benefits roundtable august 20, 2013 rey guillen, employee benefits director sandra poole, labor...
TRANSCRIPT
County of Santa Clara Benefits Roundtable
August 20, 2013
Rey Guillen, Employee Benefits Director Sandra Poole, Labor Relations Director
2
Agenda Section 1 Review of Medical RFP Results
Section 2 Health Care Reform Updates
Section 3 Introduction to Account Based Health Plans
Section 4 Question & Answer
County of Santa Clara Current Medical Plan Enrollment
3
Carrier Kaiser Health Net Valley Health
Plan
Total Active Enrollment 7043 3589 5021
Employee + Spouse + 1 or more Deps 3038 1680 2709
843
421
1048
Employee Only
Employee + Spouse
Employee + Child(ren)
1861 1107
1096
1048 338
464
County of Santa Clara RFP Goals & Objectives
4
RFP Primary Purpose - Determine if the County’s current Health Net medical plans (for both actives and retirees):
Continue to meet the needs of the County, its employees and retirees Provide the “Best Value” to the County, it’s employees and retirees Ensure that the County’s benefits and rates are competitive
RFP Primary Objectives :
Create savings without benefit modification. The County has several collective bargaining agreements that mandate certain benefits
Improved Customer Service levels to employees and retirees Partner with a health plan provider who has a commitment to developing strong networks with breadth and quality of
providers; as well as strong network discounts and innovative products and programs to help reduce the cost of providing health care/trend now and into the future
Partner with a health plan provider that has a commitment to Wellness and keeping members Healthy The County desires to continue providing its employees and retirees with health care options that afford cost-effective
choice and flexibility, while maintaining comprehensive benefit levels Establishing a partnership with a vendor that can offer comprehensive services to the employees and retirees covered
under the plans is a key objective The importance of cost savings is matched only by the importance of a strong service model and capabilities to meet
the needs of The County and its employees
County of Santa Clara RFP Goals & Objectives – Benefit Alternatives
5
Based upon feedback ESA received from the County’s employee organizations at the March 22, 2013 Benefits Advisory Roundtable, the County requested Alliant Insurance Service to obtain quotes for the following three scenarios for an effective date of January 1, 2014:
Scenario 1 - Provide quotes to match ALL current Health Net plan benefit levels
Scenario 2 - Provide quotes to match ALL current Health Net plan benefit levels AND add an HMO plan that would be offered alongside the current POS plan to actives and early retirees
Scenario 3 - Provide quotes to replace the current Health Net POS plan with a dual option of an HMO and a PPO for actives and early retirees, as well as all other current retiree plan offerings
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
August 20, 2013
Alliant Team:Christine KernsKimberly MillerLinda Kepley
Santa Clara CountyBenefits Round Table
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C368617
Section 1: Medical RFP Results Project Scope
RFP Project Scope:
Completion of Final RFP Document Bid Solicitation Comprehensive analysis of received proposals, plan design comparison, rate analysis and network comparisons
Considerations:
Rates & Rate caps Network Strength Partnership & Flexibility Product Offerings & Innovation
Current Health Net POS Network Usage:
Tier 1 77.58% of non-capitated claims costs & 90% of utilization Tier 2 16.64% of claims costs Tier 3 5.79% of claims costs
Network Analysis:
Current Top Provider Comparison Current Pharmacy Formulary Comparison All carriers provided Geo Access reporting to show employees with desired access between 90% and 100%
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C368618
Section 1: Medical RFP Results Plan Design Comparison
Medical Plan Benefits Health Net POS Health Net HMO Health Net PPO
Current Option OptionHMO In-Network Out-of-Network HMO In-Network Out-of-Network
Calendar Year Deductible
Individual / Family None None $200 / $600 None None $200 / $600
Annual Out-of-Pocket Maximum
Individual / Family $1,500 / $4,500 $2,000 / $6,000 $3,000 / $9,000 $1,500 / $4,500 $2,000 / $6,000 $3,000 / $9,000
Physician Office Visit $15 $20 30% $15 $20 30%
Specialist Copay $15 $20 30% $15 $20 30%
Preventative Care
Child (through age 17) No Charge No Charge 30% No Charge No Charge 30%
Adult (age 18 and older) No Charge No Charge Not Covered No Charge No Charge Not Covered
Lab and X-Ray
CT, MRI, PET scans No Charge 10% 1 30% 1 No Charge 10% 1 30% 1
Other lab and x-ray tests No Charge 10% 1 30% 1 No Charge 10% 1 30% 1
Hospitalization
Inpatient No Charge 10% 1 30% 1 No Charge 10% 1 30% 1
Outpatient No Charge 10% 1 30% 1 No Charge 10% 1 30% 1
Emergency Room $50 $75 30% $50 $75 30%
(Waived if admitted)
Urgent Care Services $35 $50 30% $35 $50 30%
(Waived if admitted)
Durable Medical Equipment No Charge 50% 1 (Max $5,000) Not Covered No Charge 50% 1 (Max $5,000) Not Covered
Chiropractic Care 2 $15 Not Covered Not Covered $15 Not Covered Not Covered
Acupuncture Care $15 Not Covered Not Covered $15 Not Covered Not Covered
PRESCRIPTION DRUGS Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary
Retail - 30 day supply $5 / $15 / $30
Mail Order - 90 day supply $10 / $30 / $601 Services require prior certification.
This summary is for informational purpose only. It does not amend, extend, or alter the current policy in any way. In the event information in this summary differs from the Plan Document, the Plan Document will prevail.
