Saint Mary’s College Employee Benefits Advisory Committee (EBAC)

1. Saint Mary’s CollegeEmployee Benefits Advisory Committee (EBAC) March 2014 Meeting March 24, 2014

2. EBAC Meeting – March 2014 Agenda – • Welcome / Introductions – EBAC Update • Review of draft EBAC tenets • Wellness Program Discussion • Plan for Community Meeting ? • Timeframe and Schedule for 2014 Process

3. EBAC Meeting – March 2014 2014 – Proposed New Tenets • 1.     Employee Benefits are part of the college’s total compensation strategy and must be  considered  as part of a holistic employee engagement (We stressed the importance of the term employee engagement) • 2.     The  employee benefits program(s) offered should align with Catholic and Lasallian principles (It was suggested that we consider adding Catholic, social teachings, and Liberal Arts traditional or principles to the Lasallian principles with which employee benefits should align. 

4. EBAC Meeting – March 2014 • 3.  Programs offered will treat all members of the College community with fairness;  and support our families.  (It was noted that we need to clearly and explicitly define what we mean by the terms "fairness" and "family" ... that we are taking a particularly broad and inclusive perspective on both counts. • 4.  Programs offered should contain choices for employees that match to their individual needs, beliefs and circumstances. This may include offering  optional low cost or limited benefit plans. (It was suggested that IF we are going to explicitly offer "optional low cost or limited benefit plans" ... that we really should also offer the flip side of this ... i.e., optional high cost and expanded benefit plans ... for which employees must pay more, so that others do not have to subsidize this higher cost.

5. EBAC Meeting – March 2014 • 5.  The program’s financials should be easy to project and budget and within agreed upon targets. • 6.  Employees should share in the cost of their program elections in a way that  reflects the relative value and cost of their elections. (It was suggested that we drop the qualifier "If necessary" ... and use more plain language for the phrase "the cost of their program elections" (e.g., the cost of their particular health care plans, programs, or coverage options) • 7.  Wellness and health initiatives should be supported and promoted 

6. EBAC Meeting – March 2014 • 8.  There should be COMMUNICATION with the campus community about the value of the benefits program, the ADVISORY ROLE OF EBAC, AND THE DECISION-MAKING PROCESSES OF THE ADMINISTRATION of the cost and value of the benefits program. • 9. Technology should be leveraged to improve efficiency and value to participants. (It should read more like the following: "ALL MEANS (e.g., social, administrative, technological, institutional, etc.) should be leveraged to contain costs and to improve efficiency and value to all participants.)

7. EBAC Meeting – March 2014 Wellness Discussion -

8. Behavior Drives Healthcare Utilization “75% of all health care costs is for chronic care and 75% of that is behavior based modifiable risk.” Center for Disease Control Source: IFTC, Center for Disease Control and Prevention Midwest Business Group on Health, 2003 Annals of Internal Medicine, 2002

9. The KEY is to Identify Future Risk Who is Driving Cost? The 5/50 Principle Who Will Be The Next 5%? 5% 59% of last year’s healthy are this year’s high risk 75% of chronic diseases are preventable or reversible

10. Health & Performance 5 Phase Approach

11. EBAC Meeting – March 2014 • Phase I: Strategy & Goals • Sr. Leadership Buy-In • Develop Framework • Analyze Data • Develop Vision, Mission and Branding • Phase II: Collect & Analyze • Environmental Assessment • Incentive Design • Biometric Screening and Health Assessments • Wellness Survey • Workers’ Compensation Analysis

12. Health Assessment • A simple questionnaire about your health and lifestyle • Not a medical questionnaire • Measures current health status • 20-30 minutes to complete • On-line version • Assesses lifestyle behaviors • Identifies good health practices • Detects lifestyle health risks and provides information • to help avoid those risks Nav

13. Onsite Biometric Screenings • Metrics: • Finger-stick blood test • Total cholesterol • LDL cholesterol (bad) • HDL cholesterol (good) • Triglycerides • Glucose • Blood pressure • Height and weight • Waist measurements • Body fat % (onsite screenings only) • Teachable moment • Alternatives for those not on site Nav

14. Incenting Behavior Change Option 1 Trinkets for participation ($5-$25 per participant) Option 2 Cash, coupons or merchandise for participation ($10-$125 per participant ) Option 3 Use of “reward” points for participation ($50-$200 per participant) Option 4 Medical Plan Contribution Differential ($300-$1200 per participant/year) Option 5 Individual Outcomes are required for Contribution Differential (Legal Limits apply) 0% 30% 50% 75% 90% Participation Levels Optimal incentives and resulting participation are significantly impacted by the culture of the organization, including leadership support Sources: Larry Chapman, WebMD. National Wellness Institute Nav

15. Keys to Success/ Lessons Learned Nav

16. EBAC Meeting – March 2014 Timeframe and Schedule for 2014 Process • Frequency of EBAC Meetings • Monthly (Next meeting is tbd) • Public Forum Process • Need to schedule and organize • Leadership buy in • ALL of us must work to involve • Define deliverables and Goals

17. EBAC Meeting – January 2014 2014 EBAC Initiatives – Thank you for your participation ! Please forward all questions to Eduardo

18. EBAC Meeting – March 2014

19. EBAC Meeting – February 2014 2014 EBAC Initiative: A re-examination of what and how Saint Mary’s College provides their employees with employee benefits; the vendors, the offerings, the budget and the competitive needs of the community.

