EMPLOYEE BENEFITS PROGRAM COMMITTEE MEETING

JPIA EXECUTIVE CONFERENCE ROOM 2100 PROFESSIONAL DRIVE ROSEVILLE, CA 95661 (916) 786-JPIA (800) 231-JPIA www.acwajpia.com EMPLOYEE BENEFITS PROGRAM COMMITTEE MEETING Thursday, July 19, 2012 8:30 AM Chairman: Charles Muse, Helix Water District Vice Chair: Joseph Dion, Citrus Heights Water District Merle Aleshire, Valley Center Municipal Water District Bette Boatmun, Contra Costa Water District Sandy Olson, Walnut Valley Water District Glen Peterson, Las Virgenes Municipal Water District Stacy Peterson, Fair Oaks Water District J Bruce Rupp, Humboldt Bay Municipal Water District Randy Shilling, Kings River Conservation District

WELCOME ACWA/JOINT POWERS INSURANCE AUTHORITY EMPLOYEE BENEFITS PROGRAM COMMITTEE MEETING JPIA CONFERENCE ROOM 2100 Professional Drive Roseville, CA 95661-3700 www.acwajpia.com (800) 231-5742 AGENDA Thursday, July 19, 2012 8:30 AM CALL TO ORDER AND ANNOUNCEMENT OF QUORUM EVACUATION PROCEDURES PUBLIC COMMENT Members of the public will be allowed to address the Employee Benefits Committee on any agenda item prior to the Committee's decision on the item. They will also be allowed to comment on any issues that they wish which may or may not be on the agenda. If anyone present wishes to be heard, please let the Chairman know. INTRODUCTION OF GUESTS Presenter Page# Sells Sher Sells * I. Function of the Employee Benefits Program Committee. 1 * II. Pricing for 2013 Program Year. 2 III. Future agenda items. Muse * VI. Announce next scheduled meeting date. 28 *Related items enclosed ADJOURN Preliminary Agenda issued June 16, 2012 Page 1 Final Agenda issued June 29, 2012

Americans With Disabilities Act The ACWA/JPIA conforms to the protections and prohibitions contained in Section 202 of the Americans with Disabilities Act of 1990 and the Federal Rules and Regulations adopted in implementation thereof. A request for disability-related modification or accommodation, in order to participate in a public meeting of the ACWA/JPIA, shall be made to: Bobbette Wells, Executive Assistant to the CEO, ACWA/JPIA, P. O. Box 619082, Roseville, CA 95661-9082; telephone (916) 786-5742. ACWA/JPIA s normal business hours are Monday Friday, 7:30 a.m. to 4:30 p.m. (Government Code Section 54954.2, subdivision. (a)(1).) Written materials relating to an item on this Agenda that are distributed to the ACWA/JPIA Executive Committee within 72 hours before it is to consider the item at its regularly scheduled meeting will be made available for public inspection at ACWA/JPIA, 2100 Professional Drive, Roseville, CA 95661-3700; telephone (916) 786-5742. ACWA/JPIA s normal business hours are Monday Friday, 7:30 a.m. to 4:30 p.m. Preliminary Agenda issued June 16, 2012 Page 2 Final Agenda issued June 29, 2012

1 ACWA/JPIA Function of Employee Benefits Program Committee July 19, 2012 BACKGROUND ACWA/JPIA officially began administration of the ACWA Health Benefits Authority (HBA) health and benefits programs on July 2, 2012. The membership of the HBA voted to dissolve effective June 29, 2012. The final termination of HBA will transpire over the next few months. CURRENT SITUATION This is the first meeting of the newly formed Employee Benefits Committee. The group will review the functions of the committee. The following outline will be used to begin the discussion: Role: - Advisory to the Executive Committee - Provide member feed back Tasks: - Annual rate adjustments - Changes to the Program - New members in the pipeline - Underwriting guidelines - Internal policies review - Program manual Logistics: - Travel expenses - Packet preparation - Electronic meetings RECOMMENDATION None, for information only. Prepared by: Walter Andy Sells, Chief Executive Officer Date Prepared: July 6, 2012

