Updates from PEBA South Carolina Association of School

Updates from PEBA South Carolina Association of School Business Officials March 7, 2018

State Health Plan benchmarks 2

State Health Plan • PEBA manages the State Health Plan. • Self-funded insurance plan; premiums are not paid to an insurance company. • Members’ and employers’ premiums go into a trust fund and these funds are used to pay claims. • Blue. Cross Blue. Shield of South Carolina processes claims. 3

State Health Plan enrollment as of March 2018 Subscribers Active subscribers 278, 354 State agencies 35, 408 Actives 189, 545 Higher education 25, 850 Retirees 85, 155 School districts 86, 823 Others 3, 654 Local subdivisions 32, 948 8, 516 Spouses 81, 591 Other Children 131, 577 Total employees Total covered lives 491, 522 Total employer groups: 695 189, 545 Retirees Medicare 65, 628 Non-Medicare 19, 527 Total retirees Numbers represent enrollment in the State Health Plan, the MUSC Health Plan and TRICARE Supplement Plan. 85, 155 4

State Health Plan versus national trends Public and private sector insurance plans 1 State Health Plan 2 2013 5. 6% 4. 0% 2014 8. 1% -1. 4% 2015 8. 5% 8. 9% 2016 7. 5% 4. 6% 2017 9. 3% 5. 0%3 5 -year average (2013 -2017) 7. 8% 4. 2% 1 Includes active participants and retirees under the age of 65 in private and public sector insurance plans. 2 Trend is defined as claims paid per member (includes employee and dependents). 3 Incurred in 12 months; paid in 12 months Data from the most recent Segal Health Plan Cost Trend Survey 5

2017 average monthly total premiums Totals include employee and employer contributions Single Family State Health Plan $461 $1, 207 Large public and private sector employers 1 $583 $1, 646 Public and private sector in South 2 $541 $1, 502 Public employers $594 $1, 519 Private – manufacturing $575 $1, 667 Private – financial services $579 $1, 656 1 Lg. Public and Private Sector Employers: ≥ 200 employees in public and private sectors 2 Public & Private Sector Employers in South includes Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia Data from the Kaiser Family Foundation Employer Health Benefits 2017 Annual Survey 6

2017 average annual deductible Amount State Health Plan $445 Large public and private sector employers 1 $856 Public and private sector employers in South 2 $1, 149 1 Lg. Public and Private Sector Employers: ≥ 200 employees in public and private sectors 2 Public & Private Sector Employers in South includes Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia Data from the Kaiser Family Foundation Employer Health Benefits 2017 Annual Survey 7

2018 composite monthly premiums 1 Compared to other state employee health plans Employer Employee Total State Health Plan $533. 25 $159. 71 $692. 96 South 2 $726. 00 $186. 19 $912. 19 United States $890. 87 $181. 02 $1, 072. 89 1 Composite monthly premiums: Weighted average of all PEBA health subscribers enrolled in each coverage level 2 South includes Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Data from the 2018 PEBA 50 -State Survey of State Employee Health Plans Virginia 8

State Health Plan budget 9

House Ways and Means FY 2019 budget released • Includes the addition of covered adult well visits as a regular contractual service. • Adult well visits will be subject to regular deductible and coinsurance. • Calls for an increase in member copayments, deductibles and coinsurance maximums. • Based on its budget, there is a 5. 7 percent overall increase in the cost of the State Health. • Currently projecting an employer-only increase of 7. 4 percent for the State Health Plan. • No change in the enrollee contributions is anticipated. 10

House Ways and Means FY 2019 budget released • Initial step in the budget process; details are subject to change. • Budget must also go through the Senate before the Governor signs the final Appropriations Act. • Projections are for the 2019 plan year, which begins January 1, 2019. • Final rates will be published in August 2018. • Participating optional employers should apply any change in the experience rating load factor to this projected increase. 11

Projected permissible changes in patient liability • Remain in ACA-grandfathered status. • -1. 7 percent Plan impact. Standard Plan benefit design 2018 2019 Annual deductible $445 $495 $2, 540 $2, 850 Outpatient copay $95 $105 Emergency room copay $159 $175 Office visit copay $12 $14 Tier 2 (preferred brand) prescription drug copay $38 $42 Tier 3 (non-preferred brand) prescription drug copay $63 $71 $2, 500 $3, 000 Annual coinsurance maximum Annual prescription drug copay maximum 12

PEBA Perks Value-based benefits at no cost 13

PEBA Perks • Value-based benefits available at no cost to State Health Plan primary members at network providers and pharmacies. • Benefits can help make it easier for you and your family to stay healthy. • www. PEBAPerks. com. 14

PEBA Perks • Preventive screenings. • Flu vaccine. • Adult vaccinations. • Well child benefits. • Colorectal cancer screening. • Cervical cancer screening. • No-Pay Copay. • Mammography. • Diabetes education. • Tobacco cessation. • Breast pumps. 15

