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R-11-11-10-10B1 - 11/10/2011City Of Round Rock Annual Renewal Rating : January 1, 2012 through December 31, 2012 Contractholder Number - 819919 Group Number - N/A XAetna 10/11//2011 City Of Round Rock Karin Holland 221 East Main Street Round Rock, TX 78664 Dear Ms. Holland: Kendra Hoduski MMA Senior Account Manager Great Hills Corporate Ctr. Bld 39050 Capital of Texas Highway North Suite 150 Austin, TX 78759 Phone: 512/8842971 Fax: 512-346-7406 HoduskiK(�aetna.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 2012 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. ■ Future Program Costs - This section illustrates the cost projections to operate your current benefit program for the period 01/01/2012 through 12/31/2012. This section contains the following: experience exhibits, illustrative administrative service fees, and a Stop Loss exhibit. For the 01/01/2012 through 12/31/2012 contract period, the fee will increase 4.3% for medical and will increase 0.9% for dental. Vision will be at the same rate. ■ Program Services, Financial Assumptions, and Stop Loss Assumptions Program Services Included - This section incudes 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). Please review this section thoroughly. Stop Loss Assumptions - This section incudes specific information regarding what's included and excluded from your Stop Loss quotation, plus there is a separate page explaining leveraged Vend. ■ Guarantees - The guarantees described herein will be effective for a period of 12 months and will run from 01/01/2012 through 12/31/2012. Please refer to our attached Performance Guarantee document(s) for complete descriptions of each guarantee. This guarantee does not apply to non -Aetna benefits or networks. ■ 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 Assumption section, the rates, fees, and factors presented here will remain in effect through December 31, 2012. If you would like to make any plan changes, please contact me by December 1, 2011. If you have any questions, please contact me at 512/864-2971. 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: Date: MMA Senior Account Manager 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 Califomia Inc., Aetna Dental Inc., Aetna Dental of California Inc., Aetna Health Insurance Company, Health Insurance Company of New York, Aetna Life Insurance Company (Aetna). In Maryland, by Aetna Health Inc., 151 Farmington Avenue, Hartford, CT 06156. Each Insurer has sole financial responslbility for its own products. Health benefits and health insurance plans contain limitations and exclusions. Policy form numbers include GR-9/GR-9N, GR -23, GR-29/GR-29N, GR -700-W, andlor GR -88435 and/or GR -96476. RESOLUTION NO. R-11-11-10-1OB1 WHEREAS, the City of Round Rock (the "City") has previously entered into an agreement with Aetna Life Insurance Company ("Aetna") for Aetna to provide independent third -party administration of the City's self-funded health plan; and WHEREAS, Aetna has submitted a Letter of Understanding regarding the extension of administrative services for health benefits for Plan Year 2012; and WHEREAS, the City Council desires to approve the Letter of Understanding with Aetna, 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 a Letter of Understanding with Aetna Life Insurance Company, a copy of said Letter of Understanding 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 10th day of November, 2011. ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary O:\wdox\SCClnts\0112\ 1104\MUNICIPAL\00236793. DOC/jkg Administrative Service Fees ASC City of Round Rock Renewal Perlod: 1/1/12 through 12/31/12 Contractholder Number - 819919 • The below Administrative Service Fees will become effective 1/1/12. • The fees below exdude 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 2 appeals. City of Round Rock performs claim fiduciary for voluntary appeals after Levels 1 & 2 are exhausted (Option 4). • Aetna Health Connections is induded in the below ASC medical fees. • MedQuery is included in the below ASC medical fees. • Simple Steps to a Healthier Life is induded in the below ASC fees. • Beginning RightMatemity Program is induded 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 0%. • Consulting Fee, if applicable, is subject to Plan Sponsor approval. Service Fee Comparison Projected Number of Enrolled Employees Choice II/APM 756 Dental 777 Vision 756 Current Period Projected Period 1/1/11-12/31/11 1/1/12-12131/12 % Change Administrative Service Fees as Billed Choice II/APM (PEPM) Dental (PEPM) Vision (PEPM) Administrative Service Fees as Total Contract Period Dollars 33.32 4.39 1.00 34.75 4.43 1.00 Choice II/APM 302,279 315,252 Dental 40,932 41,305 Vision 9,072 9,072 Total Service Fee 10/11/2011 4.3% 0.9% 0.0% $ 352,283 $ 365,629 3.8% www.aetna.com ASC Fees Programs and Services City Of Round Rock — Renewal Rate Period: 01/01/2012 through 12131/2012 Contractholder Number - 819919 Programs and Servlces We have provided a list, by product, of those programs and services that are induded 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, Kendra Hoduski. Programs and services that are not available for particular products are identified as N/A. 10/11/2011 www.aetna.com Program & Services ASC Choice® POS II Aetna Pharmacy Mgmt PPO Dental (General Adminlstration Account Management Included Included Included Customer Team Services Induded Included Included Banking Included Included Included - Altemate Stoc kpilin9 $ $ $ Communication Materials Included Included Included Eligibility (Standard) Included Included Included Customized Forms $ $ $ Printing of Booklets or Certificates $ $ $ Claim Fiduciary & Extemal Review (Details on Financial Assumption Tab) Included N/A $ HIPAAAdministration Included N/A N/A Claims Subrogation Included N/A N/A Claim & Member Services [Claim Administration Included Included Included ilember Services Included Included Included Network Administration Network Management Included Included Included Provider Relations Included Included Included National Advantage Program Included N/A N/A - Facility Charge Review Induded N/A N/A - Itemized Bill Review $ N/A N/A Rural PPO Network Program $ N/A N/A Dental Medical Integration (DMI) N/A N/A Included Network Access Services Medical Network Discount (also known as VBM, Details on Medical Network Access Charge of Financial Assumption Tab) $ N/A N/A Dental Network Discount (PPO ll) N/A N/A $ Patient Management Precertification Included Included Included High Tech Radiology Precertification and Steerage $ N/A N/A Case Management Induded N/A Included Concurrent Review Included N/A N/A Discharge Planning lncluded N/A N/A Aetna Compassionate Care Program Included N/A N/A National Medical Excellence Included N/A N/A Rx Step Therapy N/A $ N/A Save-A-Copay N/A Included N/A Rx Check N/A $ N/A Therapeutic Class Management (TCM) Programs - Non Sedating Antihistamines (NSAs) N/A $ N/A - Antifungals N/A $ N/A - Proton Pump Inhibitors (PPIs) N/A $ N/A (wellness & Health Management (Aetna Health Connections- Disease Management Included N/A N/A MedQuerySM with Standard Member Messaging Included N/A N/A - Enhanced Member Messaging $ N/A N/A Healthy Lifestyle Coaching $ N/A N/A Simple Steps To A Healthier Life® Included N/A N/A 10/11/2011 www.aetna.com Program & Services ASC Programs and Services City Of Round Rock Renewal Rate Period: 01/0112012 through 12131/2012 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, Kendra Hoduski. Programs and services that are not available for particular products are identified as N/A. 10/11/2011 www.aetna.corn Program & Services ASC Choice® POS II Aetna Pharmacy Mgmt PPO Dental Simple Steps To A Healthier Life Reward Trackina $ N/A N/A CareEngine® Personal Health Record $ N/A N/A Wellness Counseling $ N/A N/A Heatthy Body, Healthy Weight Program $ N/A N/A Beginning RightsM (formerly Mom -to -Babies) Induded N/A N/A Quit Tobacco Program $ N/A N/A Informed Health Line - Nurseline (800 #) only Induded N/A N/A Informed Healthe Line - Plus $ N/A N/A Value Add Programs Fitness Program (GlobalFit) Induded N/A N/A Aetna Natural Products & Services Program Induded N/A N/A EPIC Dental Discount Program Induded Included Induded Vision One Discount Program Induded N/A N/A Standard Behavioral Health Focused Psychiatric Review N/A N/A N/A Managed Behavioral Health Induded N/A N/A - Med/Psych Program $ N/A N/A Behavioral Health Disease Management Programs (Must have both Medical & BH with Aetna) - Alcohol Disease Management $ N/A N/A - Anxiety Disease Management $ N/A N/A - Depression Disease Management $ N/A N/A Case Management Behavioral Health Programs - Intensive Case Management Induded N/A N/A Member Internet Services Public Sites DocFind° Induded Included Included InteliHealth® Induded $ Included Pharmacy Infomration N/A Induded N/A Learning Resources Induded Induded Included Secure Sites Relay Health $ $ N/A Staying Healthy Induded Induded Induded Estimate the Cost of Care Tool Induded Induded Induded Claim Research/Forms/Contact us Induded Induded Induded Spanish version Induded Induded Included Plan Sponsor Internet Services e.PlanSponsor Monitor'M Reporting Aetna Integrated Informatics' - Level A Reporting Induded Induded Included - Level B Reporting Induded Induded Induded - Level C Reporting $ $ $ - Level D Reporting $ $ $ - Disease Management Activity Report (DMAR) Induded N/A N/A - Ad hoc Reporting (5 hours/calendar year for 100 to 2999 medical ees or rx/dentai standalone product with any enrollment, 10 hourslcalendar year for 3000 to 4999) Induded N/A N/A Third Party Stop Loss Reporting $ N/A N/A Aetna Navigator Reporting Induded N/A N/A 10/11/2011 www.aetna.corn Program & Services ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Administrative Fees Parameters: • Services Agreement • Enrollment and Funding Assumptions • Self -Funded Fee Guarantee ■ Financial Condition ■ Health Care Reform Disclosure Contractholder Number -819919 This renewal package is made and offered by Aetna Life Insurance Company (hereinafter "Aetna") specifically for City Of Round Rock (hereinafter "Customer"). The contract period begins on the effective date of January 01, 2012 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 parry. 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. Based on this census information and the subsequent access analysis, we have assumed that approximately 756 employees will be enrolled for medical or pharmacy 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 assumed enrollment in each coverage: Coverage Assumed Enrollment Choice POS II 756 Total Medical Enrollment 756 Aetna Pharmacy Management 756 The mature fees are guaranteed according to the per employee per month fees as illustrated on the financial exhibits. Customer is a legitimate business and meets underwriting approval for acceptable financial strength. Aetna reserves the right to request additional supporting information in order to evaluate financial status. This renewal is intended to be compliant with healthcare reform. The Federal govemment released regulations related to grandfathering of health plans in existence on March 23, 2010. Under the health care reform legislation, health plans existing prior to the enactment of the legislation may be "grandfathered" and not subject to some of the mandated benefits and reform provisions. Changes in your benefit design as well as your contribution strategy may affect grandfathering. Plan sponsors are required to notify Aetna if their contribution rate changes for a grandfathered plan at any point during the plan year. This renewal offering assumes your plan is not grandfathered. As a non -grandfathered plan, the plan will include Preventive care as defined by regulation without cost sharing on In Network services Except for specific and limited scenarios described as transitional rules in the health care reform legislation, if a plan's grandfathered status has been lost, it cannot be regained. If, after reviewing the grandfathering rules with your benefit consultant or counsel, Customer determines that their coverage could be or is grandfathered, and they want to retain grandfathered status, they should contact Aetna for further instructions. Any taxes or fees (assessments) applied to self-funded benefit plans related to The Patient Protection and Affordable Care Act (PPACA) will be solely the obligation of the plan sponsor. The administrative service fees that Aetna is presenting do not include any such plan sponsor liability. The benefits and rates within this proposal are subject to change pending any required approvals from state or federal regulatory agencies. If you have questions, please contact your Account Manager. Aetna reserves the right to modify its products, services, rates and fees, in response to legislation, regulation or requests of government authorities resulting in changes to plan benefits and to recoup any material fees, costs, assessments, or taxes due to changes in the law even if no benefit or plan changes are mandated. • Executive Medical Plans The Patient Protection and Affordable Care Act (PPACA) prohibits insured group health plans that are not 10/11/2011 www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 ■ Advance Notification of Fee Change ■ Performance Guarantee • Guarantee Parameters • Run -Off Claims Processing 10/11/2011 Contractholder Number - 819919 grandfathered from discriminating in favor of highly compensated employees as to benefits and eligibility. This rule will become effective after additional regulatory guidance is issued in the future. Employer penalties for violating the rule include a $100 per day penalty multiplied by the number of those individuals "discriminated against.If you think your plan may be discriminatory under PPACA, we urge you to monitor the rulemaking process and contact your tax counsel for further guidance. Aetna does not conduct discrimination testing and is not responsible for an employer's compliance with this PPACA non-discrimination rule. Guidance issued by the Internal Revenue Service ("IRS"), Department of Labor ("DOL"), and Department of Health and Human Services ("HHS") has indicated that "retiree only" plans are exempt from the new benefit mandates under PPACA including Medical Loss Ratio ("MLR") and rebate requirements for fully insured plans. In order to demonstrate the establishment of a retiree only plan, a plan must maintain, separately from the plan for current (i.e., active) employees, a separate plan document and Summary Plan Description (SPD) and file a separate Form 5500. If you have a retiree only plan, in order to be considered exempt, please submit a retiree only certification form and required documentation to Aetna. We will notify Customer of any fee change at least 120 days prior to the effective date of fee change. We will put 10% of our Medicall/Pharmacy annualized administrative service fees at risk through PerformanceGuarantees. The annualized administrative service fee will be calculated at the beginning of the contract period and will be based on the total number of employees enrolled in the medicallpharmacy plans throughout the guarantee period. This guarantee does not apply to non -Aetna benefits or networks. Aetna reserves the right to recalculate the guaranteed fees to take effect on the date a contingent event described below occurs. In such case, Customer will be required to pay any difference between the fees collected and the new fees calculated. Aetna may recalculate: 1. If, for any product: a. There is a 15% change in the number of employees from our enrollment assumptions by site or by product, or from any subsequently reset enrollment assumptions. The enclosed medical and dental fees assume Aetna is the administrator for the medical and dental product(s) for the policy year. If Aetna is not the administrator for the medical and dental product(s), the enclosed fees and guarantees are subject to change. b. The change in member -to -employee ratio is greater than 15%. We have assumed a member -to -employee ratio of 2.01. c. The change in number of processed claim transactions (PCTs) per employee is greater than 15%. We have assumed 25.85 PCTs per employee per year. We define a 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. d. There is a 15% increase in the retiree percentage from that assumed or from any subsequently reset assumptions. We have assumed that 0% of the enrolled employees are over -65 retirees. 2. If there is a material change in the plan of benefits initiated by Customer or by legislative or regulatory action. 3. If there is a material change initiated by Customer 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. 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 services agreement. www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 ■ Late Fee Payment Aetna Standards: • ALIC Rewrite ■ Seed Money • Alternate Stockpile If Customer does not cover benefit payments in a timely manner as provided in the agreement, and/or fails to pay service fees in a timely basis as provided in such Agreement, Aetna will assess a late payment charge. The current charges are: - late funds to cover benefit payments (for example, late wire transfers after 24-hour request): 12.0% annual rate - late payments of service fees after 31 -day grace period: 12.0% annual rate Aetna will provide written notice to Customer of any change in late payment charges. 