2 ACWA/JPIA Pricing for 2013 Program Year July 19, 2012 BACKGROUND Pricing for the benefit programs are traditionally set in July. This allows enough time for the appropriate documentation to be prepared for the fall Open Enrollment process. CURRENT SITUATION The insurance broker for the Employee Benefits Program (Tom Sher, Alliant Insurance Services) was instructed to proceed with this year s renewal with no or little change to the structure of the current programs. The stated goal was to negotiate the best possible prices with no change to programs. Tom Sher will provide a program overview of past practices and pricing history during the meeting. Program pricing options and recommendations will be reviewed during the meeting. RECOMMENDATION Staff recommendations will be presented at the meeting. Prepared by: Walter Andy Sells, Chief Executive Officer Date Prepared: July 6, 2012

3 ACWA-JPIA 2013 Renewal Review and Analysis July 19, 2012

4 Overview Section I: Health: In-Force Plans & History Section II: Health: Anthem Blue Cross Section III: Recommendations: Anthem Blue Cross Section IV: Health: Kaiser Section V: Ancillary Plans Section VI: Market Trends and Health Care Reform Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 2

5 I. Health: In-Force Plans ACWA Medical Plan Offerings Anthem Blue Cross Prudent Buyer Classic PPO Prudent Buyer Advantage PPO Health Fund High Deductible Plan PPO California Care HMO Kaiser Traditional HMO Senior Advantage HMO High Deductible HMO Plan designs and offerings have remained consistent and competitive with the market Implemented Anthem Blue Cross High Deductible Plan (HDHP) January 2007 Implemented Kaiser High Deductible Health Plan (HDHP) January 2008 Out-of-state members moved to Blue Card, effective January 1, 2008 Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 3

6 I. Health: Enrollment History Anthem Blue Cross Plans 2008 2009 2010 2011 2012 Prudent Buyer (PPO) Classic 4,656 4,567 4,623 4,552 4,369 Advantage 86 101 127 191 313 High Deductible Health Plan (HDHP) 0 0 0 2 3 Total 4,742 4,668 4,750 4,745 4,685 % Change from Previous Year 2.51% -1.56% 1.76% -0.11% -1.26% % of Total Anthem Enrollment 74.95% 74.70% 74.54% 75.59% 76.01% CaliforniaCare (HMO) All Regions 1,585 1,581 1,622 1,532 1,479 % Change from Previous Year 10.07% -0.25% 2.59% -5.55% -3.46% % of Total Anthem Enrollment 25.05% 25.30% 25.46% 24.41% 23.99% Total Anthem Plans 6,327 6,249 6,372 6,277 6,164 % Change from Previous Year 4.30% -1.23% 1.97% -1.49% -1.80% Kaiser Plans 2008 2009 2010 2011 2012 Northern Region Total Employees 174 169 193 199 182 % Change from Previous Year 20.83% -2.87% 14.20% 3.11% -8.54% % of Total Kaiser Enrollment 38.07% 34.42% 32.49% 32.31% 24.07% Southern Region Total Employees 283 322 401 417 574 % Change from Previous Year 17.43% 13.78% 24.53% 3.99% 37.65% % of Total Kaiser Enrollment 61.93% 65.58% 67.51% 67.69% 75.93% Total Kaiser Plans 457 491 594 616 756 % Change from Previous Year 18.70% 7.44% 20.98% 3.70% 22.73% Total All Medical Plans 6,784 6,740 6,966 6,893 6,920 % Change from Previous Year 5.16% -0.65% 3.35% -1.05% 0.39% Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 4

