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HomeMy WebLinkAbout09/08/1997 BAKERSFIELD Patricia J. DeMond, Chair Mark Salvaggio Jacquie Sullivan Staff: John W. Stinson AGENDA PERSONNEL COMMITTEE · Monday, September 8, 1997 4:15 p.m. City Manager's Conference Room 1501 Truxtun Avenue Bakersfield, CA 1. ROLL CALL 2. APPROVAL OF AUGUST 11, 1997 MINUTES 3 PRESENTATIONS 4. PUBLIC STATEMENTS 5. DEFERRED BUSINESS A. HEALTH PLAN MARKETING - Stinson 6. NEW BUSINESS None 7. ADJOURNMENT JWS:jp FILE COPY DRAFT B A K E R S F [ E L D Alan Tandy, City Manager Patricia J. DeMond, Chair Staff: John Stinson Mark Salvaggio Jacquie Sullivan AGENDA SUMMARY REPORT PERSONNEL COMMITTEE Monday, August 11, 1997 _ 12:00 noon Risk Management Conference Room 1501 Truxtun Avenue Bakersfield. CA 93301 1. ROLL CALL Call to Order 12:15 p.m. Present:Councilmembers Patricia J. DeMond, Chair; Jacquie Sullivan and Mark Salvaggio 2. APPROVAL OF JULY 14, 1997 MINUTES Approved as submitted. 3. PRESENTATIONS None 4. PUBLIC STATEMENTS None 5. DEFERRED BUSINESS A. HEALTH PLAN MARKETING In resDonse to a question about a rec!uest by an outside insurance consultant firm to address the Insurance Committee. Mr. Stinson exl~lainecl that the Insurance DRAFT PERSONNEL COMMITTEE Monday, August 11, 1997 Page -2- Committee's purpose is part of the meet and confer process as established in the City's MOUs with the bargaining units, and as part of that process is typically not open to the public. Mr. Stinson stated that the request had been passed on to members of the Insurance Committee representing the bargaining units who expressed no interest in meeting with the consultant. Mr. Stinson discussed the marketing proposal submitted by AON Consultant Herb Kaighan. As the whole report (which is available in the City Clerk's Office) was voluminous, an executive summary was distributed which includes: · an overview of the City's plans - · a renewal summary' · elements of renewal · marketing summary · overall-numbers for the different potential renewal options · a glossary of terms Committee Chair DeMond requested that a summary of the reasons why the vendors did not choose to bid be made available. Staff indicated the in-formation will be provided. Mr. Stinson stated that staff, Mr. Kaighan, and a subcommittee of the Insurance Committee had met and reviewed the report. Mr. Kaighan also met with staff and the Insurance Committee. From the summary in the report, staff and the Insurance Committee made the following recommendations. · The Insurance Committee and staff recommend renewal of the Blue Cross Fee for Service Prudent Buyer Plan. Mr. Kaighan felt that the plan is competitive and would provide a reduction in rates of approximately 7.6 percent which equates to $216,000. · The Insurance Committee and staff are not recommending the Kaiser proposal -which is a revised plan design utilizing a point of service (POS) approach. The concern is that this plan is a design change and does not include the same level of benefits we currently offer employees that were agreed upon in the meet and confer process. There would be a savings of $196,000 with the POS plan and staff is recommending that if the City is interested in this approach, Blue Cross be contacted for a POS proposal for comparison purposes. Committee Chair DeMond requested a synopsis of benefit comparisons between the POS plan and the City's current plan. · The Insurance Committee and staff are recommending renewal of the HMO Plan with Blue Cross CaliforniaCare. Mr. Kaighan's report shows the current plan to be competitive and projects a premium reduction of approximately 1.5 percent or $36,000. AGENDA SUMMARY REPORT DRAFT PERSONNEL COMMITTEE Monday, August 11, 1997 Page -3- · The Insurance Committee is not recommending adding the Kaiser HMO Plan as an additional HMO in addition to the existing CaliforniaCare HMO at this time. The Insurance Committee has concerns about the possible effects on future rates and impacts on the purchasing power with vendors if multiple HMO plans were offered. Mr. Stinson stated that there would be some cost savings to the City and to the participants