UNIVERSITY OF MISSOURI BOARD OF CURATORS MEETING

UNIVERSITY OF MISSOURI BOARD OF CURATORS MEETING Friday, July 22, 2016 Kansas City, Missouri The Board meeting will take place in the Sanders Confere...
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UNIVERSITY OF MISSOURI BOARD OF CURATORS MEETING

Friday, July 22, 2016 Kansas City, Missouri The Board meeting will take place in the Sanders Conference Room at the Husch Blackwell, LLP offices, 4801 Main Street, Kansas City, Missouri , 64112 unless otherwise noted.

Dial-In Number: (866) 357-7737 Participant Code: 7797937005 AGENDA

BOARD OF CURATORS MEETING – Public Session

9:00 AM Call to Order – Chair Henrickson General Business Action 1. Approval, Board Executive Committee and Standing Committee Assignments

Consent Agenda Action 1. Minutes of the Board of Curators Meeting, June 16-17 2016 2. Minutes of the Board of Curators Committee Meetings, June 16-17, 2016

9:10 AM

Finance Committee

Action 1. Fiscal Year 2018 State Appropriations Request for Operations, UM 2. Adjourn, Finance Committee Meeting

AGENDA - 1

9:40 AM

Compensation and Human Resources Committee Meeting

Action 1. Retiree Insurance Provider Approval 2. Adjourn, Compensation and Human Resources Committee Meeting

10:00 AM

General Business

Information 1. Discussion with the Board - Thematic Areas of Focus Action 2. Adjourn Board of Curators Meeting

----------------------------------------------------------------------------------------------------------Future Board of Curators meetings: October 6 – 7, 2016 December 8 – 9, 2016

University of Missouri – Kansas City University of Missouri – St. Louis

AGENDA - 2

GENERAL BUSINESS

No. 1

Recommended Action -

Approval of Board of Curators Executive Committee and Standing Committee Appointments, 2016

It was recommended by Chair Henrickson, moved by Curator ___________ and seconded by Curator ____________, that the following Board of Curators Executive Committee and Standing Committees appointments be approved for 2016:

Executive Committee Pamela Q. Henrickson, Chair Maurice B. Graham Phillip H. Snowden

Academic, Student and External Affairs Committee Phillip H. Snowden, Chair Donald L. Cupps David L. Steelman Jon T. Sundvold Patrick Graham, Student Representative

Audit Committee Maurice B. Graham, Chair Mary E. Nelson John R. Phillips Thomas R. Voss

Compensation and Human Resources Committee John R. Phillips, Chair Maurice B. Graham Mary E. Nelson Thomas R. Voss

July 22, 2016

OPEN – GB 1-1

Finance Committee David L. Steelman, Chair Donald L. Cupps Mary E. Nelson Jon T. Sundvold Patrick Graham, Student Representative

Governance, Resources and Planning Committee Donald L. Cupps, Chair David L. Steelman Thomas R. Voss Pamela Q. Henrickson, ex officio Michael A. Middleton, ex officio

Health Affairs Committee Pamela Q. Henrickson, Chair Ronald G. Ashworth Teresa R. Maledy John R. Phillips Phillip H. Snowden Jon T. Sundvold

Roll call vote:

YES

NO

Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss

The motion ____________.

July 22, 2016

OPEN – GB 1-2

CONSENT AGENDA

CONSENT Recommended Action - Consent Agenda

It was endorsed by Interim President Middleton, moved by Curator ___________ and seconded by Curator ___________, that the following items be approved by consent agenda:

CONSENT AGENDA 1. 2.

Minutes of the Board of Curators Meeting, June 16-17 2016 Minutes of the Board of Curators Committee Meetings, June 16-17, 2016

Roll call vote of the full Board:

YES

NO

Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss The motion __________________.

July 22, 2016

CONSENT AGENDA

Consent 1

Recommended Action -

Minutes, June 16-17, 2016 Board of Curators Meeting

It was moved by Curator _______________ and seconded by Curator _______________, that the minutes of the June 16-17, 2016 Board of Curators meeting be approved as presented.