Preventive screenings • Available to State Health Plan primary subscribers, non-Medicare eligible retirees, COBRA subscribers and covered spouses. • Screenings, worth more than $300, include: • • • Blood work; Health risk appraisal; Height and weight measurements; Blood pressure check; and Lipid panels. 16

Flu vaccine • Available to State Health Plan primary members. • Members may get the shot from a participating network pharmacy for a $0 copay. • If a member receives the shot at a network doctor's office, the vaccine and the administration fee will be covered at no cost. • Any costs associated with the office visit will be processed according to regular Plan coverage rules. 17

Adult vaccinations • Available to State Health Plan primary members. • Covered as recommended by the U. S. Centers for Disease Control and Prevention. • If a member receives a shot at a network doctor's office, the vaccine and the administration fee will be covered at no cost. • Any costs associated with the office visit will be processed according to regular Plan coverage rules. 18

Well child benefits • Available to covered dependents through age 18. • Plan pays 100 percent of the allowed amount for approved exams and immunizations at a network provider. • American Academy of Pediatrics recommends services at certain ages. • U. S. Centers for Disease Control and Prevention recommends immunizations. 19

Colorectal cancer screening • Available to State Health Plan primary members at a qualified network provider. • Routine screening covered based on age range recommended by the United States Preventive Services Task Force. • Eligible members can also opt for a certain take-at-home test. • Diagnostic screenings available at any age. • Benefit covers generic prep kit, pre-surgical consultation, procedure and anesthesia. 20

Cervical cancer screening • Available to State Health Plan primary women ages 18 -65. • Covers a Pap test each calendar year at no cost. • Women ages 30 -65 can also receive the HPV test at no cost in combination with a Pap test once every five years. • This benefit only covers the lab fee and portion of the office visit associated with the Pap test. 21

No-Pay Copay • Available to State Health Plan primary subscribers and covered spouses. • Qualify for the program on a quarterly basis through Rally by completing certain activities each quarter. • Receive certain generic medications for the following conditions: • High blood pressure and high cholesterol; • Cardiovascular disease, congestive heart failure and coronary artery disease; and • Diabetes. 22

Mammography • Available to State Health Plan primary women. • One baseline routine mammogram (four views) for women ages 35 -39. • One routine mammogram (four views) each calendar year for women ages 40 and older. • Diagnostic mammograms are processed according to regular Plan coverage rules. 23

Diabetes education • Available to State Health Plan primary members. • Diabetes education helps diabetics understand their condition and how to better manage it. • People who receive diabetes education are more likely to • Use primary care and preventive services; • Take medications as prescribed; and • Control their blood glucose, blood pressure and cholesterol levels. 24

Tobacco cessation • Available to State Health Plan primary subscribers and covered spouses and dependent children age 13 or older. • Enroll in Quit For Life® program at www. quitnow. net/SCState. Health. Plan or 800. 652. 7230. • Includes a $0 copay for eligible tobacco cessation medications to eligible participants. 25

Breast pumps • Available to State Health Plan primary women. • Receive certain electric or manual breast pump. • Learn more by enrolling in Coming Attractions. • Log in to your My Health Toolkit account. Select Wellness, then Health Coaching. • Call 855. 838. 5897 and press 4. • Coming Attractions program supports mothers throughout pregnancy and baby’s first year of life. 26

Health and wellness benefits 27

Patient-centered medical home (PCMH) • Focus is on coordinating care and preventing illnesses rather than waiting until an illness occurs and treating it. • Physician office visit copay is waived for Standard Plan members. • Members pay a 10 percent coinsurance, rather than 20 percent coinsurance once meeting their deductible. • Learn more and find a list of PCMH providers at statesc. southcarolinablues. com under Coverage Information. 28

Blue Care. On. Demand • Available to State Health Plan primary members age 18 and older. • Dependent children can use the benefit with an adult member. • Connect with health care professionals via computer or smartphone 24/7/365. • Maximum cost of $59 for members. • Cost is subject to regular Plan coverage rules, including annual deductible and coinsurance. • www. peba. sc. gov/bluecareondemand. html. 29

Health issues appropriate for a video visit • Cold and flu symptoms. • Allergies. • Bronchitis and other respiratory infections. • Urinary tract infections. • Rashes and other skin irritations. • Sinus problems. • Migraines. • Pinkeye. 30

Rally • Digital health platform that offers State Health Plan primary members age 16 and older a personalized experience. • Link certain wearable devices to Rally. • Find your Rally Age, track your movement, complete missions and compete with others in challenges. • Register by logging in to your My Health Toolkit account. Select Wellness, then Rally. 31

Health coaching • Available to State Health Plan subscribers and covered adult family members. • Designed to help those with behavioral or chronic medical conditions. • Automatically enrolled if you are identified through claims as someone who could benefit from one of the programs. You can opt out at any time. • To self-enroll, call Blue. Cross at 855. 838. 5897. • www. peba. sc. gov/healthcoaching. html. 32

Online tools and resources 33

Member messaging • Text messages that can help you stay on top of your health. • Receive benefits information, health and wellness reminders and costsaving tips. • Two ways to sign up: • Call 844. 284. 5417. • Text PERKS to 735 -29. 34