2 Note - If referred and authorized by the medical group, it is covered under the POS plan and that is built in to the medical plan. Additionally, the chiro rider gives the member the additional option of direct access to a Chiropractic (ASHN) network provider and can directly refer themselves for coverage. Benefit is $5 OV (max 20 visits per calendar year)
(Waived if admitted)
(Waived if admitted)
Generic / Brand / Non-Formulary
$5 / $15 / $30
$10 / $30 / $60 $10 / $30 / $60
$5 / $15 / $30
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C368619
Section 1: Medical RFP Results Medical Marketing Carrier Response
Carrier AM Best RatingStandard &
PoorsProduct(s) Response
Aetna A A+ POS/PPO/HMO Declined to quote - Not competitive
Anthem A A+ POS/PPO/HMO Quoted
Blue Shield A A POS/PPO/HMO Quoted
CIGNA A A- POS/PPO/HMO Declined to quote - Not competitive, no POS Product
Health Net B++ BBB- POS/PPO/HMO Quoted
UHC Not Found AA- POS/PPO/HMO Declined to quote - Not competitive
MEDICAL MARKETING LIST
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686110
Section 1: Medical RFP Results RFP Summary Results - Scenario 1
Overview of Results for the above Scenarios for a January 1, 2014 effective date:
Scenario 1 Health Net is offering a 6 month savings of -3.37%, or $1.75 Million
Rate cap of 13% (ACA fees included)
Blue Shield is offering a 6 month savings of -4.98%, or $2.58 Million Rate cap of 8.9% (ACA fees not included)
Anthem’s quote is not competitive as it results in an additional cost of $3.2 million Rate cap of 11% (ACA fees included)
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686111
Section 1: Medical RFP Results RFP Summary Results - Scenario 2
Overview of Results for the above Scenarios for a January 1, 2014 effective date:
Scenario 2 - Enrollment Assumption = 70% HMO/30% POS Health Net is offering an estimated savings of $2.7 million with enrollment assumptions
The Health Net HMO is 3.5% less than the Health Net POS plan Little incentive to add the HMO Rate cap of 13% (ACA Fees included)
Blue Shield is offering an estimated savings of $2.8 million with enrollment assumptions The Blue Shield HMO is 1% less than the Blue Shield POS plan Little incentive to add the HMO Rate cap of 8.9% (ACA fees not included)
Anthem is offering an estimated savings of $6.7 million with enrollment assumptions Anthem HMO is 39.9% less than the Anthem POS plan Rate cap of 11% (ACA fees included)
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686112
Section 1: Medical RFP Results RFP Summary Results – Scenario 3
Overview of Results for the above Scenarios for a January 1, 2014 effective date:
Scenario 3 – Enrollment Assumption = 80% HMO/20% PPO
Health Net is offering an estimated savings of $2 million with enrollment assumptions The HMO is 4.5% less than the Health Net PPO Rate cap of 13% (includes ACA fees)
Blue Shield is offering an estimated savings of $1.6 million with enrollment assumptions The HMO is 7.2% less than the Blue Shield PPO Rate cap of 8.9% (does not include ACA fees)
Anthem is offering an estimated savings of $13.5 million with enrollment assumptions The HMO is 18.1% less than the Anthem PPO Rate cap of 11% (ACA fees included)
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686113
Section 1: Medical RFP Results RFP Questionnaire Summary
General Information Health Net Blue Shield Anthem Agreement to all Basic Assumptions Yes Yes Yes
Second Year Rate Cap (assumes enrollment does not change by more than 10%)
13%Includes ACA Fees
8.9%Does not inlcude ACA fees
11%Includes ACA Fees
Performance Guarantee 1% of Premium 2% of Premium 10% of Premium Mental Health & Substance Abuse Vendor MHN Magellan Anthem Santa Clara Valley Medical Center - In-Network? Yes Yes Yes
NCQA* Scoring Overall Score HMO - Commendable
PPO - Commendable HMO - Commendable
PPO - Accredited HMO - CommendablePPO - Commendable
Access & Service HMO - 4 StarsPPO - 3 Stars
HMO - 4 StarsPPO - 4 Stars
HMO - 3 StarsPPO - 4 Stars
Quality Providers HMO - 3 StarsPPO - 4 Stars
HMO - 4 StarsPPO - 3 Stars
HMO - 3 StarsPPO - 4 Stars
Provisional, Pending & Denied are the other accreditation values.
Excellent - NCQA awards its highest accreditation status of Excellent to organizations with programs for service and clinical quality that meet or exceed rigorous requirements for consumer protection and quality improvement. HEDIS and CAHPS results are in the highest range of national performance
Commendable - NCQA awards a status of Commendable to organizations with well-established programs for service and clinical quality that meet rigorous requirements for consumer protection and quality improvement.
Accredited - NCQA awards an accreditation status of Accredited to organizations with programs for service and clinical quality that meet basic requirements for consumer protection and quality improvement. Organizations awarded this status must take further action to achieve a higher accreditation status.
* NCQA Health Plan accreditation is the Gold Standard for assuring and improving quality care and patient experience. NCQA is a rigorous, comprehensive and transparent accreditation program that includes unbiased, third party review to verify, score and publicly record and report results.
