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R-09-01-08-8C4 - 1/8/2009RESOLUTION NO. R -09-01-08-8C4 WHEREAS, the City of Round Rock previously entered into a Health Plan Document with Aetna to provide City employees with health care benefits, and WHEREAS, Aetna has submitted a letter dated December 12, 2008 regarding renewal of the 2009 policy, and WHEREAS, the City Council desires to approve said letter, Now Therefore BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: That the Mayor is hereby authorized and directed to execute on behalf of the City the attached letter from Aetna dated December 12, 2008 indicating acceptance of Aetna's health benefits services for the renewal of the 2009 policy period, a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 8th day of January, 2009. ATTEST: 8714444,. arm SARA L. WHITE, City Secretary 0:\WDOX\RESOLUTI\R90108C4.DOC/rmc ceyh,4 ALAN MCGRAW, Mayor City of Round Rock, Texas We want you to know" )(Aetna® December 12, 2008 City Of Round Rock Linda Gunther 221 East Main Street Round Rock, TX 78664 Dear Ms. Gunther: Kendra Hoduski Account Manager Great Hills Corporate Ctr. Bld 3 9050 Capital of Texas Highway North Suite 150 Austin, TX 78759 Phone: 512-349-1974 Fax: 512-346-7406 HoduskiKRaetna.com Thank you for allowing us to serve your health insurance and health benefit needs over the past year. We are hopeful that this package will provide you with the information you need in order to develop your company's future benefits program. As we approach the January anniversary of your program with our company, we are pleased to present you with our renewal for the 2009 policy period. At Aetna*, we believe it is fundamental that you understand the full financial picture of your benefit plan. Therefore, the enclosed package provides the following important information about the cost of your current program, potential changes you may want to consider and the value that Aetna brings to you and' your company. I. Future Program Costs - This section illustrates the cost projections to operate your current benefit program for the period 01/01/2009 through 12/31/2009. This section contains the following: illustrative administrative service fees, and a Stop Loss exhibit. For the 01/01/2009 through 12/31/2009 contract period, the fee will increase 6.9% for medical and 1.2% for dental and 0% for vision. Also included in this section is renewal information regarding your Stop Loss coverage. Aetna's charge for maintaining your current Stop Loss protection levels will increase 6.0% over the current rate. Your aggregate trigger factor will increase 7.3%. II. Utilization Overview - This section contains graphs pertaining to your benefit program. III. Program Services Included, Financial Assumptions, and Stop Loss Assumptions Program Services Included - This section includes additional services that have been included in our pricing or require an additional fee. Financial Assumptions - Our renewal offer is contingent upon the parameters outlined here. It is important to note that deviations from these assumptions may result in additional charges and/or adjustments on our Life, Medical and Dental quotations for conventional premiums, Service Fees, and Stop Loss rate(s) and factor(s). Customer Notifications of any Aetna initiated changes for the upcoming contract period are outlined here. Please review this section thoroughly. Stop Loss Assumptions - This section includes specific information regarding what's included and excluded from your Stop Loss quotation, plus there is a separate page explaining leveraged trend. IV. The Aetna Difference - This section outlines the latest Aetna facts that we would like you to know about our company. We hope that by reading this information you will better understand the many ways we are striving to provide quality healthcare programs and services to companies like yours. In the absence of any changes impacting the conditions of this renewal as outlined in the Financial Assumptions section, the rates, fees, and factors presented here will remain in effect through December 31, 2009. If you have any questions, please contact me at 512-349-1974. We are committed to working with you to provide quality products and services that reinforce your decision to do business with Aetna and help manage your current and future health care costs. Sincerely, Accepted for City of Round Rock By: Title: Account Manager Date: Senior Underwriting Consultant -"Aetna" is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. The Aetna companies that offer, underwrite or administer benefit coverage include Aetna Health Inc., Aetna Health of California Inc., Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc., Aetna Dental Inc., Aetna Dental of California Inc., Aetna Life Insurance Company, Aetna Health Insurance Company of New York, Corporate Health Insurance Company and Aetna Health Administrators, LLC. These health benefit and health insurance plans contain limitations and exclusions. Policy form numbers include GR -29, GR -700-W, GR -88435. Administrative Service Fees ASC City of Round Rock Renewal Period: 1/1/09 through 12/31/09 Contractholder Number - 819919 • The below Administrative Service Fees will become effective 1/1/09. • The fees below exclude charges for items such as printing, special reports and late fees. These will be billed separately. • The below ASC fees assume that Aetna will be Claim Fiduciary for Level 1 and Level appeals. City of Round Rock performs claim ficuciary for voluntary appeals after Levels 1 & 2 are exhausted (Option 4). • Simple Steps to a Healthier Life is included in the below ASC fees. • Beginning Rights"" Maternity Program is included in the below ASC fees. • The National Advantage with Facility Charge Review programs have been included in the renewal at a charge of 50% of any attained savings. • Rx rebate share is 50%. • Effective Jan 1,2009, our Healthy Outlook Disease Management program will be discontinued and replaced by Aetna Health Connections. Our Aetna Health Connections Disease Management program includes MedQuery and is offered for an additional $3.95 PEPM. This is included in the fees below. Service Fee Comparison 12/12/2008 Projected Number of Enrolled Employees Choice II/APM 756 Dental 766 Vision 766 Administrative Service Fees as Billed Choice II/APM (PEPM) Dental (PEPM) Vision (PEPM) Administrative Service Fees as Total Dollars Current Period Projected Period 1/1/08-12/31/08 1/1/09-12/31/09 % Change 38.57 ** 4.26 1.00 41.23 4.31 1.00 Choice II/APM 349,907 374,038 Dental 39,158 39,618 Vision 9,192 9,192 6.90% 1.17% 0.00% Total Service Fee $ 398,257 $ 422,848 6.17% "Illustrative - Includes Aetna Health Connections www.aetna.com ASC Fees Stop Loss Exhibit ASC City of Round Rock Renewal Period: 1/1/09 through 12/31/09 Contractholder Number - 819919 • Minimum Stop Loss Aggregate Limit will be set using the first month enrollment x Stop Loss Aggregate Limit (PEPM) Composite Factor x number of contract months. • Premium rates are billed and Aggregate Factors are administered on a composite basis. • Please see the Stop Loss Caveats for additional information. • Quote assumes Plan change on High plan - In network Ded from $250 to $350. Plan Characteristics Individual Limit Aggregate Limit Stop Loss Coinsurance Level Mental/Nervous Apply Contract Basis Terminal Liability Option Benefits applied to ISL Benefits applied to ASL Commissions Individual Lifetime Stop Loss Payment Maximum Annual ASL Payment Policy Period Length (months) Cost & Factors Total Expected Claims with Stop Loss Attachment Point Lives covered under Stop Loss Rate Cost/ee/month Trigger Factor Comparisons 12/12/2008 Annual Stop Loss premium (at proposed lives of 756) Maximum Claim Liability (at proposed lives of 756) % Increase in Rate/ee/month % Increase in Trigger Factor Current $ 75,000 125% 100% Yes Paid No Extension (N/A) Rx/Medical Rx/Medical 0% $ 1,000,000 $ 1,000,000 12 $ 4,216,067 5,270,084 718 $ 91.10 $ 611.66 $ 826,459 $ 5,549,002 www.aetna.com Renewal with Plan Chg - Ded $350 Option 1 $ 75,000 125% 100% Yes Paid No Extension (N/A) Rx/Medical Rx/Medical 0% $ 1,000,000 $ 1,000,000 12 $ 4,762,800 5,953,500 756 $ 96.56 $ 656.25 $ 875,992 $ 5,953,500 6.0% 7.3% ASC Stop Loss Utilization Overview City Of Round Rock Current Data For Claims Processed/Paid June 01, 2007 - May 31, 2008 Plan Paid by Demographic Spilt Contractholder Number - 819919 35% 30% 25% 20% 15% 10% 5% 0% Customer Current Percent of Membership, Claimants and Plan Paid Comparison ®% of Members ■ % of Claimants O % Plan Paid Top Hospitals Top 7 Hoapltala Valley Baptist M C Brownavllla, TX Round Rook M C Round Rook, TX 12/12/2008 wonv.aetna.com Utilization Overview Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are included or available to City Of Round Rock. Programs and services that are optional are noted with a $ sign and require an additional fee, for specific pricing please contact your Account Manager, Darryl Rogers Programs and services that are not available for particular products are identified as N/A. 12/12/2008 www.aetna.com Program & Services ASC Choice® POS II General Administration Account Management Included Customer Team Services Included Banking Included Communication Materials Included Eligibility (Standard) Included Customized Forms $ Printing of Booklets or Certificates $ Claim Fiduciary & External Review (Details on Financial Assumption Tab) $ HIPAA Administration Included Claims Subrogation Included Claim & Member Services Claim Administration Included Member Services Included Network Administration Network Management Included Provider Relations Included National Advantage Program Included - Facility Charge Review Included - Itemized Bill Review $ Rural PPO Network Program $ Dental Medical Integration (DMI) N/A Network Access Services Medical Network Discount (Details on Medical Network Access Charge of Financial Assumption Tab) $ Dental Network Discount N/A Patient Management Precertification Included High Tech Radiology Precertification and Steerage $ Case Management Included Concurrent Review Included Discharge Planning Included Aetna Compassionate Care Program Included National Medical Excellence Included Rx Step Therapy N/A Save-A-Copay N/A Rx Check N/A 12/12/2008 www.aetna.com Program & Services ASC Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are included or available to City Of Round Rock. Programs and services that are optional are noted with a $ sign and require an additional fee, for specific pricing please contact your Account Manager, Darryl Rogers Programs and services that are not available for particular products are identified as N/A. 12/12/2008 www.aetna.com Program & Services ASC Choice® POS II (Wellness & Health Management Aetna Health Connections- Disease Management Included MedQuerys" - Member Messaging $ Healthy Outlook Program® (sunset 12/31/08 group has to move to AHC - DM effective 1/1/09) N/A - Caring for Asthma $ - Caring for Heart Failure $ - Caring for Diabetes $ - Caring for CAD $ Enhanced Member Outreach (1,000+ ee's- Fee will vary based on Member to employee ratio) $ Simple Steps To A Healthier Life® Included Simple Steps To A Healthier Life®Reward Tracking $ CareEngine® Personal Health Record $ Wellness Counseling $ Healthy Body, Healthy Weight Program (1,000 $ Beginning Rights"' (formerly Mom -to -Babies) Included Quit Tobacco Program $ Informed Health® Line - Nurseline (800 #) only $ Informed Health® Line - Plus $ Value Add Programs Fitness Program (GlobalFit) Included Aetna Natural Products & Services Program Included Vision One+ Discount Program Included Standard Behavioral Health Focused Psychiatric Review N/A Managed Behavioral Health Included - Med/Psych Program $ 12/12/2008 www.aetna.com Program & Services ASC Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are included or available to City Of Round Rock. Programs and services that are optional are noted with a $ sign and require an additional fee, for specific pricing please contact your Account Manager, Darryl Rogers Programs and services that are not available for particular products are identified as N/A. 12/12/2008 www.aetna.com Program & Services ASC Choice® POS II Behavioral Health Disease Management Programs (Must have both Medical & BH with Aetna) - Alcohol Disease Management $ - Anxiety Disease Management $ - Depression Disease Management $ Case Management Behavioral Health Programs - Intensive Case Management $ Member Internet Services Public Sites DocFind® Included InteliHealth® Included Pharmacy Information