2014 Medical Renewal Providence

Administrative fees from Providence are unchanged from the 2013 rates Statewide ASO fee is $52 PEPM Providence Choice fee is $93.21 PEPM - Fees have been unchanged since 2010

Other fixed costs: PEBB admin fee: 0.4% load Commissions: 0.16% load Rx Rebates: - Statewide: $4.02 PEPM - Providence Choice: $1.39 PEPM PPACA Fees (Applied to medical rates only): - Reinsurance Fee: $13.65 PEPM - Comparative Effectiveness Fee: $0.45 PEPM - Oregon Children's Reinsurance Fee: $3.33 PEPM
Assumptions used for the self-insured plans Claims incurred through December 2012 and paid through February 2013 Trend rates of 7.5% for medical and prescription drugs for both Statewide and Choice - VSP trend of 3% Excludes OMIP and Self-Insured Tax No cost increase assumed for HCR OOP Fully loaded rates are on the following page

MERCER

April 12, 2013

2014 Medical Renewal Proposal Providence

Providence 2014 Rate Proposal Full-Time Medical Plan (Fully Loaded premium equivalents, including VSP) Employee 2013 Statewide Rates 2014 Statewide Rates % Change Statewide 2013 Prov Choice Rates 2014 Prov Choice Rates % Change Prov Choice $1,060.62 $1,028.09 -3.1% $935.06 $911.82 -2.5% Employee & Spouse/Partner $1,421.08 $1,377.50 -3.1% $1,252.94 $1,221.82 -2.5% Employee & Child(ren) $1,219.62 $1,182.23 -3.1% $1,075.33 $1,048.60 -2.5% Employee & Family $1,452.90 $1,408.36 -3.1% $1,281.01 $1,249.20 -2.5%

Note: Percentage increase for part-time plans mirrors change for full-time plans shown above. Based on 30,367 total enrolled in Statewide and 10,638 in Prov Choice as of March 2013.

The above Providence rates include: Addition of Active Employee PEBB administration of 0.4% Excludes Funding Assessment Includes consultant commissions of 0.16% Includes Childrens Reinsurance Fee Excludes OMIP, Provider Tax Includes PPACA Reinsurance Fee and Comparative Effectiveness Fee Includes 2014 VSP rates
MERCER April 12, 2013

2014 Medical Renewal Providence

Mercer recommends that PEBB consider adding margin to the rates to account for potential legislation to reinstate the OMIP and self-insured fees PEBB could retain the 2013 rates, excluding funding assessment, for both the Statewide and Choice plans which would be sufficient to cover those plan rates Another option would be to include a 2% margin to account for OMIP and selfinsured fees which could be used to fund any potential change to the out-ofpocket maximum

Mandated plan changes Update current out-of-pocket maximums and limitations to comply with PPACA non-Grandfathered plan requirements Change alternative care benefit limits from 60 days per provider to 60 visits per type of service - PPACA prohibits the limitation of benefits based on provider types Coverage of certain diagnostic procedures that may be related to clinical trials

MERCER

April 12, 2013