Roll call vote:

YES

NO

Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss

The motion _________________.

July 22, 2016

OPEN – CONSENT – 1-1

Consent 2

Recommended Action -

Minutes, June 16-17, 2016 Board of Curators Committee Meetings

It was moved by Curator _______________ and seconded by Curator _______________, that the minutes of the June 16-17, 2016 Board of Curators committee meetings be approved as presented.

Roll call vote:

YES

NO

Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss

The motion _________________.

July 22, 2016

OPEN – CONSENT – 2-1

FINANCE COMMITTEE

Fiscal Year 2018 State Appropriations Request for Operations UM

The Board of Curators will be asked to approve the Fiscal Year 2018 State Appropriations Request for Operations for the University of Missouri System at the July 22, 2016 meeting.

Request Summary - FY2018 FY2018 State Appropriation Request

Item UM Core Operations

$465.0

UM Core Operations New Requests

26.7 $491.7

Total UM Core Requests Request for Other Programs & Legislative Requirements

$10.4

Other Programs Core Other Programs New Requests Request in Accordance with Legislative Requirements Total Requests for Other Programs and Legislative Requirements Total FY2018 Request for Operations

2.2 11.4 $24.0 $515.7

Dollars in M illions

July 22, 2016

OPEN – FIN –1-1

No. 1

Recommended Action -

Fiscal Year 2018 State Appropriations Request for Operations, UM

It was recommended by Vice President Burnett, endorsed by Interim President Middleton, recommended by the Finance Committee, moved by Curator ____________ and seconded by Curator

, that the following recommendations be approved:

The President is authorized to file a request for state appropriations for operations as follows: (1) (2) (3) (4)

Funding for Core Operations of $465.0 million; New Requests of $26.7 million; Other Curator Programs Requests which includes core funding of $10.4 million and new requests of $2.2 million; and Requests in Accordance with Legislative Requirements of $12.6 million.

Roll call vote Finance Committee

YES

NO

Curator Cupps Curator Nelson Curator Sundvold Curator Steelman The motion

.

Roll call vote of Full Board:

YES

NO

Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss The motion ____________. July 22, 2016

OPEN – FIN –1-2

Fiscal Year 2018 State Appropriations Request for Operations UM The University’s FY2018 State Appropriations Request for Operations is being presented to the Board by management for approval at the July meeting. The University’s FY2018 appropriations request for operations has four components: 1) Funding for Core Operations, 2) New Requests, 3) Other Programs Requests, and 4) Requests in Accordance with Legislative Requirements. The University has a unique role to play in improving the quality of life for all Missourians through unparalleled excellence in each of our missions: teaching, research, public service, and economic development. The University’s partnership with the state and its financial support are critical for the University to continue fulfilling its mission, and playing an instrumental role in Missouri’s future. Table 1 summarizes the core operations items and new requests and is followed by narrative descriptions of each area. Table 1: Funding for Core Operations - FY2018 FY2018 State Appropriation Request

Item UM Core Operations Appropriation Base (Core + FY17 Improved Outcomes) MU Medical School Expansion

$448.7 10.0

UMKC/MSU Pharmacy Funding

2.0

UMKC Satellite Dental Program at MSSU

1.0

Missouri S&T Expansion of MSU Engineering

1.0

Missouri S&T Programs in Clay County

1.0

Missouri S&T Project Lead the Way

0.4

UMSL International Collaboration

0.5

UMKC Neighborhood Initiative Program Total Funding (prior year TAFP bill)

0.4 $465.0

New Requests Restoration of UM System Core UMKC Satellite Dental Program at MSSU Performance Funding for Core Operating Support (5%) Total New Requests Total Requests

$3.8 0.5 22.4 $26.7 $491.7

Dollars in M illions

July 22, 2016

OPEN – FIN –1-3

I.