N/A Learning Resources Included Secure Sites Staying Healthy Included Estimate the Cost of Care Tool Included Claim Research/Forms/Contact us Included Spanish version Included Plan Sponsor Internet Services e.Plan Sponsor MonitorTM Reporting Aetna Integrated Informatics®` - Level A Reporting Included - Level B Reporting Included - Level C Reporting $ - Level D Reporting $ - Disease Management Activity Report (DMAR) Included - Ad hoc Reporting (2hrs/cal years for 100 to 999 medical ees, 4hrs/cal year for 1000 to 2999, 12 hrs/cal year for 3000 to 4999) Included Third Party Stop Loss Reporting $ Aetna Navigator Reporting Included 12/12/2008 www.aetna.com Program & Services ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 • Services Agreement ("Contract") Period - The contract period begins on the effective date of January 01, 2009 and will be applicable for a 12 month period. Our contracts provide for automatic renewal upon the completion of each contract period unless either party invokes the termination provision, which requires 31 days advance written notice of termination to the other party. This provision may be invoked at any time during the continuance of the contract and is not limited to termination occurring on the renewal date. Contractholder Number - 819919 • Enrollment and Funding Assumptions - Based on this census information and the subsequent access analysis, we have assumed that approximately 756 employees will be enrolled for medical coverage. Our renewal quote assumes that coverage will not be extended to additional employees without review of supplemental census information and other underwriting information for appropriate financial review. The following illustrates the funding arrangement and enrollment assumptions by line of coverage: Coverage Funding Arrangement Assumed Enrollment Choice POS II Self -Funded 756 Dental - PPO Self -Funded 766 Basic Vision Self -Funded 766 Total Medical Enrollment 756 • Individual Medical Conversion Policies - This policy is unavailable (excluded) for all self-insured arrangement. As a reminder, most self insured group plans offer COBRA continuation (18, 29 or 36 months) to employees upon group termination. Self -Funded Fee Guarantee The mature fees are guaranteed according to the per employee per month fees as illustrated on the financial exhibits. Advance Notification of Fee Change — We will notify City Of Round Rock of any fee change at least 60 days prior to the effective date of the fee change. Guarantee Parameters - Aetna reserves the right to recalculate the guaranteed fees to take effect on the date a contingent event described below occurs. In such case, City Of Round Rock will be required to pay any difference between the fees collected and the new fees calculated. Aetna may recalculate: 12/12/2008 1. If, for any product: a. There is a 15% decrease in the number of employees from our enrollment assumptions by site or by product, or from any subsequently reset enrollment assumptions. b. The change in member -to -employee ratio is greater than 15%. We have assumed a member -to -employee ratio of 1.97. c. The change in number of processed claim transactions (PCTs) per employee is greater than 15%. We have assumed 22.7 PCTs per employee per year. We define a processed claim transaction, or PCT, for medical or dental benefits as any transaction with respect to a benefit request or predetermination of dental benefits for expenses incurred or expected to be incurred by one claimant in any one calendar year for a major line of coverage, including but not limited to benefit payment, benefit denial, pended request or decision on an appeal of a denied benefit request. www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 d. There is a 15% increase in the retiree percentage from that assumed or from any subsequently reset assumptions. We have assumed that 1.7% of the enrolled employees are over 65 retirees. 2. If there is a material change in the plan of benefits initiated by City Of Round Rock or by legislative or regulatory action. 3. If there is a material change initiated by City Of Round Rock or by legislative or regulatory action in the claim payment requirements or procedures, account structure, or any change materially affecting the manner or cost of paying benefits and/or administering the plan. • Run -Off Claims Processing - Your administrative service fees are mature; we have included the cost of processing self-funded run- off claims for 12 months following the termination of our administrative service agreement. • Mental Health/Substance Abuse Benefits - Our renewal quote assumes that mental health/chemical dependency benefits are included. • Prescription Drug Benefits - Our renewal quote assumes that prescription drug benefits are included and will be provided through Aetna Pharmacy Management at the per employee per month fee shown on the financial exhibits. • Direct Member Reimbursement (DMR) claims are Pharmacy claims (incurred in or out -of -network) submitted by eligible members to APM and processed in APM's DMR unit. These claims are not adjudicated on-line at point of service subject to the copay. They are paid in full by the member. A surcharge is necessary to recoup the additional cost of processing DMR claims and to provide an additional incentive to plan sponsors to educate their employees on how to use their APM program to minimize the occurrence of DMR claims. For 2009, the charge is $2.95 per script for Non -Off Shore and $1.80 per script for Off -Shore Processing. • Management Formulary Rebates — City Of Round Rock would receive 50% percent of the manufacturer volume discounts we receive based on actual utilization of formulary drugs under contract. The percent share is based solely on the number of employees enrolled in the pharmacy benefit plan. • MedQuery"' is a program that uses member data such as medical claims, pharmacy claims, laboratory reports, and demographic information to identify potential gaps in care. This information is shared with physicians to help improve clinical quality and patient safety. MedQuerysM can be included for an additional $1.75 per employee per month for our self-funded medical products. Our MedQuery Standard Member Messaging program is included as part of our MedQuery program. Our MedQuery Member Messaging program includes sending a consumer version of the care consideration by letter to the member. The letter encourages the member to call his or her doctor to discuss the care consideration and is sent only after the care consideration is communicated to the treating physician, to allow the physician time to evaluate the issue. Our Standard Member Messaging option is standardly included. Our MedQuery Enhanced Member Messaging program is also available as an option to our MedQuery program. Our MedQuery Enhanced Member Messaging program is offered to those members who are not participating in Aetna Healthy Connections Disease Management program. MedQuery Enhanced Member Messaging can be included for an additional $0.20 per employee per month for our self-funded medical products. Effective January 1, 2009, Healthy Outlook Programs on a per participating member per month basis charged thru the claim wire will be discontinued. This will be replaced by Aetna Health Connections on a per member per month basis. Aetna Healthy Outlook Program - . Effective January 1, 2009, we will no longer be offering the Healthy Outlook Program. This program will be discontinued and replaced by Aetna Health ConnectionssM (Disease Management) programs on a per employee per month basis. The new program expands our capabilities, allowing us to provide disease management services for more than 34 conditions. For your next renewal, please consider signing up for Aetna Health Connections. To learn more about this program, please contact your Aetna sales representatives. 12/12/2008 www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 Aetna Health Connections Disease Management — Our Aetna Health Connections Disease Management program provides innovative and individualized clinical programs, information and support for total, integrated health management to help members achieve their optimal state of health. Aetna Health Connections Disease Management integrates a full suite of 34 chronic conditions and common co -morbidities in a holistic fashion, with an Aetna nurse acting as a generalist to address the total health of those members who will benefit most from disease management services. Our program also includes MedQuery®, which uses member data such as medical claims, pharmacy claims, laboratory reports, self- reported data, and demographic information to identify potential gaps in care. This information is shared with physicians to help improve clinical quality and patient safety. Our Aetna Health Connections Disease Management with included Medquery programs charge for City Of Round Rock will be on a per employee per month basis at $3.95 pepm. • National Advantage Program - Aetna's National AdvantageTM Program allows plan sponsor's access to contracted rates for many medical claims that currently are paid at billed charges under indemnity plans, the out -of -network portion of managed care plans, or for emergency/medically necessary services not provided within the standard network. The NAP network consists of many of Aetna's directly -contracted hospitals, ancillary providers, and physicians as well as hospitals, ancilliary providers, and physicians accessed through vendor arrangements where Aetna doe snot have direct contractual arrangements. The average savings to our customers - before NAP fees - range from 15 percent to 25 percent of billed charges depending on product. Discounts vary by geographic region. The NAP fee is not a part of the overall per employee per month (PEPM) administrative service fee calculation for the plan sponsor. It is automatically charged to plan sponsors as part of their claim charges. It is charged only if savings are achieved. This standard percentage for City of Round Rock is 50 percent and has been assumed in this self-funded proposal. • Facility Charge Review Program - The Facility Charge Review Program (FCR) is an additional feature of the National Advantage Program (NAP) for self-funded plans which has been included as part of this proposal. It provides reasonable charge allowance review for most inpatient and outpatient facility claims under indemnity plans, the out -of -network portion of managed care plans, or for emergency/medically necessary services not provided within the network, where a NAP contracted rate is not available. FCR is only available in conjunction with NAP and is not available separately. The fee for the Facility Charge Review feature of NAP is the same as the NAP fee, 50% of savings and is not included in the per employee per month fee. A listing of participating NAP hospitals, facilities, and physicians can be found on Docfind®, Aetna's online provider listing, on our website at www.aetna.com. We will recalculate plan sponsor's administrative service fee if either of the following changes are made: group discontinues the National Advantage Program or group changes the facility charge review program. • Claim Fiduciary (Option 4) — Our quoted Administrative fees assume Aetna will be the ERISA claim fiduciary for the first level of mandatory plan appeal for all denied claims and for the second level of urgent care claims for the medical and dental coverages. City Of Round Rock will be the ERISA claim fiduciary for all other second -level appeals. The claim fiduciary is responsible for final claims determination and the legal defense of the decisions it makes. • External Review - External Review is offered as an option to self-funded customers. Extemal review utilizes outside vendors who coordinate a medical review through their network of outside physician reviewers. Customers who retain claim fiduciary responsibility may choose to include this service and Aetna will pass the actual vendor charges through on a direct charge basis. • Health Insurance Portability and Accountability Act (HIPAA) - Our proposal assumes that Aetna will be providing HIPAA certifications of coverage for terminated employees. • Data Transfer at Termination - Upon contract termination, we agree to cooperate with succeeding administrators in producing and transferring required claim and enrollment data. Data will be transferred within 30 days after determination of City Of Round Rock's specific format and content requirements, subject to a charge that is based on direct labor cost and data processing time. • Late Fee Payment - If City Of Round Rock fails to provide funds on a timely basis to cover benefit payments as provided in the Agreement, and/or fails to pay Service Fees on a timely basis as provided in such Agreement, Aetna will assess a late payment charge. 