with the Kaiser HMO plan, and some potential impacts on retirees if implemented. Committee Chair DeMond requested additional information on what the impacts/ loss of purchasing power might be in future years and savings, if the City were to offer a second HMO and also make it available to retirees and those on Medicare. Mr. Kaighan has additional information coming from Kaiser. · Medicare Risk programs with Blue Cross and PacificCare are competitive. Blue Cross has a new plan called Blue Cross Secure Plan II1. The Insurance Committee is recommending contacting the six retirees that are currently in the Blue Cross medicare risk plan and ask which plan they prefer--_they must all be in the same plan. There is no cost difference to the City. · Blue Cross Iridemnity dental is based on the City's claims experience. The report shows the renewal is reasonable and competitive and the Insurance Committee and staff recommend renewal of the Blue Cross Dental plan. · The two current prepaid dental plans provide good service to the participants and are competitive. The Insurance Committee and staff recommend renewal of HBI and DDS HMO dental plans. Mr. Stinson stated that the Insurance Committee has requested additional cost information regarding increasing the Blue Cross Indemnity dental plan annual maximum, due to inflation and the rising cost of dental services, from $1,000 to $2,000, which would be an annual cost to the City of $60,000. The annual maximum has been set at $1,000 for over fifteen years. The Insurance Committee also asked for cost information to increase the lifetime orthodontia benefit maximum from $1,500 to $3,000 per person, which would be an annual cost to the City of $51,000. Any of these changes would need to be reviewed further by the Personnel Committee, approved by Council and then based on Council direction, taken back to the Insurance Committee. Staff has concerns with increasing the orthodontia benefits since it could only benefit a small number of employees within the plan, and everyone would have to pay the increase. The Personnel Committee was supportive of increasing the Blue Cross Indemnity dental plan annual maximum from its current $1,000, but did not take any action. DRAFT AGENDA SUMMARY REPORT PERSONNEL COMMITTEE Monday, August 11, 1997 Page -4- Personnel Committee Chair DeMond requested that a retiree representative and an alternate be appointed to serve on the Insurance Committee, as the current representative has been unable to attend. A motion was made and approved that the health insurance marketing report be referred back to staff to follow up on requests for information and come back to the Committee at the next meeting. 6. NEW BUSINESS A. PLANNING TECHNICIAN RECLASSIFICATION (This item was heard before Deferred Business) As information is still being processed by staff, a motion was made by Committee member Salvaggio and approved ~y the Committee to defer this item. Staff was directed to keep Committee member Salvaggio advised as to progress and status. 7. ADJOURNMENT The meeting was_adjourned at 1:50 p.m. Staff present: Assistant City Manager John W. Stinson; Human Resources Manager Carroll Hayden; Public Works Director Raul Rojas; Chief Assistant City Attorney Bob Sherfy; Benefits Technician Ginger Rubin. Others present: Herb Kaighan, AON Consulting; Wanda Lim, AON Consulting; Retiree Margaret Ursin; Clayton Koerner, Alliance Brokers and Consultants; Rodger Gagosian, Gagosian Associates; Jim Barks, FinHealth Services; Denny Haynes, S.E.I.U. Local 700, Chuck Waide, SEIU Local 700. cc: Honorable Mayor and City Council JWS:jp Employee Benefits Cons~dting Group August 28, 1997 Via Facsimile and Overnight Mail Carroll Hayden City of Bakersfield 1501 Truxtun Avenue Bakersfield, CA 93301 Re: 1998 Marketing - Follow-Up to August 11 Meeting Dear Carroll: The responses to the questions raised during the August 11, 1997 Personnel Comm_ ittee meeting follow and will be addressed in the order discussed. 