Funding for Core Operations: State Request - $465.0 million The University’s first priority for the FY2018 appropriations request is to maintain its base level of support and to protect the purchasing power of that support. This, along with the University’s continuous commitment to containing costs and strategic reallocation, is necessary to ensure the University can carry out its mission of teaching, research, public service, and economic development. The core request is based on the appropriations bill as passed by the legislature and signed by the Governor. The items are presented and discussed separately because each is currently in a separate appropriation House Bill section. The University’s goal is for the state to combine all of the University’s core items into a single House Bill section. 1.

FY2017 Operating Appropriations Base: Core $448.7 million The University’s first priority in the FY2018 request for operations is the continuation of its FY2017 core state appropriations. In the past this House Bill section was provided collectively to the University of Missouri. The FY2017 House Bill contains individual lines for each business unit. It is preferred for FY2018 that the House Bill language be returned to a single line item for the University for simplicity and efficiency. The University’s Operations Fund supports core teaching and service missions of the University as well as administrative operations for research and economic development. The gross FY2017 appropriation of $448.7 million, comprised of the $430.7 million recurring core plus new FY2017 funding for improved outcomes (performance funding) of $17.9 million, contributes 37% of the operating fund revenue budget.

2.

MU Medical School Partnerships (CoxHealth and Mercy): Core $10.0 million In response to the shortage of physicians in Missouri, particularly in the southwest part of the State, the University of Missouri School Of Medicine in Columbia and CoxHealth and Mercy health systems in Springfield will increase medical school enrollment at MU by creating a third and fourth year clinical campus in Springfield, Missouri. Funding to begin this partnership began in FY2014 and the first additional students were admitted in Fall 2014. The appropriation of $10.0 million is needed on a recurring basis to sustain these increased costs.

3.

UMKC/MSU Pharmacy Funding: Core $2.0 million This funding is for the satellite Doctor of Pharmacy Program at Missouri State University. UMKC first received this appropriation in FY2012. After supporting infrastructure needs, the sustaining appropriation will support personnel and distance education costs for the program and is mandatory for the program to continue. The program is fully accredited and the first class was enrolled in Fall 2014. July 22, 2016

OPEN – FIN –1-4

4.

UMKC Satellite Dental Program at MSSU: Core $1.0 million The University of Missouri-Kansas City will partner with Missouri Southern State University (MSSU) in Joplin to address the shortage of dentists in that region. In FY2017, $1.0 million was appropriated in operating appropriations and $0.5 million was appropriated in capital appropriations. MSSU received a $2.0 million appropriation. UMKC needs $1.5 million in recurring state support to cover their program costs and make the program viable. The UM appropriation submission will include a request to continue the $1.0 million operating appropriation and a new operating request for $500,000 ongoing.

5.

Missouri S&T Expansion of MSU Engineering: Core $1.0 million In 2008, Missouri S&T entered into a partnership with Missouri State University (MSU) to provide undergraduate degree programs in Civil Engineering and Electrical Engineering. In FY2017, MSU and Missouri S&T jointly requested an expansion of the partnership to deliver undergraduate Mechanical Engineering programs. Both institutions set the price tag for program implementation at $2.0 million with each receiving $1.0 million. This appropriation is needed on a recurring basis.

6.

Missouri S&T Programs in Clay County: Core $1.0 million At the request of the north Kansas City business community, Missouri S&T will deliver graduate level and certificate courses in the new Clay County Education Center. A $1.0 million appropriation was provided to cover the estimated cost to provide distance education delivery of these programs. This funding is needed on a recurring basis.

7.

Missouri S&T Project Lead the Way: Core $0.4 million Missouri University of Science and Technology will partner with Southern Ozarks Alliance for Rural Development (SOAR) to increase the number of school districts utilizing Project Lead the Way (PLTW). The goal of PLTW is to help students understand that STEM education is relevant in their lives and see potential for future careers. This appropriation was provided in FY2017 to help school districts offset costs of these programs and to provide state match for potential federal grant money. The $400,000 is needed on a recurring basis.

8.

