The document summarizes Lockton Companies' presentation to Metropolitan Community College's Insurance Committee regarding MCC's health insurance renewal for 2015. It includes: (1) a summary of 2013-2014 plan performance and large claims; (2) details of MCC's current 2014 plan design and cost sharing; (3) BlueKC's proposed 2015 renewal rates, which include a 15% increase to fixed fees and a negotiated 10% increase to maximum claim liability factors; and (4) an analysis of the impact of proposed increases to prescription drug out-of-pocket maximums. The presentation provides information to help MCC evaluate its health insurance options and costs for 2015.

1. L O C K T O N C O M P A N I E S
Metropolitan Community College
2015 Renewal Presentation
March 28, 2014
Insurance
Committee Meeting

2. 1
Agenda
 2013/2014 YTD Plan Performance
 2015 BlueKC Renewal
 2015 Lockton’s Renewal Analysis
 Appendix
 Basics of Stop Loss

3. 2013 and 2014 Plan Performance

4. 3
2013 Experience – All Plans Combined
Month/Year
Total
Subscribers
Total
Members
Adminn Stop Loss Total Fixed
Medical
Claims
Capitated
Claims
Rx Claims
Specific Stop-
Loss
Reimbursable
Claims
($200K)
Monthly Net
Paid Claims
Monthly Net
Paid Claims
+ Fixed
Costs
Monthly ER
& EE
Funding
Monthly EE
Contributio
ns
Total Net
Plan Cost
Jan-13 1,139 1,963 $68,150 $23,568 $91,718 $672,156 $1,903 $157,157 $0 $831,216 $922,934 $1,005,452 $165,656 $757,278
Feb-13 1,135 1,959 $67,736 $23,425 $91,161 $912,997 $1,737 $150,877 $0 $1,065,611 $1,156,772 $999,897 $163,270 $993,502
Mar-13 1,129 1,948 $67,448 $23,326 $90,775 $873,164 $2,318 $232,639 $99,606 $1,008,515 $1,099,290 $995,475 $162,287 $937,002
Apr-13 1,127 1,934 $67,167 $23,229 $90,396 $942,530 $1,978 $171,363 $133,089 $982,783 $1,073,179 $992,392 $161,427 $911,752
May-13 1,133 1,943 $67,533 $23,355 $90,888 $723,128 $2,004 $188,242 $20,683 $892,691 $983,579 $997,821 $162,345 $821,234
Jun-13 1,125 1,933 $67,094 $23,203 $90,297 $831,496 $1,985 $237,372 $110,623 $960,230 $1,050,527 $991,139 $162,210 $888,316
Jul-13 1,085 1,885 $65,304 $22,584 $87,888 $826,966 $1,828 $162,356 $46,649 $944,501 $1,032,389 $964,095 $165,666 $866,723
Aug-13 1,086 1,895 $65,509 $22,655 $88,164 $727,268 $1,749 $242,215 $23,770 $947,463 $1,035,627 $966,297 $166,412 $869,215
Sep-13 1,093 1,908 $65,951 $22,808 $88,759 $862,121 $1,877 $173,210 $139,055 $898,154 $986,912 $971,382 $165,151 $821,761
Oct-13 1,102 1,917 $66,466 $22,986 $89,452 $596,154 $1,841 $198,703 $21,725 $774,973 $864,425 $978,404 $167,295 $697,130
Nov-13 1,106 1,916 $66,594 $23,030 $89,624 $957,021 $1,841 $241,178 $211,291 $988,749 $1,078,373 $980,030 $166,313 $912,060
Dec-13 1,107 1,914 $66,556 $23,017 $89,574 $831,524 $1,860 $212,455 $75,673 $970,166 $1,059,740 $979,246 $165,405 $894,335
Total 13,367 23,115 $801,507 $277,189 $1,078,696 $9,756,526 $22,921 $2,367,768 $882,164
$11,265,05
0
$12,343,74
6
$11,821,63
0
$1,973,437
$10,370,30
9
Average/PEP
M
1,114 $59.96 $20.74 $80.70 $729.90 $1.71 $177.14 $66.00 $842.75 $923.45 $884.39 $147.64 $775.81
Funding
Surplus/(Deficit)
-$522,116
% of
Funding
104.4%

