication Brochure J. Sample Well Care Communications K. Sample Compliance Checklist IV. RESPONSE TO QUESTIONNAIRE Inpatient Hospital Utilization and Chronic Disease Impact Hays Inpatient Hospital XYZ Incorporated Inpatient Admission Rates iso --- —7 e 8 100 m ` 011 z 50 v 0 Employee Spouse Dependent Total Group 17- �Hp: No,— � h � r- 77 The average charge per inpatient hospital stay can vary greatly. During this reporting period, the average charge per inpatient hospital admission is shown on the right. This average charge only represents the facility fee and does not include related professional or ancillary fees. Note: unusually large claims may have been excluded from this analysis. Inpatient hospital admissions are defined as episodes of care involving an overnight stay in a hospital or other inpatient facility. Inpatient admission rates per 1,000 represent a statistical measure of how many inpatient admissions occurred per 1,000 covered members.]F Average Charge per Admission szo,00c $ts,00u Si2l'669 r t f 10,00C i ss,00C s- Employee Spouse Dependent Total Group -H'I Dlx-- -K.A� Norm Par analysis can be used :o evaluate the relative performance of your plan. The frequency of services rendered combined with the cost per unit determine the gross dollars. These gross claim dollars are ultimately paid at a certain rate after provider discounts, member cost sharing and other plan provisions have been applied. The values reported are relative to a par/normal value of one. RFP 7279 Benefits Consultant 29 IV. RESPONSE TO QUESTIONNAIRE Hays Chronic Disease Impact XYZ Incorporated The health care costs for members with chronic disease can have a dramatic impact on the overall performance of a health plan. This analysis focuses on six, relatively common chronic diseases: ■ Coronary Heart Disease ■ Depression ■ Obesity ■ Asthma • High Blood Pressure • Diabetes Crronic Disease Imps¢ Percentage of +members N NM1MK wft Cr O c :.�a] ■Ottiar WmEars Coronary Fiery. D sease U',OCC Pressure t Depnessror- Re'a[ec D:sc.rde s rra- D�a:.+eres All Members Total Dollars Paid for Members with Clwonic Diseases fthousancs - a:--ILa j 250 Son ®Tom, Paid for Members wid, Chron c Disease Members without Chronic Diseases Members with Chronic Diseases Chronic Disease impact Pe -tentage oF Tote: Pad 3144 0396 750 ■ManbM WWI Chic Df� ■cltY t MenD s Members treated for one or more of these chronic diseases usually have other health problems which are considered comorbidities. The methodology employed in this analysis "rolls -up" the total medical claim cost, regardless of specific diagnosis, for any member treated with one or more these chronic diseases. The claim costs for members treated with multiple chronic diseases may be included in more than one category in the chart (left). Members Annual Gross Paid Average Per Member 1,477 5 3,459,755 $ 2,342 1,262 s 2,268,500 $ 1,718 215 ¢ 102510299 $ 6,o06 RFP 7279 Benefits Consultant 30 IV. RESPONSE TO QUESTIONNAIRE Hays To demonstrate the power of HPI please refer to the graph below. From 2005-2010 the average annual health insurance increase has been 11.3%. Over that same time period, the average annual health insurance increase for Hays Companies' clients utilizing Health Plan Intelligence is 5.1 %. This equated to an average savings of $2,731 per employee! 7 $15,000 1 $10,000 $5,000 HPI Employers vs. National Trend Annual Health Care Cost Per Employee 11.3% National Trend - 2005 2006 2007 2008 2009 2010 Please refer to the Appendix for a complete sample of our Health Plan Intelligence (HPI) report. 14) What resources do you use for benchmarking? Hays Companies uses the latest industry surveys to provide our clients with current, relevant benchmarking data. We use the Mercer National Survey of Employer Sponsored Benefit Plans general plan design benchmarking as it is the industry standard. We also have access to many other types of benchmarking data including surveys from Hewitt Associates, Deloitte & Touche, Segal, the Hays Group Study, the Kaiser Family Foundation, and the Benefits Source Book to provide the best type of benchmarking for our clients particular need. These national surveys assist in monitoring the performance of non -medical plans as well. We also access numerous industry resources that provide updated information regarding changing legislation, national benchmarking and court cases that set new precedence. We access insurance carrier norms and benchmarks as well as the National Counsel on Compensation Insurance. Our professionals attend periodic training sessions to stay current. RFP 7279 Benefits Consultant 31 IV. RESPONSE TO QUESTIONNAIRE Hays Furthermore, we have developed our own benchmark data for industry related business based on our Health Plan Intelligence (HPI) reporting package. The reporting package empowers you to benchmark your benefit plan against those offered by other similar employers, defined by size range, industry, geographic location and plan types. HPI also benchmarks your medical utilization against normative data. We benchmark your company to normative data that consists of more than 1.2 million members, 800 employer groups, and over $3 billion in gross medical claims. We also generate normative data based upon our Colorado operations' book of business. Below is a sample chart for a Hays client's health plan service utilization and costs, compared against the normative average for client demographics in our HPI database based upon industry and location. Utilization Category Frequency Average Charge Network Penetration Reported Discount Average Paid Plan Expense Inpatient Hospital 0.87 1.15 100.0°1b n;a Outpatient Hospital 1.57 0.95 100.0% n/a 1.19 1.87 Emergency Room 1.40 0.94 100.0% n/a 1.15 1.61 Inpatient Surgery 0.82 0.72 100.0% n/a 0.88 0.72 Outpatient Surgery 0.95 1.10 100.0% n/a 1.18 1.12 Office Visits 0.93 1.18 100.0% n/a 1.16 1.08 Mental Heath Visits 0.01 1.23 100.0% n/a 1.95 0.03 Physical Medicine Visits 0.17 0.92 100.0% n/a 0.51 0.09 Wellness/Routine Visits 0.95 1.14 100.0% n/a 1.13 1.08 Radiology Services 0.91 0.78 100.0% n/a 0.88 0.81 Laboratory Services 0.54 1.23 100.0% n/a 1.42 0.77 Overall 100.0% n/a 15) Explain how you will ensure that performance standards for the City vendors are negotiated and met. Hays Companies' philosophy of focusing 100% on client service is carried over into what we and our clients expect from vendors and insurance carriers. We request Performance Guarantees from all vendors and evaluate the vendor performance against those guarantees on an on -going basis. These Performance Guarantees must include service standards, claim turnaround time, financial accuracy, and network discount targets. We will set up and attend monthly and quarterly meetings with your vendors to evaluate service levels and to continually monitor how well they are meeting objectives laid out by Hays and the City. We will also require quarterly reporting on Performance Guarantee measures when applicable. If our vendors are not meeting their Performance Guarantees or certain service levels then we will hold them accountable. These RFP 7279 Benefits Consultant 32 1 1 IV. RESPONSE TO QUESTIONNAIRE Hays accountability measures are generally outlined before we would feel comfortable with the City engaging their services. The initial vendor selection process is also very important and we find that the more thoroughly we review the vendors upfront, the more likely they are able to meet the performance standards set out by our clients. As a result, we will evaluate potential vendors through a rigorous vendor selection process. We have elaborated on each of these below and provided a "Sample Vendor Selection/ Renewal Analysis Work Plan" flow chart further outlining the process and timelines. Program Design Using a variety of strategies, we will help the City build a program that fits the established Human Resources and financial objectives. We will benchmark your plan as indicated above but also against other employers based upon geographic and industry parameters that are meaningful to the City. This information will assist you in developing plans that are competitive with other employers in the area. Program design encompasses more than just plan design. Plan design is important to accomplishing the benefit value objectives established for the plan and employees. It also helps to encourage proper use of the health plan or discourage inappropriate health care utilization. Programs such as disease management, wellness or therapeutic prescription interchange, strengthen an organization's ability to improve the health of its population. We will work with the City to ensure that programs and plans are properly coordinated to give you the best opportunity to achieve optimal plan performance. Vendor Evaluation and Selection Once the program is designed, we will help the City assess the vendor markets through a comprehensive Request for Proposal (RFP) process. RFPs are tailored to reflect the specific needs of the City. They are then distributed to vendor markets that are most capable of delivering in accord with the established design. We coordinate the finalist interview process, which allows you the opportunity to meet and select the ultimate vendor to support your program. Our specialty resources will further enhance our ability to support the City with vendor evaluation and marketing. This allows you to make "apples to apples" comparisons of the vendors under evaluation. Implementation. Communication and Ongoing Administrative Support As part of the vendor selection process, we demand implementation and ongoing performance guarantees of all vendors. We also recognize communication is critical to the successful implementation of a new benefit plan. We will provide the City with the professional communication tools to help educate employees on the new program features. Further, we provide ongoing administrative and compliance support during implementation, allowing you the time to focus on your core business activities. The schedule to review the City's plan and assess alternative strategies and tactics would ideally start six months prior to commencing your annual open enrollment communications. RFP 7279 Benefits Consultant 33 IV. RESPONSE TO QUESTIONNAIRE Please refer to the sample "Vendor Selection / Renewal Analysis Work Plan" below: Vendor Selection / Renewal Analysis Sample Work Plan • Confirm scope and objectives • Request all renewals to be received by Hays Companies • Evaluate initial renewal proposals from vendors • Analyze premium levels, claims, reserves, retention, pooling levels, underwriting methodology and margins • Utilize claims experience and financial reports to assist in analyzing and negotiating renewals • Develop plan alternatives and pricing for your consideration • Provide a review of alternative funding contract options and offer recommendations • Negotiate the appropriate renewal action with the insurance carriers • If necessary, conduct vendor selection process Renewal action • Establish Request for Proposal (RFP) objectives • Pre -select vendors based on objectives • Create RFP using standardized templates - Health care (2011) : cost of administration, claim turnaround time and accuracy, customer service, performance guarantees, financial offering, unit cost/discounts, provider access/network depth, utilization levels, care management initiatives and quality of care metrics - Ancillary lines (2011), premiums, contract provisions, funding alternatives, performance guarantees and account management, impact on absence and productivity • Evaluate proposals • Conduct finalist site visits • Comprehensive RFP analysis report • Vendor implementation work plan Hays • Present vendor recommendations and rationale in a high level executive summary I Approval I • Post implementation review • Monitor costs, employee satisfaction and consumer behavior • Measure vendors' performance against guarantees • Conduct claim audit when appropriate • Monitor vendors' CQI progress • Contract review 16) What is your firm's experience in dealing with Northern Colorado demographic area healthcare issues? (e.g. single hospital, consolidated specialty physicians, etc.) Hays Companies of Denver understands the employee benefit challenges and needs of Northern Colorado. Eric Rosales and Jana Knox have both managed and consulted employer groups in Northern Colorado for over 20 years. Currently, Hays provides benefit consulting services to 14 employer groups in Northern Colorado. The City of Loveland, Center Partners, Neenan Archistruction, and Waterpik to name a few, all have similar issues and concerns about access of care and costs associated with local providers. Most of these clients have a single hospital were RFP 7279 Benefits Consultant 34 IV. RESPONSE TO QUESTIONNAIRE Hays the majority of their membership utilization occurs without significant travel time required. The discounts provided are nominal compared to the Denver Metro area. We find it imperative to work closely with our clients in Northern Colorado to educate the members on options available to them as consumers. Since the member's share in the cost of a self -funded health plan it is to their advantage to understand the costs associated with seeking care locally. We evaluate benefit options to steer membership to more cost efficient facilities and providers. While doing this, we must also evaluate the feasibility and cultural philosophy of the client to implement and or incentivize members to utilize facilities and physicians that are more cost effective for the plan and the member. Most surgeries are now planned well in advance and if membership can be directed to a more cost effective facility for these elective surgeries, then it will save the plan and the member money. Education on options available to the members is key. By utilizing our Health Plan Intelligence (HPI) reporting we can drill down and look at surgeries and procedures that your membership had and develop a benefit option or program to drive these services to facilities that are more cost effective. This could include travel incentives from the employer to the member. All costs would be evaluated and presented so that the City can make the best decision based on good information. If any benefit changes or incentives are going to be adopted, we work with our clients to create member informational pieces which explain the advantage of utilizing certain providers outside of the local area. We also find it necessary to engage in discussions with local providers and facilities to try and negotiate a better discount arrangement for our clients. While this practice is not always successful with the local providers and facilities, it is evaluated by Hays for the benefit of our clients. This due diligence can be performed for the City. The charts on the following pages represent a sample comparison we performed for a client to ensure they were receiving the most competitive discounts at their local hospitals and health providers. RFP 7279 Benefits Consultant 35 I IV. RESPONSE TO QUESTIONNAIRE Hays This chart compares the facility charges between two local hospital networks: Client XYZ • Facility Cost Comparison CPT4 Com ProOaEwe EMMC FOCldty Cost ST. JOSEPH'S Facility Cost BEST ESTIMATED FACILITY COST' SAVINGS EVALUATION L MANAGEMENT 99202 CFFIG'OUTPT VISIT ELM NEW LOW -MOD SEVERITY 2DMIN na na Office or Od*f Ouflmtlant Squkas 9=3 OFFIGOUTPTVISIT ELM NEW MODERAT SEVERITY 30MN da Na %X4 OFFIGOUTPT VISIT ELM NEW MDOHI SEVERITY 45 MN na na 902 OFFIG'OUTPTVISIT ELMEST SELF-UMIT,MNORIOMN da rva 39213 CFFIGOUTPTVISfT ELM EST LOW MOD SEVERITY I5MIN de Na 99214 OFFIGOLTTPTVISR ELM EST MOO -HI SEVERITY 25 MN da Na 99215 CFFCOUTPTVISIT ELM ESTAB MOD -HI SEVRTY 4C MN da Na HospnelulpattemServices 99i23 KIT HOSPCARE-DAELM HIGH SEVERITY 70MIN $472 St.Jospews da 9902 SUBSCT HOSP CARE DA ELM MINOR COMPLIC 25 MIN $170 St. Jospeh's Na A233 SUBSOT HOSP CARE-DA ELM SXO4PIC COMPLIC 35 MN $243 SL Joapeft's his 99243 CIF O COWS NEW ESTAB MODERATE SEVERITY 40 MIN $224 St. Jospeh's Na 99244 OFFIC CONS NEW!ESTAB UOD-HIGN SEVERITY 80 MN $356 SL JcapeWS Iva ErnergencyDapat nsmSentm W83 E6rRDEPTVSTELM MOD ERATESEVERITY $P77 St.Jospeh's n+a 9M ESTER DEPT VISIT ELM HIGH SEVERITY URGENT EVAL $385 SL Jospeds da 393% PREVEN MEDS ELM ESTAB PT; 40-64 YR n•a na da MEDICINE 90806 NOM MU PSYCHOTHERAP-PHYS; APPROX 46-50 MIN Na Wa Na 929K TP.NSCATH PLC1JT NTRACORONRY STENT-PERC SNGL VSL $18.975:00 na EMMC he 93CCU ECG-RCUTINE WI2 LEADS: WiMTEAPT L RE?ORT 1139.00 Na EMUC rva 33C15 •CV STRESS TEST W.TREADMILL-PHA RM. NTRPT L R£PRT S408.CO Na EMIAC na =7 ECHO TRNSTHORAC REAL TIME WMIO M-MODE: COLT $650.00 he EMMC me 93"x^0 DOPPLER ECHO GONT WAVE *SPECTRAL DISPIY: COMPL T SffiTCO $2.738 EMIAC S1.94120 MID LTHEART CATHRETROGRAD-BRACHAWFEMART:PERCUT $6,175.00 54.96E St.Jospehe S1210-DO 97014 APPUC MODAL 1-. AREAS. ELEC STA1 $5200 na na Na 97110 THERAP PROC 11> AREAS EA 15 MN; EXERCISES ve.00 $66 St. Jospetes $12A0 97530 THERAP ACTIVITIES DIRECT PT CONTACT EA 15 MIN S71100 $68 St. Jospeh's $10.00 98940 CHIROPRACTIC M ANP TX SPINAL 1-2 REGIONS Not Applicable na da We 39941 CHIROPRACTIC MANP T)L SPNAL 3-4 REGIONS Nat Applicable na da Wa PATHOLOGY L LAB 80061 LPO PALL $74.00 $66 SL Jcspelt's $8.00 TH XROID STU HORMONE $93:03 $63 St. Jospeh's $10.00 8830E LEVEL N-SURGPATH GROSS•MICROEXAM S166.00 $110 St. Jospews $SBDD RADIOLOGY 70450 CAT HEAD 'BRAN:WO DYE SSCID.CC $1.030 E6151C S430.00 ,B663 MRIBRAN;WOAND WDYEIPrafessionalComponem0* S900.04 $1.720 EMIAC MOD 71C20 RAD EXAM CHEST 2 VIEWS FRONTAL L LAT $79,00 $150 EMMC $71.00 72148 MPJ SPINAL CANAL L CONTENTS LUMBAR: WO CONTRAST S900.00 $688 St. Jospeh's SMao 74160 CATASD:W-CONTRAST $970.00 $1,360 EMMC S490.00 76M SCREENING M AMMO BEAT S210.00 $186 St. Jospeh's $24.00 78465 NIYOCAP,DIAL PERFUS IMAG: TOMO fSPECTI MX STUDIES $1.498.00 $6.422 EIAMC $3,924.D0 SURGERY 17WO DESTRCT-ANY METH041E J LES W,+LOCJLLANES;1 LESIhteNdes Na Wa na 225FA ARTHRODES&ANTWMNIDISKECT.CERVBELOW 02 Not APPIMbe- na is Na 27130 ARTHROPLASTY ACETAIIULAR L PROX FEM PROSTH REPLAC WApplicWe n•a da me 21447 ARTHROPLAS7Y KNEE CCNDYLE L PLATEAU: MED L LAT Nol Applicxde n•a Na na 2982E ARTHROSCCPYSHOULDER SURD. DECOMPSUSACROMSPA CE 39J)5.00• SIU19 EMMC 51,664.00 2R687 ARTHROSCOPY KNEE SURG: WMENISECTMY I'MEDIAL 'LAT $4, MAC $6.329 EMMC $1,629.00 2988S ARTIHROEOOPMCALLYABEDACL REPAIRAUGLMEJNTt•EWN $14266-00 $17$19 EMIR $3,254-00 33S2j SEPTOPIASTYSMR W:WO CARTIL SCOPING'R.EPLAC W.'GFT $:27C.0C Na is as 33M CORONAWARTBYPASSWiART(3FT.IARTGFT Not Apple rva de ma. 36415 ROUTINEVENPUNC-TNGER.