1. Request for Proposal Carrier Response Summary · A copy of the exhibit that was previously sent summarizing the carriers that received the Request for Proposal and their responses is attached (Exhibit 1). If the information included in the exhibit is not sufficient, please let us know. 2. Benefit and Access Differences Between Blue Cross Fee-For-Service / Prudent Buyer Compared to Kaiser Point-of-Service · The current Blue Cross Fee-For-Service/Prudent Buyer (FFS/PB) is a two tier structure. Individuals obtaining services from Blue Cross contracted providers are generally reimbursed at 100% for hospitalizations and outpatient professional services and 90% for outpatient diagnostic and extended care services. Services obtained through non-contracted providers are generally reimbursed at 80% for hospitalizations and outpatient professional services and 70% for outpatient diagnostic and extended care services. Pharmacy-filled prescriptions are covered after a $10 copay for brands and a $5 copay for generics. Network and non-network benefits are subject to a $150 individual deductible; the family deductible is 3 times the individual amount. After the member has paid $1,600 annually per person, benefits are reimbursed at 100%. The plan's lifetime maximum is $5 million per person. Network benefits are based on negotiated rates; non-network benefits on usual and customary (u&c). Aon Constdtittg & Insurance Serr'ice,s · Formerly G,~,hvins t3ooke & Dickenson Insurance Services -'t)7 Wil~hirc l~t,tflcx'~mt, 5t~i~:t: 5--~}(} · la}s Angc'lcs, (Stiff,mia 90017 * tel: (213) 630-2900 · thx: (213) 627-6155 Mailin.<: P(). [*(,x ~0%9(*, I.os Angcics. (Ldit})rma 900~1)-O596 License No. 0763901 Aon Conszdting £mployee Benej~;ts Co~s//,lting Carroll Hayden August 28, 1997 Page 2 The proposed Kaiser Point-of-Service (POS) is a three tier structure. Under the first tier, individuals can only receive care through Kaiser's HMO network. Services are generally covered at no out-of-pocket expense; prescriptions are subject to a $5 copay. First tier services are not subject to deductibles and do not have a lifetime maximum. The annual maximum copay is $1,400 per individual and $4,000 per family. Under the second tier, services can only be obtained through a CCN contracted provider. Second tier services are generally reimbursed at 80%; prescriptions are subject to a $25 copay for brands and a $15 copay for generics. Third tier services can be obtained from any provider. They are generally reimbursed at 60%; prescriptions are subject to a $25 copay for brands and a $15 copay for generics. Second and third tier benefits are subject to a $250 individual deductible; the family deductible is 3 times the individual amount. After the member has paid $1,500 annually per person ($4,500 per family), benefits are reimbursed at 100%. The plan's lifetime maximum is $2 million per person. Second tier benefits are based on negotiated rates; third tier benefits on allowable charges. Although Kaiser's POS plan provides higher reimbursement levels for some first tier se~ices, benefits obtained at the second and third tiers can be reimbursed up to 20% less per tier compared to the comparable network and non-network levels on Blue Cross' FFS/PB plan. In addition, Kaiser's annual deductible is higher and lifetime maximum is lower on these tiers compared to Blue Cross' benefits. Exhibit 2 summarizes the benefit differences discussed above for Blue Cross' Fee-For-Service/Prudent Buyer (FFS/PB) and Kaiser's Point-of-Service (POS). Blue Cross and Kaiser were asked to provide information regarding their reimbursement schedules for the most frequently utilized professional services on the FFS/PB and POS, respectively. Exhibit 3 summarizes the information received from the Kern Foundation, the claims administrator for Blue Cross, and CCN, the administrator for Kaiser's second tier benefits. Aon Cons dting Ca~oll Hayden August 28, 1997 Page 3 Kaiser's POS altemative differs significantly from Blue Cross' FFS/PB in terms of provider access and benefit reimbursement levels, therefore, the plans and the respective costs are not truly comparable. If the City is interested in implementing a POS plan, we recommend that we be requested to obtain a POS proposal from Blue Cross so that an 'equivalent' evaluation of costs and benefits can be conducted. We also suggest we obtain and analyze similar proposals from all other carders that responded to the Request For Proposal for medical. 