5. 4
2014 Experience – All Plans Combined
Month/Year
Total
Subscribers
Total
Members
Total Fixed
Medical
Claims
Capitated
Claims
Rx Claims
Specific Stop-
Loss
Reimbursable
Claims ($200K)
Monthly Net
Paid Claims
Total ACA
Fees
Monthly Net
Paid Claims
+ Fixed
Costs + ACA
Fees
Monthly ER
& EE Funding
Monthly EE
Contributions
Total Net
Plan Cost
Jan-14 1,106 1,870 $97,538 $812,695 -$61 $169,924 $0 $982,558 $9,966 $1,090,062 $901,132 $101,032 $989,030
Feb-14 1,109 1,869 $97,656 $418,545 $0 $139,965 $0 $558,510 $9,951 $666,117 $901,188 $100,546 $565,570
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Total 2,215 3,739 $195,194 $1,231,240 -$61 $309,889 $0 $1,541,068 $19,917 $1,756,179 $1,802,320 $201,579 $1,554,600
Average/Month 1,108 1,870 $97,597 $615,620 -$31 $154,945 $0 $770,534 $9,958 $878,089 $901,160 $100,789 $777,300
Average/PMPM $52.20 $329.30 -$0.02 $82.88 $0.00 $412.16 $5.33 $469.69 $482.03 $53.91 $415.78
Funding Surplus/(Deficit) $46,141
% of
Funding
97.4%
February ‘14 is the most favorable claims month MCC has had in three years!

6. 5
Large Claims
March 2013 – February 2014
Based on actuarial claims distribution tool, we would expect a group of similar membership to have seven members with claims in
excess of $100,000 and 2.2 members with claims in excess of $200,000.
Large Claims - March 2013 - February 2014
Claimant Plan 2014 Plan* Status Paid Claims Above $100K
Prognosis/
Projected Claims
over next 6
months Diagnosis
MNZH-ZWZF-BHS BlueCare HMO HDHP Active $956,601 $856,601 Premie/$300K+ Respiratory
MNZH-ZWST-AHM BlueCare HMO Early Retiree/Pre-65 $263,240 $163,240 Injury/Poisoning
MNZH-ZWZV-MHS PPO Option 1 Early Retiree/Pre-65 $260,760 $160,760 Musculoskeletal and Connective Tissue
MNZH-ZWPX-GHS PPO Option 1 Premier Active $232,417 $132,417 Genitourinary
MNML-MHSD-YHM PPO Option 1 Cobra $217,589 $117,589 $100K-150K Genitourinary
MNZH-ZWBH-BHM PPO Option 1 Premier Active $207,535 $107,535 $50K-75K Neoplasms
MNOW-MDGU-AHM BlueSaver (HDHP) HDHP Early Retiree/Pre-65 $195,997 $95,997 Neoplasms
MNZH-ZWPD-BHM PPO Option 1 Active $157,795 $57,795 Neoplasms
MNZH-ZWGL-QHO BlueCare HMO Active $152,210 $52,210 Endocrine, Nutritional and Metabolic Diseases
MNOW-MDGV-YHM PPO Option 1
Regular Retiree/Post-
65 $150,291 $50,291 Musculoskeletal and Connective Tissue (Rx)
MNZH-ZWZW-ZHM PPO Option 1 HDHP Active $117,773 $17,773 Neoplasms
Total $2,912,208 $1,812,208
*If blank, member is not appearing on the large claim report through February 2014.

7. 6
2014 Plan Design
Premier Standard HDHP
Preferred Care Blue Preferred Care Blue Preferred Care Blue
Benefit In-Network Out-of-Network In-Network Out-of-Network In-Network Out-of-Network
Annual Deductible
Individual
Family
$500
$1,000
$500
$1,000
$1,000
$2,000
$1,000
$2,000
$2,500
$5,000
$2,500
$5,000
Coinsurance 90% 70% 80% 70% 100% 80%
Out of Pocket Maximum
Individual
Family
$2,000
$4,000
$4,000
$8,000
$3,000
$6,000
$6,000
$12,000
$2,500
$5,000
$5,000
$10,000
Includes copays Medical Medical Medical Medical N/A N/A
Includes deductible Yes Yes Yes Yes Yes Yes
Office Visit Copay
$20 30% Coinsurance $30 30% Coinsurance 0% Coinsurance 20% Coinsurance
Inpatient Hospital 10% Coinsurance 30% Coinsurance 20% Coinsurance 30% Coinsurance Deductible then Coinsurance
Emergency Room $100 Copay+Deductible then 10%
Coinsurance
$150 Copay+Deductible then 30%
Coinsurance
Deductible then 0%
Coinsurance
Deductible then 20%
Coinsurance
Prescription Drugs
Retail
Generic
Preferred Brand
Non-Preferred Brand
Mail Order
Generic
Preferred Brand
Non-Preferred Brand
$10
$30
$50
$20
$60
$100
$10 then 50%
$30 then 50%
$50 then 50%
$20 then 50%
$60 then 50%
$100 then 50%
$10
$30
$50
$20
$60
$100
$10 then 50%
$30 then 50%
$50 then 50%
$20 then 50%
$60 then 50%
$100 then 50%
$0
$0
$0
$0
$0
$0
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
Bold indicates changes for 2014