UMSL International Collaboration: Core $0.5 million This funding promotes economic opportunities and job growth through international collaboration and attraction of new businesses to Missouri. FY2016 was the first year for this appropriation at $300,000 with a $150,000 increase provided in FY2017. The initiative connects the economies of St. Louis and Israel with a robust pipeline that engages and links experienced professionals to identify Israeli companies who are likely to be attracted by St. Louis’ convergence of corporate, university, and entrepreneurial strengths. Specific business strategies partner prospective July 22, 2016

OPEN – FIN –1-5

Israeli companies with St. Louis and Missouri resources that might lead to recruitment of a presence in St. Louis. The appropriation of $450,000 is needed on a recurring basis. 9.

II.

UMKC Neighborhood Initiative Program: Core $0.4 million This appropriation allows the UMKC Center for Neighborhoods in the Department of Architecture, Urban Planning and Design, meet the critical needs of neighborhoods through technical assistance, capacity building, neighborhood planning and design services, legal aid and organizational assistance. The Center will provide a one-stop location where leaders can access the available resources and capacities of UMKC – including faculty, staff and students. Data about neighborhoods as well as training, workshops, and other opportunities with faculty and students will be available. In addition, faculty will benefit from these partnerships with opportunities for research and engaged teaching. FY2016 was the first year for this appropriation and it is needed on a recurring basis.

New Requests for Funding: State Request - $26.7 million In addition to core funding requirements, the University’s appropriations request for operations focuses on new investments which will better position the University to serve its students and to contribute to the future economy of Missouri and the welfare of its citizens. These investments support the University’s strategic goal of maintaining its position as one of the top public research universities in the country. This funding is critical to provide quality, accessible and affordable education. 1.

Restoration of UM System Core: State $3.8 million The University of Missouri System state appropriation was reduced by $3.8 million in FY2017. The UM System exists to serve the campuses and MU Health Care with cost saving shared services offices. While the system worked diligently to reduce expenses without increasing the costs or adding to the workload of the campuses, maintaining current service levels without a degradation of quality or timeliness will not be sustainable. The reduced funding also limits the flexibility of the system to implement actions to increase efficiencies and effectiveness for the benefit of the campuses and the ability to respond to new opportunities.

2.

UMKC Satellite Dental Program at MSSU – Increase to Operations: State $0.5 million As discussed previously, UMKC needs $1.5 million recurring for this partnership effort. In FY2017, $1.0 million was appropriated in the operating appropriations and $0.5 million was appropriated from capital appropriations. MSSU received a $2.0 million recurring appropriation for their costs in support of this new program. This request is for a $500,000 increase in operating appropriations recurring to UMKC for a total of $1.5 million in required recurring state program support. This is the amount previously requested by the campus and Curators.

July 22, 2016

OPEN – FIN –1-6

3.

III.

Funding for Improved Outcomes – Performance Funding: State Request - $22.4 million The Funding for Improved Outcomes (Performance Funding) initiative was developed by the CBHE Performance Funding Task Force (2012) as a way to advocate for increased appropriations to base funding for higher education institutions. The University is requesting an increase in core operating appropriations of $22.4 million for performance funding. This increase is computed as 5% of the FY2017 core appropriation ($448.7 million). The University’s growth over the last several years has been in high cost and high demand programs. Continued performance funding is critical to maintaining these programs.

Other Programs Requests: State Request - $12.6 million MU Health Care, Missouri Kidney Program, Missouri Telehealth Program, MOREnet, and State Historical Society of Missouri comprise other programs. As with the other operating appropriations, the first goal in the FY2018 appropriations request is to maintain FY2017 core appropriations. In addition, there are two programs with new requests. Table 2 summarizes these requests, followed by detailed descriptions. Table 2: Other Programs Requests - FY2018 FY2018 State Appropriation Request MU Health Care MU Tier 1 Safety Net Hospitals (Core) Other Curator Programs Missouri Kidney Program (Core) Telehealth (Core) Show-Me Extension for Community Healthcare Outcomes (Core) State Historical Society of Missouri (Core) Total Recurring Funding (prior year TAFP bill)

$2.0

1.8 0.4 3.0 3.2 $10.4

New Requests State Historical Society of Missouri (One-time) State Historical Society of Missouri (Recurring) MOREnet (One-time) Total New Requests

$0.8 0.4 1.0 $2.2 $12.6

Total Other Programs Dollars in M illions

July 22, 2016

OPEN – FIN –1-7

1.

