Agenda Cover Memorandum

Agenda Cover Memorandum Meeting Date: February 9, 2015 Meeting Type: COW (Committee of the Whole) City Council Budget Workshop Item Title: Approve resolution Authorizing the City of Park Ridge to become members of the Intergovernmental Personnel Benefit Cooperative ( IPBC ) and to place the Resolution on the agenda for the February 16, 2015 City Council Meeting. Action Requested: Approval Discussion Feedback Requested For your Information Staff Contact: Mike Suppan, HR Manager Phone Number: (847) 318-5201 Email Address: msuppan@parkridge.us Background: The instability of the health insurance marketplace and recent changes in the health insurance industry have increased the future possibility of premium increases for the City. In an effort to minimize these annual expenses related to the City s Health Insurance benefits, Human Resources began analyzing our current health insurance plan and exploring other options the City has available. Early in the process, it was evident that the City could stabilize future renewals and competitive pricing by joining a municipal pool. A presentation of the various options the City had available was made to the Council in the fall of 2014. At the January 26, 2015 COW, staff presented the conclusion that the City staff was recommending that the City become members of the Intergovernmental Personnel Benefits Cooperative (IPBC). There was consensus to move this item forward to action. The minimum membership commitment is three years. This was one of the options presented to the Council previously. This organization is a cooperative of 83 government entities that together help stabilize costs in the health care arena to gain the buying power advantage of a large group. Another advantage of this group is that large individual claims (catastrophic claims) can be mitigated by spreading the cost among a large group rather than bearing the entire cost alone. This factor is one of the reasons we are facing double digit percentage increases in our health insurance coverage this year, and potential future years. Our employees will not see a change in providers and the city will continue to use the Blue Cross/Blue Shield network for PPO and HMO services. We are facing a renewal increase this year of more than 15%. That estimate for FY16 can be reduced in FY16 with the buying power of moving to the IPBC, and will be reduced in future years with our membership. The FY16 budget for health insurance is approximately $3.7 million (offset by employee contributions), which includes premiums and claims. Our quote for membership is slightly under $3.7 million for 12 months. Open enrollment for IPBC is July 1, so we will receive a 14 month quote at $4,294,576 ($3,685,714 for 12 months). Typical annual renewals from this consortium have averaged under 5%. In fact, if we had been a member this year, we would be looking at a 1-3% increase instead of the estimated 15% increase. Additionally, because of the buying power in the group the City will be able to take advantage of Life Insurance rates that are 50% less than what we currently pay. We also pay separately for an Employee Assistance Program (EAP), which is also included in the membership of the consortium in addition to also offering a wellness component. The transition takes approximately 90 days to complete, and the timing of this resolution allows the transition to be completed prior to the City s annual open enrollment period. David Cook, Executive Director of the IPBC, will be attending the meeting to answer any question the Council may have. Previous materials distributed to the Council are attached to this memorandum, along with a resolution. This resolution was reviewed by City Attorney Henn. Alderman Shubert volunteered during the process to be involved in reviewing information and materials and staff would like to thank him for his efforts. Rev 03/01/2013

Agenda Cover Memorandum Recommendation: Approve resolution Authorizing the City of Park Ridge to become members of the Intergovernmental Personnel Benefit Cooperative ( IPBC ) and to place the Resolution on the agenda for the February 16, 2015 City Council Meeting. Budget Implications: Does Action Require an Expenditure of Funds: Yes No Attachment(s), if any: Resolution Executive Summary & Information Sheet IPBC Informational Presentations Rev 03/01/2013

RESOLUTION NO. A RESOLUTION AUTHORIZING THE ACCEPTANCE OF THE CONTRACT AND BY-LAWS DOCUMENT OF THE INTERGOVERNMENTAL PERSONNEL BENEFIT COOPERATIVE AND AUTHORIZING MEMBERSHIP IN THE IPBC BY A MUNICIPALITY. WHEREAS, a number of Illinois municipalities and Sub-Pools have entered into an intergovernmental agreement and created the Intergovernmental Personnel Benefit Cooperative ( IPBC ); and WHEREAS, the IPBC has existed for several decades, and has provided benefit coverages for the officers and employees of many Illinois municipalities; and WHEREAS, this municipality wishes to become a Member of the IPBC; and WHEREAS, the obligation of membership requires the acceptance by the Corporate Authorities of the municipality of the Contract and By-Laws document of the IPBC as an intergovernmental contractual obligation to which the municipality will become bound; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Park Ridge located in the County of Cook and State of Illinois, exercises its home rule powers, as follows: SECTION 1: This municipality, as of the starting date at which admission to membership was or is granted by the IPBC Board of Directors, shall become a Member of that intergovernmental cooperative. SECTION 2: The terms and conditions of that membership shall be such terms and conditions as were imposed by the Board of Directors of the IPBC in the acceptance motion, and the contractual obligations under the terms of the Contract and By-Laws of the IPBC as such document currently exists and as it may be amended in accordance with its terms. This municipality assumes such terms and conditions. 1