20. EBAC Meeting – February 2014 2014 EBAC Initiative: A re-examination of what and how Saint Mary’s College provides their employees with employee benefits; the vendors, the offerings, the budget and the competitive needs of the community.

21. EBAC Meeting – March 2014 Review of certain group insurance concepts Risk vs Exposure vs Credibility Defined Benefit vs Defined Contribution Risk Sharing and Pooling

22. EBAC Meeting – March 2014 Risk vs Exposure vs Credibility Risk is the potential of an event, the probability of the event is likely uncertain, but exists with various level of credibility. Exposure is the projected cost of a risk, although not all exposures are monetary. Exposures are usually shared between various parties (insurer, insured, etc.) Credibility is an actuarial term used to define the projected accuracy that past outcomes have in predicting future results. More data yields higher credibility (greater certainty). You have car insurance. The risk is in operating (crashing) the car, YOUR exposure is the deductible (and potential lost time and use of the vehicle). The credibility (likely hood that you will have an accident) comes from your driving record (past outcomes) and other historical data. COST = (Risk x Exposure ) / Credibility

23. EBAC Meeting – March 2014 Risk vs Exposure vs Credibility For Saint Mary’s: the ‘Risk’ is in offering a plan(s); morbidity of participants the ‘Exposure’ is the cost of the plan (premiums in a fully insured scenario); which is a reflection of claims costs the ‘Credibility’ is 100% for the total pool (600+ employees). Slices of the pool may have lower credibility

24. EBAC Meeting – March 2014 Defined Benefit vs Defined Contribution Defined Benefit is the ‘promise’ of providing a certain level of benefit, regardless of cost. Example: If you work here 5+ years we will provide a pension equal to 5% of your life time earnings starting at age 65 until you die Defined Contribution is the promise to provide a certain level of funding for a benefit. Example: If you work here a year we will contribute 5% of your earnings into a tax favored vehicle for your retirement.

25. EBAC Meeting – March 2014 Defined Benefit vs Defined Contribution For Saint Mary’s the current structure is a hybrid. The defined contribution part is that the college has a set budget per employee (pepm) for benefits. The employee can choose what they want to buy, although there is a cost share, and the specific value to the employee is not tied to the SMC contribution. The defined benefit part is that the options available are limited and if an employee waives any part of the program they lose that part of the SMC contribution.

26. EBAC Meeting – March 2014 Risk Sharing Discussion (originally presented to HIRC in 2009) Absent delivery system differences the total cost of care for SMC participants (the ‘pool’) is a constant; cost differences between carriers is driven more by the relative health of the benefitted population than by the carrier chosen. Kaiser’s costs are lower in large part because the participating population in Kaiser is healthier. Driving employees into Kaiser for the lower cost is a short term (1 year) solution. Is it reasonable (fair) to charge employees more for being part of an older, sicker group?

27. EBAC Meeting – March 2014 Risk Sharing Discussion (originally presented to HIRC in 2009) For example, IF the overall morbidity of SMC = 1.0 (risk factor) Then the relative risk factors would be: Kaiser = .95 ; Non-Kaiser= 1.10 Should SMC support each plan equally or proportionally? Equally: SMC contribution is the ‘same’ regardless of plan choice Proportionally: SMC contributions are modified to pay more, on a relative basis, toward the higher risk group

28. EBAC Meeting – March 2014 The total cost of the ‘pool’ is not impacted by contribution strategy or scheme except for: > dis-enrollments (modify risk) > cost shifting (sorta) The issues around contribution modeling are more than the technical discussion above and are impacted by the values of the college and the total compensation strategy.

29. EBAC Meeting – March 2014 2014 EBAC Initiatives – Basic Tenets Originally developed as part of the first HIRC process in 2006 for the 2007 plan year Designed to articulate the values of the college and provide a framework for our decisions then and in the future Addressed what was perceived as the most significant issue at the time; dependent affordability and college budget ability

30. EBAC Meeting – February 2014 Basic Tenets - Contribution Strategy: • Employee choice of Kaiser / non-Kaiser • Maintain a ‘Low/no-cost’ plan • Reflect cost difference • Stay within the target budget • Ease of communication and administration • Support coverage for dependents

31. EBAC Meeting – March 2014 PROPOSED New Tenets for 2014: Employee Work/Life Programs (employee benefits) Employee Benefits are part of the college’s total compensation strategy and must be considered as part of a holistic employee engagement 2. The employee benefits program(s) offered should align with Catholic and Lasallian principles 3. Programs offered will treat all members of the College community with fairness; and support our families. 4. Where practical programs offered should contain choices for employees that match to their individual needs, beliefs and circumstances. This may include offering optional low cost or limited benefit plans.

32. EBAC Meeting – March 2014 PROPOSED New Tenets for 2014: Employee Work/Life Programs (employee benefits) 5. The program’s financials should be budgetable and within agreed upon targets. 6. If necessary, employees should share in the cost of their program elections in a way that reflects the relative value and cost of their elections. 7. Wellness and health initiatives should be supported and promoted 8. There should be a strategy to communicate with the campus community the value of the benefits program, the decision process of the EBAC and administration 9. Where practical, technology should be leveraged to improve efficiency and value to participants.