8. 7
2014 Cost Sharing
Before MCC HSA and HRA Contributions
Total Projected 2014 Premium $10,674,671
2014 Employee Contributions $1,028,740
2014 Total Net Projected MCC Cost $9,645,930
% Subsidized 90%
Cost per Employee
Enrollment 1041
Gross Cost per Employee $10,254
Net Cost per Employee $9,266
After MCC HSA and HRA Contributions
Total Projected 2014 Premium $10,674,671
2014 Employee Contributions $1,028,740
2014 Total Net Projected MCC Cost $9,645,930
MCC HSA and HRA Contributions $1,383,525
Total Net Projected Plan Costs + HSA/HRA Contributions $11,029,455
% Subsidized 103%
Cost per Employee
Enrollment 1041
Gross Cost per Employee $10,254
Net Cost per Employee, including HSA/HRA Contributions $10,595

9. 2015 BlueKC Renewal

10. 9
2015 BlueKC Renewal
 The Modified Cost Plus contract is comprised of Fixed Fees, which include
Administrative Fees, Stop Loss Fees, and Excise Tax (which applies to the Stop
Loss Fee). The combined increase equates to +15%.
 Administrative Fees: +3%
 Stop Loss: +40%
 ACA Excise Tax: 2.4%
 As we analyze the stop loss component of the overall fees, it is important to look at
historical plan performance:
Stop Loss Fee $ Over Spec Loss Ratio
2011 $332,949 $1,853,381 557%
2012 $346,339 $499,918 144%
2013 $365,479 $775,354 212%
3 Year Total $1,044,767 $3,128,653 299%

11. 10
BlueKC 2015 Renewal – Fixed Fees
*Includes the 2.4% Excise Tax
February 2014
Enrollment
2014 Current 2015 Renewal
Fixed Fees
Admin
Employee Only 725 $41.55 $42.80
Employee + Spouse 145 $85.48 $88.04
Employee + Child(ren) 112 $77.50 $79.82
Family 127 $121.42 $125.07
$799,424 $823,434
Stop Loss
Employee Only 725 $19.36 $27.27
Employee + Spouse 145 $39.82 $56.08
Employee + Child(ren) 112 $36.10 $50.85
Family 127 $56.57 $79.68
$372,450 $524,603
Total Annual Fixed Fees 1,109 $1,171,874 $1,348,037
Impact to Current (%) N/A 15.0%
Impact to Current ($) $176,163

12. 11
BlueKC Renewal – ACA Taxes
2014 Current 2015 Renewal
PPACA Fees - PMPY
Comparative Effectiveness Fee $2 $2
Reinsurer Fee $63 $44
Total PPCA PMPY Fee $65 $46
Total Annual PPACA Fee (1870 members) $121,550 $86,020
Important Note: ACA Taxes are not included in the Contractual Billed Rates

13. 12
BlueKC 2015 Renewal (cont.)
 The second component of the Modified Cost Plus contract is Maximum Claim
Liability Factors/Aggregate Stop Loss Limits.
 Using claims through January, BlueKC initially proposed an increase of +16.7%.
Based on Lockton’s underwriting, as well as updated claims through February,
we were able to negotiate the increase to +10%.
 To maintain compliance with ACA requirements, Prescription Drug copays will
apply towards the Out-of-Pocket Maximum effective 1/1/2015. To account for
this, BlueKC has proposed an increase to the Out-of-Pocket maximums on the
Standard and Premier plans:
 Standard: From $3,000/$6,000 to $3,900/$7,800
 Premier: From $2,000/$4,000 to $3,000/$6,000
 Should MCC wish to keep the Out-of-Pocket maximums the same in 2015, the
Maximum Claim Factors would increase by an additional +1.55% to the Premier &
Standard plans.