SECTION 3: The Mayor of this municipality, or such other officer, as shall be authorized, is directed to execute any documents necessary to indicate the membership of the municipality in the IPBC. SECTION 4: This Resolution shall be in full force and effect upon its passage, approval and publication in pamphlet form, if required by law. PASSED this day of, 2015. AYES: NAYS: ABSENT: ATTEST: David F. Schmidt, Mayor Betty W. Henneman, City Clerk 4845-2435-8937, v. 1 2

City of Park Ridge Executive Summary Senior staff is recommending that the Board resolve to join the Intergovernmental Personnel Benefit Cooperative (IPBC) for an initial period of 3 years. The IPBC is an insurance captive for municipalities in operation since 1980 and has over 85 municipalities as members. The advantages are that the City would own a stake in the IPBC rather than being a customer of Blue Cross. The City would still retain Blue Cross but take advantage of the transparent structures and cost sharing elements that are part of the IPBC, as well as the facts that the IPBC has had single digits adjustment for the last 9 years, which will allow the City greater stability in its costs. The City would still retain the right to offer its current plans or change them in the future with the IPBC. The IPBC will also allow the City customization privileges to mitigate Cadillac Tax implications and other Health Care Reform issues in conjunction with the rest of the membership We are recommending that we stay with the current two PPO plans and the single HMO plan. PPO 2 rates had been set rather artificially low, this will be corrected to properly identify to true nature of the cost of PPO 2. We are projecting that the City s cost for the PPO and HMO plans will be approximately $4M. The quote to keep the status quo but with a minor change to the RX program, lower generic co-pays and raising formulary and non-formulary co-pays slightly will be approximately $4.04M in the IPBC. This is a cost change of one percent to the City s costs for a period of 14 months, May 1 to June 30, 2016. This is to then have the City be in line with the IPBC fiscal year which runs July 1 to June 30 annually. There are three attachments with this Executive Summary. One is listing all the members of the IPBC, second is the recent renewal history highlighting the single digit adjustments, third is the bylaws and resolution to join the IPBC.

IPBC Information Sheet as of January 1, 2015 Inception: 1979, per the Illinois Intergovernmental Cooperation Act Members: 83 public sector entities as of January 1, 2015 Governance: Member communities designate their representatives to the Board of Delegates. Executive Committee comprised of Chair, Vice Chair, Treasurer, Past Chair, Finance and Operations Chair and 3 other members selected from the Membership. The Executive Director administers the day-to-day operations of the Cooperative. Employees Covered: Life Insurance 10,200 PPO Plan 7,098 HMO Plan 3,334 Dental Plan - 5,418 Insurance Providers: BlueCross Blue Shield (PPO/HMO) Blue Advantage & HMO IL United Healthcare (PPO/EPO) CIGNA (PPO) MetLife (Dental) Reliance Standard (Life/AD&D) 2013-2014 Expenses: $164,780,924* Reserves as of 6-30-2013: $40,114,843 (restricted)* $57,559,695 (unrestricted)* *Per IPBC Audit Year End 6/30/14 IPBC Members have benefited from the stability in average renewal increases of only 2.3% for PPO and 3.3% for HMO the last 3 years. IPBC Members receive the benefit of administrative and network access fee reductions of 10-30%. IPBC Members benefit from lower stop loss fees and the ability to participate in dividends of the contract.

What Does IPBC Mean to Your Organization? Operationally Financially Ease Administrative Burden *Purchasing Power One-stop Shopping * Stability Significant Resources * Transparency Comparables * Better Decision Making IPBC Differentiators: Proactive Strategic Planning Meetings 3- to 5-year Projections Freedom in Plan Design Carrier Selection Internal Plan Modeling and Pricing Access to Information/Data National and Regional Public Sector Data Webinar, Seminars and Conference Support Purchasing Power Leveraging 11,000 + Employees Covered Leveraging 30,000 Total Covered Persons Dedicated Municipal Service Team 8 Team Members Focused on the Public Sector Compliance, Wellness, HR, Underwriting & Communications Support Budget - Predictable, Stable and Flexible Full Disclosure and Transparency Annual Pool Disclosure Annual Member Disclosure Your Peers City and Village Managers Finance Directors & HR Professionals