•HEELSTICK-CCLJZC $6.0C $11, EMMC S5.00 43232 UGI ENDO;WflX 1.W $146.00 $3.344 EMMC S1.419.00 ai3 8 CGA.ONOSCOPY FLEX-PROX SPLEN FLEX: Olt ISEP PROS $1.40.0C $22A9 EMMC SU920 405)5 REPR INIT ING HERNIA 5 YRTAORE: REDUCIBLE S030.00 $7A65 EMMC MIXI W K%0 LITH EXIAACORPCREAL SHOCK WAVE $11278.00 S12.013 EMIX 573720 58150 TOT ABDHYSTWWOREMOVTLEE45I-OVARY4SJ $16350:00 na EMMC da S94CO ROUTINE OB CARE NCL ANTEFARTLN CARE-VAG DEL -PP na 11a ria HSI0 ROUTINE 06 CARE INCLANTEPARTU4CARE-CSECT-PP Na da rva 52289 NJ SUBSTANCE: LL%fEM CAUDAL EPIDURAL ISEP PROI Not Applicable $1.649 St. Jospeh's rva OW TAMING T W.'DECOIMP NERV ROOT: I NTE RSPACE LUMBAR 9200.00 $7.489 B.&IC S289DO 63047 iAMNECNLTY SNGL VERTEHRALSEGMT- UNVEIL: :UMBAR $6.515A0 $7.173 St. JospeN's S1,342A0 MI5 DISKECTOMYANTWDEM P:CSVSNUINTERSPACE $16317.00 316,045 St.JaepeNs S212A0 6472' NE'JROPLAS'TY LOP TRANSPO: MEDIAN a CARPAL TJNNEL $3,456,OC $3.332 St. Jospeh's 5124.E 6S EXTRACAPSULAR CATAFACT RESC'VWINSRT KX PROSTH $4.855.00 $5.171 EMMC S1,119.00 TOTAL FACILITY AMOUIT S 139330.00 S 121.26L.00 UP 7279 Benefits Consultant 36 r IV. RESPONSE TO QUESTIONNAIRE Hays This chart compares the professional charges between two local PPO networks. Client XYZ - Professional Cost Comparison CPT1 Code Pro0e0Ure EMMC AVera9e Prvfe�Onal Fee' ST. JOSEPHS Professions Fee ESTIMATED PROFESSIONAL SAVINGS ESTIMATEDFe COST EVALUATION L MANAGEME%- 9M OFFICDUTPT V'ISLT ELM NEW LOW -MOD SEVERITY 20MN $11-50 SSr _ SL Joseph's $23.57 Offt 0r Other 0utpoint SmvoP3 9B21X1 OFFVOUTPTVISiT ELM NEW MODERAT SEVERITY 30MN $17ZS0 $135M SL JoaepWs $36A 992Cd OFFIG'OUTPT VISIT ELM NEW MOD -HI SE VERITY AS MN $26250 521126 St. Joseph's $4124 99212 OFFr0OUTFTVISITELM EST SELF-Lli W40R1pAN SMSO SUL12 SLJosos 514M %213 OFFIC'OUTPTVISITELM EST LOW-MDCSEVERITYISMN $10250 $91.17 St. Joseph's $1133 99214 OFFMTPTVEITE&MEST M06#9SEVERITY 25MIN $157.50 $138.74 SL Joseph's $2076 99215 OFRGOUTPT VISIT ELM ESTAS MOD -HI SEVF.TY 40 MN 522250 $184.76 St. Joseph's 53772 Hospft npawnt Spn'Ices 9= NIT HOSP CARE-DA ELY HIGH SEVERITY 70 LLM 5300.00 $266.76 SL Joseph's $3322 99232 SUBSOT HCSP CARE-DA ELM MINOR CCNPLIC 26 MIN $107.50 S96.55 St. Joseph's $10.95 99233 SUBSOT HOSP CARE-DA ELM SIONIFIC COMPLJC 35 MN $1532 $138.64 SL Joseph's $14.36 N243 OFFIC CONS NEWrESTAB MODERATE SEVERITY 40 MIN $296 DO $T6ET9 St. Joseph's $118,81 WU OFFICCONSNEWIESTASMOL}HDHSEVERITY 60MIN $40420 5247.70 StJoao's $166M ELnergenq LW psmtem Sarr M 99M EMER DEPT VISIT ELM MODERATE SEVERITY 576.00 $203.36 EMMC $127.36 9M EMER DEPT VISIT EN HIM SEVERITY URGENT EVAL S14Z00 M94 EMIC $24294 99396 PREVEN MEDS ELM ESTAB PT. 4064 YR $181,00 $136.54 St. Joseph's $44.46 MEDICINE 901106 NDIA MED PSYCHDTH84AP-PHYS: APPRN(45M MN 5221.00 $122.05 SL Joseph's $98.95 92980 TRNSCATH PLCMT NTRACORONRY STEM-PERC: 94GLVSL na rva na Na 93000 ECG -ROUTINE W.h2 LEADS: WfNTERPT L REPORT rva 525.36 St. Joseph's rva 93015 CV STRESS TEST W"SREADMILL-PWARM; NTRPT L REPRT rva $119.35 St. Joseph's rva 93307 ECHO TRNSTHORAC REAL-TIME WXO M-MODE; COMPLT Na rva rva rva 93M DOPPLER ECHO CONT WAVE W� SPECTRAL DISPLY. COMPLT rva rva rva rva 93510 LT HEART CATH RETROGRAD-BRACRAXFEMART; PERCUT rva na as we 97C14 APPLIC MODAL 1i, AREAS: ELEC STM rva na na rva 97110 THERAP PROD Vh AREAS EA 15 MN: EXERCISES rva Na ma rva 9730 TF4:RAP ACTNITES DIRECT PT CONTACT EA 15 MN rva na rva rva 9W CHIROPRACTIC MANP TX: SPINAL 1-2 REGIONS rva rva na rva 38641 CHIROPRACTIC MANP TX: SPINAL 3.4 REGIONS as na na rva PATHOLOGY LAB Boost LPDPANEL Iva rva rva rva 84443 THYROD STN HORMONE is na na rva am LEVEL N-SURG PATH GROS9MICR0 EXAM na its Na rva RADIOLOGY 70450 CAT HEAUSAA IN: WO DYE na as na rva 70563 MR! BRAN:WOANDW DYEOPiahssional Coapenery OMtyi rva rva rva da 11021 9AD EXAM CHEST 2 VIEWS FRONTAL L LA" na na na rva 721AB MIR SPINAL CANAL L CONTENTS LUMBAR: WO OONTAAST as rva rva da 74160 CAT ABC: W:CCNTRAST na na na rva 761102 SCREENING MAWDBIAT rva rva rva rim 78465 MYCCAADiAL PERFUS IMAG. TOUO tSPECT; MX STUDIES na na na rva SLIRGEITY 17000 DESTRCT-ANY MET}D-BEN LES W.rLOCAL AMES; i LESflra3des $112-660 554.44 St Joseph's $18D6 22%4 ARTHRODESPSANT WMN DISKEC T. CERV BELOW C2 as na na rva 27130 ARTHROPLASTY ACETAMJLAA L PRCX FELT PROSTH REPLAC rta St 747.96 St Jouph's ria 27447 ARTHROPLAS i t KNEE DOINDYLE L PtAT-.AL: MED L LAT na S'.8693/ St. Joseph's rva 29M ARTHROSCOPY SHOULDER SURD; DEOOMP SUSACROM SPACE rva $799.74 St Joao's rva 29881 ARTHROSCOPY KNEE SUR G: WMENISECTMY WE LA-1ATI as $7U29 St Joseph's na 29M ARTFWOSOOPYCALLYADEDACLREPALbiAUGMENTRECON Ns $1,192.83 SL Joseph's Na 305N SEPTOPLASTYSMR. WrWO CARTL SCCANG'REPIAC WrOFT rva as na rva 33M CORONARY ART BYPASS WFARTGFT; 1 ART GIFT ma rva na rva 36415 ROUTINE VENPINJCTTINGERHEEL STICK-COLLEC na 54.05 St. Joseph's na 4=19 UGi ENDO:WA3X 1.RDt rva $217.32 St Joseph's Na 45578 COLONOSCOPY FLEX PROX SPLEN FLEX: OX (SEP PR0) rta $213.98 St. Joseph's na 49505 RLEPR NIT NG HERNIA 5 YFVMORE; REDUCIBLE rva $61Z98 St Josephh we WSW LITH EXTRACORPOREAL SHOCK WAVE na $7siss St. Joseph's rva 58150 TOT ASO HYSTWWO REMOV TUBE(S)-OVARY{S) rva Na rva Na 59400 ROUTINE OB CARE INCL ANTEPARTLJM CARE-VAG DEL�PP 52.804.50 rta EMMC na 59510 ROUTINE OB CARE NCLANTEPARTLIM CARE-C SECT -PP $4A38.00 rva EMMC rva 62299 NJ SUBSTANCE: LLIMEAR.C,AUCAL EPDURAL ISEP PRO} na na Na rva 6= LAMNOT W1DEC06P NERV ROOT: 1 NTERSPACE LLWR rva as rva rva 630d7 LAMNEC iO►Y SNGL VEFT EBRAL SEGMT-UN6'SL: LUMBAR na na as rva 63WS DISKECTOMYANTWfDECOMPCERVSNMNTERSPACE na Na rva Na 6472! NEUROPLASTY &OR TRANSPO: MEDIAN @ CARPAL TUNNEL n a $495.45 St Joseph's rva 669" EXTRACAPSULAR CATARACT REMOVW:NSAT DL PROSTH as rva rva ria TOTAL PROFESSIONAL COST $9,918.00 1 511.646.82 RFP 7279 Benefits Consultant 37 IV. RESPONSE TO QUESTIONNAIRE Hays 17) What is your experience in developing/evaluating/maintaining Section 125 plans? Hays Companies provides full consulting services for all types of Section 125 Cafeteria Plans. This would include administration support, marketing, and plan compliance. We currently maintain ' the Section 125 plans for over 90% of our clients. Most of these plans are evaluated annually by our Consultants and we continue to counsel our clients on any changes or recommendations that should be made. 18) What is your experience in bid proposals and negotiating for services of third party administrators, stop loss, other insurances? Hays Companies has extensive experience in negotiating for these insurance services. As one of the ten largest employee benefits brokers in the country we have formed relationships with every major market, carrier, vendor, and Third Party Administrator (TPA). We have a very strong market presence within Colorado as well as nationally. We also make sure that our clients are using A- or better rated carriers to ensure financial stability and longevity. Our positive market relations are key to our success in receiving priority account management and service teams from our markets. Our markets are highly aware of our technical expertise and respect our ability to underwrite our client's benefit programs. Our Consultants have all established senior relationships with all of the national carriers and we continue to foster those relationships and continue to receive preferential service and pricing from our markets. We pride ourselves in obtaining the most competitive pricing and delivering quality vendors to our clients. We assess the vendor markets through a comprehensive Request for Proposal (RFP) process. RFPs are tailored to reflect the specific needs of the City. They are then distributed to vendor ' markets that are most capable of delivering in accord with the established design. We coordinate the finalist interview process, which allows you the opportunity to meet and select the ultimate vendor to support your program. ' .Additionally, as is the City's benefit plan, 70% of our clients managed out of the Denver office are self -funded and many are in unbundled arrangements. This requires us to thoroughly evaluate ' third -party administrators, stop -loss vendors, PPO networks, and other insurance vendors in great detail. We then work closely with our clients to clearly lay out the options and consult them in the right direction. ' 19) What is your experience in conducting feasibility studies for in-house clinics and pharmacies? What is your experience in implementing in-house clinics and pharmacies? Hays Companies has multiple clients that we have worked with to establish an in-house clinic as well as clients that are in the process of implementing an in-house clinic. Regarding in-house pharmacy, not all states allow for dispensing of pharmaceuticals on -site, so we also have clients ' that have clinics that dispense prescription drugs, and those who do not. Incidentally, Colorado does allow for in-house clinic prescription drug dispensing. To determine feasibility, we perform an in-depth analysis of plan utilization, chronic condition drivers, and prevention and early detection opportunities to determine education and health 1 management opportunities. An in-house clinic solution may be one of several suggestions provided. We find the in-house clinic solution most effective when: RFP 7279 Benefits Consultant 38 I. INTRODUCTION Nays Thank you for the opportunity to participate in your Request for Proposal (RFP) process for Benefit Consulting Services. As you will note from our response, Hays Companies is uniquely qualified to handle the benefits needs of the City of Fort Collins. We believe this to be true because of the experience and expertise of our staff, the vast array of value-added services we provide our clients, our exclusive reporting tools, advanced proprietary technologies and the in-depth industry and insurance market knowledge that we possess. As a full -service brokerage and consulting firm, we also have Worker's Compensation, Property, Casualty and Executive Risk expertise. Hays Companies was founded on the principal of being a firm that's national in scope with local service delivery. This is accomplished in three basic ways. First, we are 100% client focused. Many of the services we provide have been developed from surveys and dialogues with our customers. We believe that any time we can meet a unique need for our customers, we are living up to our client -focused mission statement. The second way we accomplish our national scope and local service is through constant internal and external dialogue to gather market intelligence. Our customers are the benefactors of our leverage in the market place and knowledge is the most significant element in the leverage game. We believe that the local service delivery we provide enables us to understand what carrier or service provider is the right fit for each client. The third way we deliver national scope with local services is through strategic partnerships. We are always looking to better our service offerings for our customers and provide this through both internal account management and external partnerships. Our customers rely upon us to integrate with their specific needs and we have found that partnering with our clients is best served in partnering with industry experts to meet some of those needs. The overall culture is focused on delivering the highest quality product for our clients. We believe that everything we do is to serve our customers. This culture starts from our CEO and permeates throughout the entire organization. The following pages address specific questions as outlined in the RFP and describe our service methodology for guiding the strategic process and ultimately helping our clients reach optimal plan performance. In reviewing this document, you will note that we bring very specific value to each area outlined. We add value for our clients where most firms cannot. We strive to exceed our clients' service expectations and raise the bar on ourselves every year. Our goal is to be much more than a transactional broker and consultant, but rather a trusted advisor who our clients can rely upon and trust. We look forward to introducing the Hays Benefits team and earning the opportunity to be the City of Fort Collins' Benefits Consultant. RFP 7279 Benefits Consultant IV. RESPONSE TO QUESTIONNAIRE Hays • An employer has a concentrated number of employees within a small geographic area • Disease Management through the medical carrier is not customized, has low participation and/or is not demonstrating cost -savings • Optimal behavior modification is not being achieved (or effectively measured) through a Wellness program We also partner with in-house clinic vendors that share our philosophy of risk identification, health management/monitoring and on -going reassessment. The in-house clinic must be capable of managing the Health Risk Assessments (HRAs), biometrics, member outreach & health coaching, care plan development & follow up. This is in addition to the routine on -site care, including acute care (colds, flu, etc.), preventive care (vaccinations, etc.) and occupational health (fitness for duty evaluations, etc.). The on -site setting must allow for a more time efficient care experience as well as a more cost effective experience. Lastly, a Hays vendor partner must be able to demonstrate an evidence -based ROI with substantial financial implications should the ROI not be obtained. 20) Describe any pending litigation against your firm. Hays Companies does not and has not had any litigation, investigations, sanctions, penalties or settlements regarding its brokerage and consulting operations. 21) Describe the professional liability coverage carried by your firm. Hays Companies carriers a Professional Errors & Omissions (E&O) policy with Chartis Specialty Insurance Co. in the amount of $5,000,000, which is effective from 8/15/11 to 8/15/12. Hays Companies also has a Professional General Liability policy for the amount of $1,000,000 for each occurrence effective from 1/19/11 to 1/19/12. Hays Companies Automobile Liability policy covers the amount up to $1,000,000 and is effective from 1/19/11 to 1/19/12. There is also an Excess/Umbrella Liability policy for $5,000,000 for each occurrence effective from 1/19/11 to 1/19/12. The Workers Compensation and Employers' Liability policy coverage $500,000 and is effective from 1/19/11 to 1/19/12. Finally, Hays Companies has a General Property Liability policy including Business Interruption for the amount of $2,000,000 effective from 1/19/11 to 1/19/12. 22) Describe any problems you foresee in your ability to conduct the services described in this Request for Proposal. Hays Companies will be able to perform all of the services as outlined in the Scope of Services in Section II of this Request for Proposal (RFP). We can also confirm that we meet all of the Qualifications as described in Section III of the RFP. 23) Proposed cost of basic duties: The length of the contract will be for a period of one (1) year plus up to four (4) additional one-year periods. It is expected that the firm will provide all of the Scope of Services described in Section II. The proposed fees should include all costs (i.e., miscellaneous administrative, travel, etc.) State an annual cost for each of the contract years, the maximum annual consulting cost for the proposed services. (Do not respond with hourly rates.) RFP 7279 Benefits Consultant 39 IV. RESPONSE TO QUESTIONNAIRE Hays Total Cost not to exceed: Hays Flat Annual Consulting Fee January — December 2012 $70,000 January — December 2013 $70,000 January — December 2014 $70,000 January — December 2015 $70,000 January — December 2016 $70,000 ' Cost of additional services: The City reserves the right under the terms of this RFP to request duties unrelated to the defined set of consulting services. The Scope of these services and related cost will be agreed to prior to the consultant performing the work. Compensation for these services will be based on a "not to exceed" amount. The City also recognizes that at times various projects and services may develop that are not part of the proposed Scope of Services. State the current hourly billing rates for each level of employee that may be involved in conducting additional services. Hays Companies does not utilize a philosophy of billable hours. We believe in providing one all- inclusive consulting fee to our clients. We have set this fee based on our experience with clients of similar size, plan considerations, and other factors and believe it is fair compensation for our potential partnership. Our entire "Core Services" listing as provided below will be provided to the City regardless of the number of hours and amount of travel required. Eliminating billable hours, commission structures and other contingency issues allows us to focus solely on providing the best consulting/brokering services possible to the City. As a result, there will be no additional fees for conducting projects or services as they relate to the City's employee health and welfare plan. RFP 7279 Benefits Consultant 40 IV. RESPONSE TO QUESTIONNAIRE Hays Companies Core Services Hays Finding A Way Together. This is the foundation of our company. It means that we strive to serve the needs of our clients by listening and learning from them. It means meeting and exceeding their goals. Of utmost importance is that we