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686114
Section 1: RFP Results - Scenario 1Financial Summary - Status Quo
Line of Coverage Lives CurrentHealth NetOption 1
% DBlue Shield
Option 2% D
AnthemOption 3
% D
Health Net POS Blue Shield POS Anthem POS
Health Net POS - Actives 4,042 $42,355,399 $40,726,414 -3.85% $40,271,507 -4.92% $44,698,838 5.53%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net PPO - Actives 1 $12,747 $12,257 -3.85% $11,796 -7.46% $12,769 0.17%
Actives Subtotal 4,043 $42,368,146 $40,738,671 -3.85% $40,283,304 -4.92% $44,711,607 5.53%
Health Net POS Blue Shield POS Anthem POS
Health Net POS - Early Retirees 383 $2,687,505 $2,584,145 -3.85% $2,555,279 -4.92% $2,736,476 1.82%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net PPO - Early Retirees 49 $461,149 $443,413 -3.85% $426,753 -7.46% $383,283 -16.89%
HN FlexNet Blue Shield PPO Anthem Assurance
Health Net FlexNet - Early Retirees 1 $10,914 $10,494 -3.85% $10,100 -7.46% $3,618 -66.85%
Early Retirees Subtotal 433 $3,159,568 $3,038,052 -3.85% $2,992,133 -5.30% $3,123,376 -1.15%
Health Net POS Blue Shield POS Anthem POS
Health Net POS - Medicare Retirees 1,101 $4,226,370 $4,226,370 0.00% $4,067,682 -3.75% $5,505,687 30.27%
Health Net PPO Blue Shield GMAPD Anthem PPO
Health Net PPO - Medicare Retirees 2 $8,870 $8,870 0.00% $7,995 -9.87% $10,182 14.79%
HN FlexNet Blue Shield PPO Anthem Assurance
Health Net FlexNet - Medicare Retirees 441 $2,028,509 $2,028,509 0.00% $1,866,748 -7.97% $1,660,170 -18.16%
HN Seniority Plus Blue Shield PPO Anthem
Health Net Seniority Plus - Medicare Retirees 32 $105,220 $105,220 0.00% $93,241 -11.38% $109,492 4.06%
Medicare Retirees Subtotal 1,576 $6,368,970 $6,368,970 0.00% $6,035,666 -5.23% $7,285,532 14.39%
TOTAL 6 MONTHS PREMIUM 6,052 $51,896,683 $50,145,692 $49,311,102 $55,120,515
6 MONTHS DOLLAR CHANGE ($1,750,991) ($2,585,581) $3,223,831
6 MONTHS PERCENTAGE CHANGE -3.37% -4.98% 6.21%
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686115
Section 1: RFP Results - Scenario 1Active Rates Summary - Status Quo
Benefit Plan & Coverage Level
KAISER HMO($10 CO-PAY): Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate
Employee $310.05 $310.05 $310.05 $310.05 Employee and Spouse $651.10 $651.10 $651.10 $651.10
Employee and Child(ren $558.09 $558.09 $558.09 $558.09 Family $899.14 $899.14 $899.14 $899.14
VALLEY HEALTH PLAN HMO ($0 CO-PAY):
Employee $292.71 $292.71 $292.71 $292.71 Employee and Spouse $614.70 $614.70 $614.70 $614.70
Employee and Child(ren $526.89 $526.89 $526.89 $526.89 Family $848.87 $848.87 $848.87 $848.87
HEALTH NET POS ($15 CO-PAY):
Employee $456.45 $438.89 $433.99 $392.83 Family $966.42 $929.26 $918.88 $1,060.66
Note: Part-time coded employees pay a pro rata portion of the premiums
2013-2014 PLAN YEAR Biweekly Benefit Plan RatesFull-Time Active Employees
In-Force Rates Kaiser/VHP/HN Kaiser/VHP/Blue Shield
Scenario 1 - Status Quo
Kaiser/VHP/Anthem
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686116
Section 1: RFP Results - Scenario 1Early Retiree Rates Summary - Status Quo
Benefit Plan & Coverage Level
Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate
HEALTH NET POS:
Employee $449.81 $432.51 $427.68 $387.44 Employee + 1 $650.40 $625.38 $618.40 $813.63
Family $1,104.74 $1,062.25 $1,050.38 $1,162.33 HEALTH NET PPO:
Employee $598.55 $575.52 $553.90 $411.20 Employee +1 $886.26 $852.18 $820.16 $863.53
Family $1,225.05 $1,177.93 $1,133.68 $1,233.61 HEALTH NET FLEX NET:
Employee $839.56 $807.27 $776.94 $278.28 Employee + 1 $1,380.42 $1,327.33 $1,277.46 $584.39
Family $1,820.62 $1,750.59 $1,684.82 $834.84
2013-2014 PLAN YEAR Biweekly Benefit Plan Rates
Early Retirees
Scenario 1 - Status Quo
In-Force Rates Health Net - Renewal Blue Shield Anthem Blue Cross
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686117
Section 1: RFP Results - Scenario 2 Financial Summary – HMO & POS
Line of Coverage Lives CurrentHealth NetOption 1
% DBlue Shield
Option 2% D
AnthemOption 3
% D
Health Net POS & HMO Blue Shield POS & HMO Anthem POS & HMO
Health Net POS - Actives 4,042 $42,355,399 $39,728,615 -6.20% $39,989,612 -5.59% $34,245,723 -19.15%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net PPO - Actives 1 $12,747 $12,257 -3.85% $11,796 -7.46% $12,769 0.17%
Actives Subtotal 4,043 $42,368,146 $39,740,872 -6.20% $40,001,408 -5.59% $34,258,492 -19.14%
Health Net POS Blue Shield POS Anthem POS
Health Net POS - Early Retirees 383 $2,687,505 $2,584,145 -3.85% $2,555,279 -4.92% $2,907,940 8.20%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net PPO - Early Retirees 49 $461,149 $443,413 -3.85% $426,753 -7.46% $383,283 -16.89%
HN FlexNet Blue Shield PPO Anthem Assurance
Health Net FlexNet - Early Retirees 1 $10,914 $10,494 -3.85% $10,100 -7.46% $3,618 -66.85%
Early Retirees Subtotal 433 $3,159,568 $3,038,052 -3.85% $2,992,133 -5.30% $3,294,841 4.28%
Health Net POS Blue Shield POS Anthem POS
Health Net POS - Medicare Retirees 1,101 $4,226,370 $4,226,370 0.00% $4,067,682 -3.75% $5,850,626 38.43%
Health Net PPO Blue Shield GMAPD Anthem PPO
Health Net PPO - Medicare Retirees 2 $8,870 $8,870 0.00% $7,995 -9.87% $10,182 14.79%