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. Aetna rewrote our standard description of benefits. We began using the revised version in 2008. The revisions affect documents that support Aetna's Traditional Medical (including Traditional Choice, Open Choice, Managed Choice and Open Access Managed Choice), Dental, Group Insurance and Pharmacy product lines. New customers receive documents on the new forms as they are implemented into Aetna's e.Publishing system. Renewing customers will receive updated contracts on renewal, as they have revisions, over a two-year contract renewal cycle. Please contact your account manager for further information on the changes. Aetna will periodically assess the need for and sufficiency of any payment fund and may require a plan sponsor to deposit additional amounts to an existing payment fund or, if none exists, establish a payment fund/seed money or letter of credit. Aetna's standard stockpiling arrangement is to request payment from the plan sponsor via funds transfer once claims reach a $20,000 threshold. Alternate Stockpiling arrangements, such as funds transfers on a specific frequency or with a higher limit, will incur an Altemate Stockpiling charge. Customer currently has an Alternate Stockpile arrangement, a nonstandard funds transfer arrangement with Aetna. The estimated charge for this service for 2012 is $1,961. This amount has been built into the per employee per month administrative service fees for 2012. The final actual charge will be presented as due along with the 2012 annual accounting and reconciled against actual payment collected. • Broker/ Consultant The quoted fees do not include broker/consultant compensation. Compensation Prescription Drug Benefits: Our renewal quote assumes that prescription drug benefits are included and will be provided through Aetna Pharmacy Management as described on the Service and Fee Schedule and the Specialty Addendum. ■ Rebates In this renewal, Aetna has elected to retain all rebates to help offset medical and pharmacy fee costs. Direct Member • Reimbursement (DMR) Aetna Specialty CareRxSM Aetna Specialty • Pharmacv® 10/11/2011 DMR is a surcharge applied to Pharmacy claims (incurred in or out -of -network) which are submitted by eligible Plan Participants to Aetna and processed separately. These claims are not adjudicated online at the point of service subject to the Cost Share. They are paid for in full by the Plan Participant. For 2012, the charge is $2.10 per DMR script. Processing fees are subject to change on an annual basis. Aetna Specialty CareRx refers to a pharmacy benefit plan design for certain specialty drugs. You may get your first fill of these drugs at a retail pharmacy. To achieve best coverage, all refills must come from an in -network specialty pharmacy, like Aetna Specialty Pharmacy. Your plan may require you to get your refills through Aetna Specialty Pharmacy. Please refer to your plan documents to learn more. Aetna Specialty Pharmacy is is a subsidiary of Aetna. It offers specialty medications and ongoing support for members with certain high-cost, high-risk chronic health conditions. With Aetna Specialty Pharmacy, you get a www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 Programs and Services: • Claim Fiduciary (Opt. 4) ■ Aetna Health Connections Disease Management • MedQuery 10/11/2011 personal care plan and ongoing support. - Nurses and pharmacists who specialize in your needs can offer help 24 hours a day, every day. - Care coordinators work with you to help your order process quickly. - Insurance and claims specialists help you to maximize your benefits plan. - Service representatives reach out to you or your doctor to set up your refills Aetna Specialty Pharmacy offers other helpful services, including: - Free, secure delivery within 48 hours of confirming your order, or later if you request. - Delivery to your home, doctor's office or any other location you choose. - Package tracking to ensure prompt delivery of your order. - Self -injection training/education about your condition and medication. - Flexible payment options for out-of-pocket costs, when necessary. - Free injection supplies, such as needles, syringes, alcohol swabs, adhesive bandages and Sharps containers for needle waste, if needed. Our renewal quote does not include Aetna Specialty Pharmacy. Please contact your account manager for more details. Our quoted administrative fees assume Aetna provides mandatory Levels 1 and 2 appeals, writes the letter to the employee to communicate the uphold or overturn prior decision. Aetna is claim fiduciary on Levels 1 and 2 appeals and Extemal Review Options, if applicable. Aetna defends any lawsuit originating or after completion of the first two levels of appeal. The Customer provides a voluntary appeals process after Aetna completes the mandatory two levels of appeal. The Customer assumes fiduciary responsibility for appeals that go through this final voluntary level of appeal. The Customer defends litigation for any claims going through this voluntary appeals process. Our Aetna Health Connectionsdisease 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 comorbidities 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 MedQuery program is included in your self-funded medical fees. 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. MedQuery is included in the self-funded medical fees. 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 included. Our MedQuery Expanded Member Messaging program is also available as an option to our MedQuery program. Our MedQuery Expanded Member Messaging program is offered to those members who are not www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 • Personal Health Record (PHR) • National Advantage Program • Facility Charge Review Program • Mental Health/ Substance Abuse Benefits ■ Federal Mental Health Parity • Extemal Review 10/11/2011 Contractholder Number -819919 participating in Aetna Health Connections Disease Management program. MedQuery Expanded Member Messaging can be included for an additional $0.20 per employee per month for our self-funded medical products. Powered by the patented Aetna Care Engine®, provides members with online access to personal information, including health alerts, detailed health summary, and integrated information and tools to help members make informed decisions about their health care. Aetna's Care Engine -powered PHR combines detailed, claims -driven information gathered from across the health care spectrum, such as physician offices and hospitals, labs, diagnostic treatment and pharmacies, and adds member -reported health information to build a comprehensive health profile that the member can share with his or her doctor. Aetna's Care Engine -powered PHR applies to all Funding Arrangements and all medical products. MedQuery and the Informed Health Line 1-800# are required when implementing PHR. Our PHR program is available as an option and can be included for an additional $0.50 PEPM. Aetna's National AdvantageTM Proqram allows plan sponsors access to contracted rates for many medical claims that otherwise would be 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, ancillary providers, and physicians accessed through vendor arrangements where Aetna does not have direct contractual arrangements. The average savings to our customers from NAP — 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 Customer. Instead, the fee for NAP is a percentage of savings. It is automatically charged to Customer as part of their claim charges. The fee is charged only if savings are achieved. For Customer, the NAP fee is 50 percent and has been assumed for this proposal. The Facility Charge Review program (FCR) is an additional feature of the National Advantage Program (NAP) for self-funded plans that 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 available only in conjunction with NAP and is not available seperately. The fee for the Facility Charge Review feature is 50 percent of savings and is not included in the per employee per month fee. A listing of participating NAP health care professionals and facilities is available through our DOCFinde, online directory at www.aetna.com. We will recalculate Customer'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. Our renewal quote assumes that mental health/chemical dependency benefits are included. The Federal Mental Health Parity and Addiction Equity Act of 2008 applies to fully insured traditional and HMO Middle Market (MM) & National Accounts (NA) commercial plans as well as self-funded Traditional and HMO MM & NA commercial plans for plan years beginning on or after October 3, 2009. This means many calendar year plans were required to comply with the Act by Jan. 1, 2010. The new Interim Final Regulations apply to plan years beginning on or after July 1, 2010, so calendar year plans must comply with the regulations by January 1, 2011. However, given that this is a self funded plan, it is ultimately up to the plan sponsor to comply with federal Mental Health Parity. We can continue to make our recommendation regarding application and how we think their plan should be designed in order to comply but we are not in the position to provide self funded plan sponsors legal advice. Therefore, the plan sponsor should speak to their own legal counsel and make the final determination related to compliance with Federal Mental Health Parity. Extemal Review is offered as an option to self-funded customers. External Review uses outside vendors who coordinate a review through their network of outside reviewers. www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 • Claims Subrogation • Data Transfer at Termination • Third -Party Audits • Health Insurance Portability and Accountability Act (HIPAA) • Medical EOB Suppression • Additional Products and Services 10/11/2011 Contractholder Number - 819919 Customers who ask Aetna to assume claim fiduciary responsibility will have this service included at no additional charge. Aetna will administer the plan in compliance with the Federal external review process. 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. Grandfathered plans and retiree -only plans do not have to comply with the new extemal review rules. Aetna can continue to administer these plans under the current guidelines. Customers with grandfathered plans and retiree - only plans (group plans with fewer than two current employees) should provide Aetna with written notification if they want to move to the new Federal extemal review process. Unless we receive notification of your intent to move to the Federal external review process, Aetna will continue to administer extemal review for your plan in accordance with your current amendment. Aetna has entered into an agreement with the firm of Rawlings & Associates to provide comprehensive subrogation services. A contingency fee of 30% is retained upon recovery for self-funded customers. 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 Customers specific format and content requirements, subject to a charge that is based on direct labor cost and data processing time. 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. Our proposal assumes that Aetna will be providing HIPAA certifications of coverage for terminated employees. This has been included in their guaranteed fees. 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. Costs for special services rendered which are not included or assumed in the pricing guarantee will be direct billed. For example, Customer 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. www.aetna.com Financial Assumptions ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Administrative Fees Parameters • Services Agreement ("Contract") Perlod • Enrollment and Funding Assumptions • Self -Funded Fee Guarantee Advance Notification of Fee Change Guarantee Parameters • Run -Off Claims Processing • Late Fee Payment Aetna Standards ALIC Rewrite 10/11/2011 Contractholder Number - 819919 The contract period begins on the effective date of January 01, 2012 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. Based on this census information and the subsequent access analysis, we have assumed that approximately 777 employees will be enrolled for dental 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 assumed enrollment in each coverage: Coverage Assumed Enrollment PPO Dental 777 Total Dental Enrollment 777 The mature fees are guaranteed according to the per employee per month fees as illustrated on the financial exhibits. We will notify City Of Round Rock of any fee change at least 31 days prior to the effective date of fee change. 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 fee collo the new fees calculated. Aetna may recalculate: 1. If, for any product: a. There is a 15% change 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 2.16. c. The change in number of processed claim transactions (PCTs) per employee is greater than 15%. We have assumed 3.44 PCTs per employee per year. We define a PCT for dental benefits as any transaction 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. 2. If there is a material change in the plan of benefits initiated by City Of Round Rock or by legislative or regulatory actior 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. 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. If City Of Round Rock does not cover benefit payments in a timely manner as provided in the Agreement, to pay service fees in a timely basis as provided in such Agreement, Aetna will assess a late payment charge. The current charges are: - late funds to cover benefit payments (e.g., late wire transfers after 24-hour request): 12.0% annual rate - late payments of service fees after 31 day grace period: 12.0% annual rate Aetna will provide written notice to City Of Round Rock of any change in late payment charges. 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. Aetna rewrote our standard description of benefits. We began using the revised version in 2008. The revisions affect documents that support Aetna's Traditional Medical (including Traditional Choice, Open Choice, Managed Choice and Open Access Managed Choice), Dental, Group Insurance and Pharmacy product lines. New customers receive documents on the new forms as they are implemented into Aetna's e.Publishing system. Renewing customers will receive updated contracts on renewal, as they have revisions, over a two-year contract www.aetna.com Dental Assumptions ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 • Seed Money • Broker/Consultant Compensation Programs and Services: • Claim Fiduciary (Opt. 4) • Data Transfer at Termination • Third -Party Audits • Additional Products and Services 10/11/2011 Contractholder Number - 819919 renewal cycle. Please contact your account manager for further information on the changes. Aetna will periodically assess the need for and sufficiency of any Payment Fund and may direct a plan sponsor to deposit additional amounts to an existing Payment Fund or, if none exists, establish a Payment Fund/Seed Money or Letter of Credit. The quoted fees do not include broker/consufant compensation. Our quoted administrative fees assume Aetna provides mandatory Levels 1 and 2 appeals, writes the letter to the employee to communicate the uphold or overtum prior decision. Aetna is claim fiduciary on Levels 1 and 2 appeals and External Review Options, if applicable. Aetna defends any lawsuit originating or after completion of the first two levels of appeal. The Customer provides a voluntary appeals process after Aetna completes the mandatory two levels of appeal. The Customer assumes fiduciary responsibility for appeals that go through this final voluntary level of appeal. The Customer defends litigation for any claims going through this voluntary appeals process. 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. While in most cases we do not request reimbursement for intemal 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. 