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Additional RX Opportunity for Savings In addition to offering a core Premier Silver Plan and a buy up Premier Gold Plan, additional cost saving measures to control pharmacy costs are recommended. There are opportunities for additional cost savings (avoidance) by implementing: ✓ Formulary Optimization - A program that excludes low clinical value drugs from our formulary (gross projected savings of $98,944 — 40 members) ✓ RxB Utilization Management Review - A high dollar claim review program for all pharmacy claims over $1,000 to ensure that high costs medications are medically appropriate (gross 'projected savings of $148,930 to $208,502 —120 members) ✓ Manufacturer's Assistance Program for Specialty Medications - Redeem manufacturer assistance coupons on behalf of the plan (gross projected savings of $231,632 — 34 members) ✓ Out of Pocket Protection - A program to ensure that only actual out of pocket costs paid by members are applied to the plan's out-of-pocket maximums (credit coupons issued by manufacturers to reduce member costs would not apply towards out of pocket maximum). This program is termed the Clinical Advantage Program (CAP) — Standard Program and the net savings is estimated to be $413,456 based on a recent medication analysis after CAP fees of $1.45 per claim. It is important to note that these cost saving measures have a corresponding disruption or impact to approximately 194 of 3,597 covered members. For example if a medication does not meet the established criteria, it would no longer be covered under the pharmacy benefit. However, if no oversight of medications filled under the plan is implemented, the plan will continue to be vulnerable to paying for high costs medications that do not have supporting medical/clinical justification. Members who may be impacted will have access to concierge customer service through RXBenefits to assist them in medication transitions. Upon the Board's approval of recommended changes, staff would discuss the upcoming change with labor representatives and the constitutional HR representatives. In advance of annual open enrollment, meetings with employees would be held at various work sites to communicate the changes and answer questions. Funding Current funding for the health plan is provided by employer, employee and retiree contributions to the plan as well as OPEB funding. The recommended changes to the plan will provide necessary premiums to cover the current projected deficit and the projected costs for the 2019/2020 plan year. Current Funding Based on Current Enrollment 699 Employee / 953 Family $18,811,410 Proposed Funding with Increased Contributions $22,649,850 Increase over. Current Year Funding $3,838,440 189