History The Intergovernmental Personnel Benefit Cooperative (IPBC) is an entity created under Illinois state laws, which allows municipal groups to band together for the purposes of insurance. The IPBC was established in 1979 and currently includes 75 municipalities or municipal entities as members. Purpose The purpose of the IPBC is to provide economies of scale and risk pooling that will allow members more financial stability than offered by the commercial insurance market in a fully transparent environment. The members retain the right within the IPBC to create and change their plan design, which is often required due to the nature of bargained contracts. Members also operate as part of a larger Board of Directors to control the finances within the pool. Members Long-term commitment by members to the philosophy of risk pooling has been instrumental in the success of the IPBC. Many members have been part of the organization for more than two decades. The Streamwood Village Board has established a formal budgetary policy encouraging intergovernmental cooperation in order to improve services and control costs. The IPBC offers group purchasing power that the Village would not have on their own. The IPBC Board has worked hard to develop creative products and flexible plan designs that are both cost-effective and meet the needs of our employees. Dave Richardson, Former Finance Director, Village of Streamwood Products The IPBC offers self-insured PPO, HMO, and Dental programs. Upon entering the IPBC, each community will have access to a Life/AD & D benefit as well as a multitude of other products (vision, property and casualty, long-term care, retirement, etc.). The PPO program allows members authority over plan design, but provides a unique pooling of risk among all members for individual claims between $35,000 and $125,000. Claims over $125,000 are fully reinsured. Therefore, members are responsible for claims under $35,000 and the redistributed claims cost for claims between $35,000 and $125,000. This allows for enhanced budgeting and stability from year to year. The HMO product is also self-insured through a special arrangement. Members pay for fixed costs of capitation (monthly stipend paid to primary care physician) for hospital and Rx charges. There are several different choices of plan designs with different levels of office visit and prescription drug co-pays. All members pay the same rates based on plan design offerings. The Dental program is self-insured, and each member has complete flexibility over plan design. IPBC Business Partners Ancel Glink (Attorney) Sikich LLP (Auditing) Lauterbach & Amen (Accounting) CM Services (Management Services) Arthur J. Gallagher (Benefits Consulting) IPBC Officers & Executive Director Kelly Amidei (Libertyville): Chair Patrick Seger (Hoffman Estates): Vice Chair Lisa Happ (Schaumburg): Treasurer Dave Strahl (Mt. Prospect): Finance & Ops Dave Cook davec@cmservices.com

IPBC Individual Members Barrington (7/1/1979) Bloomingdale (7/1/1984) Buffalo Grove (1/1/2012) Carol Stream (10/1/1983) Carpentersville (1/1/2007) Central Lake County JAWA (6/1/1997) Crystal Lake (5/1/2011) Deerfield (5/1/2003) DeKalb (1/1/2008) Des Plaines (6/1/2003) Evanston (12/1/2009) Forest Preserve District of DuPage County (1/1/2004) Franklin Park (11/1/2003) Glenview (7/1/1979) Hanover Park (5/1/1981) Highland Park (1/1/2008) Hinsdale (6/1/1997) Hoffman Estates (1/1/2005) Homewood (1/1/2005) NW Suburban JAWA (1/1/2000) Libertyville (5/1/2006) Lombard (1/1/2014) Morton Grove (1/1/2007) Mount Prospect (4/1/1998) Northbrook & Library (5/1/2003) Oswego & Park District (7/1/2010) Rolling Meadows (7/1/1979) Schaumburg (1/1/2012) Streamwood (7/1/1979) West Chicago (10/1/1997) Westmont & Park District (7/1/1979) Wheaton (4/1/2003) Wheeling (7/1/1979) Wood Dale (7/1/1981) IPBC Sub-Pool Members SCDCBP Benefit Pool Burr Ridge (3/1/1985) Clarendon Hills (9/1/1984) Darien (9/1/1984) Willowbrook (9/1/1984) Woodridge (9/1/1984) SWAHM Benefit Pool Crest Hill (8/1/2010) Glen Ellyn (1/1/2009) Homer Glen (1/1/2009) Lemont (7/1/1992) Lockport ((7/1/2008) Mokena (7/1/1992) New Lenox (7/1/1992) Plainfield (7/1/1992) Shorewood (7/1/1992) WCMC Benefit Pool Countryside (8/1/1983) Indian Head Park (8/1/1983) LaGrange Park (8/1/1983) NIHII Benefit Pool Algonquin (1/1/2014) Bensenville (6/1/2011) Cary (1/1/2015) Glencoe (1/1/2015) Gilberts (4/1/2011) Metropolitan Pier & Exposition Authority (1/1/2012) North Riverside (10/1/2009) Oak Park Public Library (1/1/2015) Oak Park Township (1/1/2014) River Forest (5/1/2011) Rock Falls (1/1/2010) Schaumburg Township (9/1/2014) SEECOM (1/1/2011) West Suburban Consolidated Dispatch Center (1/1/2014) EWBC Benefit Pool Beecher (11/1/2010) Channahon (1/1/2015) Coal City (1/1/2012) Crete (11/1/2010) Crete Township (11/1/2010) Monee (11/1/2010) Peotone (11/1/2010) South Chicago Heights (5/1/2014) Steger (11/1/2010) SIHII Benefit Pool Collinsville (6/1/2004) Gateway Center (1/1/2015) Glen Carbon (7/1/2013) New Baden (7/1/2013) Swansea (5/1/2011) Trenton (9/1/2014)

IPBC PPO Rate Renewal History Avg. Approved Adjustment** Avg. Dividend** Medical Trend** 2005-06 10.0% 7.7% 14.0% 2006-07 9.0% 11.7% 12.0% 2007-08 7.0% 14.9% 11.0% 2008-09 4.5% 8.4% 11.0% 2009-10 3.9% 3.9% 10.0% 2010-11 7.2% 4.3% 10.0% 2011-12 7.3% 6.5% 10.9% 2012-13 5.9% 8.3% 10.8% 2013-14 4.3% 13.7% 9.6% 2014-15 -3.3% N/A 9.2% Percent 15.0% 10.0% 5.0% 0.0% -5.0% IPBC Net PPO History Years Excess Funding Medical Trend Approved Adjustment