12/12/2008 www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 The charges for 2008 are: - late funds to cover benefit payments (e.g., late wire transfers after 24-hour request): 9.0% annual rate - late payments of Service Fees after 31 day grace period: 9.0% annual rate Aetna will provide written notice to City Of Round Rock of late payment charges for subsequent years. The late payment charges described in this section are without limitation to any other rights or remedies available to Aetna under the Agreement or at law or in equity for failure to pay. • Medical EOB Suppression — Unless required by state law, we do not produce EOBs for claims when there is no member liability. Additionally, EOBs are always available electronically through Aetna Navigator on our website www.aetna.com. • Claims Subrogation - Aetna has entered into an agreement with the firm of Rawlings & Associates to provide comprehensive subrogation services. There is no administration charge from Aetna to utilize the subrogation program, however, a contingency fee is collected upon recovery for self-funded customers. The fee currently in place with Rawlings is 27.0%. ■ Broker/Consultant Compensation - The quoted fees do not include broker/consultant compensation. • Third -Party Audits - While in most cases we do not request reimbursement for internal costs associated with a third -party audit, we reserve the right to recoup these expenses if significant time and materials are required. A complete description of the terms and conditions of our audit policies is outlined in our Services Agreement. • Additional Products and Services - Costs for special services rendered, which are not included or assumed in the pricing guarantee will be direct billed. For example, City Of Round Rock would be subject to additional charges for customized communication materials, as well as costs associated with custom reporting, booklet and SPD printing, etc. The costs for these types of services would depend upon the actual services performed and would be determined at the time the service is requested. A list of these special services can be found on the Programs and Services Sheet. 12/12/2008 www.aetna.com Financial Assumptions ASC Stop Loss Assumptions City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 This caveat document outlines specific information for the quotation provided on 08/20/2008 Stop Loss is available to cover claims for all of the Plan Sponsor's eligible employees and their dependents who are enrolled on a timely basis and are covered under the ASC plan, provided the employee satisfies the following definition: an employee means an employee of the Insured who Aetna determines is physically able to perform all the regular duties of employment, is regularly working at least 25 hours per week and for whom the Insured is deducting any required U.S. FICA taxes. Retirees under65/over 65 have been included in this quotation at the Plan Sponsor's request. This is a firm quote Stop Loss Policy Year - The Stop Loss policy year must agree with the ASC contract year, both of which must end on the customer's standard renewal date. Rate/Factor Adjustments - We reserve the right to adjust the premium rate and Aggregate factor during the policy year if there are a) changes to the medical plan, b) deviations from any of our quote assumptions (e.g. policy period, type of Stop Loss coverage, runoff coverage for employees who terminated prior to the renewal date, etc.), or c) changes in other factors bearing on the Stop Loss risk that result in a combined manual change of 10% or more (e.g. , single/ family split, age/gender mix, etc.). However, we will not change the rate or factor based on changes in the make-up of the group unless the number of covered employees (either in total, by type of medical plan, by single/family split, by age/ gender or by location) changes by more than 10% from the number assumed in the quote. We also will not change the rate or Aggregate factor based on actual Stop Loss experience after the effective date. Family Participation - This quotation assumes 43.5% family participation. Large Group Acquisition - In the event that a large group (in excess of 10% of total covered lives) is acquired after the original effective date and is covered under the Stop Loss policy, we reserve the right to underwrite the individuals within this group based on current large claim data provided by the customer. If this information is not forthcoming, we will apply the Actively -at -Work and Dependent Non -Confinement underwriting rules to those in the new group on the effective date of their coverage under Stop Loss. Coverages Excluded from Individual Stop Loss - Non-integrated (APM, PCS) drug benefits will apply to the Individual Stop Loss limit while separate ancillary benefits such as: Dental, Vision and Temporary Disability will not apply to the Individual Stop Loss limit. Coverages Included under Aggregate Stop Loss - Aggregate Stop Loss coverage includes the following benefits: Medical and Pharmacy Mental/Nervous and Substance Abuse - Mental/Nervous and Substance Abuse claims will be covered by Individual and Aggregate Stop Loss only when Aetna's vendor provides these benefits. If these benefits are provided by an outside vendor, the claims resulting from these services will be excluded from Individual and Aggregate Stop Loss. HIPAA — Stop Loss coverage for new entrants (those who become covered after the Stop Loss effective date) are subject to HIPAA's pre-existing conditions limitation in accordance with Aetna Life Insurance Company's then current standard underwriting practices established for applying pre-existing condition limitations to group accident and health insured plans in accordance with HIPAA, Public Law No. 104-191. Reimbursement for Aggregate Stop Loss Claims - The monthly budget feature standardly applies to Aggregate Stop Loss claims as long as the Stop Loss policy remains in effect; however, this feature is not available under the following conditions: 1) when customers choose to fund claims through multiple primary wire lines or 2) when customers choose to fund claims through one primary wire line and report through one or more internal wire lines. For these plans, reimbursement will be made within 120 days after the policy year end. 12/12/2008 www.aetna.com Stop Loss Assumptions ASC Stop Loss Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 The Aggregate liability limit will equal the sold trigger factor times the number of months in the policy year times the total number of covered Stop Loss lives reported for that policy year (exception: when a customer drops in size during the policy year, the actual enrolled lives at the start of the policy year will be utilized to determine the liability limit for that policy year). Maximum Annual Aggregate Stop Loss Payment Amount - This quote assumes $1,000,000 Maximum Annual Aggregate Stop Loss Payment Amount. Individual Lifetime Stop Loss Payment Amount - This quote assumes a $1,000,000 Individual Lifetime Stop Loss Payment Amount. The Individual Lifetime Stop Loss Payment Amount will be capped to be no greater than the underlying lifetime medical plan maximum, for a given Participant, minus the Individual Stop Loss Amount in effect for each policy period. Producer Commissions - There are no producer commissions included for Stop loss Prior to acceptance of this proposal, we reserve the right to withdraw or modify it for any reason. However, in no event may this proposal, as it pertains to Stop Loss, be accepted after the earlier of a) 90 days from the date of this proposal, or b) the proposed effective date for Stop Loss coverage. 12/12/2008 www.aetna.com Stop Loss Assumptions ASC We want you to know® )(Aetna The Aetna Difference Aetna* is one of the nation's leading providers of health care benefits. Our resources include one of the largest networks of physicians, dentists, hospitals, pharmacies, and health professionals; extensive experience in claims payment and administration of innovative health benefits and health insurance; and powerful online resources and self-service tools. Aetna is a leader, cooperating with doctors and hospitals, employers, patients, public officials, and others to build a stronger, more effective health care system. Broad Choice of Products and Services Helps You Provide Coverage For Your Employees You know Aetna as a leader in health insurance. But we also offer a full range of insurance policies, including dental, pharmacy, group life, and disability, each of which provides the high level of quality and service you demand. Whether taken individually or as a complete package, they allow us to enhance your coverage. And Aetna harnesses the power of information to help you and your employees make better, more informed decisions. This helps you control costs, and helps keep your employees healthy and productive. Benefits Work Better ... Together When Aetna's full range of benefits, Medical, Dental, Pharmacy, Disability, and Group Life are taken together, they can work in ways a mixed bag of benefits can't. Aetna Integrated Health & Disability (IHD) is a concrete and compelling example of Aetna's strengths: innovation, information and integration. IHD is a business process fundamentally about making the right connections early enough and at the right time to create a better outcome for our members, plan sponsors and providers. Aetna gathers aggregated data and integrates it across our areas of service — medical management, disability, Aetna Behavioral Health and Aetna Integrated Informatics® — to help improve the overall health of our members, while potentially reducing medical costs for you and your employees. IHD may uncover concerns earlier, which can help employees get back to health faster and return to work sooner. We combine predictive modeling, patient information, early outreach, condition management and care coordination with our rehabilitation and return -to -work experience. The end result is a holistic approach to the individual's health and ability to remain productive. Innovative Consumer -Directed Plan Designs Help To Lower Medical Costs Our accumulated information allows us to create innovative solutions like the Aetna HealthFund® integrated suite of health, dental, and pharmacy. Did you ever think your employees could help you control health care costs? They can with Aetna HealthFund. These consumer -directed plans gives employees responsibility for managing their own spending, and we'll give them the information they need to spend wisely. It's the first integrated benefits suite of its kind, and it's only from Aetna, the pioneer in consumer -directed plans. Personal Health Record (PHR) We seek to empower consumers by helping them make better informed health decisions — decisions that will help them achieve their optimal state of health. In keeping with this goal we have developed the Aetna CareEngine®-Powered Personal Health Record (PHR). The PHR can help people become better informed, organized and active with regard to their health, health information, and health care. It combines detailed, claims -driven information gathered from across the health care spectrum — such as physician offices, labs, diagnostic treatment and pharmacies — with user -entered information such as family history or allergies. The result is a comprehensive health profile that the member can access anytime online, and print to share with his or her doctor. It also features targeted messages and alerts to members, informing them of opportunities to improve their health and well-being, reminding them to consider alternative therapies or warning them of potentially dangerous medication errors. While the PHR is populated by claims data and kept up-to-date without effort on the member's part, the member has the option of filling gaps by entering information not provided by claims data. In addition, through our innovative health questionnaires, we will remind and encourage members to input data to maintain the timeliness and accuracy in the PHR. To learn more on how you can make history with the PHR please visit us at: http://www.aetna.com/makehistorv/ or please refer to the PHR brochure included