demonstrate ethical integrity at all times. In order to achieve our Mission Statement, the Hays Companies has developed a comprehensive service package that incorporates the following core and optional Services Determine clients benefit philosophy and goals Benefit Plan Consuttation/Design Assistance with Federal Laws Standard 5500 Form - Schedule A Non-standard 5500 forms Summary Annual Reports (SARs) ERISA COBRA/HIPAA ADA FMLA W HA MHPA Review insurance contracts and plan documents for accuracy Develop and market self -funded contribution strategies Market ancillary products Customized Periodic Reports Ongoing Experience Reports Annual/Semi-annual Health Plan Intelligence Reports Customized and Standard Communications Employee Presentations Train The Trainer Materials Enrollment Forms Employee Information Pieces Online Employee Communication with Benergy Benergy Essential Benergy Enhanced CORE Service 0- Optional 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0 0- 0- 0- 0- 0- 0- 0- 0- RFP 7279 Benefits Consultant 41 IV. RESPONSE TO QUESTIONNAIRE Online Employee Communication with Benergy Benergy Enroll Benergy Encounter Assistance with Claim Issues Follow-up on large claim management Executive Claim Issues Interface with claim payer Preparation of Benefit Manual Market Health & Welfare Plans Review national and local managed care alternatives Develop marketing materials. RFPs and proposals Negotiate carver/vender pricing and performance standards Assistance with financial forecasting of plan management Assistance with employee contribution strategies Formal presentation of options Coordination of implementation of selected options COBRA rate change notification Periodic Stewardship Meetings Update current medical/dental trends Pre -renewal planning meeting Annual planning meeting Employee Benefit Surveys Educational Materials Monthly health newsletter to HR staff Bi-monthly corporate newsletter Periodic topical seminars Review internal administrative procedures Access to Benefit Specialists Benefits Attorneys Human Resource Professionals Salary Surveys Job Descriptions Employee Handbook HR Audits Staff Training 401(k) Registered Investment Advisors COBRA/HIPAA Independent Claim Auditors Prescription Drug Consultant International Benefit Programs Underwriting/Actuarial Services Legal Assistance World Wide Broker Network Employee Benefit Statements Hays RFP 7279 Benefits Consultant 42 IV. RESPONSE TO QUESTIONNAIRE Hays 24) Beyond the stated scope of services, what additional services would you anticipate for a client like the City? What would be the estimated cost of those additional services? The Scope of Services outlined in the RFP is comprehensive, but Hays Companies could anticipate a few other projects or services the City would be interested in pursuing. These additional services include, but are not limited to the following: • An audit of the City's prescription drug plan and vendor marketing • Assistance with claims advocacy on behalf of employees • Implementation of an in-house clinic or pharmacy • Evaluation of payroll vendors • Implementation of online benefit administration tools lie. open enrollment, employee portal) • Print, email, and online benefit communication campaigns There will be no additional billable hours by Hays Companies for any consulting services or labor related to the additional services above. However, any vendor or print costs for these services will be the responsibility of the City. We also provide risk management services including workers compensation, property/casualty consulting, and personal lines coverage. There would be an additional consulting fee for these services. If the City is interested in any of these services, we would be glad to discuss the details and costs associated with these services. 25) Provide at least three (3) current clients, include at least one (1) public sector client, to which your firm provides similar services referenced in this RFP. For each reference include entity name, length of time as consultant, number of employees, and contact information (name, title, telephone number, and email address) of individuals that can be contacted as references for your company. Below are three Hays Denver public sector clients in which we provide similar services: 1. City of Westminster Debbie Mitchell Human Resources Manager 4800 West 92nd Avenue Westminster, CO 80031 (303)658-2155 dmitchell@cityofwestminster.us (Self -funded, 1,000 employees) Benefits Consultant for one year 2. City of Loveland Karen Rees Human Resources Manager 500 East Third Street Loveland, CO 80537 970-962-2375 reesk@ci.loveland.co.us (Self -funded, 650 employees) Benefits Consultant for two years RFP 7279 Benefits Consultant 43 IV. RESPONSE TO QUESTIONNAIRE 3. Town of Vail John Powers Vice President of Human Resources 75 South Frontage Road Vail, CO 81657 970-479-2332 jpower@vailgov.com (Self -funded, 220 employees) Benefits Consultant for seven years Hays A complete listing of our Colorado clients and a sample of some of our National clients can be found in the Appendix. 26) Provide at least three (3) terminated clients, include at least one (1) public sector client, to which your firm provides similar services referenced in this RFP. For each reference include entity name, length of time as consultant, number of employees, and contact information (name, title, telephone number, and email address) of individuals that can be contacted as references for your company. Below are three clients we have lost over the past three years and the reason for termination. We are unable to provide any terminated public sector clients to serve as a reference. 1. Time Warner Telecom Lisa Donovan Director, Employee Benefits and Human Resources 10475 Park Meadows Drive Littleton, CO 80124 (303) 566-1442 lisa.donovan@twtelecom.com (Self -funded, 2,700 employees) Time Warner Telecom left Hays Companies effective April 2009 after a 4 year relationship. The change was the result of change in Time Warner's VP of HR position. Hays Companies participated in an extensive RFP process and lost due to a previous relationship between the VP of HR and the new broker. The contact person listed above has expressed her willingness to act as a reference on our behalf. 2. Longmont Clinic Lori Spahn Director of Human Resources 1925 West Mountain View Avenue Longmont, CO 80501 (303) 776-1234 Ispahn@longmontclinic.com (Self -funded, 210 employees) Longmont Clinic left Hays Companies in 2010 after a 5 year relationship. The contact person listed above has expressed her willingness to act as a reference on our behalf. RFP 7279 Benefits Consultant 44 IV. RESPONSE TO QUESTIONNAIRE 3. Coram-An Apria Healthcare Company Faye Major Director, Human Resources 1600 Broadway, Suite 900 Denver, CO 80203 (303) 888-1228 fmajor@bioscrip.com (Self -funded, 1,000 employees) Hays Coram left Hays Companies effective March 2008 after just over 2 years as a client. This client was lost due to an acquisition involving Coram that resulted in a change in broker/consultant due to the acquisition. RFP 7279 Benefits Consultant 45 No Text ' • www.businessinsurance.com l,i-- usiness insurance, LJuly 18,_2011 100 LARGEST BROKERS OF U.S. BUSINESS t k 1 1 11 Ranked by 2010 brokerage revenues generated by U.S. based clients 2010 2009 Company rank rank 1 1 Marsh6McLennan Cos. Inc! 2 2 Aon Corp.' - - - 3 3 Willis Group Holdings P.L.C. 4 4 Wells Fargo Insurance Services USA Inc. 5 5 Arthur J. Gallagher S Co. 6 6 BB&T Insurance Services Inc. - 7 7 Brown I: Brown Inc. 8 8 USI Holdings Corp. 9 9 Lockton Cos. L.L.C. 10 10 Hub International Ltd. 11 11 Alliant Insurance Services Inc. 12 12 Leavitt Group 13 14 Jardine Lloyd Thompson Group P.L.C. 14 13 CBIZ Benefits li Insurance Services Inc. 15 15 Frank Crystal 6 Co. Inc. 16 16 Hays Group Inc., dba Hays Cos. 2010 revenue %change I _ ___ J $4,24Z,400,000 59% $1,650,000,000 -1.2% $1,649,538,000 5.7% $1,557,199,086 2.2% $1,078,576,900 -0.3% - $964,016,361 _ 0.2% $632,249,000 0.7% S578,799,900' 9.5% $510,256,590 -0.9% $357,303,988 1.5% $183,640,000 -4.4% $159,282,30W 18.8% $157,800,000 2.4% $131,530,000 13% $117,200,000 5.2% $116,391,174 9.7% $105,020,193 0.3% $99,494,406 -4.6% $96,587,439 n/m $92,787,282 -1.1% $92,453,487 0.8% $87,495,570' -1.7% $86,014,197 2.9% $85,564,364 -0.5% $81,611,594 -2.6% $80,812,270 _ 4.2% $18,310,466 0.6%_ $76,150,800 7.7% $74,400,0006 26.8% $72,603,000 27.6% $71,465,000 5% $69,520,220 4% $68,621,000 16.3% $64,556,118 9.8% $62,882,000 83% $61,093,000 11.7% $60,195,269 8.9% $58,662,450 -7.2% $55,817,803 -5.3% $54,788,423 2.1% $52,582,000 14.9% $51,259,900 -1.5% $50,619,825 -2.6% $47,321,215 13% $46,200,205 -0.2% $45,493,508 _ 3.6% $44,818,000 12.5% $44,200,000 5.9% 7.1% 17 17 Ballinger Inc. 18 18 J. Smith Lanier 6 Co. 19 19 _ Regions Insurance Group Inc. 20 20 John L. Wortham 6 Son L.P. 21 21 Beecher Carlson Holdings Inc. 22 22 Holmes Murphy S Associates Inc. 23 23 Mesirow Insurance Services Inc. 24 26 Neace Lukens Holding Co. . 25 24 Hylant Group Inc. 26 25 Bancorp5outh Insurance Services Inc. 27 28 Insurance Office of America Inc. 28 27 IMA Financial Group Inc. 29 29 Barney S Barney L.L.C. 30 NEW Paychex Insurance Agency Inc. 31 39 Integra USA Inc. 32 31 Heffernan Group 33 32 Canner Strong S Buckelew Cos. Inc. 34 35 Ascension Insurance Inc. 35 37 Woodruff -Sawyer 6 Co. 36 38 Cottingham S Butler Inc. 37 41 Higginbotham 6 Associates 38 40 Capacity Group of Cos. 39 34 Huntington Insurance Inc. 40 36 Eastern Insurance Group L.L.C. 41 42 Frenkel 6 Co. Inc. 42 48 Edgewood Partners Insurance Center _ 43 43 Associated financial Group L.L.C. 44 44 Western States Insurance 45 46 Marshall 6 Sterling Enterprises Inc. 46 47 Horton Group Inc. 47 50 First Niagara Risk Management Inc. 48 58 Assurance Agency Ltd. 49 54 _ Propellnsurance 50 57 Lawley Service Inc. $43,384,542 "Compuniu that derive less thnn 50% of revenues from commercial result brokerage or employee benefits are not ranked. a✓m=,art menningf d 1 Pro forma to include a full year ofHSBC Insurance Brokers Ltd 2 Pro forma to include full year of Hewitt Associates Inc. 3 Fiscal year ending April 30. 4 Britohpuoui=SL5452 (2010) fiscal year ending Dec 31. 5 Fscal year ending March 31. 6 Fiscal year ending May 31. Source. BI Survey Researched by Kevin Edison Reprinted with permission form Baaineu, Insurance. 02011 Cain Communications Inc All nghu reserved. Fuvher duplication without pemtimion is prohibited. 212.210.0707 • V it w Bu inesslnsumnce cam/section/rcprinu. kBI11-034 NOS Hays J� Hays Denver Benefits Client list Agland Incorporated l\ Denver Rescue Mission ®G A I A M Neenan Archistruction Alpine Lumber Co. American Developmental Disabilities Northern Colorado Water District American National Bank National Bank Resource Centers (DDRC) Oregon Trail Equipment (NE) Arapahoe Library District Draper Valley Farms Pendum Aurora Bank RONTILS (6) 111/t Effective Ul Baxa EnCon United / Stresscon rj 0 `''t' Perkins Health Services (NE) Bonfils Blood Center Baxa Floyd's Truck Center, Inc. (WY) InaediW things wll haopen' Sonnenalp Resort of Vail Booth Creek Natural Foods -— Gaiam SourceGas Boulder Scientific Company i Gallegos Corporation South Suburban Parks & Rec. Center Partners Golden Aluminum I • Sturm Financial Group Central Nebraska Public Power (NE) Greenleaf Wholesale Florist Routt County Chase County Community Hospital (NE) ®•� Group Publishing Telwares Chase County (NE) Hansen Construction Town of Vail Cheyenne Regional Medical Center (WY) I I,,.,,.,,Il, Im _I,II,, l Holdrege Memorial Homes (NE) MRS Trinidad Benham City of Durango ,.,.rl ,:Ir, Howard Head Sports Medicine ._.... ......... UDR City of Imperial (NE) Imagine! US Space Foundation City of Loveland La Plata Electric Association Valmont Industries (NE) City of McCook (NE) City of Loveland Local Matters �e U n Valley Hope Association (KS) City of Westminster Via West ClearChoice CHIC Managed Business Solutions Waterpik Colorado Mountain Medical Care MerrittEquipment south suburban PARKS AND RECREATION Ap Weathercraft Companies (NE) Cornerstone Programs Corporation Moffat County Western Sugar Cooperative Correctional Healthcare Companies Nebraska Salt &Grain Co, (NE) Coleman Natural Foods OENVER RESCUE IMISSION a ��- water 1�C pi Denver Center for the Performing Arts Account Management Date Analysis Service Team Communication strategic Partnerships II. ACCEPTANCE OF ADDENDUM AND AGREEMENT Hays Hays Companies would like to acknowledge the receipt of Addendum #1 on September 14, 2011. This written statement confirms we have read and reviewed Addendum #1, "Exhibit 1 — Questions & Answers" and are in compliance with the specifications of RFP — 7279. Additionally, we have signed and included a copy of the Business Associate Agreement below. HIPAA Business Associate Agreement This Amendment is entered into this �r1} day of ;Lolili between City of Fort Collins ("Employer'), acting on behalf of (t ee""Phan—(s)"), and is ("Business Associate"). This Amendment is incorporated into the *aofsss rcAA, Services Agreement between Employer and Business Associate, dated (the "Agreement"). The parties intend to use the Agreement to satisfy the Business Associate contract requirements in the regulations at 45 CFR 164.502(e), 164.504(e) and 164.314(a), issued under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), as amended by Title XIII, Subtitle D of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) and regulations promulgated there under; and for further applicable HIPAA developments published after enactment of P.L. 111-5, including statutes, case law, regulations and other agency guidance Effective as of February 17, 2010. the Agreement shall be amended by adding the following new provision: Enactment and Impact of ARRA Provisions. Business Associate acknowledges that enactment of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5, ARRA) amended certain provisions of HIPAA in ways that now directly regulate, or will on future dates directly regulate, Business Associate's obligations and activities under HIPAA's Privacy Rule and Security Rule. Requirements applicable to Business Associate under Title XI I], Subtitle D of ARRA are hereby incorporated by reference into the Agreement. including provisions that would govern the Plan's action if the Business Associate undertakes that action on behalf of the Plan. Business Associate agrees to comply, as of the applicable effective dates of each such HIPAA obligation relevant to Business Associate, with the requirements imposed by ARRA, including monitoring federal guidance and regulations published there under and timely compliance with such guidance and regulations. Further, notwithstanding any other provision of the Agreement or underlying services contract(s) between the parties, Can 4c ("Business Associate") agrees to pay all penalties and reasonable expenses. including those incu red for reasonable [emedi_qltion, which are assessed or finally determined by a court of competent jurisdiction to be result of S .z 5 ("Business Associate") (or its agent's) failure to comply with its HIPAA obligations or through contractual agreement between the Business Associate and Plan. In consequence of the foregoing direct regulation of Business Associate by HIPAA laws and regulations, notwithstanding any other provision of the Agreement, Business Associate further agrees to monitor HIPAA Privacy and Security requirements imposed by future laws and regulations, and to timely comply with such requirements when acting for or on behalf of the Plan in its capacity as a Business Associate, Business Associate agrees that it will report security violations to the City of Fort Collins, Security Manager IN WITNESS WHEREOF, each of the parties has caused this Amendment to be signed on its behalf by a duly authorized officer of such party as of the ja date writtten below. City of Fort Collins, Colorado 1AAJS 'h12ANr-r4,::-S ("Business Associate") By' By: Name: Name. LRzu- IEr"'1Pu3zj Title: Title: C6MS" L.