14. 13
Prescription Drug Analysis
 If MCC maintains the current Out-of-Pocket Maximum (OOPM),
 Average savings for members meeting OOPM
 Premier: $716 Per Member Per Year (PMPY)
 Standard: $940 PMPY
 If MCC implements the proposed OOPM,
 Percentage of members who would be paying more:
 Premier: 9.4% (49 members) paying on average $76.50 more PMPY
 Standard: 10.9% (47 members) paying on average $82.75 more PMPY

15. 14
BlueKC 2015 Renewal – Contractual Billed Rates
February 2014
Enrollment
2014 Current
2015 Initial
Renewal
No Changes to
OOOPM
2015 Initial
Renewal
Changes to OOPM
2015 Negotiated
Renewal
No Changes to
OOPM
2015 Negotiated
Renewal
Changes to OOPM
Premier
Employee Only 324 $711.75 $841.08 $829.31 $797.09 $785.99
Employee + Spouse 40 $1,464.07 $1,730.10 $1,705.89 $1,639.61 $1,616.78
Employee + Child(ren) 21 $1,327.40 $1,568.60 $1,546.65 $1,486.56 $1,465.86
Family 15 $2,079.69 $2,457.58 $2,423.19 $2,329.03 $2,296.61
Standard
Employee Only 96 $600.82 $699.90 $700.90 $673.18 $663.97
Employee + Spouse 43 $1,235.87 $1,459.76 $1,439.68 $1,384.70 $1,365.76
Employee + Child(ren) 47 $1,120.55 $1,305.34 $1,306.34 $1,268.95 $1,238.33
Family 27 $1,755.60 $2,073.65 $2,045.12 $1,967.01 $1,940.11
HDHP
Employee Only 305 $495.20 $576.69 $577.69 $547.79 $547.79
Employee + Spouse 62 $1,051.13 $1,224.17 $1,224.17 $1,162.54 $1,162.54
Employee + Child(ren) 44 $953.03 $1,109.92 $1,110.92 $1,067.50 $1,054.05
Family 85 $1,493.17 $1,738.98 $1,738.98 $1,651.44 $1,651.44
Total Annual Contractual Billed
Rates 1,109 $11,330,251 $13,287,069 $13,204,274 $12,640,871 $12,522,258
Impact to Current (%) N/A 17.3% 16.5% 11.6% 10.5%
Impact to Current ($) N/A $1,956,818 $1,874,023 $1,310,620 $1,192,007
Total Annual Contractual Billed
Rates + ACA $11,451,801 $13,373,089 $13,290,294 $12,726,891 $12,608,278
Impact to Current (%) 16.8% 16.1% 11.1% 10.1%
Impact to Current ($) $1,921,288 $1,838,493 $1,275,090 $1,156,477

16. 15
2015 BlueKC Proposed Plan Design – Without Plan Changes
Premier Standard HDHP
Preferred Care Blue Preferred Care Blue Preferred Care Blue
Benefit In-Network Out-of-Network In-Network Out-of-Network In-Network Out-of-Network
Annual Deductible
Individual
Family
$500
$1,000
$500
$1,000
$1,000
$2,000
$1,000
$2,000
$2,500
$5,000
$2,500
$5,000
Coinsurance 90% 70% 80% 70% 100% 80%
Out of Pocket Maximum
Individual
Family
$2,000
$4,000
$4,000
$8,000
$3,000
$6,000
$6,000
$12,000
$2,500
$5,000
$5,000
$10,000
Includes copays Medical and Rx Medical and Rx Medical and Rx Medical and Rx N/A N/A
Includes deductible Yes Yes Yes Yes Yes Yes
Office Visit Copay
$20 30% Coinsurance $30 30% Coinsurance 0% Coinsurance 20% Coinsurance
Inpatient Hospital 10% Coinsurance 30% Coinsurance 20% Coinsurance 30% Coinsurance Deductible then Coinsurance
Emergency Room $100 Copay+Deductible then 10%
Coinsurance
$150 Copay+Deductible then 30%
Coinsurance
Deductible then 0%
Coinsurance
Deductible then 20%
Coinsurance
Prescription Drugs
Retail
Generic
Preferred Brand
Non-Preferred Brand
Mail Order
Generic
Preferred Brand
Non-Preferred Brand
$10
$30
$50
$20
$60
$100
$10 then 50%
$30 then 50%
$50 then 50%
$20 then 50%
$60 then 50%
$100 then 50%
$10
$30
$50
$20
$60
$100
$10 then 50%
$30 then 50%
$50 then 50%
$20 then 50%
$60 then 50%
$100 then 50%
$0
$0
$0
$0
$0
$0
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%