within your renewal package. We Can Make Your Job Easier Choice and Flexibility In Health Benefits And Financial Protection Solutions 12/12/2008 www.aetna.com Aetna Difference We want you to know® )Aetna Aetna offers a product portfolio aimed at balancing the needs of both employers and employees. We strive to maintain a competitive and comprehensive health product portfolio of HMO- and PPO -based products, as well as consumer -directed health plans. These consumer - driven plans have been created so employers and employees can more fully share the cost of health care. The Aetna HealthFund plans give employers flexibility to customize product design and give members choice and control in directing their health benefits. In addition, we develop and manage value-added programs to attract and retain members by giving them access to services and products not typically covered under their health benefits plan or insurance plan. Our other products include dental, pharmacy, life, disability, and stop loss. You can choose one or several products to best meet the needs of you and your employees. We Deliver a Total Service Experience We provide City Of Round Rock with customer -specific services so the plan functions smoothly. We designate a specific field office and account manager as your primary contact. The account manager listens to and consults around your health care concerns and recommends adjustments as your company grows or changes. Through ongoing interaction, the account manager understands your position and works through benefits concerns. Easy -To -Use Technology For Benefits Planning, Eligibility And Enrollment Aetna offers an array of Internet -based applications that are designed to make it easier for City Of Round Rock to do business with us. e.Plan Sponsor Monitor"rm is an easy-to-use online reporting tool that helps customers identify their health care spending patterns. Eligibility transfer solutions, such as SecureTransportr", Aetna EZConnectT"", EZLinkT"', and EZenroll®, enable customers to quickly and efficiently transmit information to Aetna. EZLink connects to our enrollment and billing systems and provides online eligibility, enrollment, account maintenance, billing and electronic funds transfer. EZenroll is Aetna's online enrollment application that provides our customers with online capability to access and modify employee eligibility. We Support Members 24/7 For your employees, Internet tools include Aetna NavigatorTM, a self-service website that provides a single source for online health and benefits information 24 hours a day, 7 days a week. Through Aetna Navigator, members can change their Primary Care Physician (PCP), replace an ID card, research Aetna's products and programs, contact Aetna directly, and access a vast amount of health and wellness information. Aetna Navigator also includes secure, personalized features for registered members including access to claims and benefits status. Medical Management Programs Help Promote Healthier Outcomes And Reduce Benefit Costs One of Aetna's goals is to help people maintain their health as well as to identify the need for care early, in the lower risk categories of care. By increasing the reach and impact of our proven medical services programs, Aetna continuously strives to connect care with individual needs. We're making it easier for employers to control costs while providing quality coverage. We offer innovative case and disease management programs as regular components of our plans. The intention is to proactively identify members who have chronic illnesses and intercede to provide them with educational resources to help them better manage their conditions. Aetna Integrated Informatics, our data analysis subsidiary, uses predictive modeling and risk stratification to identify members for early outreach. Aetna Health Connections Disease Management — Our Aetna Health Connections Disease Management program provides innovative and individualized clinical programs, information and support for total, integrated health management to help members achieve their optimal state of health. Aetna Health Connections Disease Management integrates a full suite of 34 chronic conditions and common co -morbidities in a holistic fashion, with an Aetna nurse acting as a generalist to address the total health of those members who will benefit most from disease management services. (User Notes: If group is fully insured, pls remove the following statement. If group is ASC, pls leave this statement on.) Please ask your account manager for pricing information regarding this program. Our program also includes MedQuery®, which uses member data such as medical claims, pharmacy claims, laboratory reports, self- reported data, and demographic information to identify potential gaps in care. This information is shared with physicians to help improve clinical quality and patient safety. Information Sharing Helps Improve Quality And Safety Of Care 12/12/2008 www.aetna.com Aetna Difference We want you to know® )Aetna One of our newest efforts is Aetna's MedQuerysM program, a data -mining initiative that turns Aetna's member health data into information that physicians can use to improve clinical quality and patient safety. Through the MedQuery program, Aetna's data are analyzed and the resulting information gives physicians access to a broader view of a patient's clinical profile. The data that fuels this program include claims history, current medical claims, pharmacy, physician encounter reports, patient demographics and evidence -based treatment recommendations. At Aetna, our medical services model is not just about return on investment and the savings you can experience through our programs and services. It's also — and perhaps more importantly — about the people. It's about Aetna's commitment to facilitate access to quality, cost- effective health care to affect better health outcomes. Aetna Affordable Health ChoicessM Provides Benefits To Non -Traditional Employees In August 2004, we announced the acquisition of Strategic Resource Company (SRC), the latest in a series of targeted acquisitions designed to enhance the scope of our product and service offerings and increase our ability to serve new market segments. SRC, An Aetna Company"' offers an innovative solution for unbenefitted employees (i.e. Part-time, waiting period, seasonal, temporary, per diem, etc.) Through SRC, we can offer quality, affordable coverage to this important segment of the workforce, which provides significant value to these individuals and plan sponsors as well. SRC offers affordable medical, dental, life, disability, vision and pharmacy insurance administered through payroll deductions. Specifically, our experience shows that offering these benefits reduces turnover in this population and therefore, positively impacts acquisition, hiring and training costs. Please contact your Account Manager if you would like more details. Vital Savings by Aetna SM provides dental discount card program Vital Savings by Aetna ski- is a program that provides access to discounts for dental services from participating dental providers, as well as access to discounted fees for vision services and supplies through the Vision One discount program. These dental discounts are the same as Aetna's Dental PPO discounts (average 30% nationally). This program is NOT an insurance plan. Participants simply present their Vital Savings ID card when they visit a participating dental office. Participants are responsible for payment of 100% of the fee directly to the dentist at the time services are rendered. There are no claims with this program. Vital Savings provides access to a network of 64,700+ dental office locations nationwide and it targets the 40 percent of Americans who currently lack dental insurance. The Vital Savings Program is currently available to plan sponsors with 51+ employees who perform traditional benefit administration functions such as collection of enrollments, payroll deduction of fees and remittance of fees via Service Fee Billing. There are two main options available for Vital Savings — a group billing option and an individual billing option. In addition, Vital Savings fees are eligible for pre-tax payroll deductions for employees/retirees under age 65. "Aetna" is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. The Aetna companies that offer, underwrite or administer benefit coverage include Aetna Health Inc., Aetna Health of California Inc., Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc., Aetna Dental Inc., Aetna Dental of Califomia Inc., Aetna Life Insurance Company, Aetna Health Insurance Company of New York, Corporate Health Insurance Company and Aetna Health Administrators, LLC. These health benefit and health insurance plans contain limitations and exclusions. Policy form numbers include GR -29, GR -700-W, GR -88435. 12/12/2008 www.aetna.com Aetna Difference INDIVIDUAL. BILLING KEY ACCOUNTS COBRA TION — CITY OF ROUND ROCK SEs - 01/01/2009 -12/3112009 Installation or Restructure Fee: For a direct billing arrangement setup within a control number. Payable only in the first year. A full or partial charge may also be applied for restructures after the initial setup. (e.g., whenever new records must be established for existing continuees who are being moved to a new or revised control, suffix, plan or account structure.) *There is a monthly service fee minimum of $150.00 Fee Per COBRA Participant Per Month (PPPM): Monthly PPPM fee charged for each primary participant/subscriber enrolled in COBRA Services Include: • Billing and collection • Delinquent monitoring • Member record maintenance • Dedicated Customer Call Center with toll free number for members available Monday -Friday 8 AM — 9 PM ET • Dedicated Processing Center • Dedicated Account Service Representatives for Plan Sponsor issues • Funds distribution to Insurance Carriers and Plan Sponsor • Account maintenance • Monthly management reports • Electronic Eligibility (twice weekly) Initial Notification Statement The plan sponsor requests that Aetna sends out notification to newly hired employees detailing COBRA rights in the event that they or a covered family member experience a COBRA event. Cost per notice mailed Qualifying Event Notification: For each Qualified Beneficiary the employer has requested Aetna to send out enrollment/notification materials after a qualifying event. Fees vary based on method of Aetna receiving source information from Employer: a) FTP File HIPAA Certification Notices (Optional Service) Cost per certificate mailed Fee for Specialized Services (PPPM): Fee for Members maintained in the Individual Billing System for eligibility only. 2009 Fees $1,000 $ 7.00 $3.25 $8.35 $3.00 $3.10 Explanation of Fees Explanation of Services Service Category dministration services: enses associated with the followin Includes ex s, etc. Rates are based upon the number of ti V ad Y 0 • 0 Ti, 3� V0 4., o ▪ v .5 t be Y0 Y 00 0 b a' ami 0 0. p .�'.. O ani WO _g 0 OD • .O O O 0 • f„ O G: cd0 0 a d o S c 00 Q W o 3 O _ o a v oo0 • Oti 00 id X 0 ''�G�-+j ami p � U . " > 0 A �' O as •L) "O 7 0 0 0 — 4. 0 0 0 3 rn O a'�.. 0 O ca L]. 0 0 0 co 5 1,a9 N .' bU h a) Q cd(0 .��73 eq) � a E ' vN • .E c °a 0 ✓ �c s0. 0 0 • p 4. G4 — 00 0 y. O o 50 0 0) 0D 'b a) y CO 14 b 00 U al 0• �' v`ni ' 4"v. • -o 0Y bI. 0 •� s. m O 0. '" ami O 3 3 0) 3 cd cd 3<0 0 3 ti W OD o CA < 0 O •O U to N •O 4) .O 0 c •O ti 3 $ c4 cn av.cl fl al 0 • " a> a -I-. cil K O aQ.xx k'? aww w-0eg wow w(0( . ADMINISTRATION 2 Ca . CLAIM ADJUDICATION/MEMBER SERVICES Expenses associated with maintaining and reporting on data for multiple suffixes and/or accounts. - Additional Suffix/Account Expenses associated with uploading data from a clerical submission into the SPARKS database. - Clerical Reporting Service Profile ON 00 8119921-010 819921-010-000 1. N g z g v• ° Z ;za b 5 75 Zx O 0 0 • . a a g teU U U a. co'a a. co 8 a. , O U Y 4 U � � .Yx ▪ a� x A 0 M 00 . Number of 2008 Participants Enrolled to Date Total Participants 00 00 Automated Claims Manual Submission Claims Vg 00 00 Cl . Number of ytd claims 2008 Total Claims Claim Automation Rate . Draft Frequency . Other Services Selected or Incurred L O L w 0 c N G) . ee-- C �v- = •a 1 ✓ • 0 Q co ON _ O N c 0. 