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 materi 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. www.aetna.com Dental Assumptions ASC )TAetna August 8, 2011 City Of Round Rock Karin Holland 221 East Main Street Round Rock, TX 78664 ADMINISTRATIVE SERVICES AGREEMENT NO. / ASC POLICYHOLDER NO. —819919 Dear Ms. Holland: This letter agreement between City Of Round Rock (hereinafter "Customer") and Aetna Life Insurance Company (hereinafter "Aetna") amends the above captioned Administrative Services Agreement (Agreement). The Performance Guarantees attached to this letter agreement replace any Performance Guarantees in the Agreement for the Guarantee Period 01/01/2012 through 12/31/2012 (hereinafter "Guarantee Period"), effective 01/01/2012. Aetna is committed to providing quality administrative services to Customer, and we would like to emphasize our degree of commitment through the attached Performance Guarantees. The attached Performance Guarantee agreement describes the Performance Guarantees in detail. Please sign this letter agreement and return it to us by 11/02/2011, indicating your acceptance of the Guarantees. If this letter is not signed and returned by 11/02/2011, it is assumed that Customer is in agreement with the Performance Guarantee offerings, Performance Objectives, and amounts at risk if the Performance Objectives are not met. Guarantee Measure Turnaround Time Financial Accuracy Payment Incidence Accuracy Average Speed of Answer (ASA) Abandonment Rate Performance Objective Maximum at Risk 90% in 10 days 99.0% or higher 96% or higher 30 seconds 3.00% Total at Risk 2.00% 2.00% 2.00% 2.00% 2.00% 10.00% IN WITNESS WHEREOF, AETNA has signed this amendment to become effective 01/01/2012. Signed by Aetna on 08/09/2011 Senior Underwriting Consultant Signed by City Of Round Rock on Signature 10/11/2011 www.aetna.com Official Title Performance Guarantee Letter Medical Performance Guarantees City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 General Performance Guarantee Provisions Aetna Life Insurance Company (ALIC) provides health benefits administration and other services for the self-funded Choice POS II.The services set forth in this document will be provided by ALIC (hereinafter "Aetna"). Performance Objectives Aetna believes that measuring the activities described below are important indicators of how well we service City Of Round Rock (hereinafter "Customer"). Aetna is confident that the Plan Administration, Claim Administration and Member Services provided to Customer will meet their high standards of performance. To reinforce Customer's confidence in Aetna's ability to administer their program, Aetna is offering guarantees in the following areas: Claim Administration Tumaround Time Financial Accuracy Payment Incidence Accuracy Member Services Average Speed of Answer (ASA) Abandonment Rate Guarantee Period The guarantees described herein will be effective for a period of 12 months and will run from 01/01/2012 through 12/31/2012 (hereinafter "guarantee period"). The performance guarantees shown below will apply to the Choice POS II administered under the Administrative Services Only Agreement ("Services Agreement"). These guarantees do not apply to non -Aetna benefits or networks. If Aetna processes runoff claims upon termination of the Services Agreement, performance guarantees of Turnaround Time, Financial Accuracy,and Total Claim Accuracy will not apply to such claims. Further, performance guarantees described herein will not apply to the guarantee period claims if termination is prior to the end of the guarantee period. Aggregate Maximum In total, Aetna agrees to place 10% of its applicable guarantee period administrative service fees at risk (hereinafter "guarantee period administrative service fees at risk or fees at risk") through the Performance Guarantees outlined in this document. The guarantee period administrative service fees will be based on Aetna -only services (excludes services such as outside vendor services, commissions, etc.) calculated at the end of the guarantee period and will be based on the total number of employees actually enrolled in the Choice POS II medical plans throughout the guarantee period. In no event will fees be adjusted by more than 10% due to the results of this guarantee and all other guarantees combined. Termination Provisions Termination of the guarantee obligations shall become effective upon written notice by Aetna in the event of the occurrence of (i), (ii) or (iii) below: (i) a material change in the plan initiated by Customer or by legislative action that impacts the claim adjudication process, member service functions or network management; (ii) failure of Customer to meet its obligations to remit administrative service fees or fund the Customer bank account as stipulated in the General Conditions Addendum of the Services Agreement; (iii) failure of Customer to meet their administrative responsibilities (e.g., a submission of incorrect or incomplete eligibility information). 10/11/2011 www.aetna.com Performance Guarantee Medical Performance Guarantees City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 No guarantees shall apply for a guarantee period during which the Services Agreement is terminated by Customer or by Aetna. Refund Process At the end of each guarantee period, Aetna will compile its Performance Guarantees results. If necessary, Aetna will provide a "lump sum" refund for any penalties incurred by Aetna. Measurement Criteria Aetna's intemal quality results for the unit(s) processing Customer's claims will be used to determine guarantee compliance for any Financial Accuracy and/or Total Claim Accuracy Guarantees. Claim Administration Turnaround Time Guarantee: Aetna will guarantee that the claim turnaround time during the guarantee period will not exceed 10 calendar days for 90% or the processed claims on a cumulative basis each year. Definition: Aetna measures turnaround time from the claimant's viewpoint; that is, from the date the claim is received in the service center to the date that it is processed (paid, denied or pended). Weekends and holidays are included in turnaround time. Penalty and Measurement Criteria: If the cumulative year tumaround time (TAT) exceeds the day guarantee as stated above, Aetna will reduce its compensation by an amount equal to 0.2% of the guarantee period administrative service fees for each full day that Tumaround Time exceeds 10 calendar days for 90% of all claims. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. A computer generated turnaround time report for the processing site that handles Customer's specific claims will be provided on a quarterly basis. Financial Accuracy Guarantee: Aetna will guarantee that the guarantee period dollar accuracy of the claim payment dollars will be 99.0% or higher. Definition: Financial accuracy is measured by the dollar amount of claims paid accurately divided by the total dollars paid. Aetna considers each underpayment and overpayment an error; Aetna does not offset one by the other. Penalty and Measurement Criteria: Aetna will reduce its compensation by an amount equal to 0.2% of the guaranteed period administrative service fees for each 1 % that financial accuracy drops below 99.0%. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Aetna's audit results for the unit(s) processing Customer's claims will be used. The results will be based on Aetna's applicable Quality Assessment Policy in effect at the time of the audit. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Payment Incidence Accuracy Guarantee: We will guarantee that the guarantee period payment incidence accuracy will be 96.0% or higher. Definition: Payment incidence accuracy is measured by the number of correct payments divided by the total number of payments audited. 10/11/2011 www.aetna.com Performance Guarantee Medical Performance Guarantees City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 Penalty and Measurement Criteria: Aetna will reduce its compensation by 0.2% of the guarantee period administrative service fees for each 1% that payment incidence accuracy drops below 96.0%. There will be a maximum reduction of 2% of the guarantee period administrative service fees Aetna's audit results for the unit(s) processing Customer's claims will be used. The results will be based on Aetna's applicable Quality Assessment Policy in effect at the time of the audit. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Member Services Average Speed of Answer Guarantee: Aetna will guarantee that the average speed of answer for the site(s) providing Customers member services will not exceed 30 seconds. Definition: On an ongoing basis, Aetna measures telephone response time through monitoring equipment that produces a report on the average speed of answer. Average speed of answer is defined as the amount of time that elapses between the time a call is received into the telephone system and the time a representative responds to the call. The result expresses the sum of all waiting times for all calls answered by the queue divided by the number of incoming calls answered. ASA measures the average speed of answer for all callers answered. Interactive Voice Response (IVR) system calls are not included in the measurement of ASA. Penalty and Measurement Criteria: Aetna will reduce its compensation by 0.2% of the guarantee period administrative service fees for each full second that the average speed of answer exceeds 30 seconds. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Aetna's results for the site(s) providing member services for Customer will be used. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Abandonment Rate Guarantee: Aetna will guarantee that the average rate of telephone abandonment for the site(s) providing Customer's member services will not exceed 3%. Definition: On an ongoing basis, Aetna measures telephone response time through monitoring equipment that produces a report on the average abandonment rate. The abandonment rate measures the total number of calls abandoned divided by the number of calls accepted into the site Penalty and Measurement Criteria: Aetna will reduce its compensation by 0.2% of the guarantee period administrative service fees for each 1 % that the average abandonment rate exceeds 3%. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Aetna's results for the site (s) providing member services for Customer will be used. Results for the HMO, QPOS, USAccess plas will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Please have an authorized individual sign the performance guarantee ASC amendment letter, signifying your acceptance of the arrangement, and retum the original to us for our files. 10/11/2011 www.aetna.com Performance Guarantee z- r Aetna Medical and Pharmacy Integration Benefits Streamlining your healthcare with Aetna Pharmacy Management Aetna Pharmacy Management provides full pharmacy benefit management services. Our cIinical focus and vigilance in helping to promote health care quality was recognized by URAC, an independent accrediting organization. We are accredited in both Pharmacy Benefits Management and Drug Therapy Management. Aetna is one of only four organizations to achieve this dual accreditation. Aetna's pharmacy program provides: ■ Advanced clinical programs and resources to help manage costs. ■ Experienced pharmacy account management and customer support. ■ Leading online tools to help Aetna members make informed decisions. ■ Pharmacy discounts and rebates. ■ An extensive pharmacy network. ■ Access to advanced mail-order and specialty pharmacy services. When you partner Aetna prescription drug benefits with Aetna medical benefits, your healthcare outcome is enhanced because the two plans work together to promote clinically appropriate, cost-effective care. Our advanced medical and pharmacy integration capabilities provide customers and members with key benefits: Advanta es of Inte, rated Aetna Medical & Pharmac Easier member service experience ■ i ne ID card or both medics an. p armacy bene is ■ High -deductible health plan funds integrate with our medical HMO and PPO plans, allowing better coordination of benefits • One health benefits company reaching out to members with targeted program and health information ■ Member access to detailed medical and pharmacy claims information, including drug names and explanations of benefits — through Aetna Navigator, our secure member website ■ Coordinated precertification and other policies improve and simplify patient care Efficient healthcare management • Focus on managing overall ea thcare spend ■ Enhances Aetna's disease management program leading to healthier outcomes ■ Aetna Specialty Pharmacy healthcare professionals reach out to help specialty pharmacy members have the right medication, education and support they need. ■ Medical diagnosis and other clinical parameters allows quick ad'udication of claims at •oint-of-service 10/11/2011 Our studies have shown that integrated medical and pharmacy benefits result in improved health outcomes by allowing an overall approach to our members' treatment plan. With Aetna's focus on member wellness and disease management, our integrated medical and prescription drug plans work together to achieve our goal of healthier membership. www.aetna.com Medical APM Integration Stop Loss - Aetna Competitive Advantage City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Contractholder Number - 819919 Features and Benefits of Aetna Stop Loss Insurance Aetna Stop Loss Insurance offers a number of features and benefits to the customer. This is what The Aetna Advantage" is all about - how we have differentiated ourselves from the competition. Aetna's Stop Loss product provides immediate reimbursement,* monthly budgeting feature, and coverage for mental health/substance abuse and transplant claims commonly excluded from Stop Loss policies. Each one of the features and benefits listed below in the "Features and Benefits" chart provides an important retum to customers and demonstrates "The Aetna Advantage." Features and Benefits Feature Benefit Com. : titive Advanta, e Monthly budgeting feature for Aggregate Stop Loss allows for simple monthly budgeting and tracking of Stop Loss aggregate liability. Regular Stop Loss claim auditing and Medical Claim Management (MCM) programs help ensure tight adjudication of claims initially. In addition, ensures catastrophic claims are managed to an a • • ro • nate level. Automatic claims submission. No paperwork. Less variability in month-to-month costs and cash-flow advantages. Aetna's auditing and MCM avoid some claims that otherwise would have been paid. Aetna may pay some Stop Loss claims that a Third- Party carver would deny based on claims administration errors. Greater convenience and lower administrative charge. No chance of missing and failing to submit eligible claims. Often no monthly budgeting. Third -party carvers may "readjudicate" claims and may reject a significant % of dollars submitted, leaving the claims administrator and customer to recover disputed amounts. Paperwork to request reimbursement is often required. Claims administrators may charge extra for providing documentation to third -party carriers. Premier Product Offenng for Individual Stop Loss (state approval is required). No lasenng and reduced expenence loads for known catastrophic claims at renewal. Third -party Stop Loss carriers may load rates or laser at renewal for known catastrophic claims. "Immediate reimbursement is not available for claims that are not administered on Aetna claims systems. Individual and Aggregate Stop Loss reimbursements resulting from the inclusion of claims paid during the 3 month run out period will be handled on a delayed year-end reimbursement basis. Medical claims that exceed the Individual Stop Loss Amount or Aggregate Limit during the first twelve months of the policy period will be handled on an immediate/monthly budget reimbursement basis. 10/11/2011 www.aetna.com SL -Aetna Competitive Advantage The Aetna Difference )Aetna Aetnais 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. Aetna Can Make Your Job Easier... ■ Aetna's Broad Choice of Products and Services Helps Provide Comprehensive Coverage You know Aetna as a leader in medical 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, any of Aetna's programs will enhance the heath coverage you provide for your employees. Aetna hamesses the power of information to help you and your employees make better, more informed decisions. This helps control costs and helps keep your employees healthy and productive. Aetna offers a product portfolio aimed at balancing the needs of both employers and employees. We strive to maintain a competitive and comprehensive health portfolio of HMO and PPO -based products, as well as consumer -directed health plans. Aetna is committed to help facilitate access to high-quality, cost-effective care to produce healthier outcomes. ■ Plan Sponsor Services — Aetna Delivers a Total Service Experience We provide plan sponsors with customer -specific services so the plan functions smoothly. We designate a specific field office and account manager as the primary contact. Through ongoing communication with the Plan Sponsor, the account manager provides recommendations as employer needs grow or change. The account manager provides support for plan sponsors regarding their health coverage issues and benefits concems. ■ Online Tools — Easy -To -Use Technoloqy For Benefits Plannin_q, Eligibility. Enrollment And Billinq Aetna offers an array of Internet -based applications that are designed to make it easier for Plan Sponsors to do business with us. Aetna's e.Plan Sponsor Monitor' is an easy-to-use online reporting tool that helps customers identify their health care spending pattems by providing access to standard reports as well as the ability to customize and create ad hoc reports. If you are an e.Plan Sponsor Monitor T"" customer, you can easily access the program online with a secure username and password. Plan sponsors who cannot access e.Plan Sponsor MonitorTM and who have 100 eligible enrolled subscribers will receive quarterly reports from Aetna's reporting tool that provide comprehensive statistics related to their plan and Aetna's book of business. If you are not yet an e.Plan Sponsor Monitor T" customer, please feel free to contact us to learn more about our capabilities. Aetna Integrated Informatics and Medical Manaqement Proqrams — Healthier Outcomes and Cost Reduction One of Aetna's goals is to help members maintain their health as well as to identify the need for care in the early stages of a disease. Aetna Integrated Informatics, our data analysis subsidiary, uses predictive modeling and risk stratification to identify members for early outreach. By increasing the reach and impact of our proven medical services programs, Aetna continuously strives to connect care with individual needs. We are 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. Enrollment and Billinq Solutions Customers with an HR system can use SecureTransportT" to quickly and efficiently transmit eligibility information from their system to Aetna. Customers who do not have an HR system, can use EZenroll to process new hire enrollments, changes, and terminations or EZLinkTM for online enrollment, billing and electronic premium payment. Programs/Services