HN FlexNet Blue Shield PPO Anthem Assurance
Health Net FlexNet - Medicare Retirees 441 $2,028,509 $2,028,509 0.00% $1,866,748 -7.97% $1,660,170 -18.16%
HN Seniority Plus Blue Shield PPO Anthem
Health Net Seniority Plus - Medicare Retirees 32 $105,220 $105,220 0.00% $93,241 -11.38% $109,492 4.06%
Medicare Retirees Subtotal 1,576 $6,368,970 $6,368,970 0.00% $6,035,666 -5.23% $7,630,470 19.81%
TOTAL 6 MONTHS PREMIUM 6,052 $51,896,683 $49,147,893 $49,029,207 $45,183,803
6 MONTHS DOLLAR CHANGE ($2,748,790) ($2,867,477) ($6,712,881)
6 MONTHS PERCENTAGE CHANGE -5.30% -5.53% -12.94%
This summary is for informational purpose only. It does not amend, extend, or alter the current policy in any way. In the event information in this summary differs from the Plan Document, the Plan Document will prevail.
For illustrative purposes, this Summary assumes that 70% of POS Actives move to HMO plan (Base Plan) and 30% stay on the POS, actual premium will vary based on plan selectionEarly Retirees are eligible for the HMO, but we did not make any assumptions on this summary for the early retirees
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686118
Section 1: RFP Results - Scenario 2 Active Rates Summary - HMO & POS
Benefit Plan & Coverage Level
KAISER HMO($10 CO-PAY): Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate
Employee $310.05 $310.05 $310.05 $310.05 Employee and Spouse $651.10 $651.10 $651.10 $651.10
Employee and Child(ren $558.09 $558.09 $558.09 $558.09 Family $899.14 $899.14 $899.14 $899.14
VALLEY HEALTH PLAN HMO ($0 CO-PAY):
Employee $292.71 $292.71 $292.71 $292.71 Employee and Spouse $614.70 $614.70 $614.70 $614.70
Employee and Child(ren $526.89 $526.89 $526.89 $526.89 Family $848.87 $848.87 $848.87 $848.87
HEALTH NET POS ($15 CO-PAY):
Employee $456.45 $438.89 $433.99 $417.45 Family $966.42 $929.26 $918.88 $1,127.11
HMO Plan
Employee $423.53 $429.65 $251.05 Family $896.73 $909.69 $677.83
Note: Part-time coded employees pay a pro rata portion of the premiums
No Current Plan
2013-2014 PLAN YEAR Biweekly Benefit Plan RatesFull-Time Active Employees
Scenario 2 - Add HMO Plan
In-Force Rates Kaiser/VHP/HN Kaiser/VHP/Blue Shield Kaiser/VHP/Anthem
HMO Plan
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686119
Section 1: RFP Results - Scenario 2 Early Retiree Rates Summary - HMO & POS
Benefit Plan & Coverage Level
Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate
HEALTH NET POS:
Employee $449.81 $432.51 $427.68 $411.72 Employee + 1 $650.40 $625.38 $618.40 $864.61
Family $1,104.74 $1,062.25 $1,050.38 $1,235.16 HEALTH NET PPO:
Employee $598.55 $575.52 $553.90 $411.20 Employee +1 $886.26 $852.18 $820.16 $863.53
Family $1,225.05 $1,177.93 $1,133.68 $1,233.61 HEALTH NET FLEX NET:
Employee $839.56 $807.27 $776.94 $278.28 Employee +1 $1,380.42 $1,327.33 $1,277.46 $584.39
Family $1,820.62 $1,750.59 $1,684.82 $834.84 HMO Plan:
Employee $417.37 $423.40 $246.82 Employee + 1 $603.49 $612.21 $518.32
Family $1,025.07 $1,039.88 $740.46 No Current Plan
2013-2014 PLAN YEAR Biweekly Benefit Plan Rates
Early Retirees
Scenario 2 - Add HMO Plan
In-Force Rates Health Net - Renewal Blue Shield Anthem Blue Cross
HMO Plan
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686120
Section 1: RFP Results - Scenario 3 Financial Summary – HMO & PPO
Line of Coverage Lives CurrentHealth NetOption 1
% DBlue Shield
Option 2% D
AnthemOption 3
% D
Health Net PPO & HMO Blue Shield PPO & HMO Anthem PPO & HMO
Health Net POS - Actives 4,042 $42,355,399 $39,667,513 -6.35% $40,484,935 -4.42% $29,831,433 -29.57%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net PPO - Actives 1 $12,747 $12,201 -4.28% $12,740 -0.06% $10,764 -15.55%
Actives Subtotal 4,043 $42,368,146 $39,679,714 -6.35% $40,497,675 -4.41% $29,842,197 -29.56%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net POS - Early Retirees 383 $2,687,505 $2,609,985 -2.88% $3,040,336 13.13% $2,136,767 -20.49%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net PPO - Early Retirees 49 $461,149 $337,850 -26.74% $394,231 -14.51% $281,992 -38.85%
HN FlexNet Blue Shield PPO Anthem Assurance
Health Net FlexNet - Early Retirees 1 $10,914 $10,494 -3.85% $10,100 -7.46% $3,618 -66.85%
Early Retirees Subtotal 433 $3,159,568 $2,958,330 -6.37% $3,444,667 9.02% $2,422,377 -23.33%
Health Net PPO Blue Shield PPO Anthem PPO
Health Net POS - Medicare Retirees 1,101 $4,226,370 $5,056,128 19.63% $4,338,202 2.65% $4,303,833 1.83%
Health Net PPO Blue Shield GMAPD Anthem PPO
Health Net PPO - Medicare Retirees 2 $8,870 $8,870 0.00% $7,611 -14.20% $7,374 -16.87%
HN FlexNet Blue Shield PPO Anthem Assurance
Health Net FlexNet - Medicare Retirees 441 $2,028,509 $2,028,509 0.00% $1,866,748 -7.97% $1,660,170 -18.16%
HN Seniority Plus Blue Shield PPO Anthem
Health Net Seniority Plus - Medicare Retirees 32 $105,220 $105,220 0.00% $93,241 -11.38% $109,492 4.06%
Medicare Retirees Subtotal 1,576 $6,368,970 $7,198,728 13.03% $6,305,802 -0.99% $6,080,869 -4.52%
TOTAL 6 MONTHS PREMIUM 6,052 $51,896,683 $49,836,772 $50,248,143 $38,345,442
6 MONTHS DOLLAR CHANGE ($2,059,911) ($1,648,540) ($13,551,241)