IPBC HMO Rate Renewal History Avg. Approved Adjustment Avg. Dividend** Medical Trend*** 2005-06 9.5% 6.6% 13.0% 2006-07 11.5% 11.8% 12.0% 2007-08 4.1% 7.0% 11.0% 2008-09 5.4% -1.7% 11.0% 2009-10 13.1% 5.3% 10.0% 2010-11 10.1% 8.3% 10.0% 2011-12 7.7% 9.3% 11.7% 2012-13 3.6% 11.4% 10.2% 2013-14 2.9% 11.9% 9.0% 2014-15 3.5% N/A 8.5% Percent 20.0% 0.0% -20.0% IPBC Net HMO History Years Approved Adjustment Excess Funding Medical Trend

A Note from the Past Chairman Bob Fialkowski, Former Finance Director, Village of Deerfield I believe the most important benefit of joining the pool is the future flexibility provided in designing a health benefits program within the budget set forth by the Village each year and access to innovative strategies to deal with the continued provision of these benefits to our employees. There have been quite a number of articles recently in the local and national press concerning the widespread expert opinion of 15% annual increases in employer-provided health insurance into the future and the unknown effect of the recent major changes to come due to the Federal health insurance bill. To deal with these types of increases and rapid changes, we need to be able to offer a menu of alternatives designed to share a greater responsibility for choosing and managing cost-effective health care with the employees. With 175 lives, we are not big enough on our own to offer a cafeteria of options to effect this transfer of decision-making. However, as part of a pool of like-minded and similarly situated municipalities, membership in the IPBC will enable us to share and pool, with a larger number of covered employees, alternatives such as high-deductible plans or healthcare reimbursement arrangements. It also gives us access to consultants who can evaluate our individual circumstances along with the pool as an entity and offer cost effective programs to deal with the rising cost of these benefits. This document briefly highlights the history of the Intergovernmental Personnel Benefit Cooperative (IPBC). This information is proprietary and may be shared with your Boards. For more information on IPBC, please contact Dave Cook, Executive Director at (630) 942-6521 or via email at davec@cmservices.com

IPBC 101 Administration/Orientation GALLAGHER BENEFIT SERVICES PUBLIC SECTOR TEAM APRIL 2014 Q:\2014\Gallagher\20\25233A.pptx

Overview IPBC Governance Annual Process Quarterly Board Meetings Monthly Process Ongoing/Ad Hoc Events 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 2

IPBC Governance Overview Inception: Created in 1979 through the Illinois Intergovernmental Cooperation Act Members: 75 public sector entities as of January 1, 2014, includes 32 member communities, 6 sub-pools (total of 38 entities in sub-pools) and 5 listed entities. Governance: Member communities designate their representatives to the Board of Delegates. Executive Committee elected by members as is comprised of Chair, Vice Chair, Treasurer, Past Chair, Finance and Operations Chair and 4 other members selected from the Membership who serve 2-year terms. The Executive Director administers the day-to-day operations of the Cooperative. Executive Director Dave Cook Chairperson Kelly Amidei, Libertyville Vice Chair Patrick Seger, Hoffman Estates Treasurer Lisa Happ, Schaumburg Finance & Operations Chair Dave Strahl, Mt. Prospect Acting Past Chair Steve Stricker, Burr Ridge Large Member Rep. Marty Lyons, Evanston Medium Member Rep. Caryl Rebholz, Carol Stream Sub-Pool Member Rep. Eric Palm, River Forest At-Large Member Rep. Brad Wilson, Wood Dale 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 3

IPBC Governance Boards & Committees Board of Directors Currently 38 voting members, responsible for determining the general policy of the IPBC. Meetings normally held in January, March, August, and November. Members are required at attend. Executive Board A board comprised of 9 members, which is responsible for implementing the policy decisions of the Board of Directors and overseeing the performance of the Executive Director. Normally meets bimonthly. Members are highly encouraged to attend. Finance & Operations Committee (recommending body to the Executive Board) 9 members selected by Chair. The Committee shall review and recommend the annual budget, programs and vendor performance and other projects and tasks as assigned. Meetings normally held in same month as Board of Directors. Members are highly encouraged to attend. 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 4

IPBC Governance Membership & Ad Hoc Committees Membership Development Committee Chaired by the Vice Chair of IPBC. Committee meets periodically to enhance education of the membership and to provide training. Wellness Committee Committee works to review performance of Wellness program and to recommend changes. Ad Hoc Investment Committee Chaired by the Treasurer. Committee reviews investments, broker performance, and overall policy. Ad Hoc Member Service Committee Committee works to improve services to members and develop performance standards for vendors. Other Ad Hoc Committees as Needed Involvement in Committees is highly encouraged for all Members. 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 5

Annual Process Renewal Audit Open Enrollment Benchmarking Long-Term Planning Contract Services 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 6

Review of Process Beginning of Annual Cycle Development of funding sheet by Gallagher Sikich audits revenues and expenses Gallagher develops IPBC renewal and member renewal Premiums sent to Lauterbach & Amen IPBC invests reserves Gallagher uses renewal to develop funding sheet Lauterbach & Amen pays actual expenses Gallagher tracks premiums and expenses Cycle Repeats 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 7