3. Status of Gem Care Contract · Blue Cross indicated they are still actively negotiating the provider contract with Gem Care. As of August 27, this group is participating in BlueCross' network. We have asked Blue Cross to keep us apprised of their negotiations. 4. Kaiser Medicare Risk Plan for Non-California Residents · Kaiser indicated Medicare Risk participants residing outside of California (i.e., Washington, Oregon, etc.) in areas where Kaiser offers Medicare Risk coverage would pay the same cost for coverage and receive the same level of benefits as the California Medicare Risk participants since these individuals are set up under the same group contract. In addition they would have the added advantage of being able to use the Kaiser plan in the service area of their home residence and in the California service area. 5. Kaiser "Zero-Premium" Medicare Risk Coverage · Kaiser reconfirmed they can offer a "zero premium" Medicare Risk plan to individuals who assign Medicare Parts A and B. This plan has a $3 office visit copay, $7 prescription drug copay, 100% hospitalization, $5 dental service copay, and $3 vision exam copay. Aon Consulting Ca.oil Hayden August 28, 1997 Page 4 6. Benefit Differences Between Blue Cross Senior Secure Current Plan and Proposed Plan III · Blue Cross is preparing detailed comparison of benefit differences between the current Senior Secure and their proposed Senior Secure Plan III. They will have this information to us the week of September 1. 7. Kaiser Rates to Offer HMO Coverage to Retirees Over and Under Age 65 Who Are Not Medicare Eligible · Kaiser proposed three plans to offer HMO coverage only to the City's retirees (over and under age 65) who are not Medicare eligible. A summary of these plans is attached (Exhibit 4). Effective January 1, 1998, Kaiser's proposed rates for HMO coverage (including active employees) and their proposed rates to cover only the retiree groups mentioned above are: Proposed Option 1: Option 2: Option 3 with Actives NN Coverage AA Coverage QQ Coverage Single $109.60 $188.06 $194.65 $170.99 Two-Party $219.20 $376.12 $389.30 $341.98 Family $310.16 $532.20 $550.85 $483.89 Aon Cons dting Carroll Hayden August 28, 1997 Page 5 The retiree over and under age 65 enrollment, excluding Medicare eligibles, is: Retirees Retirees Over Age 65 Under Age 65 Single 34 31 Two-Party 25 27 Family 0 4 Comparing the portion of the costs attributable to retirees in the original proposal to the cost for offering coverage only to retirees, the projected annual premium increases are: · Option 1 (NN Coverage): 72% or $170,000. · Option 2 (AA Coverage): 78% or $184,000. · Option 3 (QQ Coverage): 56% or $133,000. & Confirmation That Dental Coverage Was Not Submitted by Gagosian and Barks · The proposals submitted by Gagosian and Barks in conjunction with the insurance carriers did not include proposals for dental coverage. 9. Rates to Modify Delta Dental's Proposed Indemnity Plan Annual Maximum and Lifetime Orthodontia Maximum · Delta Dental provided rates to modify the proposed indemnity plan's annual maximum and lifetime orthodontia maximum. Aon Consulting Carroll Hayden August 28, 1.997 . Page 6 To change the proposed plan's annual maximum from $1,000 to $1,500 and $2,000, respectively, Delta's proposed rates (effective January 1, 1998) are: Proposed $1,000 Increase Annual Increase Annual Annual Maximum Maximum to $1,500 Maximum to $2,000 Single $25.87 $31.60 $34.71 Two-Party $45.20 $54.75 $59.97 Family $77.99 $89.75 $95.86 The following shows the additional costs for Blue Cross and Delta for these plan modifications: Blue Cross Delta Dental · $1,500 $41,000 $64,000 · $2,000 $60,000 $98,000 To modify the proposed plan's lifetime orthodontia maximum from $1,500 to $2,000, $2,500, and $3,000, respectively, Delta's proposed rates (effective January 1, 1998) are: Proposed Increase Increase Increase $1,500 Orthodontia Orthodontia Orthodontia Orthodontia Maximum Maximum Maximum Maximum to $2,000 to $2,500 to $3,000 Single $25.87 $25.87 $25.87 $25.87 Two-Party $45.20 $45.36 $45.47 $45.58 Family $77.99 $80.94 $81.34 $81.74 Aon Conszdting Carroll Hayden August 28, 1997 Page 7 The following shows the additional costs for Blue Cross and Delta for these plan modifications: Blue Cross Delta Dental · $2,000 $48,000 $11,000 · $2,500 $49,000 $13,000 · $3,000 $51,000 $15,000 Exhibit 5 shows the dentists participating in both Blue Cross' and Delta Dental's networks in Kern County. 