MU Health Care Tier 1 Safety Net Hospital: State Request - $2.0 million Missouri is fortunate to have two strong academic medical centers, Truman Medical Centers (TMC) and MU Health Care, affiliated with Missouri’s two medical schools. Both hospital systems serve not only as the state's teaching institutions, but also as the core safety net providers in Kansas City and mid-Missouri. A key component necessary for teaching hospitals is enhanced information technology. The state recognized this need by appropriating $5.0 million in FY2017 to fund Health Information Technology for these two hospitals. $2.0 million of the $5.0 million is provided to MU Health Care and will be requested in FY2018 as a recurring appropriation.

2.

Requests for Other Curator Programs Core: State Request - $10.4 million Requests for Missouri Kidney Program, Missouri Telehealth, Telehealth Show-Me Extension for Community Healthcare Outcomes, and State Historical Society include continued funding of the core. FY2016 was the first year we received funding for the Telehealth Program Show-Me Extension Community Healthcare Outcomes (ECHO) at $1.5 million and this was increased to $3.0 million in FY2017 to expand the availability of health care to rural areas. The core amounts for each of these programs is listed in Table 2. Each program is a specific line item in the appropriation House Bill and therefore is shown separately.

3.

State Historical Society: State Request - $0.8 million One-time The State Historical Society of Missouri will occupy a new state funded building in Columbia in FY2019. In order to properly secure the museum assets while providing greatly enhanced public access, a security system is needed and would be incorporated as the building is built. It is estimated one-time funds of $800,000 is needed for this effort.

4.

State Historical Society: State Request - $0.4 million Recurring The State Historical Society of Missouri (SHSMO) will need new positions for the new building in Columbia and to meet patron demand in out-state research centers. Four new positions planned for Columbia include a security officer, library support specialist, archivist, and event services manager. Although the building will not come online until FY2019 the new positions will help with the move preparation and planning in FY2018. SHSMO also provides research centers across the state to provide access to an ever-growing number of reference materials and historical collections. To enhance these efforts two new positions are needed one at the Rolla Research Center and one at the Cape Girardeau Research Center. Total costs of salary and benefits for these six positions is estimated at $301,000. An additional $70,000 is needed to address continuing cost increases and July 22, 2016

OPEN – FIN –1-8

retain staff at competitive market salaries. The total recurring request is $371,277. 5.

MOREnet: State Request - $1.0 million One-time MOREnet is requesting $1.0 million one-time to provide state match for the federal E-rate program for high-speed broadband construction in Missouri K-12 schools. The Schools and Libraries program, also known as the E-rate program, makes telecommunications and information services more affordable for schools and libraries in America. The federal funding is prioritized to the highest poverty schools and libraries. New federal funding in this program is available covering up to 10 percent of special construction charges for high-speed broadband connections to state’s that supply 10 percent matching funds to schools. 100% of the funds provided by this request will be spent for new high-speed broadband infrastructure for Missouri K-12 school districts. The E-rate Program already provides broadband discounts for MOREnet member school districts ranging from 74% to 86%. With the additional matching funds, in many cases, new broadband infrastructure one-time charges could receive discounts of 90%. With $1.0 million in state funding for eligible special construction charges, Missouri schools would realize an increase in federal E-rate funding of $1.0 million in improved technology for the neediest Missouri school districts.

IV.