-r7iii.r- I [1 1 t 1 1 1 H s NNORTHERN'TOOL + EQUIPMENT e ' ABC Bus Company Hunter, Keith Industries Inc. Abbott Laboratories J.L. French Automotive Castings, Inc. ma O Aggregate Industries Management Johnson Brothers Liquor Albany International Land O' Lakes GREAT RIVER ALLETE Nolme/ Leggett &Platt ENERGY Alumacraft Boat Co. Foods Life Time Fitness American Baptist Homes Lifetouch, Inc. American Family Insurance Lincoln Paper & Tissue Ameriprise Financial, Inc. Marshall & Ilsley Corp. Andersen Corporation Mackay/Mitchell Envelope Company ' Angus Industries MGE Energy, Inc. Archer Daniels Midland Company Malt-O-Meal Company Associated Electric Cooperative, Inc. Mayo Foundation Basin Electric Power Cooperative Meagher & Geer SUCKERS 1 �1„ Baxter International LNETW Michael Foods Beltmann North American ® Minnesota Health Care Association Bemis Company, Inc. Minnesota Rural Electric Trust ' Blue Cross Blue Shield of Minnesota MoneyGram International, Inc. Briggs & Morgan, P.A. Mosaic Company Brunswick Corporation Northern Tool + Equipment Co. ' CIF Industries, Inc. NorthWestem Energy CHS Inc. Oshkosh Corporation Cambridge Associates, LLC Personnel Decisions International Corporation Career Education Corp. Pfingsten Partners, LLC Cargill, Inc. POET Energy Agamber �J Carleton College Cargill Quality Pork Processors Carlson Companies, Inc. R.D. Offutt Company ' Donaldson Cemer Corporation Ryan Companies The Churchill Companies Sage/The Goodman Group Coleman Natural Foods, LLC School Specialty, Inc. ' Commercial Vehicle Group Select Comfort Corporation Convergys Shooting Star Hotel & Casino Dairyland Power Cooperative Smead Manufacturing Company Dakota Electric Association The J.M. Smucker Company ' Deseret Generation Southern Minnesota Beet Sugar Coop,LHI Donaldson Company TCF Financial Corporation m First Industrial (REIT) Thrivent Financial for Lutherans ' G&K SERVICES Foods 2000 Tyler Technology G&K Services, Inc. Universal Hospital Services Graco Inc. U.S. Bancorp ' Great River Energy Wausau Paper Corp. Harvard Management Company Western Fuels Association Hormel Foods Xcel Energy Yellow Book " � BASIN ELECTRIC ►LPOWER COOPERATIVE ' 2/17111 I City of 12 Sample Service Calendar Fit Collins T ed 9/19/2011 VI Coverages edical UMR/UHC 1-Jan Monthly Hays UMR/UHC ental Delta Dental 1-Jan Monthly Hays Delta Dental prescription Drug Prescription Solutions 1-Jan Monthly Hays Prescription Solutions (Vision VSP 1-Jan Annually Hays VSP de/AD&D CIGNA 1-Jan Annually Hays CIGNA TD CIGNA 1-Jan Annually Hays CIGNA TD CIGNA 1-Jan Annually Hays CIGNA IFSA ASIFlex 1-Jan Monthly Hays ASIFIex .0BRA UMR/UHC 1-Jan Monthly Hays UMR/UHC .AP MHN 1-Jan Annually Hays/IHS MHN r Hays Build Monthly Reporting Package Monthly Reporting Monthly Reporting ick-off & Strategy Meeting Hays Present 2012 Benefits Strategy Outline Request Health Plan Intelligence (HPI) Repo -Discuss 2012 benefits goals & objectives -Gather claims data from vendors -Customer service & support strategy Benefit Manual Preparation -Review financials and budget strategy -Present updated coverage profile Request Rx data from PBM Vendor -Employee communications -Gather updated SPD's & Contracts -Hays perform Rx audit/analysis -Legislative & Health Care Reform update ather SPD's & Contracts Monthly Reporting Monthly Reporting Monthly Reporting uarterly Meeting Hays Build Benergy Online HR Website Pre -Renewal Strategy Meeting -Discuss YTD financials & Rx audit -Train HR on Benergy -Review YTD financials & trends -Present HPI report -Medical & ancillary marketing strategy -Discuss wellness strategies & comm Roll -out Benergy to Employees -Employee communication strategy -Discuss vendor customer service -Communicate through print & onsite demos -Legislative & Healtr' Care Reform update Schedule Pre -Renewal Strategy Meeting July 2012 August 2012 September2012 onthly Reporting Monthly Reporting Monthly Reporting ays Request Renewals & Market RFPs Renewal Meeting Make Final Renewal Decisions -Medical, TPA, Stop -loss, Life/LTD, etc -Present renewal & marketing results -Discuss strategy and recommendations Prepare for Open Enrollment Hays Prepare Renewal & Marketing Results -Discuss Health Care Reform impact -Meeting dates -Employee communication & support -Employee communications chedule Renewal Meeting Interview potential new vendors/carriers October 2012.• r December i onthly Reporting Monthly Reporting Monthly Reporting Open Enrollment Open Enrollment Schedule 2013 Planning Meeting -Open enrollment support provided by Hays -Open enrollment support provided by Hays !lays Compliance & Legislation Webinar repare employee communications for OE Hays Wellness Webinar -Print and gather from vendors Notify COBRA vendor of 2013 COBRA rates rint and gather open enrollment materials Annual Model Notices to Employees Open enrollment follow-up and assistance Health Care Reform Update -Present updated coverage profile 1 Hays 1 Strategic Readiness Assessment Hays XYZ Company Managing Health Plan Costs and Aligning Health Care Actions to Employee Behavior • Provide insight on where to focus for both short-term & long-term savings • Set stage for an emphasis on the long-term vision of health care program and employee engagement in plan management and success • Align health care program with employee readiness to develop a sustainable health care program through integrated activities Sustainable change Behavior change N Supportive V environment A a oc Education C 0 H Awareness c m O Pre- Contemplative Action Contemplative Preparation Maintenance Employee Readiness • Assessments that focus on planning and actionable items — Stakeholder input —Focused Web survey — Organizational assessment —Hays review of health care plan & HR/Benefits input and review — Leadership assessment —Senior management assessment and support for health care program changes • Financial assessment — Client -specific financial model that quantifies cost implications of a "current state" or "cost to continue' versus future scenarios • Improved employee and organizational readiness in actionable/measureable items • Create a future stale of health care where employees become engaged consumers of health care with — Financial accountability — Personal health accountability — Real-time information and decision -support tools — Increased satisfaction, choice and flexibility • Clearly defined financial goals and resource allocations What is your employees perception of their health benefits? What do you want your plan to deliver in the future? Where do employees find quality information? What is important when choosing a providers? How do your employees perceive their health? How active are your employees in trying to improve their health? How involved are your employees in making health care decisions at the point of time when care is needed? Can employees become proactive in seeking health care information? What is your role as the employer in the dissemination of information, if any? What is the Internet usage among your employees? Do employees use the Internet for health care information? What incentives would most influence your employees' decisions as it pertains to health care? XYZ Company - Planning for the Future Assessing Health Plan Costs and Aligning Employee Behavior to Create a Multi -Year Benefits Plan 171, 11 JT' Mission Vision Values nancial clarity lEmployee Benchmarking Plan design ountability Funding Policy -Choice Cost Analysis Vendor Selection Criteria -Consistent communication Vendor Performance Audits Health Improvement Plans & -Enhanced appreciation Incentives Plan/Network Selection -Achieving balance in cost -sharing Information Needs Assessment -Willingness to be creative/aggressive Reality Checkpoint Discussion -Vendor Assess & Selection Actuarial Evaluation Data Integration -implementation Clinical Results Employee Education -Hays reporting and analytics Performance Standards Clinical Targeting -XYZ Company employee surveys Plan Evaluation Standards -Vendor performance targets Annual Evaluation July 1, r Initiatives July 1, 201 Actions JuIV 1, 2011r Actions Actions Determine the Foundation Determine the Foundation Implementation of overall Outcome related of the overall benefit of the overall benefit Program Design Accountability and program — Partners and program — Partners and Incentives Platforms Platforms 1) Increase member -New Medical TPA with "Institute Base and Base -Continue Base and Base satisfaction of employee better Customer Service Buy up benefit design for Buy up strategy for all benefits and improve financial all programs (Medical, programs (Medical, Dental, 2) Create Choice situation for both XYZ and Dental, STD, LTD) STD, LTD) the employees -Offer Worksite benefits 3) Begin communications -implement Patient Care -Research spousal -Communication of key regarding more -Create Benefit Statements carveout utilization metrics to accountability of members -Enhance the open -Institute a member plan further enhance education for their health and enrollment messaging selection tool about costs general understanding of -Educate employee -Self service benefit -Continue accountability costs knowledge of total plan administration and education message costs relative to business goals 4) Increase differentials -Continue Base Plus plan -Replace Base plan with an -Comply with Health Care between the current Base with minor changes, Account Based option Reform and Base Plus plan designs institute major changes to -increase cost sharing in Base plan Base Plus plan -Comply with Health Care Reform 5) Align Medical premium -Correct tier rating for all -Research socially -Create socially equivalents according to four tiers according to responsible cost sharing responsible cost sharing actuarial norms and XYZ actuarial norms so no one for employee contributions where Directors and higher demographics tier is subsidizing the .Research salary based contribute more or salary others employee contributions based contributions 6) Adjust contribution cost -Begin shifting employee -Continue shift to equal -Finalize shift to equal cost sharing according to contributions to create cost sharing between all sharing between all plans coverage tier equal cost sharing between tiers (WI 25% Base Plus / and coverage tiers(25% all tiers (WI 25% Base Plus/ 20% Base, Memphis 23% Base Plus / 20% Base) 20% Base, Memphis 21% Base Plus / 20% Base) Base Plus / 19% Base) 7) Value Based Benefit -Research ability to begin -Add Disease Management -Mandatory Health Risk Design data sharing between (DM) program, incorporate Assessments and DM with wellness and Medical/Rx wellness results agreed intervention •100%Preventive coverage •Rx incentives for DM participation begins -Same ER Benefit In/Out compliance -Employees understand and appreciate benefit program and costs -Tools promoting accountability and supporting decision - making are available -Employee choice expanded -Benefit program financial performance monitored and measured -Appropriate balance established and maintained in cost - sharing arrangement between XYZ and employees Hays Companies Employee Benefits Risk Pool Management - OpportunityAnalysis May26th, 2011 Presented To: City ofFort Collins 1125 17th Street Suitr 1710, Dmm, CO 80202 m m m m m m m m m m m r m m m m m ! m City OfF01t CoB nrts Illurtr-ildoll Prospectrve Opportm ty Cost Analysis MTMM1 2 3 4 5 6MMF 7 8 9 111 EMPLOYEE AUtltril $17,720 $,52.730 �A:lG7 $611,38.5 $71,1.15 $78,616 $86,870 $9.5,992 $106,071 $117,208 Cumulative .$17.720 $I(M),65(1 .$1S8,717 $223,102 $294,247 $372,863 $159,733 $555,724 $661,795 $779,003 O u ,...1 :1uuu:lCosl $911951 $930,W) 31,028,047 $1,135,992 $1,255,271 $1,387,075 $1,532,719 $1,698,653 $1.871,187 $2,W7,993 u COOndative Cost $841,954 $1,772,314 $2,800,361 $3,936,3.54 $5,191,62.5 $6„578,7(X) $8.111,418 $9,805,071 $11,676,558 $13,7",.5.51 Annual Cost $889,674 $983,090 $1,086.31-1 $1,D)(077 $1,326JI7 $1,46.691 $1,619,588 $1,789.615 $1,977,558 $2,185,201 Cumadative Cost $889,674 $1,872,764 32,959,078 $4,159,455 $.5;485,872 $6,9.51„563 $8,571,1.51 $10,360,795 $12,338,353 $14,523,554 Imiumullm Annual Cost $892,472 $986,181 31,089,730 $1,204,152 $1,330,588 $1,470,299 $1,624,681 $1,795,272 $1,9Wi,776 $2,192,073 Cwutilativc Cost $812;472 $1,!)32,201 $3,137,863 $¢,530,287 $6,132,692 $7,970,9.5R $10,073.891 $11,473,597 $15,`205;789 $18,31(;209 O $20,000,000 $18,000,000 $160M)S M) $1.1,000,000 $12,000,000 $10,000,()W $8,000,000 $6,000,0(M) $,4,000,000 $2,000,000 $0 TCYCAL Ci1MtTIATIVT 01TORTUNITY COST 1 2 3 4 5 6 7 8 F) 10 rt-EMPLUYEP. —o—EMPL.OYER —p—TOTAI. �E\1PLOYEROPPORTINITTCUST 7hr:Nra4ca/Out aulysu:uvrxnn'1(l.Sg,urrG a/arxd:xxl,m chargrsm xrmva*arW p/ar, d,4,. Nays 77,r bnpk,)zi Oppummj (iut.4=13 s......s of /uxnul Rwk o!'RNtln, n(6%. M M M M M M M M M M M r M M M M M M M XYZ Company Financial Summary for plan year January 1, 2009 through December 31, 2009 August 2009 Revised: October 12, 2009 Ha1(S M M M M M r M M M M M M M M M M= M XYZ Company Table of Contents Monthly Claims Report Executive Summary 2009 Experience Summary 2008 Experience Summary 2007 Experience Summary Large Claim Detail Projections 2009 Total Cost Projection 2010 Total Cost Projection 2009 I BN R 2010 Renewal Contributions 2009 Contributions 2010 Contribution Illustration Plan Options Benchmarking Compliance Marketing Hats M M M M M M M M M= M M M M ■■a w M M XYZ Company 2009 Monthly Plan Cost Report Enrollment Fixed Fees Medical I Rx Claims Stop Lass Calculation Aggregate Claims Vision Dental Plan Costs Eligible Aggregate Claims Over Claims Over Aggregate Med(Rx Total Dental Grand Total Med/DeWs Medical Rx Incurred Medical Rx Incurred Total Medical ISA 1/1/09- ISA 111108. Total Claims Med)R% Claim Total Vision Clams s MaNDarvVis Contribution Month Total Admin Access Fee Stop Loss Total Incurred 2009 2009 Incurred 2008 2008 S Rx Claims 3131110 3/31/09 Over ISA Claims Attachment Claims Premium 6 Premium Estimate Jan-09 355 $7,171 $4.083 $41439 $52,693 $0 s0 s0 s0 $0 $0 so s0 so $407.597 so $22,125 $74,818 $380,348 Fetb09 371 $7,484 $4,267 $43,307 $56,068 $86,357 $76,347 $4129W $22,212 $599,882 s0 $209.903 $209,803 $164.704 $425.967 $6,761 $31252 $482,149 $392,853 Mar-09 390 $7.878 $4,485 $46,525 $57,888 $249,542 $30,890 S46,140 s0 $326.672 so $8.459 $8,469 $280.532 $447.782 $7,069 $25,431 $408,801 $406.492 Ap>09 390 $7,878 $4,485 $45,525 $57,888 $820.115 $33.273 $13,544 $360 $867.292 $533.849 30 S533,849 S319,539 $447.782 $4.724 $13 541 5409,596 $409,458 May-09 390 $7,878 $4,485 $45,525 S57,888 $250.755 S47.255 $3.887 $25 $3D1,702 $59,086 s0 $59,086 $238.824 $447,782 $2.430 S17.991 $320,925 S409.878 Jun-09 427 $8,625 $4.911 $49,844 $63,380 S283,703 $28.217 S85.601 s0 $397,621 $119.008 so $119.006 $192.912 S490.264 $8,232 $17,743 S367.867 S457.107 Ju1-09 415 $8.403 $4,794 $48560 $61.747 $81.815 $35.810 $5,891 $23 $123.539 S2,272 SO $2.272 $115,353 $477,635 $4,185 S20.827 $208.025 S448.417 Aug-09 424 $8.565 $4.876 $49,494 $62.934 $167,604 $38.346 $91,102 s0 $297,D42 $21,839 s0 $21.839 $194,011 $486,820 $8,372 $19547 $364,156 S458.906 Sep-09 Oct-09 Nov-09 Dec-09 09 Total 3,163 $63,893 $38,375 $369,217 $469,484 $1.939,891 $292,138 $659,001 $22,620 $2,913,650 $736,054 $219,262 $954,316 $1,496.976 $3.631,630 $39,763 $168,557 S2,636,138 $3.363,458 Mo/Avg 395 $7,987 $4,547 $46.152 $68,686 $242,486 $36,517 S82,375 $2.826 $364,206 $92,007 $27,283 $119,290 $106,997 $453.954 $4,845 $21,070 $329,517 $420,432 PEPM Avg $20.20 1111.50 $116.73 $148.43 $613.31 $92.36 $208.35 $7,15 $921.17 $232.71 $69.00 $301.71 347296 $1 148AS $12.26 $53.29 $833.43 $1 063.38 % Change 23.5% 2.0% T.0% 29.7% 23.1% 4.5% 123.0% 46.6% 12.9% -16.5% 2.9% .10.7% 08 Total 3,842 $76,072 $41,302 $345.703 S463,076 $2,201,680 $422,548 $727.849 $34,546 $33386.923 $483,350 $56.412 $519.792 $2,867,131 $3.905,547 $56.375 $198,947 $3.585,529 Mo/Avg 320 $6,339 $3,442 $28,809 $38,590 $183.473 $35,212 $60,654 $2.004 $282,244 $38,615 $4.701 $43.316 $238,928 $325,462 $4.698 S16,579 $298,794 PEPM Avg $19.80 $1075 S89.98 $120.53 $673.05 $109.98 $189.45 $9.07 S881.55 $120.61 $14.08 $135.29 $746.26 $1,016.54 $1467 $51.78 $933,25 % Change 6.7% -11.8% 26.5% 4.5% 3.0% -8.4% -38.1% 0.3% rda 15.7% 3D% 1.0% 07 Total 3.595 $80,708 $30,558 $309314 $420,779 $3,460,341 $785,166 S2,675,175 No A99tegate S45.576 $177066 $3.318,576 Mo/Avg 300 $6,728 $2,546 $25,793 $35,065 $288,360 $65,431 $222,930 Stop -Lose $3,798 $3.521 $265,314 PEPM Avg $22.45 $8.50 $86A0 $117.05 1 $962-54 1 S218.41 1 $744,13 Insurance 1 $12.68 $50.29 1 $924.15 calAdmmistrabon CNIC $20.20 PEPM ork Access -DM/CM Cofiniy $11.50 PEPM ific Stop Lass, Sunhfe $112.12 PEPM - ISL v6.opo nvt51 - S375 000 Lever (25%)-12t15 Sunift S4.B7 PEPM polite Attachment Stasife $1,148.16 PEPM $203,708 s0 $158.159 $88,159 $98,728 $28.728 S39.352 $0 2009 Contnbutions Mod, Total EE Only S4W80 EE+SP $1.188.14 EE-CH $1283.65 EE+Fam $1,660+02 Dental Total EE Only $22.92 EE+ SP $61.57 EE-CH $65.17 EE+Fam $90.95 Data was gathered from varwus sources and is unaudited. Data is for companson and cost estimation purposes only. Incurred But Not Reported Estimation (IBNR( As of 9/31/09. $397,376 2009 Plan Year 41% % Of Maximum Liability 51% % Of Stop -Loss Carrier Expected Liability $2135,655 Amount over Maximum Liability 2009 Plan Year 78% % of Med/RxlDen Contributions - HaYs Page 1 III. QUALIFICATIONS Hays 1) A minimum of three (3) years prior experience with governmental entities as clients. Hays Companies has provided consulting services to governmental entities for over seven years. Please refer to the Response to Questionnaire section, specifically questions 3 and 6. 2) Must have prior experience within the last three (3) years with organizations with at least 500 employees as clients. Hays Companies provides benefits consulting experience to organizations of at least 500 employees. We currently have approximately 16 clients which have over 500 employees. Please refer to the Response to Questionnaire section, specifically questions 6 and 25. 3) Your firm must be licensed in the State of Colorado. Hays Companies is actively licensed in the State of Colorado. 4) Prior experience with self -funded health and dental plans. Hays Companies has experience and an in-depth understanding of self -funded health and dental plans. Over 70% of our clients in the Denver office are self -funded. Please refer to the Response to Questionnaire section, specifically questions 5 and 18. 5) Understanding of, and direct experience with, Northern Colorado demographic area healthcare delivery concerns (e.g. single hospital, limited PPO arrangements). Hays Companies currently consults for 14 employers in Northern Colorado. We understand the unique challenges of the healthcare delivery system, especially in Fort Collins. Please refer to the Response to Questionnaire section, specifically question 16. 6) Experience working with cafeteria -style benefit programs, including Section 125 and 129. Hays Companies has experience helping clients design and manage their cafeteria benefit programs. Please refer to the Response to Questionnaire section, specifically question 17. 7) Experience in evaluating benefit program designs and in making recommendations for program improvements and/or restructuring (e.g. HSA, HRA, onsite clinic experience). Hays Companies has the people, tools, and experience to evaluate and make recommendations to improve the City's benefit program. Please refer to the Response to Questionnaire section, specifically questions 13, 18, and 19. 