1° • F. m T. O O N CO O N d 0 0 N W N y 0 0 TO. 0 F- N W H 0 0 lQ 0 1- 0 is 0 CO o 0 N c H 00 0 • V N c v v 00 00 •71- 4.9 rn Cr, 00 00 O 06 06 o 00 00 69 . Per Member Per Month vi 0 2009 FSA Renewal_8199211106.xls DATE: December 31, 2008 SUBJECT: City Council Meeting — January 8, 2009 ITEM: 8C4. Consider a resolution authorizing the Mayor to execute a letter from Aetna dated December 12, 2008 indicating acceptance of Aetna's health benefits services for the renewal of the 2009 policy period. Department: Staff Person: Justification: Human Resources Teresa Bledsoe, Director of Human Resources The agreements for the services Aetna provides will terminate December 31, 2008. This resolution will ensure continuity of service for the 2009 Plan year. Beginning mid -year of 2009,. we will beginning the soliciting proposals for all services for Plan Year 2010. Funding: Cost: General Fund, Water/Wastewater Utility Fund The cost of this insurance is a function of the number of employees and dependent units covered. Source of funds: City contribution and employee paid premiums for health care. Outside Resources: N/A Background Information: For the past three years we have utilized Aetna to provide health benefit services. These services include third party administration for COBRA, FSA, Claims processing, Stop Loss, prescription drugs and other related services. Good program management dictates that we explore other providers for these services. Public Comment: N/A EXECUTED DOCUMENT FOLLOWS We want you to know® )(Aetna" December 12, 2008 City Of Round Rock Linda Gunther 221 East Main Street Round Rock, TX 78664 Dear Ms. Gunther: Kendra Hoduski Account Manager Great Hills Corporate Ctr. Bld 3 9050 Capital of Texas Highway North Suite 150 Austin, TX 78759 Phone: 512-349-1974 Fax: 512-346-7406 HoduskiKaetna.com Thank you for allowing us to serve your health insurance and health benefit needs over the past year. We are hopeful that this package will provide you with the information you need in order to develop your company's future benefits program. As we approach the January anniversary of your program with our company, we are pleased to present you with our renewal for the 2009 policy period. At Aetna*, we believe it is fundamental that you understand the full financial picture of your benefit plan. Therefore, the enclosed package provides the following important information about the cost of your current program, potential changes you may want to consider and the value that Aetna brings to you and your company. I. Future Program Costs - This section illustrates the cost projections to operate your current benefit program for the period 01/01/2009 through 12/31/2009. This section contains the following: illustrative administrative service fees, and a Stop Loss exhibit. For the 01/01/2009 through 12/31/2009 contract period, the fee will increase 6.9% for medical and 1.2% for dental and 0% for vision. Also included in this section is renewal information regarding your Stop Loss coverage. Aetna's charge for maintaining your current Stop Loss protection levels will increase 6.0% over the current rate. Your aggregate trigger factor will increase 7.3%. II. Utilization Overview - This section contains graphs pertaining to your benefit program. III. Program Services Included, Financial Assumptions, and Stop Loss Assumptions Program Services Included - This section includes additional services that have been included in our pricing or require an additional fee. Financial Assumptions - Our renewal offer is contingent upon the parameters outlined here. It is important to note that deviations from these assumptions may result in additional charges and/or adjustments on our Life, Medical and Dental quotations for conventional premiums, Service Fees, and Stop Loss rate(s) and factor(s). Customer Notifications of any Aetna initiated changes for the upcoming contract period are outlined here. Please review this section thoroughly. Stop Loss Assumptions - This section includes specific information regarding what's included and excluded from your Stop Loss quotation, plus there is a separate page explaining leveraged trend. IV. The Aetna Difference - This section outlines the latest Aetna facts that we would like you to know about our company. We hope that by reading this information you will better understand the many ways we are striving to provide quality healthcare programs and services to companies like yours. In the absence of any changes impacting the conditions of this renewal as outlined in the Financial Assumptions section, the rates, fees, and factors presented here will remain in effect through December 31, 2009. If you have any questions, please contact me at 512-349-1974. We are committed to working with you to provide quality products and services that reinforce your decision to do business with Aetna and help manage your current and future health care costs. Sincerely, Accepted for City of Round Rock By: v Title: Vi Ali a1 - Account Manager Date: 1. g • U 9 Senior Underwriting Consultant ."Aetna" is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. The Aetna companies that offer, underwrite or administer benefit coverage include Aetna Health Inc., Aetna Health of California Inc., Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc., Aetna Dental Inc., Aetna Dental of California Inc., Aetna Life Insurance Company, Aetna Health Insurance Company of New York, Corporate Health Insurance Company and Aetna Health Administrators, LLC. These health benefit and health insurance plans contain limitations and exclusions. Policy form numbers include GR -29, GR -700-W, GR -88435. 11.--09.0 - o9-ticz(- Administrative Service Fees ASC City of Round Rock Renewal Period: 1/1/09 through 12/31/09 Contractholder Number - 819919 • The below Administrative Service Fees will become effective 1/1/09. • The fees below exclude charges for items such as printing, special reports and late fees. These will be billed separately. • The below ASC fees assume that Aetna will be Claim Fiduciary for Level 1 and Level appeals. City of Round Rock performs claim ficuciary for voluntary appeals after Levels 1 & 2 are exhausted (Option 4). • Simple Steps to a Healthier Life is included in the below ASC fees. • Beginning Rights"' Maternity Program is included in the below ASC fees. • The National Advantage with Facility Charge Review programs have been included in the renewal at a charge of 50% of any attained savings. • Rx rebate share is 50%. • Effective Jan 1,2009, our Healthy Outlook Disease Management program will be discontinued and replaced by Aetna Health Connections. Our Aetna Health Connections Disease Management program includes MedQuery and is offered for an additional $3.95 PEPM. This is included in the fees below. Service Fee Comparison 12/12/2008 Projected Number of Enrolled Employees Choice II/APM 756 Dental 766 Vision 766 Administrative Service Fees as Billed Choice II/APM (PEPM) Dental (PEPM) Vision (PEPM) Administrative Service Fees as Total Dollars Current Period Projected Period 1/1/08-12/31/08 1/1/09-12/31/09 % Change 38.57 ** 4.26 1.00 41.23 4.31 1.00 Choice II/APM 349,907 374,038 Dental 39,158 39,618 Vision 9,192 9,192 6.90% 1.17% 0.00% Total Service Fee $ 398,257 $ 422,848 6.17% Illustrative - Includes Aetna Health Connections www.aetna.com ASC Fees Stop Loss Exhibit ASC City of Round Rock Renewal Period: 1/1/09 through 12/31/09 Contractholder Number - 819919 • Minimum Stop Loss Aggregate Limit will be set using the first month enrollment x Stop Loss Aggregate Limit (PEPM) Composite Factor x number of contract months. • Premium rates are billed and Aggregate Factors are administered on a composite basis. • Please see the Stop Loss Caveats for additional information. • Quote assumes Plan change on High plan - In network Ded from $250 to $350. Plan Characteristics Individual Limit Aggregate Limit Stop Loss Coinsurance Level Mental/Nervous Apply Contract Basis Terminal Liability Option Benefits applied to ISL Benefits applied to ASL Commissions Individual Lifetime Stop Loss Payment Maximum Annual ASL Payment Policy Period Length (months) Cost & Factors Total Expected Claims with Stop Loss Attachment Point Lives covered under Stop Loss Rate Cost/ee/month Trigger Factor Comparisons 12/12/2008 Annual Stop Loss premium (at proposed lives of 756) Maximum Claim Liability (at proposed lives of 756) % Increase in Rate/ee/month % Increase in Trigger Factor Current $ 75,000 125% 100% Yes Paid No Extension (N/A) Rx/Medical Rx/Medical 0% $ 1,000,000 $ 1,000,000 12 $ 4,216,067 5,270,084 718 $ 91.10 $ 611.66 $ 826,459 $ 5,549,002 www.aetna.com Renewal with Plan Chg - Ded $350 Option 1 $ 75,000 125% 100% Yes Paid No Extension (N/A) Rx/Medical Rx/Medical 0% $ 1,000,000 $ 1,000,000 12 $ 4,762,800 5,953,500 756 $ 96.56 $ 656.25 $ 875,992 $ 5,953,500 6.0% 7.3% ASC Stop Loss Utilization Overview City Of Round Rock Contractholder Number - 819919 Current Data For Claims Processed/Paid June 01, 2007 - May 31, 2008 Plan Paid by Demographic Split 35% 30% 25% 20% 15% 10% 5% 0% Customer Current Percent of Membership, Claimants and Plan Paid Comparison 0 to 19 Males 0 to 19 Females 20 to 44 Males 20 to 44 Females 45 to 64 Males 45 to 04 Females D % of Members • % of Claimants 0 % Plan Paid 65/Ozer Males 65/O,er Females Top Hospitals Top 7 Hospitals Valley Baptist M C Brownsville, TX University Health System San Antonio, TX Staten M ed Ctr Austin, TX Round Rook M C Round Rock, TX Heart Hospital or Austin Austin, TX N Austin MC - HCA AM. Austin, TX 12/12/2008 txvw.aetna.com Utilization Overview Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are included or available to City Of Round Rock. Programs and services that are optional are noted with a $ sign and require an additional fee, for specific pricing please contact your Account Manager, Darryl Rogers Programs and services that are not available for particular products are identified as N/A. 12/12/2008 www.aetna.com Program & Services ASC Choice® POS II General Administration Account Management Included Customer Team Services Included Banking Included Communication Materials Included Eligibility (Standard) Included Customized Forms $ Printing of Booklets or Certificates $ Claim Fiduciary & External Review (Details on Financial Assumption Tab) $ HIPAA Administration Included Claims Subrogation Included Claim & Member Services Claim Administration Included Member Services Included Network Administration Network Management Included Provider Relations Included National Advantage Program Included - Facility Charge Review Included - Itemized Bill Review $ Rural PPO Network Program $ Dental Medical Integration (DMI) N/A Network Access Services Medical Network Discount (Details on Medical Network Access Charge of Financial Assumption Tab) $ Dental Network Discount N/A Patient Management Precertification Included High Tech Radiology Precertification and Steerage $ Case Management Included Concurrent Review Included Discharge Planning Included Aetna Compassionate Care Program Included National Medical Excellence Included Rx Step Therapy N/A Save-A-Copay N/A Rx Check N/A 12/12/2008 www.aetna.com Program & Services ASC Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are included or available to City Of Round Rock. Programs and services that are optional are noted with a $ sign and require an additional fee, for specific pricing please contact your Account Manager, Darryl Rogers Programs and services that are not available for particular products are identified as N/A. 12/12/2008 www.aetna.com Program & Services ASC Choice® POS II Wellness & Health Management Aetna Health Connections- Disease Management Included MedQuerysM - Member Messaging $ Healthy Outlook Program® (sunset 12/31/08 group has to move to AHC - DM effective 1/1/09) N/A - Caring for Asthma $ - Caring for Heart Failure $ - Caring for Diabetes $ - Caring for CAD $ Enhanced Member Outreach (1,000+ ee's- Fee will vary based on Member to employee ratio) $ Simple Steps To A Healthier Life Included Simple Steps To A Healthier Life® Reward Tracking $ CareEngine® Personal Health Record $ Wellness Counseling $ Healthy Body, Healthy Weight Program (1,000 $ Beginning RightsM (formerly Mom -to -Babies) Included Quit Tobacco Program $ Informed Health® Line - Nurseline (800 #) only $ Informed Health® Line - Plus $ Value Add Programs Fitness Program (GlobalFit) Included Aetna Natural Products & Services Program Included Vision One® Discount Program Included Standard Behavioral Health Focused Psychiatric Review N/A Managed Behavioral Health Included - Med/Psych Program $ 12/12/2008 www.aetna.com Program & Services ASC Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are included or available to City Of Round Rock. Programs and services that are optional are noted with a $ sign and require an additional