Included in your Renewal ■ Aetna Health Connections Disease Manaqement 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 an 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. See below for additional information. ■ Aetna NaviqatorTM - We Support Members 24/7 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference Aetnr Aetna Navigator TM is a self-service website that provides members with 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 indudes secure, personalized features for registered members including access to claims and benefits status. ■ MedQuery® - Informatlon Sharing Helps Improve Quality And Safetv Of Care Aetna's MedQuery® program is 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 is analyzed and the resulting information provides physicians with access to a broader view of a patient's clinical profile. The data that fuels this program includes claims history, current medical claims, pharmacy claims, physician encounter reports, patient demographics and evidence -based treatment recommendations. ■ Personal Health Record (PHRi We seek to empower consumers by helping them make better informed health 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). PHR can help members organize health information and actively participate in their health care. PHR combines detailed, claims - driven information gathered from across the health care spectrum such as physician offices, labs, diagnostic facilities 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. PHR features targeted messages and alerts to members, informing them of opportunities to improve their health and well-being as well as reminding them to consider altemative therapies, or warning them of potentially dangerous medication errors. While PHR is populated by daims data and kept up-to-date without effort on the members part, the member has the option of filling-in gaps by entering information not provided by claims data. In addition, through our innovative health questionnaires, Aetna will encourage members to maintain the accuracy of their information in PHR. To leam more about PHR please visit us at: http://www.aetna.com/makehistory/, or refer to the PHR brochure included within your renewal package. Additional Products & Service Offerings ■ Aetna Health Connections Get ActivelSM Aetna Health Connections Get Active!SM: Shape Up Challenqe plus Stay in Shape Fitness and Nutrition Tracking Program Aetna Health Connections Get Active! Sprovides a great way for plan sponsors to help employees of all health and fitness levels to get and stay motivated to improve their fitness and well-being. It features an online fitness and nutrition tracker, team -based competition, social networking, emails & newsletters, activity tracking reports, and the option to buy -up for a pedometer. Employees can select any or all program activity tracking categories: exercise hours, pedometer steps, or weight loss. The recommended team competition is 12 or 16 weeks in length. Additionally, the program includes the fitness and nutrition tracking program which provides members with an ongoing maintenance program following the challenge. Aetna Health Connections Get Active!SMShape Up Challenqe Program Aetna Health Connections Get Active!SM provides a great way for plan sponsors to help employees of all health and fitness levels to get and stay motivated to improve their fitness and well-being. It features an online team -based competition, social networking, emails & newsletters, activity tracking reports, and the option to buy -up for a pedometer. Employees can select any or all program activity tracking categories: exercise hours, pedometer steps, or weight loss. The recommended team competition is 12 or 16 weeks in length. Aetna Health Connections Get Active!SM: Stay in Shape Fitness and Nutrition Trackinq Program Aetna Health Connections Get Active!' provides a great way for plan sponsors to help employees of all health and fitness levels to get and stay motivated to improve their fitness and well-being. The program features an online application that makes it easy for participants to track fitness and nutrition information. The social networking capability allows participants to communicate with fellow members and schedule group exercise activities, if desired. The social networking feature encourages team -building, program camaraderie, and most importantly - program engagement. ■ Aetna Affordable Health ChoicesSM — Provides Benefits To Non -Traditional Employees 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference X'Aetnr In August 2004, Aetna 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 Companyoffers an innovative solution for non -benefited employees (Le. 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. Our experience shows that offering these benefits reduces tumover in this population and therefore, positively impacts acquisition, hiring and training costs. Please contact your Account Manager if you would like more details. ■ Aetna HealthFund® — 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 give 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 its only from Aetna, the pioneer in consumer -directed plans. ■ Aetna Integrated Proqrams — Benefits Work Better ... Together Aetna Inteqrated Health & Disability (IHD) When Aetna's Medical and Disability benefits are taken together, they can be coordinated to provide a more efficient health care program. Aetna Integrated Health & Disability (IHD) is a concrete and compelling example of Aetna's strengths: innovation, information and integration. IHD links medical and disability case management together by utilizing Aetna's rich data management tools. This allows the right connections to be made 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 concems earlier, which can help employees recover faster and retum 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. • Aetna Integrated Health Solutions"" (IHS) IHS is another innovative program that connects clinical services, claims data, and wellness resources across multiple products to positively impact members' health, improve workforce productivity, and manage healthcare as well as disability costs. Why is IHS needed? "Presenteeism", or on-the-job productivity loss that is illness related, is costing plan sponsors money. Research on employee health and wellness shows that presenteeism costs businesses $150 billion a year. Lost productivity is 7.5 times higher due to presenteeism than for absenteeism. IHS is uniquely aimed at addressing this need. The IHS continuum of fully -integrated services provides our medical, behavioral health, pharmacy, wellness and disability clinicians with a single, comprehensive view of each member's health and health needs. Customers receive integrated reports that pinpoint the health issues of greatest need and track the engagement and progress of employees toward better health. And because IHS helps members and health care professionals identify conditions at the earliest stages - when they are most treatable - recovery times improve, presenteeism and work-related absenteeism are addressed, and medical and disability costs are managed more effectively. Aetna has achieved remarkable results from its integrated programs initiated to date — medical and psychiatric case management, health and disability management, and medical and pharmacy management. Ultimately, showing the value of integrated care results in expected reduction in medical claim costs of 4% in year 1, 5% in year 2, and 6% in year 3. Aetna Dental/Medical Inteqration (DMI) Program Plan Sponsors with both medical and dental coverages under Aetna receive the DMI program at no additional charge. This program utilizes Aetna's unique data integration tools to identify at -risk members whose conditions have high cost/risk characteristics that could result in adverse health outcomes. The program focuses on members who have not had a recent dental visit and creates a complete health history for these members. By combining outreach programs, education materials and enhanced dental benefits, Aetna encourages these members to obtain dental care for an improved overall health outcome. At -risk members could include those with diabetes, coronary artery disease, cerebrovascular disease or pregnancy. ■ Life and Disability Proqrams & Services 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference )'Aetna Life and disability insurance are important components in a comprehensive employee benefits package, providing peace of mind for employees and family members. Aetna's core offering of high-quality disability products and services — Short Term Disability (STD), Long Term Disability (LTD), and Absence Management including Family and Medical Leave Act (FMLA) — can be offered alone or in any combination. Within this core model are a variety of plan design options, service features and system capabilities that enable you to customize the plan to meet your needs. Included with Aetna's Basic, Voluntary, Supplemental or Dependents' Group Term Life Insurance plans is a new package of programs and services designed to enhance the value of our products for both employees and their family members by leveraging programs from Aetna's innovative health business. With Aetna Life Essentials, active employees and their families have access — at no additional cost — to programs that help promote healthy, fulfilling lifestyles. In addition, Aetna Life Essentials provides critical support resources for often -overlooked needs at the end of life. These programs provide value for beneficiaries and their loved ones beyond the financial support from a death benefit. Here are highlights of Aetna's Life and Disability programs: Discounts - If your employees enroll in an Aetna Disability and/or Life Insurance Plan our discount programs can be their ticket to the small luxuries that help keep them healthy and happy. Aetna's differentiation in disability claim management - We view disabilities as health events, not just absences from work. As such, we have developed a market -leading approach that will return your employees to health — and to work — sooner. Workability® - Workability is our state-of-the-art integrated disability system. It is task, clinical outcome based system with smart logic. Workability is a single platform generating communications across your FML, STD and LTD claimants An Employee Assistance Program (EAP) for Long Term Disability members - We are pleased to offer, as a value-added service in conjunction with our insured Group Long Term Disability policies, an EAP serviced and managed by Aetna Behavioral Health. It includes access for employees and immediate household members to unlimited phone consultations with EAP Aetna Life EssentialsSM - Included with Aetna's Basic, Voluntary, Supplemental or Dependent's Group Term Life insurance plans is a package of programs and services designed to enhance the value of our products for both employer- and employee -paid coverage. This program includes such valuable services as expert financial advice, access to legal services, and healthy lifestyle Travel Assistance Program - To help minimize the stress of emergency situations you may encounter while traveling overseas on business or pleasure, we offer you and your dependents access to medical, travel, legal and financial assistance services through this program Coordination of Premium Waiver - If Aetna covers both Life and long-term disability, we send premium waiver notification to the Premium Waiver Unit once an LTD claimant has met the predetermined qualifying period. ■ Medicare Advantaqe Plans Aetna has a wide range of health plan choices for plan sponsors to offer their Medicare retirees. Below are some of the plan options you may want to consider: Medicare Advantage HMO Offers a large national provider network, worldwide emergency care, preventive health and wellness programs, optional dental benefits, online resources, value added services such as eyewear discounts and fitness club memberships. Medicare Advantage PPO Offers flexibility to visit providers in -network or out -of -network, no annual or lifetime dollar maximums for in -network services, no copays for select in -network preventive services. Aetna's Supplemental Retiree Medical Plan Insurance Policies Aetna Supplemental Retiree Medical Plans are fully insured policies that mirror the standardized individual Medigap benefit plans, paying secondary to medicare. Aetna Supplemental Retiree Medical Plans do not utilize a provider networks, allowing members the flexibility to seek care from providers of their choosing. Discount programs for vision, fitness, weight management, dental and hearing are included. Medicare Prescription Drug Plans (PDP) A wide range of standalone PDPs are available under Aetna Medicare Rx. They range from plans that provide Standard PDP benefits to enhanced plans that fill in the Medicare PDP coverage gap. These plans are available nationwide. Medicare Advantaqe Prescription Druq Plans (MA -PD) Aetna's MA -PD Plans integrate our Medicare Advantage plans with our Prescription Drug plans in order to provide a complete health solution for members. MA-PDs also help simplify enrollment, billing and administration for both the plan sponsor and the member. For more information about Aetna's Medicare options or to request a quote, please call toll free 1-877-603-2061, or contact your account manager. ■ Vital Savinqs by Aetna SM - Dental Discount Card Proqram and Other Discounts 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference TAetnr 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. Discounts on other services are also available. This program is NOT an insurance plan. Participants simply present their Vital Savings ID card when they visit a participating dental office or other participating provider. Participants are responsible for payment of 100°x6 of the fee directly to the provider at the time services are rendered. There are no claims submitted under this program. Discounts are the same as Aetna's Dental PPO discounts (average 30% nationally). 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. Vision — Participants can receive discounts on exams, eyeglasses, contact lenses and LASIK eye surgery through the Aetna Vision Discounts' program. Other Health Care Products and Services — Through Aetna's Vital Savings Program, discounts are available on many other health care services including chiropractic services, acupuncture, massage therapy, and nutritional counseling. Fitness — Participants can save on membership rates through independent health clubs contracted within the GlobaIFitT"" network as well as save on certain home exercise equipment. Hearing Services — Discounts are available on exams and hearing aids. 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 is a monthly fee to purchase the Aetna Vital Savings program. Two billing options are available - a group billing option and an individual billing option. Vital Savings monthly fees may be eligible for pre-tax payroll deductions for employees/retirees under age 65 if the program is under the group billing option. For more information on discounts available or participating providers, please contact your account manager or visit online at www.vitalsavingsbyaetna.com. ■ Wellness Proqrams Implementing a solid and well -thought-out Wellness Strategy is key to infusing a supportive culture for plan sponsors. At Aetna, we are committed to taking steps to ensure that this future in health care strategy is realized. We are ready TODAY for this joumey and we invite our customers to join us. Aetna's Roadmap to Wellness Packages are simple, easy -to -implement wellness solutions for plan sponsors to ensure a successful and effective wellness strategy for their employees. In addition, the Roadmap is supported by a turn -key communications toolkit that enables a streamlined implementation and ongoing support for the plan sponsor's wellness strategy. To help plan sponsors choose the right wellness programs for their employees, we have grouped the Aetna Wellness offerings into three levels: Core, Enhanced and Premier. For specific pricing, please contact your account manager. 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 Califomia Inc., Aetna Dental Inc., Aetna Dental of California Inc., Aetna Health Insurance Company, Health Insurance Company of New York, Aetna Life Insurance Company (Aetna). In Maryland, by Aetna Health Inc., 151 Farmington Avenue, Hartford, CT 06156. Each insurer has sole financial responsibility for its own products. Health benefits and health insurance plans contain limitations and exclusions. Policy form numbers include GR-9/GR-9N, GR -23, GR-29/GR-29N, GR -700-W, and/or GR -88435 and/or GR -96476. 10/11/2011 www.aetna.com Aetna Difference ASC ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY. City Council Agenda Summary Sheet Agenda Item No. 1OB1. Consider a resolution authorizing the Mayor to execute a Letter of Understanding with Agenda Caption: Aetna Health, Inc. for the extension of administrative services for health benefits. Meeting Date: November 10, 2011 Department: Human Resources Staff Person making presentation: Teresa Bledsoe Human Resources Director Item Summary: Consider a resolution authorizing the Mayor to execute a Letter of Understanding with Aetna Health, Inc. for the extension of administrative services for health benefits for Plan Year 2012. Aetna was selected to continue as our Third Party Administrator (TPA) for the Plan Year beginning January 1, 2010 after we completed a Request for Proposal process. This is the second renewal for a 12 month period, and is for the plan year beginning January 2012. Aetna continues to provide very good customer service, very strong provider discounts as well as to meet performance guarantees. Cost: $365,629 (3.8% increase) Source of Funds: Self-funded Health Insurance Date of Public Hearing (if required): N/A Recommended Action: Approval EXECUTED DOCUMENTS FOLLOW XAetna 10/11//2011 City Of Round Rock Kann Holland 221 East Main Street Round Rock, TX 78664 Dear Ms. Holland: Kendra Hoduski MMA Senior Account Manager Great Hills Corporate Ctr. Bid 3 9050 Capital of Texas Highway North Suite 150 Austin, TX 78759 Phone: 512/864-2971 Fax: 512-346-7406 HoduskiKtdaetna.