Annual Process Renewal 1. Preliminary (January) 2. Final (March) 3. Funding Sheet (April) Sets rates for the year Members Finalize enrollment by June IPBC Accountant Lauterbach & Amen (L&A) sends ACH in June for the new plan year 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 8

Annual Process Audit (prepared yearly in November) Gallagher sends out year end reconciliation exhibit (actual month by month head counts) Members provide final approval of enrollment exhibits/head counts Gallagher provides Lauterbach & Amen year-end reports Claims Enrollment Prepared by IPBC Auditor Sikich Members approve audit at November Board Meeting 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 9

Annual Process Audit Sikich audits revenues and expenses Four Accounts in Audit: Admin. (CM Services, Gallagher, L & A, IPBC Auditor), Benefit Account (PPO, Wellness and Dental), HMO Account (HMO), and Terminal Reserve Account (surplus/deficit) Expenses paid out of first 3 accounts; Reserves can be retained in Terminal Reserve Account Reserves tracked annually in the audit with estimated reserves balances available throughout the year at Member s request Revenues above actual expenses remain in IPBC accounts, unless directed otherwise by the individual Member Amounts in Reserves above liabilities (Incurred but not Reported - IBNR, etc.) are available to Members at their request 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 10

Annual Process Open Enrollment Members finalize plan changes Annual Event (Jan/July) Members set meeting dates Plan design/benefit summary Members set Employee contributions Employee communications Coordinate schedules Members make Enrollment Changes are entered at carrier On the carrier websites 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 11

Annual Process Benchmarking How do the marketplace norms compare to my community? What plan does community XYZ have in place and how does it compare to mine? 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 12 Q:\2014\Gallagher\20\25233A.pptx

Annual Process Gallagher Insider Claims utilization analysis Identify plan cost drivers Areas to "Bend the Trend by adding cost containment 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 13

Annual Process Contract Services Pool-wide contracts with vendors are at the IPBC level Contracts in place include: Blue Cross Blue Shield PPO & HMO Medical vendor CIGNA, UHC Medical vendors MetLife Dental vendor Express Scripts (Medco) Prescription drug vendor Standard Life and STD coverage vendor OptumHealth PPO stop loss vendor BlueCross BlueShield HMO stop loss vendor Healthcare Analytics Data warehouse vendor Lauterbach & Amen Accountant Ancel Glink Attorney Sikich - Auditor CMS Executive Director & Secretariat Services Gallagher Benefit Services Administrator 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 14

Quarterly Board Meetings Board Meeting Overview Board & Committee Reports Executive Board Chair (Kelly Amidei Village of Libertyville) Executive Director (Dave Cook) Finance and Operations Chair (Dave Strahl Mt. Prospect) Treasurer (Lisa Happ - Village of Schaumburg) Legal (Stewart Diamond - Ancel Glink) Lauterbach & Amen (Accounting, Billing, ACH debits) Secretariat (CMS) Board claim and utilization updates Gallagher Vendor/Marketplace updates Gallagher All Members are required to attend Board Meetings 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 15

Quarterly Board Meetings Board Claim Reports Review of IPBC Financial Performance PPO/EPO activity Stop loss Loss Ratio Banding HMO activity Utilization Reports BCBS CIGNA UHC Express Scripts Dental Healthcare Analytics (Utilization/Benchmarking Analysis) 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 16

Monthly Process Gallagher Reports Track premium and claims experience Track ACH Funding Stop loss reporting to vendor Vendors billing to L & A Data warehouse updates Reports posted on GBS Insight for Member review Member Responsibilities Enrollment exhibits uploaded to GBS Insight Review Carrier eligibility files Review Gallagher Monthly email reminders and respond when necessary 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 17 Q:\2014\Gallagher\20\25233A.pptx

Ongoing/Ad Hoc Events Eligibility maintenance Issue resolution (claim issues, etc.) Vendor management Plan management Member meetings Compliance assistance (Healthcare Reform, Grandfather status, COBRA, HIPAA, etc.) New Member implementations Long-term planning sessions New products/services Seminars/Summits 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 18

Ongoing/Ad Hoc Events Eligibility Maintenance Member Current Members go online or manually make changes to carrier systems Multiple entries (each carrier needs change) Multiple logins required Now/Future Eligibility Management Vendor Implementation Save the pool Members time and money Create efficient single-entry point for eligibility Can be implemented/discussed at any time Track/Report Telephonic or Web-based enrollment Track adds/drops Feeds to all carriers 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 19

Ongoing/Ad Hoc Events Member Services for non-urgent issues Gallagher Day-to-day response to: claim issues Gallagher service team phone, e-mail, or individual team member eligibility questions benefit design strategy customer service levels 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 20

Ongoing/Ad Hoc Events Vendor Management IPBC Executive Director & Gallagher Vendor updates Monitor customer service levels Accountability and improvement of customer service New product offerings Implementation of new vendors Vendor evaluation A.M. Best Ratings 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 21

Ongoing/Ad Hoc Events Plan Management Gallagher Managing Plan changes Federal and State mandates Identify changes to all carriers Track and report enrollment changes Provide documents to carriers/members Review changes Update communications to employees Changes in structure Identify and report to carriers Review new structure Identify migration/enrollment 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 22