fee, for specific pricing please contact your Account Manager, Darryl Rogers Programs and services that are not available for particular products are identified as N/A. 12/12/2008 www.aetna.com Program & Services ASC Choice@ POS II Behavioral Health Disease Management Programs (Must have both Medical & BH with Aetna) - Alcohol Disease Management $ - Anxiety Disease Management $ - Depression Disease Management $ Case Management Behavioral Health Programs - Intensive Case Management $ Member Internet Services Public Sites DocFind® Included InteliHealth® Included Pharmacy Information N/A Learning Resources Included Secure Sites Staying Healthy Included Estimate the Cost of Care Tool Included Claim Research/Forms/Contact us Included Spanish version Included Plan Sponsor Internet Services e.Plan Sponsor MonitorTM Reporting Aetna Integrated Informatics' - Level A Reporting Included - Level B Reporting Included - Level C Reporting $ - Level D Reporting $ - Disease Management Activity Report (DMAR) Included - Ad hoc Reporting (2hrs/cal years for 100 to 999 medical ees, 4hrs/cal year for 1000 to 2999, 12 hrs/cal year for 3000 to 4999) Included Third Party Stop Loss Reporting $ Aetna Navigator Reporting Included 12/12/2008 www.aetna.com Program & Services ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 • Services Agreement ("Contract") Period - The contract period begins on the effective date of January 01, 2009 and will be applicable for a 12 month period. Our contracts provide for automatic renewal upon the completion of each contract period unless either party invokes the termination provision, which requires 31 days advance written notice of termination to the other party. This provision may be invoked at any time during the continuance of the contract and is not limited to termination occurring on the renewal date. • Enrollment and Funding Assumptions - Based on this census information and the subsequent access analysis, we have assumed that approximately 756 employees will be enrolled for medical coverage. Our renewal quote assumes that coverage will not be extended to additional employees without review of supplemental census information and other underwriting information for appropriate financial review. The following illustrates the funding arrangement and enrollment assumptions by line of coverage: Coverage Funding Arrangement Assumed Enrollment Choice POS II Self -Funded 756 Dental - PPO Self -Funded 766 Basic Vision Self -Funded 766 Total Medical Enrollment 756 • Individual Medical Conversion Policies - This policy is unavailable (excluded) for all self-insured arrangement. As a reminder, most self insured group plans offer COBRA continuation (18, 29 or 36 months) to employees upon group termination. Self -Funded Fee Guarantee The mature fees are guaranteed according to the per employee per month fees as illustrated on the financial exhibits. Advance Notification of Fee Change — We will notify City Of Round Rock of any fee change at least 60 days prior to the effective date of the fee change. Guarantee Parameters - Aetna reserves the right to recalculate the guaranteed fees to take effect on the date a contingent event described below occurs. In such case, City Of Round Rock will be required to pay any difference between the fees collected and the new fees calculated. Aetna may recalculate: 12/12/2008 1. If, for any product: a. There is a 15% decrease in the number of employees from our enrollment assumptions by site or by product, or from any subsequently reset enrollment assumptions. b. The change in member -to -employee ratio is greater than 15%. We have assumed a member -to -employee ratio of 1.97. c. The change in number of processed claim transactions (PCTs) per employee is greater than 15%. We have assumed 22.7 PCTs per employee per year. We define a processed claim transaction, or PCT, for medical or dental benefits as any transaction with respect to a benefit request or predetermination of dental benefits for expenses incurred or expected to be incurred by one claimant in any one calendar year for a major line of coverage, including but not limited to benefit payment, benefit denial, pended request or decision on an appeal of a denied benefit request. www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 d. There is a 15% increase in the retiree percentage from that assumed or from any subsequently reset assumptions. We have assumed that 1.7% of the enrolled employees are over 65 retirees. 2. If there is a material change in the plan of benefits initiated by City Of Round Rock or by legislative or regulatory action. 3. If there is a material change initiated by City Of Round Rock or by legislative or regulatory action in the claim payment requirements or procedures, account structure, or any change materially affecting the manner or cost of paying benefits and/or administering the plan. • Run -Off Claims Processing - Your administrative service fees are mature; we have included the cost of processing self-funded run- off claims for 12 months following the termination of our administrative service agreement. • Mental Health/Substance Abuse Benefits - Our renewal quote assumes that mental health/chemical dependency benefits are included. • Prescription Drug Benefits - Our renewal quote assumes that prescription drug benefits are included and will be provided through Aetna Pharmacy Management at the per employee per month fee shown on the financial exhibits. • Direct Member Reimbursement (DMR) claims are Pharmacy claims (incurred in or out -of -network) submitted by eligible members to APM and processed in APM's DMR unit. These claims are not adjudicated on-line at point of service subject to the copay. They are paid in full by the member. A surcharge is necessary to recoup the additional cost of processing DMR claims and to provide an additional incentive to plan sponsors to educate their employees on how to use their APM program to minimize the occurrence of DMR claims. For 2009, the charge is $2.95 per script for Non -Off Shore and $1.80 per script for Off -Shore Processing. • Management Formulary Rebates — City Of Round Rock would receive 50% percent of the manufacturer volume discounts we receive based on actual utilization of formulary drugs under contract. The percent share is based solely on the number of employees enrolled in the pharmacy benefit plan. • MedQuerysM is a program that uses member data such as medical claims, pharmacy claims, laboratory reports, and demographic information to identify potential gaps in care. This information is shared with physicians to help improve clinical quality and patient safety. MedQuerysM can be included for an additional $1.75 per employee per month for our self-funded medical products. Our MedQuery Standard Member Messaging program is included as part of our MedQuery program. Our MedQuery Member Messaging program includes sending a consumer version of the care consideration by letter to the member. The letter encourages the member to call his or her doctor to discuss the care consideration and is sent only after the care consideration is communicated to the treating physician, to allow the physician time to evaluate the issue. Our Standard Member Messaging option is standardly included. Our MedQuery Enhanced Member Messaging program is also available as an option to our MedQuery program. Our MedQuery Enhanced Member Messaging program is offered to those members who are not participating in Aetna Healthy Connections Disease Management program. MedQuery Enhanced Member Messaging can be included for an additional $0.20 per employee per month for our self-funded medical products. Effective January 1, 2009, Healthy Outlook Programs on a per participating member per month basis charged thru the claim wire will be discontinued. This will be replaced by Aetna Health Connections on a per member per month basis. Aetna Healthy Outlook Program - . Effective January 1, 2009, we will no longer be offering the Healthy Outlook Program. This program will be discontinued and replaced by Aetna Health ConnectionssM (Disease Management) programs on a per employee per month basis. The new program expands our capabilities, allowing us to provide disease management services for more than 34 conditions. For your next renewal, please consider signing up for Aetna Health Connections. To learn more about this program, please contact your Aetna sales representatives. 12/12/2008 www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 Aetna Health Connections Disease Management — Our Aetna Health Connections Disease Management program provides innovative and individualized clinical programs, information and support for total, integrated health management to help members achieve their optimal state of health. Aetna Health Connections Disease Management integrates a full suite of 34 chronic conditions and common co -morbidities in a holistic fashion, with an Aetna nurse acting as a generalist to address the total health of those members who will benefit most from disease management services. Our program also includes MedQuery® which uses member data such as medical claims, pharmacy claims, laboratory reports, self- reported data, and demographic information to identify potential gaps in care. This information is shared with physicians to help improve clinical quality and patient safety. Our Aetna Health Connections Disease Management with included Medquery programs charge for City Of Round Rock will be on a per employee per month basis at $3.95 pepm. • National Advantage Program - Aetna's National Advantageml Program allows plan sponsor's access to contracted rates for many medical claims that currently are paid at billed charges under indemnity plans, the out -of -network portion of managed care plans, or for emergency/medically necessary services not provided within the standard network. The NAP network consists of many of Aetna's directly -contracted hospitals, ancillary providers, and physicians as well as hospitals, ancilliary providers, and physicians accessed through vendor arrangements where Aetna doe snot have direct contractual arrangements. The average savings to our customers - before NAP fees - range from 15 percent to 25 percent of billed charges depending on product. Discounts vary by geographic region. The NAP fee is not a part of the overall per employee per month (PEPM) administrative service fee calculation for the plan sponsor. It is automatically charged to plan sponsors as part of their claim charges. It is charged only if savings are achieved. This standard percentage for City of Round Rock is 50 percent and has been assumed in this self-funded proposal. • Facility Charge Review Program - The Facility Charge Review Program (FCR) is an additional feature of the National Advantage Program (NAP) for self-funded plans which has been included as part of this proposal. It provides reasonable charge allowance review for most inpatient and outpatient facility claims under indemnity plans, the out -of -network portion of managed care plans, or for emergency/medically necessary services not provided within the network, where a NAP contracted rate is not available. FCR is only available in conjunction with NAP and is not available separately. The fee for the Facility Charge Review feature of NAP is the same as the NAP fee, 50% of savings and is not included in the per employee per month fee. A listing of participating NAP hospitals, facilities, and physicians can be found on Docfind®, Aetna's online provider listing, on our website at www.aetna.com. We will recalculate plan sponsor's administrative service fee if either of the following changes are made: group discontinues the National Advantage Program or group changes the facility charge review program. • Claim Fiduciary (Option 4) — Our quoted Administrative fees assume Aetna will be the ERISA claim fiduciary for the first level of mandatory plan appeal for all denied claims and for the second level of urgent care claims for the medical and dental coverages. City Of Round Rock will be the ERISA claim fiduciary for all other second -level appeals. The claim fiduciary is responsible for final claims determination and the legal defense of the decisions it makes. • External Review - External Review is offered as an option to self-funded customers. External review utilizes outside vendors who coordinate a medical review through their network of outside physician reviewers. Customers who retain claim fiduciary responsibility may choose to include this service and Aetna will pass the actual vendor charges through on a direct charge basis. • Health Insurance Portability and Accountability Act (HIPAA) - Our proposal assumes that Aetna will be providing HIPAA certifications of coverage for terminated employees. • Data Transfer at Termination - Upon contract termination, we agree to cooperate with succeeding administrators in producing and transferring required claim and enrollment data. Data will be transferred within 30 days after determination of City Of Round Rock's specific format and content requirements, subject to a charge that is based on direct labor cost and data processing time. • Late Fee Payment - If City Of Round Rock fails to provide funds on a timely basis to cover benefit payments as provided in the Agreement, and/or fails to pay Service Fees on a timely basis as provided in such Agreement, Aetna will assess a late payment charge. 