10.Survey Data on Dental Plan Annual Maximums and Lifetime Ortifodontia Maximums Based on information included in the 1996 Foster Higgins survey, the median annual maximum on indemnity dental plans nationally for large employers (500 or more employees) is $1,000; the median for government employers is also $1,000. In the west region, however, the median.is $1,200. The survey did not include information regarding lifetime orthodontia maximums. However, an informal survey based on Aon's clients indicated the maximum ranges from $1,500 to $2,000. 9. Blue Shield's Proposed Rates · Blue Shield verbally verified the proposed PPO, HMO, and Medicare Risk rates included in our report. 12.PacifiCare Point-Of-Service Proposal PacifiCare only proposed their HMO and prepaid dental plans and provided renewal rates for the City's Medicare Risk plan. They did not propose a POS medical plan alternative. Aon Consulting Employee C'or~snhin,g Carroll Hayden August 28, 1997 Page 8 13. Carve-out Mental Health and Substance Abuse Benefits from Proposed Kaiser Plans · Kaiser confirmed they will not carve-out the mental health and substance abuse benefits from the plans they proposed for the City. 14.Blue Cross Indemnity Dental Annual Maximum Report for 1996 · A report showing the number of employees that met the dental annual maximum in 1996 was requested from Blue Cross. A similar report was requested for dependents. Blue Cross expects to have this information available by the week of September 2. When received, it will be sent to the City under separate cover. 15. Oth er Inform ation Although the following items were not requested during the meeting, we contacted DDS, HBI, and PacifiCare for the following to give the City comparative information similar to that previously requested by the City. · DDS and HBI provided rates for two lifetime orthodontia benefit options. Option 1 provides 50% coverage up to a lifetime maximum of $1,250 for adults and children. The renewal and Option 1 rates effective January 1, 1998 for DDS and HBI are: Renewal Option 1 Renewal Option 1 DDS DDS HBI HBI Single $17.50 $17.50 $18.14 $18.30 Two-Party $35.00 $35.00 $36.18 $36.49 Family $52.50 $52.50 $53.62 $54.08 Aon Consulting Ca.oil Hayden August 28, 1997 Page 9 Compared to renewal costs, the projected annual premiums to change to this benefit approach are: · DDS: no impact to the cost. · HBI: increase of 1% or $2,000. DD$ and HBI were also asked to provide rates for the 50% orthodontia option with a $1,500 and $2,000 lifetime maximums for adults and children. We expect to receive these rates the week of September 1. They will be forwarded to you under separate cover. Exhibit 6 summarizes DDS' and HBI's current and Option 2 orthodontia benefits which are both copay approaches. Option 2 provides discounted orthodontia for adults and children. The renewal and Option 2 rates effective January 1, 1998 for DDS and HBI are: Renewal Option 2 Renewal Option 2 DDS DDS HBI HBI Single $17.50 $17.50 $18.14 $17.41 Two-Party $35.00 $35.00 $36.18 $34.73 Family $52.50 $52.50 $53.62 $51.48 Compared to renewal, the projected annual premiums to change to this benefit represents: · DDS: no impact to the cost. · HBI: a decrease of 4% or $9,000. Aon Consulting £mp/o),'~e Benq~its Carroll Hayden August 28, 1997 Page 10 · PacifiCare's "zero premium" Medicare Risk products are only available in specific California counties with plan designs that vary by county. Attached is a summary prepared by PacifiCare outlining the costs and benefits (Exhibit 7) by location. PacifiCare indicated they cannot offer a "zero premium" plan with the same level