17. 16
2015 BlueKC Proposed Plan Design – With Plan Changes
Premier Standard HDHP
Preferred Care Blue Preferred Care Blue Preferred Care Blue
Benefit In-Network Out-of-Network In-Network Out-of-Network In-Network Out-of-Network
Annual Deductible
Individual
Family
$500
$1,000
$500
$1,000
$1,000
$2,000
$1,000
$2,000
$2,500
$5,000
$2,500
$5,000
Coinsurance 90% 70% 80% 70% 100% 80%
Out of Pocket Maximum
Individual
Family
$3,000
$6,000
$6,000
$12,000
$3,900
$7,800
$7,800
$15,600
$2,500
$5,000
$5,000
$10,000
Includes copays Medical and Rx Medical and Rx Medical and Rx Medical and Rx N/A N/A
Includes deductible Yes Yes Yes Yes Yes
Office Visit Copay
$20 30% Coinsurance $30 30% Coinsurance 0% Coinsurance 20% Coinsurance
Inpatient Hospital 10% Coinsurance 30% Coinsurance 20% Coinsurance 30% Coinsurance Deductible then Coinsurance
Emergency Room $100 Copay+Deductible then 10%
Coinsurance
$150 Copay+Deductible then 30%
Coinsurance
Deductible then 0%
Coinsurance
Deductible then 20%
Coinsurance
Prescription Drugs
Retail
Generic
Preferred Brand
Non-Preferred Brand
Mail Order
Generic
Preferred Brand
Non-Preferred Brand
$10
$30
$50
$20
$60
$100
$10 then 50%
$30 then 50%
$50 then 50%
$20 then 50%
$60 then 50%
$100 then 50%
$10
$30
$50
$20
$60
$100
$10 then 50%
$30 then 50%
$50 then 50%
$20 then 50%
$60 then 50%
$100 then 50%
$0
$0
$0
$0
$0
$0
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%
$0 then 50%

18. 17
2015 Illustrative Cost Share
Annual Costs 2014
2015
No Plan Changes
2015
w/Plan Changes
Total Projected Premium $10,674,671 $11,907,460 $11,797,961
Employee Contributions $1,028,740 $1,028,740 $1,028,740
Total Net Projected MCC Cost $9,645,930 $10,878,720 $10,769,221
% Subsidized 90% 91% 91%
Cost per Employee
Enrollment 1041 1041 1041
Gross Cost per Employee $10,254 $11,438 $11,333
Net Cost per Employee $9,266 $10,450 $10,345
Annual Costs if MCC funds HSA and HRA at 2014 Level 2014
2015
No Plan Changes
2015
w/Plan Changes
Total Projected Premium $10,674,671 $11,907,460 $11,797,961
Employee Contributions $1,028,740 $1,028,740 $1,028,740
Total Net Projected MCC Cost $9,645,930 $10,878,720 $10,769,221
MCC HSA and HRA Contributions (If funded by MCC at 2014 Level) $1,383,525 $1,383,525 $1,383,525
Total Net Projected Plan Costs + HSA/HRA Contributions $11,029,455 $12,262,245 $12,152,746
% Subsidized 103% 103% 103%
Cost per Employee
Enrollment 1041 1041 1041
Gross Cost per Employee $10,254 $11,438 $11,333
Net Cost per Employee + HSA/HRA Contributions $10,595 $11,779 $11,674
*Enrollment reflects data provided on census dated 1/17/2014 and therefore the total premium differs from other exhibits using February enrollment

19. 18
Benchmarking
$3,300
$1,000 $1,000
$750
$0
$1,000 $1,000
$750
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
MCC
HDHP
Lockton
Education
Services
Lockton
Midwest Region
Lockton
1,000 - 4,999
Employees
HSA Employer Contributions
Individual Family