Requests in Accordance with Legislative Requirements: State Request $11.4 million The University has certain requests made annually as one-time or recurring requests in accordance with legislative authority. Table 3 summarizes these requests, followed by detailed descriptions. Table 3: Requests in Accordance with Legislative Requirements - FY2018 FY2018 State Appropriation Request Debt Offset Tax Authority (Recurring) Missouri Returning Heroes (One-time) Alzheimer's Research (One-time) Spinal Cord Injury Research (Increase) (One-time) Seminary Fund (One-time) Total Requests in Accordance with Legislative Requirements

$1.4 4.2 0.5 2.0 3.3 $11.4

Dollars in M illions

July 22, 2016

OPEN – FIN –1-9

1.

Debt Offset Tax Authority: Core - $1.4 million The University currently receives a tax refund offset appropriation to cover unpaid debts owed to the institution by state taxpayers. An increase to this core amount from $200,000 was requested and received with FY2017 as a result of improvements in methods to utilize this appropriation. The appropriation of $1.4 million, from the Debt Offset Escrow Fund, is needed on a recurring basis.

2.

Missouri Returning Heroes Act: State Request - $4.2 million The University is requesting additional appropriations equivalent to tuition waived in FY2010 through FY2016 for the Missouri Returning Heroes Education Act. This act limits the amount of tuition charged to combat veterans who meet certain criteria but provides that institutions may request the tuition waived in the following year’s appropriation request. Since the request was not funded in previous years, all six years are included. The amount of the request is estimated at $4.2 million because data for FY2016 will be gathered at the end of the fiscal year. Also, the impact of Senate Bill 968 is still being evaluated. Prior to the appropriation submission, the number will be refined. Based on the most recent data available, 1,348 unduplicated students have benefited from this program.

3.

Alzheimer’s Research Fund: State Request - $0.5 million Section 172.801, RSMo, stipulates the Board of Curators shall request annually an appropriation for Alzheimer's research of not less than $200,000 adjusted for inflation. In addition, the request is to include administrative costs not to exceed ten percent of the appropriation for research. The $500,000 amount is an estimate. June CPI numbers are needed to finalize the appropriation request amount. Appropriations have not been provided for this program since FY2005.

4.

Spinal Cord Injury Research Fund: State Request - $2.0 million The Spinal Cord Injury Fund, established by legislature in 2001 and funded from non-General Revenue sources, supports research in Missouri in the area of spinal cord injuries and congenital or acquired disease processes. State statute stipulates the Board of Curators shall request annually an appropriation for research awards from the Spinal Cord Injury Fund. Research awards are a maximum of $250,000 per award. In FY2017 and the most recent prior years, $1.5 million has been appropriated for this effort. Recent increased research demand requires a one-time increase to $2.0 million for FY2018. This appropriation request is composed of appropriation for research funds and for administrative funds as provided by legislation. The appropriation is made from the Spinal Cord Injury Fund held at the state for this purpose.

July 22, 2016

OPEN – FIN –1-10

5.

Seminary Fund: State Request - $3.3 million This program provides income for the general operation of University of Missouri College of Agriculture and School of Mines and Metallurgy. Per state statute, the Seminary monies belong to the University but the state must hold the securities. A request must be made to the state annually for earnings from the monies to be distributed to the University. Requests must also be made for any reinvestment of the principal from maturing investments. Approximately $3.0 million of the appropriation the University requests provides for reinvestment of principal made by the University. The additional $275,000 represents interest earned on those investments and is used to fund operations at the MU College of Agriculture, Food and Natural Resources, Missouri S&T School of Mines & Metallurgy, and to fund some scholarships. These appropriations come from the state Seminary Fund.

Of the five requests, only the Missouri Returning Heroes and Alzheimer’s Research are funded from state general revenue. The others have special fund sources that cannot be used for any other purpose.

July 22, 2016

OPEN – FIN –1-11

No. 2

Recommended Action -

Adjourn Board of Curators Finance Committee Meeting

It was moved by Curator __________ and seconded by Curator __________, that the Board of Curators Finance Committee Meeting, July 22, 2016, be adjourned.

Roll call vote of the Committee:

YES

NO

Curator Cupps Curator Nelson Curator Steelman Curator Sundvold

The motion _________________.