of benefits for the entire group, and they are not filed to offer these Medicare Risk products outside of California. Therefore, non-Califomia residents would be offered a different plan of benefits at different rates. PacifiCare will need to get a census listing with zip codes to provide this information. Please let us know if the City would like us to follow-up with PacifiCare. Please let us know if you need any additional information. Sincerely, ~ierb~~VV a/gh~~ Senior Vice President Enclosures cc: John Stinson Ginger Rubin Wanda Lim Exhibit 1 CITY OF BAKERSFIELD Carrier Summary CARRIER STATUS Aetna Proposed Medicare Risk only; proposal received after due date. American Benefit Network (ABN) Proposed PP© only; out of network benefit did not duplicate current plan. Ameritas Proposed PPO dental only; benefits did not duplicate current plan. Blue Cross Included in report. Blue Shield ~ Included in report. Care America Proposed plans not cost competitive and did not duplicate current plans. Caval and Taylor (Brokers) See MetraHealth. Clifford and Bradford (Brokers) See Kaiser. CIGNA No proposal. CNA No proposal. DDS Included in report. Delta Dental Included in report. Dental Benefit Providers No proposal. DentiCare Proposal not cost competitive and/or did not meet access requirements. FHP See Health Net First American Dental No proposal. Foundation Health Plan Proposed programs not cost competitive. Gagosian & Barks (Brokers) See Blue Shield, Foundation, Kaiser and Denticare. General American No proposal. Great West No proposal. HBI Included in report. ~ Health Net No proposal. Jefferson Pilot No proposal. Kaiser Included in report. Maxicare No proposal. MetLife Proposed programs not cost competitive. MetraHealth Proposed programs not cost competitive. MIDA No proposal. Mutual of Omaha No proposal. s:\....\mktg\1997\EXHIBIT3.XLS\status (2)\8/26/97 Exhibit 1 CITY OF BAKERSFIELD ,I Carrier Summary :' CARRIER STATUS New England No proposal. NYL Care No proposal. PacifiCare Medicare Risk included in report; HMO and dental not cost competitive. Prudential No proposal. ReliaStar No proposal. Safeguard No proposal. United Dental No proposal. Western Dental No proposal. s:\...Amktg\1997\EXHIBIT3.XLS\status (2)\8/26/97 CITY OF BAKERSFIELD Current FFS/PB and Proposed POS Medical Benefit Highlights Exhibit 2 Current Plan Design Proposed Plan Design Blue Cross FFS/PB Kaiser POS Network I Non-Network Tier 1 - HMO Tier 2 PPO Network I Tier 3 - Non-Network Lifetime Maximum $5,000,000 Unlimited $2,000,000 Deductible I I Individual $150 None $250 Family 3 ~imes individual amount None 3 times individual amount Copay / Stop Loss Limit After Member pays $1,600, Individual - $1,400 copay After Member pays $1,500 per individual or plan pays 100%. Family - $4,000 copay $4,500 for family, plan pays 100%. Hospital Inpatient 100% 80% No charge 80% 60% after $500 deductible after $250 deductible per admission, per admission. Non-contracting, 25% penalty plus $500 deductible per admission. Professional Outpatient Services 100% 80% No char[~e 80% 60% Diagnostic X-ray / Lab 90% 70% No charge 80% 60% Prescription Drugs Inpatient: Formulary Brand: Inpatient: 100% [ 80% $5 copay 80% I 60% Outpatient: Formulary Generic: Outpatient: Brand: $10 copay $5 copay Brand: $25 copay Generic: $5 copay ~ up to a 100 day supply. Generic: $15 copay up to 30 day supply, up to 30 day supply. Extended Care 90% I 70% No charge 80% ] 60% Subject to m~tximums. Subject to maximums. Subject to maximums. s:\. ,\mklg\1997\EXHIBIT4.XLS\pos ben (2) 8/27/97 CITY OF BAKERSFIELD Exhibit 3 Average Allowable Medical Charges - Commonly Utilized Professional Services Current Blue Cross Proposed Kaiser CPT Code Procedure FFS/PB (Network) POS (Tier 2 PPO Network) 71020 Radiologic Exam $55.10 $56.00 80061 Lipid Profile $29.40 $25.00 81000 Urinalysis $11.25 $7.00 81001 Urinalysis $5.40 $9.00 99205 Office Visit- Outpatient $146.65 $148.00 99211 Office Visit - Outpatient $16.68 $20.00 99212 Office Visit- Outpatient $28.50 $33.00 99213 Office Visit - Outpatient $38.92 $51.00 99214 Office Visit - Outpatient $60.47 $71.00 s:\...