7 II. Health: Anthem Blue Cross: Current PPO Plan Designs MEDICAL PLAN BENEFIT Classic Advantage HDHP PPO Non-PPO PPO Non-PPO PPO Non-PPO Calendar Year Deductible Individual / Family $200 / $600 $200 / $600 $500 / $1,000 $500 / $1,000 $1,500 / $3,000 Annual Out-of-Pocket Maximum Individual / Family $1,000 / member $2,000 / member $3,000 / $6,000 $10,000 / member $5,000 / $10,000 MAJOR MEDICAL Physician Office Visit $15 copay 20% $20 copay 40% 10% 30% Prenatal Care $15 copay 20% 20% 40% 10% 30% Allergy Testing 20% 20% 20% 40% 10% 30% Well Woman Exam No Charge 20% No Charge 40% No Charge 30% Well Child Visit No Charge 20% No Charge 40% No Charge 30% Annual Physical No Charge Not Covered No Charge 40% No Charge 30% Hospitalization Inpatient No Charge No Charge 20% 40% 10% 30% after $500 non- PPO deductible Outpatient No Charge No Charge 20% 40% 10% 30% Emergency Room $50 copay $50 copay $50 copay $50 copay $100 plus 10% $100 plus 10% Ambulance 20% 20% 20% 20% Chiropractic 20% 20% 20% 40% 10% 30% up to $25/visit (Maximum 30 visits / Yr.) (Maximum 24 visits / Yr.) (24 visits per calendar year) PRESCRIPTION DRUGS (At Participating Pharmacies only) Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Retail - 30 day supply $5 / $15 / $45 $5 / $15 / $45 $10/$20/$40 Mail Order - 90 day supply $10 / $30 / $90 $10 / $30 / $90 $20/$40/$80 Note: 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. Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 5

8 II. Health: Anthem Blue Cross: Current HMO Plan Design MEDICAL PLAN BENEFIT California Care HMO HMO Calendar Year Deductible Individual / Family N/A Annual Out-of-Pocket Maximum Individual / Family $500 / $1,500 MAJOR MEDICAL Physician Office Visit $10 copay Prenatal Care $10 copay Allergy Testing $10 copay Well Woman Exam No Charge Well Child Visit No Charge Annual Physical No Charge Hospitalization Inpatient Hospitalization No charge Outpatient Hospitalization Emergency Room Chiropractic No charge $50 Copay $10 per visit (30 visits per calendar year) PRESCRIPTION DRUGS (At Participating Pharmacies only) Generic / Brand / Non-Formulary Retail - 30 day supply $5/$15/$45 Mail Order - 90 day supply $10/$30/$90 Deductible (Brand) N/A Note: 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. Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 6

9 II. Health: Anthem Blue Cross: PPO Rate History ACWA PPO Classic Renewal ACWA PPO Advantage Renewal ACWA PPO HDHP Renewal CA PPO Trend CalPERS PERSChoice Renewal 1 2007 12.94% 12.94% N/A 10.00% 12.50% 2008 4.38% 4.38% 0.96% 10.00% 9.00% 2009 6.00% 6.00% 6.00% 10.00% 0.00% 2010 3.27% 0.00% 00% 0.00% 00% 11.00% 2.00% 2011 (Actual) 2 12.00% 12.00% 12.00% 11.00% 9.61% 2012 2.23% 2.23% 2.23% 10.00% 1.90% AVERAGE 6.19% 5.17% 4.24% 10.29% 6.35% 1 CalPERS PERSChoice renewal figures represent overall statewide figure as published by CalPERS 2 Underwriting called for 14.10% renewal increase, HBA Trustees made decision to implement renewal increase of 12.00% Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 7

10 II. Health: Anthem Blue Cross: HMO Rate History ACWA HMO CalPERS HMO Renewal CA HMO Trend Renewal 1 2007 14.30% 12.00% 13.80% 2008 9.08% 12.00% 10.06% 2009 10.60% 12.00% 5.19% 2010 8.00% 13.00% 2.99% 2011 18.71% 11.50% 16.16% 2012 2-4.02% 12.00% 3.50% AVERAGE 9.45% 12.08% 8.62% 1 CalPERS HMO renewal figures represent overall statewide figure as published by CalPERS 2 Anthem HMO renewal was -4.02%, but committee passed on 0% renewal to groups in order to build up a stabilization fund to buy down future increases Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 8

11 II. Health: Anthem Blue Cross: PPO Renewal ACWA-JPIA Medical Renewal: PPO Trend Analysis Trend Source Medical Trend Rx Trend 2013 Renewal Action Anthem Book of Business Trends 1 9.1% 8.0% 9.24% Segal Trend Survey 2 10.0% 7.2% 9.96% ACWA-JPIA Specific Trends 3 8.0% 9.2% 8.45% Recommended 1 Anthem California recommended trend levels for 2013 renewal 2 2012 Segal ltrend Survey is an annual national survey of multiple l carriers, which hincludes Anthem Blue Cross, Blue Shield, Cigna, Aetna, etc. 3 ACWA-JPIA specific trends calculated based on 72-months of data Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 9