8) Proposals shall be accepted on a fee only basis. The City of Fort Collins will not consider a commission -based proposal. Hays Companies will be providing a flat fee consulting proposal. We believe in complete transparency and the vast majority of our clients are contracted on a fee only basis. Please refer to the Response to Questionnaire section, specifically questions 23 and 24. M M M M M M M r M M M M M M M M M M M XYZ Company 2008 Monthly Plan Cost Report Enrollment Fixed Fees Medical / Rs Claims Stop Loss Calculation Vision Dental Plan Costs Claims Over Claims Over Total Centel Total Grand Total Access Medical Incurred Rx Incurred Medical Rx incurred Tote) Medcal S ISA 1/1108 - ISA 1/7/07 - Total Claims Total Vision Claims 8 Medw. R%8 Med/DerVV,s Month Total Administration Fees Slop Loss Total 2008 2008 Incurred 2007 2007 Rx Claims 3131M9 3131MS Over ISA Net Claim Cost Claims Premium Premium S. Premium Jan-08 299 $5,920 $3,214 $26,904 S36.038 $50 S23017 S181,369 $20,142 $224,578 s0 $18,649 $18.649 $205,929 $4.327 $25.296 S241,967 S271,591 Feb-08 293 S5,801 $3.150 $26,364 $35,315 s0 S11.909 $48,850 $14,684 $75243 $0 $2,568 $2.566 S72,677 $1929 $10,876 $107,992 $120.798 Mar-08 305 $6,039 $3.279 $27,444 $36,752 $250,875 $34204 $138.820 $0 $423,899 $e $35,197 $35,197 $308,702 $8.569 511,970 $425.464 S446,003 Apr-08 313 $6,197 $3.365 $28,164 $37,726 $228,360 $29.767 $16,969 so S275,086 s0 so s0 S275,086 $4.562 $21,189 S312,812 S338,563 May-08 319 S6,316 $3,429 s28704 $38,449 $14,069 S33.388 $2.803 $10 S50,268 $0 s0 so $50.288 $752 S15,694 S88,717 S108183 Jun- OB 307 $6,079 $3,300 $27.624 $37,003 $331,725 $21,435 $33211 52 $386,373 S58,158 s0 $58,158 S328,215 $9.711 SU.076 S365,218 S389.004 Jul-08 329 $6,514 $3,537 $29,603 S39,854 $301424 $47,780 S35,035 $0 $354.239 $120,802 $0 $120,602 $263,637 S5419 $11,000 $303,291 $319,710 Aug-08 327 $6,475 $3,515 $29,423 S31l $102.139 $36.791 $204,379 $2 $423,311 $30651 $0 S30661 $392,660 $3.819 $18.536 S432,073 $454.429 Sep-08 333 WSW $3,580 $29,963 $40,136 $271.154 $38.096 $44.128 so $353,376 S103.709 $0 S103,709 S249,667 $3.517 $20.150 $289.803 S313.411 Oct-08 338 $6,692 $3,634 $30,413 $40,739 5125290 S41.108 S8,520 S2 $174,920 $3,763 so $3,763 S171,167 $3,623 $21,031 $211.9011 $236.550 Nov-08 345 $6,831 $3,709 531,043 $41.583 $157,785 $62,056 $7.122 $4 $226.967 $6.875 s0 $6,875 $220,092 $4,071 $14.558 $261.675 $280.301 Dei 334 $6613 $3,591 330,053 $40,257 $330B09 S42,999 $6,856 $0 $388,663 $139632 s0 $139632 $249031 $6,076 $14,573 $289,288 5309.937 08 Total 3,942 $76,072 S41,302 $345,703 $463,076 S2,201,680 $422.649 $727,949 $34,646 $3,388.923 $463,380 $66,412 $519.792 $2,867,131 $56,375 $198,947 $3.330,207 $3,595,529 Ma l Avg 320 $6,339 $3,442 $28,809 $38,590 $183,473 $35,212 $60,654 $2,904 $282,244 $38,615 $4,701 $43,316 $238,926 $4,698 $16,579 $277,517 $298,794 PEPM Avg $19.60 $10.75 $89.99 $120.53 $573.06 $109.99 $189.45 $9.07 $eel.55 11120.61 $14.68 $135.29 $746.26 $14.67 S51.78 $666.79 $933.25 %Change 6.72% -11.80% 26.47% 4.51% 2.97% -8.41% -38.06% 0.29% 15.72/. 2.97% 0.65% 0.96% 07 Total 3.595 $80,708 $30,558 $309,614 $420,779 $3,460.341 $785.166 $2,875.155 S45,576 $177,066 $3,095,934 $3,318,576 Ma/Avg 300 $6,726 $2,546 $25,793 $35,065 $288,360 $6.5,431 $222,930 $3.798 $3,521 $257,995 $265,314 PEPM Avg $22.45 $8.50 $86.10 S117.05 $962.64 S218.41 $744.13 312.68 $50.29 $861.15 $924.15 1 Administration CNIC $19.80 PEPM 1t Access -OMICM Col iy $10.75 PEPM c Stop Loss Sunitle S85.59 PEPM ISL 970.000 (1N15) $175.000 Lawar 5%)-12115 Sunlife S4.39 PEPM mite Attachment Sumife S1,018.54 PEPM 2008 - Large Claims 1lll0e-3131I09 Claimant Total Amount Over ISA Amount Employee-Lasei $544,484 $169.494 Employee $416,017 $346,017 Employee $145,785 S75,785 Employee $119,984 $49,984 Spouse 598,801 $28.801 Employee S78,205 S8.205 Employee $65,253 $0 Child $55,975 s0 Chid S53,217 s0 Employee $52.223 s0 e $47,723 SO Totall $1,677,678 $678,287 % of Total 55% Data was gathered from various sources and is unaudited Data is for comparison and cost estimation purposes only Incurred But Not Reported Estimation IIBNRI As of 12131108: $488 827 2008 Plan Year 76% % Of Maximum Liability 61% % Stwl-oss Camer Expected Liability t51 530 1851 Amount over Maximum Liability Hays] Page 2 1=1 = M Ml = = 1=1 XYZ Company 2007 Monthly Plan Cost Report Enrollment Fixed Fees Claims Stop Loss Calculation Total Plan Cost Total PPO Medical & Claims Over Total Medical & Month Total Administration Access Stop Loss Total Medical Rx Vision Rx ISA Net Claims Rx Plan Cost Jan-07 292 $6,555 $2,482 $25,308 $34,345 $258,393 $63,416 $4.996 $321,809 $37.861 $283,948 $318,293 Feb-07 291 $6,533 $2,474 $25,264 $34,270 $162,570 $34,317 $4,622 $196,887 $712 $196,175 $230,445 Mar-07 309 $6,937 $2,627 $26,493 $36,057 $169,510 $40,121 $2,559 $199,631 -$36 $199,667 $235,724 Apr-07 302 $6,780 $2,567 $25.450 $34,796 $136,038 $40,147 $3,942 $176,185 $0 $176,185 $210,981 May-07 299 $6,713 $2,542 $25,466 $34,720 $276.884 $33,059 $3,128 $309,943 $0 $309,943 $344,663 Jun-07 297 $6,668 $2,525 $25,674 $34,866 $160,830 $30,094 $3,515 $190,924 $0 $190,924 $225,790 Jul-07 307 $6,892 $2,610 $26,627 $36,129 $263,196 $41,881 $5,628 $305,077 $57,099 $247,978 $284,107 Aug-07 303 $6,802 $2,576 $26,010 $35,388 $397,587 $36,150 $1.279 $433,737 $96,114 $337,623 $373,011 Sep-07 299 $6,713 $2,542 $26.130 $35,384 $502,929 $30,164 $3.966 $533,093 $352,130 $180,963 $216,347 Oct-07 297 $6,668 $2,525 $25,526 $34,718 $274,150 $37,394 $4,317 $311,544 $120,009 $191,535 $226.253 Nov-07 305 $6,847 $2,593 $26,319 $35,758 $224,145 $16,319 $3,860 $240,464 $43,378 $197,086 $232,844 Dec-07 294 $6,600 $2,499 $25,247 $34,347 $203,425 $37,602 $3.864 $241,027 $77,899 $163,128 $197,475 07Total 3595 $80.708 $30,558 $309,514 $420,779 $3,019,657 $440,664 $45,576 $3,460,321 $785,166 $2,675,165 $3,095,934 Mo/Avg 300 $6,726 $2,546 $25,793 $35.065 $251,638 $36,722 $3.798 $288,360 $65,431 $222.930 $257,995 PEPM Avg $22.45 $8.50 $86.10 $117.05 $839.96 $122.58 $12.68 $962.54 $218.41 $744.13 $861.18 %Change 6.88% 3.22% 37.10% -10.97% -6.11% 52.51% -1.92% -17.22% 39.28% 1576.63% 9.75% 7.29% 06/07 Total 2803 $60,965 $17.379 $271,070 $349,414 $1.543,812 $350.299 $42,929 $1,937,040 $36,513 $1,900,527 $2.249,941 Mo/Avg 280 $6,097 $1,738 $27,107 $34,941 $154,381 $35,030 $4,293 $193,704 $3,651 $190,053 $224,994 PEPM Avg $21.75 $6.20 $96.71 $124.66 $550.77 $124.97 $15.32 $691.06 $13.03 $678.03 $802.69 %Change 11.45% -0.07% 0.20% 7.32% 11.42% -25.68% 22.03% -18.07% -90.81% -3.38% -1.34% 05/06 Total 3018 $65,686 $18.675 $271,964 $337,650 $2,236,673 $309,067 $2,545,740 $427,846 $2,117,894 $2,455,544 Mo/Avg 252 $5,474 $1,556 $22,664 $28.138 $186.389 $25,756 $212.145 $35,654 $176,491 $204,629 PEPM Av $21.76 $6.19 $90.11 $111.88 $741.11 $102.41 $843.52 $141.76 $701.76 $813.63 Fixed Fees Large Claims Large Claims Medical Administration Stop Loss Period 1-1-06 - 3-31-07 Stop Loss Period 1-1-07 - 3-31-08 $22.45 PEPM Amount Over ISA Amount Over ISA PPO Access Fee $108,572 $38,572 $405,343 $335,343 $8.50 PEPM $65,713 $335,683 $265,683 Stop Loss $64,633 $221,357 $96,357 Individual Stop Loss $70,000 With $125.000 Laser $54,796 $153,368 $83,368 $43.71 Single $39,072 $87,663 $17,663 $117.50 Family $38,572 $37,666 $74,626 $4,626 Incurred But Not Reported Estimation (IBNR) Estimated 12/31/07. (Med/DeNRx1Vis) $35,015 Total $444,039 $38,572 Total $1,278,040 $803,040 $ 55,792 % of Total 23% °k of Total 37% Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 3 XYZ Company Large Claims Detail Dependent Hemophilia $689,166 $619.166 Employee-Laser@375K Lupus/Chmnic Renal Failure $203.708 $0 Employee Chronic Abdominal Pain/Diabetes $158.159 $88.159 Employee Athemsderosis/Bypess Surgery $98,728 $28.728 Dependent roe.roa.-wro.--aa--a.-1..r . vwwO, $39,352 $0 Dependent Abdominal Pain / Colonoscepy- CNIC providing more details $39,483 $0 Total Large Claims $1,228,597 $736,054 Total Medical a Rx Claims (incurred 1I09-12109) (Paid 1109-3/10) $2,232,029 Percentage of Medical a Rx Claims Paid 55% Paid Claims Over $35.000 IS acl0c LaVel I� Ii 70000 li III Janua 20081hrou h March2009 CitGraj9:1libuil MedicalRx Clalmandflil,olli i, Diagnosis �� I', li p. '. iI Ii �Iii.,i ��Il �l�i�nn i�i ail1. ir[iiillN ii 11t Amoudt Is OverSpecihc Employee-Laser®375K Lupus/Chronic Renal Failure $544.494 $169,494 Employee Chronic Abdominal PaiNDiabetes $416,017 $346,017 Employee Coronary Bypass (12,08) / Femoral Pseudoaneurysm CY09) $145,785 $75,785 Employee Intracerebral Hemonhage/Cocaine Abuse $119,984 $49,984 Spouse Stage IV Brain Cancer (no CM per family request) $98,801 $28,801 Employee Stage IIIC OVanan Cancer $78,205 $8,205 Employee Lumbar Disc Displacement $65,253 $0 Child Premie $55,975 $0 Child Premie $53.217 $0 Employee Tube l Ligation / Perforated Bowel w/infection $52.223 $0 Spouse Complications of pregnancy (premies) $47,723 $o Total Large Claims $1,677,678 $678,287 Total Medical a Rx Claims (Incurred 1I08-12108) (Paid 1108-3109) $3,059,406 Percentage of Medical a Rx Claims Paid 55% Employee Prostate and Rectal Cancer Sa05,343 $335,343 Employee Lupus/Chronic Renal Failure $335,683 $265,683 Spouse-Lasel End Stage Renal Disease $221,357 $96,357 Spouse Chronic Abdominal Pain/Diabetes $153,368 $83,368 Employee Lumbar Disc Displacement $87,663 $17.663 Employee Lumbago/Lammotomy/Diskectomy, $74,626 $4,626 Total Large Claims $1,278,040 $803,040 Total Medical a Rx Claims (Incurred 1107.1 V07) (Paid 1107-3108) $3,460,321 Percentage of Medical a Rx Claims Paid 37% Im one was gathered eon venous sources and Is uneudiUd. Dste is Mr compadwn and wet estimation purl ony. Pape a XYZ Company 2009 Projected Plan Costs Med EE Den EE Medical Rx Vision Dental Jul 08 329 317 Aug 08 327 320 Sep 08 333 333 $315,280 $38,096 $3,517 $19,351 Oct08 338 332 $133,810 $41,110 $3,623 $20,234 Nov 08 345 334 $164,907 $62,060 $4,071 $13,754 Dec 08 334 335 $345,664 $42,999 $6,076 $13,769 Jan 09 355 371 $0 $0 $0 $21,235 Feb 09 371 382 $499,323 $100,559 $5,751 $30,335 Mar 09 390 386 $295,782 $30,890 $7,069 $24,505 Apr 09 390 392 $833,659 $33,633 $4,724 $12,600 May 09 390 393 $254,422 $47,280 $2,430 $17,048 Jun 09 427 432 $369,304 $28,217 $8,232 $16,706 Jul 09 $87,706 $35,833 $4,185 $19,785 Aug 09 $258,696 $38,346 $6,372 $19,785 Total 41329 4,327 $3,558,553 $499,023 $56,050 $229,107 Most Recent 12 Mo's of Claims $3,558,553 $499,023 $56,050 $229,107 Claims above Stop -loss level $1,208,285 $0 $0 $0 Net Claim Cost $2,350,268 $499,023 $56,050 $229,107 Lagged Enrollment 4,329 4,329 4,329 4,327 PEPM Claim Cost $542.91 $115.27 $12.95 $52.95 Plan Design Adjustment Factor 0.984 1.000 1.000 1,000 Trend Assumption 10% 10% 5% 8% Trend Months in Current Plan Year 4 4 4 4 Total Trend Assumption 3.2% 3.2% 1.6% 2.6% Trended Forward PEPM $551.40 $119.00 $13.16 $54.32 Enrollment Assumption 395 395 395 382 Projected 2009 Claim Cost $2,616,107 $564,574 $62,437 $249,022 Projected 2009 Plan Year Claim Cost Projected 2009 Total Fixed Cost Projected 2009 Total Plan Cost Projected 2009 Total Plan Costs (PEPM) (based on medical EE's) Current 2009 Total Plan Costs (PEPM) (based on medical EE's) % Change Projected 2009 Total Plan Costs (PEPM) (based on medical EE•s) Budgeted 2009 Total Plan Costs (PEPM) (based on medical EE's) % Change $3,492,140 $715,861 $4,208,001 $886.92 $833.43 6.4% $886.92 $1,063.38 16.6% Hays Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 5 XYZ Company 2010 Projected Plan Costs Med EE Den EE Medical Rx Vision Dental Ju108 329 317 Aug 08 327 320 Sep 08 333 333 $315,280 $38,096 $3,517 $19,351 Oct 08 338 332 $133,810 $41,110 $3,623 $20,234 Nov 08 345 334 $164,907 $62,060 $4,071 $13,754 Dec 08 334 335 $345,664 $42,999 $6,076 $13,769 Jan 09 355 371 $0 $0 $0 $21,235 Feb 09 371 382 $499,323 $100,559 $5,751 $30,335 Mar 09 390 386 $295,782 $30,890 $7,069 $24,505 Apr 09 390 392 $833,659 $33,633 $4,724 $12,600 May 09 390 393 $254,422 $47,280 $2,430 $17,048 Jun 09 427 432 $369,304 $28,217 $8,232 $16,706 Jul 09 $87,706 $35,833 $4,185 $19,785 Aug 09 $258,696 $38,346 $6,372 $19,785 Total 4,329 4,327 $3,558,553 $499,023 $56,050 $229,107 Most Recent 12 Mo's of Claims $3,558,553 $499,023 $56,050 $229,107 Claims above Stop -loss level $1,208,285 $0 $0 $0 Net Claim Cost $2,350,268 $499,023 $56,050 $229,107 Lagged Enrollment 4,329 4,329 4,329 4,327 PEPM Claim Cost $542.91 $115.27 $12.95 $52.95 Plan Design Adjustment Factor 0.984 1.000 1.000 1.000 Trend Assumption 10% 10% 5% 8% Trend Months in Current Plan Year 16 16 16 16 Total Trend Assumption 13.6% 13.6% 6.7% 10.8% Trended Forward PEPM $606.54 $130.90 $13.82 $58.67 Enrollment Assumption 395 395 395 382 Projected 2010 Claim Cost $2,877,717 $621,032 $65,559 $268,944 Projected 2010 Plan Year Claim Cost $3,833,251 Projected 2010 Total Fixed Cost (38.3% increase Medical / no -change Dental) $985,580 Projected 2010 Total Plan Cost $4,816,831 Projected 2010 Total Plan Costs (PEPM) (based on medical EE's) $1,015.67 Current 2009 Total Plan Costs (PEPM) (based on medical EE's) $833.43 % Change M/. Projected 2009 Total Plan Costs (PEPM) (based on medical EE's) $1,015.67 Budgeted 2009 Total Plan Costs (PEPM) (based on medical EE's) $1,063.38 % Change -4.5% FriM Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 6 XYZ Company 2009 Estimated Incurred But Not Reported Claim Liability Benefit Plan Projected 2009 Projected IBNR % Projected IBNR Enrollment PEPM IBNR Year End Cost Assumption Medical $2,616,107 12.5% $327.013 395 $68.92 Rx $564,574 4.2% $23,524 395 $4.96 Dental $249,022 8.3% $20,752 382 $4.53 Vision $62,437 4.2% $2,602 395 $0.55 Medical Administration $19.80 3 Months of Runout $23,485 395 $4.95 Admin. Total $397,376 $83.91 - All claims projections and resulting IBNR estimations are based off of the above stated enrollment assumption. - IBNR liability will fluctuate with enrollment changes. Enrollment assumption is based on the most recent 12 month average. - Large claims over the specific deductible are excluded from the calculation. - An estimate to account for the cost of processing run -out claims is included. - IBNR assumes a 1.5 month lag in Medical claims payment - IBNR assumes a 0.5 month lag in Rx claims payment - IBNR assumes a 1.0 month lag in Dental claims payment - IBNR assumes a 0.5 month lag in Vision claims payment Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 7 M = M 1=1 M r = M = 1=1 = = M = = 1=1 M i XYZ Company 2010 Renewal Summary Current Rates Renewal Rates Changes % Change $$ Change Coverage EENolume Current Rate Annualized Renewal Rates Annualized From From Current Current Medical Administration (CNIC) $17.70 $18.50 4.5% COBRA Administration (CNIC) $1.25 $1.25 0.0% HIPAA Administration (CNIC) $1.25 $1.25 0.0% Network Access Fee (Cofinity) $6.50 $6.50 0.0% Medical Management (Cofinity) $5.00 $5.00 0.0% Administration Fee 416 $31.70 $158246 $32.50 $162,240 2.50/ $3994 Individual Stop Loss (Sunlife) $112.12 $168.18 50.0% Aggregate Stop Loss (Sunlife) $4.61 $4.61 0.0% Stop -Loss Premium 416 $116.73 $582 716 $172 9 $862,568 48.0% $279,852 Total Fixed Costs 416 $148.43 $740,963 $05.29 $1,024,808 38.3% $283,845 Year-end Expected Medical, Rx, Vision Claims (Hays)' 416 $683.55 $3,412,297 $751.25 $3,750,242 9.9% $337,945 ..... Dental Administration(Wells Fargo TPA) 416 $2.40 $11,9 .40 $11,981 0.0% $0 Year-end Expected Dental Claims (Hays)" 416 $54.32 $27 1186 58.67 $292,881 8.0% $21,695 - •a a MRSM W. uyamu mamma.,. -on, em oo- on nrya rwnng ,[ mom propu,one mr uvu & [Un - t o.00 uenoal.1.1 ere oesea on nays RNng I[ Ioomn pmfedlOOa on.B 6 wID. Life & AD&D (Sunlife) (guarantee through 2011) 17,217,750 $0.125 $25,827 $0.125 $25,827 0.0% $0 LTD (Sunlife) (guarantee through 2011) 1,947,145 $0.2 $65,424 $0.28 $65,424 0.0% $0 Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 8 M M M M M M M M M M M M M M M M r M M XYZ Company Monthly Contributions 2009 Base Salary Over 60K -Medical Dependent Status Enrollment Total - ER Paid EE Paid ER EE Employee Only 34 $456.80 $342.60 $114.20 75% 25% Em to ee+Spouse 18 $1,186.14 $889.60 $296.54 75% 25% Employee + Child 4 $1,283.65 $994.83 $288.82 78% 22% Family 88 $1660.02 $1.211.82 $44B.20 73% 27% Total 144 $1,306.24 $960.28 $345.95 Annual $2,257,177 $1,659,368 $597,809 74% 26% Base Salary Under 60K - Medical Dependent Status Enrollment Total ER Paid EE Paid ER EE Employee Only 133 $456.80 $364.73 $92.07 80% 20% Em to ee+S ouse 37 $1,186.14 $940.44 $245.70 791 21% Employee + Child 12 $1,283.65 $1,042.50 $241.15 81% 19% Family 57 $1,660.02 $1.307+40 $352.62 79% 21% Total 239 $898.19 $712.71 $185.48 Annual $2,575,998 $2,044,046 $531,952 79% 21% Base Salary Over 60K - DPntal Dependent Status Enrollment Total ERPaid EE Paid ER EE Employee Only 34 $22.92 $13.68 1924. 