6 MONTHS PERCENTAGE CHANGE -3.97% -3.18% -26.11%
This summary is for informational purpose only. It does not amend, extend, or alter the current policy in any way. In the event information in this summary differs from the Plan Document, the Plan Document will prevail.
For illustrative purposes, this Summary assumes that 80% of POS Actives move to HMO plan (Base Plan) and 20% move to PPO, actual premium will vary based on plan selectionEarly Retirees are eligible for the HMO, but we did not make any assumptions on this summary for the early retirees
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686121
Section 1: RFP Results - Scenario 3 Active Rates Summary – HMO & PPO
Benefit Plan & Coverage Level
KAISER HMO($10 CO-PAY): Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate
Employee $310.05 $310.05 $310.05 $310.05 Employee and Spouse $651.10 $651.10 $651.10 $651.10
Employee and Child(ren $558.09 $558.09 $558.09 $558.09 Family $899.14 $899.14 $899.14 $899.14
VALLEY HEALTH PLAN HMO ($0 CO-PAY):
Employee $292.71 $292.71 $292.71 $292.71 Employee and Spouse $614.70 $614.70 $614.70 $614.70
Employee and Child(ren $526.89 $526.89 $526.89 $526.89 Family $848.87 $848.87 $848.87 $848.87
HEALTH NET POS ($15 CO-PAY):
Employee $456.45 $443.28 $462.85 $306.67 Family $966.42 $938.55 $979.98 $828.02
HMO Plan
Employee $423.53 $429.65 $251.05 Family $896.73 $909.69 $677.83
Note: Part-time coded employees pay a pro rata portion of the premiums
No Current Plan
Move to PPO Plan
2013-2014 PLAN YEAR Biweekly Benefit Plan RatesFull-Time Active Employees
Scenario 3 - Add HMO Plan and PPO Plan replaces POS Plan
In-Force Rates Kaiser/VHP/HN Kaiser/VHP/Blue Shield Kaiser/VHP/Anthem
HMO Plan
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686122
Section 1: RFP Results - Scenario 3 Early Retiree Rates Summary – HMO & PPO
Benefit Plan & Coverage Level
Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate Total Bi-Weekly Rate
HEALTH NET POS:
Employee $449.81 $436.83 $511.22 $302.53 Employee + 1 $650.40 $631.63 $746.38 $635.32
Family $1,104.74 $1,072.87 $1,150.24 $907.60 HEALTH NET PPO:
Employee $598.55 $436.83 $511.22 $302.53 Employee +1 $886.26 $631.63 $746.38 $635.32
Family $1,225.05 $1,072.87 $1,150.24 $907.60 HEALTH NET FLEX NET:
Employee $839.56 $807.27 $776.94 $278.28 Employee +1 $1,380.42 $1,327.33 $1,277.46 $584.39
Family $1,820.62 $1,750.59 $1,684.82 $834.84 HMO Plan:
Employee $417.37 $423.40 $246.82 Employee + 1 $603.49 $612.21 $518.32
Family $1,025.07 $1,039.88 $740.46 No Current Plan
Move to PPO Plan
2013-2014 PLAN YEAR Biweekly Benefit Plan Rates
Early Retirees
Scenario 3 - Add HMO Plan and PPO Plan replaces POS Plan
In-Force Rates Health Net - Renewal Blue Shield Anthem Blue Cross
HMO Plan
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686123
Section 1: RFP Results Provider Network Summary
Network Analysis shows that there will be some disruption if the County changes medical carriers Blue Shield
Financial Proposal creates an opportunity for savings in premium
Provider Network Significant disruption with the Mental Health Network
RX Formulary Significant disruption with the Pharmacy formulary
Anthem Financial
Proposal creates a greater degree of savings for the two alternative proposals Provider Network
Disruption is not as significant compared to Blue Shield Opportunity for additional in-network access due to larger provider network compared to
Health Net RX Formulary
Disruption with Anthem is not as significant as compared to Blue Shield
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686124
Section 1: RFP Results Provider Network Comparison -Summary Results
Category
HMO PPO MH/SA RX HMO PPO MH/SA RX HMO PPO MH/SA RX
Inpatient Facilities 93% 93% 90% 93% 24% 95% 98%
Outpatient Facilities 87% 66% 79% 84% 18% 88% 92%
MHN Professional Providers 91% 37% 60%
MHN Outpatient Facilities 96% 56% 76%
Top RX by $ Paid 81% 66% 75%
Top RX by Script Volume 96% 88% 92%
Health Net AnthemCarrier % In-Network
County of Santa Clara Provider Utilization Comparison
Blue Shield
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Section 1: Medical RFP Results Potential Next Steps
Based on the results of the RFP marketing, the County should take advantage of the immediate $1.75 million savings with Health Net effective January 1, 2014
This change requires no change in plan structure for the period of January 1 through June 30, 2013
In order to realize the greater savings associated with the Anthem proposals, the County should discuss the plan structure changes with the bargaining units
It will be important to engage the bargaining units in the details related to:
Carrier change Employee out-of-pocket costs Network changes Dual option offering for both options outlined above
It is recommended that discussions begin as soon as possible so that the County can realize savings with either option for the July 2014 renewal
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686126
On March 23, 2010, President Obama signed the health care reform bill, Patient Protection & Affordable Care Act (ACA), into law