\mktg\1997\EXHIBIT4.XLSLPOS rcimb 8/26/97 CITY OF BAKERSFIELD Kaiser Proposed Retiree Only HMO Plan Options Exhibit 4 Option 1: NN Coverage Option 2: AA Coverage Option 3: QQ Coverage Inpatient Hospitalization No charge ~ No charge No charge Doctor Office Visits $5 copay No charge $5 copay Well Baby No charge Same as Doctor Office Same as Doctor Office up to 24 months Visits benefit Visits benefit Lab and X-Rays , No charge No charge No charge Prescription Drugs No charge No charge $5 copay up to a 100 day supply up to a 100 day supply up to a 100 day supply Emergency Room $5 copay per visit $5 copay per visit $5 copay per visit waived if admitted waived if admitted waived if admitted Urgent Care $5 copay per visit $5 copay per visit $5 copay per visit Mental Health Outpatient $20 copay $20 copay $20 copay up to 20 visits per calendar year up to 20 visits per calendar year up to 20 visits per calendar year Inpatient No charge No charge No charge up to 30 days per calendar year up to 30 days per calendar year up to 30 days per calendar year Durable Medical Equipment No charge No charge No charge Prosthetics and Orthotics No charge No charge No charge Hearing Aids No charge No charge Not covered once every 36 months once every 36 months Adjustments No charge No charge up to I year after purchase up to I year after purchase Gamete Intrafallopian Transfer No charge No charge Not covered Proposal Assumptions: Minimum of 3 employees enrolled in the plan. I Minimum employer contribution of 50% of Kaiser single rate or equal dollar amount contribution to the alternate plan, whichever is greater. Enrollment is limited to those employees residing within the approved Kaiser Service Area. There is an existing employer/retiree relationship. Employees have not been offered Kaiser coverage within the last 24 months. The employee census provided was current and accurate. Subsequent renewal rates will be based upon actual enrollment at the time of the renewal calculation. s:\...\mktg\1997\EXHIBIT4.XLS\Kaiser ret only HMO opts 8/26/97 CITY OF BAKERSFIELD Exhibit 5 Kern Foundation Primary Dentists Also Affiliated with Delta Dental in Kern County City Dentist Arvin Sandra, J. Gong Bakersfield Thomas Armstrong Michael Banducci Thomas A. Berry Manuel Campero Anthony G. Ching James N. Clark Anthony Falletti Edgar W. Flickinger Thomas Frank Kathleen Freed II Richard Gapper Arthur C. Genova Michael L. Gill Thomas Goblirsch Gregory Hanford Epifanio Herrera Eric Hershkewitz I Donald Jeffries Sttephan E. Kann Edward R. Kenien Gary W. Knorr Edward S. Ko Felicia L. Lai Richard Little Terrance Lukens s:\...\mktg\1997\EXHIBIT4.XLS\Kern docs 8/27/97 CITY OF BAKERSFIELD Exhibit 5 Kern Foundation Primary Dentists Also Affiliated with Delta Dental in Kern County City Dentist Bakersfield (Continued) Recse McClcnny Robert McCrackcn Bruce Macgee Nacru Mahta Dale Nakayama Edwin Nelson Joseph Nuncz Mark Phillips Sion Pah John Postgata Andrew Pounds William Prawctt R. J. Redelsparger Robert E. Reed Roger E. Sandoval I. Cecli Schneider Hal Shapiro Richard Shaw Thomas Sherman Eric D. Small Paul Stewart Thomas Stewart Anthony Taranga William P. Thomas Larry A. Valero John C. Wilson David L. Winegar s:\...\mktg\1997\EXHIBIT4.XLS\Kern docs 8/27/97 CITY OF BAKERSFIELD Exhibit 5 Kern Foundation Primary Dentists Also Affiliated with Delta Dental in Kern County City Dentist Caruthers Richard T. Furze Fowler Rodney Paloutrian Hartford Manuel F. DeSanto$ Leon I. VanArsdala Lemoore Maria G. Ancheta Lindsay Mike Loeffler Kreigh B. Sedillo Porterville Jonathan Richey Stanford Wolfe Reedley R. Phillip Winter Tehachapi David Markiewitz s:\...\mktg\1997\EXHIBIT4.XLS\Kern docs 8/27/97 CITY OF BAKERSFIELD Exhibit 6 Current versus Proposed Prepaid Dental Orthodontia Benefit Summary Current/Renewal Current/Renewal Proposed Option 2 Proposed Option 2 DDS HB1 DDS HBI Orthodontic Services X-rays - $120 copay Records - $200 copay Initial Exam - No charge Initial Exam - $40 copay (approximate). Case Study Any fee will be credited toward Any fee will be credited toward & Diagnosis - $200 copay.