60% 40% Errol ee+S ouse 26 $61.57 $27.85 $33.72 45% 55% Employee + Child 4 $65.17 $34.69 $30.48 1 53% 47% Family92 $90.95 $39.35 $51.60 43% 57°/u Total 156 $70.57 $31.72 $38.85 Annual $132,098 $59378 $72,720 45% 55% RASP Salary under 6nK _ nnntal Dependent Status Enrollment Total ER Paid EE Paid ER EE Employee Only 134 $22.92 $13.68 $9.24 60% 40% Em to ee-Spouse 42 $61.57 $35.50 $26.07 58% 42% Employee - Child 12 $65.17 $41.49 $23.68 1 64% 1 36% Family 53 $90.95 $52.89 $38.06 1 58% 1 42% Total 241 $46.72 $27.49 $19.23 Annual $135,115 $79,502 $55,613 59% 41% Total ER Paid EE Paid ER EE Medical&Dental- Total Annual Contribution $5,100,389 $3,842,294 $1,258,094 75% 25% Life/AD&D/LTD- Total Annual Contribution $91,251 $91,251 $0 100% 0% Grand Total Annual Contribution $5,191,639 $3,933,545 $1,258,094 76% 24% Total Med (w/o HDHP) 383 (off most recent census) Total Den 397 HDHP Monthtv EE Contributions 1 $50.00 HDHP Enrollment 1 16 1 $9,600 Per -Pay -Period Premiums 2009 Health over $60K De endent Status Total ER Paid EE Paid Employee Onl $210.83 $158.12 $52.71 Employee + Spouse 1 $547.45 $410.58 $136.86 Employee + Child 1 $592.45 $459.15 $133.30 Family $766.16 1 $569.3. $206.96 Heahh under $ eOnnt tatus E1R6P8.a3id d E$E4 lS Employee $2T1o0ta8l 3 2P.4a9 ee+Spouse VEmloyee $47.455 $4340 1.4i0 3 +Chiltl $592.45 $481.15 $1110 F.mIl $766.16 $603.42 $162.75 OPntal nV.nr S6� De entlent Status Total ERPaid EE Paid ee On $10.58 $6.31 $4.26 Em ee+S ouse $28.42 $12.85 $15.56 ee+Child R $30.08 $16.01 $14.07 $41.98 1 $18.16 $23.82 Dental under $60K De ancient Status Total ER Paid EE Paid Em to ee Onl $10.58 $6 1 $4.26 Em to ee+S Spouse $28.42 $16.38 $12.03 Em to ee+Child $30.08 1 $19.15 $10.93 Famil $41.98 1 $24.41 $17.57 2009 Contributions r th over $60K onthl COBRA. $465.94 $1,209.86 $1,309.32 $1693.22 W Dental over $60K Monthly COBRA $23.38 $62.80 $66.47 $92.77 W Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 9 M = M = M XYZ Company 2009 (6 months) Total Group Medical Estimated Enrollment 3,163 Total Eligible Charges $3,543,525 Total Paid Claims $3,015,495 PEPM Claim Cost $953.37 Participant Out of Pocket $456,505 Out of Pocket as a % of Total Charges 12.9% Employee Contributions $753,174 Contributions as a % of Total Charges 21.3% Total Member Burden 34.1% Hay's 2010 Contributions Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. M M M = = M M r M M= M= IM M M M XYZ Company Monthly Contributions 2010 Base Salary Over 60K - Medical Dependent Status Enrollment Total ER Paid EE Paid ER EE Employee Only 34 $525.32 $393.99 $131.33 75% 25% Em to ee+S ouse 18 $1,364.06 $1,023.04 $341.02 759 25% Empi ee+Child 4 $1476.20 $1,144.05 $332.14 78% 22% Fami 88 $1,909.02 $1.393.59 $515.43 73% 27% Total 144 $1502.17 $1104+32 $397.85 Annual $2,595,754 $1,908,273 $687,480 Base Salary Under 60K - Medical Dependent Status Enrollment Total ER Paid EE Paitl ER EE Employee Only 133 $525.32 $419.44 $105m88 80% 20% Em to ee+S ouse 37 $1,364.06 E7 087.51 $282.56 79% 21% Em to ee+Child 12 $1476.20 $1198.88 $277+32 1 81% 1 19% Family 57 $1,909.02 $1.503+51 $405+51 1 79% 1 21% Total 239 $1032.91 $819.61 $213.30 Annual $2,962,398 $2,350,653 Efi11,745 79% 21% Base Salary Over 60K - Dental Dependent Status Enrollment Total ER Paid EE Paid ER EE Employee Only 34 $24.68 $14.73 $9.95 60% 40% Em layes -Spouse 26 $66.31 $29.99 $36.32 45% 1 55% Employee + Child 4 $70.19 $37.36 $32.83 i 53% 47% Fami 92 $97.95 $42.38 $55.57 43% 57% Total 156 $76.00 $34.16 $41.84 Annual $142,270 863850 $78,319 45% 55% Base Salary Under nnK - nental Dependent Status Enrollment Total - ER Paid EE PaiO ER EE. Employee Only 134 $24.68 $14.73 $9.95 60% 40% Em toyes +Spouse 42 $66.31 $38.23 $28.08 1 50% 1 42% Employee + Child 12 $70.19 $44.68 $25.50 Family 53 $9T95 $56.96 $40.99 Total 241 $50.32 $29.61 $20.71 Annual $145,519 $85,624 $59,896 59% 4t% Total ER Paid EE Paid ER EE Medical &Dental -Total Annual Contribution $5,845,940 E4,408,500 $1 437,440 75% 25% Life/ADBD/LTD- Total Annual Contribution $91,251 $91,251 $0 100% 0% Grand Total Annual Contribution $5,937,191 $4,498,751 $1,437,440 76% 24% Difference $$ vs. 2009 $745,552 $566 206 5179,346 Total Mad (w/o HDHP) 383 (off most recent census) Total Den 397 HDHP Monthly EE Contributions1 $50.00 IHDHP Enrollment - I 16 1 $9,600 Proected Increases Pmected Total Increase Med 15.0% Pm acted EE Increase Med 15.0% Pm acted Toral Increase Den 7.7% Pm ected EE Increase Den 7.7% Per -Pay -Period Premiums 2010 Hearth over S6� Dependent Status Total ER Paid EE Paid Em to ee On $242.46 E181.84 $60.61 Em la ee+S ouse $629.57 1 $472.17 1 $157.39 Employee + Child $601.32 $528.03 1 $153.30 Fami $801.09 $643.20 1 $237.89 Heaeh ,n�te� De endent Status Total ER Paid EE Paitl Em to ee On $242.46 E193.59 1 E48.87 Employee + Souse $629.57 1 $499.16 1 $130.41 Em la ee+Child $681.32 $553.33 1 $128.00 Fami $881,09 $693.93 1 .1.7.1. Dental over S6� De endent Status Total ER Paid EE Paid Employee On $11.38 $6.80 $4.59 EM to ee+Spouse 530.61 $13.84 $1fi.76 Em to ee+Child $32.39 1 $17.24 1 $15.15 Family $45.21 1 $19.56 1 $25.65 Dental un� de De endent Status Total ER Peid EE Paid Employee On $11.39 $6.80 1 $4.59 Em to ee+Spouse $30.61 $17.65 $12.96 Em to ee+Child $32.39 $20.62 1 $11.77 Fami $45.21 $26.29 1 $18.92 2010 Contributions Healthr Mo Health under $60K Monthly COBRA $535.83 $1,391.34 $i 505.72 E1,947 20 Dental over $60K Monthly COBRA $25.18 $67.64 $71.59 $99.91 Dental under $60K Monthly COBRA $25.18 $67.64 $71.59 $99.91 Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 10 IV. RESPONSE TO QUESTIONNAIRE Hays 1) Describe your firm, its history and size, the locations in which it operates, and the number of employees. Hays Companies is a national full -service, privately -held brokerage and consulting firm which specializes in employee benefits, risk management, retirement planning, and private client consulting. Hays was founded in 1994 through the entrepreneurial spirit of James C. Hays and five other senior level individuals from major brokerage firms. Hays was formed to fill the void of customer service and creative ideas left untouched in the marketplace. Our goal from the beginning has been to provide our expertise to help our clients protect assets and earnings, manage risks, and solve problems through a customized service delivery model. What was once six people has now grown to form a staff of over 630 professionals. Our headquarters is located in Minneapolis, Minnesota. Our growth since 1994 and over the past 17 years has been completely organic, growing one client at a time. There have been no mergers or acquisitions involving Hays since 1994. In 2011, Business Insurance ranked Hays as the 16" largest brokerage firm in the United States (based on 2010 revenues). We are currently the 2nd largest privately held employee benefits brokerage firm in the United States. Our employee benefits division manages and consults for several thousand employer groups across the country. Hays currently has 35 offices nationally, 25 of which provide employee benefit services. These locations include Chicago, Milwaukee, Minneapolis, Kansas City, St. Louis, Boston, Los Angeles, Salt Lake City, San Francisco, Denver, Fort Lauderdale, Houston, Washington D.C., New York/New Jersey, Portland, Phoenix, Seattle, Indianapolis, Des Moines, Charlotte, Philadelphia, Sioux Falls, Atlanta, Wichita, and Dallas. Throughout the 25 Hays employee benefit offices there are over 250 benefit professionals. Hays Companies is licensed in all 50 states. The timeline on the next page outlines Hays Companies organic growth since 1994 to become the 161" largest brokerage in the country: RFP 7279 Benefits Consultant 6 M =1 M M M M M=1 M M IM® M = = M= M M XYZ Company Monthly Contributions 2010 Base Salary Over 60K - Medical Dependent Status Enrollment Total ER Paid EE Paid ER EE Employee On 34 $525.32 $359.73 $1( 59 68% 32% Employee I Souse 18 $1,364.06 $934.08 $429.98 68% 32% Employee + Child 4 $1,476.20 $1,044.57 $431.63 71% 29% Fami 88 $1,909.02 $1,272.41 $636.61 67% 33% Total 144 $1,502.17 $1,008.30 $493sts Annual $2,595,754 $1,742,337 E853,417 67% 33% Base Salary Under 60K - Medical Dependent Status Enrollment Total ER Paid EE Paid - ER EE Employee Only 133 $525.32 $382.97 $142.35 73% 27% Em to ee+S ouse 37 $1,364.06 $987.46 E376.60 72% 20% Employee + Child 12 $1476.20 $1 094.63 E381.57 74% 26% Fami 57 $1,909.02 $1,372.77 $536.25 72% 28% Total 239 $1,032.91 $748.34 $284.57 Annual $2,962,398 $2,146,248 1816,150 Base Salary Over 60K . Dental Dependent Status Entailment Total I ER Paid EE Paid ER EE Employ" On 34 E24.68 $14.36 $10.32 58% 42% Em Io ee+S use 26 $66.31 $29.24 $37.07 44% 56% Em I ee+Child 4 $70.19 $36.42 $33.76 52% 48% Fami 92 $97.95 $41.32 $56.64 42% 58% Total 156 $76.00 $33.31 $42.69 Annual $142,270 $62,347 $79,923 44% Sfi% Base Salary Under 60K - Dental Dependent Status Enrollment Total I ER Paid EE Paid ER EE Employee Only 134 $24.68 $14.36 $10.32 58% 42% Em to ee+S -Spouse 42 $66.31 $37.28 $29.04 56% 44% Employee + Child 12 $70.19 $43.56 $26.62 62% 38% Fami 53 $97.95 $55.53 $42.42 57% 43% Total 241 $50.32 $28.86 $21.45 Annual $145,519 $83.477 $62,042 .Total I ER Paid EE Paid ER EE Medical B Dental- Total Annual Contribution $5,845,940 $4,034,409 $1,811,531 69% 31% Life/ADBD/LTD-Total Annual Contribution $91,251 $91,251 $0 100% 0% Grand Total Annual Contribution $5,937,191 1 $4,125,660 $1,811,531 76% 24% Difference $$ vs. 2008 1 $745,552 1 $192,115 $553,437 Total Mad (w/o HDHP) 383 (off most recent census) Total Den 397 HDHP Monthly EE Co_ntributions_ $50.00 HDHP Enrollment 1 16 1 $9600 Proiected Increases Pmected Total Increase Metl 15.0% Pmected ER Increase Med 5.0% Proeded Total Increase Den 7.7% Proeded ER Increase Den 5.0% Per -Pay -Period Premiums 2010 Heakh over $60K De endent Status Total ER Paid EE Paid Em to ee On $242.46 $76+03 1 $76.43 Employee + Souse 1 $629.57 1 $431+11 1 $198.45 Em Io ee+Child 1 $681.32 1 $482.11 1 $199.21 Fami $B81.09 I IS87.77 1 $293.81 Health under $60K Dependent Status Total ER Paid EE Paitl Em 10 ee On $242.46 $176.75 $65.70 Em to ee+Spouse, $629.57 $455.75 $173.81 Em to ee+Child $681.32 $505.21 1 $176.11 Fami $881.09 $633.59 1 $247,50 Dental over $60K Dependent Status Total ER Paid EE Paid Employee On $11.39 $6.63 $4.76 Employee + Souse $30.61 $13.50 $17.11 Employee - Child $32.39 $16.81 $15.58 Fami E45.21 1 $19.07 1 S26.14 Dental under$60K De entlent Status Total ER Paid EE Paid Em to ea On $11.39 $6.63 $4.76 Em to ee+S ouse $30.61 517.20 $13.40 Em to ee+Child $32.39 1 $20.11 1 $12.29 Fami 1 $45.21 1 $25.63 I $19.58 2010 Contributions Heath over $60K Month COBRA $535.83 $1,391.34 $1 505.72 $1,947.20 w I r $60KCOBRAA8.64.59.91 Dental under $60K Month COBRA $25.18 $67.64 $71.59 $99.91 Data was gathered from various sources and is unaudited. Data is for comparison and cost estimation purposes only. Page 10 M m M Hays April 2011 M M = = = = M M M = = r M M M M M JMS&VA] Business Model • Many employers don't manage the prescription drug component of the health plan as a separate plan, which involves: — Reviewing the Rx contract — Utilizing clinical support to analyze plan design — Assess plan performance and utilization through detailed reporting • As a result, the carriers often do not provide transparent contracts and competitive pricing, often adding substantially to the costs of the Rx program. • PBM carve -outs give employers the ability to have full disclosure with all revenue sources related to processing prescription drug claims. — In addition to claims processing and support, most PBMs provide clinical, consultative, and educational support which assists with managing the Rx program. • Carve -outs are gaining in popularity and recent studies show 60% of large employers use carve -outs as a mechanism to reduce drug spend and improve efficiency in Rx programs. V. kid The information contained in these documents is proprietary to Hays Companies and is not to be distributed to m . nArYIP.S Withni it fhp PYnrPCC Writ+Pn nermieeinn of o ronroconMfivo .,4 4J nvc (`rim.. n..inn Prescription Drugs Cost to Benchmark • It is evident that Brand pricing is causing the plan to spend higher than average dollars due to multiple factors: — Spread Pricing — Brand Utilization Rate — Non -Sharing of Rebates • The overall average cost per unit was higher than the norm. • The total amount of paid claims per unit was $87. SWI $2M S_ Brand - Generic Unit Cost Brand Multi- Generic Total Source Plan Cost � Member Cost —Nonni The information contained in these documents is proprietary to Hays Companies and is not to be distributed to narties withnut tha axnrasc writtan narmiccinn of a ranracantativa of Havc r mmnanioc M r M M M M M M M M M M r M M M M M M Prescription Drugs Generic vs Brand Utilization Brand - Generic % of Total Scripts 2I 70% 3% ■ Brand ■ MuIU- Source ■ Genenc Brand - Genetic % of Total Cost 23% 5% 72% ■ Brand ■ Mum. Source ■ Genenc Hays • Generic utilization within the population has been excellent (70% of all scripts). • There are a number of factors which influence the cost associated with prescription drugs. The channel of distribution can play a role in both unit cost and quantity dispensed. • It's obvious that brand name drugs are driving the overall drug spend for XYZ. 27% of all prescriptions comprise 72% of the total cost. 20-Sep-11 Prescription Drugs Therapeutic Classes 1 Antiasthmatic And Bronchodilat 2 Analgesics - Anti -Inflammatory 3 Antidiabetics 4 Antihyperlipidemics 5 Antidepressants 6 Ulcer Drugs 7 Antivirals 8 Psychotherapeutic And Neurolog 9 Contraceptives 0 Dermatofogicals 1 Antihypertensives 2 Antipsychotics 3 Adhd/Anti-Narcolepsy/Ann-Obes 4 Cardiovascular Agents - Misc. 5 Annconvulsants Others Top Therapeutic Classes (by cost) 612 2,681 4.4 $96,985 672 1,501 2.2 $28,256 226 1,667 7.4 $58,542 728 4,135 5.7 $87,534 678 4,050 6.0 $75,455 490 2,198 4.5 $47,606 164 371 2.3 $16,944 93 234 2.5 $8,438 592 3,929 6.6 $72,177 756 1,705 2.3 $39,836 488 2,741 5.6 $55,042 112 578 5.2 $22,375 130 785 6.0 $26,613 45 130 2.9 $7,449 280 1,649 5.9 $31,780 23,747 $436,289 -ED=. $317,126 $297,240 S259,787 $224,136 $206,014 $173,453 S164,800 $141,531 S126,780 $116,780 $116,439 $94,479 $90,216 $87,126 $82,863 $941,565 $414,111 $154 $325,496 $217 $318,330 $191 $311,670 $75 $231,469 $69 $221,059 $101 1 $131,745 $490 $149,969 $641 $193,957 $51 $156,615 S92 $171,431 $63 $116,854 $202 $116,829 $149 $94,575 $730 $114,649 $70 $1,377,854 $58 • XYZ's highest expenditure based on total claim dollars were antiasthmatics. The therapeutic classes most utilized were anti hyperlipidemics closely followed by antidepressants. - The drug data identified 612 patients filling a antiasthmatic drug but only 222 were identified through medical analysis. The information contained in these documents is proprietary to Hays Companies and is not to be distributed to s nartieg withnut tha axnrPsc written nermiccinn of a ranrasantativa of Hnvc rmmnaniac M M IIIIIIIIIIIIIIIN M M M M PBM Carve -Out Analysis Overview ■The following analysis details the differences between a carve -out Prescription Benefit Partner business model and the current carrier. •We have re -processed the historical claims data provided as if XYZ were on a standard carve -out PBM contract. ■This analysis illustrates what XYZ's prescription costs would have been utilizing the carve -out model based on actual claims. Nays • The following analysis was performed by Hays Companies to summarize XYZ's current prescription drug expenditure with a third -party solution. — Historically, health insurers use the prescription drug benefit as a profit center. • The analysis consists of repricing all of XYZ's actual prescription drug claims during the time period of 7/1/2009 through 6/30/2010. 20-Sep-11 Rx PBM Carve -Out Analysis General Assumptions Setting Total Claims Percent Generic Retail Generic Mail 32,028 41127 62% 8% Brand Retail Brand Mail 11,683 37242 23% 6% Specialty 207 0% Total 519287 100% • Each claim was re -processed at the originating pharmacy on the original date incurred utilizing pass through pricing. • The current Co -Pay Structure and formulary listing was applied; there is no cost shift to the member. • Carve -out administration fee is included on all re -processed claims • Manufacturer rebate estimates are conservative; based on large block of business experience and XYZ's current utilization The information contained in these documents is proprietary to Hays Companies and is not to be distributed tLj o IN" parties without the express written permission of a representative of Hays Companies. I• = M IPBIVI Carve -Out Analysis 7/1 /2009 - 6/30/2010 All Pharmacy Activity Brand Mail Order 3,242 $200,759 $194,217 $1,091,693 $903,767 $1,292,478 $1,097,984-$194,494 $59.99 Retail 11,683 $523,117 $506,495 $1,201,957 $1,040.395 $1,725,074 $1,546,890-$178,184 $15.25 Generic Mail Order 4,127 $82,097 $75,503 $233,941 $176,624 $316,038 $252,128-$63,910 $15.49 Retail 32,028 $402,098 $291,809 $348,156 $454,874 $750,255 $746,683-$3,572 $0.11 Specialty Specialty 207 $104,447 $104,447 $522,441 $424,107 $626,888 $528,553 -$98,335 $475.05 Total 51,287 $1,312,518 $1,172,471 $3,398,188 $2,999,767 $4,710,733 $4,172,238 -$538,495 $10.50 • Total repricing savings is calculated to be $724,908 - Savings to XYZ: $398,421 - Savings to members: $140,074 - Rebates $186,413 • Under an Rx Carve -Out model, the administrator would receive $219,310 of rebate dollars from pharmaceutical manufacturers. XYZ would have received approximately $186,414 in rebates for the reporting period. I The information contained in these documents is proprietary to Hays Companies and is not to be distributed to . e parties without the express written permission of a representative of Hays Companies. PBM Carve -Out Analysis Pricing Examples • Spread Pricing Examples Label Name LAMOTRIGINE Days Supply 30 Drug Type Generic Mail/Retail Retail Pharmacy Name WALGREEN DRUG STORE #3151 Rx Carve -Out $ 2.50 Current PBM $ 229.99 Savings $ 227.49 OXYCODONE HCL 30 Generic Retail WALGREEN DRUG STORE #7703 $ 17.92 $ 148.79 $ 130.87 TAMSULOSIN 30 Generic Retail WAL-MART PHARMACY #103546 $ 62.95 $ 190.46 $ 127.51 IPRAT-ALBUT 28 Generic Retail RITE AID PHARMACY #10070 $ 162.43 $ 251.99 $ 89.56 CLARAVIS 30 Generic Retail RITE AID PHARMACY #10060 $ 721.15 $ 807.73 $ 86.58 FRAGMIN 10 Brand Retail WALGREEN DRUG STORE #2976 $ 304.62 $ 367.10 $ 62.48 LOVENOX 10 Brand Retail WALGREEN DRUG STORE #2976 $ 299.64 $ 359.45 $ 59.81 LISINOPRIL 30 Generic Retail NEWINGTON VAMC PHARMACY $ 5.12 $ 51.00 $ 45.88 ORACEA 30 Brand Retail CVS PHARMACY #00123 $ 290.99 $ 334.25 $ 43.26 HUMIRA 28 Brand Retail CVS PHARMACY #00123 $ 3,017.04 $ 3,052.76 $ 35.72 Nays IV. RESPONSE TO QUESTIONNAIRE Seahie Porhand Minneapolis, Boston' Sioux Falls • Milwaukee New York Philadelphia • Mooldown Salt Lake City. Des Moines• ChlcapoBaltimore San Francisco IntllonaPverW ashlnatoh D.C. Den. olls Kansas CRY. Los"Oeies Wichita, St. Louis. CIarlorce Area Phoenix 'Atanta Dallas DesNn Mauston. Ft. Lauderdale.', International Contacts WBN wo, m..e. erok11 x.