July 22, 2016

OPEN – FIN – 2-1

COMPENSATION AND HUMAN RESOURCES COMMITTEE

Summary, Retiree Insurance Provider Approval

The University of Missouri requests action regarding the selection of an insurance provider for Medicare-eligible retirees covered under the University’s plans. The recommended insurance provider was selected through the Request for Proposal (RFP) procurement process. Selection criteria included plan design, member education and resources, physician/hospital network match and financial and analytic strength. As a result of this process, the University requests action to enable university administration to enter into an agreement, on behalf of the Curators of the University of Missouri, with United Healthcare, Minneapolis, for Medicare-eligible, fully-insured medical insurance coverage and administrative plan services. The effective date of benefit administration would be January 1, 2017. Significant points of interest to the Board include: • Reduction in overall medical premium of $11 million dollars; with overall savings shared between retirees and university, • Single-source benefit administration will result in greater claim simplicity for the member and efficiency for the plan, while retaining comparable benefit coverage, • Minimal physician/patient disruption, with 84.8% of current provider claims being in the United Healthcare’s network (versus Aetna’s 79%) • Advanced customer service model and additional member value-added benefits The costs of the medical plan are paid from the University of Missouri System Medical Plan accounts funded through University and retiree contributions.

July 22, 2016

OPEN – C&HR – 1-1

No. 1 Recommended Action -

Approval, Retiree Insurance Provider Approval

It was recommended by Interim Vice President Stuck, endorsed by Interim President Middleton, recommended by the Compensation and Human Resources Committee, moved by Curator _________________ and seconded by Curator ________________, that the following action be approved: the University of Missouri System be authorized to contract Medical Benefit Plan Administrative Services from United Healthcare. Funding is as follows: University of Missouri System Post-Employment Benefits Trust Roll call vote of the Committee: Curator Graham Curator Nelson Curator Phillips Curator Voss

YES

NO

YES

NO

The motion ______________. Roll call vote of Board of Curators: Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss The motion ______________. July 22, 2016

OPEN – C&HR – 1-2

Retiree Health Study: 2017 Medical Plan Recommendations

OPEN - C&HR - 1-3

July 22, 2016

2017 Retiree Medical

RATIONALE FOR CHANGE & GUIDING PRINCIPLES

OPEN - C&HR - 1-4

July 22, 2016

2

Retiree Medical Task Force Goals • Continue to offer medical coverage / subsidy to eligible retirees and covered dependents • Equal or greater value plan design • Explore market options to control/reduce annual costs for retirees and the university – Retiree medical benefits have changed considerably • 7 significant plan changes in Medicare market since 2000 • UM nominal changes since 2000 – Medicare Advantage plans are available with similar value at lower cost – Stop growth of the liability

OPEN - C&HR - 1-5

July 22, 2016

3

Retiree Focus Group Listening Tour / Survey Feedback • Provide comparable plan design • Ensure stability of medical plan for retirees • Provide choices related to their health plan: • Want the University to vet options on their behalf • Provide a few clear options, but not too many

OPEN - C&HR - 1-6

July 22, 2016

4

2017 Retiree Medical

RFP ANALYSIS

OPEN - C&HR - 1-7

July 22, 2016

5

Current Retiree Medical Population Covered Medicare Eligible Retirees

4832

Covered Medicare Eligible Dependents

710

Covered Pre-Medicare Eligible Retirees

914

Covered Pre-Medicare Eligible Dependents

1220

Total Covered Individuals

7676

Special Consideration Groups Non-Medicare eligible dependents will require a separate contract

Individuals who retired prior to September 1, 1990 may not be enrolled in Medicare A and B and would incur a penalty if enrolled (approximately 100)

OPEN - C&HR - 1-8

International coverage options still being explored

July 22, 2016

6

Plan Options in Market Today • Indemnity, HMO, Medigap, Medicare Advantage, Part D • Insurance Exchange or group coverage • Prescription can be integrated or separate • Cost sharing options: Coinsurance, copays, deductible, out of pocket maximum