20. 19
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2014 2015 2016 2017 2018
Family
EE + Spouse
EE + Dependents
Family Limit
Employee
Single Limit
What is Our Exposure in 2018? (Active Ees)
In 2018, an excise tax will be applied if the total value of employee and employer-paid
health coverage exceeds $10,200 for single and $27,500 for family coverage. Any
amounts in excess of these limits will be subject to a 40% excise tax.
Cost Trended at 9%
Excise Tax in 2018
2018 Excise Tax Projection at 9% Trend $581,926

21. 20
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2014 2015 2016 2017 2018
Family
EE + Spouse
EE + Dependents
Family Limit
Employee
Single Limit
What is Our Exposure in 2018? (Pre-65 Retirees)
In 2018, an excise tax will be applied if the total value of employee and employer-paid
health coverage exceeds $11,850 for single and $30,950 for family coverage. Any
amounts in excess of these limits will be subject to a 40% excise tax.
Cost Trended at 9%
Excise Tax in 2018
2018 Excise Tax Projection at 9% Trend $33,307

22. Lockton’s 2015 Renewal Analysis

23. 22
Lockton’s 2015 Renewal Analysis –
Assuming no Changes to Out-of-Pocket Maximum
Adjusted Paid Claims Projection $493.92
Current Aggregate Factors PMPM $452.93
Variance from Current 9.0%
1
Rx copays accumulating toward the OOPM.
Assumes that the out of pocket maximums stay at the current levels.
Total Plan Cost PMPM $557.86
Current Funding Rates PMPM $510.43
Variance from Current 9.3%
Annualized Costs
Enrollment (Members) 22,428
Claims Costs $11,077,573
Fixed Costs $1,348,037
Annual Taxes (HCR) $86,049
Total Plan Cost $12,511,659
1
Rx copays accumulating toward the OOPM.
Assumes that the out of pocket maximums stay at the current levels.
Maximum Claim
Liability Increase
Overall
Needed Increase

24. 23
Lockton’s 2015 Renewal Analysis –
Assuming Changes to Out-of-Pocket Maximum
Total Plan Cost PMPM $554.91
Current Funding Rates PMPM $510.43
Variance from Current 8.7%
Annualized Costs
Enrollment (Members) 22,428
Claims Costs $11,011,415
Fixed Costs $1,348,037
Annual Taxes (HCR) $86,049
Total Plan Cost $12,445,501
1
Rx copays accumulating toward the OOPM.
Assumes that the out of pocket maximums are increased for the
Premier & Standard to offset the Rx impact.
Overall Needed
Increase
Adjusted Paid Claims Projection $490.97
Current Aggregate Factors PMPM $452.93
Variance from Current 8.4%
Maximum Claim
Liability Increase

25. 24
2015 Renewal – Lockton vs. BlueKC
Assuming No Change to Out-of-Pocket Maximum
BlueKC
2014 Renewal
Initial BlueKC
2015 Renewal
Negotiated BlueKC
2015 Renewal
Lockton's
2015 Projection
Aggregate Claims PMPM $453 $533 $503 $494
Admin PMPM $36 $37 $37 $37
Stop Loss PMPM $17 $23 $23 $23
ACA $5 $4 $4 $4
TOTAL PMPM $511 $597 $567 $558
BlueKC
2014 Renewal
Initial BlueKC
2015 Renewal
Negotiated BlueKC
2015 Renewal
Lockton's
2015 Projection
Claims $10,147,131 $11,960,590 $11,278,144 $11,077,638
Admin $1,170,454 $1,347,923 $1,347,923 $1,347,923
ACA $121,550 $86,095 $86,095 $86,095
Total Plan Costs $11,439,135 $13,394,608 $12,712,162 $12,511,656
Increase from Prior Year (%) 0% 17% 11% 9%
Increase from Prior Year ($) ($387,808) $1,955,473 $1,273,027 $1,072,521