-o.x 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Busirim hvvalce #99 #85 #69 #52 #47 #45 #38 #31 #25 ♦ Tpp 100 U.S. emkers ♦ A Port lland Minneapolis Chicago Kansas City Washington, DC San Francisco A,..14, 1s4 Boston Ft. Lauderdale Milwaukee Irvine St. Louis Salt Lake City Denver Baltimore HaysCommitted Resources Provided with Phoenix Focus and a Sense of Urgency Newyork New Jersey Hays Member THE COUNCIL ,, INSL RAMC I': Revenue 11A N i'S & ens FF.n,S (Millions) $125 S117 Milli $100 $75 $50 $25 $0 2007 2008 2009 2010 2011 #23 #20 #16 #16 } Charlotte Philadelphia Seattle Park Ridge Santa Ctanta Sioux Falls Atlanta Houston Deslin Wichita Indianapolis Ontario Dallas Manhattan Beach Des Moines 2) Tell us the location of the office from which consulting services would be provided. What is the employee turnover rate among consultants and staff personnel of this office during the past two years? The Hays Denver office will provide consulting and account management services to the City with additional assistance from our Compliance and Research Department in Minneapolis. Hays Companies of Denver was opened in 2003. In the eight years since, the Denver office has grown to 23 employees serving the needs of approximately 70 clients and 35,000 employees. Thirteen of these individuals are solely responsible for managing accounts and do not have any additional sales responsibilities. The Denver office also has several individuals who are responsible for new business development along with a full -service property and casualty team. Over the past two years, the Denver office has had no turnover in consultants and one staff personal resulting in less than a 5% turnover rate. 3) Provide information on the principal consultant who would be responsible for the City of Fort Collins' account. What is their professional background and experience? Specifically include this consultant's experience dealing with public employers. Describe the team that would assist the principal consultant and the client. Hays Companies provides each client with a dedicated service team that includes a Lead Consultant, Consultant/Account Manager, Technical Consultant, and Benefits Analyst. RFP 7279 Benefits Consultant iA XYZ Company Medical Plan Cost Compared to Benchmark • Normative data is based on the Health Plan Intelligence statistically valid data base. Adjustments have been made to reflect a similar age/gender make up. No adjustments have been made for plan design, industry or geography. • In 2010, XYZ Company's total plan costs were $6,697, which is 5.9% above the norm of $6,323. • Areas that are above and below the benchmark are examined in greater detail for improved efficiencies. Nets Annual Cost Per Employee $10,000 $6,967 $7,500 $674 $6,323 ,,. $785 $5,000 ;2,soo $0 XYZ Norm f• Employee ■Spouse ■Dependent ■Pharmacy ❑ Admin/Stop Loss 111111111W M m IIIIIIIIIIIN M = = 11111111110 IIIIIIIIIIIIN = IIIIIIIIIIIIIN M IIIIIIIIIIIS m M = IIIIIIIIIIIIN = M XYZ Company Medical Plan Cost By Tier • Medical plan cost by tier measures the cost by relationship on the plan. -In 2010 the average cost of a spouse was 1.66 times higher than an employee. -Looking at cost by tier is important when establishing premium rates based on the actual risk of dependents vs industry standard norms. Hays CoverageParticipants Employee Spouse Dependent Total Single Coverage 1,285 0 0 1,285 Family Coverage 2,396 1,917 3,259 7,572 Total 3,681 1,917 3,259 8,857 Net Medical Claims $10,925,872 $9,425,826 $4,428,930 $24,780,628 Net Per Member $2,968 $4,917 $1,359 $2,798 Cost Relative To Employee Only 1.66 0.46 2"op-11 XYZ Company Tier Ratio Analysis — Average Contract Size • The tier ratio analysis looks at dependent costs in relation to employee only. • Tier ratio alignment is an important component to managing a risk pool within a self funded plan. • Industry standard norms have resulted in employee subsidizing dependent costs in order to lower dependent premiums. • The aligned ratio based on risk factor was derived from the average cost of a spouse being 1.66 times higher than an employee over the last two plan years. — To calculate an aligned ratio of 2.66 is 1 (for employee) + 1.66 (for spouse) • By comparing the aligned vs actual you can see that the XYZ Company ratio for EE + Spouse and EE + Child(ren) is higher than the associated risk with the family tier being lower. • It is important to note that there was an assumption of 2.2 children for every EE + Child(ren) and Family tier. The actual number of children covered by each tier could differ for XYZ Company. • Average contract size calculates how many dependents are covered for every individual on the plan. • The industry norm for average contract size is 2.2. • Average contract size has a direct correlation to plan costs. Groups with a higher contract size experience higher plan costs. Hays XYZ Company Medical Plan Average Contract Size 2007 2008 2009 2010 20-Sep,11 M XYZ Company 2010 Par Analysis Summary • The par analysis summary is used to look at individual areas of utilization to determine cost drivers within a medical plan. -Areas highlighted in red indicate areas where Western Sugar ran higher than the statistically valid benchmark established in the Health Plan Intelligence (HPI) database. -The analysis measures plan performance by four different categories. Frequency = Admission rates per 1,000 Average Charge = Cost of services utilized Average Paid = Plan sponsor paid amount following network discount, participant cost share and claim adjudication Plan Expense = Total cost impact to the plan Hays Service Category Frequency Average Charge Network Penetration Reported Discount Average Paid Plan Expense Change From 2009 Inpatient Hospital - Facility 0.99 1.31 99.2% 41.1% 1.04 1.03 9.57% Outpatient Hospital - Facility 0.84 1.08 98.3% 38.5% 0.85 0.71 -2.74% Emergency Room Visit 0.92 1.18 99.5% 42.7% 1.07 0.98 0.00% Inpatient Surgery - Procedure 1.21 0.87 98.2% 51.8% 0.73 0.89 21.92% Outpatient Surgery - Procedure 1.01 1.06 ° 99.1/° /° 46.6 ° 1.02 1.03 9.57% Physician Office Visit 1.03 1.01 98.7% 20.1% 1.11 1.14 14.00% Mental Health Visit 0.63 1.06 95.8% 19.8% 1.13 0.71 73.17% Physical Medicine Visit 0.65 1.05 93.7% 26.4% 0.99 0.64 6.67% Wellness/Routine Visit 0.77 0.99 99.8% 20.3% 0.90 0.69 9.52% Radiology Services 0.91 0.83 99.4% 49.1% 0.63 0.57 -3.39% Laboratory Services 0.87 0.92 98.5% 56.7% 0.74 0.64 12.28% Overall 97.70% 39.90% During the 2010 plan year, XYZ Company experienced higher than average plan expenses associated with In -Patient and Out -Patient Surgical procedures. These two areas are significant cost drivers within a medical plan. Plan expenses for Physician Office visits were 14% higher than 2009. Office visit utilization is an area of good utilization to manage underlying chronic and preventable conditions. Wellness/Routine Visits are an area where we would like to see higher frequency. - XYZ Company is 23% below the norm in this area. 20-Sep-11 M M M M M M M M M M M M M M i M M M M XYZ Company Claims By Condition • Claims by condition looks for common conditions that impact plan cost each year. -Wellness and workers comp programs can be looked at to manage common conditions. -Many conditions can be associated with occupational duties and or the demographic make up of the group. Hays General Conditions Musculoskeletal System Diseases Services 16,630 % Services 13.17% Mbrs 2,243 % Mbrs 29.87% Plan Paid $3,728,770 2010 14.86% 2009 15.13% Neoplasms (Cancer) 5,378 4.26% 603 8.03% $2,670,657 10.64% 10.92% Circulatory System Diseases 7,456 5.91% 1,288 17.15% $2,631,022 10.48% 7.65% Other Conditions 26,079 20.65% 4,352 57.96% $2,395,682 9.55% 10.58% Injury and Poisoning 6,295 4.99% 1,488 19.82% $2,229,604 8.89% 8.12% Symptoms and III -Defined Conditions 14,573 11.54% 2,795 37.22% $2,003,934 7.99% 8.98% Respiratory System Diseases 9,737 7.71% 2,774 36.94% $1,714,218 6.83% 5.79% Digestive System Diseases 3,391 2.69% 894 11.91% $1,684,958 6.71% 7.33% Nervous System Diseases 6,514 5.16% 1,934 25.76% $1,182,274 4.71% 4.55% Genitourinary System Diseases 5,674 4.49% 1,106 14.73% $1,174,040 4.68% 5.55% Pregnancy and Childbirth 2,591 2.05% 231 3.08% $1,034,877 4.12% 3.70% Mental Disorders 4,333 3.43% 781 10.40% $726,502 2.90% 2.07% Endocrine, Metabolic and Nutritional 10,067 7.97% 1,520 20.24% $698,427 2.78% 2.72% Skin Diseases 3,962 3.14% 1,327 17.67% $499,361 1.99% 3.19% Infectious and Parasitic Diseases 2,030 1.61 % 856 11.40% $336,249 1.34% 1.23% Blood Diseases 1,056 0.84% 220 2.93% $214,551 0.85% 0.39% Congenital Anomalies 351 0.28% 106 1.41% $150,520 0.60% 1.93% Conditions During the Perinatal Period 144 0.11 % 45 0.60% $18,091 0.07% 0.17% 20wSep-11 XYZ Company 2010 Emergency Room Utilization by Condition 2010 Emergency Room Utilization By Condition•.. Symptoms and III -Defined Conditions 291 18.87% 255 $399,934.61 Injury and Poisoning 474 30.74% 434 $342,809.42 Genitourinary System Diseases 93 6.03% 71 $141,127.68 Circulatory System Diseases 36 2.33% 34 $136,328.54 Digestive System Diseases 100 6.49% 91 $134,477.49 Nervous System Diseases 106 6.87% 84 $68,466.70 Respiratory System Diseases 127 8.24% 109 $58,042.43 Other Conditions 60 3.89% 56 $42,962.22 Mental Disorders 38 2.46% 33 $38,510.85 Endocrine, Metabolic and Nutritional 19 1.23% 12 $36,964.84 Skin Diseases 60 3.89% 52 $36,002.10 Musculoskeletal System Diseases 63 4.09% 53 $33,366.61 Pregnancy and Childbirth Total• 30 1.95% 11', 20 1,3041 $32,664.36 • When looking at Emergency Room utilization you want to distinguish between proper and improper use of the Emergency Room. • Injury and Poisoning captures open wounds, fractures and concussions. These conditions are properly treated in the emergency room. • Symptoms and III Defined conditions captures abdominal pain, chest pain, cough, nausea, dizziness. These conditions are treated in both an emergency room and office visit setting depending on the severity or timing of condition (Saturday & Sundays). • Other Conditions is a catch all category and these conditions are treated in both the emergency room and office visit setting. • Respiratory System Diseases is the category where you want to see the majority of utilization in an office visit or urgent care setting. The information contained in these documents is proprietary to Hays Companies and is not to be distributed to parties without the express written permission of a representative of Hays Companies. XYZ Company Emergency Room vs. Office Visit Savings Analysis • Many conditions that are treated in an emergency room setting can also be handled in an office visit setting. -This analysis looks at conditions with the same treatment code that were accessed in both the emergency room and office visit. -The savings is calculated by the difference in cost and shifting all of theses conditions to an office visit setting. -Hays can assist with communication pieces to encourage proper utilization of the emergency room. Hays 2010 Office Respiratory System Diseases EIR Services 127 ER Avg Paid $457 OV Services 3,560 OV Avg Paid $67 Savings / Visit $390 Total Savings $49,545 Symptoms and III -Defined Conditions 289 $1,364 1,837 $79 $1,285 $371,249 Musculoskeletal System Diseases 63 $530 1,654 $72 $457 $28,819 Nervous System Diseases 101 $595 1,217 $63 $533 $53,799 Circulatory System Diseases 29 $4,194 887 $78 $4,116 $119,376 Injury and Poisoning 405 $625 825 $67 $558 $225,872 Skin Diseases 60 $600 759 $62 $538 $32,259 Endocrine, Metabolic and Nutritional 16 $2,041 734 $82 $1,959 $31,344 Genitourinary System Diseases 93 $1,518 562 $66 $1,452 $135,034 Digestive System Diseases 87 $1,184 491 $67 $1,117 $97,144 Infectious and Parasitic Diseases 35 $456 454 $69 $387 $13,530 Mental Disorders 33 $1,012 338 $70 $943 $31,106 Other Conditions 44 $842 296 $68 $774 $34,072 Pregnancy and Childbirth 19 $900 63 $49 $851 $16,164 Blood Diseases 2 $1,732 27 $76 $1,656 $3,312 Neoplasms (Cancer) 2 $2,406 3 $96 $2,310 $4,621 Congenital Anomalies Total 1 0. $2,576 $1,355 2 $128 13,709 $2,448 $2,448 XYZ Company Emergency Room Communication N This Information piece is designed to help you understand the cost and care difference between Emergency Room, Urgent Care and a Physician's Office Visit, as well as how these services are covered under the CHC Medical Plan Did you know that the average cost of an Emergency Room visit IS $781 while the average cost an Urgent Care vlslt Is $1 ]U? the average cost of a physician'. visit Is 56t. 1 here are actual costs to CM Medical Plan. Why Is this Important? 1 mergency care Is covered after a mpay, deduclible and coinsurance — these are ad of pocket expenses for "or Urgent Care and Physnlan Office visits are subject only to a small copay, saving you significant dollars out of your own pocket Obtaining medhal services In the appropriate setting can pmvldeyou a more favorable treatment experience, save yat money, and keep Medial Plan costs lower, potentially translating to maintaining lower pmruluns for employees. Certainly. Emergency mom servke are indeed appropriate for certain Illnesses or injuries. this Information piece Is a simple reminder that you may have allanatives other than the Emergency Roan. When Is n appropriate to visit the Emergency Room? "6nergany care -Is appropriate what Immediate tare Is needed In order to save a life or prewul a permanent Impaurnaat. Finagary ate Is typically soughl to art accidental injury resulting n severe bleeding a pain oR - the sudden onset of an ante medical condition such as chest pain, tllfhculty breathing, or sudden Ions M limb use or speech ablllty. Your Company Logo It your treatment need is not life threatening, but Still one that Is unforeseen and may cause senous medical problems it not promptly treated, then an -Urgent Carr VISIT may be more appropriate. Urgent Care Centers offer the same treatment as Your regular doctor - only dutlnq extended hairs and on a first come -first serve basis Urgent Care K most suitable when treatment for the Illness or injury can be postponed, for example. a sprained ankle or an earache As It Is for the people We help as ernpluyees, Our mission for you Is -..to provide effective healthcare prograrTls that exceed national standards while controlling rusts and ensuring qualm, palter healthcare' The information contained in these documents is proprietary to Hays Companies and is not to be distributed to parties without the express written permission of a representative of Hays Companies. M M M M M M XYZ Company Healthy People 2010 • In January 2000, the Department of Health and Human Services launched Healthy People 2010, a comprehensive, nationwide health promotion and disease prevention agenda. Healthy People 2010 contains 467 objectives designed to serve as a framework for improving the health of all people in the United States during the first decade of the 21 st century. The 467 Healthy People 2010 objectives are being tracked by 190 data sources, 23 of which are major data sources • Healthy People 2010 builds on similar initiatives pursued over the preceding two decades. Two overarching goals —to increase quality and years of healthy life and to eliminate health disparities —served to guide the development of objectives that would be used to measure progress. A selected set of objectives, known as the Leading Health Indicators, was created to help identify sentinel measures of public health, and to encourage wide participation in improving health in the next decade. Hays • The data assembled by Healthypeople.gov provides a broad sample that allows us determine relationships between health conditions and human behaviors. There is a 95% correlation between certain behaviors and certain diagnoses. That information can be applied to help manage the health of a population. Our analysis focuses on three major categories: 1. Unhealthy Behaviors 2. Preventable Conditions 3. Chronic Disease 20-Sep-11 Unhealthy Behaviors laims Incurred July 2009 through April 2010, Paid through June 2010 10% of the claims are due to Unhealthy Behaviors. The Norm is 6.8%. Claims Related to Unhealthy Behavior Percentage of Total Paid 10% 7u iO Unhealthy Behavior ■Normal Behavior •28% of employees and 31 % of spouses exhibit an unhealthy behavior. •10% of claims from employees and 13% of claims from spouses were attributed to unhealthy behaviors. The dollars associated with Unhealthy Behaviors are highest when correlated to poor nutrition and tobacco use. Dollars Associat�ti�with l�nhealthy Behavior s1 Soo 1000 1500 Physical $479,850 Inactivity / r 1,099,884 Poor Nutrition J$124,51.26 $837 975 'tobacco Use Alcohol/Drug Use/Abuse Paid Amount -Medical Total Employee Spouse Children Employee Spouse Children Employer Percent Category Mix Mbrs Mrs Mbrs Claims Claims Claims Paid Paid Normal Behavior 5,605 2.946 1.128 1.531 6,940,469.16 4,138,934.43 1.634.576.13 12,713.979 72 8983 Unhealthy Behavior 1,704 1.152 504 48 797.64195 616,406 17 25,638 83 1 439,686 95 1017 TOTAL 7,309 4,098 1,632 1,579 7,738,111.11 1,755,310.60 1,660214.96 14,153,666.67 100.00 -Our experience has shown with a wellness investment enforcing accountable health management by plan members, clients were able to brinnggs costs down to the norm (6.8%). This could be a savings of $477,238 based on XYZ's 2009-2010 experience for unhealthy behaviors (10% cYms)s The information contained in these documents is proprietary • Hays Companiesto • - distributed 20-Sep-11 parties without• permission of • of • p =r IV. RESPONSE TO QUESTIONNAIRE Hays In general, the Lead Consultant is responsible for addressing strategic issues such as plan design and financing of benefits. The Lead Consultant also coordinates all services provided by Hays and our consulting partners. Eric Rosales will serve as the City's Lead Consultant providing strategic support and also assist in directing day-to-day activities. Eric is a Senior Vice President and one of the founding partners of the Hays Denver office. He has over 20 years of experience working in the employee benefits industry, including extensive experience with the public sector. Eric Rosales is currently a Senior Strategic Consultant for the following public employer clients: City of Westminster, City of Loveland, and Cheyenne Regional Medical Center. Our Denver office services over 15 public employer groups. His experience, knowledge, and strategic leadership will be very valuable in meeting the specific challenges and needs of the City. The Consultant/Account Manager provides administrative support to client Benefits and Human Resources staff, along with analytical and brokerage