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 2012 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. ■ Future Program Costs- This section illustrates the cost projections to operate your current benefit program for the period 01/01/2012 through 12/31/2012. This section contains the following: experience exhibits, illustrative administrative service fees, and a Stop Loss exhibit. - For the 01/01/2012 through 12/31/2012 contract period, the fee will increase 4.3% for medical and will increase 0.9% for dental. Vision will be at the same rate. ■ Program Services. Financial Assumotions. and Stoo Loss Assumotions Program Services Included- This section includes additional services that have been included in our pricing or require an additional fee. Financial Assumotions- 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). Please review this section thoroughly. Stoo Loss Assumotions- 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. ■ Guarantees -The guarantees described herein will be effective for a period of 12 months and will run from 01/01/2012 through 12/31/2012. Please refer to our attached Performance Guarantee document(s) for complete descriptions of each guarantee. This guarantee does not apply to non -Aetna benefits or networks. ■ The Aetna Differenc@- 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 Assumption section, the rates, fees, and factors presented here will remain in effect through December 31, 2012. If you would like to make any plan changes, please contact me by December 1, 2011. If you have any questions, please contact me at 512/864-2971. 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, Ac � o f�of a Hy nd Rock ey: Title: A1layv r Date: tit • i0 • ! l MMA Senior Account Manager Senior Underwriting Consultant Aetna Is the brand name used for products and services provided by one or more of the Aetna group of subsidlary companles. The Aetna companles that offer, underwrlte or administer benefit coverage Include: Aetna Health Inc., Aetna Health of Californla Inc., Aetna Dental Inc., Aetna Dental of California Inc., Aetna Health Insurance Company, Health Insurance Company of New York, Aetna Life Insurance Company (Aetna). In Maryland, by Aetna Health Inc., 151 Farmington Avenue, Hartford, CT 06156. Each insurer has sole flnanclal responsibility for Its own products. Health benefits and health Insurance plans contaln limitations and exclusions. Policy form numbers Include GR-9/GR-9N, GR -23, GR-29/GR-29N, GR -700-W, and/or GR -88435 and/or GR -96476. �-tit-tt��o�Iog1 Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Administrative Fees Parameters Contractholder Number - 819919 • Servlces Agreement The contract period begins on the effective date of January 01, 2012 and will be applicable for a 12 month period. ("Contract") Perlod This contract may be renewed for two additional 12 -month periods provided both parties agree. • Enrollment and Funding Assumptlons ■ Self -Funded Fee Guarantee • Advance Notiflcation of Fee Change • Guarantee Parameters ■ Run -Off Claims Processing ■ Late Fee Payment Aetna Standards • ALIC Rewrite 10/11/2011 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. Based on this census information and the subsequent access analysis, we have assumed that approximately 777 employees will be enrolled for dental 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 assumed enrollment in each coverage: Coverage Assumed Enrollment PPO Dental 777 Total Dental Enrollment 777 The mature fees are guaranteed according to the per employee per month fees as illustrated on the financial exhibits. We will notify City Of Round Rock of any fee change at least 31 days prior to the effective date of fee change. 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 Rods will be required to pay any difference between the fee colk the new fees calculated. Aetna may recalculate: 1. If, for any product: a. There is a 15% change 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 2.16. c. The change in number of processed claim transactions (PCTs) per employee is greater than 15%. We have assumed 3.44 PCTs per employee per year. We define a PCT for dental benefits as any transaction transaction with respect to a benefit request or predetermination of dental benefits for expenses incurred or expected to be incurred by one daimant 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. 2. If there is a material change in the plan of benefits initiated by City Of Round Rods or by legislative or regulatory actior 3. If there is a material change initiated by City Of Round Rock or by legislative or regulatory action in the daim payment requirements or procedures, account structure, or any change materially affecting the manner or cost of paying benefits and/or administering the plan. 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. If City Of Round Rock does not cover benefit payments in a timely manner as provided in the Agreement, to pay service fees in a timely basis as provided in such Agreement, Aetna will assess a late payment charge. The current charges are: - late funds to cover benefit payments (e.g., late wire transfers after 24-hour request): 12.0% annual rate - late payments of service fees after 31 day grace period: 12.0% annual rate Aetna will provide written notice to City Of Round Rock of any change in late payment charges. 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. Aetna rewrote our standard description of benefits. We began using the revised version in 2008. The revisions affect documents that support Aetna's Traditional Medical (including Traditional Choice, Open Choice, Managed Choice and Open Access Managed Choice), Dental, Group Insurance and Pharmacy product lines. New customers receive documents on the new forms as they are implemented into Aetna's e.Publishing system. Renewing customers will receive updated contracts on renewal, as they have revisions, over a two-year contract www.aetna.com Dental Assumptions ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 renewal cycle. Please contact your account manager for further information on the changes. • Seed Money Contractholder Number -819919 Aetna will periodically assess the need for and sufficiency of any Payment Fund and may direct a plan sponsor to deposit additional amounts to an existing Payment Fund or, if none exists, establish a Payment Fund/Seed Money or Letter of Credit. • Broker/Consultant The quoted fees do not include broker/consultant compensation. Compensatlon Programs and Services: • Claim Fiduciary (Opt 4) Our quoted administrative fees assume Aetna provides mandatory Levels 1 and 2 appeals, writes the letter to the employee to communicate the uphold or overtum prior decision. Aetna is claim fiduciary on Levels 1 and 2 appeals and 6demal Review Options, if applicable. Aetna defends any lawsuit originating or after completion of the first two levels of appeal. The Customer provides a voluntary appeals process after Aetna completes the mandatory two levels of appeal. The Customer assumes fiduciary responsibility for appeals that go through this final voluntary level of appeal. The Customer defends litigation for any claims going through this voluntary appeals process. • Data Transfer at Termination • Third -Party Audits • Additlonal Products and Services 10/11/2011 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. While in most cases we do not request reimbursement for intemal costs associated with a thins -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. 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 maters 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. www.aetna.com Dental Assumptions ASC Medical Performance Guarantees City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 General Performance Guarantee Provisions Aetna Life Insurance Company (ALIC) provides health benefits administration and other services for the self-funded Choice POS II.The services set forth in this document will be provided by ALIC (hereinafter "Aetna"). Performance Objectives Aetna believes that measuring the activities described below are important indicators of how well we service City Of Round Rock (hereinafter "Customer'). Aetna is confident that the Plan Administration, Claim Administration and Member Services provided to Customer will meet their high standards of performance. To reinforce Customers confidence in Aetna's ability to administer their program, Aetna is offering guarantees in the following areas: Claim Administration Turnaround Time Financial Accuracy Payment Incidence Accuracy Member Services Average Speed of Answer (ASA) Abandonment Rate Guarantee Period The guarantees described herein will be effective for a period of 12 months and will run from 01/01/2012 through 12/31/2012 (hereinafter "guarantee period"). The performance guarantees shown below will apply to the Choice POS II administered under the Administrative Services Only Agreement ("Services Agreement"). These guarantees do not apply to non -Aetna benefits or networks. If Aetna processes runoff claims upon termination of the Services Agreement, performance guarantees of Turnaround Time, Financial Accuracy,and Total Claim Accuracy will not apply to such claims. Further, performance guarantees described herein will not apply to the guarantee period claims if termination is prior to the end of the guarantee period. Aggregate Maximum In total, Aetna agrees to place 10% of its applicable guarantee period administrative service fees at risk (hereinafter "guarantee period administrative service fees at risk or fees at risk") through the Performance Guarantees outlined in this document. The guarantee period administrative service fees will be based on Aetna -only services (excludes services such as outside vendor services, commissions, etc.) calculated at the end of the guarantee period and will be based on the total number of employees actually enrolled in the Choice POS II medical plans throughout the guarantee period. In no event will fees be adjusted by more than 10% due to the results of this guarantee and all other guarantees combined. Termination Provisions Termination of the guarantee obligations shall become effective upon written notice by Aetna in the event of the occurrence of (i), (ii) or (iii) below: (i) a material change in the plan initiated by Customer or by legislative action that impacts the claim adjudication process, member service functions or network management; (ii) failure of Customer to meet its obligations to remit administrative service fees or fund the Customer bank account as stipulated in the General Conditions Addendum of the Services Agreement; (iii) failure of Customer to meet their administrative responsibilities (e.g., a submission of incorrect or incomplete eligibility information). 10/11/2011 www.aetna.com Performance Guarantee Medical Performance Guarantees City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 No guarantees shall apply for a guarantee period during which the Services Agreement is terminated by Customer or by Aetna. Refund Process At the end of each guarantee period, Aetna will compile its Performance Guarantees results. If necessary, Aetna will provide a "lump sum" refund for any penalties incurred by Aetna. Measurement Criteria Aetna's intemal quality results for the unit(s) processing Customer's claims will be used to determine guarantee compliance for any Financial Accuracy and/or Total Claim Accuracy Guarantees. Claim Administration Turnaround Time Guarantee: Aetna will guarantee that the claim turnaround time during the guarantee period will not exceed 10 calendar days for 90% or the processed claims on a cumulative basis each year. Definition: Aetna measures tumaround time from the claimant's viewpoint; that is, from the date the claim is received in the service center to the date that it is processed (paid, denied or pended). Weekends and holidays are included in turnaround time. Penalty and Measurement Criteria: If the cumulative year tumaround time (TAT) exceeds the day guarantee as stated above, Aetna will reduce its compensation by an amount equal to 0.2% of the guarantee period administrative service fees for each full day that Tumaround Time exceeds 10 calendar days for 90% of all claims. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. A computer generated turnaround time report for the processing site that handles Customer's specific claims will be provided on a quarterly basis. Financial Accuracy Guarantee: Aetna will guarantee that the guarantee period dollar accuracy of the claim payment dollars will be 99.0% or higher. Definition: Financial accuracy is measured by the dollar amount of claims paid accurately divided by the total dollars paid. Aetna considers each underpayment and overpayment an error; Aetna does not offset one by the other. Penalty and Measurement Criteria: Aetna will reduce its compensation by an amount equal to 0.2% of the guaranteed period administrative service fees for each 1% that financial accuracy drops below 99.0%. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Aetna's audit results for the unit(s) processing Customers claims will be used. The results will be based on Aetna's applicable Quality Assessment Policy in effect at the time of the audit. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Payment Incidence Accuracy Guarantee: We will guarantee that the guarantee period payment incidence accuracy will be 96.0% or higher. Definition: Payment incidence accuracy is measured by the number of correct payments divided by the total number of payments audited. 10/11/2011 www.aetna.com Performance Guarantee Medical Performance Guarantees. City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Penalty and Measurement Criteria: Aetna will reduce its compensation by 0.2% of the guarantee period administrative service fees for each 1 % that payment incidence accuracy drops below 96.0%. There will be a maximum reduction of 2% of the guarantee period administrative service fees Contractholder Number - 819919 Aetna's audit results for the unit(s) processing Customers claims will be used. The results will be based on Aetna's applicable Quality Assessment Policy in effect at the time of the audit. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Member Services Average Speed of Answer Guarantee: Aetna will guarantee that the average speed of answer for the site(s) providing Customer's member services will not exceed 30 seconds. Definition: On an ongoing basis, Aetna measures telephone response time through monitoring equipment that produces a report on the average speed of answer. Average speed of answer is defined as the amount of time that elapses between the time a call is received into the telephone system and the time a representative responds to the call. The result expresses the sum of all waiting times for all calls answered by the queue divided by the number of incoming calls answered. ASA measures the average speed of answer for all callers answered. Interactive Voice Response (IVR) system calls are not included in the measurement of ASA. Penalty and Measurement Criteria: Aetna will reduce its compensation by 0.2% of the guarantee period administrative service fees for each full second that the average speed of answer exceeds 30 seconds. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Aetna's results for the site(s) providing member services for Customer will be used. Results for the HMO, QPOS, USAccess plans will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Abandonment Rate Guarantee: Aetna will guarantee that the average rate of telephone abandonment for the site(s) providing Customers member services will not exceed 3%. Definition: On an ongoing basis, Aetna measures telephone response time through monitoring equipment that produces a report on the average abandonment rate. The abandonment rate measures the total number of calls abandoned divided by the number of calls accepted into the site Penalty and Measurement Criteria: Aetna will reduce its compensation by 0.2% of the guarantee period administrative service fees for each 1 % that the average abandonment rate exceeds 3%. There will be a maximum reduction of 2% of the guarantee period administrative service fees. Aetna's results for the site (s) providing member services for Customer will be used. Results for the HMO, QPOS, USAccess plas will be tracked and reported separately from the PPO, EPO, POS and Indemnity plans. Therefore, results and penalties will be reconciled separately based upon the applicable coverage level guarantee period administrative service fees. Please have an authorized individual sign the performance guarantee ASC amendment letter, signifying your acceptance of the arrangement, and retum the original to us for our files. 