12 II. Health: Anthem Blue Cross PPO: Stop Loss Coverage Specific Stop Loss Provides coverage when an individual s claims exceed a specified amount within a given period. If a member s claims exceed the specific level in a given contract period, the group no longer has to pay claims on that member and the liability then transfers to the stop-loss insurer. Terms: Carrier: Sun Life Financial Coverage: Medical and Pharmacy Claims (for self-funded PPO plans) Specific Stop Loss Attachment Point: $450,000 Contract Period: 12/18 (Incurred in 12 months, paid in 18 months) Lifetime Maximum: Unlimited Aggregate Stop Loss Coverage: None 2012 Stop Loss Premium: $19.38 Per Employee Per Month (PEPM) Renewal: Renewal Date: January 1, 2013 Alliant negotiated maximum rate cap of 30% Industry trend for specific stop loss averages 15-20% Renewal proposal p not available until mid- October to early November Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 10

13 II. Health: Anthem Blue Cross PPO: Renewal Calculation Renewal Date January 1, 2013 ALL PPO PLANS Most Recent Experience Through May 1, 2012 Medical Pharmacy Total (Per Employee Per Month) Current Paid Premium $63,184,465 Current Monthly Enrollment 4,669 Current Paid Premium (Per Employee Per Month) $1,127.73 Paid Claims $43,213,320 $13,158,837 $56,372,157 Primary Large Claim Adjustment (Claims exceeding $450k) ($791,308) ($791,308) Secondary Large Claim Adjustment (Claims exceeding $150k) ($3,555,709) ($3,555,709) Beginning IBNR Reserve ($5,025,663) ($473,892) ($5,499,555) Ending IBNR Reserve $5,302,751 $506,109 $5,808,861 861 Adjusted Incurred Claims $39,143,391 $13,191,054 $52,334,446 Average Monthly Subscriber Lives 4,704 4,704 4,704 Adjusted Incurred Claims PEPM $693.45 $233.69 $927.14 Incurred Claim Loss Ratio 82.21% Trend Adjustment Annual Trend 8.0% 9.2% 8.3% Applied Trend Factor 1.1360 1.1577 1.1415 Trended Claims (Per Employee Per Month) $787.79 $270.54 $1,058.32 Most Recent Monthly Enrollment 1 4,669 4,669 4,669 Adjusted Projected Claims $44,138,155 $15,157,674 $1,058.32 86.5% Secondary Pooling Charge 2 $4,454,603 $79.51 6.5% Margin Adjustment $341,219 $6.09 0.5% Fixed Administration and Insurance Costs $5,059,297 ($628,634) $79.08 6.5% Net Required Premium (Per Employee Per Month) $963.68 $248.10 $1,223.00 100.0% Net Required Premium $53,993,275 $13,900,406 $67,893,681 Net Required Premium Change 8.45% 1 Enrollment based on data from April 2012 2 Pooled large claims were trended at 15% for secondary pooling layer Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 11

14 II. Health: Anthem Blue Cross: HMO Renewal Rates Renewal Rates Proposed for January 1, 2013 CaliforniaCare High and Low HMO Plans (Fully Insured): Initial Anthem renewal proposal: +13.13% Alliant challenged the Anthem proposal using current market costs for retention, administration, and trend figures and suggested an increase of +5.25% Anthem agreed to an 8.00% renewal increase, or a savings in premium of about $1,076,429 Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 12

15 II. Health: Anthem Blue Cross HMO: Renewal Calculation ACWA JPIA SUMMARY OF 2013 HMO RENEWAL CALCULATION BLUE CROSS RENEWAL Estimated Monthly Medical HMO Enrollment 1,479 PROJECTED CLAIM & CAPITATION COSTS Fee for Service Claims $13,493,982 56.84% Fixed Fees to Providers (Capitation) $6,788,323 28.59% Projected Claim and Capitation Subtotal $20,282,305 85.44% FIXED COSTS Retention (Administration Charges) $1,862,439 7.85% Large Claims Charge $1,594,845 6.72% Fixed Cost Subtotal $3,457,284 14.56% RENEWAL PREMIUM (Original) $23,739,588 % CHANGE FROM CURRENT (Original) 13.1% RENEWAL PREMIUM (Alliant Negotiated) $22,661,677 TOTAL CONCESSIONS C O S (Original i minus Negotiated) $1,077,912 % CHANGE FROM CURRENT (Negotiated) 8.0% Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 13