The Key Elements of this bill are:1. Cover more people2. Shift control from local state government to federal government3. Raise money to cover more people
Consequently, the County has already implemented some of the provisions of the ACA: Cover Dependents to the age of 26 $0 Preventive Care W-2 reporting – Report the aggregate cost of insurance premiums for employee on the 2012 W2 The cost of Over the Counter drugs no longer reimbursable through the Medical FSA The limit on Health FSA salary reductions - $2,500 / year Distribution of uniform Summary of Benefits Coverage (SBC)
Section 2: Health Care Reform Update
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686127
There are three fees associated with the ACA Fees that will be included with the County’s July 1, 2014 Renewal, expected to be between 2% and 3%:
Federal Health Insurance Industry Fee – The ACA imposes a fee on all insurance carriers to help fund the Exchange and is based on market share of premium
Patient Centered Outcomes Research Institute (PCORI) – This fee will fund a private, non-profit corporation whose purpose is to assist providers, payers and policy makers in making informed health decisions
Reinsurance Fee – Insurers are required to contribute to a temporary reinsurance program for the individual market in order to offset the risk of high cost claims (risk shifting)
Employer Shared Responsibility (a.k.a. Pay of Play) – January 1, 2015 – Employers must get ready now! Employer must offer Affordable health coverage
The plan is affordable if the employee does not pay more than 9.5% of W2 earnings for the single only premium of the lowest cost plan offered by the employer
Health plan must be offered to all employees working an average of 30+ hours a week, 130 hours a month
Coverage must meet Minimum Value standards
Section 2: Health Care Reform Update - On the Horizon
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686128
Health Insurance Exchange/Covered California - January 1, 2014 In general, the Exchange will serve as a government-administered marketplace providing a choice of
group and individual health plans through a website that will provide detailed information about plans and offer a toll-free number to assist consumers in understanding their options, compare and buy coverage, as well as connect eligible individuals to federal subsidies
The Exchange will serve as a consortium of individuals and small businesses that will pool their buying power, in theory, to get coverage at lower prices
The Exchange will offer plans in 5 categories, ranging from catastrophic to extensive Employers will need to distribute a notice to all employees regarding the Exchange in October 2013
Individual Mandates – US Residents must purchase health insurance, or pay an annual increasing schedule of tax penalties – January 1, 2014 2014: $95 per person (capped at $285 per family) or 1 percent of household income 2015: $325 (capped at $975) or 2 percent of household income 2016: $695 (capped at $2,085) or 2.5 percent of household income 2017 and beyond: The $695 penalty is indexed for a cost-of-living adjustment and must be rounded to the
next lowest multiple of $50. For families, the flat-dollar penalty is capped at three times the indexed value for an individual. For example, if in 2017 the penalty is $700, the capped amount would be $2,100. As in 2016, the individual mandate penalty is the greater of the flat-dollar amount or 2.5 percent of household income
Section 2: Health Care Reform Update - On the Horizon
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
Section 2: Health Care Reform Cadillac Tax
Who Insurers and TPAs
What 40% tax on Excess Premiums
Tax = [(Individual premium – premium cap) x 40%] x # singles enrolled
+[(Family premium – premium cap) x 40%] x # families enrolled
Penalty
When 2018
How Healthcare premiums >$10,200/individual and $27,500/ family are
“excessive” Higher limits for high risk jobs or workforces with older populations Will be adjusted for inflation (benchmark at FEHB)
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
Section 2: Health Care Reform Cadillac Tax Illustration - Estimated
Health Planswill be subject to
tax in 2018;immediate
attention needed
County of Santa Clara Single FamilyMonthly Rates for Fiscal Year 2013-2014
Kaiser HMO $10 $674.02 $1,954.67Valley Health HMO $0 $634.21 $1,948.14Health Net POS $15 $988.98 $2,093.91Annual 2014Kaiser HMO $10 $8,088.24 $23,456.04Valley Health HMO $0 $7,610.52 $23,377.68Health Net POS $15 $11,867.76 $25,126.92Annual 2018 @ 9%/year (4 years)Kaiser HMO $10 $11,417.21 $33,110.11Valley Health HMO $0 $10,742.87 $32,999.50Health Net POS $15 $16,752.31 $35,468.70Current Cadillac Tax Threshold (2018) $10,200.00 $27,500.00
Annual Taxable Amount (PEPY)Kaiser HMO $10 $1,217.21 $5,610.11Valley Health HMO $0 $542.87 $5,499.50Health Net POS $15 $6,552.31 $7,968.70Annual Tax at 40% (PEPY)Kaiser HMO $10 $486.88 $2,244.05Valley Health HMO $0 $217.15 $2,199.80Health Net POS $15 $2,620.92 $3,187.48
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686131
Section 3: Account Based Health PlansOverview