10/11/2011 www.aetna.com Performance Guarantee Aetna Medical and Pharmacy Integration Benefits 10/11/2011 Streamlining your healthcare with Aetna Pharmacy Management Aetna Pharmacy Management provides full pharmacy benefit management services. Our clinical focus and vigilance in helping to promote health care quality was recognized by URAC, an independent accrediting organization. We are accredited in both Pharmacy Benefits Management and Drug Therapy Management. Aetna is one of only four organizations to achieve this dual accreditation. Aetna's pharmacy program provides: ■ Advanced clinical programs and resources to help manage costs. ■ Experienced pharmacy account management and customer support. ■ Leading online tools to help Aetna members make informed decisions. ■ Pharmacy discounts and rebates. ■ An extensive pharmacy network. • Access to advanced mail-order and specialty pharmacy services. When you partner Aetna prescription drug benefits with Aetna medical benefits, your healthcare outcome is enhanced because the two plans work together to promote clinically appropriate, cost-effective care. Our advanced medical and pharmacy integration capabilities provide customers and members with key benefits: Advanta, es of Inte, rated Aetna Medlcal 8 Pharmac Easier member service experience ■ ene ID card or both me.ica an. pharmacy •ene its ■ High -deductible health plan funds integrate with our medical HMO and PPO plans, allowing better coordination of benefits ■ One health benefits company reaching out to members with targeted program and health information ■ Member access to detailed medical and pharmacy claims information, including drug names and explanations of benefits — through Aetna Navigator, our secure member website ■ Coordinated precertification and other policies improve and simplify patient care Efficient healthcare management ■ Focus on managing overall healthcare spend ■ Enhances Aetna's disease management program leading to healthier outcomes ■ Aetna Specialty Pharmacy healthcare professionals reach out to help specialty pharmacy members have the right medication, education and support they need. ■ Medical diagnosis and other clinical parameters allows quick ad udication of claims at •oint-of-service Our studies have shown that integrated medical and pharmacy benefits result in improved health outcomes by allowing an overall approach to our members' treatment plan. With Aetna's focus on member wellness and disease management, our integrated medical and prescription drug plans work together to achieve our goal of healthier membership. www.aetna.com Medical APM Integration Stop Loss - Aetna Competitive Advantage City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Contractholder Number - 819919 Features and Benefits of Aetna Stop Loss Insurance Aetna Stop Loss Insurance offers a number of features and benefits to the customer. This is what The Aetna Advantage" is all about - how we have differentiated ourselves from the competition. Aetna's Stop Loss product provides immediate reimbursement,* monthly budgeting feature, and coverage for mental health/substance abuse and transplant claims commonly excluded from Stop Loss policies. Each one of the features and benefits listed below in the "Features and Benefits" chart provides an important retum to customers and demonstrates "The Aetna Advantage." Features and Benefits Feature Benefit Com. =titive Advanta e Monthly budgeting feature for Aggregate Stop Loss allows for simple monthly budgeting and tracking of Stop Loss aggregate liability. Regular Stop Loss claim auditing and Medical Claim Management (MCM) programs help ensure tight adjudication of claims initially. In addition, ensures catastrophic daims are managed to an a • • ro• nate level. Automatic claims submission. No paperwork. Less variability in month-to-month costs and cash-flow advantages. Aetna's auditing and MCM avoid some claims that otherwise would have been paid. Aetna may pay some Stop Loss claims that a Third- Party carver would deny based on claims administration errors. Greater convenience and lower administrative charge. No chance of missing and failing to submit eligible claims. Often no monthly budgeting. Third -party carriers may "readjudicate' claims and may reject a significant % of dollars submitted, leaving the claims administrator and customer to recover disputed amounts. Paperwork to request reimbursement is often required. Claims administrators may charge extra for providing documentation to third -party carvers. Premier Product Offenng for Individual Stop Loss (state approval is required). No lasenng and reduced expenence loads for known catastrophic claims at renewal. Third -party Stop Loss carvers may load rates or laser at renewal for known catastrophic claims. *Immediate reimbursement is not available for claims that are not administered on Aetna claims systems. Individual and Aggregate Stop Loss reimbursements resulting from the inclusion of claims paid during the 3 month run out penod will be handled on a delayed year-end reimbursement basis. Medical claims that exceed the Individual Stop Loss Amount or Aggregate Limit dunng the first twelve months of the policy period will be handled on an immediate/monthly budget reimbursement basis. 10/11/2011 www.aetna.com SL -Aetna Competitive Advantage The Aetna Difference TAetnr 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. Aetna Can Make Your Job Easier... ■ Aetna's Broad Choice of Products and Services Helps Provide Comprehensive Coveraqe You know Aetna as a leader in medical 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, any of Aetna's programs will enhance the heath coverage you provide for your employees. Aetna hamesses the power of information to help you and your employees make better, more informed decisions. This helps control costs and helps keep your employees healthy and productive. Aetna offers a product portfolio aimed at balancing the needs of both employers and employees. We strive to maintain a competitive and comprehensive health portfolio of HMO and PPO -based products, as well as consumer -directed health plans. Aetna is committed to help facilitate access to high-quality, cost-effective care to produce healthier outcomes. ■ Plan Sponsor Services — Aetna Delivers a Total Service Experience We provide plan sponsors with customer -specific services so the plan functions smoothly. We designate a specific field office and account manager as the primary contact. Through ongoing communication with the Plan Sponsor, the account manager provides recommendations as employer needs grow or change. The account manager provides support for plan sponsors regarding their health coverage issues and benefits concems. ■ Online Tools — Easy -To -Use Technoloqv For Benefits Planninq, Eligibility, Enrollment And Billing Aetna offers an array of Intemet-based applications that are designed to make it easier for Plan Sponsors to do business with us. Aetna's e.Plan Sponsor MonitorTM is an easy-to-use online reporting tool that helps customers identify their health care spending pattems by providing access to standard reports as well as the ability to customize and create ad hoc reports. If you are an e.Plan Sponsor Monitor" customer, you can easily access the program online with a secure username and password. Plan sponsors who cannot access e.Plan Sponsor MonitorTM and who have 100 eligible enrolled subscribers will receive quarterly reports from Aetna's reporting tool that provide comprehensive statistics related to their plan and Aetna's book of business. If you are not yet an e.Plan Sponsor Monitore" customer, please feel free to contact us to leam more about our capabilities. Aetna Inteqrated Informatics and Medical Manaqement Proqrams — Healthier Outcomes and Cost Reduction One of Aetna's goals is to help members maintain their health as well as to identify the need for care in the early stages of a disease. Aetna Integrated Informatics, our data analysis subsidiary, uses predictive modeling and risk stratification to identify members for early outreach. By increasing the reach and impact of our proven medical services programs, Aetna continuously strives to connect care with individual needs. We are 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. Enrollment and Billing Solutions Customers with an HR system can use SecureTransportTM' to quickly and efficiently transmit eligibility information from their system to Aetna. Customers who do not have an HR system, can use EZenroll to process new hire enrollments, changes, and terminations or EZLinkTM for online enrollment, billing and electronic premium payment. Programs/Services Included in your Renewal ■ Aetna Health Connections Disease Manaqement 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 an 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. See below for additional information. ■ Aetna Navigator - We Support Members 24/7 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference XAetnr Aetna Navigator TM is a self-service website that provides members with 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. ■ MedQuerv® - Informatlon Sharing Helps Improve Quality And Safety Of Care Aetna's MedQuery® program is 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 is analyzed and the resulting information provides physicians with access to a broader view of a patient's clinical profile. The data that fuels this program includes claims history, current medical claims, pharmacy claims, physician encounter reports, patient demographics and evidence -based treatment recommendations. ■ Personal Health Record (PHR) We seek to empower consumers by helping them make better informed health 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). PHR can help members organize health information and actively participate in their health care. PHR combines detailed, claims - driven information gathered from across the health care spectrum such as physician offices, labs, diagnostic facilities 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. PHR features targeted messages and alerts to members, informing them of opportunities to improve their health and well-being as well as reminding them to consider altemative therapies, or waming them of potentially dangerous medication errors. While 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-in gaps by entering information not provided by claims data. In addition, through our innovative health questionnaires, Aetna will encourage members to maintain the accuracy of their information in PHR. To leam more about PHR please visit us at: http:/Mrww.aetna.com/makehistory/, or refer to the PHR brochure included within your renewal package. Additional Products & Service Offerings ■ Aetna Health Connections Get ActivelSM Aetna Health Connections Get Active!SM: Shape Up Challenqe plus Stay in Shape Fitness and Nutrition Tracking Program Aetna Health Connections Get Active!" provides a great way for plan sponsors to help employees of all health and fitness levels to get and stay motivated to improve their fitness and well-being. It features an online fitness and nutrition tracker, team -based competition, social networking, emails & newsletters, activity tracking reports, and the option to buy -up for a pedometer. Employees can select any or all program activity tracking categories: exercise hours, pedometer steps, or weight loss. The recommended team competition is 12 or 16 weeks in length. Additionally, the program includes the fitness and nutrition tracking program which provides members with an ongoing maintenance program following the challenge. Aetna Health Connections Get Active!SMShape Up Challenqe Proqram Aetna Health Connections Get Active!S"" provides a great way for plan sponsors to help employees of all health and fitness levels to get and stay motivated to improve their fitness and well-being. It features an online team -based competition, social networking, emails 8 newsletters, activity tracking reports, and the option to buy -up for a pedometer. Employees can select any or all program activity tracking categories: exercise hours, pedometer steps, or weight loss. The recommended team competition is 12 or 16 weeks in length. Aetna Health Connectlons Get Activel5M` Stay in Shape Fitness and Nutrition Tracking Proqram Aetna Health Connections Get Active!provides a great way for plan sponsors to help employees of all health and fitness levels to get and stay motivated to improve their fitness and well-being. The program features an online application that makes it easy for participants to track fitness and nutrition information. The social networking capability allows participants to communicate with fellow members and schedule group exercise activities, if desired. The social networking feature encourages team -building, program camaraderie, and most importantly - program engagement. ■ Aetna Affordable Health ChoicesSM — Provides Benefits To Non -Traditional Employees 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference In August 2004, Aetna 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 non -benefited 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. Our experience shows that offering these benefits reduces tumover in this population and therefore, positively impacts acquisition, hiring and training costs. Please contact your Account Manager if you would like more details. ■ Aetna HealthFund® — 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 give 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. ■ Aetna Inteqrated Programs — Benefits Work Better ... Together Aetna Integrated Health 8 Disabilitv (IHDI When Aetna's Medical and Disability benefits are taken together, they can be coordinated to provide a more efficient health care program. Aetna Integrated Health 8 Disability (IHD) is a concrete and compelling example of Aetna's strengths: innovation, information and integration. IHD links medical and disability case management together by utilizing Aetna's rich data management tools. This allows the right connections to be made 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 recover faster and retum 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. • Aetna Integrated Health Solutions"" (IHS) IHS is another innovative program that connects clinical services, claims data, and wellness resources across multiple products to positively impact members' health, improve workforce productivity, and manage healthcare as well as disability costs. Why is IHS needed? "Presenteeism", or on-the-job productivity loss that is illness related, is costing plan sponsors money. Research on employee health and wellness shows that presenteeism costs businesses $150 billion a year. Lost productivity is 7.5 times higher due to presenteeism than for absenteeism. IHS is uniquely aimed at addressing this need. The IHS continuum of fully -integrated services provides our medical, behavioral health, pharmacy, wellness and disability clinicians with a single, comprehensive view of each member's health and health needs. Customers receive integrated reports that pinpoint the health issues of greatest need and track the engagement and progress of employees toward better health. And because IHS helps members and health care professionals identify conditions at the earliest stages - when they are most treatable - recovery times improve, presenteeism and work-related absenteeism are addressed, and medical and disability costs are managed more effectively. Aetna has achieved remarkable results from its integrated programs initiated to date — medical and psychiatric case management, health and disability management, and medical and pharmacy management. Ultimately, showing the value of integrated care results in expected reduction in medical claim costs of 4% in year 1, 5% in year 2, and 6% in year 3. Aetna Dental/Medical Integration (DMI) Program Plan Sponsors with both medical and dental coverages under Aetna receive the DMI program at no additional charge. This program utilizes Aetna's unique data integration tools to identify at -risk members whose conditions have high cost/risk characteristics that could result in adverse health outcomes. The program focuses on members who have not had a recent dental visit and creates a complete health history for these members. By combining outreach programs, education materials and enhanced dental benefits, Aetna encourages these members to obtain dental care for an improved overall health outcome. At -risk members could include those with diabetes, coronary artery disease, cerebrovascular disease or pregnancy. ■ Life and Disabilitv Proqrams 8 Services 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference Life and disability insurance are important components in a comprehensive employee benefits package, providing peace of mind for employees and family members. Aetna's core offering of high-quality disability products and services — Short Term Disability (STD), Long Term Disability (LTD), and Absence Management including Family and Medical Leave Act (FMLA) — can be offered alone or in any combination. Within this core model are a variety of plan design options, service features and system capabilities that enable you to customize the plan to meet your needs. Included with Aetna's Basic, Voluntary, Supplemental or Dependents' Group Term Life Insurance plans is a new package of programs and services designed to enhance the value of our products for both employees and their family members by leveraging programs from Aetna's innovative health business. With Aetna Life Essentials, active employees and their families have access — at no additional cost -- to programs that help promote healthy, fulfilling lifestyles. In addition, Aetna