12/12/2008 www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 The charges for 2008 are: - late funds to cover benefit payments (e.g., late wire transfers after 24-hour request): 9.0% annual rate - late payments of Service Fees after 31 day grace period: 9.0% annual rate Aetna will provide written notice to City Of Round Rock of late payment charges for subsequent years. The late payment charges described in this section are without limitation to any other rights or remedies available to Aetna under the Agreement or at law or in equity for failure to pay. • Medical EOB Suppression — Unless required by state law, we do not produce EOBs for claims when there is no member liability. Additionally, EOBs are always available electronically through Aetna Navigator on our website www.aetna.com. • Claims Subrogation - Aetna has entered into an agreement with the firm of Rawlings & Associates to provide comprehensive subrogation services. There is no administration charge from Aetna to utilize the subrogation program, however, a contingency fee is collected upon recovery for self-funded customers. The fee currently in place with Rawlings is 27.0%. • Broker/Consultant Compensation - The quoted fees do not include broker/consultant compensation. • Third -Party Audits - While in most cases we do not request reimbursement for internal costs associated with a third -party audit, we reserve the right to recoup these expenses if significant time and materials are required. A complete description of the terms and conditions of our audit policies is outlined in our Services Agreement. • Additional Products and Services - Costs for special services rendered, which are not included or assumed in the pricing guarantee will be direct billed. For example, City Of Round Rock would be subject to additional charges for customized communication materials, as well as costs associated with custom reporting, booklet and SPD printing, etc. The costs for these types of services would depend upon the actual services performed and would be determined at the time the service is requested. A list of these special services can be found on the Programs and Services Sheet. 12/12/2008 www.aetna.com Financial Assumptions ASC Stop Loss Assumptions City Of Round Rock Renewal Rate Period: 01/01/2009 through 12/31/2009 Contractholder Number - 819919 This caveat document outlines specific information for the quotation provided on 08/20/2008. Stop Loss is available to cover claims for all of the Plan Sponsor's eligible employees and their dependents who are enrolled on a timely basis and are covered under the ASC plan, provided the employee satisfies the following definition: an employee means an employee of the Insured who Aetna determines is physically able to perform all the regular duties of employment, is regularly working at least 25 hours per week and for whom the Insured is deducting any required U.S. FICA taxes. Retirees under65/over 65 have been included in this quotation at the Plan Sponsor's request. This is a firm quote Stop Loss Policy Year - The Stop Loss policy year must agree with the ASC contract year, both of which must end on the customers standard renewal date. Rate/Factor Adjustments - We reserve the right to adjust the premium rate and Aggregate factor during the policy year if there are a) changes to the medical plan, b) deviations from any of our quote assumptions (e.g. policy period, type of Stop Loss coverage, runoff coverage for employees who terminated prior to the renewal date, etc.), or c) changes in other factors bearing on the Stop Loss risk that result in a combined manual change of 10% or more (e.g. , single/ family split, age/gender mix, etc.). However, we will not change the rate or factor based on changes in the make-up of the group unless the number of covered employees (either in total, by type of medical plan, by single/family split, by age/ gender or by location) changes by more than 10% from the number assumed in the quote. We also will not change the rate or Aggregate factor based on actual Stop Loss experience after the effective date. Family Participation - This quotation assumes 43.5% family participation. Large Group Acquisition - In the event that a large group (in excess of 10% of total covered lives) is acquired after the original effective date and is covered under the Stop Loss policy, we reserve the right to underwrite the individuals within this group based on current large claim data provided by the customer. If this information is not forthcoming, we will apply the Actively -at -Work and Dependent Non -Confinement underwriting rules to those in the new group on the effective date of their coverage under Stop Loss. Coverages Excluded from Individual Stop Loss - Non-integrated (APM, PCS) drug benefits will apply to the Individual Stop Loss limit while separate ancillary benefits such as: Dental, Vision and Temporary Disability will not apply to the Individual Stop Loss limit. Coverages Included under Aggregate Stop Loss - Aggregate Stop Loss coverage includes the following benefits: Medical and Pharmacy Mental/Nervous and Substance Abuse - Mental/Nervous and Substance Abuse claims will be covered by Individual and Aggregate Stop Loss only when Aetna's vendor provides these benefits. If these benefits are provided by an outside vendor, the claims resulting from these services will be excluded from Individual and Aggregate Stop Loss. HIPAA — Stop Loss coverage for new entrants (those who become covered after the Stop Loss effective date) are subject to HIPAA's pre-existing conditions limitation in accordance with Aetna Life Insurance Company's then current standard underwriting practices established for applying pre-existing condition limitations to group accident and health insured plans in accordance with HIPAA, Public Law No. 104-191. Reimbursement for Aggregate Stop Loss Claims - The monthly budget feature standardly applies to Aggregate Stop Loss claims as long as the Stop Loss policy remains in effect; however, this feature is not available under the following conditions: 1) when customers choose to fund claims through multiple primary wire lines or 2) when customers choose to fund claims through one primary wire line and report through one or more internal wire lines. For these plans, reimbursement will be made within 120 days after the policy year end. 12/12/2008 www.aetna.com Stop Loss Assumptions ASC Stop Loss Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2009 through 12/31/2009 The Aggregate liability limit will equal the sold trigger factor times the number of months in the policy year times the total number of covered Stop Loss lives reported for that policy year (exception: when a customer drops in size during the policy year, the actual enrolled lives at the start of the policy year will be utilized to determine the liability limit for that policy year). Maximum Annual Aggregate Stop Loss Payment Amount - This quote assumes $1,000,000 Maximum Annual Aggregate Stop Loss Payment Amount. Individual Lifetime Stop Loss Payment Amount - This quote assumes a $1,000,000 Individual Lifetime Stop Loss Payment Amount. The Individual Lifetime Stop Loss Payment Amount will be capped to be no greater than the underlying lifetime medical plan maximum, for a given Participant, minus the Individual Stop Loss Amount in effect for each policy period. Producer Commissions - There are no producer commissions included for Stop loss Prior to acceptance of this proposal, we reserve the right to withdraw or modify it for any reason. However, in no event may this proposal, as it pertains to Stop Loss, be accepted after the earlier of a) 90 days from the date of this proposal, or b) the proposed effective date for Stop Loss coverage. 12/12/2008 www.aetna.com Stop Loss Assumptions ASC We want you to know® )Aetna The Aetna Difference Aetna* is one of the nation's leading providers of health care benefits. Our resources include one of the largest networks of physicians, dentists, hospitals, pharmacies, and health professionals; extensive experience in claims payment and administration of innovative health benefits and health insurance; and powerful online resources and self-service tools. Aetna is a leader, cooperating with doctors and hospitals, employers, patients, public officials, and others to build a stronger, more effective health care system. Broad Choice of Products and Services Helps You Provide Coverage For Your Employees You know Aetna as a leader in health insurance. But we also offer a full range of insurance policies, including dental, pharmacy, group life, and disability, each of which provides the high level of quality and service you demand. Whether taken individually or as a complete package, they allow us to enhance your coverage. And Aetna harnesses the power of information to help you and your employees make better, more informed decisions. This helps you control costs, and helps keep your employees healthy and productive. Benefits Work Better ... Together When Aetna's full range of benefits, Medical, Dental, Pharmacy, Disability, and Group Life are taken together, they can work in ways a mixed bag of benefits can't. Aetna Integrated Health & Disability (IHD) is a concrete and compelling example of Aetna's strengths: innovation, information and integration. IHD is a business process fundamentally about making the right connections early enough and at the right time to create a better outcome for our members, plan sponsors and providers. Aetna gathers aggregated data and integrates it across our areas of service — medical management, disability, Aetna Behavioral Health and Aetna Integrated Informatics® -- to help improve the overall health of our members, while potentially reducing medical costs for you and your employees. IHD may uncover concerns earlier, which can help employees get back to health faster and return to work sooner. We combine predictive modeling, patient information, early outreach, condition management and care coordination with our rehabilitation and return -to -work experience. The end result is a holistic approach to the individual's health and ability to remain productive. Innovative Consumer -Directed Plan Designs Help To Lower Medical Costs Our accumulated information allows us to create innovative solutions like the Aetna HealthFund® integrated suite of health, dental, and pharmacy. Did you ever think your employees could help you control health care costs? They can with Aetna HealthFund. These consumer -directed plans gives employees responsibility for managing their own spending, and we'll give them the information they need to spend wisely. It's the first integrated benefits suite of its kind, and it's only from Aetna, the pioneer in consumer -directed plans. Personal Health Record (PHR) We seek to empower consumers by helping them make better informed health decisions — decisions that will help them achieve their optimal state of health. In keeping with this goal we have developed the Aetna CareEngine®-Powered Personal Health Record (PHR). The PHR can help people become better informed, organized and active with regard to their health, health information, and health care. It combines detailed, claims -driven information gathered from across the health care spectrum — such as physician offices, labs, diagnostic treatment and pharmacies — with user -entered information such as family history or allergies. The result is a comprehensive health profile that the member can access anytime online, and print to share with his or her doctor. It also features targeted messages and alerts to members, informing them of opportunities to improve their health and well-being, reminding