Ongoing/Ad Hoc Events Member Meetings Gallagher Board/Council meetings Employee Enrollment Meetings Insurance/Wellness committee Renewal/Budget Service Plan Financial/Claims Reporting Plan Design Options Employer informational Sessions - Seminars and Website Tutorials 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 23

Ongoing/Ad Hoc Events Compliance Assistance Gallagher compliance consulting services include Technical consulting on legislative issues impacting employee benefit programs Evaluation of plan design to confirm compliance with all state and federal regulations Technical Bulletins and Regulatory Compliance Alerts Healthcare Reform, IL House Bills, Mental Health Parity Act Educational Seminars on FMLA, COBRA, HIPAA, Cafeteria Plan Rules, Healthcare Reform 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 24

Ongoing/Ad Hoc Events New Member Implementations Gallagher Implementation checklist General Life AD&D PPO Medical HMO Medical Rx Vendor Dental Administrative 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 25

Ongoing/Ad Hoc Events Member Long-Term Planning Organizational Philosophy 3-5 Year Goals Projected Timeline Drives Annual Plan Cadillac Tax Strategy 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 26

Ongoing/Ad Hoc Events Ongoing Services Medicare Supplement; Retiree Carve-out/Solutions Healthcare Reform Planner Eligibility Maintenance Vendor Employee Communications Voluntary Benefits New Products/Services Marketing Analysis/Recommendations Implementation Ongoing Issue Resolution 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 27

Next steps We greatly value the relationship we have with your community, and with the IPBC. We welcome any comments or suggestions you feel would strengthen that relationship. Thank you! 2014 GALLAGHER BENEFIT SERVICES, INC. Q:\2014\Gallagher\20\25233A.pptx ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 28

IPBC 201 Financial PRESENTED BY: ARTHUR J. GALLAGHER & CO PUBLIC SECTOR TEAM Q/2014/Gallagher/20PPT/25186.pptx

Overview IPBC History, Value, Function, and Experience IPBC Cycle, Funds, and Reporting IPBC Wellness Initiative Gallagher Function and Resources Q/2014/Gallagher/20PPT/25186.pptx Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 2

What is the IPBC? Intergovernmental agency established in 1979 Allowed by the State, Regulated by the DOI and DOL Financial vehicle Conservatively funded and reserved Preserve plan design and vendor selection freedom Managed by the State s preeminent public sector vendors Fully transparent Stable, Budgetable, and Predictable x Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 3

IPBC Value Proactive Port/Retain Plan Design Access to information/data Purchasing Power Dedicated Municipal Service Team Compliance assistance One Stop Shopping Ease administrative burden Meaningful Benchmarks Full Disclosure and Transparency Innovation Budgetable, Predictable, Stable, and Flexible Intangibles Choice of Benefit Plan Partners Your Peers Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 4

Who are your Peers: Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 5

Benefit Plan Partners Contracts with Vendors are set at the IPBC level Contracts in place include: Blue Cross Blue Shield PPO & HMO vendor Cigna, UHC PPO Medical vendors Optum Health PPO Stop loss vendor Blue Cross Blue Shield HMO Stop loss vendor Express Scripts, Inc. Prescription drug vendor MetLife Dental vendor Standard Life AD&D and Supplemental Life coverage vendor Healthcare Analytics Data warehouse vendor Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 6

IPBC Organizational Chart Board of Directors Executive Board Executive Director Finance & Operations Committee Membership Development Committee Wellness Committee Investment Committee Q/2014/Gallagher/20PPT/25186.pptx

Executive Director Duties General Administration Services: Attends all Board, Executive Board, Committee and Subpool meetings Oversees preparation of all agendas and meeting materials Sees to the recording of, review and provision of meeting minutes Establishes policies and procedures as needed Coordinates and manages goals and objectives in Strategic Plan Assess current and proposed programs and makes recommendations for improvements to Executive Board Identify deficiencies in operations and recommends alternative processes Reviews market for changes in products available Q/2014/Gallagher/20PPT/25186.pptx

Executive Director Duties Budget & Finance Services Reviews monthly financial reports Reviews vendor invoices for approval Prepares annual Administrative Budget and finalizes as approved Member Services Resolves conflicts and member complaints Reviews & coordinates activities of IPBC vendors and consultants Coordinates communications to members Q/2014/Gallagher/20PPT/25186.pptx

Executive Director Duties Oversees the implementation of the IPBC Growth Policy and coordination with marketing prospects New member orientation Represents IPBC as appropriate at local and national level Q/2014/Gallagher/20PPT/25186.pptx

IPBC Committee Duties Finance and Operations Committee Has 9 members selected by Chair. The Committee shall review and recommend the annual budget, programs and vendor performance and other projects and tasks as assigned. Membership Development Committee Chaired by the Vice Chair of IPBC. Committee meets periodically to enhance education of the membership and to provide training. Wellness Committee Committee works to review performance of Wellness program and to recommend changes. Ad Hoc Investment Committee Chaired by the Treasurer. Committee reviews investments, broker performance, and overall policy. Ad Hoc Member Service Committee Committee works to improve services to members and develop performance standards for vendors. Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 11