support to the Lead Consultant. The Consultant is often the front-line resource for dealing with vendors in resolving day-to-day issues and problems. Jana Knox will serve as the Consultant/Account Manager and will be the day -today contact along with Eric Rosales. Jana is also a Senior Vice President in the Hays Denver office. Jana has over 25 years of experience working in the employee benefits industry, including extensive experience with the public sector. Currently, Jana manages and consults for the following public sector clients out of our Denver office: City of Durango, La Plata Electric Association, City of Loveland, and Northern Colorado Water District. Her benefits experience and knowledge will be a great asset to the City. Jana will assist Eric and the City in creating a more efficient and cost-effective employee benefits program. One of her primary goals will be to serve as an extension of the City's Human Resources and Benefits Department and make every effort to make yourjobs easier. Our Technical Consultants are experienced underwriters and are responsible for all client reporting and financial analysis. These responsibilities include, but are not limited to, budget projections and tracking, employee contribution analysis, monthly claims reporting and monitoring, renewal underwriting and negotiations, marketing reports, cost driver analysis and utilization benchmarking, and prescription drug audits. Cody Purdy will be assigned as Technical Consultant. Whitney Bulterman will be assigned as Benefit Analyst and will assist Cody Purdy. Joe Long is an employee benefits practice leader at Hays Companies of Denver and will provide strategic leadership oversight and backup for Eric Rosales on elevated issues. Additionally, Erik Templin will have a working understanding of your account. Erik will also assist Eric and Jana in addressing strategic issues and assisting with open enrollment activities and communications if needed. As a result of our knowledge and experience in the public sector, Eric, Jana and their team will develop a comprehensive service plan to meet the specific needs of the City. The City will also have access to all of Hays' "Core Services." These "Core Services" are outlined further under question 23. Once the needs and challenges of the City are understood, the resources and activities listed will serve as a guide in developing the City's service plan. A sample 2012 Service Calendar and Strategic Readiness Assessment can be found in the Appendix. In support of this core service team, we will deliver additional resources as necessary, to fulfill commitments made to the City. The support team may consist of any number of individuals from within Hays, or from strategic partners and service providers to Hays. We will engage additional resources in the areas of data collection/analysis, pharmacy benefits, legal, compliance, compensation, and employee communications as appropriate. RFP 7279 Benefits Consultant i3 Unhealthy Behaviors osts and Number of Members with Conditions Physical Inactivity Cost Headct Poor Nutrition Cost Headct Tobacco Use Cost Headct Substance Abuse Cost Headct Employer Paid Total Members %of Total Paid Coronary Heart Disease $464,377 119 $464,377 119 $464,377 119 119 $464,377 119 3% Obesity $15,473 47 $15,473 47 $15,473 47 Colorectal Cancer $219,745 7 $219,745 7 2% Diabetes $92,286 289 $92,286 289 1% High Blood Pressure $66,142 691 $66,142 691 High Cholesterol $83,539 277 $83,539 277 1% Stroke $158,321 48 $158,321 48 $158,321 48 Lung Cancer $160,589 8 $160,589 8 COPD (Chronic Obstructive Pulmonary Disease) $31,570 123 $31,571 123 0% Cancer of the Oral Cavity/Pharynx $22,662 1 $22,662 1 Tobacco Use $455 16 $455 16 Alcohol Abuse $3,890 16 $3,890 16 Alcohol -Induced Conditions $19,576 2 $19,576 2 Alcohol Dependence $3,577 11 $3,577 11 Cirrhosis $32,357 21 $32,356 21 Drug Abuse $1,202 6 $1,202 6 Drug -Induced Conditions $665 2 $665 2 Drug Dependence $63,260 20 $63,260 20 Other $12,713,980 5,605 90% Total $ 479,850 166 $ 1,099,884 1,478 $ 837,975 315 $ 124,527 197 $ 14,153,668 7,309 100% Hays Prevention and Detection Demographics of Members with Conditions Relationship Mbrs % Mbrs Billed Charge Plan Paid % Paid Avg Charge Avg Paid Paid/Mbr Total 8 100% $291,743 $160,589 100% $530 $292 $20,074 Lung Cancer Employee 7 88% $207,851 $117,324 73% $873 $493 $16,761 Spouse 1 13% $83,893 $43,265 27% $269 $139 $43,265 Total 115 100% $85,114 $35,794 100% $241 $101 $311 Depression Employee 65 57% $46,711 $24,325 68% $248 $129 $374 Spouse 32 28% $26,962 $8,774 25% $223 $73 $274 Dependent 18 16% $11,441 $2,695 8% $260 $61 $150 Total 85 100% $763,546 $367,466 100% $1,285 $619 $4,323 Complications of Employee 36 42% $345,148 $174,840 48% $1,293 $655 $4,857 Pregnancy Spouse 42 49% $377,819 $174,778 48% $1,227 $567 $4,161 Dependent 7 8% $40,580 $17,848 5% $2,136 $939 $2,550 Total 222 100% $115,792 $32,583 100% $166 $47 $147 Asthma Employee 99 45% $49,547 $12,372 38% $170 $42 $125 Spouse 47 21% $23,051 $7,048 22% $153 $47 $150 Dependent 76 34% $43,194 $13,163 40% $170 $52 $173 Total 31 100% $433,840 $228,198 100% $786 $413 $7,361 Female Breast Cancer Employee 21 68% $359,771 $188,604 83% $784 $411 $8,981 Spouse 10 32% $74,070 $39,593 17% $796 $426 $3,959 The information contained in these documents is proprietary to Hays Companies and is not to be distributed to NEW. parties without the express written permission of a representative of Hays Companies. M M M M M M M M M M M M M M Illy M M M M Prevention and Early Detection Claims Incurred July 2009 through April 2010, Paid through June 2010 14% of the claims are related to Prevention and Early Detection The Norm is 11.6%. Prevention, Early Detection and Management Percentage of Total Paid Prevention, Early Detection, Management Normal Claims Claims in the categories below occurred that could potentially have been mitigated or reduced though prevention or early detection. Heart Disease & Stroke was the category with the largest total claims. Dollars Associated with Prevention, Early Detection and Management (thousands) 400 800 1200 Heart Disease & Stroke Certain Types of Cancer Certain Mental Health Maternal & Infant Health Asthma Diabetes q;787,e54 665,517 36,351 $416,966 32,583 `592 ,2 86 (♦Paid Amount -Medical •30% of employees and 34% of Total Employee Spouse Children spouses exhibit claims that could have Employee Spouse Children Employer Percent Category Mars Mbrs Mbrs Mbrs Claims Claims Claims Paid Paid been prevented. — Normal Clauns 5,597 2,944 1,127 1,526 •15%ofclaims from employees and Prevention. Etc 6,606,540 56 3,945.909 94 1,568,659 67 12,121,110 17 8564 1,996 1,274 590 132 1,131.57055 80943066 91,55529 2,032.55650 1436 17% of claims from spouses were attributed to preventable claims. TOTAL 7,593 4.218 1,717 1.658 7,738,111.11 4,755,340.60 1.660.214.96 14.153.666.67 100.00 -Similar to unhealthy behaviors, clients were able to brings costs down to the norm (11.6%). This could be a savings of $475,653 based on XYZ's 2009-2010 experience for claims that could have been prevented (14% of claims). Hays. •. •.... .. .._ .. 20- p-11 s, XYZ Company Health & Wellness Services • The % of compliant is based on following assumption. -Cholesterol = All Members over 20 -Colonoscopy = All Members over 50. AMA guideline is once every 10 years or 5 years with family history -Mammography = All Females over 40 -PSA = All Males over 40 -Pap Smear = All Females over 20 -Wellness Visit = All Members Note; Total members illustrated on this analysis captures members who accessed medical care. Actual total number of members will differ if there were no medical services utilized. Hays Cholesterol Screening 898 MembersTotal .. 4,991 18% •.. $26.28 Colonoscopy 242 2,017 12% $612.18 Immunizations/Vaccines 1,250 N/A N/A $50.70 Mammography 588 1,367 43% $36.04 PSA 575 1,797 32% $27.89 Pap Smear 425 2,239 19% $28.85 Wellness/Routine Visit 2009Eligible Cholesterol Screening 1,577 886 7,509 Total 5,540 21% 16% $126.79 $27.66 Colonoscopy 246 2,213 11% $620.01 Immunizations/Vaccines 1,197 N/A N/A $43.01 Mammography 592 1,517 39% $44.48 PSA 699 1,998 35% $28.33 Pap Smear 546 2,483 22% $28.52 Wellness/Routine Visit 1,486 8,259 18% $134.14 • This drill down measures increases or decreased in wellness services. • On site biometric screenings are not captured in this analysis and will impact the number of members accessing certain wellness services. • Hays can assist with communication materials to assist in promoting wellness services. 20-Sep-11 M i M M M M = M M = M M M M � � M M M XYZ Corporation Prevention Benefit Communication 4 'qF ...or about S2S a year Routine Caleandphyskals VW make sugeoul chudmn are Ilium, to of we may even press our spouse m go rvery year, but am taking Cate of oursetyeV This Information piwe Is designed W bring awwenes4 to the (omprehens Ne %ewnthe (are and%Wlness henehts that the LH( Medial Plan often HaSedonthestalKIXs txiow, we ale mntemrd that uu, empk,weN may m)t tr uilllting these IwnePos to ttmu full pomntui. and ewntually, fni your full health potential Hete are some facts: There are 261 female partlapanh ore, the age of 40 on ou i plan - Of the 261 tenures over 40the plan eapeorwe shows that less than 40W hoer had an annual rrangn[ gram There are 92 male participants owe The age of 40 on our plan - Of the 91 makes, only 139b have had an annual prostate exam There are over 575 males and females on our plan over the age of 10 - Of the 575+ soaks. less than 30% haw had Hpld resn to determmr cholesterol Wwk What we don't know, can hurt us The CHC Medical %sot pays hundreds of thousands of dollar each fear for medical expenses that could haw been amded with prewnwon and early detection Nr Id on and early detectlun b key lu yo. lung Iron health. At (-HC we Bellew in lo"entlw and 1014irw tam Awl lhh h why we , nn1looe to rn,wrage ",I WHIne ' participation through plan design The(.HC Medical Man sown most plewntiw vstmq. Munn physicals and Immunizations at I",%digger oui vital copay Hays Your Company Logo Here Fallowing am general guidelines published by the AMA of JUST some tit the, adult pmvenow "Ing you should consider, and the approprlale age to have them Immunizations — they re not just for kids anymore! The 0* Mnxtal Fran also Cr veer Adolf unmunuan(ais as directed by your phirikian and the AMA Again. 1(Xvae Ate, you, small copay Being compliant with you, roUleie prewntrve e,rams and testing can save so much You, Health. Your Finances & Your Life' As it is fro the people we help as employees, our mower for you is -.to pmvJdeetmtfsr heafhrare programs that exceed national standards wh,ye mrarallmy costs and ensuring quality, patient healthcare. For more lnlo rnadlon about your CHC Medical Plan coverage, limitations, and exclusions. Please refer to your Summary Plan Descripilon or All CIGHA Member Services at 1-xxxx-xxx xxv 20-Sep-11 Prevention and Detection osts and Number of Members with Conditions Heart Disease and Certain Cancer Certain Mental Maternal and Infant Asthma Diabetes Stroke Health Health Total /a of Total Employer Paid Members Paid Cost Headct Cost Headct Cost Headct Cost Headct Cost Headct Cost Headct Coronary Heart Disease $464,377 119 Obesity $15,473 47 High Blood Pressure $66,124 691 High Cholesterol $83,539 277 Stroke $158,321 48 Colorectal Cancer $219,745 7 Cervical Cancer $14,822 4 Female Breast Cancer $228,198 31 Lung Cancer $160,589 8 Cancer of the Oral $22,662 1 Cavity/Pharynx Skin Cancer $200,501 29 Depression•Relate d $35,794 115 Disorders Stress -Related Disorders $558 11 Caesarean Section $9,117 6 Complications of $367,466 85 Pregnancy Low Binh Weight $40,383 6 Spina Bifida Asthma $32,583 222 Diabetes $92,286 289 Other Total $787,836 $846,517 80 $36,361 126 $416.966 97 $32,683 222 $92,286 289 Hays $464,377 119 3% $15,473 47 0% $66,124 691 0% $83,539 277 1% $158,321 48 1% $219,746 7 2°h $14,822 4 $228,198 31 21/o $160,589 8 1% $22,662 1 $20,501 29 0% $35,794 115 0% $558 11 $9,117 6 $367,466 85 $40,383 6 $32,583 222 0% $92,286 289 1% $12,121,110 5597 86% $14,153,649 7593 100% Prevention and Detection Demographics of Members with Conditions Relationship Mbrs % Mbrs Billed Charge Plan Paid % Paid Avg Charge Avg Paid Paid/Mbr Total 119 100% $898,794 $464,377 100% $1,312 $678 $3,902 Coronary Heart Disease Employee 66 55% $362,414 $150,753 32% $1,112 $462 $2,284 Spouse 52 44% $535,626 $313,206 67% $1,517 $887 $60023 Dependent 6 1% $755 $418 1% $126 $70 $418 Total 289 100% $317,732 $92,286 100% $137 $40 $319 Diabetes Employee 196 68% $183,408 $55,431 60% $123 $37 $283 Spouse 87 30% $99,182 $22,197 24% $133 $30 $255 Dependent 61 2% $35,152 $14,657 16% $445 $186 $2,443 Total 691 100% $280,664 $66,142 100% $114 $27 $96 High Blood Pressure Employee 495 72% $195,807 $47,167 71% $112 $27 $95 Spouse 191 28% $80,587 $16,862 25% $113 $24 $88 Dependent 5 1% $4,270 $2,113 3% $328 $163 $423 Total 277 100% $212,586 $83539 100% $196 $77 $302 High Cholesterol Employee 199 72% $75,424 $16,303 20% $101 $22 $82 Spouse 76 27% $136,810 $67,179 80% $416 $204 $884 Dependent 2 1% $352 $58 0% $39 $6 $29 Total 48 100% $264,652 $158,321 100% $838 $501 $3,298 Stroke Employee 34 71% $241,912 $148,026 94% $873 $534 $40354 Spouse 14 29% $22,740 $10,295 7% $583 $264 1 $735 The information contained in these documents is proprietary to Hays Companies and is not to be distributed to 7 parties without the express written permission of a representative of Hays Companies. Chronic Disease laims Incurred July 2009 through April 2010, Paid through June 2010 Chronic Disease Impact Percentage of Members 21% 79% OMembeis with Chronic Disease ■Other Members The Norm = 17.4% Chronic Disease Impact Percentage of Total Paid 56% 444'o Members with Chionic Disease Other Membeis The Norm = 34.0% • The healthcare costs for members with chronic disease can have a dramatic impact on the overall performance of a health plan. This analysis focuses on six, relatively common chronic diseases: • Coronary Heart Disease Depression • Obesity Asthma • High Blood Pressure Diabetes • Similar to unhealthy behaviors and preventable claims, clients were able to brings costs down to the norm (34.0% of paid claims). This could be a savings of $1,415,367 based on XYZ's 2009-2010 experience for claims due to chronic conditions (44% of claims). We believe the current disease management programs are failing and this requires examination of a more robust program. Hays...contained .. proprietary. . Companies . . distributed . 20-Sep-11 E r r r ■r r r Ir M = M IM ■lls Ir Chronic Disease Costs Associated With Chronic Conditions - Comorbidities Total Dollarls Paid for Members htous�nir��ntslases 2000 4000 6000 Coronary Heart Disease $2 ,72 5, 706 Obesity $17 4,5 51 High Blood Pressure $4, 007, 98 7 Depression 1,28 ,431 Asthma-$765,844 Diabetes $1,86 7, 532 Total Paid for Members with Chronic Disease All Members Members without Chronic Diseases Members with Chronic Diseases Hays The information contain a -The methodology employed in this analysis "rolls - up" the total medical claim cost, regardless of specific diagnosis, for any member treated with one or more these chronic diseases. The claim costs for members treated with multiple chronic diseases may be included in more than one category in the chart (left). Coronary Heart Disease Patients 119 2% 2% Obesity Patients 47 1% WA High Blood Pressure Patients 691 12% 9-13% Depression -related Disorder Patients 115 2% 1.5-3% Asthmatics 222 4% 2-3% Diabetics 31 4% 5-8% Members Annual Gross Paid Average Per Member 1 e 16,984,400 $ 2,858 $ 2,991 1,n8: $ 9,541,829 $ 2,038 $ 2,146 1,261 $ 7,442,571 $ 5,902 $ 6,643 ■On average, the members who were not treated for chronic disease accumulated $2,038 in annual paid claims (per member). Members who were treated for chronic disease accumulated an average of $5,902 in annual paid claims per member; 3 times the average cost of non -chronic disease members. 20-Sep-11 M r is M M r r M M r M r M M r M M M= WByotal Costs for Chronic Members Demographics •Chronic conditions can be costly to a plan due to the on -going treatment costs and comorbidities. •When targeting a disease management program or communication campaign it is important to think about these other factors and the issues your population is experiencing. Members Treated for Chronic Total Relationship Disease Members Employee 802 3,003 Spouse 348 1,150 Dependent 111 1.532 TOTAL 1,261 5,685 Chronic Total Paid Disease for Members Total Paid Member with Chronic for all Percent Disease Members 3,587,248.49 26 71 7,738.111 11 3026 2,342,504.73 4,755,340 60 7.25 272,389 60 1,660,214 96 22.18 1 6,202,142.82 14,153,666.67 Chronic Disease Member Percent of Total Paid 46.36 4926 16A 1 43.82 •Approximately 27% of the employees on the plan have a chronic condition and account for 46% of the total claims paid for employees. ■Approximately 30% of the spouses on the plan have a chronic condition and account for approximately 49% of the total claims paid for spouses. ■Chronic conditions remain year after year and the potential cost impact of chronic conditions are substantial if they aren't managed. The comorbidities associated with chronic conditions can be greatly reduced, which account for a majority of the chronic claim costs. Total claims incurred by members with the following chronic conditions: Asthmatics # of Claimants Plan Paid Coronary Heart Disease Patients # of Claimants Plan Paid Employees 99 $326,711 66 $815,007 Spouses 47 $126,164 52 $1,437,375 Dependents 76 $185,329 1 $19,040 TOTAL 222 $638,204 119 $2,271,422 H ays .. .. Depression -related Disorder Diabetics High Blood Pressure Obesity Patients Patients Patients # of Claimants Plan Paid # of Claimants Plan Paid # of Claimants Plan Paid # of Claimants Plan Paid 65 $772,831 196 $631,803 495 $2,347,903 19 $52,955 32 $256,566 87 $897,207 191 $950,726 17 $85,077 18 $45,129 6 $27,267 5 $41,360 11 $7,428 116 $1,074,526 289 $1,566,277 691 $3,339,989 47 $145,460 20-Sep-11