them to consider alternative therapies or warning them of potentially dangerous medication errors. While the PHR is populated by claims data and kept up-to-date without effort on the member's part, the member has the option of filling gaps by entering information not provided by claims data. In addition, through our innovative health questionnaires, we will remind and encourage members to input data to maintain the timeliness and accuracy in the PHR. To learn more on how you can make history with the PHR please visit us at: http://www.aetna.com/makehistory/ or please refer to the PHR brochure included within your renewal package. We Can Make Your Job Easier Choice and Flexibility In Health Benefits And Financial Protection Solutions 12/12/2008 www.aetna.com Aetna Difference We want you to know® )Aetna Aetna offers a product portfolio aimed at balancing the needs of both employers and employees. We strive to maintain a competitive and comprehensive health product portfolio of HMO- and PPO -based products, as well as consumer -directed health plans. These consumer - driven plans have been created so employers and employees can more fully share the cost of health care. The Aetna HealthFund plans give employers flexibility to customize product design and give members choice and control in directing their health benefits. In addition, we develop and manage value-added programs to attract and retain members by giving them access to services and products not typically covered under their health benefits plan or insurance plan. Our other products include dental, pharmacy, life, disability, and stop loss. You can choose one or several products to best meet the needs of you and your employees. We Deliver a Total Service Experience We provide City Of Round Rock with customer -specific services so the plan functions smoothly. We designate a specific field office and account manager as your primary contact. The account manager listens to and consults around your health care concerns and recommends adjustments as your company grows or changes. Through ongoing interaction, the account manager understands your position and works through benefits concerns. Easy -To -Use Technology For Benefits Planning, Eligibility And Enrollment Aetna offers an array of Internet -based applications that are designed to make it easier for City Of Round Rock to do business with us. e.Plan Sponsor MonitorTM is an easy-to-use online reporting tool that helps customers identify their health care spending patterns. Eligibility transfer solutions, such as SecureTransport'M, Aetna EZConnectTm, EZLinkT", and EZenroll®, enable customers to quickly and efficiently transmit information to Aetna. EZLink connects to our enrollment and billing systems and provides online eligibility, enrollment, account maintenance, billing and electronic funds transfer. EZenroll is Aetna's online enrollment application that provides our customers with online capability to access and modify employee eligibility. We Support Members 24/7 For your employees, Internet tools include Aetna NavigatorTm, a self-service website that provides a single source for online health and benefits information 24 hours a day, 7 days a week. Through Aetna Navigator, members can change their Primary Care Physician (PCP), replace an ID card, research Aetna's products and programs, contact Aetna directly, and access a vast amount of health and wellness information. Aetna Navigator also includes secure, personalized features for registered members including access to claims and benefits status. Medical Management Programs Help Promote Healthier Outcomes And Reduce Benefit Costs One of Aetna's goals is to help people maintain their health as well as to identify the need for care early, in the lower risk categories of care. By increasing the reach and impact of our proven medical services programs, Aetna continuously strives to connect care with individual needs. We're making it easier for employers to control costs while providing quality coverage. We offer innovative case and disease management programs as regular components of our plans. The intention is to proactively identify members who have chronic illnesses and intercede to provide them with educational resources to help them better manage their conditions. Aetna Integrated Informatics, our data analysis subsidiary, uses predictive modeling and risk stratification to identify members for early outreach. Aetna Health Connections Disease Management — Our Aetna Health Connections Disease Management program provides innovative and individualized clinical programs, information and support for total, integrated health management to help members achieve their optimal state of health. Aetna Health Connections Disease Management integrates a full suite of 34 chronic conditions and common co -morbidities in a holistic fashion, with an Aetna nurse acting as a generalist to address the total health of those members who will benefit most from disease management services. (User Notes: If group is fully insured, pis remove the following statement. If group is ASC, pis leave this statement on.) Please ask your account manager for pricing information regarding this program. Our program also includes MedQuery®, which uses member data such as medical claims, pharmacy claims, laboratory reports, self- reported data, and demographic information to identify potential gaps in care. This information is shared with physicians to help improve clinical quality and patient safety. Information Sharing Helps Improve Quality And Safety Of Care 12/12/2008 www.aetna.com Aetna Difference We want you to know® )Aetna One of our newest efforts is Aetna's MedQuerysM program, a data -mining initiative that turns Aetna's member health data into information that physicians can use to improve clinical quality and patient safety. Through the MedQuery program, Aetna's data are analyzed and the resulting information gives physicians access to a broader view of a patient's clinical profile. The data that fuels this program include claims history, current medical claims, pharmacy, physician encounter reports, patient demographics and evidence -based treatment recommendations. At Aetna, our medical services model is not just about return on investment and the savings you can experience through our programs and services. It's also — and perhaps more importantly — about the people. It's about Aetna's commitment to facilitate access to quality, cost- effective health care to affect better health outcomes. Aetna Affordable Health ChoicessM Provides Benefits To Non -Traditional Employees In August 2004, we announced the acquisition of Strategic Resource Company (SRC), the latest in a series of targeted acquisitions designed to enhance the scope of our product and service offerings and increase our ability to serve new market segments. SRC, An Aetna CompanySM offers an innovative solution for unbenefitted employees (i.e. Part-time, waiting period, seasonal, temporary, per diem, etc.) Through SRC, we can offer quality, affordable coverage to this important segment of the workforce, which provides significant value to these individuals and plan sponsors as well. SRC offers affordable medical, dental, life, disability, vision and pharmacy insurance administered through payroll deductions. Specifically, our experience shows that offering these benefits reduces turnover in this population and therefore, positively impacts acquisition, hiring and training costs. Please contact your Account Manager if you would like more details. Vital Savings by Aetna sM provides dental discount card program Vital Savings by Aetna sM- is a program that provides access to discounts for dental services from participating dental providers, as well as access to discounted fees for vision services and supplies through the Vision One discount program. These dental discounts are the same as Aetna's Dental PPO discounts (average 30% nationally). This program is NOT an insurance plan. Participants simply present their Vital Savings ID card when they visit a participating dental office. Participants are responsible for payment of 100% of the fee directly to the dentist at the time services are rendered. There are no claims with this program. Vital Savings provides access to a network of 64,700+ dental office locations nationwide and it targets the 40 percent of Americans who currently lack dental insurance. The Vital Savings Program is currently available to plan sponsors with 51+ employees who perform traditional benefit administration functions such as collection of enrollments, payroll deduction of fees and remittance of fees via Service Fee Billing. There are two main options available for Vital Savings -- a group billing option and an individual billing option. In addition, Vital Savings fees are eligible for pre-tax payroll deductions for employees/retirees under age 65. "Aetna" is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. The Aetna companies that offer, underwrite or administer benefit coverage include Aetna Health Inc., Aetna Health of California Inc., Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc., Aetna Dental Inc., Aetna Dental of Califomia Inc., Aetna Life Insurance Company, Aetna Health Insurance Company of New York, Corporate Health Insurance Company and Aetna Health Administrators, LLC. These health benefit and health insurance plans contain limitations and exclusions. Policy form numbers include GR -29, GR -700-W, GR -88435. 12/12/2008 www.aetna.com Aetna Difference INDIVIDUAL BILLING ADMINISTRATION — CITY OF ROUND ROCK KEY ACCOUNTS COBRA ADMINISTRATIVE FEES — 01/01/2009 -12/31/2009 2009 Fees Installation or Restructure Fee: For a direct billing arrangement setup within a control number. Payable only in the first $1,000 year. A full or partial charge may also be applied for restructures after the initial setup. (e.g., whenever new records must be established for existing continuees who are being moved to a new or revised control, suffix, plan or account structure.) *There is a monthly service fee minimum of $150.00 Fee Per COBRA Participant Per Month (PPPM): Monthly PPPM fee charged for each primary participant/subscriber enrolled in COBRA Services Include: • Billing and collection • Delinquent monitoring • Member record maintenance • Dedicated Customer Call Center with toll free number for members available Monday -Friday 8 AM — 9 PM ET • Dedicated Processing Center • Dedicated Account Service Representatives for Plan Sponsor issues • Funds distribution to Insurance Carriers and Plan Sponsor • Account maintenance • Monthly management reports • Electronic Eligibility (twice weekly) Initial Notification Statement The plan sponsor requests that Aetna sends out notification to newly hired employees detailing COBRA rights in the event that they or a covered family member experience a COBRA event. Cost per notice mailed Qualifying Event Notification: For each Qualified Beneficiary the employer has requested Aetna to send out enrollment/notification materials after a qualifying event. Fees vary based on method of Aetna receiving source information from Employer: a) FTP File HIPAA Certification Notices (Optional Service) Cost per certificate mailed Fee for Specialized Services (PPPM): Fee for Members maintained in the Individual Billing System for eligibility only. $ 7.00 $3.25 $8.35 $3.00 $3.10 O r o c Ce V M ON C r 3 -a C Os z o Qo re N � � r :a O 0. V Cl) C � a L Explanation of Fees Explanation of Services Service Category istration services: Rates are based upon the number of U N E O b bI > O bq 0 0 0. 0 .b 0 O U iJ 0co co C al U w enses associated with the followin Includes ex . ADMINISTRATION -o w 0 0 0 0 0 GG 00 O ct U C4 F N U � N 'C3 G G O N 1) G • U g O 0 0 w G a� 0 U „ .G s. O .0 0 0 v a) to ami • O 3 0 v � Cit) v G CC w� . 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Policy Holder Number N Cr, 0 00 8119921-010 819921-010-000 4. „ t 08 z¢ K 4,4r) zcn cr) 0 0 0 c c c 0 0 0 U O U C „ U Q 4 F -0 F. c ▪ 0 G1 00, O c „,U ,4 • C b o0 ,� a) „ o CI CO C` M 00 . Number of 2008 Participants Enrolled to Date Total Participants 00 CO Automated Claims . Number of ytd claims 2008 Manual Submission Claims Total Claims r Claim Automation Rate . Draft Frequency N CLI . Other Services Selected or Incurred 2009 FSA Renewal_8199211 I06.xls L: 0 LL O d N C i V M ON C -a I C 01 O v ON C p r- 15 > C c R E 0) O O O O N c LD - 0 0 N 0) R U N 0 N 0 0 00 00 0 0 p0 00 H3 00 00 0 00 69 rn 00 00 0 00 r w 0 ' F . Per Member Per Month 2009 FSA Renewal_819921 1 106.xls