IPBC PPO Renewal Experience PPO Rate History Medical Trend** Avg. Approved Adjustment*** Avg. Surplus*** 2005-06 14.0% 10.0% 7.7% 2006-07 12.0% 9.0% 11.7% 2007-08 11.0% 7.0% 14.9% 2008-09 11.0% 4.5% 8.4% 2009-10 10.0% 3.9% 3.9% 2010-11 10.0% 7.2% 4.3% 2011-12 10.9% 7.3% 6.5% 2012-13 10.8% 5.9% 8.3% 2013-14 9.6% 4.3% 13.7% 2014-15 3.3% TBD **Medical trend is comprised of medical inflation, changes in types of service, changes in provider contracts, increased age of employee population, plan design leveraging, Healthcare Reform, etc. ***Varies by member Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 12

IPBC PPO Claim Fluctuation Self Insured Individual claims under $35,000 are the responsibility of the member Banded-layer Individual Claims over $35,000 up to the stop loss amount of $125,000 are shared equally among IPBC members. Protection Stop loss Individual Claims in excess of $125,000 are reimbursed by the stop loss carrier. Aggregate stop loss protection also provides a layer of protection over all of the paid claims up to a maximum amount. Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 13

Individual Member PPO Five Year History Plan Year Community 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/2014 Average* Variance from IPBC Avg.** Barrington 9.90% 12.10% -4.13% 14.30% 2.20% 6.87% 2.59% Bloomingdale -2.60% 14.90% 0.55% -5.70% -10.10% -0.59% -4.87% Buffalo Grove 4.20% -5.20% -0.50% -4.78% Carol Stream 6.30% 7.70% 14.95% -3.80% -10.20% 2.99% -1.29% Carpentersville 3.90% 10.50% 2.50% 7.10% -5.90% 3.62% -0.66% CLCJAWA 16.40% -2.70% -4.13% 14.30% -1.60% 4.45% 0.17% Crystal Lake 6.13% 0.60% 1.60% 2.78% -1.50% Deerfield 10.10% 6.10% 13.84% 2.40% 1.20% 6.73% 2.45% Dekalb 11.00% 9.60% 7.30% 4.50% 0.50% 6.58% 2.30% Des Plaines 3.80% 2.20% 7.56% -0.60% 1.30% 2.85% -1.43% Evanston - 0.80% 7.68% 7.10% -4.10% 2.87% -1.41% EWBC 14.10% 7.80% -8.30% 4.53% 0.25% Forest Preserve 9.20% 1.60% 1.98% 7.20% -9.50% 2.10% -2.18% Franklin Park -1.00% 15.80% 7.12% -2.50% -0.40% 3.80% -0.48% Glenview 15.60% 11.70% 1.28% 8.40% -6.50% 6.10% 1.82% Hanover Park -2.80% -2.10% -2.91% -5.70% 0.90% -2.52% -6.80% Highland Park 17.20% 10.20% 9.75% 3.30% -6.20% 6.85% 2.57% Hinsdale -2.80% 6.00% 3.74% -3.10% 6.70% 2.11% -2.17% Hoffman Estates 7.20% 5.40% 7.06% 2.90% -2.70% 3.97% -0.31% Homewood 5.30% 2.40% 13.57% -2.30% -13.30% 1.13% -3.15% Libertyville 6.60% 8.10% -4.13% 10.20% 4.10% 4.97% 0.69% Morton Grove -0.40% 3.90% 9.61% 8.60% -2.50% 3.84% -0.44% Mount Prospect 0.30% 4.20% 7.85% 6.20% 1.60% 4.03% -0.25% NIHII - 17.30% 4.77% 3.30% -6.00% 4.84% 0.56% Northbrook 5.20% 14.10% 5.08% 10.60% -8.60% 5.28% 1.00% Oswego - 9.20% -4.13% 2.20% 2.90% 2.54% -1.74% Rolling Meadows 7.00% 5.10% 14.24% 3.60% -5.60% 4.87% 0.59% Schaumburg 5.10% -2.60% 1.25% -3.03% Streamwood 9.70% 6.50% -4.13% 5.40% -1.60% 3.17% -1.11% SWAHM 13.40% 8.80% 0.15% 2.10% -4.50% 3.99% -0.29% West Chicago 3.10% 17.30% -3.92% -4.40% -4.00% 1.62% -2.66% Westmont 1.30% 5.90% 12.55% 4.30% -5.50% 3.71% -0.57% Wheaton 0.40% 3.40% 13.39% 8.40% -8.10% 3.50% -0.78% Wheeling -1.20% 3.50% 6.29% 1.00% 1.20% 2.16% -2.12% Wood Dale -0.30% 5.90% -4.13% 9.80% -9.30% 0.39% -3.89% IPBC 7.20% 7.30% 5.90% 4.30% -3.30% 4.28% 0% Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 14