Life Essentials provides critical support resources for often -overlooked needs at the end of life. These programs provide value for beneficiaries and their loved ones beyond the financial support from a death benefit. Here are highlights of Aetna's Life and Disability programs: - Discounts - If your employees enroll in an Aetna Disability and/or Life Insurance Plan our discount programs can be their ticket to the small luxuries that help keep them healthy and happy. - Aetna's differentiation in disability claim management - We view disabilities as health events, not just absences from work. As such, we have developed a market -leading approach that will retum your employees to health — and to work — sooner. - Workability® - Workability is our state-of-the-art integrated disability system. It is task, clinical outcome based system with smart logic. Workability is a single platform generating communications across your FML, STD and LTD claimants - An Employee Assistance Program (EAP) for Long Term Disability members - We are pleased to offer, as a value-added service in conjunction with our insured Group Long Term Disability policies, an EAP serviced and managed by Aetna Behavioral Health. It includes access for employees and immediate household members to unlimited phone consultations with EAP Aetna Life EssentialssM - Included with Aetna's Basic, Voluntary, Supplemental or Dependent's Group Term Life insurance plans is a package of programs and services designed to enhance the value of our products for both employer- and employee -paid .coverage. This program includes such valuable services as expert financial advice, access to legal services, and healthy lifestyle - Travel Assistance Program - To help minimize the stress of emergency situations you may encounter while traveling overseas on business or pleasure, we offer you and your dependents access to medical, travel, legal and financial assistance services through this program - Coordination of Premium Waiver - If Aetna covers both Life and long-term disability, we send premium waiver notification to the Premium Waiver Unit once an LTD claimant has met the predetermined qualifying period. ■ Medicare Advantaqe Plans Aetna has a wide range of health plan choices for plan sponsors to offer their Medicare retirees. Below are some of the plan options you may want to consider: - Medicare Advantaqe HMO Offers a large national provider network, worldwide emergency care, preventive health and wellness programs, optional dental benefits, online resources, value added services such as eyewear discounts and fitness club memberships. - Medicare Advantage PPO Offers flexibility to visit providers in -network or out -of -network, no annual or lifetime dollar maximums for in -network services, no copays for select in -network preventive services - Aetna's Supplemental Retiree Medical Plan Insurance Policies Aetna Supplemental Retiree Medical Plans are fully insured policies that mirror the standardized individual Medigap benefit plans, paying secondary to medicare. Aetna Supplemental Retiree Medical Plans do not utilize a provider networks, allowing members the flexibility to seek care from providers of their choosing. Discount programs for vision, fitness, weight management, dental and hearing are included. Medicare Prescription Druq Plans (PDP) A wide range of standalone PDPs are available under Aetna Medicare Rx. They range from plans that provide Standard PDP benefits to enhanced plans that fill in the Medicare PDP coverage gap. These plans are available nationwide. Medicare Advantage Prescription Drug Plans (MA -PD) Aetna's MA -PD Plans integrate our Medicare Advantage plans with our Prescription Drug plans in order to provide a complete health solution for members. MA-PDs also help simplify enrollment, billing and administration for both the plan sponsor and the member. For more information about Aetna's Medicare options or to request a quote, please call toll free 1-877-603-2061, or contact your account manager. ■ Vital Savinqs by Aetna SM - Dental Discount Card Program and Other Discounts 10/11/2011 www.aetna.com Aetna Difference ASC The Aetna Difference )Aetnr 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. Discounts on other services are also available. This program is NOT an Insurance plan. Participants simply present their Vital Savings ID card when they visit a participating dental office or other participating provider. Participants are responsible for payment of 100% of the fee directly to the provider at the time services are rendered. There are no claims submitted under this program. Discounts are the same as Aetna's Dental PPO discounts (average 30% nationally). 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. Vision — Participants can receive discounts on exams, eyeglasses, contact lenses and LASIK eye surgery through the Aetna Vision Discounts' program. Other Health Care Products and Services — Through Aetna's Vital Savings Program, discounts are available on many other health care services including chiropractic services, acupuncture, massage therapy, and nutritional counseling. Fitness — Participants can save on membership rates through independent health clubs contracted within the GlobalFitT"" network as well as save on certain home exercise equipment. Hearing Services — Discounts are available on exams and hearing aids. 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 is a monthly fee to purchase the Aetna Vital Savings program. Two billing options are available - a group billing option and an individual billing option. Vital Savings monthly fees may be eligible for pre-tax payroll deductions for employees/retirees under age 65 if the program is under the group billing option. For more information on discounts available or participating providers, please contact your account manager or visit online at www.vitalsavingsbyaetna.com. ■ Wellness Programs Implementing a solid and well -thought-out Wellness Strategy is key to infusing a supportive culture for plan sponsors. At Aetna, we are committed to taking steps to ensure that this future in health care strategy is realized. We are ready TODAY for this joumey and we invite our customers to join us. Aetna's Roadmap to Wellness Packages are simple, easy -to -implement wellness solutions for plan sponsors to ensure a successful and effective wellness strategy for their employees. In addition, the Roadmap is supported by a turn -key communications toolkit that enables a streamlined implementation and ongoing support for the plan sponsor's wellness strategy. To help plan sponsors choose the right wellness programs for their employees, we have grouped the Aetna Wellness offerings into three levels: Core, Enhanced and Premier. For specific pricing, please contact your account manager. 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 Califomia Inc., Aetna Dental Inc., Aetna Dental of California Inc., Aetna Health Insurance Company, Health Insurance Company of New York, Aetna Life Insurance Company (Aetna). In Maryland, by Aetna Health Inc., 151 Farmington Avenue, Hartford, CT 06156. Each insurer has sole financial responsibility for its own products. Health benefits and health insurance plans contain limitations and exclusions. Policy form numbers include GR-9/GR-9N, GR -23, GR-29/GR-29N, GR -700-W, and/or GR -88435 and/or GR -96476. 10/11/2011 www.aetna.com Aetna Difference ASC XAetna August 8, 2011 City Of Round Rock Karin Holland 221 East Main Street Round Rock, TX 78664 ADMINISTRATIVE SERVICES AGREEMENT NO. / ASC POLICYHOLDER NO. — 819919 Dear Ms. Holland: This letter agreement between City Of Round Rock (hereinafter "Customer") and Aetna Life Insurance Company (hereinafter "Aetna") amends the above captioned Administrative Services Agreement (Agreement). The Performance Guarantees attached to this letter agreement replace any Performance Guarantees in the Agreement for the Guarantee Period 01/01/2012 through 12/31/2012 (hereinafter "Guarantee Period"), effective 01/01/2012. Aetna is committed to providing quality administrative services to Customer, and we would like to emphasize our degree of commitment through the attached Performance Guarantees. The attached Performance Guarantee agreement describes the Performance Guarantees in detail. Please sign this letter agreement and return it to us by 11/02/2011, indicating your acceptance of the Guarantees. If this letter is not signed and returned by 11/02/2011, it is assumed that Customer is in agreement with the Performance Guarantee offerings, Performance Objectives, and amounts at risk if the Performance Objectives are not met. Guarantee Measure Turnaround Time Financial Accuracy Payment Incidence Accuracy Average Speed of Answer (ASA) Abandonment Rate Performance Objective Maximum at Risk 90% in 10 days 99.0% or higher 96% or higher 30 seconds 3.00% Total at Risk 2.00% 2.00% 2.00% 2.00% 2.00% 10.00% IN WITNESS WHEREOF, AETNA has signed this amendment to become effective 01/01/2012. Signed by Aetna on 08/09/2011 Senior Underwriting Consultant Sig City Of Round Rock on L(•to•l( Signature 10/11/2011 www.aetna.com Offibial Title Performance Guarantee Letter Administrative Service Fees ASC City of Round Rock Renewal Period: 1/1/12 through 12131112 Contractholder Number - 819919 • The below Administrative Service Fees will become effective 1/1/12. • The fees below exdude 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 2 appeals. City of Round Rock performs claim fiduciary for voluntary appeals after Levels 1 & 2 are exhausted (Option 4). • Aetna Health Connections is induded in the below ASC medical fees. • MedQuery is induded in the below ASC medical fees. • Simple Steps to a Healthier Life is induded in the below ASC fees. • Beginning Rights"" Matemity 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 0%. • Consulting Fee, if applicable, is subject to Plan Sponsor approval. Service Fee Comparison Projected Number of Enrolled Employees Choice II/APM 756 Dental 777 Vision 756 Current Period Projected Period 1/1/11-12131111 1/1/12-12/31112 % Change Administrative Service Fees as Billed Choice II/APM (PEPM) Dental (PEPM) Vision (PEPM) Administrative Service Fees as Total Contract Period Dollars 33.32 4.39 1.00 34.75 4.43 1.00 Choice II/APM 302,279 315,252 Dental 40,932 41,305 Vision 9,072 9,072 Total Service Fee 10/11/2011 4.3% 0.9% 0.0% $ 352,283 $ 365,629 3.8% www.aetna.com ASC Fees Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Contractholder Number - 819919 Programs and Services We have provided a list, by product, of those programs and services that are induded 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, Kendra Hoduski. Programs and services that are not available for particular products are identified as WA. 10/11/2011 www.aetna.com Program & Services ASC Choice® P0511 Aetna Pharmacy Mgmt PPO Dental General Administration Account Management Induded Included Included Customer Team Services Included Included Included Banking Included Included Included - AltemateStockpding Induded Induded Included Communication Matenais Included Included Included Eligibility (Standard) Included Included Included Customized Forms $ $ $ Printing of Booklets or Certificates $ $ $ Claim Fiduciary & Extemal Review (Details on Financial Assumption Tab) Included N/A $ HIPAA Administration Included N/A WA Claims Subrogation Included N/A N/A �Clalm & Member Services /aim Administration Included Included lnoluded v1ember Services Induded Included Included ftetwork Administration Network Management Included Included Included Provider Relations Included Included Included National Advantage Program Included N/A N/A - Facility Charge Review Included N/A N/A - Itemized Bill Review $ N/A N/A Rural PPO Network Program $ N/A N/A Dental Medical Integration (DMI) N/A N/A Included Network Access Servlces Medical Network Discount (also known as VBM, Details on Medical Network Access Charge of Financial Assumption Tab) $ N/A N/A Dental Network Discount (PPO 11) N/A N/A $ �atient Management Precertification Included Included Included High Tech Radiology Precertification and Steerage $ N/A N/A Case Management Included N/A Included Concurrent Review Included N/A N/A Discharge Planning Included N/A N/A Aetna Compassionate Care Program Included N/A N/A National Medical Excellence Included N/A N/A Rx Step Therapy N/A $ N/A Save-A-Copay N/A Included N/A Rx Check N/A $ N/A Therapeutic Class Management (TCM) Programs - Non Sedating Antihistamines (NSAs) N/A $ N/A - Antifungals N/A $ N/A - Proton Pump Inhibitors (PPIs) N/A $ f N/A I (Wellness & Health Management Aetna Health Connections. Disease Management Included N/A N/A MedQuery� with Standard Member Messaging Included WA N/A - Enhanced Member Messaging $ N/A N/A Healthy Lifestyle Coaching $ N/A N/A Simple Steps To A Healthier Life e Included N/A N/A 10/11/2011 www.aetna.com Program & Services ASC Programs and Services City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 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, Kendra Hoduski. Programs and services that are not available for particular products are identified as NIA. 10/11/2011 www.aetna.com Program & Services ASC Choke® POS II Aetna Pharmacy Mgmt PPO Dental Simple Steps To A Healthier Life° Reward Tradtina $ N/A N/A CareEngine® Personal Health Record $ N/A N/A Wellness Counseling $ N/A N/A Healthy Body, Healthy Weight Program $ N/A N/A Beginning Right (formerly Mom -to -Babies) Included N/A N/A Quit Tobacco Program $ N/A N/A Informed Health° Line - Nurseline (800 #) only Included N/A N/A Informed Health ° Line - Plus $ N/A N/A falue Add Programs Fitness Program (GlobalFit) Included N/A N/A Aetna Natural Products & Services Program Induded N/A N/A EPIC Dental Discount Program Included Included Included Vision One° Discount Program Included N/A N/A (Standard Behavioral Health Focused Psychiatric Review N/A N/A N/A Managed Behavioral Health Included N/A N/A - Med/Psych Program $ N/A N/A IBehavIoraI Health Disease Management rograms (Must have both Medical & BH with etna) - Alcohol Disease Management $ N/A N/A - Anxiety Disease Management $ N/A N/A - Depression Disease Management $ N/A N/A Case Management Behavioral Health Programs - Intensive Case Management Included N/A N/A Member Internet Services Public Sites DocFind° Included Included Induded InteliHealth® Included $ Included Included Pharmacy Information Included Induded Leaming Resources Included Included Included Secure Sites Relay HeeIM Included $ WA Staying Healthy Induded Included Included Estimate the Cost of Care Tool Induded Included Included Claim Research/Fo ms/Contact us Included Induded Included Spanish version Included Included Included f Ian Sponsor Internet Servkes e.PlanSponsor Monitor T"" Reporting Aetna Integrated Informatics' - Level A Reporting Included Included Included - Level B Reporting Included Included Included - Level C Reporting $ $ $ - Level D Reporting $ $ $ - Disease Management Activity Report (DMAR) Induded N/A N/A - Ad hoc Reporting (5 hours/calendar year for 100 to 2999 medical ees or ,x/dental standalone product with any enrollment, 10 hours/calendar year for 3000 to 4999) Included N/A N/A Third Party Stop Loss Reporting $ N/A N/A Petna Navigator Reporting Included N/A N/A 10/11/2011 www.aetna.com Program & Services ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Administrative Fees Parameters: Contractholder Number - 819919 This renewal package is made and offered by Aetna Life Insurance Company (hereinafter "Aetna") specifically for City Of Round Rock (hereinafter "Customer"). • Services Agreement The contract period begins on the effective date of January 01, 2012 and will be applicable for a 12 -month period. This contract may be renewed for two additional 12 -month periods provided both parties agree. • Enrollment and Funding Assumptions ■ Self -Funded Fee Guarantee • Financial Condition ■ Health Care Reform Disclosure 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. Based on this census information and the subsequent access analysis, we have assumed that approximately 756 employees will be enrolled for medical or pharmacy 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 assumed enrollment in each coverage: Coverage Assumed Enrollment Choice POS II 756 (Total Medlcal Enrollment 756 (Aetna Pharmacy Management 1 756 The mature fees are guaranteed according to the per employee per month fees as illustrated on the financial exhibits. Customer is a legitimate business and meets underwriting approval for acceptable financial strength. Aetna reserves the right to request additional supporting information in order to evaluate financial status. This renewal is intended to be compliant with healthcare reform. The Federal govemment released regulations related to grandfathering of health plans in existence on March 23, 2010. Under the health care reform legislation, health plans existing prior to the enactment of the legislation may be "grandfathered" and not subject to some of the mandated benefits and reform provisions. Changes in your benefit design as well as your contribution strategy may affect grandfathering. Plan sponsors are required to notify Aetna if their contribution rate changes for a grandfathered plan at any point during the plan year. This renewal offering assumes your plan is not grandfathered. As a non -grandfathered plan, the plan will include Preventive care as defined by regulation without cost sharing on In Network services Except for specific and limited scenarios described as transitional rules in the health care reform legislation, if a plan's grandfathered status has been lost, it