16 III. Recommendations (Anthem Blue Cross) PPO Renew self-insured administrative services contract with Anthem Blue Cross effective January 1, 2013 Using ACWA-JPIA group specific trend to set rates, implement a renewal rate increase of 8.45% to current rates uniformly across all regions for all PPO plans effective January 1, 2013 for a 12-month period HMO Implement a renewal rate increase of 8.00% to current Anthem rates uniformly across all regions effective January 1, 2013 for a 12-month period Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 14

17 IV. Health: Kaiser: Benefit Summaries MEDICAL PLAN BENEFIT KAISER Traditional HMO KAISER High Deductible HMO KAISER Senior Advantage HMO CURRENT CURRENT CURRENT Calendar Year Deductible Individual / Family NONE $1,500 / $3,000 NONE Annual Out-of-Pocket Maximum Individual / Family $1,500 / $3,000 $1,500 / $3,000 $1,500 / $3,000 MAJOR MEDICAL Physician Office Visit $10 No Charge after Deductible $10 Specialist Copay $10 No Charge after Deductible $10 Preventative Care No Charge No Charge No Charge Lab and X-Ray No Charge No Charge after Deductible No Charge Hospitalization Inpatient No Charge No Charge after Deductible No Charge Outpatient $10 No Charge after Deductible $10 Emergency Room $50 No Charge after Deductible $50 (waived if admitted) (waived if admitted with in 24 hours) Chiropractic $10 / Visit* N/A Not Covered (up tp 30 visits per calender year) PRESCRIPTION DRUGS (At Participating Pharmacies only) Generic / Brand Generic / Brand Generic / Brand Retail $5 / $15 No Charge after Deductible $10 / $25 (up to a 100 day supply) (up to a 100 day supply) (up to a 30 day supply) Mail Order $5 / $15 (up to a 100 day supply) No Charge after Deductible (up to a 100 day supply) $20 / $50 (up to a 100 day supply) *Traditional HMO plans are available with and without chiropractic services. Note: This summary is for informational purpose only. It does not amend, extend, or alter the current policy in any w ay. In the event information in this summary differs from the Plan Document, the Plan Document w ill prevail. Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 15

18 IV. Health: Kaiser: Rate History Jan-09 Jan-10 Jan-11 Jan-12 Renewal Rate History North 10.3% 14.7% 3.7% 7.9% South 2.5% 0.0% 8.0% 0.0% Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 16

19 IV. Health: Kaiser Renewal Summary Renewal Rates Effective January 1, 2013 Actives Northern Region Proposed increase of +4.2% Southern Region Proposed increase of +1.2% High Deductible Plan Northern Region Proposed increase of +4.4% Southern Region Proposed increase of +1.2% Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 17

20 IV. Recommendations (Kaiser) Kaiser Renew with Kaiser as proposed for HMO coverage, effective January 1, 2013 for a 12-month period Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 18

21 V. Ancillary Benefit Plans: Dental, Vision & EAP Delta Dental Based on analysis of 12-months of claims data, a +0.18% increase to current rates is necessary Alliant recommends including 2.00% margin as a claims fluctuation reserve, which brings the 2013 renewal to 2.01% Vision Service Plan (VSP) Vision coverage rates are guaranteed through Jan 1, 2014 Anthem Employee Assistance Plan (EAP) Anthem Blue Cross proposed renewing at in-force rates through December 31, 2013 Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 19

22 V. Ancillary Benefit Plans: Life & Disability The Standard 2008 2010 2013 (proposed) Basic Life 0% -5% +20% STD -20% -25% +20% LTD 0% -5% 0% Since the last renewal in 2010, loss ratios have been: Basic Life: 112% STD: 120% LTD: 127% Although the experience indicates that all lines should be receiving an increase, the Standard is making concessions to partner with ACWA- JPIA for long term stability Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 20