26. 25
2015 Renewal – Lockton vs. BlueKC
Assuming Change to Out-of-Pocket Maximum
BlueKC
2014 Renewal
Initial BlueKC
2015 Renewal
Negotiated BlueKC
2015 Renewal
Lockton's
2015 Projection
Aggregate Claims PMPM $453 $528 $498 $491
Admin PMPM $36 $37 $37 $37
Stop Loss PMPM $17 $23 $23 $23
ACA $5 $4 $4 $4
TOTAL PMPM $511 $592 $562 $555
BlueKC
2014 Renewal
Initial BlueKC
2015 Renewal
Negotiated BlueKC
2015 Renewal
Lockton's
2015 Projection
Claims $10,147,131 $11,850,376 $11,174,302 $11,011,415
Admin $1,170,454 $1,347,923 $1,347,923 $1,347,923
ACA $121,550 $86,095 $86,095 $86,095
Total Plan Costs $11,439,135 $13,284,394 $12,608,320 $12,445,433
Increase from Prior Year (%) 0% 16% 10% 9%
Increase from Prior Year ($) ($387,808) $1,845,259 $1,169,185 $1,006,298

27. 26
Lockton’s 2015 Renewal Analysis
 In an effort to mitigate the increase, Lockton requested alternative specific
deductible quotes, as higher deductibles yield lower specific premium rates.
Based on the Monte Carlo simulation, MCC ‘wins’ 88% of the time at the current
$200,000 specific deductible.
Current Contract Contract Alternative 2 Contract Alternative 3
Without Stop Loss $200,000 $225,000 $250,000
What is the plan's expected cost under the various
options?
Expected Claims (Paid by Plan after specific and aggregate) $11,968,150 $11,352,732 $11,426,082 $11,485,884
Specific Premium $511,670 $487,914 $463,061
Total Expected Cost (Expected Claims + Stop Loss Premium) $11,968,150 $11,864,402 $11,913,996 $11,948,945
% of simulations this option "wins" 88% 0% 12%
Premium savings $0 -$23,756 -$48,609
Additional Expected Claims $0 $73,350 $133,152

28. Basics of Stop Loss

29. 28
Stop Loss Background
 Self-insured (or quasi self-insured) clients who want to mitigate risks due to
large or unanticipated claims purchase stop loss coverage through their claims
administrator or from a third-party carrier.
 Under the BlueKC Cost Plus arrangements, customers are required to purchase stop loss
through BlueKC; Only under a true Administrative Service Only (ASO) agreement is
carving out the stop loss permissible.
 Stop Loss Products:
 Individual/Specific Stop Loss
 Coverage per member in excess of a set threshold
 Lockton performs Monte Carlo analysis, which is an actuarial tool, to better determine the
appropriate threshold.
 Aggregate Stop Loss
 Coverage for total claim spend above a corridor (e.g. 125% over expected claims)

30. 29
Individual/Specific Stop Loss
 Protects from catastrophic large claims on an individual member basis.
 Once claims for any covered member exceed the set threshold, all eligible
claims over this amount during the policy period are reimbursed
 Under the BlueKC Cost Plus Arrangement, customers benefit from improved cash flow,
as BlueKC starts paying claims in excess of the specific deductible (vs. the client paying
then getting reimbursed)
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
Claimant A Claimant B Claimant C Claimant D Claimant E
Specific Deductible

31. 30
Aggregate Stop Loss
 Protects from abnormally high claims for the entire covered population
 BlueKC sets Aggregate/Maximum Claim Factors; if claims for the policy period
exceed these, the Employer would be reimbursed the excess.
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

32. 31
Stop Loss Analysis
Benchmark Data
Percentage of Employers carrying Stop Loss
Covered Employees 500-999 1,000-4,999 5,000-9,999 10,000-19,999 20,000+
With Stop Loss 95% 90% 74% 60% 33%
Without Stop Loss 5% 10% 26% 40% 67%
Source: 2012 Mercer Study
Of those Employers with Stop Loss, Percentage with Specific, Aggregate or Both
Covered Employees 500-999 1,000-4,999 5,000-9,999 10,000-19,999 20,000+
Specific Only 28% 40% 53% 60% 64%
Aggregate Only 16% 13% 9% 10% 11%
Specific & Aggregate 56% 47% 38% 30% 25%
Median Specific Loss Deductible
Covered Employees 500-999 1,000-4,999 5,000-9,999 10,000-19,999 20,000+
Specific Stop Loss
Deductible
$150,000 $225,000 $300,000 $400,000 $400,000

33. 32
Our Mission
To be the worldwide value and service leader in
insurance brokerage, employee benefits, and risk management
Our Goal
To be the best place to do business and to work
This document contains the proprietary work product of Lockton Companies and is provided on a confidential basis. Any reproduction,
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