Effective January 1, 2015, the County must offer affordable health coverage to all employees working over 30 hours a week In order to meet this requirement, the County will need to implement a lower cost plan The County will accomplish this requirement with the introduction of a High Deductible Health Plan
(HDHP), which can be offered to all employees as an Account Based Health Plan
An Account Based Health Plan is a plan that combines a qualified High Deductible Health Plan (HDHP) with a Health Savings Account (HSA)
Together, the High Deductible Health Plan and the Health Savings Account can help achieve lower healthcare costs, which ultimately translates into lower premiums for employees and employers
You will also learn how the Health Savings Account may provide certain individuals with the opportunity to:
Save pre-tax dollars Roll over from year to year Earn interest Be invested in the market And, used as a retirement vehicle after the individual turns 65 and becomes enrolled in Medicare
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686132
Section 3: Account Based Health PlansWhat is a High Deductible Health Plan?
The IRS defines certain terms that must be met to be considered a “Qualified High Deductible Health Plan
The terms of a “Qualified” High Deductible Health Plan (HDHP) are as follows:
Insurance that does not cover first dollar medical expenses (including prescription), except for Preventive Care, until the deductible is reached
A plan with minimum Aggregate Deductible for 2014 of:
$1,250 (self-only coverage)* $2,500 (family coverage)*
Important: Full Family Deductible must be met before plan coinsurance and/or copays kick in
A plan with a maximum annual out-of-pocket (including deductibles and co-pays) for 2014 of:
$6,350 (individual)* $12,700 (family coverage)*
Can be an HMO, PPO, or indemnity plan, as long as it meets IRS requirements
*These amounts are indexed annually by the IRS
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686133
Section 3: Account Based Health PlansWhat is a Health Savings Account?
A Health Savings Account (HSA) is a special “tax-advantaged” account owned by an individual that can be used in conjunction with an qualified HDHP
In fact, you must have a qualified High Deductible Health Plan in order to open and contribute to a Health Savings Account
If you are no longer covered by an HDHP in the future, you can still use the funds in the account, you just can no longer contribute
Individuals and/or Employer can put money into the Health Savings Account “pre-tax” (federal level only) to help pay for “Qualified Medical Expenses “
CA does not consider employee or employer contributions to be tax-free
The IRS sets annual limits for the amount of money that can be put into the Health Savings Account: $3,300 (self-only coverage) for 2014* $6,550 (family coverage) for 2014*
There is “no use it or lose it” rules like Flexible Spending Arrangements (FSAs)
Unused funds in the account continue to roll over year after year and can earn interest and be invested
Upon turning age 65, the individual can use any unused funds in the account for any purpose, penalty free, but subject to ordinary income tax
(*These amounts are indexed annually)
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686134
Section 3: Account Based Health PlansSimple Illustration
An HSA is a tax-advantaged account that works with an HSA-compatible
High Deductible Health Plan
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686135
Section 3: Account Based Health PlansAdvantages
High Deductible Health Plan
Lower insurance premiums
Lower trend factors than traditional plans, which translates to lower renewal increases
$0 Preventive Care
Health Savings Account
HSA’s encourage individuals to be more engaged and take on a more empowered approach to their own healthcare
This engagement can lead to smarter utilization and lower healthcare costs
Tax Savings (Federal Level Only)
Account is portable – tied to employee, not the employer
Funds can grow from year to year and earn interest income
Funds can be invested
Potential retirement vehicle, as funds can be used for anything with no penalties
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686136
Section 3: Account Based Health PlansDisadvantages
High Deductible Health Plan
The Aggregate Deductible must be met before any services are paid (except preventive care) On a family plan, the full family deductible must be met before plan coinsurance and/or copays kick in
Individuals on this plan are sometimes not used to paying out of pocket costs at the doctors office or the pharmacy
Individuals may experience large out-of-pocket costs if the balance in the Health Savings Account is not enough to cover the expenses
Health Savings Account
Can be complicated to understand, lots of education and communication is required
The individual is responsible for making sure expenses are “qualified”, or penalties can apply
The individual cannot be enrolled in both an FSA and an HSA at the same time, unless the FSA is a Limited Purpose FSA
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686137
Section 3: Account Based Health PlansWhy Offer?