23 VI. Market Trends and Health Care Reform Health Care Reform Timeline 2012 New uniform Summary of Benefits and Coverage (SBC) 2013 W-2s will include employer and employee cost of health benefits Flexible Spending Account limits reduced to $2,500 2014 2018 Medicare Payroll Tax increase for highly compensated Individual Mandate: all Americans buy coverage or pay a penalty Health Benefit Exchanges will offer coverage to individuals and small employers Subsidies for those who cannot afford insurance Pay or Play : employers offer coverage or pay a tax Cadillac Tax Copyright 2012 Alliant Insurance Services, Inc. Confidential; not for distribution 21

24 100 Pine Street, 12 th Floor San Francisco, CA 94111 This proposal is for information purposes only and does not amend, extend or alter the policy in any way. Please refer to the policy form for completed coverage and exclusion information. Alliant embraces a policy of transparency with respect to its compensation from insurance transactions. Details on our compensation policy, including the types of income that Alliant may earn on a placement, are available on our website at www.alliantinsurance.com. For a copy of our policy or for any inquiries regarding compensation issues pertaining to your account you may also contact us at: Alliant Insurance Services, Inc., Attention: General Counsel, 701 B Street, 6th Floor, San Diego, CA 92101. *Analyzing insurers' over-all performance and financial strength is a task that requires specialized skills and in-depth technical understanding of all aspects of insurance company finances and operations. Insurance brokerages such as Alliant Insurance typically rely upon rating agencies for this type of market analysis. Both A.M. Best and Standard and Poor's have been industry leaders in this area for many decades, utilizing a combination of quantitative and qualitative analysis of the information available in formulating their ratings. A.M. Best has an extensive database of nearly 6,000 Life/Health, Property Casualty and International companies. You can visit them at www.ambest.com. For additional information regarding insurer financial strength ratings visit Standard and Poor's website at www.standardandpoors.com. To learn more about companies doing business in California, visit the California Department of Insurance website at www.insurance.ca.gov.

25 ACWA-JPIA vs CalPERS MEDICAL HMO PLAN OPTIONS January 1, 2013 MEDICAL PLAN BENEFIT ACWA JPIA HMO 1 CalPERS 2 CalPERS 2 Blue Cross Blue Shield Access+ Blue Shield NetValue Closest Matching CalPERS HMO Same Benefits as Blue Shield Access+, Limited etwork of Providers Calendar Year Deductible Individual / Family NONE NONE NONE Annual Out-of-Pocket Maximum Individual / Family $500 / $1,500 $1,500 / $3,000 $1,500 / $3,000 MAJOR MEDICAL Physician Office Visit $10 $15 $15 Specialist Copay $10 $15 $15 Hospitalization Inpatient No Charge No Charge No Charge Outpatient No Charge No Charge No Charge Emergency Room $50 $50 $50 PRESCRIPTION DRUGS (waived if admitted) (waived if admitted) (waived if admitted) (At Participating Pharmacies only) Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Retail - 30 day supply $5 / $15 / $45 $5 / $20 / $50 $5 / $20 / $50 Deductible (Brand) N/A N/A N/A 2013 RATE COMPARISON Northern CA: Bay Area / Sacramento Preferred Rates Standard Rates Rates Rates EE Only $650.93 $676.66 $785.54 $671.00 EE + One $1,294.25 $1,345.72 $1,571.08 $1,342.00 EE + Two or More $1,789.62 $1,860.90 $2,042.40 $1,744.60 CalPERS Only- Sacramento Area EE Only $650.93 $676.66 $703.57 $606.82 EE + Spouse $1,294.25 $1,345.72 $1,407.14 $1,216.64 EE + Child (ren) $1,789.62 $1,860.90 $1,829.28 $1,577.73 Northern CA: Other Counties EE Only $656.62 $682.58 $778.44 $664.93 EE + One $1,304.71 $1,356.59 $1,556.88 $1,329.86 EE + Two or More $1,805.34 $1,877.25 $2,023.94 $1,728.82 Southern CA: Los Angeles Area EE Only $586.55 $609.71 $531.37 $453.89 EE + Spouse $1,165.51 $1,211.83 $1,062.74 $907.78 EE + Child (ren) $1,611.30 $1,675.45 $1,381.56 $1,180.11 Southern CA: Other Counties EE Only $594.41 $617.88 $644.68 $550.68 EE + Spouse $1,181.19 $1,228.14 $1,289.36 $1,101.36 EE + Child (ren) $1,633.03 $1,698.05 $1,676.17 $1,431.77 1 ACWA 2013 rates shown are based on 8.00% increase and assumes ACWA JPIA admin fee of $7.60 per employee per month. 2013 increase of 8.00% is pending ACWA-JPIA committee approval. 2 Published 2013 rates from www.calpers.ca.gov. Detailed CalPERS benefits have not been released for 2013. CalPERS plan details shown reflect 2012 benefits. Note: 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.