OPEN - C&HR - 1-9

July 22, 2016

7

RFP Summary and Recommendation • Two vendor proposals received • Both vendors satisfied our commitments to retirees: – Continued access to coverage and same percentage subsidy, and; – a plan design that offers as good or better value

• Recommended vendor: United Health Care – Greater medical plan cost savings to both the retiree and UM – Final details of plan design determined as the contract is finalized – Prescription plan will continue to be administered by Express Scripts

OPEN - C&HR - 1-10

July 22, 2016

8

2017 Retiree Medical Recommendations

WHAT IS DIFFERENT & WHAT REMAINS THE SAME

OPEN - C&HR - 1-11

July 22, 2016

9

Current / New Plan Design Current Design: Part A Hospital Insurance

Part B Medical Insurance

New Design: Part A Hospital Insurance

Part B Medical Insurance

Part C (replaces A&B)

myRetiree Health Plan or Healthy Savings Plan (Secondary Plans)

Additional Coverage and Extras

Part D University Prescription Drug Plan

Part D Medicare Prescription Drug Plan

Note: Non-Medicare eligible participants will be on a separate plan. OPEN - C&HR - 1-12

July 22, 2016

10

Plan Design: New Value Added Services • • • • •

Silver Sneakers program House Calls program Preventive care reminders Hearing aid discount Explanation of Benefits (EOB) simplified

• Travel Insurance Option (TBD)

OPEN - C&HR - 1-13

July 22, 2016

11

High Level Benefit Comparison – Medicare Eligible Retiree Only Illustration

Current UM PPO Plan

UHC Plan Post-90

Deductible

$325 / $1000

$125

Coinsurance

20% / 30%

*5-20%

Copay

$325 inpatient hospital

*$10 - $55

OOP

$2000/$3000

$2000

In Network/Out of Network

OPEN - C&HR - 1-14

combined in/out

combined in/out

July 22, 2016

12

2017 Retiree Medical

FINANCIAL SAVINGS

OPEN - C&HR - 1-15

July 22, 2016

13

Final Proposals

Medical Plan Savings 2017 Proposal • Medicare Advantage (MA) group coverage allows the University to design a plan to meet or exceed current benefits – Reduced premiums due to University’s ability to access Medicare subsidy

• Annual expected medical plan cost reduction = $11 million – Through premium structure, approximately 50% of savings will be shared with retirees

OPEN - C&HR - 1-16

July 22, 2016

14

Timeline Overview Action

Date

Board of Curators Action

July 22, 2016

Education and Communications

August 1 – September 30

Open Enrollment

October 15 – December 7*

Plan Effective Date

January 1, 2017

*TBD upon health plan confirmation

OPEN - C&HR - 1-17

July 22, 2016

OPEN - C&HR - 1-18

July 22, 2016

No. 2

Recommended Action -

Adjourn Board of Curators Compensation and Human Resources Committee Meeting

It was moved by Curator __________ and seconded by Curator __________, that the Board of Curators Compensation and Human Resources Committee Meeting, July 22, 2016, be adjourned.

Roll call vote of the Committee:

YES

NO

Curator Graham Curator Nelson Curator Phillips Curator Voss

The motion _________________.

July 22, 2016

OPEN – C&HR – 2-1

GENERAL BUSINESS (continued)

DISCUSSION WITH THE BOARD THEMATIC AREAS OF FOCUS

There are no materials for this information item.

July 22, 2016

OPEN – GB – INFO 1-1

No. 2

Recommended Action -

Adjourn Board of Curators Meeting, July 22, 2016

It was moved by Curator __________ and seconded by Curator __________, that the Board of Curators Meeting, July 22, 2016, be adjourned.

Roll call vote:

YES

NO

Curator Cupps Curator Graham Curator Henrickson Curator Nelson Curator Phillips Curator Snowden Curator Steelman Curator Sundvold Curator Voss The motion ________________.

Time: ________________________

Date: ________________________

July 22, 2016

OPEN – GB – 2-1