HDHP w/Health
Savings Account
Price Transparency
H.S.A
Low Cost
*Note: California does not consider employee or employer contributions to an HSA tax free
Lower premium due to Deductible Preventive Care covered at 100%
Allows Employer/Employee contributions Tax Free contributions (except CA state) Unused $$$ Roll-over Can invest money Employee owned; portable
Smarter Utilization Can lead to lower healthcare costs
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686138
Section 3: Account Based Health PlansContribution Rules
There are several ways you can contribute to your account: Pre-tax through employee payroll deductions - Reduces your federal adjusted gross income (the amount you pay
tax on)
Employer Contribution – Pre-tax
Post-tax by personal check - When you file your taxes, you can make an adjustment to your gross income to
receive the tax benefit
Anyone may contribute to your HSA, provided the total contributions to your HSA do not exceed your
maximum allowable annual limit
If you are not covered by a qualified HDHP, you may not contribute to an HSA, but you can spend it
down, or leave it to earn interest
If you change jobs to another company and enroll in an HDHP, you may roll over from one HSA account
to another
You can make catch-up contributions if you are 55 years of age or older ($1,000)
Contributions must stop once you become entitled to Medicare, but the funds in the HSA can still be
used
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C3686139
Section 3: Account Based Health PlansDistribution Rules
“Qualified Medical Expense” examples (tax free/no penalty): Deductibles, Coinsurance, Co-pays Doctor’s fees, including hospital & lab Prescription Drugs Dental, Vision & Hearing services Chiropractic & Acupuncture Durable Medical Equipment Certain OTC medicines, if prescribed by a doctor Psychiatric care Weight loss & smoking cessation programs COBRA Premiums Medicare Premiums – Special Rules apply LTC Premiums
It is the Account Holders responsibility to ensure that the funds used from the HSA are for Qualified Medical Expenses, or penalties will apply
Penalties for not using distribution for “Qualified Medical Expenses”: Amount of distribution is included in income 20% additional tax applies (except when taken after):
Individual dies or becomes disabled Individual is age 65
Upon the death of an individual, HSA transfers to Spouse tax-free (any other transfer taxed)
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
HSA $1,000 employee
contribution
Preventive Care100% In-Network
After Deductible10% Coinsurance to the Annual OOP of $3,000
$1,500 DeductibleThis is your annual $1,500
deductible, but can be reduced by HSA dollars you use for covered
services
Susan Smith’s HSA Plan
$1,500 Deductible
$1,000 employee contribution $1,000
Expenses:Ob/Gyn office visit & lab tests - $350
Prescription drugs - $150$500
Paid by Preventive Care benefit at 100% $350
Paid from HSA (Susan’s choice) $150
HSA Balance $850
Year 1
Meet Susan Smith | Single Coverage
Section 3: Account Based Health Plan OverviewPlan Illustration Example
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
Susan Smith’s HSA Plan
$1,500 Deductible
HSA Balance:$850
$1,000 employee contribution$1,850
Expenses:
Ob/Gyn visit & lab tests - $150
Physician visits - $100
Prescription drugs - $200
$450
Paid by Preventive Care benefit at 100% $150
Paid from HSA (Susan’s choice) $300
HSA Balance $1,550
Year 2
HSA $1,000 employee
contribution
Preventive Care100% In-Network
After Deductible10% Coinsurance to the Annual OOP of $3,000
$1,500 Deductible(This is your annual $1,500
deductible, but can be reduced by HSA dollars you use for covered
services)
Meet Susan Smith | Single Coverage
Section 3: Account Based Health Plan OverviewPlan Illustration Example
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
The Jones’ HSA Plan
$3,000 Deductible
$2,000 employee contribution $2,000
Expenses:
Preventive visits & lab tests - $500
Physical therapy - $800
Prescription drugs - $200
$1,500
Paid by Preventive Care benefit at 100% $500
Paid from HSA (the Jones’ choice) $1,000
HSA Balance $1,000
Year 1
HSA $2,000 employee
contribution
Preventive Care100% In-Network
After Deductible 90% Coinsurance up to
Annual OOP Max of $6,000
$3,000 Deductible(This is your annual $3000
deductible, but can be reduced by HSA dollars you use for covered
services)
Meet the Jones’ | Family Coverage
Section 3: Account Based Health Plan OverviewPlan Illustration Example
© 2013 Alliant Insurance Services, Inc. All rights reserved. Alliant Employee Benefits, a division of Alliant Insurance Services, Inc. CA License No. 0C36861
The Jones’ HSA Plan
$3,000 DeductibleHSA Balance: $1,000
$2,000 employee contribution$3,000
Expenses:
Preventive visits & lab tests - $500
Hospital and surgery fees - $10,000
Office visits - $500
Prescription drugs - $200
$11,200
Paid by Preventive Care benefit at 100% $500
Remaining balance due $10,700
Paid from HSA (the Jones’ choice) toward $3,000 deductible $3,000
10% Coinsurance paid by Jones’ after Health plan pays 90%
$7,700 (90% x $7,700 = $6,930)
$770(10%
Coinsurance)
Total amount Plan pays $7,430
Total amount Jones’ pay $3,770
HSA Balance $0
Year 2
HSA $2,000 employee
contribution
Preventive Care100% In-Network
$3,000 Deductible(This is your annual $3,000
deductible, but can be reduced by HSA dollars you use for covered
services)
Meet the Jones’ | Family Coverage
Section 3: Account Based Health Plan OverviewPlan Illustration Example
After Deductible 90% Coinsurance up to
Annual OOP Max of $6,000
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Section 5: Question & Answer