~ treatment fee when treatment treatment fee when treatment is initiated, is initiated. Primary Detention Primary Detention ADA Code 08312 - $850 copay ADA Code 08312 - $850 copay Limited treatment (1 arch or less) Limited treatment (1 arch or less) up to 12 months of treatment, up to 12 months of treatment. Transitional Detention Transitional Detention ADA Code 08412 - $850 copay ADA Code 08412 - $850 copay Limited treatment (1 arch or less) Limited treatment (1 arch or less) up to 12 months of treatment, up to 12 months of treatment. Permanent Detention Permanent Detention ADA Code 08712 - $1,150 copay ADA Code 08712 - $1,150 copay Limited treatment (1 arch or less) Limited treatment (1 arch or less) up to 6 months of treatment, up to 6 months of treatment. Phase I - $575 copay Phase I - $600 copay Transitional Detention - Phase I Transitional Detention - Phase i ADA Code 08610 - $1,310 copay ADA Code 08610 - $1,350 copay up to 18 months oft~eatment, up to 18 months of treatment. Phase 11 - $1,150 copay Phase II - $1,200 copay Transitional Detention - Phase II Transitional Detention - Phase II ~ ADA Code 08620 - $1,860 copay ADA Code 08620 - $1,900 copay up to 24 months of treatment, up to 24 months of treatment. Transitional Detention - Full Treatment Transitional Detention - Full Treatment ADA Code 08524 - $2,260 copay ADA Code 08524 - $2,300 copay up to 24 months of treatment, up to 24 months of treatment. s:\...\mktg\1997\EXHIBIT4.XLS\prepd ortho 8/27/97 CITY OF BAKERSFIELD Current versus Proposed Prepaid Dental Orthodontia Benefit Summary Exhibit 6 Current/Renewal Current/Renewal Proposed Option 2 Proposed Option 2 DDS HB! DDS HBI Orthodontic Services Transitional Detention - Full Treatment Transitional Detention - Full Treatmenl ADA Code 08518 - $1,900 copay ADA Code 08518 - $1,940 copay up to 18 months of treatment, up to 18 months of treatment. Transitional Detention - Full Treatment Transitional Detention - Full Treatment ADA Code 08512 - SI,100 copay ADA Code 08512 - $1,150 copay up to 12 months of treatment, up to 12 months of treatment. Permament Detention - Full Treatment Permament Detention - Full Treatment ADA Code 08812 - $1,100 copay ADA Code 08812 - $1,150 copay up to 12 months of treatment, up to ! 2 months of treatment. Permament Detention - Full Treatment Permament Detention - Full Treatment ADA Code 08818 - $1,935 copay ADA Code 08818 - $1,975 copay up to 18 months of treatment, up to 18 months of treatment. Permament Detention - Full Treatment Permament Detention - Full Treatment ADA Code 08824 - $2,260 copay ADA Code 08824 - $2,300 copay up to 24 months of treatment, up to 24 months of treatment. Permament Detention - Full Treatment Permament Detention - Full Treatment ADA Code 08830 - $2,620 copay ADA Code 08830 - $2,660 copay up to 30 months of treatment, up to 30 months of treatment. Retention - $ ! 00 copay Retention - $ 100 copay Retention - $250 coopay Retention - $250 coopay Cases beyond 24 months - Cases beyond 24 months - Cases beyond 24 months Cases beyond 24 months $35 copay $35 copay $60 copay $60 copay (PhaSes ! and Ii) (Phases I and s:\...\mk tg\ I OO 7\EX t I In IT4.X I.S~prepd crlho R/27/O7 . Exhibit 7 SECURE HORIZONo 1997 BENEFITS Revised 10-28-96 COMPARISON OF BENEFITS & COPAYS BY COUNTY Prern~oms $ 0 $ I0 $ 20 $ 0 $ [0 $ 0 $ 0 $ 20 $ 25 $ 25 A~a ~enl Ca~ $20 ~20 ~0 $20 520 ~0 $20 ~0 Men~l ~e~ll~ J]O Se~'ice~ $10 $10 ~[0 ~lO $10 $10 ~10 ~ed Fo~t~, Unlimited G~eric $ 7/~o $ 7/Io (~taiUmail) 3 7/10 $ ?IlO $ 7/10 S 7/10 $ 7/10 Name Brand S 10~0 $10~O ~A ~ 25/60 (~il~ail) g 25/6ff $ 25/60 $ Eye ~ $ 0 $ 5 $ 25/60 N/A ~A $6 $ I0 Ey~ls~ Coverage ~20 ~. $20 ~S - eve~ 24 mon~ $20 ~ns~s - $20 ~m~ $2~ ~nses $20 ~ses $20 ~ ev~ 24 mon~s eve~ 24 - eve~ 24 - ~e~ 24 - eve~ 24 - ~ 24 - ev~ 24 - ~ 24 Solaced E~es ~lec~d ~es monks ~n~s mon~s mon~ mon~ eve~ 24 mon~ eve~ 24 ~n~s monks ~l~ted ~el~led Se~em~ Selected &f~d fi~cs evc~, 24 evc~ 24 t eve~ 24 cve~ 24 ~e~ ~ ~c~ 24 ~ 24 monks monks moal~ ev~ 24 m~ mon~ mon~ mcn~ mon~ Ro~t&e I $ 5 $ 5 $ 5 NIA NtA O~nings N/A (Note:other New Formulary effective 1-1-97 Some Name Brand Dr~gs are available at the lower Generic copay. ~,,~,~.~r~.~ Hearing discount program available in limited areas.