ACWA-JPIA vs CalPERS MEDICAL PPO PLAN OPTIONS January 1, 2013 26 MEDICAL PLAN BENEFIT ACWA JPIA Prudent Buyer Classic 1 CalPERS 2 Blue Cross Best PPO benefits, Highest Enrolled Plan PERSCare CalPers' Best Plan Network Non-Network Network Non-Network Calendar Year Deductible Individual / Family $200 Member / $600 Family $500 Member / $1,000 Family Annual Out-of-Pocket Maximum Individual / Family $1,000 / member $2,000 / member $2,000 member / $4,000 Family N/A MAJOR MEDICAL Physician Office Visit $15 20% $20 50% Specialist Copay $15 20% $20 50% Preventative Care No Charge Not Covered No Charge 40% Lab and X-Ray 20% 20% 10% 40% Hospitalization Inpatient No Charge No Charge $250 + 10% $250 + 40% Outpatient No Charge No Charge 10% 40% Emergency Room $50 $50 + 10% PRESCRIPTION DRUGS (At Participating Pharmacies only) Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Retail - 30 day supply $5 / $15 / $45 $5 / $20 / $50 2013 RATE COMPARISON Northern CA: Bay Area / Sacramento Preferred Rates Standard Rates Rates EE Only $636.78 $661.95 $1,083.11 EE + One $1,505.16 $1,565.06 $2,166.22 EE + Two or More $1,744.20 $1,813.67 $2,816.09 CalPERS Only- Sacramento Area Preferred Rates Standard Rates Rates EE Only $636.78 $661.95 $1,007.54 EE + One $1,505.16 $1,565.06 $2,015.08 EE + Two or More $1,744.20 $1,813.67 $2,619.60 Northern CA: Other Counties Preferred Rates Standard Rates Rates EE Only $639.80 $665.09 $1,055.10 EE + One $1,512.35 $1,572.54 $2,110.20 EE + Two or More $1,752.54 $1,822.34 $2,743.26 Southern CA: Los Angeles Area Preferred Rates Standard Rates Rates EE Only $596.24 $619.79 $953.90 EE + One $1,408.67 $1,464.71 $1,907.80 EE + Two or More $1,632.31 $1,697.30 $2,480.14 Southern CA: Other Counties Preferred Rates Standard Rates Rates EE Only $603.50 $627.34 $992.61 EE + One $1,425.95 $1,482.68 $1,985.22 EE + Two or More $1,652.35 $1,718.14 $2,580.79 1 ACWA 2013 PPO rates shown are based on 8.45% increase and assumes ACWA JPIA admin fee of $7.60 per employee per month. 2013 increase of 8.45% is pending ACWA-JPIA committee approval. 2 Published 2013 rates from www.calpers.ca.gov. Detailed CalPERS benefits have not been released for 2013. CalPERS plan details shown reflect 2012 benefits. Note: 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.