IPBC Average HMO Renewal Experience HMO Rate History Medical Trend Avg. Approved Adjustment*** Avg. Surplus*** 2005-06 13.0% 9.5% 6.6% 2006-07 12.0% 11.5% 11.8% 2007-08 11.0% 4.1% 7.0% 2008-09 11.0% 5.4% -1.7% 2009-10 10.0% 13.1% 5.3% 2010-11 10.0% 10.1% 8.3% 2011-12 11.7% 7.7% 9.3% 2012-13 10.2% 3.6% 11.4% 2013-14 9.0% 2.9% 11.9% 2014-15 3.5% T BD **Medical trend is comprised of medical inflation, changes in types of service, changes in provider contracts, increased age of employee population, plan design leveraging, Healthcare Reform, etc. ***Varies by member Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 15

Annual Cycle (July June) 1. Gallagher develops funding sheets (for July) 2. Members submit Premiums via ACH to Lauterbach & Amen (L&A)(monthly) 3. L&A pays actual expenses presented from vendors (monthly) 4. Gallagher tracks premiums and claims (monthly reporting) 5. IPBC invests reserves (Treasurer and Investment Managers)(ongoing) 6. Sikich presents audit of all IPBC financials (November) 7. Gallagher develops IPBC renewal options and Member renewal (January) 8. Board approves final renewal (March) 9. Gallagher uses renewal to develop funding sheets (June) 10. Process repeats annually Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 16

IPBC Funds Four Funds in IPBC: Admin. Fund (CM Services, Gallagher, L & A, Sikich), Benefit Fund (PPO, Wellness, Dental, and Life), HMO Fund (HMO), and Terminal Reserve Fund (surplus/deficit) Expenses paid out of first 3 funds, Reserves can be retained in Terminal Reserve Fund Reserves tracked annually in the audit with estimated reserves balances available throughout the year at Member s request Revenues > actual expenses remain in IPBC funds, unless directed otherwise by the individual Member Amounts in Reserves above liabilities (IBNR*, etc.) and minimum balance requirements are available to Members at their request IBNR = Incurred But Not Reported Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 17

Funding Sheet Summary Version Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 18

Funding Sheet Detail Version Pay X amount each month. Looks fullyinsured, but you have the ability to outperform this number and pay yourself back $249, 061.27 Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 19

IPBC PPO Total IPBC money in versus expenses out. Anything <100% is good Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 20

Member PPO Loss Ratio Member level money in versus expenses out Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 21

Banded Layer Member responsibility We re all in this together Column C: 98% of your people, 85% of your claim spend (predictable) Column D: 2% of your people, 15% of your claim spend (unpredictable, fluctuations) Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 22

Member Large Claims Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 23

Member Stop Loss Application Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 24

PPO Savings and Utilization Analysis Who s staying in network? What do my Rx claims look like? Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 25

Rx Utilization Comparison Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 26

IPBC HMO 50% 50% of of premiums unused unused at the at the end end of the of the year year are are allocated back back to HMO to HMO Members. The The remaining 50% 50% is is allocated to to those those members in an in an individual surplus surplus position for for the the year, year, on on a a percentage basis. basis. 11.4% 11.4% Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 27

IPBC Dental Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 28

Member Dashboard *Tutorial available Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 29

IPBC PPO Renewal Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 30

PPO Member Renewal IPBC Member renewal. Each community can range a maximum of 10 points up or down from the IPBC average. Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 31

IPBC HMO Renewal Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 32

IPBC Dental Renewal Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 33

Dental Member Renewal IPBC Member renewal. Each community can range a maximum of 10 points up or down from the IPBC average. Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 34

Funding Sheet All of the changes and renewal information is then populated into your funding sheet for the following year. This process repeats annually. Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 35

IPBC Wellness Initiative Wellness is the cornerstone of the IPBC Wellness dollars allocated within rate structure Four wellness program packages Up to $100 reimbursement per eligible screening participant annually Incentive support available with increased activity Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 36

Function of Gallagher Gallagher provides consulting services to all of the IPBC members Gallagher has been the consultant for the IPBC since its inception in 1979 Services include but are not limited to: Financial Reporting, Healthcare Reform projections, Plan Design pricing, Compliance assistance, Issue resolution, Wellness Consulting, and Benefit Vendor Contract negotiations. Q/2014/Gallagher/20PPT/25186.pptx Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. 37

Gallagher Resources Compliance Consulting Regulatory and Legislative Updates HCR Compliance Cadillac Tax Projections Customized Communication Open Enrollment Support HCR Campaigns Technology Gallagher Insight Gallagher Viewpoints (survey tool) C2MB (Employee Intranet site) Q/2014/Gallagher/20PPT/25186.pptx 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 38

Your Gallagher Team Gregg Aleman, Area Senior VP Dennis Donahue, Managing Partner Erin Duffy, Area VP, Client Development Dave Torri, Area VP, Client Management Joyce Janu, Area VP, Client Management Dan Parker, Senior Benefit Consultant Your entity Erin Gidcumb Account Manager Beth Molony, Senior Client Representative Interim, Client Representative Scott Baldwin, Managing Director, PESG Arnie Munson, Compliance Consultant John Edgerton, Lead Underwriter Adam Falk, Wellness Consultant Sharon Foster, Compliance Mike Thomas, Pharmacy Tony Hernandez, Technology Q/2014/Gallagher/20PPT/25186.pptx Scott Hamilton, Human Resources Mark Rosenberg, Healthcare Analytics Jim Murray, Health & Welfare 2014 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 39