STATE EMPLOYEES HEALTH INSURANCE PLAN

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1 STATE EMPLOYEES HEALTH INSURANCE PLAN REPORT IN ACCORDANCE WITH ACT AND September 30, 2014

2 Table of Contents September 30, 2014 Independent Accountant s Review Report 1 Report in Accordance with Act and Act

3 INDEPENDENT ACCOUNTANT S REVIEW REPORT Board of Directors State Employees Health Insurance Plan Montgomery, Alabama We have reviewed The State Employees Health Insurance Plan special purpose Report in Accordance with Act and Act (the Report) for the year ended September 30, A review includes primarily applying analytical procedures to management s financial data and making inquiries of management. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on the Report. Accordingly, we do not express such an opinion. Management is responsible for the preparation and fair presentation of the Report in accordance with Code of Alabama Section , Act and and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the Report. Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the Report. We believe that the results of our procedures provide a reasonable basis for our report. The accompanying special purpose report was prepared for the purpose of complying with the Code of Alabama section , Act and and is not intended to be a presentation in conformity with accounting principles generally accepted in the United States of America. Based on our review, we are not aware of any material modifications that should be made in order for the Report to be in conformity with the requirements of Act and Act This report is intended solely for the use of the Board and the State of Alabama and is not intended to be and should not be used by anyone other than these specified parties. Montgomery, Alabama January 15,

4 Report in Accordance with Act and Act Fiscal Year Fiscal Year Actual Estimate Premiums Premiums paid by state agencies $ 320,235,740 $ 316,463,400 Premiums paid by active and retired members 79,179,917 81,310,087 Employer rate per active employee Calendar Year Calendar Year Actual Estimate Rates paid by member for coverage: Active Employee Active Family Active Family with Spouse Retiree < Retiree <65 Family <65 without spouse Retiree <65 Family <65 with spouse < Retiree <65 Medicare dependent Retiree <65 Medicare spouse Medicare retiree Medicare retiree Family <65 without spouse Medicare retiree Family <65 with spouse < Medical retiree Medicare dependent Medical retiree Medicare spouse Wellness participation discount (25) (25) Non tobacco usage discount (50) (50) Spousal surcharge waiver (50) (50) State cost for calculating retiree sliding scale: Retiree < Medicare Retiree (Continued) See independent accountant s review report. 2

5 Report in Accordance with Act and Act Savings (Cost) from 2004 Special Session of Legislature Fiscal Year : Act Number: Code Section: Change: Savings (Costs): Other cost containment measures (wellness participation discounts forfeited) 870,925 (spousal surcharges) 2,813, Opt not to have coverage 3,314, , and 8 Supplemental coverage for employees and 14,250,699 retirees eligible for other coverage (1) Non tobacco usage discounts forfeited 4,793, a Federal poverty level assistance (788,317) Pre tax employee contributions 1,307, Retiree contributions based on years of 12,990,663 service and reduction in growth of retiree population Estimated Total Savings $ 39,553,242 (1) Adjusted for savings attributable to employees enrolled in the Public Education Employees' Health Insurance Plan. See independent accountant s review report. 3