My Health Toolkit • One-stop destination to manage your health benefits. • • • Learn more about your coverage. Check medical and dental claims. Manage your prescriptions. Replace or view your identification card. Find a doctor or hospital. Improve your wellness with Rally. • www. State. SC. South. Carolina. Blues. com. 35

Manage your medicine with taps, not trips. • Register at www. express-scripts. com or download the Express Scripts mobile app. • Online tools include: • • • Refill and renew prescriptions. View your identification card. Check order status and view medicine cabinet. Find and compare prices with Price a Medication. Locate a network pharmacy near you. 36

Retirement Systems 37

Roles in managing the Systems • PEBA administers retirement benefits, which are defined in state statute and controlled by the S. C. General Assembly. • Total authority for the investing of retirement trust funds is statutorily delegated to another agency, the Retirement Systems Investment Commission, or RSIC. 38

Profile of the Systems • Five defined benefit plans. • One defined contribution plan. • Retirement plans cover employees of state agencies, counties, cities, school districts, higher education institutions, fire districts and other political subdivisions. • Nearly 94 percent of annuitants live in South Carolina, representing a potential $2. 84 billion impact on our state’s economy. 39

Total membership as of July 1, 2017 SCRS PORS Active 193, 985 27, 056 Inactive 176, 045 16, 004 Retirees and beneficiaries 140, 2881 17, 887 Total 510, 318 60, 947 1 Represents members who retired, including those who participate in the Teacher and Employee Retention Incentive (TERI) program or who returned to employment as a working retiree and surviving beneficiaries of former members. Data from actuarial valuation reports as of July 1, 2017. 40

Covered employers as of June 30, 2017 SCRS PORS State agencies and higher education 33 30 Public school districts 118 53 Other 578 333 Total 729 416 Data from the South Carolina Retirement Systems Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017. 41

Retirement System Funding and Administration Act • Signed into law by Governor Mc. Master on April 25, 2017. • Addressed funding and governance issues. • Changes were effective July 1, 2017. 42

Retirement System Funding and Administration Act • Legislation did not change the benefits provided to members of the Retirement Systems. • Goal of the legislation was to pay down the unfunded liability faster by: • Reducing the funding period; • Increasing contribution rates; and • Decreasing the negative amortization. 43

SCRS contribution rate schedule set in 2017 July 1 Employer contributions 1 Member contributions 2017 13. 56% 9. 00% 2018 14. 56% 9. 00% 2019 15. 56% 9. 00% 2020 16. 56% 9. 00% 2021 17. 56% 9. 00% 2022 18. 56% 9. 00% 1 Includes incidental death benefit contributions for employers covered under this program. 44

PORS contribution rate schedule set in 2017 July 1 Employer contributions 1 Member contributions 2017 16. 24% 9. 75% 2018 17. 24% 9. 75% 2019 18. 24% 9. 75% 2020 19. 24% 9. 75% 2021 20. 24% 9. 75% 2022 21. 24% 9. 75% 1 Includes incidental death benefit and accidental death benefit contributions for employers covered under these programs. 45

Joint Committee on Pension Systems Review • Joint Committee is continuing its work by evaluating plan design as a second phase of the retirement reform legislation. • PEBA is working with the Joint Committee during its evaluation. 46

Retirement awareness 47

Retirement seminars • On the Road to Retirement. • For early- and mid-career employees. • Reviews retirement needs, potential income sources and retirement benefits available through PEBA. • Get Set for Retirement. • For employees who are close to retirement. • Reviews retirement eligibility, retiree insurance eligibility, benefit calculation, payment options and retirementrelated issues such as Medicare and return-to-work rules. • Regional seminars occur August to December and include presentations from the Social Security Administration and the South Carolina Deferred Compensation Program. 48

Educational series • Covers how to make smart decisions, including developing a budget, building a financial safety net and setting retirement financial goals. • Explains investment tools and resources available through the South Carolina Deferred Compensation Program and State Optional Retirement Program. • www. peba. sc. gov/retirementawareness. html. 49

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peba: connect • Core operating systems date back to the early 1990 s. • Separate insurance and retirement systems don’t share data and pose a technology risk. • PEBA recently launched a multi-year project to replace our aging systems. • One component of the new system will be a redesign of the employer reporting process. • Stay up-to-date on the progress at www. peba. sc. gov/pebaconnect. html. 51

Get social with PEBA www. facebook. com/scpeba www. twitter. com/scpeba www. youtube. com/c/pebatv www. scpeba. podbean. com 52

Disclaimer This presentation does not constitute a comprehensive or binding representation regarding the employee benefits offered by the South Carolina Public Employee Benefit Authority (PEBA). The terms and conditions of the retirement and insurance benefit plans offered by PEBA are set out in the applicable statutes and plan documents and are subject to change. Please contact PEBA for the most current information. The language used in this presentation does not create any contractual rights or entitlements for any person. 53