cannot be regained. If, after reviewing the grandfathering rules with your benefit consultant or counsel, Customer determines that their coverage could be or is grandfathered, and they want to retain grandfathered status, they should contact Aetna for further instructions. Any taxes or fees (assessments) applied to self-funded benefit plans related to The Patient Protection and Affordable Care Act (PPACA) will be solely the obligation of the plan sponsor. The administrative service fees that Aetna is presenting do not include any such plan sponsor liability. The benefits and rates within this proposal are subject to change pending any required approvals from state or federal regulatory agencies. If you have questions, please contact your Account Manager. Aetna reserves the right to modify its products, services, rates and fees, in response to legislation, regulation or requests of govemment authorities resulting in changes to plan benefits and to recoup any material fees, costs, assessments, or taxes due to changes in the law even if no benefit or plan changes are mandated. • Executive Medical Plans The Patient Protection and Affordable Care Act (PPACA) prohibits insured group health plans that are not 10/11/2011 www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 grandfathered from discriminating in favor of highly compensated employees as to benefits and eligibility. This rule will become effective after additional regulatory guidance is issued in the future. Employer penalties for violating the rule include a $100 per day penalty multiplied by the number of those individuals "discriminated against." If you think your plan may be discriminatory under PPACA, we urge you to monitor the rulemaking process and contact your tax counsel for further guidance. Aetna does not conduct discrimination testing and is not responsible for an employer's compliance with this PPACA non-discrimination rule. • Advance Notification of Fee Change • Performance Guarantee • Guarantee Parameters ■ Run -Off Claims Processing 10/11/2011 Contractholder Number - 819919 Guidance issued by the Intemal Revenue Service ("IRS"), Department of Labor ("DOL"), and Department of Health and Human Services ("HHS") has indicated that "retiree only" plans are exempt from the new benefit mandates under PPACA including Medical Loss Ratio ("MLR") and rebate requirements for fully insured plans. In order to demonstrate the establishment of a retiree only plan, a plan must maintain, separately from the plan for current (i.e., active) employees, a separate plan document and Summary Plan Description (SPD) and file a separate Form 5500. If you have a retiree only plan, in order to be considered exempt, please submit a retiree only certification form and required documentation to Aetna. We will notify Customer of any fee change at least 120 days prior to the effective date of fee change. We will put 10% of our Medicall/Pharmacy annualized administrative service fees at risk through PerformanceGuarantees. The annualized administrative service fee will be calculated at the beginning of the contract period and will be based on the total number of employees enrolled in the medical/pharmacy plans throughout the guarantee period. This guarantee does not apply to non -Aetna benefits or networks. Aetna reserves the right to recalculate the guaranteed fees to take effect on the date a contingent event described below occurs. In such case, Customer will be required to pay any difference between the fees collected and the new fees calculated. Aetna may recalculate: 1. If, for any product: a. There is a 15% change in the number of employees from our enrollment assumptions by site or by product, or from any subsequently reset enrollment assumptions. The enclosed medical and dental fees assume Aetna is the administrator for the medical and dental product(s) for the policy year. If Aetna is not the administrator for the medical and dental product(s), the enclosed fees and guarantees are subject to change. b. The change in member -to -employee ratio is greater than 15%. We have assumed a member -to -employee ratio of 2.01. c. The change in number of processed claim transactions (PCTs) per employee is greater than 15%. We have assumed 25.85 PCTs per employee per year. We define a 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, induding but not limited to benefit payment, benefit denial, pended request or decision on an appeal of a denied benefit request. d. There is a 15% increase in the retiree percentage from that assumed or from any subsequently reset assumptions. We have assumed that 0% of the enrolled employees are over -65 retirees. 2. If there is a material change in the plan of benefits initiated by Customer or by legislative or regulatory action. 3. If there is a material change initiated by Customer 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. 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 services agreement. www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 • Late Fee Payment Aetna Standards: • ALIC Rewrite • Seed Money ■ Altemate Stockpile • Broker/ Consultant Compensation Prescription Drug Benefits: • Rebates Direct Member • Reimbursement (DMR) Aetna Specialty CareRxSM Aetna Specialty • Pharmacy® 10/11/2011 Contractholder Number - 819919 If Customer does not cover benefit payments in a timely manner as provided in the agreement, and/or fails to pay service fees in a timely basis as provided in such Agreement, Aetna will assess a late payment charge. The current charges are: - late funds to cover benefit payments (for example, late wire transfers after 24-hour request): 12.0% annual rate - late payments of service fees after 31 -day grace period: 12.0% annual rate Aetna will provide written notice to Customer of any change in late payment charges. 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. Aetna rewrote our standard description of benefits. We began using the revised version in 2008. The revisions affect documents that support Aetna's Traditional Medical (including Traditional Choice, Open Choice, Managed Choice and Open Access Managed Choice), Dental, Group Insurance and Pharmacy product lines. New customers receive documents on the new forms as they are implemented into Aetna's e.Publishing system. Renewing customers will receive updated contracts on renewal, as they have revisions, over a two-year contract renewal cycle. Please contact your account manager for further information on the changes. Aetna will periodically assess the need for and sufficiency of any payment fund and may require a plan sponsor to deposit additional amounts to an existing payment fund or, if none exists, establish a payment fund/seed money or letter of credit. Aetna's standard stockpiling arrangement is to request payment from the plan sponsor via funds transfer once claims reach a $20,000 threshold. Alternate Stockpiling arrangements, such as funds transfers on a specific frequency or with a higher limit, will incur an Altemate Stockpiling charge. Customer currently has an Alternate Stockpile arrangement, a nonstandard funds transfer arrangement with Aetna. The estimated charge for this service for 2012 is $1,961. This amount has been built into the per employee per month administrative service fees for 2012. The final actual charge will be presented as due along with the 2012 annual accounting and reconciled against actual payment collected. The quoted fees do not include broker/consultant compensation. Our renewal quote assumes that prescription drug benefits are included and will be provided through Aetna Pharmacy Management as described on the Service and Fee Schedule and the Specialty Addendum. In this renewal, Aetna has elected to retain all rebates to help offset medical and pharmacy fee costs. DMR is a surcharge applied to Pharmacy claims (incurred in or out -of -network) which are submitted by eligible Plan Participants to Aetna and processed separately. These claims are not adjudicated online at the point of service subject to the Cost Share. They are paid for in full by the Plan Participant. For 2012, the charge is $2.10 per DMR script. Processing fees are subject to change on an annual basis. Aetna Specialty CareRx refers to a pharmacy benefit plan design for certain specialty drugs. You may get your first fill of these drugs at a retail pharmacy. To achieve best coverage, all refills must come from an in -network specialty pharmacy, like Aetna Specialty Pharmacy. Your plan may require you to get your refills through Aetna Specialty Pharmacy. Please refer to your plan documents to leam more. Aetna Specialty Pharmacy is is a subsidiary of Aetna. It offers specialty medications and ongoing support for members with certain high-cost, high-risk chronic health conditions. With Aetna Specialty Pharmacy, you get a www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Contractholder Number - 819919 Renewal Rate Period: 01/01/2012 through 12/31/2012 personal care plan and ongoing support. - Nurses and pharmacists who specialize in your needs can offer help 24 hours a day, every day. - Care coordinators work with you to help your order process quickly. - Insurance and claims specialists help you to maximize your benefits plan. - Service representatives reach out to you or your doctor to set up your refills Aetna Specialty Pharmacy offers other helpful services, including: - Free, secure delivery within 48 hours of confirming your order, or later if you request. - Delivery to your home, doctor's office or any other location you choose. - Package tracking to ensure prompt delivery of your order. - Self -injection training/education about your condition and medication. - Flexible payment options for out-of-pocket costs, when necessary. - Free injection supplies, such as needles, syringes, alcohol swabs, adhesive bandages and Sharps containers for needle waste, if needed. Our renewal quote does not include Aetna Specialty Pharmacy. Please contact your account manager for more details. Programs and Services: • Claim Fiduciary (Opt. 4) Our quoted administrative fees assume Aetna provides mandatory Levels 1 and 2 appeals, writes the letter to the employee to communicate the uphold or overtum prior decision. Aetna is claim fiduciary on Levels 1 and 2 appeals and Extemal Review Options, if applicable. Aetna defends any lawsuit originating or after completion of the first two levels of appeal. The Customer provides a voluntary appeals process after Aetna completes the mandatory two levels of appeal. The Customer assumes fiduciary responsibility for appeals that go through this final voluntary level of appeal. The Customer defends litigation for any claims going through this voluntary appeals process. • Aetna Health Connections Disease Management • MedQuery 10/11/2011 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 comorbidities 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 indudes 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 MedQuery program is included in your self-funded medical fees. MedQuery is a program that uses member data such as medical daims, 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. MedQuery is included in the self-funded medical fees. 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 induded. Our MedQuery Expanded Member Messaging program is also available as an option to our MedQuery program. Our MedQuery Expanded Member Messaging program is offered to those members who are not www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 • Personal Health Record (PHR) • National Advantage Program ■ Facility Charge Review Program • Mental Health/ Substance Abuse Benefits ■ Federal Mental Health Parity • External Review 10/11/2011 Contractholder Number - 819919 participating in Aetna Health Connections Disease Management program. MedQuery Expanded Member Messaging can be included for an additional $0.20 per employee per month for our self-funded medical products. Powered by the patented Aetna Care Engine®, provides members with online access to personal information, including health alerts, detailed health summary, and integrated information and tools to help members make informed decisions about their health care. Aetna's Care Engine -powered PHR combines detailed, claims -driven information gathered from across the health care spectrum, such as physician offices and hospitals, labs, diagnostic treatment and pharmacies, and adds member -reported health information to build a comprehensive health profile that the member can share with his or her doctor. Aetna's Care Engine -powered PHR applies to all Funding Arrangements and all medical products. MedQuery and the Informed Health Line 1-800# are required when implementing PHR. Our PHR program is available as an option and can be included for an additional $0.50 PEPM. Aetna's National AdvantageTM Program allows plan sponsors access to contracted rates for many medical claims that otherwise would be 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, ancillary providers, and physicians accessed through vendor arrangements where Aetna does not have direct contractual arrangements. The average savings to our customers from NAP — 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 Customer. Instead, the fee for NAP is a percentage of savings. It is automatically charged to Customer as part of their claim charges. The fee is charged only if savings are achieved. For Customer, the NAP fee is 50 percent and has been assumed for this proposal. The Facility Charge Review program (FCR) is an additional feature of the National Advantage Program (NAP) for self-funded plans that has been induded 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 available only in conjunction with NAP and is not available seperately. The fee for the Facility Charge Review feature is 50 percent of savings and is not included in the per employee per month fee. A listing of participating NAP health care professionals and facilities is available through our DocFincr, online directory at www.aetna.com. We will recalculate Customers 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. Our renewal quote assumes that mental health/chemical dependency benefits are included. The Federal Mental Health Parity and Addiction Equity Act of 2008 applies to fully insured traditional and HMO Middle Market (MM) & National Accounts (NA) commercial plans as well as self-funded Traditional and HMO MM & NA commercial plans for plan years beginning on or after October 3, 2009. This means many calendar year plans were required to comply with the Act by Jan. 1, 2010. The new Interim Final Regulations apply to plan years beginning on or after July 1, 2010, so calendar year plans must comply with the regulations by January 1, 2011. However, given that this is a self funded plan, it is ultimately up to the plan sponsor to comply with federal Mental Health Parity. We can continue to make our recommendation regarding application and how we think their plan should be designed in order to comply but we are not in the position to provide self funded plan sponsors legal advice. Therefore, the plan sponsor should speak to their own legal counsel and make the final determination related to compliance with Federal Mental Health Parity. Extemal Review is offered as an option to self-funded customers. External Review uses outside vendors who coordinate a review through their network of outside reviewers. www.aetna.com Financial Assumptions ASC ASC Financial Assumptions City Of Round Rock Renewal Rate Period: 01/01/2012 through 12/31/2012 Customers who ask Aetna to assume claim fiduciary responsibility will have this service included at no additional charge. Aetna will administer the plan in compliance with the Federal extemal review process. 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. Grandfathered plans and retiree -only plans do not have to comply with the new extemal review rules. Aetna can continue to administer these plans under the current guidelines. Customers with grandfathered plans and retiree - only plans (group plans with fewer than two current employees) should provide Aetna with written notification if they want to move to the new Federal external review process. Unless we receive notification of your intent to move to the Federal external review process, Aetna will continue to administer extemal review for your plan in accordance with your current amendment. • Claims Subrogation • Data Transfer at Termination • Third -Party Audits ■ Health Insurance Portability and Accountability Act (HIPAA) ■ Medical EOB Suppression • Additional Products and Services 10/11/2011 Contractholder Number - 819919 Aetna has entered into an agreement with the firm of Rawlings & Associates to provide comprehensive subrogation services. A contingency fee of 30% is retained upon recovery for self-funded customers. 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 Customers specific format and content requirements, subject to a charge that is based on direct labor cost and data processing time. While in most cases we do not request reimbursement for intemal 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. Our proposal assumes that Aetna will be providing HIPAA certifications of coverage for terminated employees. This has been included in their guaranteed fees. 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 websitewww.aetna.com. Costs for special services rendered which are not included or assumed in the pricing guarantee will be direct billed. For example, Customer 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. www.aetna.com Financial Assumptions ASC