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SCHEDULE 2,EXHIBIT C-2
<br /> EXAMPLE CALCULATION OF THE CONDITIONAL FEE REFUND
<br /> The following example uses actual data for 2017 and 2018, ignoring claims more than$200,000.
<br /> This example uses Hypothetical costs and Participant counts for later years during the Conditional
<br /> Fee Refund Period. The example assumes the number of Participants enrolled on the CDHP at the
<br /> beginning of the Conditional Fee Refund Period remains the same throughout the Conditional Fee
<br /> Refund Period.
<br /> Calculation of Expected PPPM Cost:
<br /> 2017 2018 Total
<br /> Medical claims $12,502,762 $13,074,422 $25,577,184 M
<br /> Pharmacy claims $2,964,816 $3,434,279 $6,399,095 P
<br /> Total: $15,467,578 $16,508,701 $31,976,279
<br /> Sum of monthly average covered members for the period 28,306 30,308 58,614 x
<br /> Per Participant per Month Baseline Amount-Medical $436.37 =M/X
<br /> Per Participant per Month Baseline Amount-Pharmacy $109.17 =P/X
<br /> Baseline amounts adjustment for Segal Health Cost Trends:
<br /> Medical-year 1 $467.35 Al
<br /> Medical-year 2 $500.53 A2
<br /> Medical-year 3 $536.07 A3
<br /> Pharmacy-year 1 $117.36 B3
<br /> Pharmacy-year 2 $126.16 B2
<br /> Pharmacy-year 3 $135.63 83
<br /> Expected PPPM Cost Year 1 $584.71 =A1+B1
<br /> Expected PPPM Cost Year 2 $626.69 =A2+B2
<br /> Expected PPPM Cost Year 3 $671.69 =A3+83
<br /> Calculation of Employer's Actual Claims Cost
<br /> Year 1 Year 2 Year 3 Total
<br /> Medical claims-PPO $8,500,000 $9,000,000 $9,500,000
<br /> Medical claims-CDHP $1,500,000 $1,800,000 $2,000,000
<br /> X1.125 X1.125 X1.125
<br /> Adjusted medical claims-CDHP $1,687,500 $2,025,000, $2,250,000
<br /> Total actual medical claims(PPO+adjusted CDHP) $10,187,500 $11,025,000 $11,750,000
<br /> Pharmacy claims $3,200,000 $3,500,000 $3,800,000
<br /> Employers Actual Claims Cost:I $13,387,500 $14,525,0001 $15,550,0001 $43,462,500
<br /> Schedule 2, Exhibit C-2
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