27 ACWA-JPIA vs CalPERS MEDICAL PPO PLAN OPTIONS January 1, 2013 MEDICAL PLAN BENEFIT ACWA JPIA Prudent Buyer Advantage CalPERS 1 CalPERS 1 Blue Cross PERS Choice PERS Select JPIA's Moderate PPO Highest Enrolled CalPERS plan, Closest CalPERS plan to JPIA's Advantage plan Same Benefits as PERS Choice, Limited Network of Providers Network Non-Network Network Non-Network Network Non-Network Calendar Year Deductible Individual / Family $500 Member / $1,000 Family $500 Member / $1,000 Family $500 Member / $1,000 Family Annual Out-of-Pocket Maximum Individual / Family $3,000 Member / $6,000 Family $10,000 / Member $3,000 member / $6,000 Family N/A $3,000 member / $6,000 Family N/A MAJOR MEDICAL Physician Office Visit $20 40% $20 40% $20 40% Specialist Copay $20 40% $20 40% $20 40% Hospitalization Inpatient 20% 40% 20% 40% 20% - 30% (depending on hospital) 40% 20% - 30% Outpatient 20% 40% 20% 40% (depending on hospital) 40% Emergency Room $50 $50 + 20% $50 + 20% (ded. waived if Admitted) (ER deductible waived if admitted) (ER deductible waived if admitted) PRESCRIPTION DRUGS (At Participating Pharmacies only) Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Generic / Brand / Non-Formulary Retail - 30 day supply $5 / $15 / $45 $5 / $20 / $50 $5 / $20 / $50 2013 RATE COMPARISON Northern CA: Bay Area / Sacramento Preferred Rates Standard Rates Rates Rates EE Only $514.37 $534.64 $667.03 $487.20 EE + One $1,213.71 $1,261.96 $1,334.06 $974.40 EE + Two or More $1,406.25 $1,462.20 $1,734.28 $1,266.72 CalPERS Only- Sacramento Area Preferred Rates Standard Rates Rates Rates EE Only $514.37 $534.64 $620.49 $453.21 EE + One $1,213.71 $1,261.96 $1,240.98 $906.42 EE + Two or More $1,406.25 $1,462.20 $1,613.27 $1,178.35 Northern CA: Other Counties Preferred Rates Standard Rates Rates Rates EE Only $516.79 $537.16 $649.78 $474.61 EE + One $1,219.49 $1,267.97 $1,299.56 $949.22 EE + Two or More $1,412.96 $1,469.18 $1,689.43 $1,233.99 Southern CA: Los Angeles Area Preferred Rates Standard Rates Rates Rates EE Only $481.71 $500.67 $587.46 $429.08 EE + One $1,136.00 $1,181.13 $1,174.92 $858.16 EE + Two or More $1,316.13 $1,368.47 $1,527.40 $1,115.61 Southern CA: Other Counties Preferred Rates Standard Rates Rates Rates EE Only $487.56 $506.76 $611.30 $446.49 EE + One $1,149.92 $1,195.61 $1,222.60 $892.98 EE + Two or More $1,332.28 $1,385.27 $1,589.38 $1,160.87 1 ACWA 2013 PPO rates shown are based on 8.45% increase and assumes ACWA JPIA admin fee of $7.60 per employee per month. 2013 increase of 8.45% is pending ACWA-JPIA committee approval. 2 Published 2013 rates from www.calpers.ca.gov. Detailed CalPERS benefits have not been released for 2013. CalPERS plan details shown reflect 2012 benefits. Note: 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.

ACWA/JPIA 2012 Meeting Calendar (as of 7/9/2012) 28 MEETING JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC 7 3 Monterey San Diego 3:00 Board of Directors Executive Committee Finance & Audit Committee Personnel Advisory Committee Liability Program Committee Employee Benefits Program Committee Property Program Committee Work Comp Program Committee 4 10:30 31 8:30 30 3:00 30 11:30 30 1:00 13 Workshop 8:30 29 11:00 28 8:30 27 3:00 27 1:00 16 Workshop 8:30 16 12:30 (TF) 7 Monterey 10:30 21 10:00 11 12:30 (TF) 20 8:30 19 3:00 16 10:30 Ontario 19 1:00 19 8:30 28 Workshop 8:30 17 8:30 11 11:00 So. Calif. 3 San Diego Risk Management Committee 7 3 San Diego If needed JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Holidays (closed) 2 20 28 4 3 8 12,22-23 24-25 Managers Meeting 20 17 16 20 18 29 20 (TF) 17 21 19 16 21 Staff Q & As 10 7 / PP 6 3 / PP 15 5 / PP 10 7 / PP *10 2 / PP 6 11 / PP MANAGERS MEETINGS 10:30 am, 3 rd Friday of month / Staff Q&A 9:00 am, 1 st /2 nd Tuesday of month / PP = Perspective Planning to follow